House of Commons
Wednesday, June 24, 1914
Private Business
"Glasgow Corporation Order Confirmation Bill,
Second Reading deferred till To-morrow.
Local Government Provisional Order (No. 23) Bill,
"To confirm a Provisional Order of the Local Government Board relating to Darlington." Presented by Mr. HERBERT LEWIS; supported by Mr. Herbert Samuel.
Ordered, That Standing Order 193a be suspended, and that the Bill be now read the first time.—[ The Chairman of Ways and Means. ]
Bill accordingly read the first time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill.294.]
Local Government Provisional Order (No. 11) Bill (by Order),
Second Reading deferred from To-morrow, at a quarter-past Eight of the clock, till Monday next, at a quarter-past Eight of the clock.
New Writ
For the Borough of Brighton, in the room of the honorable John Edward Gordon (Manor of Northstead).—[ Lord Edmund Talbot. ]
Trade Reports (Annual Series)
Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 5,300 to 5,303 [by Command]; to lie upon the Table.
Case of Oscar Slater
Copy presented of Statements submitted to the Secretary for Scotland and of the evidence taken at the Inquiry held by the Sheriff of Lanarkshire on the 23rd, 24th, and 25th April, 1914 [by Command]; to lie upon the Table.
Board of Trade (Labour Department)
Copy presented of Industrial Directory of the United Kingdom for 1914 [by Command]; to lie upon the Table.
Prosecution of Offences Acts, 1879 to 1908
Return presented relative thereto [Address 22nd June; Mr. Ellis Griffith ]; to lie upon the Table, and to be printed. (No. 294.]
Board of Education
Copy presented of Minute of the Board of Education, dated 24th June, 1914, modifying the Regulations for Public Elementary Schools, 1912, in England and Wales as already modified by the Minute dated 4th July, 1913 [by Command]; to lie upon the Table.
Army
Copy presented of Amendments to the Rules of Procedure, 1907 [by Act]; to lie upon the Table.
Colonial Reports (Annual)
Copy presented of Report, No. 798 (Gibraltar, Annual Report for 1913) [by Command]; to lie upon the Table.
Board of Agriculture and Fisheries
Copy presented of Agricultural Statistics, 1913. Vol. XLVII., Part III. Prices of Corn, Live Stock, and other Agricultural Produce in England and Wales [by Command]; to lie upon the Table.
Board of Agriculture and Fisheries and Office of Woods, Forests, and Land Revenues
Copy presented of Joint Annual Report of the Forestry Branches for the year 1912–13 [by Command]; to lie upon the Table.
Oral Answers to Questions
Royal Navy
Coal and Oil Fuel
asked the First Lord of the Admiralty if he is aware of the experiments being made in Ireland to extract oil from the beds of coal and shale in that country; and if he can state the percentage of oil recoverable from each ton of coal or shale?
The answer to the first part of the question is in the affirmative. As regards the second part of the question, it is understood that the percentage depends not only on the quality of the coal or shale, which varies with the locality in which it is mined, but to some extent also on the particular character of the products which it is desired to extract and the purpose for which they are to be used.
Are the Admiralty watching these experiments? I know that one is being conducted.
Yes.
In what part of Ireland is shale being experimented upon—is it in county Cork?
Perhaps the hon. Member will put that question down.
asked the First Lord of the Admiralty if he has caused any experiments to be made for the extraction of oil from the coal now being raised in Kent; and, if the experiments are favour able, would he consider the question of the advantages of that field for the supply of oil for the Navy?
The answer to the first part of the question is in the negative. It is only quite recently that this coal-field has furnished to the Admiralty a sufficient supply for test as coal. In regard to its possibilities for production of oil, which would, of course, involve the finding of a profitable market for the other products of distillation, no doubt the colliery companies will take the matter up if they so desire, and inform the Admiralty of results. The Admiralty will give consideration to any information in regard to developments which may take place in this or other fields. In regard to the general aspect of this question, I would refer the hon. Member to the replies which my right hon. Friend has already given to questions from my hon. Friend the Member for Merthyr Tydvil.
Royal Dockyards (Discharges)
asked what readjustments of work as between the different Royal yards have been made with a view to the avoidance of discharges as far as possible?
I am glad to say that such rearrangements of work have been made as will reduce the number of discharges substantially below the number which originally seemed necessary.
asked the First Lord of the Admiralty the exact dates (month and day) when establishment in the Royal dockyards was suspended in 1907 and when it was resumed in 1910; the exact percentage of men on the establishment at the date of suspension compared with the number of men employed in the Royal yards at the same date; and the exact percentage of men on the establishment at the date of resumption compared with the number of men employed in the yards at that date?
The Admiralty Order to the dockyards suspending the establishment was dated 6th May, 1907; the Order resuming the establishment was dated 2nd June, 1910. As regards the remainder of the question, I do not think I can usefully add anything to the information which I gave the hon. Member in reply to his questions on the 15th instant. I then stated the percentage of established to unestablished men in the Home establishments based on numbers provided for in the Estimates for each year over a period of nine years, including the two years to which he refers. To give the exact percentages for the particular dates in question would involve a great deal of labour
Does the right hon. Gentleman appreciate the value of the question?
I appreciate all questions put by the hon. Gentleman. I have given the approximate figures, but to give the precise figures and dates would be a very heavy tax on the Department.
Fleet Personnel
asked the total net addition to the personnel of the Fleet between the years ending 31st March, 1906, and 31st March, 1912, and the total net addition to the personnel of the Fleet between the years ending 31st March, 1912, and 31st March, 1914?
Between March, 1906, and March, 1912, there was a net addition of approximately 6,315 officers and men, and between March, 1912, and March, 1914, a net addition of approximately 11,780.
Questions
East Africa Protectorate
asked the Secretary of State for the Colonies whether he can give any assurances that the area of reserves of land for the natives in the Protectorate of East Africa shall not be curtailed, or any of the people at present on them removed without their consent?
I would refer the hon. Member to the answer which my right hon. Friend gave to the hon. Member for West Leeds on the 28th April.
asked the conditions on which compulsory labour for public works can be demanded in the Protectorate of East Africa?
Under the existing law free labour can be demanded for the construction and maintenance of boundary beacons, roads, bridges, water-courses, or other work for the benefit of the community in native reserves, provided that the period of work does not exceed six days in any one quarter.
India
Co-Operative Land Societies
asked the Under-Secretary of State for India whether the India Office has received a Report from the Allahabad Bank after an investigation invited by the Chief Commissioner of the Central Provinces and Berar on the general working of the co-operative land societies in those districts; and, if so, will he cause a copy of the Report to be placed in the Library?
The Report has not yet been received by the India Office.
Is there any report on the same subject from Burma?
I will inquire and communicate the result to the hon. Member.
Punjab Irrigation Colonies
asked whether there is any obligation on the part of purchasers of blocks of land in the Punjab irrigation colonies of larger extent than can be cultivated by a single peasant and his family to refrain from subletting such holdings to rack-rented tenants, or are all possible sub-tenants, protected definitely by law against harsh rents and unfair treatment by landlords?
I am not aware of any obligations of the kind to which my hon. Friend refers; but I would point out that the scale of the larger blocks offered for sale is in general too small to attract the class of landholder whose dealings he views with apprehension, and that even under the earlier schemes of capitalist Grants, which have now been abandoned in favour of the smaller scale of allotment, there does not seem to have been cause for complaint on the score of rack-renting.
Questions
Revenue Bill (Contributions to Local Rates)
asked the Chancellor of the Exchequer whether, in the Revenue Bills which he proposes to introduce in connection with the Finance Bill, with reference to local rating, the question of contributions to local rates from Crown and Government properties will be considered?
The answer is in the negative so far as the Revenue Bill is concerned. Contributions in lieu of rates are not regulated by Statute, but the effect of any proposed changes in the law, on the present method of assessing these contributions, will be carefully considered.
Income Tax (Repayment of Deductions)
asked the Chancellor of the Exchequer what means will be used for the repayment of Income Tax in cases where the tax has been already deducted at the rate of 1s. 4d. from dividends paid and coupons cashed since his Budget statement?
When effect is given to the present proposal of the Government with regard to Income Tax, the Board of Inland Revenue will issue a Circular dealing with the adjustment or repayment of any tax received by them in excess of the rate imposed by law.
Would it not be advisable to make some statement, either through the Press or otherwise, so that the present practice of banks might be regulated and made uniform; and is it not the fact that at the present time banks are in doubt as to the exact course they should pursue?
Under the Provisional Collection of Taxes Act, passed last year, the Income Tax remains at the rate of 1s. 4d. until the House alters it.
Would it not be possible to inform banks, companies, and others paying dividends what course they should take?
Yes, I think it would, and the Inland Revenue propose to issue a Circular for that purpose.
Is it not the case that banks and others will be bound to make deductions at the rate of 1s. 4d. until the Report stage of the Finance Bill when the House will be able to alter if?
The Income Tax now authorised is at the rate of 1s. 4d.
Is it not the fact that banks are unable to make adjustments before 30th June?
Banks are authorised to make deductions at the rate of 1s. 4d. That is the only authorisation made by Parliament.
Has not the Bank of England said it cannot be so?
Protection of Animals Act, 1911
asked the Secretary of State for the Home Department whether the Protection of Animals Act, 1911, as originally introduced in this House, contained a Clause protecting live poultry from unnecessary suffering while travelling by rail or otherwise; that that Clause was, at the suggestion of the then President of the Board of Agriculture, withdrawn by the promoters of the Bill upon his undertaking to bring in a measure to enable the Board to make Orders under the Diseases of Animals Acts for such purpose; and that, in accordance with such undertaking, the Poultry Act, 1911, was duly introduced and passed into law on 18th August, 1911, enabling the Board to make Orders for protecting live poultry from unnecessary suffering while being conveyed by land or water and in connection with their exposure for sale and their disposal after sale; whether any Order has yet been made by the Board under that Act, and, if not, will he explain why this has not been done and when such Order will be made?
The delay in the issue of an Order is due to the fact that difficulty has been experienced in arriving at a decision as to the best way in which to attain the object in view.
Suffragist Outrages
asked the Home Secretary whether every female person who is known to be an active participant in or in any way connected with the outrages committed by the militant suffragists is constantly and at all times shadowed by members of the detective force; and, if not, whether he will make arrangements for this to be done?
I fear it would be quite impracticable to undertake such shadowing as my hon. Friend suggests.
Will the right hon. Gentleman say why?
That would necessitate a long statement.
asked the Secretary of State for the Home Department what was the date of the arrest of Miss Grace Roe who, with others, has been charged with conspiracy at the Marylebone Police Court; how many times since her arrest and imprisonment in Holloway Gaol has she been remanded by the magistrate; for how many days she has been forcibly fed; whether there is danger of her health breaking down; and why her case has not ben dealt with before now?
Miss Roe was arrested on the 23rd May, and, after being five times remanded for short periods by the magistrate, was committed for trial on the 9th June. She was forcibly fed for the first time on the 26th May, and has been fed every day since. Her condition of health is now reported to be generally satisfactory. Since she was deprived of certain noxious drugs, which had been surreptitiously supplied to her by her friends, the process of feeding her has been attended with much better results. She will be tried at the present Sessions at the Central Criminal Court. Her case could not have been dealt with any earlier.
Paupers
asked the President of the Local Government Board the cost to the State of maintaining the 299,474 indoor and outdoor paupers over seventy years of age in 1906, and the cost to the State of providing old age pensions for the 172,426 persons who, but for the pension, would have come on the State as paupers on the 1st January, 1914, taking all charges into consideration?
Nothing more than an estimate can be given, as the actual cost in the case of the persons referred to is not shown in any return. It is estimated that the cost for one year of maintaining the 229,474 (not 299,474) indoor and outdoor paupers would be about £2,336,700. The cost to the State of providing 172,426 persons with old age pensions for a year would be, approximately, £2,133,000.
asked the President of the Local Government Board whether he will explain to the House how the cost to the State of maintaining the 266,366 indoor and the 563,790 outdoor paupers, taking the numbers, respectively, on the 1st January, 1909, compares with the cost to the State of maintaining the 243,913 indoor and the 384,409 outdoor paupers, taking the numbers, respectively, on the 1st January, 1914?
Statistics showing the cost of maintaining the paupers of England and Wales are not available for particular days. For the year ended 31st March, 1909, the cost that could be apportioned to indoor relief was £7,432,600, and for the year ended 31st March, 1913, £8,925,400. The cost that could be apportioned to outdoor relief for those two years was £3,908,300 and £3,092,000 respectively. The figures for the year ended the 31st March, 1914, are not yet available. The increased cost of indoor pauperism accompanying a decrease in the number of paupers maintained may be mainly attributed to the improved classification and the higher standard generally of the treatment provided in Poor Law institutions.
May we take it that the cost of pauperism has gone up considerably?
There has been an increase in the cost of pauperism, but a great decrease in the cost of outdoor pauperism.
National Insurance Act
Deposit Contributors
asked the Chancellor of the Exchequer if the Government have under consideration a scheme for forming a State approved society for deposit contributors under the National Insurance Act, 1911; and, if so, whether he is now or has been in consultation with collecting societies and friendly societies concerning the formation of the scheme?
I would refer the hon. Member to the reply given on the 17th instant to the hon. Member for Pontefract.
London Insurance Committee (Panel Fund Surplus)
asked if any decision has been arrived at by the medical benefit sub-committee of the London Insurance Committee in regard to the distribution of the panel fund surplus; and, if so, whether insured persons who have paid private fees in addition to their compulsory contributions for medical benefit, will have their contributions repaid to them out of the said surplus?
My right hon. Friend understands that the London Insurance Committee are still considering their decision as to the precise method of distribution to be adopted. The rest of the question does not, therefore, arise.
Enforcement of Payments (Scotland)
asked the Chancellor of the Exchequer if his attention has been called to a recent decision in the Edinburgh Court of Session, on an appeal before a full bench of judges, to the effect that it is impossible for the Scottish Insurance Commissioners to enforce payments under the Insurance Act in cases where both the employer and the employé refuse information; and, if so, whether he proposes to take any action in the matter?
As I stated in reply to a similar question on Monday last, the decision referred to has no such effect as that suggested, but merely dealt with the question whether the evidence in a particular case was sufficient to warrant a conviction.
Collective Arrangements
asked the hon. Member for St. George's-in-the-East, as representing the Insurance Commissioners, whether he is aware that the British Medical Association offers opposition to workmen who desire to make their own collective arrangements under Section 15, Sub-section (3), of the National Insurance Act, and that the General Medical Council places a ban on any doctor who contracts to work under such collective arrangements; that it is made imperative upon every member of a collective arrangement under Section 15, Sub-section (3), to resign a very complicated statutory form every year, notwithstanding he has no desire to change his doctor or scheme; whether he will take steps to so amend the Act as to make it easier for such collective arrangements to be made and established; and whether a doctor who has accepted service on a panel has any limit to the number of patients, and, if not, will he take steps to set such a limit?
With regard to the earlier part of the question, if the hon. Member will give particulars of the cases he has in mind I will make inquiries. With regard to the last part of the question, a doctor on the panel is under an obligation to give proper attendance to all the insured persons requiring treatment for whom he is responsible; and the Regulations provide for the removal, in certain circumstances, of insured persons from the list of a doctor who has assumed a greater responsibility in this respect than he can fulfil. The whole matter is, however, under consideration.
Drug Fund (Glasgow)
asked the hon. Member for St. George's-in-the-East, as representing the Insurance Commissioners, whether the drug fund in Glasgow has turned out £2,000 short for the first quarter of this year, with the result that the chemists on the panel there have been forced to accept a reduction on their accounts of 25 per cent.; whether this sweeps away the whole margin of the profits of these chemists; and what remedy he proposes to adopt to remedy this state of affairs?
The chemists in the area referred to have been paid in full for the period ending on the 14th March last, but I would remind my hon. Friend that the state of the drug fund cannot be finally ascertained until after the close of the medical year, and any payments in the meantime are in the nature of advances.
Do I gather that the 25 per cent. will not be taken off these accounts?
For the period named by my hon. Friend the chemists' accounts have been settled in full.
Central Administration (Cost)
asked the hon. Member for St. George's-in-the-East, as representing the Insurance Commissioners, whether the cost of central administration and audit and the expenditure upon management by the approved societies amount together to a sum equivalent to more than one-third of the benefits annually payable under the Act; and whether the average rate of management expenditure by friendly societies before 1911 amounted to not more than one-eighth of their benefit payments?
The actual expenditure on administration by all approved societies is not at present ascertainable, but on the assumption that all societies spend on administration the maximum allowed under the Regulations (which is not, in fact, the case) the total expenditure on administration referred to in the question would amount to about one-fifth of the cost of benefits under the National Insurance Acts. The Returns made to the Registrar of Friendly Societies before the passing of the National Insurance Act appear to indicate that the cost of administration by the friendly societies bore a considerably higher proportion to the cost of benefits than is suggested in the question.
I understand that the first part of the answer includes the cost of central administration and audit?
It does.
Inspectors
asked the hon. Member for St. George's-in-the-East, as representing the Insurance Com- missioners, whether Mr. Levershon, of Newcastle-on-Tyne, is an inspector or otherwise employed by the English Insurance Commissioners?
The answer is in the negative.
Transfers
asked the hon. Member for St. George's-in-the-East, as representing the Insurance Commissioners, whether, in a case where an insured person claimed to transfer from his approved society on the ground that he wished to take his State insurance through his trade union approved society, the English Insurance Commissioners have enforced the claim to transfer; whether they have declined to enforce a claim to transfer by an insured person who gave as his reason that he wished to take his State insurance through the State sections of a society in which he is insured on the voluntary side; and what is the reason for the differentiation in favour of trade union approved societies?
I do not know to what cases the hon. Member refers, but no such preference has been given to any type of approved society. Each case of disputed transfer is decided after consideration of the statements of the society and the insured person.
Can the hon. Gentleman say whether it is a fact that there have been decisions by the English Commissioners allowing transfers to a trade union approved society on the ground that the man was a member of a trade union and wanted to have his State benefit from the same society?
Perhaps the hon. Member will give me notice of any particular case he has in mind.
May I call the hon. Gentleman's attention to the question on the Paper, which specifically asks whether a decision has been given in these circumstances?
I stated in my answer that the cases to which the hon. Gentleman referred are not known. Perhaps he will give the names, and then I will make inquiries.
Do not the trade unions complain of friendly societies and companies taking away their members?
The admission and transfer of members do give rise to disputes, which have to be settled by the Commissioners.
Questions
Regent's Park (Advertisement Hoardings)
asked the hon. Member for St. George's-in-the-East, as representing the First Commissioner of Works, whether his attention has been called to three advertisement hoardings which have been put up in Regent's Park, near the Regent's Canal, in close proximity to the bridge carrying the Albert Road across the canal to the south of St. Mark's Square; and, if so, whether he proposes to take any action in the matter?
The First Commissioner is making inquiries as to his power in this matter.
Will not the First Commissioner, quite apart from any powers he has, make representations to the company that these hoardings interfere with the amenities of the park?
The First Commissioner is making inquiries as to whether he has power to order it to be stopped. That is the first step.
Housing Bill
asked the Prime Minister when it is proposed to introduce a Housing Bill to take the place of the housing provisions now excluded from the Revenue Bill?
I hope that this Bill will be introduced next week.
Agricultural Labourers (Minimum Wage)
asked whether the Government propose to appoint district land commissioners, who will themselves fix a minimum wage for the agricultural labourers in their district; and, if so, what approximately will be the size of the districts which such commissioners will administer, and what will be the salary that they will receive?
I am not prepared at present to announce the details of the Government's proposals for dealing with this subject.
Does it approximate to the proposals which have hitherto been made by the Government?
I think so.
Checkweighing Bill
asked the Prime Minister whether, in view of the opposition likely to be encountered by the Checkweighing Bill, he will take an early opportunity of saying whether it is intended to proceed with that Bill this Session?
My right hon. Friend is not aware of any opposition to the Bill. I am unable to say at present whether time can be found for it.
State Employés
asked if the tribunal which it is the intention of the Government to set up to inquire as to the future relations of the State and the men employed in the Royal dockyards and other State employés will be by a Royal Commission; and, if not, what is to be the form of the inquiry and when it will be inaugurated?
The inquiry will be instituted as soon as possible. The form it should take is still under consideration.
Plumage Bill
asked the Prime Minister whether he can inform the House on what day the Plumage Bill will be proceeded with?
asked the Prime Minister when he proposes to take the Report stage of the Importation of Plumage (Prohibition) Bill?
I fear I am not at present in a position to make any statement on the subject.
Will the right hon. Gentleman take into consideration, in arranging for the Report stage of this measure, the number of days it occupied in Committee and the likelihood of it being longer on Report stage?
Will the right hon. Gentleman consider suspending the Eleven o'clock Rule, so that obstruction may be defeated?
Civil Service (Royal Commission)
asked the Prime Minister whether he has now considered the Report of the Royal Commission on the Civil Service; and, if so, what steps he proposes to take towards carrying out its recommendations?
The Report is still under consideration, and I can say nothing further at present.
Is the right hon. Gentleman aware that there is considerable discontent amongst large numbers of Government employês, and the longer the right hon. Gentleman delays the action he intends to take the worse it is?
It raises a number of very complicated matters which require very careful consideration.
Education Bill
asked whether it is still the intention of the Government to introduce an Education Bill this Session; and, if so, whether it will contain the comprehensive proposals outlined by the President of the Board of Education in his speech on the Education Bill that was introduced and withdrawn last July?
The answer to the first part of the question is in the affirmative. As regards the second part, I am not prepared to anticipate the terms of the Bill.
When will the Bill be introduced?
I cannot give the exact date, but it will be soon.
British Army
Bedfordshire Regiment (Small-Pox)
asked the Secretary of State for War (1) whether he is aware that an outbreak of small-pox has been reported amongst the members of the Bedfordshire Regiment whilst stationed at Pretoria; whether he will give the names of the men attacked, the dates of their vaccination and revaccination, and the dates of their attack by small-pox; and (2) whether, with the further proof of the failure of vaccination and revaccination to prevent small-pox, as demonstrated by the recent outbreak of that disease amongst members of the Bedfordshire Regiment at Pretoria, he is now prepared to recommend the recognition of conscientious objection to vaccination in the Army in the same way as obtains in civil life and in the Territorial Force?
So far as the Army Council are aware, only one case of small-pox has occurred in the Bedfordshire Regiment at Pretoria. The man had undergone primary vaccination on enlistment in October, 1906. The case occurred in May, 1914, and the man had not been revaccinated since 1906. In the circumstances, no change in the present regulations in regard to vaccination appears to be called for.
Cavalry Mounts (Alberta)
asked the Secretary of State for War whether he can give the House any particulars of the lease of 65,120 acres of grazing land, south of the Red Deer River, in Alberta, to the National Livestock Exchange, Limited, of Montreal, for the purpose of raising Cavalry mounts for the British Army?
Under the lease which has been granted by the Canadian Minister of Militia and Defence, the Government of Canada has a right of preemption in respect of all horses raised, and the company must hold and mature all horses which the Minister of Militia may desire for Militia purposes. A maximum purchase price has also been fixed. It has been further arranged that the British War Office may exercise preemption rights if they desire to do so at the same price and terms in respect of such horses as remain after the Canadian Minister has made his choice.
Will the right hon. Gentleman consider the advisability of giving a breeding station nearer home?
We have a breeding station at home in this country.
Will the right hon. Gentleman consider the advisability of getting more?
I will consider that, but I do not think there is any necessity.
Houses Closed or Demolished
asked what was the number of houses closed or demolished during the years 1909 to 1913, respectively; under what Acts they were so closed or demolished; and the number dealt with under each Act?
The Command Paper 7206, on Housing and Town Planning, contains on pages 3 and 4 the information which the Local Government Board possess in regard to the closing and demolition of houses under the Housing Acts. Information is not available as to the number of houses closed and demolished under the Public Health Acts or under local Acts.
Questions
Anglo-Persian Oil Contract
asked the First Lord of the Admiralty whether the possibility that Kasr-i-Shirin might be adjudicated to Turkey by the Boundary Commission had been foreseen and provided for by him; and, if that possibility has been realised, or is likely to be realised, will there be any invalidity of any part of the concession from Persia at present in the possession of the Anglo-Persian Oil Company?
My attention has been called to a statement in the "Times," to which, I presume, the hon. Member refers. Kasr-i-Shirin, which has been in the de facto occupation of Persia for ninety-two years, was awarded to her de jure by the protocol signed at Constantinople last November by the British, Russian, and Persian Ambassadors and by the Grand Vizier of Turkey. I understand that my right hon. Friend the Secretary of State for Foreign Affairs hopes to lay this document, with other Papers and maps, early next month. Chia Surkh, where the Anglo-Persian Oil Company have wells, has been transferred to Turkey, but the rights of the Anglo-Persian Oil Company in the "transferred territories" have been fully safeguarded, and they have acquired the additional privilege of constructing pipe-lines through Ottoman territory to the sea. I must point out, however, that the prospective development in new places to which His Majesty's Government must look forward for the purposes of Admiralty supply is in the South of Persia, especially in what is called the British Sphere and on the islands.
May I ask the right hon. Gentleman if that pipeline to Bagdad will be protected by the Turkish authorities, and if they will receive any royalties for doing so from the company?
That is rather an indefinite extension of the question which my hon. Friend has put on the Paper, and I must ask for notice of it.
I understand the right hon. Gentleman to say de jure. Is it not de facto ?
No, Sir. With regard to the first-named place, for ninety-two years it has been de facto, and continues de facto, and now it is also de jure.
Trade Dispute—Burton-on-Trent—Charge of Assault
I desire to ask the Home Secretary a question which I put to him yesterday, namely, Whether his attention has been called to the case of Mr. Vale Rawlings, of Burton-on-Trent, who was sentenced to fourteen days' imprisonment for an alleged assault during a trade dispute on Inspector Oulton, of the borough police; whether the only evidence against him was that of two constables, whereas six independent witnesses were called who denied that there had been any assault; whether the magistrates who heard the case were themselves employers of labour; and whether he will order suspension of the sentence pending an investigation into all the circumstances by some independent authority?
I telegraphed yesterday for a report from the magistrates in this case, and I understand from a telegram which I have received this morning that the report is now on its way. As soon as I receive it I will look carefully into the case. I have since been informed that the report will reach me to-morrow morning. I will look into the case at once.
Labourers' Strike, Cambridge
May I ask the right hon. Gentleman a question, of which I could not give him private notice, namely: Whether he is aware that constables have taken the place of labourers on strike at Cambridge, and whether he will make inquiry into this, and, if found to be correct, withhold the Grant in respect of these constables?
I have no knowledge of any circumstances such as are alleged by the hon. Member, and I could not, without notice, take any action on that question—in fact, I rather doubt whether my powers would enable me to do so.
I will raise this matter on the Adjournment to-night.
I hope the hon. Member will not raise it to-night. If he will raise it to-morrow, it may be possible to give him an answer on the question, and also with respect to the case of Mr. Vale Rawlings.
Civil Service Commission (Procedure)
I desire to ask a question, of which I have given private notice, namely: Whether any White Paper has been issued to the public or the Press containing the evidence given before the Royal Commission on the Civil Service, and, if so, why has it not been circulated to Members of the House?
I have made inquiry, and I am informed that the Royal Commission on the Civil Service places on sale from time to time through the Stationery Office instalments of the Minutes of Evidence given before them. This is in accordance with practice, and no exception has been taken to it. The Minutes of Evidence are embodied in the publication. I shall be glad to consult the Stationery Office as to whether the Report can be issued to those Members who express a wish to have it.
May I ask the right hon. Gentleman if he will use his influence with the Secretary to the Treasury, seeing that these Royal Commissions take evidence on which legislation is to be based sooner or later, to see whether that evidence cannot be put in the Pink Paper day by day as it comes out?
I will consult with my hon. Friend.
Standing Committees (Procedure)
I desire to ask you, Mr. Speaker, a question, of which I have given private notice, namely: Whether, in view of the fact that the Chairman of a Standing Committee announced to-day that he would report to the Committee of Selection in order to secure their removal from the Committee certain Members whom he alleged refrained from entering the Committee Room to make a quorum, you can inform the House if the Committee of Selection has power to remove from a Standing Committee the opponents of any Bill merely because there are not on the Committee sufficient supporters of the Bill to make a quorum; whether it is legitimate in the case of a Bill so inadequately supported to give absolutely unprecedented facilities for its passage into law; whether it is competent for you, Mr. Speaker, when a count has been called in the House, to take cognisance of or to visit penalties upon Members who refrain from entering the Chamber to make a quorum; and, if no such powers are vested in you whether such powers can be claimed or exercised by any subordinate authority?
The Chairman of a Committee has no power to make any official Report except such Report as is passed by the Committee. He acts as the mouthpiece of the Committee and can only report that which the Committee orders him to report. The Committee of Selection have power from time to time to discharge for non-attendance. They have power—I am reading now from Standing Order 48—"to discharge members from time to time for non-attendance or at their own request, and to appoint others in substitution for those discharged." I do not suppose that the Committee of Selection would discharge members from attendance on the Committee simply because they were opponents of the Bill. They would discharge them if they found on investigating the facts that there was constant non-attendance. Then with regard to the hon. Member's question as to counts, I have no power to compel hon. Members to come into the House, nor would I like to exercise it.
Would you consider that it is a proper course for the Chairman of the Committee to threaten penalties upon certain members of a Committee whom he has not himself seen, and whose names could only have been brought to his notice by officials of the House or by the supporters of a particular Bill?
I must not pronounce any opinion in regard to the conduct of Chairmen of Committees. They are responsible to the Committees for the way in which they carry on their business, and are not responsible to me.
Are we to understand from your ruling that the threat which was made by the Chairman in Committee to-day was a mere brutum fulmen, and had no effect whatever?
The Chairman of the Committee is not here. I have no jurisdiction over him whatever.
The Chairman has no power to make any Report except as the mouthpiece of the Committee, and as the Committee was not constituted I presume that we may take it for granted that the announcement made was of no effect whatever?
What I said was that the Chairman of the Committee did not make any official Report. I cannot stop the Chairman gossiping with the Committee of Selection, like other people.
As I do not see the Chairman of the Committee of Selection here, may I say that the Committee of Selection passed a Resolution that they would neither alter nor change the name of anybody on the Committee, except in the case of severe illness.
Then I ought to point out to the right hon. Gentleman that probably they have violated the Standing Orders.
May I ask if you have any power to govern the attendance of those Committees? The point I want to bring to your notice is this: You know, and all the Members of the House know, the great difficulties that private Members have in getting Bills sent up to a Committee, and that when they go up to a Committee their progress depends upon a quorum. Already this year a large number of the Committees upstairs have been unable to get a quorum, and so the Bills for which private Members have had such great difficulty in securing a Second Reading in this House have been delayed. There are a great many Members of the House who do not desire to attend, and a great many others who would be quite glad to attend if they were asked to attend. I myself would be glad to attend, and so would other private Members. My point is that there is a large number of Members sitting in the Library in the morning, doing their own work, who would be perfectly glad to be on those Committees and provide the quorum necessary to do the business of this House. I submit that it is most unfair to private Members of this House who have great difficulty in getting their Bills through that they should be deprived of the opportunity of having those Bills discussed upstairs, simply because the Committees are made up of Members who do not desire to attend.
I am the last man who would wish to pass any criticism upon the conduct of Members not attending these Committees. I simply say that there is the general duty cast on Members to attend the Committees on which they are appointed, and if they cannot attend for any particular reason, public or private, their proper course is to inform the Committee of Selection that they cannot attend, and I have no doubt that the Committee of Selection, if they are informed that other hon. Members are ready and anxious to attend, and have the opportunity, would be very glad to avail themselves of their services.
Might I ask if you are fully seised of all the facts, that on two occasions hon. Gentlemen at great inconvenience to themselves, have come down to this House in order to discuss the Dogs Bill, and have been disappointed by the failure to obtain a quorum, while it is notorious that many opponents of the Bill were clustered together in mysterious corners, eligible to make a quorum, but hesitating to enter? May I appeal to them to come in like men and fight out this Bill in Committee instead of hiding in these mysterious corners of the House like the slaves of a seraglio?
Arising out of the point submitted, may I say that the Selection Committee for at least two Sessions now have passed the Regulation to which the hon. Gentleman referred? I presume that that Resolution was reported by the Chairman of the Committee to this House, and that this House endorsed the Regulation framed by the Selection Committee. Will that, therefore, constitute a modification of the Standing Order to which you have directed the attention of the House?
May I ask whether it is not a fact that this Regulation has only been in operation for the last two years, and that it is during that time that there has been a difficulty in getting a quorum on these Committees, and whether that Regulation was not passed in order that the composition of the Committee might not be altered and that people who want to get on those Committees might be kept off them?
I do not know what the reason is which induced the Committee of Selection to pass that particular Regulation. I can only read again what the Standing Order says: namely, "that the Committee of Selection shall have power to discharge Members from time to time for non-attendance." That means that the House contemplated that there might be occasions on which the Members would not attend, and that the corrective for that was that the Committee of Selection should discharge them. It leaves it to the discretion of the Committee of Selection whether it will discharge them or not. If the hon. Member asks me what my personal opinion is about it, I think that the Committee of Selection ought not to shuffle off their responsibility. They ought to have maintained it. I do not wish to be taken too strictly upon that, because I have not heard the reasons which actuated the Committee of Selection in passing that particular Resolution.
In regard to the Scottish Standing Committee, and the Scottish Members appointed by virtue of the fact that they are Scottish Members, would it be within the competence of the Committee of Selection to discharge Scottish Members from that Standing Committee for non-attendance?
I think that the powers of the Committee of Selection with regard to discharge are limited to the fifteen extra members who are appointed.
In reference to members who have not attended the Committee, may I point out that Committee A has nearly 100 members upon it, and that only fourteen were present. Would the Committee of Selection have power to discharge all save those fourteen? With regard to the alleged facts in possession of which the hon. Member for Clare sought to put you, might I say that a few of the opponents of the Bill were whipping in the Lobby outside, and waiting for their supporters when the Chairman prematurely adjourned the meeting before their supporters at length arrived.
The hon. Member who has just spoken was outside the Committee Room this morning, and he and several others chose not to go in to make a quorum.
These are not matters for me at all; they are matters under the control of the Chairmen. The Chairmen are really responsible in regard to the Standing Committees.
Should I be in order in moving the Adjournment of the House on a definite matter of urgent public importance?
Does the hon. Member think the passing of the Dogs Bill a matter of urgent public importance?
My point really is this: I shall not move the adjournment if there be any means of getting some satisfaction. As a matter of fact, any Member looking at the Committees upstairs this week would have seen a Member of the Cabinet now sitting on the Front Bench scouring the Lobbies for two days in succession trying to get a quorum for a Government Bill. It is a scandalous state of affairs that this House, after passing the Second Reading of a Bill cannot furnish a quorum for ten minutes' work. May I point out that there are a great many of us who are willing to go upstairs and sit on Committees and see that the Government business is got through. May I ask you, Sir, if you can suggest some means by which those members willing to serve can find readier access to those Committees than through the present channels?
May I say one word in explanation of the Sessional Order, about which some misconception appears to have arisen. It was not passed for the purpose of preventing members from getting on the Committees, but simply and entirely because, after a Bill had begun, it sometimes happened that some members wanted to get on the Committee, and they persuaded other members on the Committee to make room for them. That was considered a manifest injustice, because it opened the door for simply filling the Committee with those particular supporters of a Bill. This Sessional Order only applies in the case of Bills that have been begun in Committee and nothing else. It is a Sessional Order that has been reported every Session, and it is therefore of course open to the House to discuss it. That is a simple explanation of the Rule which was passed by the Committee.
I cannot carry it any further than to say that there is a general duty upon members appointed to Standing Committees to attend. Their duty is, as far as it is in their power, to attend these Committees and see that the work of the House is carried through. At the same time I may perhaps make the suggestion that this would be a fit and proper subject for the Committee which is now sitting on Procedure to consider. They may be able to produce some solution of the difficulty.
Finance Bill
Tuberculosis Treatment
asked the Chancellor of the Exchequer in what proportions the £750,000 proposed for the extension of the tuberculosis arrangements to dependents of insured persons, tuberculosis laboratories, and nurses is to be divided amongst the three items mentioned; and whether it is intended to introduce legislation on the subject this Session?
It is proposed that of the sum referred to £400,000 should be allocated to tuberculosis services, £250,000 to nursing, and £100,000 to pathological laboratories. As regards the latter part of the question, I would refer the hon. Member to the reply which my right hon. Friend gave him on this subject on the 16th instant.
Have these Grants been abandoned or are they included in the Amended Budget?
They have not been abandoned, but they are not in the Finance Bill.
Relief in Aid of Education (Scotland)
asked the Chancellor of the Exchequer whether, under the provisions of the Finance Bill, the additional relief to ratepayers in aid of education in Scotland will be subject to the condition that the benefit of such additional relief shall be first given in respect of rates charged on the houses, buildings, or other improvements on land, or whether this condition only applies to additional relief in respect of local services other than that of education in Scotland?
The condition referred to applies to the proposed new Grants for Scottish education, as well as to the proposed new Grants for other Scottish services.
Public Health Services
asked the Secretary for Scotland if he will give a definition of what services are included under the term public health purposes, as mentioned in Part II. of the Second Schedule of the Finance Bill?
The hon. and gallant Member will see on reference to the Schedule that the language is very general.
Questions
Grants to Local Authorities
asked the Prime Minister whether, in view of the decision of the Government to withdraw the promise of Grants to local authorities, he will arrange for any costs which local authorities may have incurred in obtaining information at the request of the Local Government Board in respect of the classification of roads to be refunded from the Imperial Exchequer and not placed upon the rates?
I should like to ask the right hon. Gentleman if he is aware that local authorities in preparing those plans and information have incurred little cost?
The Prime Minister has asked me to reply to this question. No such decision has been arrived at by the Government and the point therefore does not arise.
Will the right hon. Gentleman favourably consider any applications made to him?
I understand the expenses are extremely small. Hardly any local authorities have raised the point. The Rural District Councils Association have promised their most cordial co-operation in the classification of roads.
How have local authorities had time to raise the point?
Education Grants
asked the President of the Board of Education when the regulations for the allocation of the new Grants for necessitous areas and the provision of meals will be published?
The regulations are with the printers, and their publication may be expected this week.
Is the right hon. Gentleman aware that twice in the last month he has told me we may expect the publication of these regulations at once?
I do not think I ever used the words "at once." I may have said "shortly," which is rather a vague word.
Procedure: Mr. Speaker's Ruling
I desire to ask you, Mr. Speaker, a question arising out of a recent discussion in this House. On Monday last the President of the Local Government Board said:—
"The Government have decided to invite the House, after the Second Reading of the Bill, to pass an Instruction which should also include the minor points on which you, Sir, have made reference this afternoon, and to divide the Bill into two parts, the one part dealing with all the provisions relating to the new taxation and the National Debt, and the other part consisting of Part IV. of the Bill, and the Schedules that attach it—that is to say, the parts of the Bill that deal with the new Grants to local authorities."—[OFFICIAL REPORT, 22nd June, 1914, cols. 1589.]
I wish to ask whether there might not arise some difficulty as to the course which the Government have announced their intention to pursue. Earlier in the afternoon you were good enough to point out to the House that Part IV. was not yet part of the Finance Bill at all, and will not be part of the Finance Bill under any circumstances, unless and until a Committee of the House, after proper Resolutions have been passed, insert these Clauses in the Bill. In these circumstances, I wish to ask whether it would be possible to pass an Instruction to the Committee to divide the Bill into two parts, one part of which should consist of Part IV., which does not yet exist. Until Part IV. has been put into the Bill you cannot take it out, and, therefore, it would be impossible to pass an Instruction directing the Committee to divide the Bill into two parts, one of which has no existence.
If the Instruction were taken before the Resolution, of course the Instruction could not be carried out until these Clauses were in the Bill. If the Resolution be taken first, and the validity of Part IV. is established, it will be open to the House to pass an Instruction to the Committee to divide the Bill.
Will the Clauses in Part IV. be inserted in the Bill by the Resolution, or will they have to be inserted in the Bill in Committee after the Resolution has been passed authorising the Committee so to insert them?
The passing of the Resolution would enable the Chairman, when a Committee reached Clause 13 (I think it is), to call Clause 13 and deal with it. The Committee could either deal with it there and then, or postpone it in order to put it into a divided Bill. Of course, the Resolution must come first; otherwise the Chairman has no power to call Clause 13 at all.
In connection with the same question, as I understand the matter, if the Bill were not divided and a Resolution were passed under which these Clauses in italics could be inserted in the present Bill, it would be necessary for the Chairman when the Clauses were reached to put the question, "That the Clause be read a second time," as a preliminary question.
No, he simply would call Clause 13, and then take the Amendments, if any. But until the Clause has been validated by the Resolution he would not be entitled to call the Clause at all. The Clause being in italics is not there, and he could not see it. By the Resolution you turn the italics into ordinary print.
I do not quite understand what is the exact position of these Clauses. They do not exist in the Bill, and I ask how can they get into the Bill unless they are put in by the Committee in charge of it?
It is nothing novel. We have these Clauses in italics about once a week, but still the actual position is this: They are there for Second Reading and not for the Committee—that is to say, no questions can be put on them in Committee until they are sanctioned by a Resolution of the House. It is a matter which comes up often in Standing Committees, and the Chairman of the Committee has no power to put any questions in regard to Clauses in italics until they are sanctioned by a Resolution passed here. It is not necessary to put the Question: "That the Clause be read a second time."
Private Bills
Newport Corporation Bill
Reported, with Amendments, from the Local Legislation Committee (Section B); Report to lie upon the Table, and to be printed.
Electric Lighting Provisional Orders (No. 7) Bill,
Reported, with Amendments [Provisional Orders confirmed]; Report to lie upon the Table.
Bill, as amended, to be considered Tomorrow.
Selection (Standing Committees)
Sir Daniel Goddard reported from the Committee of Selection; That they had added the following Member to Standing Committee A (in respect of the Ready Money Football Betting Bill and the Prize Competition (Prohibition) Bill): Sir Cuthbert Quilter.
Report to lie upon the Table.
Message from the Lords
That they have agreed to:—
Local Government Provisional Orders (No. 4) Bill,
Local Government Provisional Orders (No. 5) Bill,
Local Government Provisional Orders (No. 6) Bill,
Local Government Provisional Order (No. 7) Bill,
Coombe Street (Exeter) Independent Chapel Charity Bill,
Foleshill Road (Coventry) Congregational Chapel Charity Bill,
Horsforth (West Riding) Baptist Chapel Charity Bill,
Marden (Kent) Congregational Chapel Charity Bill,
Old Sleaford (Lincolnshire) Chapel Charity Bill, without Amendment.
Rhondda and Swansea Bay Railway Bill,
Ashington Urban District Council Bill, with Amendments.
Amendments to:—
Butterley Company Bill [ Lords ], without Amendment.
Old Age Pensions Acts (Amendment) Bill
I beg to move, "That leave be given to introduce a Bill to amend the Old Age Pensions Acts, 1908 and 1911."
On behalf of my colleagues I ask leave to introduce this Bill, the object of which is to ease the provisions of the Acts, so far as applicants for old age pensions are concerned. In the first place, we do not wish to alter in any way the administrative provisions of the Acts in question, because with those, on the whole, we are fairly well satisfied. I believe that the Old Age Pensions Acts, through the committees and pension officers are, on the whole, administered with discretion and sympathy, and I am all the more ready to say it in regard to the pension officers because I was rather sceptical as to the use of the Inland Revenue for these purposes. But the administrative authorities cannot travel outside the scope of the Acts. We think that the Acts are rather defective in three particulars. First of all, we propose to reduce the pensionable age to sixty-five; and, secondly, we want to exclude from reckoning of income all income of the applicants for old age pensions from other sources, such as superannuation by a trade union or friendly society, or an old soldier's pension, and things of that sort. In the third place, we propose to alter the rate in respect of other income from possessions, in favour of the applicant for the old age pension. In regard to the present pensionable age, which is seventy, we submit that it is too hard. We think that a man or woman, who has spent his or her life in the industrial ranks and in the workshop, at seventy years of age finds strength diminishing and intellect weakening as they taper towards the inevitable end. We believe that men and women, before the age of seventy, are entitled to some recognition. This proposal does not involve a corresponding increase of cost, because if a worker at sixty-five is in good health and capable of continuing his work, he is not likely to throw up his wages in order to secure 5s. a week. But we do think that a man or woman at the age of sixty-five ought to have a chance of claiming the old age pension, and be put in a position to crown years of labour with some days of ease. In our own Australasian Dominions, where there is not so much money going as there is here, no less than 100,000 old age pensioners, at the age of sixty-five, have been put on the pension list at 10s. a week. What Australia can do we also should be able to do. It may be said that the Insurance Act rather alters the position, and betters it so far as old people are concerned; but in respect of that I want to point out that, after all, a person cannot get paid under the Insurance Act unless that person has benefit for illness or disablement. We suggest that a man or woman should not have to wait for the old age pension until he or she has one foot in the grave, and I think I have said enough to show the need of the reduction of the. age from seventy to sixty-five. In regard to the second point, there is stronger feeling in the ranks of labour than in regard to any other part of the Act. Members of trade unions and friendly societies feel very strongly that they are placed in a disadvantageous and unfair position as compared with other men who have not enrolled themselves in some society. I submit that those men for whom I speak, instead of being unfairly treated as compared with other men, ought to be treated better.
They are men who have saved, in the best of all possible ways of saving, by pooling their savings in their working life so as to maintain the standard of life. Yet when they arrive at seventy years they are placed at a disadvantage as compared with the men who may have saved selfishly and in isolation. Let me take the concrete case of a member of a friendly society or trade union or both, and here may I say that the best of the working people of this. country are in both. Such a man may find himself at seventy years of age in possession of a superannuation allowance of 12s. 2d. per week, and is not therefore entitled to an old age pension. The actuarial value of that 12s. 2d. is probably a little under £200, and the 12s. 2d. dies with him. The man who has saved £200 and who is not in a trade union or friendly society or anything of that sort may be in possession of 12s. 2d. for the remainder of his life, and is entitled to an old age pension, because the Act prescribes that one-twentieth of it only shall be taken as his income from possession. Or, he may take only five per cent. of it, leaving it intact to bequeath at death, and meantime get his pension. I submit that is un-'f air to the man in organised labour and to the man in a friendly society. For our part we are disposed, too, to lump in also the man who has served his country as a soldier or a sailor, and who may be in receipt of a small pension because of his services to his country while in health and strength. We propose that he should be put in the same category as the member of the friendly society or trade union who gets his pension because he has saved up, pooling with his fellows during his working life. We propose that all those pensions should be put on one side and excluded from reckoning the man's income when he applies for an old age pension. The third point is a very simple one. It has regard to the amount which a man is supposed to have as income from possessions. The Old Age Pensions Act was altered, as we think for the worse, three years ago. Prior to that a man was deemed to have the income actually derived from his property, while a man is now supposed to be in possession of an income equal to one-twentieth of his property, or 5 per cent. That assumes that the old age pension applicant is a sort of financier who knows how to put his money out to advantage, while, in fact, he is nothing of the sort. The old age pension applicant has probably got his small sum in the Post Office, which gives not 5 per cent., but 2i per cent. We propose to make the Act correspond more closely with the actual facts. I submit that in all these three respects this Bill would be an improvement on the existing Acts, and therefore beg leave to move.
I would point out that so far as I have been able to gather, this Bill would impose a considerable charge, and that being so it ought to start by Resolution in Committee. As it is not printed, it is not. possible for me to decide now, but the hon. Member must not be disappointed if, when I see it in print, I rule that it ought to be started in Committee by Resolution, and that therefore it cannot proceed further.
On that point, may I say I have not revealed where the money is to come from.
We can fairly well guess.
Question put, and agreed to.
Bill ordered to be brought in by Mr. Barnes, Mr. Gill, Mr. Bowerman, Mr. Jowett, Mr. O'Grady, and Mr. Arthur Henderson. Presented accordingly, and read the first time; to be read a second time upon Monday next, and to be printed. [Bill 295.]
Orders of the Day
National Insurance Act, 1911 (Part Ii. Amendment) [Money]
Resolution reported,
"That it is expedient to authorise the payment, out of moneys provided by Parliament, of any additional sums which be required for the purposes of any Act of the present Session to Amend Part II. of the National Insurance Act, 1911."
Resolution agreed to.
Finance Bill
Local Authorities (Grants.)
Order read, for resuming Adjourned Debate on Amendment [ 23rd June ] to Question [ 22nd June, ] "That the Bill be now read a second time ":—
Which Amendment was to leave out from the word "That," to the end of the Question, and to add instead thereof the words "this House, recognising the immediate right of the local authorities to substantial additional Grants in aid of national services locally administered, regrets that no provision should be made in the current financial year for that purpose, and that any provision to be made in a future year should be conditional on setting up a new system of valuation for rating purposes under the control of the Land Valuation Department and subject to conditions destructive of local autonomy."—[ Mr. Hayes Fisher. ]
Question again proposed, "That the words proposed to be left out stand part of the Question." Debate resumed.
4.0 P.M.
In approaching this question I desire to say, first of all, that I have great sympathy and commiseration with the Chancellor of the Exchequer, and I wish to deprecate the unkind things which were said yesterday by the hon. and learned Member for North East Cork (Mr. T. M. Healy). I do not look on the right hon. Gentleman in an apocalyptic light. I do not regard him as the man of sin or as the rider of the red horse, or as a kind of fiscal Attila designed to scourge the present generation. I think he is a man of wide benevolent sympathies, but gifted, perhaps, with a perfervid imagination and a tongue that is strikingly illustrative of the Epistle to St. James. Now that he has been forced to bring into liquidation the wasting assets of a water-logged enterprise, I will not grudge him a sympathetic tear. The position in which we find our selves at present is an unusual one. We have one Bill before us, and we are discussing four. We are discussing the Finance Bill No. 1, and what will be Finance Bill No. 2, and we are discussing the Revenue Bill, and they are all to hang on a fourth Bill, as to which the representative of the Government yesterday said he did not know what was in it, and would not say if he did. While the others depend on that Valuation Bill of next year, and because of that many of the Grants are not to be paid in this year, still, as we understand from the President of the Local Government Board, the scheme and the conditions are to be set up by the end of the present year. I want to put this to the Government—when do they really think the local authorities are going to touch any of these Grants? It all depends on the Valuation Bill. Let me suppose everything goes exactly as the Government wishes; that they have a quiescent House of Commons, and that there is no obstacle from another place, and that there is no General Election, and that no other inconvenient matters crop up. Even so, and granting them all those hypotheses, the Valuation Bill can hardly be expected to become law within about thirteen months. After the Valuation Bill is carried, how long will it be before the valuation is brought into effect? Let me again suppose that under the £50 blunderbuss of the Schedule of the Revenue Bill all the information is obtained in the autumn. The Valuation Department will not be able to act upon that information until the Bill is passed, as I say, some thirteen months, hence, and when you consider the task that has to be gone through, I do not believe there is the smallest chance of the local authorities touching the money until the year 1916–17, and probably not until the year after that. Because what have they to determine? They have, first of all, to bring all the existing valuations up to date. The existing valuations are calculated as on the 30th April, 1909. More than a quinquennial period has passed already, and much more will have passed before the Valuation Department can possibly get to work under this Bill. Therefore, they will have to record the two valuations, one as on the 30th April, 1909, and the other the current value for the time being. I take it that you will have to get four values. First of all, there is the existing annual value. I suppose that that will be retained, at any rate, for the purposes of Income Tax, and perhaps for other purposes; then there is to be the improvements value, then the land value, and then the new capital value. The relations between the improvements value and the capital value are exceedingly obscure. The President of the Local Government Board spoke on this subject, but further enlightenment is needed. The right hon. Gentleman said:— buildings relatively comparatively few, the improvements on the land will be less than in the case of arable districts. There the improvements value will be small, but until you know the sort of proportion that exists in any area between the improvements value and the land value, I submit that you cannot tell how this calculation will work out in practice. I do not want to be dogmatic on so difficult a point, but it is a question on which we ought to have some enlightenment. Then there is the question of appeal. Is there anything said about appeal? At present, in connection with the Land Duties of 1909, there is an effective appeal. In regard to local valuation there is also an appeal. Is there going to be an appeal in this case? If so, to whom? I do not think that it is unreasonable to ask these questions now. I remember a very good precedent. When questions of Irish finance were being discussed in 1897, the then Leader of the House, the right hon. Gentleman the Member for the City of London (Mr. Balfour), gave a full outline of the intended Irish Local Government Bill of the next year, in connection with the question of the division of rates between owner and occupier. If it was possible to do that then, it ought to be possible to do it now, and I think we are perfectly justified in not going further until we have vital questions of this sort answered.
Coming to the general question, I well remember the first Budget that I heard introduced in this House. It was the Budget of Lord St. Aldwyn in 1901. One Member after another of the then Opposition got up and denounced it on the ground of profligate expenditure. I remember in particular a most eloquent speech made by Mr. Morley, as he then was, denouncing in the most ruthless manner the extravagance of the Government of that day. He said that there were only two ways in which you could get economy: one was a rigid scrutiny of the Estimates, and the other "was a Chancellor of the Exchequer who was determined to effect economy. The House can judge whether either of those conditions is fulfilled at the present time. The amount of the Budget of that year was £187,000,000. A great part of that was purely war expenditure, which was met to the extent of £41,000,000 by loan. Taking the Estimates of that year, there were three main blocks, only one of which has gone down, namely, the Army. The Army Estimates in that year amounted to £30,000,000; they are now £28,845,000. In that year, although the Army Estimates were detached as far as possible from the war expenditure, there was a great deal of consequential expenditure, such as that involved by sending the Militia abroad, which was included in the Estimates. The Navy Estimates amounted to £31,000,000; they are now £51,000,000. The Civil Service Estimates amounted to £23,000,000; they are now £57,000,000. And yet that Budget, apart from the war expenditure, was denounced on all hands on the ground of reckless extravagance. What did the present Prime Minister say at the beginning of the new Parliament? He said:— clarum et venerabile nomen —has very justly pointed out that there are other items that you must take into account. For example, there are Appropriations-in-Aid. They are not like aerolites; they do not come down from heaven. They are expended and they are a source of revenue, and they ought to be entered on both sides of the account. There are also light dues. They do not fall on the community generally, but on some part of it. Then there is the question of insurance, with which my hon. Friend the Member for Chelmsford (Mr. Pretyman) dealt yesterday. How can you say, except by a play upon words, that compulsory insurance contributions are not a tax? If I were asked as an amateur to define a tax, I should say that it was a compulsory impost for public purposes; and these insurance contributions are compulsory imposts for public purposes which can be enforced by ordinary process of law. If you make these additions, you get a far more formidable total. You have Estimates amounting to £202,000,000; Appropriations-in-Aid, on last year's basis, are over £9,000,000; and if you take only seven-ninths of the insurance contributions—and that is not an accurate figure—you get at least £19,250,000 more; so that altogether, keeping on the safe side, the total expenditure now involved comes to over £230,000,000. I know that the Chan- cellor of the Exchequer will say that it is Members of the House of Commons who-are responsible. To some great extent I am disposed to agree. We ought to look after this question in some closer and more accurate way than we have done. But, on the whole, I do not believe that there will be any very great or striking reduction, at any rate, during the next two or three Parliaments. If it should be the lot of my right hon. Friend (Mr. Austen Chamberlain) to introduce Budgets in the future, I fear that his task will not be an easy one. Still, some reductions are possible.
In the first place, I think we ought to-begin with ourselves. I know that you cannot simply multiply £400 by 670, because there are Ministers' salaries to betaken into account. I think, too, that the case of really poor men will have to be met. Still, I am sure that there is a saving of £200,000 a year to be made there. Then there are certain items of expenditure on objects which, however excellent, however worthy, are luxuries all the same. In that category I put the work of the Development Commissioners and of the Road Board. Speaking for myself, however desirable and excellent these things may be, I would have both these bodies painlessly and pensionably annihilated. Then I come to aesthetic expenditure—on new public buildings, the beautification of London, the purchase of works of art, and soon—again very excellent objects, but luxuries. If I were Chancellor of the Exchequer, I would keep the First Commissioner of Works very severely in his place. In the fourth place, there is the immense and costly Valuation Department, which is apparently to be perpetuated. It is large enough now, and apparently it is to be made larger. Then some means ought to be devised for putting greater responsibility upon Departments. I am very heretical in one respect. As far as raising money from taxes in the year is concerned, I agree to the principle of annuality; but where the money is once appropriated for a specific object, I think that the present system of having to spend that money in that particular financial year is a very bad one. I am quite sure that it leads to abuses—that is to say, a spending Department, when there is some question of construction involved, is tempted to spend the money uselessly before the end of the financial year, in order that it may be in a better position for its representatives to talk to the Treasury in the next year. Say a certain amount is devoted to constructive work and is appropriated for that work and a frost comes on. It would be much better to let that money remain, always strictly appropriated to the same purpose, until the next financial year, than to insist upon its being spent in the current financial year or falling into the Old Sinking Fund, which is the last thing that any public official wishes to do. This is not only my own opinion. I talked the matter over a few years ago with an eminent French authority, M. Jules Roche, who agreed that the system, which prevails also in France, was a bad one. In Germany they have another plan. The Estimates Committee is able to mark certain items with the note, "This sum may be carried over." The system works perfectly well, there is no difficulty in auditing, and the money is spent when it is easiest and best for the work to be carried out. I think that that is a matter which ought to be seriously gone into.
Finally, I believe there ought to be some scrutiny of the Estimates. At present the Estimates afford an opportunity for raising questions of public importance which could just as well be done on some general Motion, put, say, one a week, "That Mr. Speaker do now leave the Chair," while the detailed Estimates could, I think, as some of them are now, be sent to small Special Committees. I do not place too much reliance upon this, but I think the experiment well worth trying. After all, the expenditure will be very large. We shall have to look to other sources to meet it. Hon. Members opposite know one thing in my mind, and therefore I will not dilate upon it. Low Import Duties for revenue will raise a very large sum, which we believe will be paid by the producer; but I would, besides this, have high Import Luxury Duties, which undoubtedly would be paid by the consumer. I believe that by far the best way to attack the income of rich people is to make them pay for their foreign luxuries; and if by chance some part of the revenue is sacrificed and the result is that luxuries are produced at home instead of abroad, certainly I should not regard that as against the general interest of the nation.
I break rather fresh ground. I believe that the right hon. Gentleman might go in for an Amusement Tax. I think amusements are a very proper subject for taxation. I would have the tax graduated so that those who indulge in the more expensive kind of amusements should, directly or indirectly, pay more. It is done in other countries and a sufficient revenue got. I am perfectly prepared to defend this proposal to my Constituents. Lastly, I believe that if you go on, raising nothing from Import Duties, you may have to come in the future to new and, to our idea, strange forms of taxation. If you go on simply on the present narrow basis of direct taxation, if you refuse Import Revenue Duties, you may be driven into very strange courses. I suppose hon. Members opposite would shudder at the name and sound of the word "monopoly"? They forget that a good part of the revenue of the country at present is derived from, the monopoly of carrying letters, and the rest. I believe the Chancellor of the Exchequer in future will have very seriously to consider whether it may not be necessary to follow the example of foreign nations, and secure to the State the profits on certain common articles of consumption. I go back—and I hope the House will pardon the digression from the immediate Amendment—to the subject which the Amendment specially sets forth. I have the very gravest doubt as to whether in ten years' time local authorities will be any better off for that Grant. I remember some years ago Sir Henry Meysey-Thompson, then a Member of this House, saying that he was in a room with the late Mr. Forster and other gentlemen somewhere about the year 1872. Mr. Forster was asked why he did not put a limit, or did not stick to the limit, which I think was at first proposed, of a threepenny education rate. Mr. Forster replied that the only reason he did not do it was that he was afraid if he put a threepenny rate as a maximum all the local authorities would at once spend up to it. If he had thought that they would go beyond the threepence, of course he would have insisted upon the limit. That is always the temptation and tendency of local authorities, but it is a new thing for the Government to encourage that tendency. From the Chancellor of the Exchequer's Budget Speech, but more especially from the remarks of the President of the Board of Education last night, I think we may take it for certain that it will be so. For instance, the Chancellor of the Exchequer, in opening his Budget Statement, said:— Again he says:— decide—that the one is to supply the information and to do the work, and that the higher authority is to enforce the decision? If so, I think the sooner it is known in the country, the better. What I fear from the whole of this Budget is that just as the friendly societies have been caught in the maw of the State, so also will the local authorities be. In one direction you have not attempted that policy; you knew better. The Grant to Ireland is to be given unconditionally. The Grant to local authorities in this country is hedged about with conditions that I believe, whether the Chancellor of the Exchequer intends it so or not at the present time, will have the inevitable result that local freedom, local interest, and local knowledge will be caught in the great wheel of bureaucracy, and will press out the local administration of the country. I am afraid that the whole of these schemes, brought forward at the fag end of a tired Parliament, present no general view of the national liabilities and resources, and I trust that at the last moment they will be abandoned by the Chancellor of the Exchequer, but that he will, at any rate, give to the local authorities that assistance which their duties already require, and which they can be well trusted to use.
The hon. Member, in the interesting speech to which we have just listened, in which he has travelled over very wide ground, has, I rejoice to think, brought the House back again to the general question which we have to consider. After all, our votes to-morrow night are to be given, nominally perhaps, on the Amendment before the House, but they have also to be given upon the point of the entire financial policy of His Majesty's Government. Upon that ground, at least, my vote will be given, and I hope to show before I sit down why it will be given, in spite of some minor differences I have to the policy of His Majesty's Government, without hesitation, to the right hon. Gentleman. The hon. Member has once more raised the question of our national expenditure as a whole—indeed, it is well, in view of the increase in our national expenditure, that we should very seriously ask ourselves where we are going, what road we are travelling, and whether the recent increases in our expenditure can or cannot be justified. The hon. and gallant Gentleman the Member for Chelmsford yesterday quoted some figures from my friend, Mr. Harold Cox, in which he points out that in the last six years the national expenditure has increased by something like £56,000,000. Of course that figure is accurate in the broad sense, but it requires a good deal of analysis. Analysis has in part been made in the previous Debate on the Financial Resolutions. I should be wearying the House if I reiterated the arguments in that connection at any great length, but I think the House will pardon if I remind hon. Members that if we are to take either the last six years—if you will—though I should prefer the last ten years—and compare the present financial year with the last financial year for which the party opposite were responsible—
1906!
I prefer to take 1904–5, because of the interval of the decade. If we are to compare the interval of the decade it shows a nominal increase of over £56,000,000; but as I ventured to point out to the Committee the other day, and as has been pointed out by others'—and admitted quite frankly by hon. Members opposite—it is only right that the great increase in the postal outgo should be deducted from that nominal increase. That increase, so far from being national expenditure is a sign that we are getting more profit to pay the nation's way. The postal profit during that period has increased, and instead of adding to the sum, we should really deduct the larger postal profit which has accrued. I do not propose to make that deduction, the deduction of profit, I mean, but I am entitled to point to that very considerable increase of £10,000,000 or £11,000,000. In 1904–5 the practice which we at that time vigorously denounced of not charging military and naval work upon the Estimates was of course practised. It accounts for about £7,000,000. That is a very serious item, which must in common fairness, be taken into account, yet I am bound to say in many of the Liberal organs of this country that has not been frankly acknowledged in the endeavour to make the growth of our naval expenditure appear as large as possible. There is another item, not called into account in the previous Debates, of which I venture to remind the House. It is a very serious thing, and it is that the cost of the living of Governments, like the cost of the living of individuals, has increased in that period. I do not pretend to give exactly and precisely a figure in this connection, but I do not think on the most moderate estimate you can put the increase in the expenditure due to higher prices at less than £8,000,000 in this financial year compared with the financial year 1904–5. I do not think I would exaggerate if I put it at £10,000,000, but if I take £8,000,000 I think I am on the safe side.
These three items altogether, the Post Office outgo, works, and prices, amount to about £25,500,000 of the increase of the expenditure in the last ten years. Therefore the true increase of the expenditure in ten years has been under £33,000,000, and that is not taking into account the population factor. It must be agreed that £33,000,000 is a serious increase, and one which is more striking when you compare it with the slow rate at which our national expenditure increased in the nineteenth century. But when we compare it, on the other hand, with the increase in the national income in the period, why I think none of us should feel alarm at the mere naming of this large sum. As a matter of fact, in this ten years the increase in the class of incomes subject to Income Tax was £268,000,000 gross, and rather lesS than that net, but when you make an allowance for the net it is a very serious sum. It is an increase of £268,000,000, while the increase in expenditure is less than £33,000,000, and that should surely calm the fears of those who think that in our rate of national expenditure we are running ahead of income! Then we have got to ask ourselves upon what our expenditure has been made. When I look at the items I am naturally reminded that hon. Members opposite have endeavoured to increase some of them, but I also feel that each one of them is not so high that the effort to increase them was not justified upon its merits.
Let me take the Budget as it was, and the figures as they were before these alterations were made in the Finance Bill. I find that on education in these five years the increase has been just under £5,000,000. Does anyone in this House regret that? Is there any hon. Member in any part of the House who regrets an increase in our education expenditure of less than £5,000,000 in ten years? It ought to be more. Education is easily the first interest of this country. There is much talk in these Debates about our national position in regard to finance. May I take this opportunity, very seriously, to remind the House that the British economic position is a very serious one, and that it depends in the main upon the position of one great asset—a wasting asset—which must disappear in the course of a few generations, so that it may come to be written that the whole wealth of this country covered a period of not more than three centuries.
Which asset is that?
Coal! It is not merely a wasting asset, but the advance of science in the twentieth century is so great that long before it is wasted it may have been replaced by a factor in connection with which we have not the peculiar advantage that we have in regard to coal. So it is the interest of this country to regard the present as a period of preparation during which the people should be so cultured, so trained, that they should be prepared so that whatever happens to that asset, at the coming of that period, we may be able to face with confidence the position in which this country will not have a peculiar advantage—in which we will have to face the world upon level terms with all the other white races. But even if that were not the case, we are not the only country in these days that has developed that peculiar resource, and I confess the more I examine the changes in other countries in connection with education, the more I am impressed with the need for greater expenditure on education. And looking at these melancholy figures of less than £5,000,000 increase of the last ten years in our State contribution to education, I see no cause to congratulate the House of Commons upon this figure being so small, but rather to deplore that it is so small.
What is the increase in local rates for education?
There has been an increase, but surely the hon. Member does not contend it has been sufficient! The hon. Member must know we pay many of our teachers badly, and the hon. Member must know that the majority of our children leave school at thirteen years of age.
Can the hon. Member give us the total expenditure on education?
No, I cannot at the moment; but I got a Return from the Board of Education recently, and if the hon. Member refers to it he will find the precise figures set out there. I think it is £38,000,000. With regard to old age pensions, when hon. Members opposite are brought face to face with this particular item, to do them justice, not one of them desires to reduce it. The hon. Gentleman who has just sat down confessed frankly he saw no chance of reducing national expenditure during the next two or three administrations.
On any very large figure.
Yes, on any very large figure, and I think he will find when his party comes into power that our national expenditure must continue on the increase. Old age pensions come to 12.7 millions, just under £13,000,000, and, of course, that ranks as an increase as compared with the year 1904. With regard to the Army and Navy, I think there is an nominal increase of over £15,000,000, but when we take into account the items of naval and military works, the real increase has been very little over £8,000,000. I quite agree that is something to be deplored. The only question we can ask ourselves is, whether it is necessary. I should not be entitled to discuss that at any length in this connection, suffice to say, I cannot see, in view of the enormous increase that has taken place in the armaments of the world, how it is to be reduced. If hon. Members of this House will take the trouble to trace the increase of expenditure on armaments in the world, and in the chief countries of the world, they will find that instead of this country being a leader in that movement, it is a laggard.
If the fair comparison be taken between 1905–6 and this year, the actual increase is nearly £20,000,000, the last administration having reduced expenditure.
The actual increase between 1904–5 and now is £15,000,000. I have often reminded hon. Members that proves the virtue, not only of His Majesty's Government, but of the administration that preceded it. I do not desire to make unfair comparison. The other main item, of course, is in regard to insurance, but the whole House, surely, must shoulder that responsibility. When the Insurance Bill came before the House of Commons, we know that the Second Reading was passed, not only with, general approval, but with enthusiasm. My right hon. Friend the Chancellor of the Exchequer was indeed thanked from all quarters when he introduced the matter. The only question at issue then was how best to spend the money that was to be raised. With regard to a great many details, of course it is fresh in the minds of the House that we were pressed from the benches opposite to increase expenditure. Time and again when my own heart was softening with regard to items pressed upon us by the Opposition, my right hon. Friend who is now accused of being a spendthrift was hardening his heart. What is the amount of insurance expenditure? Taken with the expenditure on Labour Exchanges and unemployment insurance it is £9,300,000 for 1914–15, and of course the whole of that figure is an increase as compared with the former period. We have to remember that these items relate to affairs of a great nation of 46,000,000 of people. If we increase expenditure on any public work at only 5s. per head of the population, it means an increase in national expenditure of over £11,000,000. The sum spent in connection with the affairs of a great nation like this are very large in the aggregate, and that is very often forgotten. I remember my hon. Friend the Member for Blackburn in a recent speech, referring to the Army and Navy expenditure in recent years as the price of a Utopia. He said you could make a Utopia in this great country of ours out of that expenditure. Could a Utopia be purchased so cheaply? There are 46,000,000 of people, and to provide decent houses for these people would entail an expenditure of four to five thousand millions of money. We are too apt to forget these things—to relate such items to population and incomes.
May I point out this interesting fact. If we go back to the first detailed examination of the amount of national income in this country by Mr. Dudley Baxter, in 1867, we find that he put national income at just over £800,000,000. The national expenditure of that year, without the Post Office, was £65,000,000, so that national expenditure expressed in percentage of national income was 7.9 per cent. At the present time the national income is £2,100,000,000, and taking expenditure at £183,000,000, as it was in this Budget before this last alteration, the expenditure had only gone up, in nearly half a century, from 7.9 to 8.7 per cent., and I think it must be obvious to the House that we can better afford 8.7 now than the Britain of Mr. Dudley Baxter could afford 7.9 per cent. In the interim it is true that national expenditure declined in proportion to national income. For instance, take the year 1883, when Sir Robert Giffin estimated national income £1,270,000,000. National expenditure then was £82,000,000, so that expenditure had fallen, in the expression of percentages, from 7.9 per cent. to 6.4 per cent. in 1883. Here arises a point of very great interest when considering this question of national expenditure.
Was it a good thing for this country in 1883 that national expenditure had fallen to 6.4 per cent. of national income? These were the days of what I may call deliberately public parsimony. They were the days which I heard extolled, not only by hon. Members opposite, but by some hon. Members on this side. What was happening in those days? In those days, of course, not only did our public men deplore the Income Tax, and often promise to abolish it, but those same public men considered that housing was grandmotherly legislation. I rejoice to think that there are few Members of this House now who consider housing to be grandmotherly legislation, and I hope we have at one and the same time got rid of the conception of public expenditure that obtained in the 'eighties, and the view that obtained with regard to housing in those days when our national expenditure was deliberately starved, and when the very slums we deplore to-day were rising. I say that during the '70's, '80's, and even during the '90's houses were falling into deterioration, neighbourhoods were remaining unimproved, the public health was neglected, and slums were being created, and the one thing went with the other. The view of public finance was accompanied by these unfortunate views of our obligations to the people of this country. I submit that if what I conceive to be a better view of national expenditure had obtained then, we should not have had to deplore to-day the social evils which hon. Members on both sides of the House are now endeavouring to eradicate, and many persons would have been fitter and better wealth producers than they are, and they would not have needed the social expenditure we now have to undertake, and they would have been making a larger contribution to the wealth of the nation.
What has been the effect upon trade? What about trade in the old days of public parsimony? In the 1870's, 1880's, and the 1890's each of those decades was remarkable for the most extraordinary slumps, and there was distress which we have almost forgotten the nature of. Many hon. Members like myself can remember the distressful days when the fair trade agitation arose. There was bad trade, unemployment, commercial distress of a kind that, happily, we do not know to-day. Not only those sitting on this side of the House, but nearly all public men were agreed that there was only one way to procure prosperity, and that was to starve the Government. At any rate, those who support that view cannot contend that that idea of public expenditure resulted in good steady trade. In the twentieth century, during which, not only this country, but all countries have increased their expenditure as they have never done before—I suppose Ministers in foreign countries get these deputations from their own side from hon. Members who are alarmed at the rate of public expenditure—there is no country in Europe which has not increased its expenditure at least at as great a rate as we have in the last decade, and many of them have increased it at a greater rate. I agree that there is not a reason or an argument for us making an increase, but at least we have the satisfaction of knowing that in this period during which a different view has been taken of public expenditure the trade of the world has gone ahead as it never did before.
It would be absurd to argue post hoc, ergo propter hoc, but I am entitled to say that those who urge that an increase of public expenditure must necessarily bring ruin and disaster in its train have got to show why it is that not only in our own country but in other countries the trade and production of the world has expanded as it never expanded before. In the twentieth century so far we have not experienced the old-time slumps in such a marked degree. Another curious thing is that the booms have succeeded each other more rapidly. In the nineteenth century the trade booms were separated by periods of ten years. In the twentieth century we have had two trade booms at periods of seven years and six years. Not only have the slumps been less acute, but the booms have succeeded each other more rapidly, and the expenditure of foreign countries has increased at least as rapidly as our own.
I should like to direct attention to some very valuable information which has been got out by Mr. George Schuster with regard to the comparative taxation of this country and Germany. Mr. Schuster has prepared his figures very carefully indeed, and so far as I have been able to check them, they are perfectly accurate. If we take Germany, in order to get the total public expenditure you have not only to take Imperial expenditure, but also civic expenditure, and adding together the expenditure of the German Empire, the various States, and the local authorities shows that since 1881, taking the figures down to 1913–14, the taxes raised in the German Empire have risen from £51,000,000 to £229,000,000. In the same period the taxes raised in the United Kingdom for both State and local purposes including local rates, as in Germany, have risen from £100,000,000 to £244,000,000. So that the rate of increase in Germany has been very much greater than it has been in this country. But that is the least part of it. We have to remember that in the case of Germany, the German Empire, the German States and cities have very much larger natural revenues. They not only raise money by taxes, but they raise £60,000,000 or £70,000,000 by State and civic socialism of a kind referred to by the hon. Member who last addressed the House. That is a very serious handicap in comparison with this country. When my right hon. Friend addressed the House making his Budget statement, he starts with only the profit on the Post Office and the little bit of profit made upon the Suez Canal shares, but when the Prussian Minister makes his statement the National Debt does not exist for him, because the whole of the charge upon it is found out of the profit of the railway undertakings alone. What is true of the German States is also true of the German cities, which have larger revenues from public works than we have.
When the hon. Gentleman opposite spoke of our country reducing its expenditure on luxuries, there flashed across my mind an experience of my own in Germany, when a certain English county councillor was with me, and we were admiring some of the magnificent buildings of Frankfurt. It was an educational establishment, fitted up in such a lavish manner as would simply astound the people of this country. My friend was so staggered at this civic expenditure that he lifted up his hands in horror, and said they would be ruined. Why? Because of that kind of lavish public expenditure which is deplored by the hon. Gentleman who has just sat down. But what has happened to Frankfurt? Has ruin come upon it? No; all the records show that they collect more local Income Tax than ever, and are now making tremendous headway. I think hon. Members should consider whether public expenditure of that kind is not reproductive in the very best sense, and whether they do not produce both for countries and cities results that cannot be procured in any other way. I might argue upon the true view of the German Import Duties, and I might take what I should call the true incidence of the taxes into consideration and make allowance for the extra prices paid by the German consumer, but I will leave that point out. I think there will be general agreement that in view of the fact that Germany with 60,000,000 people has only about the same national income as this country with 46,000,000 people, it is very remarkable that she should have increased her national expenditure at a much greater rate than we have during the period I have spoken of. Whether or not that has been to the advantage of Germany, it is for hon. Gentlemen opposite to make up their minds. I have made up my mind, and I believe that at least the greater part of this expenditure made by the German nation since the 1880's has been reproductive in the very best sense.
I am reminded in this connection of the message which William I. gave to the German people when they began State insurance in the 1880's. He did not talk of the necessary contributions as they have been spoken of by some hon. Gentlemen; he did not regard them as taxes. In that famous message he referred to the beginning of insurance legislation by Germany as an attempt to incorporate Christianity in legislation, and he referred to it also as an attempt to embody moral concepts. I believe the lapse of time has abundantly justified the message which William I. delivered to his people in this connection, and I cannot help feeling that the first thoughts of hon. Gentlemen opposite were the best in that connection, and I believe that in time to come they will be as glad as I am that they voted for national insurance in this country.
5.0 P.M.
With regard to the interesting speech which I heard from the right hon. Gentleman the Member for the Strand Division he rather took the line adopted by Lord Esher in a letter to the "Times" which attracted a great deal of attention. The right hon. Gentleman asked the House to consider whether the taxation of the rich was not coming to be felt by the poor in the loss of employment. He pictured what was happening in regard to gardeners and gamekeepers, whom he believed had been discharged through the legislation of His Majesty's Government. I really think those fears are exaggerated. I take up the Census returns, and I find in England and Wales that the number of domestic gardeners between 1901 and 1911 increased from 75,200 to 100,600. Consequently there are 25,000 more domestic gardeners in the country than there were ten years ago. I find that in the case of gamekeepers the total in the same period has increased from 15,100 to 15,500. I do not know to what extent chauffeurs have increased, but I expect that they have increased by a much greater proportion. It is perfectly true that if you tax the rich you do limit their enjoyment of luxuries, and, if the tax of my right hon. Friend had not been levied, there would be even more gardeners and chauffeurs than there are in this country. Would that be a thing to rejoice about? I think not. What matters to the country is not only employment, but also the nature of employment, and I venture to submit, in answer to the fears of the right hon. Gentleman opposite that, in so far as the legislation of my right hon. Friend has changed, employment in this country from domestic gardeners and chauffeurs and any hangers-on of that kind—
Gardeners are not hangers-on.
I should say that the undue employment of domestic gardeners is certainly a misfortune to the country. Any changes that have been effected in the nature of that employment, diverting people from the service of the few to the service of the many, is a good thing for the country. It is only necessary to look at the census of production to see how far too many people in this country are engaged in unproductive employment. That largely results from the bad distribution of wealth in this country. When a man gets a large income, either by his own hand or by the hands of female relatives, you get a large diversion of labour from useful purposes. That is a well known and established pro- position. I refuse to deplore any stemming in that kind of employment. I now come to some matters in which perhaps my agreement with my right hon. Friend is not so great as in regard to those matters on which I have spoken. My right hon. Friend the President of the Local Government Board (Mr. Herbert Samuel) spoke of our rating system, and said it is quite the worst that the perversity of man had devised. There is a general agreement that our rating sytsem needs reform, but is it quite so bad and does it deserve quite that degree of condemnation? How far are buildings, private houses, and business premises of all sorts true measures of what a man ought to pay in local taxation? That is really the practical point. It seems to me that local taxation divides itself broadly into two things: First, we have got to consider the benefits received by the people who pay the taxation, as, for example, when a business man has his premises drained, when a business man has his business premises protected by the police, or when a business man has the dust and rubbish removed from his premises by the local authority. The business man ought really to pay the local authority for doing those things, just as he pays the merchant who supplies him with material, or anybody who performs any private service for him. They are merely tradesmen's bills; they are not taxes, and in that connection it does seem to me that in the general case the size of the premises does very largely accord with the benefits received by the local taxpayer.
Then next is the category of national services, in regard to which there is a general opinion in the House, I will not say an unanimous opinion, that if we can we ought to make our system accord with ability to pay taxation. Where do the buildings, the houses, or the business premises fail to be a proper gauge in that connection? It is in a very large number of cases, indeed a very good guide, so much so that I do not think the condemnation of my right hon. Friend when he says it is the most perverse system that can be devised can be justified. There are many cases in which the size of a man's house, shop, or premises does very nearly indeed accord with his ability to bear local taxation. Where does it chiefly break down? I should say that it chiefly breaks down with regard to private houses with very large incomes, because a man's house rent does not increase in proportion to his income over a certain limit; and, with regard to business premises, the small shopkeeper very often pays too much, while the large shopkeeper does not pay enough, if you take the annual value of his shop as a guide of what he ought to pay according to the principle of ability to pay. If we tried to devise a system to amend our system of local taxation we should really have regard to these points.
I have already this afternoon mentioned the famous city of Frankfurt. May I give the House—I have taken the trouble to get this information—the particulars as to how Frankfurt meets these particular items. It has regard, not only to benefits received, but also to ability to pay. It is not the case, as some people think, that the German cities do not levy rates like our rates. They do levy rates like our rates. Frankfurt has a house rate. It also has a special rate for drainage and dust removing. It also has a small rate which you might call an undeveloped land duty, which calls upon the owner of unoccupied land to make a small contribution towards the expenses of the town. Taking those rates together, I find that Frankfurt raised £348,000 from them in the last year of which I have account, but in addition to those rates they levy a local Income Tax, which, combined with the Industry Tax, which is really another Income Tax, yielded £877,000. They, therefore, raised £877,000, according to ability to pay, while they raised £348,000 by a system of rating not unlike our own, although it is graduated, and which may be said to have regard to benefits received. They also, of course, make large profits from their municipal undertakings, but I need not go into that question. After all, the size of the city and the manner of its conduct should at least make us respect what they do. We find that they levy successfully a local Income Tax in addition to something approaching our own rating system.
Is it successful?
It is so far successful that the German towns which are managed as we know by professional experts who are trained in their work, have no idea of giving up the system. I have never heard the suggestion that they should give it up or reform it, except as such matters are ordinarily altered by improving details here and there. There is no suggestion in Germany of their giving up their local Income Tax.
Is it not true, then, that rich men make bargains with local authorities?
That is true in very exceptional cases, but I do not think you should judge any system by exceptional cases. If you did there is not one single tax which would remain on our Statute Book. You could dispose of the Income Tax, of the Death Duties, and of every tax ever suggested in the same manner. Indeed, suppose we brought exceptional cases against site value taxation, I wonder what would become of it. At any rate, I do suggest that it is successfully working, and it is not competent for anybody in this House to dismiss the local Income Tax as impracticable; indeed, if anybody will peruse the Blue Book in which the German, the Prussian, the Hamburg, and other local Income Taxes are described—of course, the officials who have made the report could not bring themselves as wholly unprejudiced observers in the matter—will see it is admitted, if reluctantly, that the system does work, and, on the whole, that it works very well. I have said that, supposing we used exceptional arguments against site value taxation, such as I understand is contemplated in connection with the valuation which is now shadowed forth, we should there meet, not with the small number of exceptional cases that can be urged in connection with a local Income Tax, but we should meet with great difficulties, for example, as respecting existing contracts, which means that a new local site value rate would be a new local tax on existing occupiers, a fact which will presently dawn on some millions of people in this country. When it does dawn on them I think that they will have one of the greatest shocks of their lives. Again, what can we urge to be so anomalous in connection with a local Income Tax as this: that you so often tax the wrong man, and that you so often tax, not the man who is enjoying the unearned increment, but the innocent man who has become the possessor of it by purchase. That is not a single case or a case to be reckoned by thousands or tens of thousands; there are hundreds of thousands of such cases, and they are cases, of course, which have got to be reckoned.
There is also the question of mortgages, which have not been sufficiently considered. Of course, Henry George would be quite willing to exempt capitalists or moneylenders entirely from taxation. There are to him only two divisions—the one is wages and the other rent—which simplifies political economy tremendously. Of course, to a man who thinks like that the spectacle of a mortgaged property in the hands of a poor man being specially taxed, while the rich man who has lent two-thirds of the money on mortgage entirely escapes taxation, is a thing of no moment; but to those of us who do not regard the moneylender exactly in that light it seems a terrible thing. If we have regard to these things and others I might mention, then I am bound to say those of us who feel ourselves brought as it were to the confines of the Henry George prairie shrink from the arid prospect. I hope, at any rate, that the very gravest consideration will be given to the matter before we proceed any further with it. I have heard a good deal about untaxing improvements in this Debate. What is an improvement? The answer is, of course, that an improvement is capital, and when you say you untax an improvement, it really means you untax capital. An improvement is the result of industry, and a further question arises—whose industry?
From the point of view of the great mass of people who create improvements in this country, the improvements are made by labour, and ill-requited labour, and the possessors of the improvements do not coincide with the people who help to make them. Therefore, when you speak of untaxing improvements, the working man is likely to ask, "What does that matter to me. I was paid a poor wage in the construction of the improvements, and it does not matter to me whether you tax the landlord or the capitalist who employed me to make the improvement, and who gave me a poor wage for making it."That is how it suggests itself to me, and it seems to me that that consideration has not been taken sufficiently into account by those who talk so lightly of untaxing improvements. We all have sympathy with those who create improvements, and we feel that a man ought not to be taxed in respect of an improvement unless it fructifies; its fructification is income, and so we get back to the test of income as the test whether or not you should tax improvements. It seems to me the method of combining the two, as they manage to combine them in German towns—the method not only of rating the improvement in the ordinary sense, but also of taxing with regard to ability to pay, is the way to do justice to the case. I myself am quite willing to agree that, in. the alternative, if the Government cannot see its way to imposing a local Income Tax, to the system of pooling which the Government has itself decided upon. The Government, instead of setting up a local Income Tax, has decided to levy an additional amount by the State Income Tax, and to distribute that amount to the local authority.
That brings me to the question of Grants, and the delay in the making of those Grants. When the right hon. Gentleman spoke of a local Income Tax he did not attack it on principle, but he attacked it from the point of view of whether it was practicable. He said, in fact, if the Government had been able to propose a local Income Tax to the House, no one in the House would have found fault with them on the point of principle. That is true. We are most of us agreed that, if a local Income Tax were practicable, it would be a good thing. I may point out that the President of the Local Government Board did not add that that would be a relief to the landlords in localities, and that it was to be deplored on that account. Whether you collect the Income Tax locally, or whether you collect it centrally and distribute it to the locality, in both cases it must have some effect on the existing rates. What is that effect? Is it true that the landlords pay the rates? I have never been able to admit that a ground landlord, in the real sense of the word, pays rates. What is the truth about that? The truth is, because rates are levied in respect of fixed property, the landlords have not been able to get as much rent as they otherwise would have got for their property. That, surely, is not the same thing as saying that they actually pay these rates! The difference is this: They do not get as much as they otherwise would, but at the same time they are getting for their property a rent which they would not get if it were not for the presence of the community. Let us look at the matter ab initio. Let us take the case of a new neighbourhood, where a seam of coal has been discovered. The land had an agricultural value, but, because the coal is discovered, and because a mining village springs up, the landlord draws not only the royalties and mining rents, but rent in respect of what have become valuable sites. He draws a large income which he did not draw before. If rates were not levied on the houses that were built, it is true he would get even more than he actually gets. But he only gets what he does because of the presence of coal and of the community. How can it be said that he pays the rates? The fact is they are paid by the occupier, and not by him.
I should like to put a question to the hon. Gentleman. Does he consider that the landlord gets less by the amount of the rates than he would have if there were no rates?
That would seem to be implied from what I have said. If it were not for the levying of local taxation on fixed property he would draw a larger rent, and the size of the rate does, of course, decide, as was pointed out yesterday, what he can get for his property. What people really mean when they say the ground landlords pay the rates is that they do not get as much as they otherwise would get if the rates did not exist. I say these two expressions do not mean the same thing, and the fact that the landlord does not get as much as he otherwise would get need not prevent us finding some other means of making him contribute out of these things to local expenditure. Everyone of us would, if we could, make the increment attaching to land a subject of taxation, so long as we could see our way to do it equitably. But we must not be tempted to do injustice to hundreds of thousands of people merely in the name of an academic principle. We can console ourselves with this reflection, that if we go the other way to work we may be quite sure, if a landlord is making big royalties or ground rents, we shall get a contribution from him. He cannot escape the Income Tax, or a tax levied with others and distributed locally, or, in the case of a local Income Tax, levied directly on him. We shall get home in respect of either. Some years have elapsed since I ventured to advocate a local Increment Tax as one of the fairest ways of getting at the unearned income of a locality. We have now a State Increment Tax, but it is, of course, very different to that proposed.
With regard to what I may call the surplus of the new Budget, I am one of those who very deeply regret that the Government should have, when it has this surplus to distribute, chosen to devote it to the relief of drawers of unearned income. I am exceedingly sorry that has been done, and I do not know whether it is possible, even at the eleventh hour, for the Government to retrace its steps in that direction. If the Income Tax ought to be relieved, surely earned income, and not unearned income, should have had the benefit! But I am not one of those who believe that the relief should have been given to Income Tax at all. We have staring us in the face the remnants of the Sugar Duty, and, by an arithmetical coincidence, the amount of the surplus we have to distribute and the amount of money needed to sweep away the remnant of the Sugar Duties is so suggestive that I wonder it did not occur to His Majesty's Government to adopt that course. But while I deplore both the fact that the local authorities are not to get the Grants which seemed so near to them, and the method chosen by the Government to dispose of its new and unexpected surplus, I come back to how my vote should be given in the Division to-morrow. I am one of those who believe that the democracy of this country is under a very deep debt indeed to our present Chancellor of the Exchequer. I believe the alteration which has been made in the incidence of taxation in this country has been entirely for the good of the country, and not only for the good of the working classes, so-called, but for the national undertaking as a whole. I believe that the money needed for great national purposes and for social reform has been raised without injuring trade; indeed, I think it could be demonstrated that it has helped trade.
We have avoided not only placing fresh burdens on the backs of the poorer people of this country, but we have so altered the relationship of direct and indirect taxation as to make taxation, as a whole, very much fairer. In 1904–5 we raised £58,000,000 by direct taxation; in 1914–15 we are raising about £97,000,000 by direct taxation. With regard to indirect taxation, in 1904–5 we raised £72,000,000, and in 1914–15 £75,000,000, or very little more than ten years previously. It is apparent, therefore, that, while it is true part of the Sugar Tax remains unrepealed, and while the Tea Tax is higher than I like to see it, relatively the poorer classes of this country have been largely benefited by the financial operations of the right hon. Gentleman, and taxation, as it stands in this country to-day, is very much fairer than it ever was before. That is the chief point I keep before my mind in this Debate. Although I deplore recent incidents, and I am sorry, deeply sorry, that the Grants, to local authorities have been postponed in pursuit of what I conceive to be an academic idea, and although I should have liked to have seen this last relief given to indirect rather than direct taxation, I keep in my mind, above all, the fact that the finance of the right hon. Gentleman has had regard to the terrible error in the distribution of wealth in this country. I believe what he has done has helped to make taxation fairer. It has strengthened national economy; it has shown the nation that it is possible to raise money for social purposes in a degree that was not believed possible by many people only ten years ago. I believe the work the right hon. Gentleman has done will, in a large measure, not be upset, even by right hon. Gentlemen opposite if they come to succeed him, and I hold, therefore, that not only in the name of gratitude, but in the name of wisdom also, it is the duty of those who see eye to eye with us in this matter to support the right hon. Gentleman in the Division which we are going to take.
The hon. Gentleman who has just sat down has made, as he usually does make on these occasions, a most interesting and informing speech, and I am sure there are many who have heard of him who will do him the compliment of reading his speech as well as of listening to it. He will excuse me if I do not attempt to follow him into the labyrnth of figures he put before the House. In one portion of his speech he compared the national expenditure of different years with the object of showing that there had been exaggerations in the statements as to the increase of expenditure, and he proved that the increase during the last ten years was £33,000,000 only. He did that by taking out of the account altogether the money spent on Naval and Military loans and refusing to put back into the account the Telephone borrowings, which you must do if you are going to compare the balances of expenditure. You must put in the balances on both sides of the account. As a matter of fact, his figures contradicted the figure which was given by the President of the Local Government Board who, in the earlier Debates, estimated the increased expenditure at some £42,000,000, leaving out of account altogether the expenditure on insurance. If you are going to check the total expenditure, you surely must add the expenditure which is made by the employer and the employé under the Insurance Act, amounting to something like £20,000,000 a year. It is no use saying that that expenditure cannot properly be called a tax. In my judgment it ought to be called a tax, because it is compulsory expenditure. To say that it is beneficial expenditure is no answer to the statement that it is a tax. The hon. Gentleman who has just spoken will be the last to deny that it is none the less a tax, because it is beneficial expenditure. That is not the test he would apply as to whether it is a tax or not. Indeed, he has throughout his speech been comparing this country with Germany in respect of beneficial expenditure which ought to be paid for in the nature of services. In the same way foe will not deny that insurance money is also a tax.
I want rather to deal with the new Budget now before us. I have been amused in reading in some of the Liberal newspapers the attempts made to explain the cause of the discomforture of the Government. They would like to represent that it is the Unionists who have caused the local authorities to lose the temporary Grants. They put it down to a technical objection taken by the Unionist party, when it is really the result of the blundering of the Government. It is an utter disregard by the Government of all constitutional practice, due to a sort of swollen-headed belief that whatever they do must be right, and that they can get over any sort of difficulties that may be in their path. Unfortunately for them in this case they have been brought up against the safeguard which our forefathers most thoughtfully put into the practice of this House, which was designed for the very purpose that this House should not lose its control over the finances of the country, namely, that a Bill should be brought in only with leave, and should be conformable to the leave which is given by this House. On the other hand, the Government are extremely lucky to have found a way out of the difficulties in which they put themselves. If the old practice had been followed, it would probably have necessitated the withdrawal of the Finance Bill altogether—a withdrawal which might have disastrous effects, because, hung up as they are by the Gibson Bowles Act, it is quite possible that they might not have been able to bring in any Resolution with regard to Income Tax again this Session, and it might, therefore, have necessitated a Dissolution or a new Session to get out of the difficulty into which they put themselves. The way out which has been found for them is to treat Part IV. of the Bill as non-existent, although the Debate has largely turned at present upon what is going to happen if it does come into existence under the very ingenious procedure which has been found for them.
As to the local Grants, the hon. Member who has just spoken deplored that they have not been given. Why are they not now being given? It is nothing else than the obstinacy of the present Government that prevents these local Grants from being given now. They have chosen to make them part and parcel of what the hon. Gentleman called a "fantastic scheme of local valuation," and they have chosen to say that, because that fantastic scheme of local valuation cannot be carried through now, the Government will there-hold the temporary Grant from the local authorities. Another part of their proposals is to give a temporary Grant to the necessitous school areas, not upon the principle of the Block Grant which is finally to prevail, but merely as a temporary Grant to help the necessities of the poorer school areas. If they can do that with regard to the necessitous school areas, why cannot they do it with the temporary Grants for local government? They can do so if they chose, but they are obstinate, or, perhaps, it is that an hon. Member who sits behind him is not willing to allow them to give any further Grants, unless his precious land value taxation is brought in by the skin of its teeth. With reference to the altered balance-sheet, the Chancellor of the Exchequer originally had a surplus of £252,000. By reason of dropping a penny Income Tax and abandoning the temporary Grants, that surplus has been turned into a deficit of £144,000. The Chancellor treats that very lightly. A deficit of £144,000 is nothing to him, and he says, "We will take it out of the Exchequer Balances." Last year he had a deficit of £815,000, which he turned into a fictitious surplus of £185,000 by misappropriating £1,000,000 from the Exchequer Balances. It is quite true that when that was pointed out to him last year in Debate he denied it and said that, on the contrary, he had a balance on the right side of £185,000. This year, however, he introduces his Budget, and forgetting what he said last year, and it no longer being necessary to pretend that he had a surplus when, in fact, he had a deficit, he told the House that in the previous year he budgeted for a deficit of £815,000. He is one of those Gentlemen who always tells his audience what he expects his audience would like to know. He thought they would like to know that he had a surplus the previous year, therefore he said so. This year he wanted to show how clever he had been, so he admitted to the Committee that last year he budgeted for a deficit, although last year he denied that.
These allowances and alterations having been made, we have now to provide for the surplus which we have already voted, and in addition we are providing for new services a sum of £586,000—for education, necessitous areas, and the feeding of school children. We have had some explanation of that. The President of the Board of Education last night was kind enough to give the House some particulars of the principles upon which that sum would be expended, but with regard to two items, insurance, £1,000,000, and various small specific Grants amounting to £250,000, they have never been explained in this House, and up to this moment we have not the least idea how that money is going to be spent. Besides the increased Estimates which have already been voted by the House, there is, therefore, a total of £1,826,000. About one-third of that is to be paid to the necessitous school areas, and that has to some extent been explained, but with regard to the remaining two-thirds, that has not been explained in any way in this House. As the Chancellor of the Exchequer is to speak shortly, I hope he will give us some information before we are asked to provide this sum. I desire to call the attention of the House to the various headings, for they were nothing more, the Chancellor of the Exchequer gave us of the expenditure he proposes to make in regard to insurance. He said that he was proposing to give a sum to help societies to meet deficiencies. He did not tell us how much. He said that the whole burden would not fall upon the State, but that societies would also have to come to the rescue. I want him to say how much of this £1,000,000 he is going to give to the societies to help them to meet their deficiencies, and how much he expects the societies themselves to find for that purpose. Apparently it is to be a Grant-in-Aid to the societies, and I want him to tell us upon what principle that Grant-in- Aid is to be given, and how much the societies themselves are to find. When he has told us that, perhaps he will tell us out of what fund the societies are going to find the money, because, so far as I know, they have no spare money, and there is no possibility of their finding any money for this purpose. If there were money to spare, there would be no deficiencies at all to cover. When the Chancellor of the Exchequer said that the whole burden would not fall upon the State, and that the societies must also come to the rescue, he must have unwillingly misled the House, and he ought now to take the opportunity of telling us more about it.
He also said that he was not going to give that amount to help bad management, but that it was only to be for deficiencies due to three specific causes. I have no time to deal with them all, but he said he was going to help those societies which had an unusual proportion of bad lives. I want to know how he is going to ascertain what societies have an unusual proportion of bad lives. Is he going to ask the various members to go through a personal medical examination to ascertain which of the societies have an unusual proportion of bad lives? So far as he has indicated his proposal, it is founded on a basis which cannot be carried out without giving an enormous amount of trouble to the societies. That was one of the objects for which the insurance money was to be used. It is also to be used for the purpose of establishing a system of medical referees. I want to know under whose control those medical referees are to be placed. Are they to be under the control of the insurance committees; how much money is to be granted for the purpose, and are the societies to help in that respect, or is any of the present medical money to be made available for that purpose? There are several minor matters with which I wish to deal, but, as the time is short, I will take only the more important one. The right hon. Gentleman told us that he was going to do something for certain cases of arrears connected with unemployment. That was, perhaps, so far as insurance is concerned, the most important statement that he made in his speech. He did not tell us how much, and the only thing he said was that he proposed to do something for certain cases of arrears of unemployment. That is all he has told us. But notwithstanding that, the Insurance Commissioners have issued a circular in which they give us a great deal more information than the Chancellor has, and it seems to me that after all the House is the proper place for this information to be given, and we are the proper people to be told, when we are asked to find the money, for what purpose it is to be provided. The Insurance Commissioners, however, have issued a circular. I will read a few words from it:—
There is one other point that the Chancellor of the Exchequer is going to deal with out of this money. He is going to do something for the deposit contributors. I should very much like to know what his opinion of deposit contributors is at the present moment. We have had so many statements from him that it is very difficult to know exactly what his present view is. On 4th May, 1911, he said:— his mind in the three years. He is not going to give support to the drunkards and the uninsurable people!
The uninsurable people.
That is how he was describing them. I read the description that he gave three years ago, and of course if he desires to correct it I am giving him the opportunity. I want to know on what terms the Grant is going to be given. Are they going to be subsidised especially, and are you going thereby to constitute a form of insurance which may become a very powerful competitor with the approved societies, or what are you going to do? I think this House is entitled to know, when it is asked to raise this money, in greater detail as to the method in which it is intended to be expended. I ask the right hon. Gentleman, therefore, to say what he is going to do in that respect.
I am afraid, having regard to the very considerable number of questions which have been raised in the course of the discussion, and the time at my disposal, which I have to divide with the right hon. Gentleman (Mr. Austen Chamberlain), it will be impossible for me at this stage to enter into a detailed explanation of the proposals of the Government with regard to insurance. A full explanation will be given to the House, and a Vote will have to be taken. Part of these proposals will have to be embodied in legislation, and there are other parts of the proposal which will not need legislation. A Vote taken in Committee of Supply under the Act of last year will cover the particular scheme of action which the Commissioners have in contemplation. I hope the hon. Member will excuse me for a moment if I do not answer the very detailed questions he put to me, because it will take me away from the general drift of the Debate. After all, there are three or four very big questions which have loomed largely in the discussion, and I do not think I should be treating the House respectfully unless I entered in some detail into these greater questions. The first thing that strikes me about the discussion is this. Nothing has been said about the taxes. We have had two or three days' Debate upon the Finance Bill. I proposed taxation which raises considerable sums of money, and I think it is rather gratifying for a Chancellor of the Exchequer who proposes taxation that the only complaint which is made against him is that he has taken a penny off. That complaint comes from both sides of the House. That is the only attack which has been made on the ground of taxation in the course of the Second Reading Debate as far as I have heard it.
made an observation which was not heard in the Reporters' Gallery.
I must make an exception in the case of the hon. Baronet. That is the solitary exception. A good deal has been said about expenditure, but only from two quarters have we had any suggestion of a reduction of expenditure. One suggestion emanates from an hon. Member behind that it is time armaments should be cut down. That has been put forward with considerable force and strength. But then other economists who sit upon the other side of the House certainly will not agree with my hon. Friend there. He has had no support for that criticism, at any rate from that side of the House. The hon. Member (Mr. James Hope) made a speech which I thought was fresh, and was really a contribution to the discussion and I am only sorry that in discussions on finance we do not get original suggestions of that kind. Too much is devoted to criticism and attack, and very little suggestion comes to assist the Chancellor of the Exchequer. The hon. Member, at any rate, had the courage to suggest some very fertile sources of revenue which I can assure him have been the subject of investigation by myself, and I should not be a bit surprised if they have not been investigated by the right hon. Gentleman (Mr. Austen Chamberlain.) With regard to one of these suggestions I have more letters than on almost anything—a tax on amusements. The hon. Member is the only one who, instead of confining his criticism to a general attack on the extravagance of the Government, has made specific suggestions for economies, and I think it is well worth the while of those Who had not the pleasure of hearing the speech to refer to it, because it showed, when the House really applies itself to problems of economies, how difficult it is to get things cut down. The whole of his suggestions amounted to something like £2,000,000 or £3,000,000—a very substantial sum, something less than a penny on the Income Tax. It included the Development Commission, the whole of whose money has gone to agriculture.
Irish and Scotch harbours.
Is there anyone who suggests that you should cut out the whole of the money of the Development Commission with regard to agriculture or harbours? You would not get twenty men to go into the Lobby to support that suggestion. The second suggestion the hon. Member made was that you should get rid of the Road Board expenditure. It is no use getting rid of the Road Board that only costs a few thousand pounds. What would the local authorities say if the whole of the money which is derived from petrol or motors is diverted from that purpose and an end is put to that expenditure?
Local authorities are constantly asked to find as much as they are getting.
I agree; but there is no compulsion there. It is purely voluntary on their part. They have improved their roads enormously, and the consequence is that now we, I think, are the first in the whole world in the matter of roads. I am told there is not a system of roads in the whole world equal to ours, and that is very largely due to the encouragement given by that Grant. How many would follow the hon. Member into the Lobby to cut the whole of that out? I am only pointing out that the moment you come down from generalities to details, hon. Members always make suggestions for which they get no support, or suggestions such as that made by my hon. Friend, where undoubtedly they would be outvoted by the vast majority of Members on both sides of the House, even if you left it an open question. That is the difficulty which every Chancellor of the Exchequer is confronted with when you come to the question of expenditure.
6.0 P.M.
But the Debate has turned far more upon the proposals of the Government with regard to local taxation than upon even questions of expenditure, and certainly upon questions of taxes, and it must have puzzled an outsider reading the Debate to account for the bitter opposition which we are encountering from hon. Members opposite to these proposals. What does it mean? You might have imagined they were destructive proposals which they had all their lives opposed and which they thought would be injurious to the well-being of the community, and that they were bound to put forth the whole of their strength to frustrate them. The proposals were for millions of money to relieve the ratepayers of this country, and which they themselves have been urging upon the Government ever since it has been a Government. The moment we redeem the pledges given to them—the moment we make an effort to redeem the pledges we have given, what happens? They make every effort to destroy the Bill. A distinguished King's Counsel with a very ingenious mind, the hon. and learned Member for West St. Pancras (Mr. Cassel), employs the whole of his ingenuity rummaging through precedents. What for? If he succeeded, it would have the effect of preventing millions for the relief of rates to the local authorities.
I only asked for a ruling as to whether the procedure of this House was being followed. If the regular procedure had been followed, it would have been much easier for the right hon. Gentleman to carry through these proposals.
If I may make a suggestion to the hon. and learned Gentleman it is this. I think he is perfectly entitled to interrupt on a statement of fact, but that is a comment, and it would be quite impossible to conduct Debate in that way. He has made his speech, and he must allow me to make my speech in my own way. At any rate, the hon. and learned Gentleman knows that if he succeeded, the only result would be to destroy the proposals for the purpose of granting millions of money to local authorities—[HON. MEMBERS: "No!"]—and in so far as he has succeeded, if the success is due to his ingenuity, I think he can go to his constituents and tell them that through his efforts he has deprived them this year of £17,000. What is all this opposition about? It is because, as I have pointed out, of redeeming pledges we were pressed by the Opposition to give. The Amendment assails the Government on the ground of changes in the Bill. I may point out that these are changes which could have been discussed in Committee. The effect of the Amendment, if it were carried, would not be to restore the Bill; the effect of the Amendment would be to destroy the Bill, and so far from the effect of the Amendment being to secure the Grants as at first proposed, the local authorities would be deprived of Grants for the next six months and next year as well. I am taunted because changes have been effected in the Bill. I will come to the character of the changes in a few minutes. One would almost suppose that I am the first Chancellor of the Exchequer who has ever made changes in a Budget. [An HON. MEMBER: "Hear, hear!"] There is an hon. Member there—a new Member by the way—who seems to think so. If he was as old a Member as I am, he would have seen three Budgets in which changes were effected by Unionist Chancellors of the Exchequer. I admit that it is worth while pointing out one or two or them. There is nothing that the Opposition resent so much as a change in policy. They never change! Let us take one or two cases. My right hon. Friend the Secretary for Scotland referred to two of them the other day—the Van and Wheel Tax and the Cheque Tax. The hon. Member referred to the first Budget he ever saw in this House. I will give him my experience of the first Budget I saw passed in this House. It was in 1890. It was proposed by the Chancellor of the Exchequer, a Gentleman not open to the criticism directed to me by the hon. Gentleman, but who is claimed—far be it for me to measure the relative importance of these great Gentlemen—as being the greatest Conservative Chancellor of the Exchequer since the days of Sir Robert Peel—I mean Mr. Goschen. He brought in a Budget in 1890. What happened? It aroused a great deal of opposition in the country, it is true, but before he proceeded very far he had completely changed his Budget in consequence of a ruling of Mr. Speaker. That was the greatest Conservative Chancellor of the Exchequer since the days of Sir Robert Peel! The Van and Wheel Tax was also introduced by Mr. Goschen, and the Cheque Tax was introduced by Sir Michael Hicks-Beach.
The changes I have quoted were complete changes of policy. In the Budget of 1890 the whole of the proposals of the Government were changed. The purpose for which the money was raised was changed. It was raised for the purpose of compensating publicans, but before the discussion proceeded very far in the House it was used for the purpose of education. That is a very complete change. I may say by way of reassuring hon. Members that the Government survived that change for over two years. What is the character of the change we propose? We do not propose a change in our general proposals. The only change we have proposed is this, that whereas our original contention was that part of the Grants should become payable on 1st December, We. now propose that they should become payable in the next financial year. It is a matter of four months. That is not a very complete change in the character of the proposals of the Government. We do not propose to change our proposals for the relief of rates with respect to local authorities. We do not propose to drop them. May I point out the conditions under which the Amendment of the Opposition was moved? It was only put on the Paper after it was clear that my hon. Friend (Mr. Holt) was not proceeding with his Amendment. As long as he had his Amendment on the Paper the Conservative Press knew perfectly well what his proposals were, and he was acclaimed as a great patriot. He was flattered and flummeried by Tories in the Press. He was upholding the noblest traditions of British finance against a buccaneering Chancellor of the Exchequer. That was his proposal, and I have not the faintest doubt that it was the intention of the Opposition to fight behind his Amendment. There was then no Amendment on the Paper from the Opposition. The moment my hon. Friend withdrew his Amendment there was a complete change of front. Then the Government were attacked, not because they did not accept the noblest traditions which my hon. Friend challenged them to accept, but because they surrendered to them. That was the attack which was made immediately afterwards. The Government have not altered their general plans in the slightest degree. They are simply postponing the date at which the money will accrue as due to the local authorities.
What is the Government plan? It has already been explained by my right hon. Friend the President of the Local Government Board. We are redeeming pledges which we have repeatedly given on pressure from both sides of the House. Eight times have Amendments been moved in this House during the period we have been sitting on these benches demanding that the Government should find money for the relief of local taxation. Never a protest came from any quarter of the House against such Amendments. They have always met with support from every section, and the Government gave their pledges. If there is anything to complain of in the action of the Government it is that we have not been in too great a hurry, and that these pledges are overdue. What is the position of these local authorities? The industrial districts are strangled with rates—rates not due to extravagance, but due to the actual necessities of civilisation, very often the minimum demand. Why are the rates high in those cases? The rates are high, in the first place, because the rateable value is low, and because the needs are higher. I gave one or two instances in my Budget Statement. I will give some of them. Take the case of Bournemouth. The rateable value there is very high. The number of children you have to educate in the public elementary schools is smaller than in an industrial district. There you have an average attendance at the schools of one in ten of the population. Take the case of West Ham There you have got to provide for one in five of the population. That is double the number in proportion to the population you have to provide for. The rateable value, on the other hand, is very much lower in West Ham, and, at any rate, in Bournemouth, a 1d. rate gives 7s. 9d. per child, while a 1d. rate in West Ham gives 1s. 9d. Take the case of Eastbourne. There you have to provide for one in ten of the population in the elementary schools. Take the industrial town of Ebbw Vale. There you have to provide for one in six. In Eastbourne a 1d. rate gives 6s. 5d. per child, while in Ebbw Vale the same rate gives 1s. 7d. Let us take another case. I do not know whether the hon. Member for Reading is here. In some cases the expenditure per child is very much higher. Sometimes it is higher because the education is better, and sometimes because the necessities of the case, such as buildings, are costlier. In Reading the cost is £5 12s. 6d. per child per annum, and in Harrogate the cost is £4 6s. 2d.
What do the Government propose to do? They propose, instead of having Grants per head of the children, that the Grants should be so arranged that you can take into account all these conditions and that the hard-pressed districts will get a larger share of Imperial aid than they do in other cases. That is a perfectly fair principle. That is the principle to which we adhere, and the principle which we propose to embody in legislation in the course of the present year. In some of these cases the legislation which we propose in the proposals which are appended to the Finance Bill have the effect of reducing the rate between a shilling and two shillings in the £. In some of the very heavily rated districts that is a very considerable relief. It means a difference very often, and a very substantial difference, in the rents of cottages in some of these districts. Take another problem which has occupied the House a great deal during the last two or three years, at the instance of not merely Members on this side of the House, but at the instance of Members on the other side of the House—the problem of housing reform. Bills have been introduced by hon. Members opposite, and we have been taunted repeatedly with doing nothing to carry through reforms to which we profess to be favourable. The right hon. Gentleman the Member for the Strand (Mr. Long)—I am going to quote one of his speeches—has stated repeatedly that subsidies from the Imperial Exchequer are the first essential preliminary of any real social reform for municipalities. I will read what he said, because it embodies the whole of my confession of faith on this point. That is what he said on 16th February, 1912. I am perfectly sure that he will not go back on it. He is not the sort of man who does:— obliged to him for his expression of sympathy in anticipation of my difficulty in trying to carry out his policy. The hon. Gentleman who spoke to-day quoted from the speech which I made about Acts of Parliament being dead letters. That is perfectly true. We have got a housing proposal which we propose to embody in the form of a Bill this year. It will be useless to carry through a housing proposal of that kind unless you are going to do something to elaborate the resources which the local authorities have for carrying them out. Having an Act of Parliament in these conditions is just a flogging: of an overburdened horse. It cannot carry the weight, and therefore it is essential for housing reform, and for educational reform, and in order to enable the industrial districts to discharge the elementary duties of civilisation in those areas that you should make provision, and make it this year, for the purpose of assisting them to discharge these functions. What has been my fate, because I have carried out all these pledges which were extracted from the Government by the House of Commons, and rightly so? I did not expect after all those lavish professions of anxiety to help the local authorities that hon. Members who had uttered these professions would go rummaging in the dustbins of ancient precedents to find obstacles to place in the way of those proposals being carried into operation. Everyone protested that it ought to be done, and now everyone is protesting to prevent its being done. They are different protests, but they are all protests in the way of the thing being done.
One side says, "You must not do it this year." The other says, "If you do not do it this year, we will not allow you to do it at all." One side says, "You must value the land." The other says, "You must not touch the land. We will not allow you"; and between all these protestant sects it is very difficult to get along with the work which everybody has been professing for years is the one thing that is nearest to his heart. Of course, I am not complaining of the Opposition. The temptation is great. There are many things which they do not like in it. They never like you to touch land valuation. To value land at its real value is a thing which they never like. They do not like the Government to get the credit of settling anything, and, of course, it is too. much of a temptation, if they think that the Government is in difficulties or embarrassed, for them not to make the most of it. I am, therefore, not complaining of them. It is human nature that they should succumb to this temptation of party in those circumstances, but I am hoping that my hon. Friends on this side of the House will bear that in mind. The right hon. Gentleman made a speech. As an old Parliamentarian, as I am getting to be now, I knew what was at the root of it. He said, "This is a very complicated measure. It would take no end of time; it is full of complexity. You will be here until Christmas. I want it done, but I am only telling you this." We all know what that means, or at least a few of us who have been engaged in that operation for many years. But I only want to point out to the House, and to a great many of my hon. Friends on this side who have not yet had a training in opposition. The right hon. Gentleman opposite said that they would get it soon. At any rate they have not had it yet; they do not know what it means. I have no doubt what it means. It means that in spite of the fact that we have been pressed to do this for years, once we have undertaken to do it they would rather have it done by themselves. That is the view which they take, naturally, because they think that a job done by themselves is done very much better than a job done by anyone else. [HON. MEMBERS: "Hear, hear!"] I observe that that cheer was confined to the youngest Members of the party opposite. Those who have been here for twenty or thirty years know too much of the difficulty to cheer it with any sort of alacrity. The right hon. Gentleman has had much experience in dealing with valuation, and he knows perfectly well the difficulties that are in the way. They are not altogether party difficulties, but difficulties of interest.
If the house will permit me, I will deal seriatim with the objections to the Government plan. The first objection is one which is taken to our imposing any conditions with regard to efficiency. They say that this is interference with the local authority. I do hope that hon. Members opposite will not persist in that. I am perfectly certain that if they were to bring in this plan themselves they would never dream of letting money go without strengthening the powers at the centre to see that the money is well spent. Control does not always mean more expendi- ture. Control must mean a check on waste. Is your Executive Government to have no control over that? Take at the present moment the Grants from the Imperial Exchequer for education and police. In those two cases you have, I should say, on the whole, fairly complete control. You can withdraw, I think—I am subject to correction here—the whole of the money given by the Imperial Exchequer for the police unless they are efficient. That is very tremendous power. I believe that that is the case with regard to the Board of Education as well, and that if education is not efficiently administered in the district they can withhold the Grants. Both parties are responsible for that. Do hon. Members opposite, or hon. Members on this side, propose with regard to either of those two items that we should withdraw the control of the Executive? We are asking for no more powers there, but then when we come to a big new Grant for the first time for public health we propose that you should attach the same conditions to that Grant—that is the intention—as you have already imposed with regard to the Grants for education and police. Is not that a reasonable proposition? Suppose that you have got a local authority that neglects to carry out the provision of the Act of Parliament with regard to housing do hon. Members opposite propose that we should not have the power to withhold the money until it carries out the obligations imposed by Parliament? It is a tangible proposition. We do not propose to interfere with the local authorities in respect to public health more than we interfere with them in respect of police and education. On the whole it has worked well. Like every other power it is sometimes abused, but in the main it has conduced to educational and police efficiency. I believe that it will also conduce to efficiency in the discharge of the duties of local authorities with regard to public health.
Then hon. Friends of mine and the hon. Gentleman opposite have talked about economy and efficiency as if they were two hostile and irreconcilable objects. They are not alternatives. The fact is that the highest efficiency means the greatest economy. The right hon. Gentleman the Member for the Strand put forward his proposal with regard to this, and I venture to say that all that we have done in this Bill—questions of drafting are questions for the Committee—is first of all to provide—I will come to valuation later on—large sums of money for the relief of the local authorities on the express condition that they carry out efficiently duties which were imposed upon them almost by the common consent of Parliament. I cannot think of one of these great duties which we are imposing upon them that both parties in the State have not done their best to call upon the local authorities to discharge—education, police, housing. Is it too much, when the taxpayer is coming in, and when he is increasing his share in the partnership, to say that he must have a little more control of the cash which he himself is finding? These are statutory duties, and not new duties at all. I come to the second objection to the plan of the Government. They refuse the money dependent on the setting up of a national system of valuation. When the right hon. Gentleman dealt with his project in his Bill, we on our part should have introduced that condition. My right hon. Friend the Prime Minister, when he made his first speech on this project in 1908, made the proposal subject to there being a national system of valuation. I quoted the passage in the House in my Budget Speech, and we are simply carrying out the pledge given in 1908, that nothing would be done to relieve the local authorities unless at the same time there were some step made for the setting up of a more uniform and more equitable valuation. The right hon. Gentleman opposite himself knows perfectly well—I was in the House when he introduced his Bill—that this was one of the most essential necessities of the situation. The present system of valuation, except in Scotland, perhaps, and in some of the great towns of this country, is perfectly ludicrous
What happens? You go to the rural areas or some small towns and you find a couple of overseers who have to make the whole of the valuation. Those overseers are frequently tenant farmers, tradesmen, or publicans, and just think of those overseers valuing great estates—estates of which they may be the tenants! How can you expect them to make an adequate valuation? In the first place, they have not the necessary knowledge of the principles of valuation. When land agents, with a knowledge of valuation, tell them what the position is, they have not got the equipment to contest the point with them, nor have they the information. What is the result? You have got some great houses in the country the valuation of which is a perfect farce. I have got a list of them. But if I were to single one out it would be said that I was attacking some particular individual. But nobody knows better than the right hon. Gentleman opposite that this is the case. It may be due to the fact that the machinery is imperfect—undoubtedly that is the case—or it may be due to the fact that the principles of valuation are all wrong at the present moment. Take appeals: If anyone appeals against the valuation of a particular house, where does he appeal to? He appeals to the assessmsnt committee, manned by the same people that he comes from, and that assessment committee goes to Quarter Sessions. Hon. Gentlemen who have had any experience of rating in rural districts will soon come to the same conclusion as the right hon. Gentleman when he was President of the Local Government Board, that there ought to be a complete change—I do not suggest of the whole system, but that there ought to be a complete system. The right hon. Gentleman came to that conclusion, and anybody who has anything to do with the present system of assessment knows that is the true one. The system is unfair as between one district and another—very unfair. It is extremely unequal between one district and another. There are districts which deliberately lower their valuation, deliberately reduce the valuation all round. Why? Because they want to reduce the general contribution to the common fund as against other districts. There is no doubt about that in connection with assessment committees. Sometimes they arrange among themselves on the assessment committee.
What is the good of saying that under those conditions you have got anything like a practical, businesslike, equitable system of valuation? Therefore, when the Government made up its mind to give Grants to the local authorities, they thought that was the best opportunity for putting the valuation system of this country on a proper footing. What is the system of valuation we propose to set up We propose to set up a valuation which has been prepared by experts. [An HON. MEMBER: "Oh!"] At any rate, they are better than overseers. Every local authority knows perfectly well that the only systems of valuation that you have got now which are of the slightest use are the expert valuations. You have got them in London, you have got them in Scotland, you have them in two or three other districts—and in Durham, I believe, you have got a system of the same kind. The right hon. Member for the Strand Division complained that the central authority has too much to say in the framing of the valuation. What did he propose? He had two proposals, and it is worth the while of the House to bear that in mind. The first was that the surveyor of taxes should go over every valuation and that he should alter the figures, and the figures as altered were to be the figures of the valuation. That was his proposal. The officials of the Inland Revenue Department—[An HON. MEMBER: "No, no!"]—the surveyors representing that Department and work in it—were to go over the figures of the district valuers. There are district valuers, and we hope to obtain the assistance and active co-operation of those very able expert assessors who are now engaged in the task in different parts of the country. There are parts of the country where you have no experts at all. That was one of his proposals, and a very valuable proposal it was. Another proposal of his was that the county council should have the power to employ State valuers for purposes of valuation. He contemplated that there was this difference between his view and our proposal. He proposed that the expense of these expert valuers should fall upon the ratepayers of the district; we propose that they should fall upon the Exchequer. That is the only difference.
No, no!
They were to be employed by the county council; the county council had the power to employ them.
I am reluctant to interrupt the right hon. Gentleman, but it is difficult, in a few sentences, to describe a Bill which contains one hundred Clauses. I propose to put it very briefly, and very differently from the way in which it was put by the right hon. Gentleman. I gave supreme power to the county council over the assessment committees scattered all over the area, and on the county committee the surveyor of taxes was to represent the revenue Department, and in some cases he had power to decide. The supreme body was to act through district committees. So far as I under- stand the proposal of the right hon. Gentleman, he said it was to transfer the supreme power to the Valuation Department.
Not at all! I said that the county council might employ the valuers, whereas the valuers under our proposals would be chosen by the Central Department. What I want to point out is that the right hon. Gentleman contemplated the employment of central valuers instead of assessment committees, at an extra cost to the ratepayers. He contemplated in the second place the complete supersession of the present system.
I am very sorry to interrupt the right hon. Gentleman again, but he is not quite correct. He is ignoring the fact that at the time when I brought in my Bill there were three distinct assessment authorities—the county council, the borough council, and the union assessment committee. The county council has the right as it has now to make its own assessment, and to establish what I call the county rate basis. The union assessment committee make that their basis for the union rate as between the individual ratepayers within the area over which the whole rate runs. That is no injustice, because they find the money which is required for that self-contained area. Therefore, whether in the county or the unions there was no injustice between them. There was the county rating committee, and I proposed to make that the chief committee, and that it should supersede the powers of the district committees. That is what brought me into trouble. I am really giving the hon. Gentleman an accurate account of my Bill, and I would not have interrupted him if he had confined his attention to describing his own method rather than describing mine.
I think that the right hon. Gentleman in giving us his explanation has displayed sound judgment in trying to get us off the Valuation Bill. I think that the description which he gave of his proposal was very similar to mine, given in a sentence, that it was a complete supersession of the present system. No doubt his proposal was a complete supersession of the present system, and the county councils superseded the districts, and experts were brought in. I did not go into the merits; I simply stated the facts. Here is another point to which I should like to refer. We may be told that we are contemplating in this measure obtaining valuations which no expert can arrive at. It is very remarkable what an expert valuer can discover if he is valuing for compensation. They can discover in a separate valuation of the land the most recondite facts; they value every poppy in a field, they separate every blade of grass and enter into the most abstruse valuations, once you have a valuation with reference to a question of compensation. But when you come to our proposal we are not to separate improvements from the site. The hon. Member for Chelmsford (Mr. Pretyman) has described the proposal of the Government as a lunatic proposal. It is very odd that our Colonies have adopted that lunatic proposal, and that in British Columbia, one of our most advanced Colonies, it is in working order to-day, and it was proposed by a Conservative Government and a Conservative Parliament. When the Colonies propose to tax corn they are great Imperial statesmen, they are our kith and kin, but let them tax land and they are lunatics. The proposal in this Bill is a proposal which is working well in British Columbia, and why is it a lunatic proposal if it is working well?
made an observation which was inaudible in the Reporters' Gallery.
After all, land is land, and you have got buildings on it which are just the same as here if you are in a town. You have got cultivated areas there. You have got, certainly in British Columbia, some of the most cultivated areas in the whole of the British Empire, areas with intensive cultivation. There is that kind of culture you can find in British Columbia, and they manage to do it there. What is the proposal they have worked out there? It is substantially the proposal which the Government have embodied here, that you should make a deduction in respect of improvements; but the way they do might be a better way, and that is a matter which can be discussed in Committee. Their proposal is that you should take, say, 10 per cent. off the improvements or 15 or 50 per cent. In some of the areas they have gradually worked it out from 20 to 30 per cent. until in some of their best cities the whole of the rates are practically on the land. The result is that the city is developed and you do not discourage buildings. At any rate that is a proposal which is in working order, and it is no use describing it as if it were some fantastic idea of some of my hon. Friends sitting there [ pointing to the benches below the Gangway on the Ministerial side ]. The last point which is made with regard to valuation is, I think, with regard to the demands which are made by us in the Revenue Bill—and I do not want to discuss the Revenue Bill now—for information. "A new Form IV." it is called. I am sorry to say the right hon. Gentleman the Member for the Strand (Mr. Walter Long) had a more drastic Form IV. in his Valuation Bill, and I am not at all sure that it is not on the whole a better one than ours, and I think it is worth considering in Committee. There is a penalty attached to it which, it is true, is not as heavy as ours. Every occupier and owner was bound to answer a certain number of questions, and, if he did not, he was to be fined. He should not have set these very vicious precedents. There were A and B, but I will not mind them, and I should like to call his attention to C, under which they were to make a return
"of such other particulars respecting the hereditament as may be required for the due execution of this Act."
That would give us everything we ask for; all we ask for. [An HON. MEMBER: "Incorporate it!"] He is the father of Form IV. It is true he abandoned his offspring at a very early date, but there it is enshrined in this very valuable measure which, I am very sorry, he did not see his way to carry through, though it was no fault of his. To sum up, those are our proposals with regard to valuation. We propose to raise this money with a view to making the Grants in the next financial year to the local authorities. We propose this year to drop the proposals, for the temporary Grants, very largely because of the difficulties with regard to time. There were difficulties with regard to time, and it would not be quite certain that we could carry those through in the time. I should like to say with regard to them something as to a suggestion which has come from some of my hon. Friends. They have said, "You are dropping a penny of the Income Tax, and why do you not abolish the Sugar Tax?" I can assure my hon. Friends that there would be no more attractive proposal to me, but I want them to realise what it means. If you are going to give relief to local authorities, and to pass proposals for relief, those are Parliamentary commitments which next year will operate, and you will want that penny. You cannot do without it, and if you abolished the Sugar Duty this year there would not be enough for the purpose In that penny, and next year it would involve, at any rate, twopence, at least twopence, or more, to the Income Tax. Let not my hon. Friends go away with the idea that it is a question of an alternative between a penny off the Income Tax and the abolition of the Sugar Duty. It would be an alternative between reducing by three and a half millions the relief to local authorities, and I am very much afraid It would be a reduction in that part of the Grant which I should regard as exceedingly disastrous—public health, which means housing. This is the first step in the action which the Government take with regard to the housing question to put it into effective operation.
Why did you not do it before?
I am glad the hon. Gentleman is pleased. It is the first step we are taking in order to enable local authorities to carry out the powers which they have got, and to enable them to carry out further powers.
Hear, hear.
I hope the hon. Member will help us to put it on the Statute Book, and I shall be very much delighted to meet him in the Division Lobby to-morrow night.
made an observation which was inaudible in the Reporters' Gallery.
It will be a Parliamentary commitment which will involve the finding of the money for this purpose for the next financial year, and which will involve the finding of the sum of money which we have indicated with regard to Ireland as well. Those who vote against this Bill, and the voting on this Amendment means not voting for alterations in Committee, but it is voting against the proposals to commit Parliament to the making of those Grants to the local authorities, and the making of the Grant to Ireland. That is the proposal. We are taking this step, and we mean to put the whole strength of the Government to carry It through. We are taking this step, first of all, because we are redeeming pledges given repeatedly in this House. We are taking this step, in the second place, because we believe it is essential in order to get healthy villages and towns, that you should equip the local authorities with those means. We believe, in the last place, it is necessary in order to increase the efficiency of the people, and to make a stronger and more enduring State.
The House itself is in a very curious position owing to the blunders of the Government, but surely the speech to which we have just listened is one of the most extraordinary the House has ever heard. I think it would be difficult for anyone to gather any sort of idea of the Bill, which we are asked to read the second time, from the speech of the Chancellor of the Exchequer, and, though I suppose the Chancellor of the Exchequer has read his own Bill, I am utterly unable to suppose that he has read the Amendment which he professed to be answering, for his description of it was ludicrously absurd and inaccurate. What was the line which the Chancellor of the Exchequer took? Apart from all details, stated in the broadest possible terms, it was this: The question of the relief of local rating is of the utmost urgency. Industrial districts are being strangled by their rates, the legislation of Parliament is being rendered of no avail because of the burden. Reform, progress, improvement in health, better housing, all are arrested for want of money, for want of relief which this House ought to give to the overburdened ratepayer and overburdened local authority. What is the proposal which the Chancellor of the Exchequer now lays before us? It is that no attempt whatever should be made this year to give any relief of the kind.
Necessitous school areas.
Always excepting some temporary relief to necessitous school areas and a trifling Grant for the feeding of school children, I do not say trifling in regard to the work that is done, but in the amount that is given. With those exceptions, no relief whatever is given this year. The Chancellor of the Exchequer now requires us to postpone the relief which was earlier held out until next year, and the relief which is contingently promised for next year is made to depend upon the passage of other Bills, and upon the adoption of a system of valuation which he has not sought to defend and as to the main parts of which the House is still in profound ignorance. I am going to return to this subject, but I only call the attention of the House here to the fact that the speech which the Chancellor of the Exchequer was making has no relation whatever to the proposals which he is asking us to adopt. I desire to go back for a moment to the observations with which the right hon. Gentleman began his speech. He said that no criticisms had been made of the taxes which he proposed. He is mistaken. His memory, as not infrequently happens, played him false.
I said in this Debate.
7.0 P.M.
I think he is mistaken even as to this Debate. Not only in respect of the speech of my hon. Friend behind who corrected him, but of course others of us have taken objection in the earlier Debates. I do not want, having reviewed the financial situation as a whole in the earlier Debate on the Resolution, to cover the whole ground that I went over then. But since the Chancellor of the Exchequer issues that challenge, I repeat now the statement that I made then, and the contention that I made then, and which he then attempted to answer, that I think his proposals in regard to settled estates are not merely inexpedient, but are positively unjust and indefensible. What are those proposals as we now see them? He has made the concession which he promised in regard to settled estates where only the interest of a survivor of a marriage intervenes between the devisor of the property and to those to whom it is ultimately to go. For that concession I am most grateful; it will avoid great hardship. But my contention is that it is not equitable or honest of this House to break a bargain which it has made with individual taxpayers, and in respect of which it has received money from them. And note the harshness with which it is done! Under certain circumstances time is allowed to taxpayers to redeem their obligations to the State, but in all such cases the State charges interest from the moment the debt is due. Here is the Chancellor of the Exchequer who, by himself or his predecessors—or, let us say, the Government of the country—has taken money from individual taxpayers in respect of a bargain which was then en- tered into with the State, and years afterwards the Chancellor of the Exchequer proposes that we should come down and by force break that bargain—on what condition? On the simple return of the money originally paid, of the usufruct of which the taxpayer been deprived all these years, and the use of which during all that time has been enjoyed by the State. How different is the attitude of the State when it allows a little time to pay and exacts interest for all the time the money is due, and its attitude when, having had the money all these years, the Chancellor of the Exchequer actually proposes that in breaking the bargain he shall give back merely the original sum paid, without any allowance whatever for interest! Apart from the question of interest, I contend that that is a dishonest action, and I challenge the policy. What is the Chancellor of the Exchequer's defence? I said that there would be no objection to making the proposal as regards future settlements. He said that that would not suit his book, because it would not give him any money for the old settlements, and would deprive him from all the money from the new settlements. He can gradually raise the rates if he likes for new settlements so as to tide over the time, and gradually adjust the circumstances to the new conditions that he wants to bring in; but the fact that it is only by doing an injustice that he can obtain the money that he wants does not entitle him to do that injustice.
The only other answer the Chancellor of the Exchequer put forward was that, if it were once allowed that, when the State had taken the money in this way as a consideration for not charging a duty, it must not then charge that duty, corrupt bargains would, or might be, made between Chancellors of the Exchequer and particular interests which they wished to serve. Is there any suggestion that in this case there has been any corrupt bargains of any kind between any of the Chancellor of the Exchequer's predecessors and taxpayers? Of course not. Time enough when you can impute corruption to destroy a bargain on the ground that it was invalid from the first because it was corrupt; but you have no right to break a bargain honestly made, of which the individual taxpayer has fulfilled his part, simply because some other person might make a corrupt bargain and try to defraud the taxpayer or limit the Chancellor of the Exchequer's rights. I am not going to dwell at this stage on other features of the taxes proposed in the Bill, although there are features which require explanation, which explanation we have not had. For instance, if it be right, as I think it is, to meet, as the Chancellor of the Exchequer proposes in particular cases—the cases of land, and of businesses not being companies—the hardship involved in the rapid succession of different heirs, why is that hardship only to be met in those particular cases? Where is the equity in saying that if my property is in land, and I die, and my heir dies, and his heir dies in rapid succession, then, instead of paying the whole duty, they shall pay only 50 per cent., or 40 per cent., or whatever it may be, while, if my property is in anything other than land or a business not being a company, they shall pay the full duty? I think the Chancellor of the Exchequer will find that in these days, when limited liability companies are often private companies in all but name, his position is quite untenable, and that he must extend the grace which he proposes for certain cases to all similar cases.
One further observation I wish to make in regard to a general matter. The Chancellor of the Exchequer alluded to the speech made by my hon. Friend (Mr. James Hope) earlier in the afternoon, and paid my hon. Friend a well-deserved compliment. No doubt it is true, as they both perceive, that there is not any margin for very large or striking economies in our existing expenditure. For my part, I have never concealed from the House in these discussions the belief that, short of circumstances arising beyond our control, which would enable us to make great reductions—that is, in the field of armaments—you cannot expect a reduction of any great extent, and that the tendency must be for expenditure to grow. But does not the Chancellor of the Exchequer himself see that the very difficulty upon which he dwelt, of making economies in expenditure once sanctioned, is a reason for being more careful than he has been about incurring fresh commitments? He always challenges the House with: "Do you disapprove of old age pensions; do you disapprove of the Insurance Act?" We could find a great deal to criticise in the Insurance Act. But that is not, from the point of view which he is arguing, a fair way to put the question. If that were all, we could all of us produce to the House schemes of social reform, costing countless millions of money, for every one of which, individually considered, a majority could be found in the House. Should we then be right in voting the whole lot regardless of their cost? No Sir; you have to balance the objects which you wish to achieve with the means which you have available for achieving them. You have to ask yourself, not after you have passed your law, "Can we make some economies in its execution"; but, before you frame your scheme, "Can we afford to spend at this rate and to increase our expenditure as fast as we are doing?"
On the other side of the House you find, by the Chancellor of the Exchequer amongst others, attempts being made to divide the two sides of the House in regard to the expenditure on armaments. I do not think that you can divide at any rate the Government and this side of the House on that question. We may differ as to what the facts require at any given moment, but the test that we apply is the same; what is required for the safety of the country? We want no more than that, and men who sit there and carry the responsibility of Ministers can be content with no less than that. But when an hon. Member on the Back Benches, like the hon. Member for Hexham (Mr. Holt), says that it is in that field that you can make economies, I venture to say that he would alter his tone, as we have seen others alter theirs, if from the Back Bench he descended to the Front Bench, and instead of the irresponsibility which he now enjoys he had to take upon himself the burdens of Ministers sitting in Cabinet or in the great offices which administer these services. If you want to make economies, that is not the field in which you have full control. It is in the realm of domestic expenditure that at any time this House can, if it is bold and strong enough, make such economies as it pleases. But in the field of armaments the action of this House is dependent on conditions not made by us, not framed or controlled by this House or by this country; and it is idle to pretend that, regardless of what is going on in the world elsewhere, this House or the Chancellor of the Exchequer can cut and carve at the Navy and Army Estimates in order to suit the exigencies of his finance, or to provide means for social reform.
But that question, though it is often raised in speeches, as it was in the speech of the hon. Member for Hexham, is not directly raised by this Budget. The main question raised by this Budget and by this Amendment is, no doubt, that of local rating. I say that it is raised by the Budget and by the Bill which we have before us. I wonder whether the Chancellor of the Exchequer really thinks that the precedents which he cited, which perhaps were not altogether fortunate for the Governments which they concerned, and certainly are not the particular features in the career either of the late Lord Goschen or of Lord St. Aldwyn upon which their financial reputation is based—I wonder whether he thinks that even those episodes bear any comparison with the muddle in which he has involved himself and the House. We are discussing a Bill which is to become two Bills, one half of which is, as I understood you, Sir, to say from the Chair to-day, visible to your eye, and therefore to ours, on the Second Reading, but becomes invisible the moment you leave the Chair, and the Chairman of Committees takes your place. These two Bills, regarded at the present time as one Bill, have to be read in connection with a third Bill, and both have to be interpreted in the light of a fourth Bill which has not yet made its appearance, added possibly to other Bills which will develop particular features of the policy.
The Chancellor of the Exchequer showed, I think, pretty clearly, that he felt that he had received a considerable blow by the rulings which were given from the Chair the other day. He turned with great anger on my hon. and learned Friend the Member for West St. Pancras (Mr. Cassel), and accused him of destroying the chance of the local authorities to get any relief this year. A more monstrous travesty of the facts was never invented even by the Chancellor of the Exchequer. Higher than that I cannot put it. But what is the claim of the right hon. Gentleman? He speaks in tones of fierce indignation—[An HON. MEMBER: "No!"] Yes, he did. He turned on my hon. and learned Friend and said that he had been raking in the dustbins for ancient precedents in order to destroy this scheme. What does that mean? All that my hon. and learned Friend asked was whether the Government were conforming to the rules and practice of this House. We know on your authority, Sir, that they were not. The claim of the Chancellor of the Exchequer is that this Government is to be above all ruling. Of course, I am not surprised at it. As far as they can they make themselves so. There still, however, exists, thanks to the Chair of this House, some restrictions on the powers of Ministers even with a majority as docile as that which supports the Government. If my hon. Friend's intervention had been to make it impossible to proceed with the relief this year, he was still right to intervene and to guard the practice formed, not without reason, by the House, and by which the House has hitherto been bound. It is quite untrue to say that the intervention of my hon. Friend and what followed made it impossible to give that relief.
Nothing has made it impossible to give that relief this year except the determination of the Chancellor of the Exchequer to couple with the relief conditions, which are wholly unnecessary, and many of which are, in my opinion, not merely unnecessary, but are bad. It is because the Chancellor of the Exchequer insists upon maintaining those conditions that industrial districts are to continue to be strangled; housing reform is to be held up; and—if the Chancellor of the Exchequer is to be believed—men, women, and children are to die to gratify the fancies of the Government and half a dozen Gentlemen who sit below the Gangway, rather than that by a slight change—and a great improvement—in the Government proposals, the money should be made immediately available. The right hon. Gentleman undertook to answer the objections which have been made to the conditions which he proposes to attach to the Grant. The right hon. Gentleman wished to show that there had been some misunderstanding as to the attitude of the Government with regard to the administration of these Grants. If there has been any misunderstanding, nobody is more responsible for it than the Chancellor of the Exchequer himself. I confess, for my part, that I still do not know what in the mind of the Chancellor of the Exchequer is the object of the money which he proposes eventually to give from the National Exchequer to the local authorities. Is it relief of the rates or is it extension of activities? When the Chancellor of the Exchequer was electioneering—not very successfully!—still we must give the right hon. Gentleman his due, he did his best—
And will do it again.
I am quite sure that the right hon. Gentleman will.
Go to every by election!
I hope the right hon. Gentleman will go down to Brighton.
I went there once, and turned your man out.
Try again!
Let the Chancellor of the Exchequer try again. I never doubted that this was not a single excursion of the Chancellor of the Exchequer. I have not the slightest doubt that he proposes to repeat the form of argument that he used at that by-election, and which was the crudest form of bribery that he could offer to a constituency. "I can give you so many thousand pounds per annum." [An HON. MEMBER: "The Agricultural Rates Act!"] He forgot that the poor taxpayer has to find the money. It was a boon granted by a generous Chancellor of the Exchequer—at the expense of his country!—to this particular borough—for the sake of getting its votes! A very little earlier in the Session an unfortunate junior Member of the Government went down to another election and promised that out of the money at the control of the Government a harbour should be built in that constituency. [HON. MEMBERS: "No, no!" and "Yes!"] He was subsequently brought to the Table of this House, and he himself, and the Prime Minister, expressed regret that anything of the kind had ever been said. The hon. Member explained that he had said what he had without premeditation and without intention. [HON. MEMBERS: "What did he say?"] Send for the hon. Member himself. [Interruption.] He was brought to this Table and apologised, and he explained that he had made the statement without premeditation.
On a point of Order. Is the right hon. Gentleman entitled in this Debate to refer to a personal incident that occurred some time ago?
I do not see why the right hon. Gentleman should not do so if he cares to.
On a point of Order. Ought not the right hon. Gentleman, when preferring a charge against my hon. Friend—a charge which has been made before and refuted by my hon. Friend—to quote the exact words on which he bases his charge?
No doubt the right hon. Gentleman, if he has got the words with him, will quote them. I recollect the incident quite well, and so does the House.
I referred to the incident, Sir, because it is very pertinent to what the Chancellor of the Exchequer has just said. That which in the case of the junior Member of the Government was declared to be an inadvertency, and was apologised for by him at the Table of this House, and for which in his case the Prime Minister expressed regret, the Chancellor of the Exchequer now declares to be his deliberate intention to practice on a big scale, by premeditation, in every constituency.
He never said so.
A man may, by too great zeal for the success of a political cause, offer a voter a shilling, and may unseat his candidate, and find himself in prison. What is his offence, morally judged, compared with that of the Chancellor who deliberately sets out—
What about the promise of work to the cement workers, and "work-for-all." Are those not bribes?
The right hon. Gentleman has deliberately erected bribery on a great scale into a system. He has done more and is doing more to degrade politics, because of that deliberate policy, than any other Member of this House. I have been led into a longer digression than I intended, and I come back to the question that I was arguing when the Chancellor's interruption led me to divert my attention. The right hon. Gentleman when he goes down to a constituency on the eve of a poll represents the sums to be given as wholly in relief of rates. In his speeches here, he represents the sums to be given in respect of new services. If that is so they will not be in relief of rates. The local authorities view with the greatest suspicion the amount of control which the Chancellor seeks to secure for the Government Departments. The Chancellor of the Exchequer mentioned a certain illustration. He said: "We are seeking to do only what we have already done in the case of the police, for instance, or education." I make no complaint of the administration of the police Grant, or of the demands which have been made by the central authorities in that respect. But does anyone think that the Education Department ever makes for economy anywhere, or that to give them additional power to stop the whole of the Grants unless all their whims and fancies are complied with is to give to the ratepayers any security that any relief at all will ever reach them, or leave the local authority with any feeling that they are masters in their own house? For my part I confess that I think that the right reform in the Education Department is not to increase its control over the great local authorities but to diminish it, and to give them more authority to make experiments if they wish within their own area to suit the education there. I should not have said the same thing of the old school boards. In the case of the county councils and the councils of the county boroughs I say that the right reform would be to give them more authority. It is perfectly absurd that the council of a great city like Birmingham, Manchester or Liverpool should be tied hand and foot in every little detail; that a corporation which you can trust to bring water down from Wales, and to manage its tramway undertaking, gas undertaking, and vast matters of that kind, should not be trusted to build a single school without permission from clerks in the Education Department! It is perfectly ludicrous. I do protest, and I hope there will be some echo on the opposite side of the House, against this constant attempt to limit the discretion of the authority of our great local bodies, and to concentrate power in the hands of a bureaucracy. Take again the question of housing. The right hon. Gentleman proposes a Grant which is to include assistance in housing. The housing problem is essentially different in different parts of the country. There are places where the right policy for the local authority is to build. There are places where that is the worst policy they could undertake. What is the effect of centralising all control? That the Government Department seeks to enforce one policy all over the country. They try to stretch everybody on their Procrustean bed. The consequence is a great waste of money and expenditure which is not suited to the particular needs of the ocality. The consequence again may be that many authorities will be deprived of the assistance under the Grant, because they will not adopt the particular solution which commends itself to the Department.
It is your own Bill.
The hon. Member must not interrupt.
I was not interrupting. I was only explaining—
It is not necessary to explain in the middle of a speech by an hon. Member.
I say, for my part, that I view with the greatest jealousy this constant infringement of the rights and authority of local bodies, and the constant attempt to transfer the authority from them to a bureaucracy which cannot be controlled in all these details by Ministers at the head of the Department, and which I think, even if such control were possible, would still be less well done by them than by the local authorities, and what the local authorities have to dread and do dread in this matter is attempts by the central authority to increase the demand made upon them in respect of any money voted by this House for them, and so to prevent any part of this money going to the relief of the rates, about which we hear so much.
The right hon. Gentleman then turned to the defence of his national valuation. He said that national valuation was necessary in order to get equity and uniformity. I venture to say that in our great cities national valuation is not necessary for that purpose, and I do not think he will deny it. I will go further. I will agree that in some small areas there should be an outside adviser, sitting, as my right hon. Friend proposed in his Bill, with the local assessment authority, to prevent things being smuggled through in the dark, and who should be able to question the decision which he thought unjust. But, as we understand the proposals of the Government, they are not merely tendering advice to local authorities, or placing a skilled assistant at their elbow, where they have not got one, but they are practically superseding all local authorities and local information by a centralised land valuation in the name of equity and uniformity. I venture to say, if you take a great city like Birmingham, the ratepayers will be of opinion that they are much more likely to get equitable treatment from their local assessment committee, with its expert advisers, than they will ever get if they have to go to the Government land valuer. Take the city of Birmingham as an example. Who is it that the right hon. Gentleman proposes should advise? The land valuation officers. Who are they for the city of Birmingham? One gentleman established in Birmingham, one gentleman established in Walsall, and one gentleman, I think, established in Dudley. These three gentlemen are to do the work of assessment throughout the whole city of Birmingham. Do you think they will have all the information, or that they will be able to get the information got by the present assessment committees and local authorities, who have the advantage of being in close touch with the collectors, and are constantly checking the valuation put upon property? The right hon. Gentleman will find, and rightly, that he will have the strongest opposition of those local authorities to the proposals to take this work out of their hands and keep them as ornamental appendages to cover whatever deeds are done without any real authority or control.
What is the guarantee of the right hon. Gentleman? He never thought it worth while to show that national valuation would be uniform. Is he content with the valuation he has already got? Notoriously not! There ought to be a basis for agricultural land and for urban land. But that is not to be. What sort of a guarantee is there that it is to be uniform, even amongst agricultural land? None whatever. In particular cases it may be that on appeal to the central authority you may have some sort of security for some sort of uniformity, bearing a little upon what the gentlemen at the head of that authority had for breakfast on that particular morning. Are you to have substantial uniformity in this case? In the great bulk of the cases you cannot. In the case of local rating every man has an interest in seeing his property is assessed on the same basis as the surrounding property which contributes to the same rates. Take land values. I have an interest in seeing that the results arrived at by the land valuers of my property are comparable to those arrived at on my neighbour's property. We may get entirely different results. My neighbour may very well think that though we have exactly similar land, the value of his is greater or lesser than mine. He may put in a value which may be accepted. I come along later and put in a different value. I argue it with the land valuer. I convince him. My land is valued at a different figure though the two are absolutely the same. You have no sort of guarantee under a valuation of that kind that you have anything that will be uniform throughout the United Kingdom. Then you come to what is after all the whole object of this proposal—the separation of site valuation from improvement valuation. I do think that we ought to have had, at one period or another, some defence by the Government of that proposal. They have taken as axiomatic that it is desirable. The only defence we had was from the President of the Local Government Board, who announced to the House that, having given some study to the question of local rating, he had come to the conclusion it was the worst that could be devised. He declared that the moment a person has improved his property on account of his enterprise and skill, down came the rate collector and taxed him for his enterprise and skill.
The right hon. Gentleman was talking of the rate collector, and he said by your present system of rating, where a man shows a little enterprise and makes improvements, the rate collector at once comes down and fines him for his improvement. Does he not see that it is exactly what the Chancellor of the Exchequer does to the taxpayer? The moment he makes a little improvement in his property, down he comes upon him. The whole system of taxation is the same. The basis of the present system of taxation is supposed to be ability to pay; the basis of the present system is intended to be ability to pay. The right hon. Gentleman entirely abandoned that basis, and he proposes to substitute for it an entirely different one, and the one condemned by the Committee which he himself set up, and the delay of whose Report he gave as his excuse for not dealing with this question for four years past. He dismissed that Report without one word of comment. He dismissed the damaging criticism they make of this scheme without one word of explanation as to why he throws it on one side. If anyone takes the pains to read that Report they will see how little there is to be said for this distinction in practice, and how utterly flimsy it is as an excuse for hanging up the relief of rates a day longer. My hon. Friend's Amendment condemns the Government for their voluntary act in abandoning any relief in the present year, except in two minor instances mentioned earlier. The Amendment condemns them for the conditions they attach to any relief which is to be granted in subsequent years. The right hon. Gentleman insists upon these conditions which make the present relief impossible, and he uses these conditions to try and pacify his political supporters, and he extricates himself from the difficulties of time and the lack of consideration given to the subject by the confusion into which he has thrown our financial business and in order to cover up the mess he has made.
I am quite of the Chancellor's opinion, so far as assisting rating authorities goes. I have read with great interest the Report of the Departmental Committee, and I am rather surprised that he should have adopted an idea in regard to rating which is certainly not in their Report and which is condemned in their Report. The real relief that ought to be given to local authorities ought to be relief in payment of Imperial taxation—that is to say, of certain charges which have been put on local authorities which are really Imperial in their nature, and which ought to be, in my opinion, removed and paid by the Exchequer, or the greater portion paid by the Exchequer, frankly and fairly and simply. Now there are one or two things I should like to ask the Chancellor of the Exchequer to consider. He said that there is very high rating in certain districts and towns and localities, and he proposed to relieve these according to the excessive or high rates. I always think that people talking about high rates have forgotten this, that where districts have high rates they have low rents. The high rates are there because the assessable values are small. Let me explain what I mean when I say the rents are low. I will take a case that illustrates this very clearly. Edmonton is a place we hear always cited as having high rates. They are 10s. 6d. in the £, I think. We have St. Luke's, in the City, where the rates are 7s. 6d. People say, "Just look at that difference!" Well, but if a man takes premises in St. Luke's and pays £120 a year rent and £45 in rates, that amounts to £165. If he goes to Edmonton, where the rates are 10s. 6d., he gets better premises for £85, and, with the rates in Edmonton, his rent and rates and taxes amount to £135. So that he gets better premises in Edmonton than in St. Luke's with a lesser expenditure by £30. That has always got to be borne in mind when you talk of relieving places which have high rates, and I say that would be wrong unless you take into consideration the question of rent as well. I was very much interested to hear the speech of the right hon. Gentleman the President of the Local Government Board. Some parts of his speech struck me as very extraordinary. The President of the Local Government Board said:—
"After having given it some study, it appears to me quite the worst principle of local taxation that the perverse ingenuity of man could have devised. It imposes the severest check upon building and upon all forms of improvements. We adopt the methods of Eastern tax-gatherers. He waits to see some evidence of industry, and enterprise and prosperity, and then pounces upon the man and seizes the proceeds."
That is what the Chancellor of the Exchequer always does. I have had no experience as probably the President of the Local Government Board has of what Eastern people do. But I know that the Eastern tax-gatherers would not have a chance against the Income Tax surveyors and collectors in this country, for these people even search the files at Somerset House. If a new prospectus goes out and you appoint a director, down goes the collector of taxes on him, even before he has received any fees, and there is no escape. The right hon. Gentleman has no doubt profoundly studied this subject, but there have been greater men than he who have studied this question. What I object to is that my hon. Friends will not take the trouble to think this subject out for themselves. You do not tax improvements; you say you wish to tax a man according to his ability to pay, and you take his house rent as the indication of his ability to pay. The President of the Local Government Board may have studied this question deeply, but I will give the opinion of some of the great economists of the last century. What does Adam Smith, John Stuart Mill, and Bastable say about it? John Stuart Mill says:—
"It is one of the fairest and most unobjectionable of all taxes. No part of a person's expenditure is a better criterion of his means, or bears on the whole more nearly the same proportion to them."
Bastable considers this
"Tax proportionable to house rent, which is a good rough measure of taxable capacity."
Shop rent is the same thing.
indicated dissent.
You rate railway companies upon what? Upon the income they can derive. Well, you tax the shop upon the income it can derive. The Chancellor of the Exchequer says we cannot do it by a local Income Tax. Well, I am not so sure about that. He says, "I will take something from the general Income Tax." I do not blame him for taking something from personalty for the excess of burdens that have been put upon local authorities by the State. What is this extraordinary process which is proposed? You are to divide it up. As I have said before, 80 per cent. of the people of this country live in hired houses, and the whole of the rates are borne by the tenant. If you give relief on one part of the rates, what does it matter whether it is on the land or the houses built upon the land? It cannot make the slightest difference. The only thing is this: It is said that it will encourage building, but has the Chancellor of the Exchequer really considered that point? What is the encouragement offered to me to build £100 worth of buildings? You get a rebate in your rent or your taxes, and what is the rebate? You ask me to spend £100, and the interest I shall get by way of rent is £5, while the relief I get is 5s. Therefore, you encourage a man to spend £100 on buildings by saying, "I will relieve you of 5s." The thing is preposterous, and I do not know where the idea comes from unless it be a sort of sop to my hon. Friends behind me.
Why should you not continue the present valuators for this proposed valuation? They have been at this business since 1910, and perhaps the Chancellor of the Exchequer would hardly believe it, I have just got Form IV. for the first time, and it is nearly five years since the Act was passed, and it is not nearly done yet. It has cost an enormous sum of money, and until it is done, why cannot that be used? It is there, and you have found the site value, and why should it not be brought up to date and done with? I agree with the Chancellor of the Exchequer that he must have some overlooking for valuation. He was good enough to say that in Scotland the valuations were better, but there is this difference. There are certain Grants which are obtained according to the necessitous areas, or according to the amount of the assessment, and in some districts the allowance is 10 per cent., and in others 15 per cent., and 20 per cent., so that you do not get the same uniformity at all. I agree that there ought to be some guiding standard of uniformity. Whether it is by surveyorship or with the assistance of the local authorities supervised by some members from the Governmental staff I do not know. I do not care which way it is so long as there is uniformity, and so long as all share alike and in proper proportion I am content. I do object, however, to the idea that you are going to give them relief according to the highness of the rate. You have to take the whole of the circumstances into consideration, whether it is cheaper for a man to live there, and it is a question of the rent. If he gets a low rent and high rates he is as well off as if he gets a high rent and low rates.
On the general question of the Finance Act, I am afraid I cannot agree with the right hon. Gentleman as to the necessity for all these armaments, particularly the money spent upon these enormous ships. I believe we are nearing a time when the whole expenditure upon these large ships will become practically waste, for we have the evidence of some of our leading men who believe that you cannot send these "Dreadnoughts" to sea. If a ship is going to cost £2,500,000, and when you have built it you cannot use it, I consider that to be a most shameful waste. Then there is a good deal of other expenditure which might be saved. We have been rather misled with regard to the cost of the Insurance Act. It was to have cost £2,500,000 and now the cost is £7,000,000. Therefore the amount is greatly in excess of what was estimated at first. I think a great deal of this excess is owing to the anxiety manifested by the Government to get that Bill through in a certain time. That drove you unwillingly into an expensive bargain with the medical men and they have profited enormously by it. We find all over the country that the doctors have motor cars which they never had before, and almost every panel doctor has one now. We are paying very much too heavily for our medical assistance, and I am not at all sure that it would not have been better if we had had a little more time to consider this Bill, for this would have allowed us to come to a proper arrangement with the doctors themselves. In any case I intend to support the Government on this Amendment. I wish, however, to keep a free hand with regard to the later stages of the Bill, as I have certain Amendments down for the Committee stage. I protest against this enormous expenditure. I was reading the other day a book published by the Liberal Publication Department entitled "Ten Years of Tory Finance." It was not pleasant reading, having regard to the difference between the taxes then and the taxes now and our expenditure.
Hear, hear!
Hon. Gentlemen opposite were just as much to blame for that because they clamoured for old age pensions. Hon. Members opposite began the agitation for old age pensions, but they left it for us to carry out. I do not complain of it because I think it is an excellent measure. Hon. Members opposite demanded these wretched "Dreadnoughts," and gave us no peace until the Chancellor of the Exchequer gave way. This enormous expenditure is a great danger to our party. I know what my own Constituents feel on this subject, for I have had direct communications with them, and they feel very strongly that this expenditure has got to such a height that it has become not only dangerous to our party but to the State, and unless some check is put upon it, I feel it will result in a distressing condition of finance in this country in the near future.
8.0 P.M.
There are one or two challenges which the Chancellor of the Exchequer has thrown out in the course of this Debate which require answer. The discussion during the last few days has been chiefly upon the alteration in the Budget. After all, when the whole heart of the Budget is taken out, I think it is only natural that a very great deal of the criticism should be levelled against such extraordinary dealing with the House. I should like to remind the Chancellor of the Exchequer that the whole trouble from his point of view has come from the fact that he has fallen into the "cave" created by Members of his own party. When the right hon. Gentleman complained that very little attention has been paid to the taxes in this Budget, I really think, considering the way he has attracted criticism on other subjects, that it was hardly justifiable to suggest that there is not a great deal of uneasiness in all parts of the House at the present state of affairs. The hon. Member who has just sat down showed what is the general feeling of moderate men on the side he sits with regard to that position. There has been a great deal of discussion as to what mandates were received the last election. There was only one mandate given to the Radical party, and that was a man- date for retrenchment. The Chancellor of the Exchequer was the keenest critic of Unionist Chancellors in the past with regard to the question of economy, but he has gone along a kind of rake's progress, which, in my opinion, is most serious for the whole future of this country. The right hon. Gentleman has increased the taxation of this country by something like £55,000,000, or £9,000,000 a year on the average. The Chancellor of the Exchequer, whose attacks on my right hon. Friend I have read with the greatest interest, and who promised us that the Liberal party, at any rate, was going to end the reckless finance of the Tory party has increased our taxation by £9,000,000 a year. I remember that the right hon. Gentleman once or twice during the Debates on the Budget, and in the present Debate, referred to the fact that there has been complete silence on the part of Tariff Reformers with regard to their proposals. Unhappily for this country it is not our Budget, and it is not our place to produce detailed proposals. I know the right hon. Gentleman is fond of Biblical quotations, and I should like to refer him to St. Matthew, chapter xvii., verse 25:— been introduced, we may presume, in order to alleviate their sufferings, but every single reform has been a palliative, and not one of them has really mitigated the disease. Every single one of them has undoubtedly aggravated it. We have just had a speech from one of the Gentlemen who highly disapprove of. the methods of the Chancellor of the Exchequer, and who deplore the state to which we have been reduced, in this House of enormously increasing taxation year after year, but he is going to vote for the Chancellor of the Exchequer. I congratulate him on his words, if not on the bravery of his action afterwards.
We heard once more that the taxation for armaments is a great burden to this country. The right hon. Gentleman has again and again thrown at this party the fact that taxation for armaments has gone up. That taxation was either right or wrong, and, if it was wrong, surely the right hon. Gentleman should have said so to the Cabinet! This taxation for armaments has been raised because the Cabinet as a whole has believed it essential for the insurance of this country, and it is a very poor standard of Debate when the Chancellor of the Exchequer, who has consented to this taxation owing to pressure from his own colleagues, from time to time tries to make out that it is the Unionist party which is responsible for it. Although the taxation for our defence has increased by £20,000,000 under the right hon. Gentleman, we find that civil expenditure has increased by £35,500,000. The right hon. Gentleman's various reforms have cost 75 per cent. more than any increase in taxation for armaments. The House will agree that the whole burden of the new taxation has been practically levied upon Income Tax and Death Duties. I suppose the right hon. Gentleman imagines that the least number of votes are affected in this manner. The House, I think, should be reminded that the present Prime Minister, when the Unionist party were in power, declared that a shilling Income Tax in time of peace was impossible to justify. He told us then that it tends to destroy or, at any rate, to contract the most readily available resource on which the State can draw in a sudden and unforeseen emergency. It will be remembered that the present Chancellor of the Exchequer also made a bitter attack on the Unionist Chancellor of the Exchequer. He said:— He also warned us that we were draining our last reserve. Whatever may be the present condition of the minds of the Prime Minister and the Chancellor of the Exchequer, I think it is very strange that we should find their opinions change so very rapidly. The Prime Minister certainly expressed his view very strongly. Supposing we admit, and I think everybody on these benches does admit, that if you have got to raise taxation under our present system it is better to raise it by an increased Income Tax, and I for one also think by a Super-tax; but there comes a point when you will inevitably defeat the object which you set out to achieve, and I believe that we have reached that point now. Previous Chancellors of the Exchequer have always held that direct and indirect taxation should be equally balanced, and it was Mr. Gladstone who compared the two descriptions of taxation to two young ladies neither of whom should be favoured at the expense of the other. It was only last year that the Prime Minister told us that direct taxation had increased by 10s. per head, and that indirect taxation was down by 1s. per head. This disparity has been greatly increased, and it will now be more. It has been in fact increased since the present Chancellor of the Exchequer assumed his position from 40 to 60 per cent. The Prime Minister's view upon this subject was also very different only a year ago. He then said that nothing could be more fatal to the root principle of democratic Government than the constant amelioration of the conditions of the less favoured classes of the country at the sole and exclusive expense of the other classes. Here again he appears to have changed his view very rapidly, and we find that his steadying hand is not placed upon his colleague's shoulder in this Budget.
It is my conviction that you cannot go on increasing direct taxation upon the rich of this country without causing grievous injury to the poor. I want to give one instance if I may. Take the case of some fortunate gentleman, according to some, who may have to pay £5,000 in Income Tax and Super-tax per annum. The first inclination of people like myself is to cheer and say "it serves him right. How glad I should be if I were in that position, and had to pay £5,000." That is one's first thought, but what does it mean? It means that one of two things would have to happen to that £5,000. The man who possesses that wealth would either have saved that £5,000, in which case the national wealth would have been increased, and the national source of income in days to come would be increased, or else he would have spent it upon various luxurious uses. He might have purchased a motor car, or built himself a house in Bournemouth, that excellently governed town, as we have heard to-day, where we find the best of all possible government, or he might have been sufficiently luxurious to have bought a yacht. These are only three instances, but, of course, the same thing applies to every kind of way in which the man might have spent the money. If he cuts down his motor car, he cuts down his expenses there. If he cuts down his seaside residence, he is immediately depriving labour of work. If he does not buy that yacht, which he would have bought if only the Chancellor of the Exchequer were hidden in Wales, the money will not be spent in the shipbuilding yard. When that is applied to every wealthy man in this country it must come back to this, that in the end the working classes of the country, although the rich man has to find the money, have practically to pay every penny of that taxation.
I do not hold that view alone. I believe it is held by the hon. Member for Blackburn (Mr. Snowden), who told us, I do not know how long ago it was, that the workers in the end pay the bulk of the Income Tax and Death Duties. If we suddenly withdraw £10,000,000 extra this year and £16,000,000 next year from the free flow of wealth in this country, it stands to reason that amount less is circulated in the country, and all classes of the community are going to feel it. At the present time the quite natural and proper demand among the industrial workers of this country is for higher wages. This demand is not put forward recklessly, and without justice, but it is owing to the great increase in the cost of living. Increased taxation means an increase in the cost of living and the cost of rent. All these taxes—take the Insurance Tax—and all these social reforms, however splendid the principle may be, are inevitably driving up the cost of living, and the cost of rent, and everything else. The cost of articles of every description and the cost of food of every description is being increased. Those who are engaged in industries will bear me out when I say that industry cannot provide higher wages if you go on filching more year after year from the profits of industry.
I have been managing director of one industry now for some nine or ten years. It is an industry which happened to be struggling four or five years ago. First of all, we had the increased taxation of the 1909–10 Budget. It was a heavy burden. Then, without having consulted the employers of labour, or the employés for that matter, the Insurance Bill came along, and you had immediately an enormously increased burden upon industry in this country. Afterwards, you had the miners' Eight Hour Act, raising the cost of coal, and in my business we have to buy several thousand tons of coal every year. That is a serious consideration. Then there was the settlement of the railway strike, involving increased freightage. Every single one of these burdens comes back upon industry. Then, on the top of it all, we have this second great Budget, half of which has already gone, and the progress of the remainder of which must be very doubtful. This great Budget places further burdens on the industries of this country. I notice that the Chancellor of the Exchequer, in his speech last Saturday, was very much upset by a speech made by Mr. J. J. Hill, in the United States of America, and I should like to recall to his mind one or two words in that speech in which England is held up as a warning to the United States. Nobody will deny the wonderful ability of Mr. Hill. He said:— even ten years hence, this taxation may appear to be attractive, but I venture to put it to this House, that if you take the case of a man who, by his own industry and toil has built up a business which may be worth in the end a million sterling, and if you consider that this business man finds himself in the position that he has to pay 2s. 8d. in the £ Income Tax per annum, and on his death one-fifth of the million he has built up by his brains and industry is confiscated, you will understand that that capital will surely go to countries where capital is not attacked in this manner.
The business is built up by the brains and industry of the workers.
I suppose the hon. Gentleman has not yet learned that there are other people in business besides himself who may employ labour, and who have brains and industry as well as himself. The fact remains that this present Budget with its attack on industry, will have a most serious effect. All this enormous sapping of national wealth by way of Death Duty can only have the effect that vast fortunes which contribute the Income Tax and Super-tax will, in future, not go on to the next generation, and the result will be that your very Income Tax and Super-tax on which you are relying now, almost entirely, will be sapped at its source. The Chancellor of the Exchequer has left the Chamber and therefore I am afraid that my concluding words will not be of much use so far as he is concerned. He challenged us because we, in examining his Budget—this perfect Budget, which has already dropped one-half—did not put forward proposals of our own. We were once told by a great statesman that it would be a good thing if he were called in. I can only say that when we are called in, if we cannot produce a more patriotic Budget than this, we shall deserve to go out very quickly. It is an interesting fact that when the Chancellor of the Exchequer began with his Budget there was a deficit of something like £10,000,000 sterling. I need not suggest, for there can be no doubt about the subject, because we have authorities I can quote at length on that side of the House, great trade authorities, who agree with us that on our manufactured goods alone he could have raised the £10,000,000 by means of a tariff, instead of putting the whole burden on industry and on the workers, and he could have put the burden so that it could have been largely shared by our competitors in foreign countries. I venture to think that, since that policy is believed in by every single one of our Dominions over the seas, and by every single country where our customs are understood and our language is spoken, this Budget is the swan song of Free Trade. However good the Chancellor of the Exchequer may have proved himself to be as a mob orator—and I do not think he can claim to have been so very successful, even in that direction—history will record of him that he is was who finally won this country for Tariff Reform, and he it was who proved the worst Chancellor of the Exchequer the country has ever had.
I have listened to the very extraordinary speech of the hon. Gentleman who has just spoken with very great interest, and I can only suggest that if his arguments are sound, he, for one, ought not to object to this form of taxation, because he says that, after all, the working man does in the long run pay these taxes. I am glad to see that the right hon. Gentleman, the Member for East Worcestershire (Mr. Chamberlain), is still in the House, because some little time ago, while he was speaking, I interrupted him. I did so with the idea of correcting a statement which he had made. I entirely agree with the conclusions he has drawn, for I am not one of those who believe that the Central Department should interfere too much with the local authorities. But I pointed out to him that that was the real policy of his own party with regard to housing reform. He took exception to that statement. I am afraid he is not aware of the Bill promoted by the Unionist party, which has received the imprimatur of the right hon. Gentleman the Member for the Strand Division, and which is now their official scheme for the housing of the working classes. I fought that Bill upstairs, and consequently know something of what is proposed under it. The proposal is to transfer housing schemes to three commissions, and these commissions will have sole control in supervising the local authorities. If the local authorities will not carry out their desires, they have the power of applying for a mandamus to compel them to do so. If that is the policy of the Tory party, I will ask the right hon. Gentleman where does he find in the scheme now propounded by the Government in this Finance Bill, anything which can compare with the scheme of housing reform put forward by the Tory party, seeing that they propose under their Bill to make a Grant of £500,000—originally it was £1,000,000—towards housing schemes, and for this Grant they undertake to place the whole of the housing schemes under a central authority. It was for that reason that I desired to correct the right hon. Gentleman. I agreed with him that too much power can be given to the central authority to compel local authorities to do what they really believe they cannot do within their own sphere.
I rose for the purpose of referring to the increased expenditure which has now been going on for some time. It seems to me that there is a concentrated attack upon the Chancellor of the Exchequer in regard to this increased expenditure. The right hon. Gentleman the Member for East Worcestershire (Mr. A. Chamberlain) was quite fair in one respect. He said that if it was the opinion of the Government that this vast expenditure upon armaments was required for the security of the country it was the duty of Members of this House to support the Government, without any distinction of party. The bulk of this increased expenditure is upon armaments, and not upon social reform. A great deal of criticism has been passed on the Chancellor of the Exchequer, and it is said that he is the gentleman who should safeguard the Treasury. I quite agree with that principle. It is only fair to state that the Chancellor of the Exchequer is responsible for only a portion of this expenditure on social reform. He certainly is not responsible for old age pensions, which were initiated before he became Chancellor of the Exchequer. So far as I can see, the only measure for which he is responsible is the Insurance Act. When that Bill was brought in everybody in the House blessed him for it. They not only voted in favour of the Bill, but they demanded much larger contributions from the State, which the Chancellor of the Exchequer resisted. It is, therefore, very unfair that he should be charged with the whole responsibility for this so-called extravagant expenditure.
I have argued before that, with Members on both sides persisting in the policy of resisting taxation, the proper thing would be to bring in the Budget before we vote money in Committee of Supply, because the practice of hon. Members on both sides now is to exact from the Government large expenditure in Committee of Supply upon all sorts of things, and when the Finance Bill is brought in there is a large and powerful resistance from all sides against any increased taxation. The hon. Member for Chelmsford (Mr. Pretyman) stated yesterday that the Chancellor of the Exchequer had conceded certain points with regard to this Bill because he wanted to keep his support of the land valuers; in other words, that he had played up to the land valuers, but that practical Members of the Liberal party had succeeded in their opposition. There is no doubt that there are two sides with regard to land valuation, and there are also two sides as to whether it is right or wrong to increase the taxation in the form proposed in this Budget. If the party opposite came into power and had to find the money to meet this increased expenditure, and if they proposed, as the last speaker suggested they would, to bring in Tariff Reform, they would meet countless difficulties with regard to that form of taxation. The hon. Gentleman (Mr. Croft) seemed to indicate that he believed in indirect taxes; in other words, that we should go back to the old days when the House of Commons raised 73 per cent. of the taxes by indirect taxes and only 27 per cent. by direct taxes. Since those days there have been very great changes, until now there is a less percentage of indirect taxes and a greater percentage of direct taxes.
Anyone who read that valuable and instructive Supplement to the "Times" which appeared, I think, last Monday week—it was a remarkable Supplement which should be read by everybody—in which they reviewed the food supply of the world, must know that there would be no taxation on food proposed by this House of Commons, because there is going to be a great struggle for food by the civilised countries of the world, and owing to the fact of this great struggle the price of food is bound to be increased. Therefore, to place taxes upon that heavily priced food, which is bound to come in future years, would be a cruel thing to the poor of this country. Let me give one instance. The "Times" cited that only eight years ago we imported about £5,000,000 of chilled and frozen meat from America, while last year we only imported £12,000. America is now a purchaser in the markets of the world, and is becoming a very keen competitor with this country. For the hon. Member to suggest, as he did, that the only form of taxation we could adopt is one by which we should go back to the old days when food was taxed and the indirect taxes were higher, is, in my opinion, to suggest a policy which this country would never for a moment tolerate. Therefore, while this Government have their difficulties in finding the requisite taxes because of the opposition from all sides, the difficulties of the Tory party would be infinitely greater if they discontinued placing the burden upon the shoulders best able to bear it and were to place it on the poor of this country.
Although the expenditure has gone up by a very large sum, it is well for the House to consider the proportions of that expenditure. This year we shall spend out of taxable revenue £171,000,000. I leave out the Post Office, which should not be counted when we are considering taxes, because it is a remunerative department of the State. We are expending upon the Army, the Navy, and on interest and redemption of debt no less than £104,000,000. Practically speaking, we have left only £67,431,000 to meet all our civil expenditure, including old age pensions, insurance, education, and the whole administration of our Empire. I consider that our Civil expenditure is not excessive, in the sense that we can well meet it. If it had not been for the vast increase of our armaments, I believe that the increase on the social side could have been met without any increased taxation whatever. Every Member from the other side to whom I have listened supports the expenditure upon armaments, and they would like, if they could, to decrease the expenditure upon the social side. If they believe in that policy, why are they not men enough to say which part of this social expenditure they propose to omit. Are they prepared to dispense with old age pensions? Are they prepared to cut down the contribution towards the Insurance Act? I know the hon. Member (Mr. C. Bathurst) is a very great supporter of the Insurance Act.
I flattered myself that I was its severest critic when it was passing through the House.
The hon. Member may have been a critic when the Bill was going through the House—I believe everyone was more or less—but I understood that he has been a very great supporter since, and he has been asking for larger contributions from the State towards the administration and other benefits under the Act, and I understood that now he was more or less a converted supporter of the Act.
Most certainly not.
I am very much surprised to learn that, because I thought if there was one genuine supporter in the House the hon. Member was the one in favour of the Act. With regard to the statement of the Chancellor of the Exchequer at Ipswich that that city would derive so much money if these Grants were given, the fact is that both sides of the House make these promises. There was the Noble Lord (Lord Robert Cecil) who went to Norwich and proposed that we should have a voluntary scheme, because it was the best electoral asset that the Tory party could adopt. There was the same suggestion of appealing to the electorate for the purpose of getting votes, and whether it is done on one side or the other, most Members of Parliament when they go to their constituents, put before them the best things they can with a view to inducing them to give their support to their side.
With regard to the Amendment, I think it is a very inconsistent one. It really proposes, in the first place, to censure the Government because they have not seen their way to give immediate Grants to the local authorities. I think the criticism which the Chancellor of the Exchequer made upon the hon. and learned Gentleman (Mr. Cassel) was quite justified because we saw in what delight and glee the Tory Party were on Monday when they were able to prevent, for the time being, these Grants being given to the local authorities. I understood at least that they were pleased with getting the Government in the position they found themselves in. Now they censure the Government, after they have destroyed the Bill, because they are not prepared to give immediate Grants. I think myself that it is very much better for the Government to consider this scheme in all its bearings and not to rush it. I think it is essential that the Government should deal with these local Grants in a manner which will be fair to all. I was very much surprised at the speech of the hon. Member (Sir Luke White) in which he stated that because the Government were not going to give these Grants he was going to vote against them. One would have thought that in his Division the ratepayers were overburdened with rates. I really must compliment the agricultural representatives in this House. They are persistent, they are dogged, they are always after the Government for Grants, and they exact them also from time to time. They get a very much larger amount of money in proportion to what the urban districts get. But in the Buckrose Division the total rates of the County only amount to 1s. 4d. in the £. If anyone has a right to cry, it is the urban district councils and boroughs, where the rates average from 6s. up to 11s. These are the people, in my opinion, who are entitled to ask for relief towards their rates. I have a list of the whole of these total rates. The lowest, I believe, is about 1s., and the highest runs to about 3s. 4d., and I think under the circumstances the rates are not excessive in many of these cases, and I think they can afford to wait, although I am in favour, with proper protection, of giving these Grants-in-Aid.
With regard to the scheme for a local assessment, I think the Chancellor of the Exchequer has no doubt a strong case in favour. I am not speaking of towns as much as country districts, but I believe that anyone acquainted with the form of assessment in our towns and in our country districts must admit that there are irregularities, and that very often there is not equality in the assessment, and they should from time to time be overhauled. The right hon. Gentleman (Mr. Long) was quite correct in what he stated with regard to the powers of the county councils, and that the county councils really do now bring in a professional valuer to go over the assessments of the local assessment committees within the unions of the county. I have in my hand the report of one such valuer, in which he makes this statement. He says:— errors. In the valuation of land it is essential, in my opinion, and I think in the opinion of every man who has got experience in local government work, that land should be valued and rated according to its value. I am not going to speak about the difference between site value and building value from that point of view. What I do say, speaking with a knowledge of my own county—the county of Durham—where I am a member of the Education Committee, we have had to pay for building sites for our schools prices ranging from l0d. up to 10s. 7d. per square yard in different parts of the county. We have had to pay for agricultural land practically under cultivation as much as 5s. per square yard when the county council has been called upon to buy some acres for the purpose of building a school. I think in those cases, if the landlords charge a very large sum for the price of land, the land ought to be valued up to that price. It ought at least to have a fair valuation, and should not be undervalued, seeing that the local authorities, when they demand land for building purposes, have to pay such extravagant prices. I believe if a proper valuer came in to supervise the values of land, we should have a fairer and more equitable system of valuation.
With regard to some remarks made by Ministers as to the rating of improvements, I think we ought really to get some further explanation upon that point. I am a believer that it is fair to rate improvements. When a man makes improvements on his property he does it for a purpose, and one purpose only. He does not do it for the fun of the thing. He does it for the purpose of obtaining a better rent, and as rent is a fair system of valuation I think improvements ought to be rated accordingly. In the City of London we find one firm in particular—I will not mention the name of the firm—who buy old properties, pull them down, and erect palaces where they sell food for consumption. They increase the value of the properties. Some of these firms pay as much as 45 per cent. per annum in dividends. I say it is only fair that when they put up these palatial buildings they ought to be rated according to the value of the property. There is another argument. If you do not increase your rating powers upon improvements, I should like to know how it is possible to obtain an increase of rateable value in town or country. I take my own county where, owing to the increase in the rateable value, owing to the increase of the production, say, of coal by improvements, the rateable value has gone up until a penny in the pound to-day is equal to £18,000. When that council was formed a penny in the pound only averaged £11,000 to £12,000. There is an increase practically of £6,000 on a rate of a penny in the pound. That money has gone to meet increased expenditure, otherwise if you have a stationary rateable value and your expenditure is increasing, then your rates must go up by leaps and bounds, and the men who are making very large sums of money in the way of profits upon their industries are escaping this increase in their rateable value upon which, in my opinion, it is only fair that they should pay.
I take another case where firms have put down a new factory practically out of profits. I do not see why, if they are making profits, they should not be taxed on their improvements. The local authority must be called upon to increase their expenditure to meet the demands of these firms and, therefore, I think it is only fair and just if large factories or mills are put down in this way, the rateable value should be increased in proportion, so that the ratepayers should have from that firm a fair share of rates to meet the expenditure which is caused by the increased burden. I put this other point to the Government. There are thousands of separate pieces of property in a town—take houses—that you cannot improve—that is to say, if you build a street of cottages and keep them in repair, you cannot improve them in the sense that the rateable value can be increased upon them. I ask if it is fair for a firm who are owners of multiple businesses to come to a town and pull down a piece of old property and erect, say, a bank, or that is it not fair that the local authority should increase the rateable value in proportion to the value of the property? I contend it is only fair, and I am really surprised that Members of this House should argue that improvements in this sense should not be rated upon a fair basis, so that they will bear their share of local rates. I should like to put this other point. I think Clause 13 of the Finance Bill is rather obscure and that we are entitled to a further explanation. I dare say we will be able to elaborate the point when we get into Committee, or when we are discussing the Second Reading of the second Bill. The point has reference to the Grants to be given in respect of rates charged on value attributable to houses, buildings, or other improvements. How does the Government propose to increase or to deal with the Grants? In the first place, it is proposed to separate site value from the building. The Grant is not to be given, I understand, on the site value. If it is not to be given on site value, is it to be given on the value of buildings, apart from improvements, or, in other words, is it only to be given to buildings without improvements, or is it to be given to buildings and improvements?
There is another objection which I think the Government has not taken into consideration, and I should like to give expression to it. It is with regard to the assessments. If you are going to have a variety of assessments upon different property owners in a town or in a county, then you are going, in my opinion, to complicate the serving and making up of these assessments. That is a point which has not yet been considered by the Government. It is essential to those who are engaged in local government work that you should simplify as much as possible the making up of the demand notes. If the Government are going to have a variety of assessments, if you are going to separate the site value from the buildings, and if you are going to give these increased Grants upon buildings and improvements, or upon one or the other, then you are going to complicate in a very remarkable way, in my opinion, the making up and the serving of the assessments upon local ratepayers. These are points which the Government should take into consideration before they impose this scheme upon the local authorities. I support the Finance Bill, but I have offered a few criticisms on some parts of it, because I believe that the local authorities are anxious that they should be explained. I certainly do not myself believe that we should rate improvements. I think that that would be damaging to the local authorities, but I think that, taking the whole scheme of the finance, the Government is meeting their expenditure in the proper way by placing the taxes upon those who are best able to pay. I would ask hon. Members opposite to consider what has happened since this Government came into power. The hon. Member who spoke last I think exaggerated very much indeed the amount of increased taxation that has been raised, because it is essential that we should remove the expenditure of what is called tax expenditure from remunerative expenditure, such as that on the Post Office and the telephones. But with all this increased expenditure there is one very important point which I desire to point out. Every man earning under £2,000 a year is paying less in taxation now, even under this Budget, than he did when the Conservative party was in power. That is a very remarkable fact. I am speaking of earned incomes.
Labouring men?
9.0 P.M.
Yes: The hon. Member for Norwich (Mr. G. Roberts) last night blamed the Government for not removing the Sugar Tax. I am in favour of removing that tax, but I want to be quite fair, and I think that it is unfair to increase Income Tax, when the Income Tax is so high, for the purpose of removing another tax. The Income Tax was specially raised for the purpose of finding money for the local authorities. There is not a single Chancellor of the Exchequer on the Liberal side who has increased any tax upon food. Every Chancellor of the Exchequer on the Liberal side for the last sixty years has decreased, and markedly decreased, taxation upon the food of the people of this country, and since this Government came into power they have reduced the tax upon tea and sugar by more than £6,000,000 a year. I think that it is only fair, when we are considering these matters, to give credit to the Chancellors of the Exchequer on this side when they represent our position for the fact that their policy has been in the past, as I hope it will be in the future, not to place taxes upon food, but to remove them, and to make those pay who are best able to do so.
The remarks of the hon. Member who has just sat down with reference to rating improvement were very interesting. Though I do not agree with them all, one can see clearly that the matter is one to which he has given serious and careful consideration. There are one or two statements made by him to which I would like to refer. First, in reference to the increased expenditure on armaments, I would like to refer him to figures given by a late Member of this House, Mr. Harold Cox, dealing with the questions of increased expenditure on armaments compared with the increased ex- penditure on social reform. I do not think that he will dispute those figures, knowing the man who puts them forward. Mr. Cox showed very clearly that whereas the expenditure on the Army and the Navy during the time of the present Chancellor being in office, increased by £20,000,000 under other headings the total increase amounted to £35,000,000. This shows that the Chancellor of the Exchequer was expending more money of the increased taxes on social reform, and that the Army and Navy are not, as I think the hon. Gentleman rather tried to make out, the chief cause of this increased expenditure for which we now have to find the money. Mr. Cox says very clearly that between 1908–09 and 1914–15, expenditure on the Army and Navy has risen from £60,000,000 to £80,500,000, which is an increase of £20,500,000, while on the other side, taking the various increases such as the Road Development Grant, the Local Taxation Grant, national insurance and so on, the total was £35,583,000. I do not think that those figures have been challenged. They have already been referred to in Debate. That is one point to which I take exception in the hon. Gentleman's speech. Another point to which I take exception is his statement that the Tory party had killed the Bill for giving Grants to local authorities. That has been already referred to by the right hon. Gentleman the Member for East Worcestershire, who pointed out that the statement was absolutely incorrect. He might have used stronger words. It is perfectly clear that the Bill has been altered because the Member for Hexham (Mr. Holt) and his Friends, put up a very strong opposition to the Chancellor's proposals. The Chancellor was afraid of dissension in his own party, and therefore the change was made. I hope, therefore, that we shall hear nothing more about the Tory party having killed the Bill.
As regards the inquiry by the hon Member for St. Pancras (Mr. Cassel) which led to Mr. Speaker giving his ruling, all we have asked is that this Government, if it possibly could, should conform to the precedents of the past. Mr. Speaker showed clearly that they had not done so; but if that is to be a cause for spreading abroad that the Tory party tried to kill this Bill, then I say that that statement has no foundation in fact. I take exception to another statement made towards the end of the hon. Gentleman's speech when dealing with the difficulties that local authorities have in getting land for public use. As one who has served on local bodies from the county council downwards, I quite agree that there are certain cases in which local authorities find it difficult to get the land which they want. I served on the West Riding County Council for a good many years, and they had difficulties in getting sites for schools and so on What is the position of the Government? I can give the right hon. Gentleman, if he wishes, instances of where the Government who hold land are asking higher prices than were ever asked for before, while at the same time they have a monopoly of the land in the particular locality, there being no other land available. If the right hon. Gentleman wishes I can give him two references to such cases. I think that the Government when they make an attack on private landowners should inquire how their own Department is acting the part of landlords, and how it deals with communities anxious to obtain land for public purposes. The attitude which the Government Department took up in the instance which I have in my mind, was rendered all the more glaring by the fact that it held the only land available at the time the authorities applied for some. In dealing with the question of landlords the hon. Member who preceded me and other hon. Members opposite would do well to remember the attitude assumed by their own Government, instead of constantly holding up English landowners to ridicule.
One thing which has struck me is the character of the excuses made on the other side for the enormous expenditure with which we are now dealing. On the First Reading of this Bill we had several speeches, and one hon. Member advanced, among other reasons, that the old age pensions money should be entirely deducted from the total sum of the national expenditure. He advanced the most remarkable reason that £12,000,000, or whatever it is, should be deducted, because it was money passing from one part of the community direct to another—in other words, money going to the relief of the aged people who are not any longer able to help themselves. A more ludicrous reason was never produced, and it is hardly worth listening to. It is simply saying that money taken from your pocket by a pickpocket is money transferred from your pocket to his. Again, in the course of to-day, we have had from the Chancellor of the Exchequer the old cry, which we have so often heard before, as to why we do not show ways in which this expenditure could be cut down. I find, again referring to figures given by Mr. Harold Cox, that there is one point where the expenditure could be cut down. Mr. Harold Cox states that the cost of the revenue collection is £1,500,000, and we have no proof that this valuation which is supposed to be carried on throughout the length and breadth of the country, is worth anything like the amount of money which is being spent upon it at the present moment. No doubt the valuers are probably doing their best, but while we hear so much about these local assessment committees and about the valuations made by local valuers, it is well to recall the fact that the Government valuers go to those very committees and obtain the points and information which the committees have collected, and upon that evidence they make up the valuations. While that is going on, it is rather hard to hear the general distrust which is expressed in regard to those local bodies by hon. Members on the other side of the House. It should be further remembered that the assessment committees are doing their work for nothing, and doing it, I dare say, well. Seeing that the Government valuers obtain their information and facts from the local assessment committees, I do not see why those valuers should be upheld by hon. Members opposite, while the local assessment committees have to surfer in the way they are suffering at the hands of the right hon. Gentleman the Chancellor of the Exchequer and those who support him. I think that the whole attitude towards local bodies is most unfair and unjust.
It is a great many years since we heard of the Grants to be allowed from the Land Tax to help to relieve the local authorities in respect of burdens, which, owing to the action of this Government have been greatly increased. The local authorities are called upon to administer every Act and thus increase their expenditure, and I think that they have a very right and true cause of complaint. They were promised in this Budget Grants for the relief of local rates, and, excepting the Grant for necessitous school areas, they are not going to get any. It is very easy to talk about relieving the rates, but the Bill is not yet passed, and anybody who considers the time-table of the House of Commons, and is aware of the amount of discussion which the Bill will entail if it is to be properly considered, will see that the time to be occupied will be much longer than seems to be wished by hon. Gentlemen on the other side of the House, who do not want an Autumn Session. Speaking on behalf of the Division which I represent, and where there are several local authorities, I think that considering they are asked to bear the enormous extra burdens thrown upon them, they have a very justifiable grievance when they hear that they are once more thrown over and deprived of those Grants which they need to carry out the reforms that they wish to effect if they had the funds. One other point I wish to raise, and it is in reference to Clause 10 of the Finance Bill, which deals with the Settlement Estate Duty. In paragraph ( a ) and paragraph ( b ) there are provisos which give some relief, but I cannot see the justice of the Clause at all. Under the Settlement Estates Duty the man has paid the duty under the contract with the Government, and he naturally believes that the contract will be carried out. It seems to me a most gross breach of contract that the Government should come in now and say that the agreement under which he paid is broken, and I think they ought to repay some of the money paid under this agreement.
The right hon. Gentleman the Member for East Worcestershire alluded to the case where a man had been allowed by the Government to pay by instalments and had been charged by the Government interest at 3 per cent. because he had not paid the whole sum that was demanded. Is it to be said now that the Govrenment, having taken up that attitude, are not prepared to refund that interest which was extorted from the individual because he was not in a position to pay the whole sum demanded from him? If that interest is not to be repaid, I do say that the action of the Government shows itself to be absolutely reckless as regards contracts; and I do hope that, when the Bill comes into Committee, hon. Members will realise that this is most unjustifiable treatment of those who hold settled estates, and who are to be dealt with under this Clause. I hope that the Government will very carefully consider what I have brought before their notice. The Chancellor of the Exchequer said there was nothing more to be repaid except the sum of money which had been repaid already, perhaps years ago; but I say that in cases where individuals have had to pay interest because they were not in a position to pay the whole sum at once, the least the Chancellor of the Exchequer can do is to repay the interest, and I should like to see it paid at the compound rate because of the unjustifiable attitude which the Government has taken up in the matter. I support the Amendment very strongly because I think that local bodies in the country have just cause of complaint, and we shall see when we go into the Division Lobby who are going to vote in support of those local authorities.
The proceedings of this evening have been extremely interesting, and the speeches made by private Members the most so of all; but they are really responsible in my case for a very serious process of mental unsettlement. I cannot really tell what to make of the speeches that have been delivered. The hon. Member who, I believe, represents Christchurch (Mr. Croft) was very emphatic upon one point, namely, that all the taxation—Super-tax, Death Duties, and similar taxes, all filter down upon the shoulders of the working men ultimately, and his argument seemed to be that inasmuch as they would ultimately reach there they had better be placed there at once. I hope I am doing him credit, and not unfairly transposing his argument, but that seemed to me to be the conclusion at which he desired the House to arrive. That is a perfectly straightforward statement, and indeed if it were true would get rid of a great many of the difficulties of taxation. A Chancellor of the Exchequer would simply have to say, "The ultimate incidence of all taxation is upon the shoulders of the working people, and therefore the wealthy shall be absolved." That would be a very happy state of things in Parliament. But as to what might happen in the country it is very difficult to say. We had an hon. Member on this side who seems to think that people engaged in trade ought to be treated as public malefactors. That is a point of view that has hardly ever been put forward by my Friends on these benches. We have been charged with a great many atrocities, but I do not know that we have ever said that a person who was conducing to the improvement of a locality should really be rated upon those improvements. We have said that the person who is lying still and who, whether sleeping or waking, does not add one single ounce of energy to the development of a locality, that at the beginning he is the person upon whom the taxation and local rating should primarily fall. I think I will stand by that spirit even yet. Although as I say the speeches of this afternoon have been responsible for a great deal of unsettlement in my case. I cannot imagine a man is a malefactor who builds a mill, since whether it is for profit or for whatever it may be for, he is at least doing something for the general well being of mankind. But in the case of a landowner, who contributes nothing to the monopoly which he is exercising, and who is able practically to command what terms he likes, it seems to me that he is a proper person for taxation at the begining. I am not at all a vindictive person, but I should be very glad indeed to see taxation imposed on such a person on a much higher scale.
We listened also to what I am bound to admit was one of the most interesting speeches I have listened to in this House, that of the hon. Gentleman the Member for East Northants (Mr. Chiozza Money). It covered a wonderfully wide field of investigation, and it seemed to me to be a speech worthy of the most serious consideration of this House. He appeared as the apologist for the great expenditure that is taking place at the present moment, and we were told that after all this country is quite able to bear, and that there was not a single item of expenditure that either this side or the opposite side could reasonably cut down, and that the economists of the past, the statesmen of the 'sixties and the 'seventies were, after all, men who deliberately starved the public services. We were told they had a most hateful policy of housing and a general disregard of the interests of the common people, and I wondered after all why we should have put those statues in the Central Lobby and other parts of this building to the statesmen of the nineteenth century. I had a great regard for some of those statesmen. I lived about the same time as some of them, and I remember one famous Member of this House who stated that a Ministry that could not govern the country with seventy millions ought to be impeached. That was a man who was deemed to be one of the greatest Members who ever adorned this House—John Bright. I was wondering whether, after all, men like the late Mr. Gladstone can really have been said to have starved public services, and whether, after all, in their desire for economy they were really open to the charge of deliberately starving the public services, and of exercising hateful economy with regard to the general welfare of the people. And I bethought me, when Mr. Gladstone was Prime Minister of the Government, and had been for about forty years in the service of the nation, whether after all those years had been so badly misspent. Personally, I do not think any apology is needed for the tremendous expenditure of to-day. I think with regard to one item, and that is the armaments expenditure, there can be only one opinion by those who seriously think upon the matter, and that is that it is horribly inflated and tremendously overgrown, and that in the interests not only of this nation, but in the interests of the world, a serious attempt ought to be made by the British Government to make that expenditure much less, and to bring it within far more manageable limits. Here let me say that I think if there is one tribute that can be more honestly paid to this Government than any other it is that in the midst of European complications and great difficulties, Continental and Asiatic, they have at least kept the country clear from war, and to have done so for all those years in the face of such complications is, to my mind, one of the greatest tributes that could be paid to them. But I think they would deserve even a greater tribute to this Government, when conditions are so promising as they are to-day, with a thoroughly good understanding with our neighbour on the Continent, and when our relations with Germany are growing more amicable day by day, and when we are celebrating a 100 years' peace with the Western States of America, and when, whichever way we look, profound peace prevails, if they could make a step in advance and do something to seek the peace and ensure it by reducing the swollen and inflated expenditure on armaments from under which the nation is suffering. That would be the greatest tribute that could possibly be paid to them.
I have risen to speak from the point of view of my colleagues and myself upon the present Budget. There are no Members of this House more ready than we are to pay a tribute to the Chancellor of the Exchequer for the exceedingly fine work that he has done. I will not say another word about that. But we believe that on this occasion he really might have taken a different departure. Personally, I have no love at all for millionaires. I think that, with paupers, they are a monstrosity in our civilisation. I do not believe, with the hon. Member for Christ-church (Mr. Page Croft), that a man becomes a millionaire by his own brains and industry. I believe that he becomes a millionaire by the brains and industry of other people, and that his inflated fortune is the cause of misery and impoverishment to hundreds of thousands of people. If) were Chancellor of the Exchequer—which, of course, is in the dim and diistant future—I should do my very best to make it impossible for millionaires to exist in a civilised society. I do not know that my love is very much greater for the people with unearned incomes of £2,000 a year and over. They certainly are not in need, to say the least of it. If there was to be a penny in the £ remission given anywhere, it might, I think, with far greater advantage to the public well-being, have been given to the poor instead of in the direction in which the Government propose that it should go. The view that we take on this occasion is that that penny might very well have been devoted either to doing away altogether with the Sugar Tax or to lessening the Sugar Tax, and doing away with at least a penny in the pound on tea. I am sure that Members of this House are pretty well tired of hearing the arguments in favour of these proposals. On this side by Liberals bot habove and below the Gangway, and even by Conservatives on the other side, the arguments for doing away with or materially lessening these taxes have been repeated over and over again, and it is difficult to say anything new. I think we could, however, spend a few moments profitably in going over the arguments once again.
It is admitted that the Sugar Tax was a war tax. It was imposed thirteen or fourteen years ago. Practically all the effects of the war have disappeared. The people against whom we were fighting are now a component part of the British Dominions with a Government of their own. Yet, although the vast majority of Members in this House admit that it was a war tax, and was imposed peculiarly for that purpose, a large part of the Sugar Tax still remains. It is perfectly true that the Government, some few years ago, took 2s. 4d. per cwt. off the tax, but that still leaves 1s. 10d. That, after all, is the reason and the excuse for traders imposing upon the working people very much more that that 1s. lOd. would really represent. Every leading Member of this House was in agreement as to the tax itself. The present Leader of the House spoke of the tax as being "vicious in principle, burdensome in its incidence, and unequal in its operation." That is a fairly comprehensive condemnation under any circumstances. He went on to say—I am speaking now of the Prime Minister—that the tax was not only a tax upon food, but upon the one of the first necessities of life, and that amongst the taxes to be remitted that certainly should find the first place. Since then he has gone back completely upon his word, and has given us to understand that he has never pledged himself to the remission of these taxes, and that, after all, a free breakfast-table is not part and parcel of Liberal doctrine. I confess that I heard that with some astonishment. The Chancellor of the Exchequer himself has said:— present. That is no light burden, and we think it is time that that burden should be removed. We think, further, that it is time Parliament justified its good faith to its constituents. I am pretty confident that two-thirds of the Members on this side, and a considerable proportion of Members on the other side, came in upon the understanding that they were prepared to do their very best to bring about the abolition of these taxes upon food. I know perfectly well that political exigencies are responsible for a great deal of curious behaviour on the part of Members of Parliament, and one really must make some allowance. But I certainly think that in the expiring years of a Liberal "Government, who have now had the confidence of the electors in three hotly contested elections, it is time for that Government to show that they were animated by good faith when they spoke about the repeal of taxes upon food.
The fact is that we have got into the habit of thinking that the working classes to-day are being a great deal pampered, that because at seventy years of age they receive a pension of 5s. a week, that is a big thing in itself; and we are constantly told by Members on the Treasury Bench that, after all, the working classes ought to be prepared to shoulder the cost of such a benefit. We believe that not only is it illogical in itself, but that it is bad economy. We believe that the right to 5s. a week is due long before seventy years of age, and is only a very small return for the robbery that is constantly being inflicted upon working people. Five shillings a week at seventy years of age does not seem to us to be any justification at all for placing ten millions a year upon the food of the whole people. It is not lightly that we refuse to vote with the Government. We know perfectly well that the government of the nation must be carried on. Expenses must be met. We are just as patriotic in our desire for the general well being of the nation as any Members of this House, but we believe that with the vast increase in wealth, which, after all, comes out of labour of hand or brain, it is not only perfectly possible for these taxes to be removed, but that the time has long been over-past for this. Questions as to how much the national income has increased one need not trouble with. One hears about it in this House ad nauseum.
We believe that if the Government itself would remorsely tackle the question of armaments, that not only would they tap the means whereby the public expenditure would be more easily met, but they would be conferring a very vast benefit upon humanity itself. I believe that most of the nations are awaiting the lead of England. England, after all, holds a commanding position in the world. She has a right to do so in view of her past history. I do not wish to speak in a pharasaical manner, but I believe in many things this country stands in a position of moral pre-eminence, and if the Government of this country would take the occasion to make a bold pronouncement in favour of peace we could reduce the horribly swollen Estimates which at present go to meet the expenditure on armaments. One really wonders why that is not done. We are all talking about the necessity of peace, and yet whenever a Division takes place, we are met on that side and on this side by people speaking upon the necessity of having a large Navy and a large Army.
I remember reading many years ago a little story which I think is appropriate to this occasion. A man was accused of stealing a box of hams. He was really caught in the act. He went to a very eminent lawyer with a request to plead his case. The eminent lawyer put the case very forcibly, and the twelve intelligent and high-principled jurymen in the box, to the astonishment of all in the court, brought in a verdict of "not guilty." The lawyer was very pleased with himself, and desiring a compliment from the prisoner as to the way in which the case had been pleaded opened a short conversation. The prisoner replied: "My dear Sir, it was not your pleading at all, before the case came on I saw to it that everyone of those jurymen had a ham apiece." I think that is the case of a good many people on that side of the House and on this. They have a ham apiece. At least great numbers of them are concerned in the maintenance of armaments. The speech delivered by the hon. Member for Blackburn some time ago showed that both sides are by no means free from the reproach of mutual participation in the profits of these horribly inflated armaments. It would be well if we could start in this matter with our own hands clean. If hon. Members of this House could really rise superior to personal temptation, I think there might be a real chance of that reduction in armaments that all profess to desire. Until that day arrives, it surely is time for this Government to see that the burdens upon the very poorest are lessened. There can be no better opportunity than on this occasion giving a remission of a penny to the whole of the people who are all interested in the consumption of sugar and tea. If we do not take part to-morrow in the Division on this Budget it is not because we are not quite desirous of the general well-being of the country, but because we feel that remission has been given to people who do not stand in any need at all of the relief.
The main bearing of the speech of the Chancellor of the Exchequer this afternoon was that in the provision which he was making for local authorities he was redeeming the pledges which he had given to them. I am on my legs at this moment to endeavour to show to the House that the Chancellor of the Exchequer is not redeeming his pledge at all. His record is as bad as the record of any man could be. No man to my knowledge has added so much to the burdens on land or house property, or has done so much to interfere with and to arrest the development of building in this country, on which he enlarged so much this afternoon. As I understand it there is no pretence now of any assistance to local authorities this year, but we are asked in this Finance Bill to vote a large sum of money, approximately I think about £8,000,000, to go towards the benefit of public health, or to the relief—the alleged relief, as I call it—of local burdens next year, 1915–16. We are asked to vote that money now, but the money is not to be given to the local authorities until certain conditions have been fulfilled. I think that those conditions not only ought never to have been made, but that they are incapable of fulfilment. I suggest, therefore, that we ought either to vote the money unconditionally—that would be fulfilling the pledges which the Chancellor of the Exchequer has given to the local authorities—or we ought not to raise the money at all until we are in a position to devote it to the purposes for which it is required.
The first condition that the Chancellor of the Exchequer makes is that there shall be a new valuation. I do not know what he calls a valuation. It is called an adaptation or adjustment of the full site value, to make it suitable and arrange it so that the structure and the site shall be separately valued and separately assessed. In this country there are 9,000,000 separate hereditaments. Two separate valuations therefore will be required for each hereditament, a valuation of the site and a valuation of the structure. That means. 18,000,000 valuations. These have got to be completed—as the Chancellor of the Exchequer said, will be completed—by 30th September, 1915. I might remind the House that these valuations are of the character and nature which have never been seen before in this or in any other country, except perhaps British Columbia, as suggested by the right hon. Gentleman. I am not sure of that—at any rate British Columbia is the only country he has referred to. We have no valuers in this country who ever made that kind of valuation before. I will refer in more detail to this question later on. My first point is it is physically impossible that that valuation should be completed by the 30th September, 1915, or the 30th September, 1916, or 1917, and until that valuation has been completed, as I understand the provisions of this Bill, the money we are voting and raising under the Finance Bill to-day is not to be handed over to the local authorities. If I am wrong, I hope to be corrected from the proper quarter.
The next point is, that in attaching conditions to the using of this money by the local authorities, we are committing a breach of faith with the ratepayers. The promise which the Chancellor of the Exchequer says he is redeeming, was that he was going to give relief to the existing ratepayers, and that that relief should be given immediately. Not only is there no prospect of its being given immediately, but there is no prospect of its being given under the scheme of valuation and taxation that is put forward, which is as I believe absolutely incapable of execution. He limits under his scheme the relief of taxation to structures and other improvements, and he exempts from that relief all owners or occupiers of land. The promise that was made to the ratepayers was that the existing ratepayers should be relieved, and he is leaving out of the scheme quite one-half of the existing ratepayers. He went down to Ipswich and said he was going to relieve the rates at so much a year. He did not say "I am going to relieve structures by so much a. year." He said, "I will relieve the ratepayers by so much a year," and I think the existing proposal is a breach of faith. of the present ratepayer.
My third point is, that as a condition to the user of this money, he is pinning down the House of Commons to a new method of rating which the House of Commons has never accepted and never considered, and which neither the country nor the House of Commons, nor any expert body in this country has ever passed or approved. References have been made in the course of this Debate to the Majority Report of the Departmental Committee upon local taxation. The majority, of course, as is well known, reported and advised very strongly against this method of rating structures and sites separately, either in conjunction with the present tax on site values under the "People's Budget" or as a new departure. But the Minority Report did make some recommendations in regard to this subject, and I take it that the Chancellor of the Exchequer in his scheme is proposing to follow the Minority Report. I will read an extract or two from that report to show that he is doing nothing of the sort. He has absolutely ignored the Majority Report, and he is going very much farther than the Minority Report recommended. The Minority Report read as follows:—
What about the Select Committee on the Scottish Bill that reported unanimously in 1907?
They did not report upon this at all. The Scottish Committee simply reported upon the taxation of site value.
They advocated a complete change in the basis of rating.
At any rate, that was only as regards Scotland. This Departmental Committee, when it has made its Report, had the Scottish Report before them, and having that Scottish Report before them they came to this conclusion, that no scheme of this character should be embarked upon at all, except by way of experiment, and not until this valuation of sites, on which it had been based, had been completed and published, and when this had been done they said there would be an opportunity for some authoritative consideration of the scheme in the light of the change that probably would be made. The Chancellor of the Exchequer ignores altogether that which is the only justification whatever he has for proceeding with this measure. His own Departmental Committee, men who were experts, appointed in this way, were not prepared to recommend a scheme of this sort, and said it should only be of an experimental character and should not be embarked upon at all or started as an experiment until the valuation had been completed, which he suggests in the Finance Bill and the Revenue Bill, and then we should have an opportunity of judging what effect it would have upon the different classes of property in this country. Coming to consider of what was the ground on which this minority even suggested that it might be advantageous to rate structures and sites separately, they gave two reasons. The reasons they gave were these: They said if this scheme was adopted it would be found that there would be more rapid development and improvement of land, and the provision of an incentive to its better use would be the encouragement which would be given to the erection of housing accommodation for the working classes, with consequent improvement of housing conditions in towns and urban districts. These are the exact reasons which were formerly given for taxing site values and unearned increment in land under the "People's Budget." That taxation not having succeeded, and building have been stopped owing to the taxing of land values, and what is called unearned increment in land not having resulted in opening up and developing land and causing houses to spring up, the Chancellor of the Exchequer now says, "As taxation did not have that effect, let us rate it and see if that will do it." That is what it comes to. Those are the precise reasons which were given by the Chancellor of the Exchequer when he introduced his "People's Budget." We know what the effect of that Budget has been, and now the reasons that are given, for this alteration of the system of rating, are exactly the same.
The right hon. Gentleman practically says, "taxing the land has not answered our purpose. It has not caused houses to spring up. Let us place a special rate on it in addition and see what effect that will have." I call that a sort of homoeopathic treatment. The right hon. Gentleman the Member for Swansea (Sir A. Mond) took exception to the statement of the hon. and gallant Member for Chelmsford (Mr. Pretyman) that the Liberal party were not committed to this rating of structures and sites separately, and he quoted from some book written in 1849, in which the writer suggested taxing the unearned increment of land. I think there is a considerable amount of confusion on that subject. What the Liberal party have put their hands to is an endeavour to get the unearned increment in land. The right hon. Gentleman the Member for Swansea, seemed to me to be confusing that with the rating proposals of the Chancellor of the Exchequer in the present Budget. The hon. Member for Norwich confirmed my view in the observations which he made yesterday, when he said that:—
Do you get that from the Labour party.
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I get it from the Liberal party and the Labour party, and I can give many other quotations to the same effect. That system has been in vogue since 1910, and that was done under the "People's Budget." You set up a complete scheme for taxing the unearned increment in land. I suppose that scheme met with the approval of the Liberal party. It certainly did not meet with the approval of the majority of this House of Commons, although it was passed into law. I remember perfectly well how that proposal was carried into law. I remember the hon. and learned Member for Waterford (Mr. John Redmond) getting up in his place, he and his party having voted against these proposals on a previous occasion—I remember on the 21st February, 1910, the hon. and learned Member for Waterford saying, "We are prepared to pay the price, but we are not prepared to pay it for nothing." It was under these conditions, and in consequence of that bargain that the "People's Budget" passed into law, and it is in consequence of that bargain, and under the same conditions, that the Chancellor of the Exchequer proposes to pass the present Budget into law. Any scheme or any Act of Parliament passed under such a bargain as that must be disastrous to the country and must recoil on the heads of its authors. That is exactly what the "People's Budget" has done. What has been the effect of that? You have been placing an enormous burden on the country in the matter of the valuation of land, costing this year just on £1,000,000 to the State, not to mention the cost to the owners and occupiers of land, and you get from this unearned increment, or rather you have got an average for the five years it has been in vogue of £11,000 a year, and that is all. This year, it is true you have got £31,000, but the average that you have got has been £11,000 a year, and you are spending this year in attempting to get it £1,000,000, according to the Chancellor of the Exchequer's estimate. The whole energies of the Liberal party have been directed to getting at this unearned increment in land, with the result that they have got £11,000 a year for five years, and they are now spending £1,000,000 a year in attempting to get it.
My second point was that there has been a breach of faith with the ratepayers. On this side of the House, as well as on the other side, we promised to relieve local burdens. We think a large number of those burdens are national in their character, and both parties are pledged to relieve them unconditionally. We are pledged to relieve the existing ratepayers, and I do not think anyone can get up here and say that under the scheme of the Chancellor of the Exchequer there is any suggestion that land will be relieved. On the contrary, the only relief to be given is a relief to structures. Now structures do not pay rates, and land does not pay rates, but individuals pay rates, and the promise was made to the existing ratepayers whether they own or occupy land, or own or occupy structures. I think I am justified in saying under the circumstances that the scheme of the Chancellor of the Exchequer is a breach of faith with the existing ratepayers. It is proposed to relieve only structures. I understand that the local burdens which are considered to be national or semi-national in their character are mainly education, main roads, and police. I should have thought that structures and those occupying structures benefit more than the occupiers and owners of land from these services', and while the occupiers and owners of land pay their full share of burdens, they are the ones that do not get the same benefit as the owners and occupiers of structures, and yet they are to be left out of this scheme. I know there are certain grievances—of course we all know that—and I do not defend the present system in all respects, but we ought not to change our whole system of rating and set up a new fantastic system of which no one approves, and of which the country has never heard. We ought to set about in a businesslike way to remedy our existing system. The Secretary for Scotland last evening mentioned that he knew of a mansion in the country let at £250 a year which was only rated at £80. I dare say that may be the case, and, if so, it is very wrong of the local assessment authority, and I hope that they will be hauled over the coals. That sort of thing ought not to be allowed to go on.
What will happen? Under this new scheme you are perpetuating that system. Relief will be given to that very man. His house is built on land probably worth £20 an acre, and because he has spent £10,000 on his mansion and is rated at £80 a year he is to receive relief for his structure. The small man in the village who occupies a certain area of land and is a tiller of the soil—he may be a smallholder, or an allotment holder, or a small farmer—on the other hand is not to receive any relief because he has not a structure of such value. You are aggravating and perpetuating the very system which the right hon. Gentleman condemned last evening. There is no occasion to pass a new law to remedy the defect which he mentioned. He could himself point it out, and get it put right. I should very much like to have the case brought before me. I should take the trouble of pointing it out to the assessment authority. We do not want to alter the whole system because a local authority has assessed a house at £80 instead of at £200. The outcry is very largely that the tillers of the soil are paying too much in proportion to what the occupiers of such houses as the Secretary for Scotland mentioned pay, and also that small shopkeepers occupying valuable sites in villages and in towns, having a site value in comparatively high proportion to the composite property, are paying too much in rates. Under this system the occupier of that shop in that town or village would get no relief at all, because the value of his shop, the building, forms a small proportion of the value of the site which he is compelled to occupy for the purposes of his business. Instead of removing any inequalities, this proposal would create a vast number of fresh inequalities. The Government have placed upon the Statute Book the Housing and Town Planning Act, and one of the main objects of that Act is to ensure that there shall not be more than a certain number of houses on a certain area of ground, so as to give more light and air and elbow room to the occupiers of those houses. How does this proposal operate in that connection?
It makes land cheaper.
The hon. Member says that it makes land cheaper. I will leave him to work that out. It does not, however, put less rates on it. It puts more rates on it. This relief is only to be given under this Act to the structure or to the improvement, and therefore the more land, that is given under the Housing and Town Planning Act to each cottage or house the higher the man will be rated. My hon. Friend reminds me that in British Columbia, where this system in is vogue, there is not a house with a garden to it. They build up in the air, and that is what we shall be compelled to do. The hon. Gentleman laughs, but he knows perfectly well that it is true. Why should we, without having considered the matter, go and commit ourselves and this country to a system of this sort? This, after all, is the House of Commons which controls the finances of the country. Are we justified in committing ourselves blindfold to a system which no one in this House has considered, which no one understands, and which I guarantee that the Chancellor of the Exchequer, of all people, does not understand? This scheme will not bring about that which we promised to the ratepayers, and I therefore say that it is a breach of promise to the ratepayers. My third point was that it was physically impossible that this valuation could be completed by the date specified. The Chancellor of the Exchequer said that valuers could value anything. They could, he said, value blades of grass. If they were paid enough, they could value anything. Of course, a man can place a value upon anything, but the point is whether it will be a value which will be accepted, and which will be equitable as a basis for rating and taxation for all the people of this country. The Chancellor of the Exchequer thinks that such a valuation as he proposes to make is possible. I think that it is not possible, and I have most of the expert opinion behind me when I make that statement. I have never seen the opinion of a single expert that such a valuation is possible. He must at any rate admit that it is an experiment, and that it is a valuation which no valuer has ever made before. Therefore, I think we are wholly unjustified in committing this House and this country to a scheme and system of valuation that has not only never been tried or experimented upon in this country, but has never, I believe, been tried in any country in the world. That is the position.
I could go into the technicalities of site value and so forth, but I do not want to get into technicalities this evening. I do not think that there is anyone in this House, beyond perhaps the hon. Gentlemen who sit in one corner of the House, who knows what site value, or full site value, or gross value, or statutory site value, or site value on an occasion means. I do not think that there is anybody who would venture to get up in his place and tell me what they mean. I have even to get books myself to tell me. Yet it is on the statutory site value, the full site value, that the new valuation is to hinge. There was a case in the House of Lords this week, yesterday or the day before, and the Lord Chancellor stated that this full site value on which we are asked to base our new system was no real value at all, but was only a difference. This case has gone right through all the Courts, and has had the benefit of the opinions of all the judges in the Courts below. When it comes up to the House of Lords, the Lord Chancellor says, that this full site value, on which the Chancellor of the Exchequer is basing the valuation of the whole of this country for rating and taxation purposes, is no value at all; it is only a difference. I do not propose to enlarge upon that point. I know I should only get into technicalities. But I may remind the House that the valuations which are made under the Finance Act, 1910, are made as on the 30th April, 1909, and valuations which have to be made after this will have to be made as on 30th September, 1915—that is, six years later. Therefore, it is quite obvious that every valuation made in 1909 will have to be valued over again, and further than that, the units of value have changed, property has changed hands, houses have been built, and all this will affect absolutely, entirely and completely the new valuation. The valuations which are made under the Finance Act, 1910, are ad hoc valuations, made simply and solely for the purpose of the imposition and collection of the taxes imposed by that Budget. People in getting these valuations fixed and amended asked for deductions, remissions, and so forth, simply in order that they might avoid taxation under that particular Budget scheme. None of these site values—neither the full site values, nor assessable site values, nor gross values, recorded under that Budget—are really values at all. They are simply, as the Courts of Law have said, statutory conceptions.
Anybody with any experience in the matter has only to take one of the valuations in order to realise that. I was looking at a valuation the other day of eight different pieces of land in Yorkshire. I was looking at the site values arrived at by the Government valuer in his valuation. In making it he was not interfered with at all. He fixed the site values. They averaged from £40 down to £9 per acre. I employed the best valuers I could get in Yorkshire to tell me what was the site value as far as they could ascertain it, and they told me that the site values of all these pieces of land were absolutely and entirely the same, and yet one is valued at four times as much as the other. I only mention that because the Courts of Law have also said that it does not matter what values are placed on land under the "People's Budget"; the taxes are not on the value of the land, but only on the difference between two valuations, and, as long as a uniform basis is arrived at, it does not matter whether the land is valued at minus value or plus value. It makes no difference, because these are no values at all. They are simply arrived at for the purpose of assessing the difference on which the taxes imposed by the "People's Budget" are based.
That is the system which the Chancellor of the Exchequer proposes to adopt for the rating of the whole of this country. It is not only absurd, it is wicked. Hon. Members opposite may laugh, but land and house property are the greatest asset we possess in this country, and we cannot tamper with that asset in such a silly and ridiculous fashion. We must deal with the subject in a businesslike way. Enough damage has already been done under the "People's Budget." Do not let us tie ourselves under a bribe to the local authorities which they will never get—do not let us bind ourselves to this ridiculous system. If such a proposal as this is adopted, it must hit further at the credit and security of land. The right hon. Member for the Spen Valley (Sir T. P. Whittaker) yesterday said—and I agree with him—that he did not think it would make any difference to the owner of a house whether you assess him on the composite property or rate him on the site and on the building, but, he added, it will make a great deal of difference as between that man and other owners of property. He said it will transfer property from one person to another. If that system of valuation and rating is adopted, it means an immediate and immense transference of property from one class of persons to another, without any rhyme or reason whatever.
I think he said it would lead to an alteration in the rates, not to a transfer of actual property.
If I pay £5 a year in rates which are put on my property instead of yours, is that not a transfer of property? That is what it would mean, that is what he said, and that is what will be the effect of this scheme if it is carried into operation. I say that it will have a very detrimental effect on the credit and security of land, which is our greatest national asset.
It will make it cheaper.
I know the hon. Member's pet scheme. Have you not hit the credit and security of land sufficiently already? Take agricultural estates. You appointed a Departmental Committee to consider what could be done to remedy and stop this break-up of agricultural estates. [HON. MEMBERS: "Not stop it!"] Well, you appointed the Committee to inquire into the cause of it. [HON. MEMBERS: "No!"] At any rate you appointed a Committee which sat on this subject, and I have their Report here. They found that, in the opinion of the majority of the witnesses called before them, this breakup of estates and this feeling of insecurity which existed among owners of land was occasioned by the recent land legislation of the present Government—that is to say, the "People's Budget," They said that that feeling of insecurity would be very much allayed in the opinion of those witnesses if there could be an assurance that there would be no further legislation of this character. What are you doing now? You are attempting to link on to this finance scheme a new scheme of rating which will impose a burden on agriculture estates, a new burden which they have not borne in the past, and at the same time you are telling the tenant farmers, whose votes you wish to catch, that you are giving them immense relief. Anybody who looks into the scheme must know, for the Bill itself says so, that the relief is only to be given in respect of structures. In conclusion, I should like to say a word about the Chancellor of the Exchequer's credentials as a land reformer. I say those credentials are the very worst, not only of any Chancellor of the Exchequer, but of any Minister who has ever sat on the Government Bench. I have here, to start with, a list of twelve new burdens which he has already placed on land, not to mention the new burdens he proposes to place on land under his present Budget.
He has placed Undeveloped Land Duty, Increment Duty, Reversion Duty, Mineral Rights Duty, a novel form of valuation entailing heavy cost, double Stamp Duty on sale of land, double Stamp Duty on leases of land, and these two last items have produced up to 31st March no less than £3,000,000 of money. That has been rather overlooked. That is a new burden of which no notice is taken. I want that to be known. I have given you seven. Increase in Estate Duty ranging up to 15 per cent., Settlement Estate Duty doubled, and now the right hon. Gentleman proposes to abolish that and place a much heavier duty on it; relief from Estate Duty abolished in respect of settled property, Legacy and Succession Duties largely increased, he has made the wife pay Legacy Duty for the husband, and the husband for the wife, which has never been done in this country before, and he has placed an ad valorem Stamp Duty on settlements and voluntary dispositions made inter vivos. These are twelve new burdens placed on land, and the Chancellor of the Exchequer proposes to place further burdens under this Budget. We have heard a great deal this afternoon about housing. The right hon. Gentleman said of course houses were necessary for the health of the people, for the children, and so on. I quite agree with every single words he says, and no one is more in favour of providing better houses than I am. But what has the Chancellor of the Exchequer done to provide us with houses? He has deprived us of more houses than any man who has ever lived. There is not the slightest doubt about it at all. I can give figures that I got from the right hon. Gentleman himself. Up to the time the Liberal Government began business in 1906 the average increase in the number of houses in this country annually was 135,000 a year. That was the average for seven years. The average number of houses built since that date has been 81,000. The average number since the "People's Budget" was passed has been 61,000, and the number built last year fell to 56,0000.
I have asked the Chancellor of the Exchequer over and over again how he accounts for that drop in the number of new houses. He has never been able to make a satisfactory answer, and, of course, there is no answer. I asked him if he would refer to the builders who built these houses. He did not do so. I did, and got answers from 500 builders, and they have all practically said it was owing to the People's Budget. The finest measure of social reform which the Chancellor of the Exchequer could introduce would be a measure to repeal the "People's Budget." Very little money would be required under his health scheme. The houses would spring up naturally. There would be a sigh of relief throughout the length and breadth of the land. I have put down an Amendment to the Finance Bill to repeal the "People's Budget." There is a long schedule of Acts to be repealed and a Section or two of the "People's Budget", and if they are repealing one Section the best plan is to repeal the whole of it. We should then have £1,000,000 available which is being uselessly spent now. I think there is not a single Member on the other side of the House who would speak in favour of Part I. of the "People's Budget" at the present time. I do not know what he would be able to say. If any hon. Member can speak in favour of it, if he wishes it to remain in force, and if he can point to any good it has done, I hope he will speak. I do not think any hon. Member can do so. It is much better to be honest, and to tell the truth. You know in your heart of hearts that it has been a most dismal failure, and that it has done a vast amount of harm. As long as it is left on the Statute Book, we shall not have sufficient houses, and it would be much better, as I have said, to repeal the People's Budget, and to be done with it. I hope the Chancellor of the Exchequer is a big enough man to do it. What has happened? It seems to me that, the Chancellor of the Exchequer got up this afternoon and made a very interesting speech, which was applauded by hon. Members on his own side. He has got the gift of the gab. That is a very great power in this House and out of it, and I know that hon. Members behind him appreciate it. I think it was George Stephenson, the great engineer, who said: "That of all powers on' the earth, under the earth, or above the earth the greatest power was the gift of the gab." The Chancellor of the Exchequer possesses that power in no small degree, and he relies upon it in this House and out of it. Fortunately, we have a record against his character as a land reformer and a land financier. I think that record of facts against his character speaks much more eloquently than can even the Chancellor of the Exchequer himself.
I have some difficulty in following the hon. Gentleman (Mr. Royds), who said that the gift of the gab is the greatest power on earth. He spoke for half an hour, and I do not hope to equal him in that respect. I have heard him in past speeches question the policy pursued by the Chancellor of the Exchequer. I have heard him urge it was very necessary if we were to have full site value correctly estimated, that the value of certain improvements which have been created on agricultural land should be eliminated from the valuation. He has constantly told us that when you have taken out all the improvements on agricultural land, no value remains. It seems to me that the object of this Budget is to do exactly what the hon. Member has so often urged should be done. If he is correct in his view that it is the tiller of the soil who is going to get the greatest advantage, then the attack has been directed, not against the method of raising the revenue, but against the method of allocation. I quite understand some hon. Members not being able to attack the method of raising the revenue. For instance, the hon. Member for the Chelmsford Division (Mr. Pretyman) not long ago went down into my Constituency and made a speech on the question of taxation and the rating system. He told his audience there that the land taxers have stolen the policy of the Land Union in respect of the transference of national services to the Exchequer. Towards the end of the meeting he was asked how he was going to raise the revenue, and he stated that the method of raising these sums should be by way of Income Tax. Well, he, at any rate, should be satisfied with the Budget, so far. It is the method of allocation which the Opposition object to, because it carries with it the adjustment of burdens and the valuation of the land. That is the ground of their opposition to pass financial proposals of this nature.
I am in rather a different case in criticising the method of raising this revenue. I do not believe that it is the best method. We support the method of allocation because we believe that it carries with it a rectification of the value of the land of the United Kingdom, and gives a proper basis for future rating and taxes. We present to the Government a proper method by which this readjustment should take place. We believe that if a transference of the cost of these services to the Exchequer took place, you should raise the revenue by way of a tax levied on the land values of the United Kingdom. It is the scientific method of securing this revenue, and passing it on to the municipalities without any difficulty or danger of its passing into the pockets of the landowners. The President of the Local Government Board stated yesterday that there was wide support for the transference of the cost of these national services to personalty. I do not know where that wide support comes from among the ranks of the Liberal party. A memorial on this question was presented to the Chancellor of the Exchequer and the Prime Minister a few years ago. We did not suggest that this new tax should fall upon personalty but upon land values. While party organisations outside were saying that the demand had been made, the only demand which has been made that this taxation should fall on personalty, Income Tax, has come from municipalities with a Tory majority, and the Member for East Northants. But we realise that until, we secure a valuation it is not possible to get what we believe to be the most perfect system of raising revenue for these services. So we are glad to support the Budget, because we believe that it will. secure this valuation. We realise the difficulty in which the Government is placed.
I may add one or two reasons why we consider that this is not the best way for raising all these millions. The President of the Local Government Board stated very clearly yesterday what was our object in making these Grants. We desire to relieve improvements. We desire to encourage the use of land. He pointed out the pernicious nature of the present system which penalises the man who does put his land to the best use. Under the Income Tax very much the same thing results, at any rate in part. If you tax a man who uses his land and improves it to some economic effect, it results as if you rate him when he improves his land. You discourage the use of land, and this also results when you rate a man upon improvements: that rate is passed on to the user or occupier of the structure in exactly the same way as a tax upon a commodity, as a tax upon bread, or any other labour produce commodity would be passed on. I may give a good example which I hope will enable Members of the Labour party to realise the economic effect of part of this Income Tax. I was down recently in a Sussex village talking to a small builder there who had erected some cottages for men who were getting from 16s. to 18s. a week. He pointed out that when he erected a cottage he must get his 6 per cent. profit. He charged the tenants a compounded rent, including his profit and the rates and taxes levied upon the structure. He told me that he passed on to the occupier of the cottage l0d. rates and 3d. Income Tax, levied under Schedule A. There you have exactly the same economic effect of taxation under Income Tax as you have under the present rating system. Therefore we say that it is not the most perfect system. The perfect system is to get the revenue from a source which cannot be passed on to the user or occupier of the cottage. The only method by which that can be done we find is the taxation and rating of land values. The Chancellor of the Exchequer this afternoon, in a jocular way, suggested that hon. Members on the other side raised objections as if we on these benches put forward fantastic proposals. The proposals we have made are on the lines laid down by the Prime Minister in 1908. This is what he said to the House:— three months ago as regards the acreage of greater Birmingham, the acreage assessed for rates as agricultural land, and the total amount raised in rates from the total area, and from that part assessed as agricultural land. The object of that was to find out what area in Birmingham virtually escapes rates, being assessed only as agricultural land. This was the reply:— rates are levied on a correct assessment of the full site value, there will be a far larger contribution made from that vacant quarter of the city. The area of Liverpool is 19,502 acres, including 2,883 acres of tidal water and foreshore, leaving 16,619 acres available, of which 3,876 acres are rated as agricultural land, and contributing £1,590 out of a total contribution of £1,598,000, so that there again virtually a fourth of the city contributes about a little over £1,500 out of almost £1,600,000.
How much of that is parks?
This is land rated as agricultural land. Take Blackburn. The area of the borough is 7,432 acres, of which 6,400 acres are devoted to agriculture. Another great farming centre! Those 6,400 acres contribute £1,081 a year to a total rate contribution of £201,152. Take Blackpool. There is an area of 4,244 acres, including 717 acres of tidal water and foreshore. Agriculture here claims 2,008 acres, and the "farmers" pay a contribution of £429 a year to a total of £128,442. So we could go on, city after city. I will take one or two Scottish cities to give hon. Members an indication of why there has been such a consistent and insistent demand from Scotland for the new source of revenue to be opened to them. Take Dundee. The total area is 4,826 acres, of which 2,116 acres are rated as agricultural land, and contribute £635 to a total rate contribution of £250,664. When Dundee is presented with the valuation made by this Budget, I am confident that they will make good use of it, and will call upon that portion of the city to contribute more than £635 a year to the rates. In Edinburgh there are 11,416 acres, and the agricultural land represents 3,072 acres—that is, something like one-fourth of the capital of Scotland is rated as agricultural land, and contributes £1,779 towards a total rate contribution of £731,328. There will be a further contribution from agricultural land there when it is properly assessed. [An HON. MEMBER: "King Arthur's seat!"] We will make it more worthy of King Arthur's seat or any other seat. Then we come to Glasgow, whence this demand has chiefly emanated. The total area is 12,975 acres, of which 2,170 acres are rated as agricultural land—about one-sixth of the city—and contribute £347 a year towards a total rate contribution of £1,730,000.
With these figures before us, two things are obvious. The first thing is the utter absurdity of saying that the present rating system in any way conforms to the principle of ability to pay, when you have areas such as these virtually escaping rates altogether, while on the other side you have the overburdening of houses, cottages, shops, and those structures which are occupied by the people least able to bear any burden whatsoever.
I should like to point out the position as regards my own Constituency, the borough of Hanley. How do the conditions there conform to the principle of ability to pay? You get there £25 worth of land, with the value of the miserable structure estimated at £130 to £150, assessed for rates at £8 per annum. The rates are 11s. in the £. You have the man paying £4 18s. a year rates alone on his miserable hovel—for it is nothing better—a man who has got 22s. 6d. per week. That payment is equal to an Income Tax of 1s., 1s. 3d., or 1s. 6d. in the £. On this question of ability to pay under the present rating system, I will take one other illustration which has stood the test of publication. We hear a great deal from the other side as to overburdened agricultural land under the present system of rating and taxation. This illustration will show the need for rectification in the method of assessment and the need for a State valuation. I am going to take some farms owned by the Duke of Norfolk in the parish of Angmering, Sussex. The first is a farm at Angmering Park. It is of 566 acres, is assessed at £55 per annum, and pays annually £6 8s. 4d. The land only, I suppose, is worth £10,000. It pays only £2 a year more in rates than the miserable abode of one of my poorly - paid Constituents.
Does the hon. Member know what is the tithe on that farm?
I am not aware of it.
That makes all the difference.
11.0 P. M.
There is another farm—Hill Farm Lower—of 249 acres. The rateable value attributed to it is £13, and it pays in rates £1 10s. 4d. per annum. We have 315 acres—Upper Borpham—with an attributed rateable value of £51, and it pays £5 19s. 4d. A total of 256 acres pay £7 9s. 8d. per annum in rates. The least taxation under the present system falls on the one best able to bear it. To illustrate the injustice even in this parish itself, I now take the case of a man who has two acres of land. He has improved that to its uttermost. He obtained the site of a disused quarry, and got £25 worth of land carted in it. He erected glass-houses upon it, and carries on the business of a nurseryman. Round tame the assessment authorities and rated the glass-houses at £56 per annum, and he therefore pays on them £13 2s. per year. If you take several of these farms together, you get an aggregate of 1,300 acres, and they only contribute to the rates £15 15s. a year, while the man with two acres and his glass-houses contributes £13 a year. What is the cause of it? The cause of it is because members of that assessment committee for valuations are tenant farmers, and the Duke of Norfolk and the other great landowners in the district. Adjoining the parish of Angmering there is another assessment committee, consisting of the tenant farmers and the Duke of Norfolk. I do not want in any way to mislead the House, and I learned from Angmering that since I made use of these figures the assessment committee there have something like doubled these figures upon these farms. If exposure by the mere statement of these facts has that result I think we may hope for proper adjustment of assessments and site values when this Budget is carried. I should like to point out to the House the result of this under assessment. A very prominent member of this community, a man of long standing and manager and agent for a large estate of some thousands of acres, highly informed, informed me that one of the unions of which he is president, is in what he calls a semi-bankrupt condition, and that the rates of the district have doubled in the last two years. What is the meaning of this semi-bankruptcy, and why have the rates nearly doubled? Simply because the great owners of land have their tenant farmers upon the assessment committee, which under assess the property. What is the reason of the low rental of these farms? It is because these farms are surrounded by game preserves, which game preserves are also under assessed by something like a quarter of the amount got by way of sporting rights. The farmer gets his land at a low rent on condition of allowing the pheasants to eat his crops.
I should like to have the opportunity of purchasing from the Duke of Norfolk some of those farms based upon twenty-five years' purchase of the assessment for rates or even thirty years' purchase. When this valuation is secured and the land is assessed at its proper true value there will be a very much larger contribution from those ducal farms than at present. One great advantage will be that it will compel the proper use of land. It is an imposition to suggest that taxation of land would make it more difficult to put land to better uses. It is because they know that the introduction of this system will cause them to put their land to the best uses, or let at rent to others that desire to use it, that the landowners object to the institution of this sysem, and that they object to the whole of this Budget. Their whole objection to this Budget and the Budget of 1909 is that it carries with it the valuation of the sites, and when that valuation is secured they know perfectly well there will be exposed to the people of this country the extent to which their labours have added thousands of millions to its value, and the people of this country will no longer be taxed upon their tea and sugar. No longer will they be content to be rated on their buildings and cottages so long as such a source as that is open to the Chancellor of the Exchequer. I support this Budget because it carries with it this valuation, and when the Chancellor of the Exchequer secures a correct valuation of the land of the United Kingdom his name will stand amongst those statesmen who have done something to emancipate the poor.
I wish to refer to the remarks made by the right hon. Gentleman the other night when he announced after the conclusion of the business that the collection of the 1s. 4d. Income Tax would be continued to be exacted, although it is the intention of the Government to reduce it to 1s. 3d. The right hon. Gentleman said it must be deducted at 1s. 4d. for the present, and I believe this will have to continue under the Resolution which has been passed for probably a month from now. The Chancellor of the Exchequer said this was a matter of very small importance, because only small sums were being paid in by the Income Tax payers. He said it was a matter of small importance to the Treasury and the officials who will have to repay this money, but it is a matter of very great importance to the people who are paying it, and to the financial houses, firms, and agents for the different foreign loan contractors who have to deduct this money, and who will have to account for it to the thousands and tens of thousands of people who will be paying 1s. 4d. when the real rate is only 1s. 3d. The right hon. Gentleman said it could be rectified when the second dividend for the other half of the year was paid. The July payments are for the most important period of the year, and the most difficult time that could have been pitched upon to make a change in the rate of Income Tax. No time could have been fixed upon which could have been so inconvenient as the present. It may be perfectly possible in the case of those who have paid 1s. 4d. for this part of the year to pay 1s. 2d. for the next part, and then 1s. 3d. for the proper period afterwards. What will happen to those who have parted with their bonds? The labour that will be thrown upon the brokers, who conduct these transactions both of the seller and the purchaser of these bonds, will be so great that the popularity of the Chancellor of the Exchequer in the City of London cannot be increased by the unfortunate mistake he has made and the unfortunate change which has taken place at this particular time of the year. I will not refer to the land question any more.
My case is that we shall not see these other Bills, or, at any rate, none of them will become law. I believe that the only part that will become law will be the new taxes which the Chancellor of the Exchequer is putting on—the Estate Duty, the additional Income Tax, the Super-tax, and, of course, the Tea Duty. We may or we may not see the others. It is quite enough to refer to that part of the Budget which will certainly stand and which will have to stand if the money is to be collected for these services of the country. There is no great novelty in these taxes which accentuate the taxes of the "People's Budget" as it is called. They are simple old taxes with something additional put in. The Parliamentary Secretary to the Board of Admiralty (Dr. Macnamara) the other day in a speech made a curious remark. He said there had been a great deal of benefit derived from the "People's Budget," and that no one could say that any single man had had one meal the less owing to it. I should have thought that the building trade would have shown him that, not one, but tens of thousands of people have suffered, not only in one meal, but in a very severe pinch of hunger and destitution owing to the Budget. After the Budget was passed, 80,000 houses were not erected which would otherwise have been erected, representing a difference of over £10,000,000 in the pockets of the artisans of this country. There has not been the addition one would have expected to the unemployed, because a very large number of those employed in the building trade have been driven by the Budget from the country and have emigrated to places where they could get work. I have tried on more than one occasion to find out how many builders' labourers have left the country, but they are all classed as labourers. There is not the slightest doubt, however, that among the tens of thousands of labourers who have left the country there are very large numbers of builders' labourers. I have come across many builders who have told me that work has been so slack since the Budget that they have had to dismiss their best men, and they have left for Canada or Australia because there was not work for them in this country. It is most unfortunate for any country that the best of its artisans should be driven from it. This new Budget accentuates the evils of the old Budget and will tend still more to drive these men out of the country.
I wonder if the Government have realised that for the first time in the last century the population of Scotland has decreased. It is a matter which I should have thought would have occasioned the Government the very gravest concern. It is well known that the population of Scotland was about half that of Ireland fifty years ago. The population of Scotland steadily increased while the population of Ireland steadily decreased, until five years ago, when the population of Scotland passed that of Ireland. Since the Budget has been in operation, however, a great change has taken place in Scotland, and for two years the population has been actually decreasing. We look upon this as a progressive country, and a few years ago, when the population of France was said to be decreasing, our papers were full of the most gloomy reports, and pointed out how terrible it was that its population should decrease. I do not know whether the French papers are now sympathising with us because Scotland is in the same lamentable position. Its population at the present time is actually decreasing. I do not say, of course, that the death rate exceeds the birth rate, but owing to the emigration from that country the population, which for a few years past had been increasing by about 30,000 a year, were for the first time for over a hundred years shows a decrease. [An HON. MEMBER: "What about the land laws—is not that the cause?"] There were land laws in Scotland exactly as obtain to-day. This Budget, indeed, was going to alter all these things of which complaint was made, but yet under it, as I have pointed out, for the first time for a hundred years the population is decreasing, and the Minister, when confessing this lamentable fact, simply said he hoped the decrease would not be so great this year as there were signs that the amount of emigration this year was less than in the preceding year. It may be that Canada or Australia have not now the great demand for labour which existed two or three years ago, and therefore Scotland may be able to keep its people at home. But you cannot get over the fact that since these Budgets were brought in the population of Scotland has for the first time for over a hundred years shown a decrease.
I wish to refer also to the Estate Duties, and the increase of the Income Tax. The great increase of the Estate Duties put on by this Budget has had a most depressing effect in all commercial circles connected with finance. There is not the slightest doubt that some of the reduction in the value of Consols and other securities which has taken place during the last nine years following on the previous eight years' reduction is attributable to the sales of stock and bonds which have taken place in order be provide for the exceedingly heavy Estate Duties which are now levied. These Estate Duties are going to be increased again, and if recent increases have already had the effect I have stated what may we expect from the proposed additions. You cannot take thirty million pounds' worth of securities every year in order to pay those Estate Duties without depressing the market. Yet, as a matter of fact, the executors have to sell on the Stock Exchange something like thirty million pounds' worth of securities, and unless there are buyers for them you have to get rid of them at reduced prices. There are more for sale than there are buyers, and the securities must fall in value. That is what has been happening during the last three or four years, and even the soundest securities have been falling. It is, of course, impossible to say how much of the fall is due to the Estate Duties and the enforced realisation of stocks caused by them.
With regard to the Income Tax, it now stands at 1s. 3d.—the rate of what was called a War Tax in the days of the Crimean War. It only stood at that figure for one year, and in the next year was reduced to 8d., but it has now gone up again to 1s. 3d., and next year it is to be increased to 1s. 4d. At the time of the Crimean War, when this extraordinary tax was imposed, there was no Super-tax, and people did not have to pay the extra 6d. or 1s., as it may be.
During the last few months investors have been inundated with letters from insurance companies, pointing out that the way to meet the excessive Estate Duties is to insure their lives and take out a policy equal to the amount of the duty. They generally send examples of young men, and say that if you insure at forty years of age, and if you have a considerable fortune, like a Cabinet Minister, with £5,000 a year, by a payment of 3s. in the £ a year you can pay your Income Tax and provide for the Estate Duties. But what happens in the case of a man who is fifty or sixty years of age when this tax is put on? He cannot insure at anything like that rate. If I were to insure now against Estate Duties I should be charged rates for a man of sixty, and it would come to at least 5s. in the £ on one's income to meet Income Tax and capitalised Estate Duties. Five shillings in the £ is the heaviest tax and probably more than double the amount that has been laid on any people in any part of the world at any time. I know that they have a Capital Tax in Germany, but that is an exceptional thing. If these charges work out at 5s. in the £ per annum it is a tax of such an excessive nature that it is impossible to foresee what effect it may have on the future of the country, upon the savings of the country, and upon the capital of the country. It is the savings of everyone in this country which alone provide the sinews out of which all factories and works in this country are constructed. We may not feel the effects of this taxation for some years, but I believe the effects will be most marked and that they may be disastrous is well within the bounds of possibility. They may result in the country being bled to death. I heartily support the Amendment.
Motion made, and Question, "That the Debate be now adjourned"—[ Mr. Godfrey Collins ]—put, and agreed to.
Debate to be resumed to-morrow (Thursday).
The remaining Orders were read, and postponed.
Finance (Local Grants)
Committee to consider of authorising the payment out of moneys provided by Parliament of Grants for local purposes, and of superseding certain Grants now payable out of moneys provided by Parliament or charged on the Consolidated Fund.
(King's recommendation signified) To-morrow.—[ Mr. Gulland. ]
Adjourned at Twenty-nine minutes after Eleven o'clock.