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Commons Chamber

Volume 63: debated on Thursday 25 June 1914

House of Commons

Thursday, June 25, 1914

Private Business

Midland Railway Bill [ Lords ] (by Order),

Second Reading deferred till To-morrow.

Electric Lighting Provisional Orders (No. 7) Bill,

As amended, considered; to be read the third time To-morrow.

Local Government Provisional Order (No. 20) Bill (by Order),

Second Reading deferred till To-morrow.

Glasgow Corporation Order Confirmation Bill (by Order),

Read a second time; to be considered upon Monday next.

Naval and Marine Pay and Pensions Act, 1865

Copy presented of seven Orders in Council, dated 18th June, 1914, under the Act [by Act]; to lie upon the Table.

Foreign Jurisdiction Act, 1890

Copy presented of Order in Council, dated 18th June, 1914, entitled the Persian Coast and Islands (Slave Trade Jurisdiction) Order in Council, 1914 [by Act]; to lie upon the Table.

Explosives Act, 1875

Copy presented of Order in Council, dated 18th June, 1914, made under the Act relating to Acetylene [by Act]; to lie upon the Table.

Colonial Prisoners Removal Act, 1884

Copy presented of Order in Council, dated 18th June, 1914, entitled the Nyasaland Protectorate (Colonial Prisoners Removal) Order, 1914 [by Act]; to lie upon the Table.

Irish Land Commission

Copy presented of Return of Advances made under the Land Purchase Acts during the month of November, 1913 [by Command]; to lie upon the Table.

East India (Education)

Copy presented of Report on Progress of Education in India, 1907–1912. Vol. I. Sixth Quinquennial Review. Vol. II. Appendices and Tables [by Command]; to lie upon the Table.

Coal Shipments

Copy presented of Tables giving details as to Shipments of Coal Abroad, Coastwise, and as Bunkers from each port of the United Kingdom for each quarter of the years 1912 and 1913 [by Command]; to lie upon the Table.

Emigration and Immigration

Return ordered relative thereto [ordered 23rd June; Mr. Burns ]; to lie upon the Table, and to be printed.

Electric Lighting Acts, 1882 to 1909 (Proceedings)

Copy presented of Report by the Board of Trade respecting the Applications to, and Proceedings of, the Board of Trade under the Electric Lighting Acts, 1882 to 1909, during the past year [by Act]; to lie upon the Table, and to be printed. [No. 296.]

Finance Accounts

Copy presented of Finance Accounts of the United Kingdom for the year ended 31st March, 1914 [by Act]; to lie upon the Table, and to be printed. [No. 297.]

Trade Reports (Annual Series)

Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 5304 to 5307 [by Command]; to lie upon the Table.

Private Legislation Procedure (Scotland) Act, 1899

Copy presented of Report by the Chairman of Committees of the House of Lords and the Chairman of Ways and Means in the House of Commons, under Section 2 of the Private Legislation Procedure (Scotland) Act, 1899, that they are of opinion that the Provisional Orders be allowed to proceed, subject to such recommendations as they may hereafter make with respect to the several Orders [by Act]; to lie upon the Table.

Supreme Court (Rules)

Paper laid upon the Table by the Clerk of the House:—Copy of Amendment of Rules of the Supreme Court (Finance (1909–10) Act, 1911), dated 22nd June, 1914 [by Act].

Oral Answers to Questions

Questions

Servia and Montenegro

asked the Secretary of State for Foreign Affairs whether his attention has been called to the alleged boycotting of Albanian traders, both Catholic and Moslem, in Podgoritza, and to the emigration of Moslems from the territory recently annexed to Montenegro; and whether he will publish as a Blue Book any reports he has received from His Majesty's Consuls at Uskub and Monastir, and from the British Minister at Cettinje, relating to the present or recent condition of the districts now being administered by Servia and Montenegro?

I have no information as to the alleged boycotting. There has been extensive emigration of Moslems from all the territories recently annexed from Turkey. As regards the publication of official reports, I would refer the hon. Member to my reply to the hon. Member for North Norfolk on the 18th instant.

Portuguese East Africa (Arrest of Rev. J. S. Bowskill)

asked the Secretary of State for Foreign Affairs whether His Majesty's Government is satisfied that there was any sufficient reason for the arrest of the Rev. J. S. Bowskill by the Portuguese authorities; and, if not, can he say what action His Majesty's Government have taken in the matter?

His Majesty's Minister at Lisbon has on different occasions requested the Portuguese Government to inform him of the specific charges preferred against Mr. Bowskill. On 7th June Lieutenant Crato, Chef du Cabinet of the Portuguese Minister for the Colonies, left for Angola to investigate into the whole affair, and the Portuguese Government have not so far formulated any charges against Mr. Bowskill.

Is it not a very serious thing that a British subject should be imprisoned for so long a time without any definite charge being brought against him; and ought not the Portuguese Government to telegraph for information?

I do not think that he is in prison at all, because he is now released. The question of whether or not he is to be tried at all is still in doubt, as no charges have been formulated against him. The question I shall have to consider, when we know the full circumstances, is, of course, whether we shall make any claim for compensation for the treatment he has received.

Mexico

asked the Secretary of State for Foreign Affairs if he can state what is the recorded number of British subjects in Mexico at the present time; how many of these are in Mexico City; what measures are being taken to protect them or to assist them to leave should they desire to do so; is communication by railway still maintained between Mexico City and the coast; and is there any British steamer at the coast available for the reception of refugees?

In reply to the hon. Member's first two questions, I have no other information than published statistics, according to which there were 5,198 British subjects in the Republic of Mexico in 1910, the date of the last Census. His Majesty's Minister in Mexico City has arranged, as far as possible, for the defence of British residents at His Majesty's Legation and neighbouring houses in an emergency. Some 350 refugees of various nationalities were successfully conducted by the Secretary of His Majesty's Legation from Mexico City to Vera Cruz at the end of April, and I have no doubt that at present a similar exodus could be carried out, if necessary. As regards communication by railway with the coast, it appears that the line to Vera Cruz was broken for some two kilometres at the time of the above-mentioned expedition, but I have no later information as to its condition. I have not heard that the railway between Mexico City and Puerto Mexico is interrupted. The Admiral in command of the Fourth Cruiser Squadron in Mexican waters has authority to charter steamers for the conveyance of refugees as and when necessary, and arrangements in this respect are being left to him to carry out.

Are not our Consuls in Mexico giving British subjects certificates which they can show to the contending parties, and have the Foreign Office no record of those certificates?

I have not heard of it, but if the hon. Gentleman will give me notice of that question, I will make inquiries upon the point.

Greece and Turkey

asked the Secretary of State for Foreign Affairs whether, with a view to decreasing the present tension, he will suggest to the Governments of Greece and Turkey the appointment of an International Commission to inquire into the claims of refugees from racial animosity in Greek and Turkish territory, respectively, to resettle refugees under their national flags, to cancel one set of claims against the other, and to recover the balance of cost from that Government against which the heavier claims may be found to lie?

A Turco-Greek Commission for the purpose indicated was appointed not long since by the two Governments concerned. If these two Governments desire the assistance of the Powers to help the working of the Commission I have no doubt the Powers would endeavour to give it.

In view of the atmosphere of procrastination and mutual distrust which now exists between these two countries, will not the right hon. Gentleman make direct suggestions to them to allow international mediation?

It is no good, as a rule, in these cases making proposals to two Powers who are at variance with each other, unless it can be done at the desire of both of them.

Brazil (New Loan)

asked the Secretary of State for Foreign Affairs whether the acting British Minister at Rio de Janeiro is assisting to obtain a settlement by the Brazilian Government of the claims made by British subjects; whether claims by German and French subjects are to be settled out of the proceeds of a new loan to Brazil, and as the result of representations by the German and French Governments that no further Brazilian loan would be authorised for issue and subscription in Germany or France until the German and French creditors had been provided for; and whether any guarantees have been given by the Brazilian Government of the settlement of the claims of British subjects out of the funds of the new loan to which the British public is to be asked to subscribe?

On the 23rd instant His Majesty's Chargé d'Affaires at Rio de Janeiro was instructed by telegraph to take such action as he could with a view to the settlement of all outstanding British claims. I regret to say that no progress has been made. I have no knowledge of the action of the French and German Governments alluded to in the second part of the question. I will make inquiry on this point. As regards the third part of the question, no such guarantees have been given by the Brazilian Government to His Majesty's Government, who have no part in any loan to Brazil.

Looking at the very superior position the French and German Governments are in to protect their citizens, will not the right hon. Gentleman take active steps to protect British creditors?

I am going to inquire as to that. I said in my answer that I did not know whether the French and German Governments have been successful in securing better terms than we have. That is a point into which I will inquire, and, if so, in what way they have secured them. But I must point out with regard to the issue of a loan in this country, that, of course, some foreign countries on the Continent have much more control than we have. We have no real control over British financiers as to whether they will subscribe or not. We cannot control what they will do.

China (Opium Traffic)

asked the Secretary of State for Foreign Affairs whether the central and provincial Governments of China, so far from suppressing the production and consumption, of opium, are obstructing the sale of Indian opium, in contravention of their agreement with the British-Indian Government, in order that, or with the result that, a market is afforded for the Chinese product; and whether, in view of this fact, His Majesty's Government will now give the British-Indian a free hand that they may do justice to British-Indian growers and traders in opium?

The statement made by the hon. Member in the first part of his question is not borne out by the information at my disposal, and I see no reason for interfering with the operation of the agreement.

Albania

asked the Secretary of State for Foreign Affairs if he can inform the House, in view of Great Britain's partial responsibility for the integrity of Albania, through what channel the soldiers in the employ of the provisional Government of Epirus are armed with machine guns and modern rifles; and whether this is against the wishes of the Hellenic Government?

I have no information as to the exact nature or source of the arms in the possession of the Provisional Government of Northern Epirus. The Greek Government have disclaimed all responsibility in the matter.

asked the Secretary of State for Foreign Affairs if, in view of the responsibility of Great Britain together with other great Powers for the creation of Albania, he will confer with the Ministers of the Powers with a view to putting an end to the massacres and ill-treatment of the population of Southern Albania?

The establishment of good government in Albania is already a matter of concern to the Powers, and the subject of constant communications between them. I cannot, however, under- take on behalf, of His Majesty's Government to send British troops into Albania.

asked the Secretary of State for Foreign Affairs, if, in view of the repudiation by the Hellenic Government of responsibility for outrages committed in Southern Albania, he can say by whose orders certain Cretan criminals were released and are now perpetrating crimes in Northern Epirus; and whether he will make representations to the Hellenic Government to order that these persons should be withdrawn from Southern Albania?

I have no information as to the first part of the question, and therefore cannot make representations to the Greek Government.

asked the Secretary of State for Foreign Affairs whether, in view of the repudiation by the Greek Government of the responsibility for the recent outrages in Southern Albania, he will say upon whom the responsibility rests?

I am not in a position to fix the responsibility for occurrences upon which I am imperfectly informed. The responsibility for outrages where such have occurred rests primarily with those who commit them.

asked the Secretary of State for Foreign Affairs if he will consider the advisability of publishing the telegram which he has received on the 12th instant from his informant in Southern Albania, an United States citizen; and whether he has yet been able to verify its contents?

I have received no confirmation of the statements contained in the telegram in question, and I think no useful purpose would be served by its publication by me, particularly as I understand that the gentleman referred to is in the company of the United States Minister to the Greek Government, as the hon. Member was informed on Monday.

asked the Secretary of State for Foreign Affairs if, in view of the fact that Great Britain is partly responsible for the creation of Albania, and in view of the fact that Albanians are being massacred and ill-treated in the South of Albania, he will consider the advisability of sending Consuls or other qualified persons to the areas in question for the purpose of gaining accurate information?

Though His Majesty's Government are responsible with the Governments of other Great Powers for the creation of an autonomous Albania, I cannot admit responsibility for maintaining order there, and I do not wish to assume such responsibility by taking the measure which the hon. Member suggests.

Treaty of Bucharest

asked the Secretary of State for Foreign Affairs if he can now state whether His Majesty's Government has yet signified its consent to the Treaty of Bucharest, and upon what conditions?

His Majesty's Government have not yet signified their assent. I propose very shortly to address the States concerned as indicated in the reply given to the hon. Member for East Nottingham on the 10th instant.

Persia

asked the Secretary of State for Foreign Affairs if, in view of the fact that order is now restored in Northern Persia, he can say when the Russian Government is going to withdraw its troops and agents from that district?

I have quite recently answered more than one question on this point, and I can really only repeat what I said as lately as last Tuesday, to the effect that though the Russian Minister for Foreign Affairs spoke of there being order in Northern Persia he attributed it to the presence of Russian troops, but that some progress in the withdrawal of Russian troops had been made.

Foot-and-Mouth Disease

asked the Secretary of State for the Colonies when will the Canadian ports be opened to British stock?

A notice allowing the resumption of importation under permit was signed by the Deputy-Minister of Agriculture at Ottawa, on 20th June.

asked the Vice-President of the Department of Agriculture (Ireland) whether he is aware that, owing to the Regulations imposed on the landing of cattle in Great Britain during the first out- break of foot-and-mouth disease, through bookings of live stock from stations west of the port of Drogheda were stopped; and whether he will communicate with the Great Northern Railway Company and Lancashire and Yorkshire Steamship Company to have them restored?

Consequent of the Regulations made in connection with the outbreak of foot-and-mouth disease in 1912 through booking arrangements for cattle from stations west of Drogheda ceased. The bookings have been resumed in the case of fat cattle for slaughter at Birkenhead. Owing to a question which seems to have arisen between certain English railway companies and the port authorities at Birkenhead, the Department understand that some difficulty also exists as regards through booking for live stock via the port of Drogheda to interior stations in Great Britain. The matter is receiving the careful attention of the Department.

asked the Vice-President of the Department of Agriculture (Ireland) what changes are about to be made in reference to the shipment of cattle from the port of Belfast, consigned there via the Great Northern Railway; and when he expects these new conditions will be in operation?

The Great Northern Railway have under construction at Mays-fields, Belfast, a new yard, proposed, when completed, to be used instead of the yards at Grosvenor Street and Lagan Bank Road, Belfast, for the inspection of animals brought for shipment. It was anticipated that this new yard might be ready by the end of August next, but it is possible it may not be completed by then.

Does that mean that cattle coming by the Great Northern Railway will go direct for inspection and then to the boats?

asked the Vice-President of the Department of Agriculture (Ireland) (1) whether in the county of Kerry there has been a single case of foot-and-mouth disease during the past thirty years; and, if not, will he reconsider his decision imposing restrictions on the moving of cattle from that county by allowing them to be entrained via Limerick to the Midland Counties; and (2) whether, seeing that there has not been a single case of foot-and-mouth disease in the county of Kerry during the past thirty years, and in view of the trade in store cattle done in the county, which is being very seriously injured by the present restrictions, he will take steps to give Kerry store cattle a permit for export to England and Scotland?

County Kerry has been free from foot-and-mouth disease for over thirty years. It is regretted that the appearance of the disease in Cork and Tipperary this year unavoidably brought the county of Kerry within the scope of restriction imposed in the general interest on movement out of the South West Ireland area. The Department recognise the hardship thus arising, and they are endeavouring, in conjunction with the Board of Agriculture and Fisheries, to find some suitable means of overcoming the difficulties of the case, so as to allow of cattle from Kerry having outlet to the Midland Counties of Ireland and also to Great Britain.

Does not the right hon. Gentleman think the time has now come to do away with the line that he drew some time ago East and West, and allow the free movement of cattle North and South?

How soon does the right hon. Gentleman expect he will be able to change the line?

I am in actual consultation with my right hon. Friend now with a view to relieving the situation all round. Hon. Members will understand that with regard to that part of Cork which is still under restrictions, it will be impossible, but I think a good deal can be done to relieve the situation elsewhere.

asked when the line drawn across the country from Mornington, outside Drogheda, to the West of Ireland will be wiped out and the port of Drogheda opened for stock from the south of the existing line?

This question is at present under consideration by the Department and the Board of Agriculture and Fisheries.

Westminster Hall (Repair of Roof)

asked the hon. Member for St. George's-in-the-East, as representing the First Commissioner of Works, whether he has accepted all the recommendations of Mr. Talbot Baines's Report upon the roof of Westminster Hall, and is carrying them out; and whether suitable oak has been obtained, fulfilling all the conditions as to quality and dimensions laid down by Mr. Baines as necessary for the replacing of decayed timber?

The First Commissioner has accepted all the recommendations of Mr. Frank Baines' report. The question of the oak to be used has not yet been decided.

National Insurance Act

Transference of Patients

asked the hon. Member for St. George's-in-the-East, as representing the Insurance Commissioners, whether his attention has been called to the delay in the transference of domestic employés from one panel doctor to another, in cases where the residence of the employer is changed from one district to another; and whether he has any remedy for this defect in administration under consideration?

I would refer the hon. Member to my reply of the 13th May to a similar question by the hon. Member for Devonport.

Share Fishermen

asked whether an order has now been made to exempt share fishermen at Aldeburgh from liability to compulsory insurance under the National Insurance Act?

The answer is in the negative. As the result of inquiries the Commissioners have, however, expressed the opinion that the conditions under which fishermen work in the lugsail boats sailing from Aldeburgh do not constitute a contract of service. Aldeburgh fishermen while engaged in share fishing under these conditions are, therefore, not liable to be insured.

Can my hon. Friend say whether fishermen who have been entitled to enter into compulsory assurance will be entitled to a refund of their contributions should they so desire, seeing it is now held that they were not liable to enter into compulsory assurance?

I am not aware that the share fishermen at Aldeburgh have been compulsorily insured; but, if so, they will be entitled to repayment in accordance with the rules laid down by the Insurance Commissioners.

Auxiliary Postmen

asked whether auxiliary postmen employed from two to three hours daily, a total of about seventeen hours a week, are compulsorily insurable under the provisions of the Act; and, if so, whether steps can be taken by the Insurance Commissioners to compel the Post Office to carry out their obligations to their employés?

Auxiliary postmen are insured as employed contributors; but employment as a collector or deliverer of letters under allowance involving not more than eighteen hours' work weekly is excepted by Special Order as a subsidiary employment, and the persons so employed are not required to be insured in respect of such employment.

Is this large class still to be left out of the benefits under the National Insurance Act?

The employment being of a subsidiary kind these persons could not be insured. I could not within a short answer to a question give the reasons for that, but I may say that they are very good reasons.

Deposit Contributors

asked whether it is the intention of the Government this Session to introduce a Bill dealing with the position of the deposit contributors under the National Insurance Act; and whether the Government contemplate creating a State friendly society for these contributors?

My right hon. Friend would refer the hon. Member to the replies given to the hon. Members for Dulwich and Pontefract on the 21st May and the 17th June, respectively.

Questions

Land Purchase (Ireland)

asked the Chief Secretary for Ireland what is the present condition of the Congested Districts Board in regard to the Reeves estates, Killimer, West Clare; and, if the business is not finally complete, what is the cause of the delay over this matter?

The Congested Districts Board inform me that the estate referred to is ready for sale, except portions of two townlands, which they do not propose to sell until additional land is acquired in the vicinity for the relief of congestion on these townlands. About a third of the tenants are at present paying interest on the purchase prices of their holdings in lieu of rent.

Can the right hon. Gentleman indicate when the matter will be finally disposed of?

asked whether the Congested Districts Board will now take further steps to secure the production of the necessary maps and documents in connection with the purchase of the E. J. Sugrue estate, parish of Prior, county Kerry?

The Congested Districts Board have been in correspondence with the trustee for the property referred to, but the maps and documents necessary for an inspection have not so far been lodged. The Board do not at present propose to take any steps to acquire the property compulsorily.

When the right hon. Gentleman says the maps have not been produced, do I understand that the trustee has refused to produce them?

Will the right hon. Gentleman ask the Congested Districts Board to send a further requisition to this gentleman?

Yes. I can assure the hon. Member that the Congested Districts Board are anxious to get the maps.

Royal Irish Constabulary

asked the Chief Secretary whether the Committee appointed to inquire into the pay and pensions of the Royal Irish Constabulary have presented to the Government their Report; if so, when do the Government purpose introducing legislation on the subject; whether the Committee have recommended that the annual pay of the head constable major, at the Royal Irish Constabulary depot, be £130, and that the maximum grade of pay of the other head constables be £120 annually; whether the Government would consider the advisability of making three grades of pay in the rank of head constable, so that men of long service in that rank might attain £130 annual pay; and whether this suggested assimilation of the maximum grade of pay of head constables to the pay of head constable major would be in conformity with the precedent of the Constabulary (Ireland) Act, 1883; and (2) whether he is now prepared to make any statement to the House as to a proposed increase of pay to the rank and file of members of the Royal Irish Constabulary; whether he is aware that considerable discontent exists owing to the long number of years since the last scale of pay for the rank and file of the Royal Irish Constabulary was established and owing to the increased cost of living, which places the men at a disadvantage compared with those who work in a civil capacity; whether he is aware that many men are resigning on account of the small prospects; and, if it is his intention to deal with the matter, whether he will make a statement on the subject at an early date?

As I have already stated the Report was only recently published and is still under my consideration, but I am fully alive to the importance of immediate action, and no effort on my part will be wanting to secure that the matter, which is one of urgency, shall be dealt with at once. The Committee have made the recommendation referred to in the question. The suggestion of the hon. and gallant Member will be duly considered.

I will put a question down for next Thursday in order to get a complete answer.

Outrages (Ireland)

asked the Chief Secretary whether he has any information to give the House regarding the recent attack by a crowd of Nationalist rowdies on a party of excursionists from Portadown, in connection with the local co-operative society; whether he is aware that the party, which was a small one, was composed largely of the wives and children of the members of the society; whether several of the children were knocked down, kicked, and otherwise injured; whether any arrests have been made; and whether excursions have been abandoned to Warrenpoint in consequence of this attack?

The police inform me that an excursion party of between 400 and 500 persons, mainly composed of the Portadown Co-operative Society's employés, accompanied by a band, visited Warrenpoint on the 13th June. Shortly before their return home a rumour was circulated that the Roman Catholic chapel had been wrecked, and a crowd at once collected and attacked the band, a number of whom were boys. An elderly man carrying a banner was knocked down, and is said to have been kicked, but the police are not aware that any women or children were assaulted. The occurrence has been greatly exaggerated in the Press, and no arrests were made. I understand that two excursion parties have been cancelled, but that several others have since visited Warrenpoint without being in any way interfered with.

Was there any truth in the rumour spread abroad that the Roman Catholic chapel had been in any way disturbed?

asked the Chief Secretary whether his attention has been called to the case of Mr. Charles F. Allen, of 19, Ann Street, Dalton, who was assaulted at Ballybunion, county Kerry, on the 11th instant; whether he is aware that Mr. Allen went to Ireland on the business of the Universal Radio Syndicate; that he was set on in the bar of his hotel without warning by several Irishmen, who used the foulest language towards him, on the ground that he was a Protestant Englishman; that in spite of complaints to the police the assaults were renewed on the following day; that he was obliged to leave Ireland and throw up his job for fear of his life; that in consequence of the assault he has been laid up ever since his return to England; will he say what steps the police are taking in the matter; and whether any arrests have been made?

I am informed that Mr. Allen called at the police barrack at Ballybunion and asked that the police would procure for him the name of a man who had assaulted him. Two constables accompanied him to the hotel and procured for him the information he required, and they understood that Mr. Allen himself intended to take proceedings in the matter. Mr. Allen was under the influence of drink at the time, and any unpleasant consequences would appear to have been brought on by him by his own misconduct. No further assaults were made upon him. He was refused employment by his firm owing to the condition he was in and was paid his expenses back to England.

Police Cinematographed (Ireland)

asked the Chief Secretary whether he is aware that Pierce Gun Mahony, of Castleisland, posed for the cinema in Tralee with a number of police recently; whether the police officers in this case acted with his sanction; and, if not, what steps is it proposed to take to deal with the matter?

The police inform me that Mr. Mahony, accompanied by his usual police escort, when passing through Tralee on the occasion referred to, was photographed, apparently for the purpose of the cinematograph. The police were unaware of Mr. Mahony's intention to have this done, and I am told lent no assistance to the operation. The instructions to the police are to do what they can to prevent the persons they protect from indulging themselves in this way.

Is the right hon. Gentleman aware that on several previous occasions the police and this gentleman have been photographed, and that these photographs have been sent to the Tory Press in this country, and, if that is so, will some steps be taken to prevent this practice?

If the hon. Member will tell me for my own guidance how to prevent people being photographed, I shall be much obliged to him.

Is the right hon. Gentleman aware that this gentleman has not the slightest need of any police protection?

I do not know about that. It is a matter for the Executive. I shall be only too glad to be relieved of the obligation of protecting him.

Is it not the fact that if the Nationalist party gave orders to withdraw the boycott of this gentleman there would be no necessity for protection?

Tobacco Growing (Ireland)

asked the Chief Secretary whether representations have been made to him that tobacco growing in Ireland is specially adapted for occupiers of small holdings, as affording employment for young members of the family; and, if so, whether he will join in the appeal to the Chancellor of the Exchequer to give it material encouragement?

The answer to the first portion of the question is in the affirmative. I do not understand what appeal the hon. Member refers to in the concluding portion of the question.

Post Office

Lower Hardres Postman

asked the Postmaster-General whether he is aware that a postman at Lower Hardres is unable to obtain a house, and that his predecessor was similarly unable to obtain accommodation in that village; and whether he will place the Lower Hardres postman on the Canterbury scale of wages, seeing that he is compelled to live in that city?

I would ask the hon. Gentleman to postpone this question.

Will the postman get wages on the higher scale? I have postponed the question once already. How long will I have to wait for a reply?

Sidcup Post Office (W. W. Seagust)

asked the Postmaster-General whether his attention has been called to the case of Walter Waldren Seagust, of Sidcup, who recently had to leave the service of the Post Office on reaching the age limit; whether he entered the service in 1883, and was a letter carrier until 1886, when he became station messenger until 1898, and in recent years has been employed collecting and delivering parcels; whether he has retired without a pension; and, if so, can he take his case into consideration and make him some compassionate allowance?

I am making inquiries into the case, and will communicate the result to the hon. Member.

Wireless Telegraph Stations

asked the Postmaster-General (1) whether, before permitting any work to be done by the Marconi Company in connection with the erection of long-distance installations in South Africa, India, Singapore and the Malay Peninsula, he will take steps to ascertain what the cost would be to the Post Office if that Department undertook the work; (2) whether any long-distance installations for the transmission of wireless messages have been erected or commenced by the Marconi Company in South Africa, India, Singapore or the Malay Peninsula under the agreement of the 30th July, 1913, or whether notice of any intention to erect such installations has been given to him; and, if so, whether he has exercised, or contemplates exercising, the option provided by the agreement enabling the Post Office to do the work; and (3) how many long-distance installations for the transmission of wireless messages under the agreement of 30th July, 1913, have been constructed, or the construction of which has been commenced, by the Marconi Company in the United Kingdom, Egypt and the East African Protectorate?

The agreement of the 30th July, 1913, provides for single installations in the United Kingdom, in Egypt, in the East African Protectorate, in India, in South Africa, and in Singapore or the Malay Peninsula, respectively, though each of those installations comprises separate sending and receiving stations. Several of the masts of the United Kingdom installation have been erected; a considerable amount of material has been sent out to Egypt; and material has been prepared, and is on the point of being sent out for the masts of the East African, Indian and Singapore stations. The Marconi Company gave notice some time ago that they were placing orders for this material. The Post Office is not at present itself in a position to undertake the work of erecting the second three stations. It is, however, still open to the Government to cancel the contract with the Marconi Company so far as it relates to those stations, and I am still prepared to consider the question of employing any other contractors to carry out the work in connection with the later stations who are able by means of practical demonstration to satisfy me of the efficiency of their system. No such demonstration, however, has yet been given. As the South African Government has not yet finally approved the contract, it is not yet in operation so far as the South African station is concerned.

May I ask the right hon. Gentleman if he will answer the last part of question No. 43 as to the cost to the Post Office, if that Department undertook the work?

In the Blue Book which has been published there is an estimate put down. I do not know how far it is accurate, it is in the form which I think the hon. Member knows about. I do not think I should be justified at the present moment in preparing an estimate at very considerable cost.

May I ask if the Government have acquired sites for all these stations?

We have acquired sites in England and in Egypt. We have not yet acquired the other sites, but I think we know, more or less, where we require them to be.

May I ask whether work has begun on the buildings or foundations of the stations?

No, Sir; I have already explained that. If the hon. Member will refer to the answer which I gave to the hon. Member for the Isle of Wight, he will see these facts set out. We do not know exactly where the sites are to be.

Considering that the Committee appointed by the late Postmaster- General some time ago, and also a high official, stated that this was an urgent matter, and that there should be no delay, are not the Government delaying somewhat?

I think I have explained already that one of these stations, a very important one—the South African station—does not depend altogether upon the Government of this country for the acquisition of a site. The South African Government have to ratify the contract, and that has not yet been done.

It is not only the South African station in regard to which there has been delay.

In consequence of the East African station being found unsuitable for communicating direct with India, that has altered the arrangement which was originally contemplated.

Holt Committee's Report

asked the Postmaster-General whether he can now state the names of the Commissioners appointed to consider the Report of the Holt Committee?

How soon will it be possible to know the names of these gentlemen?

:I will represent again to the Departments concerned the hon. Gentleman's desire to know the names. I cannot control the action of these Departments.

Has the right hon. Gentleman received the names of the members of the staff as members of this Committee?

I have received from what is called the National Joint Committee the names of two members of the staff, but there are a large number of other classes, and I do not know how far they would join in the recommendations made by this committee.

Shetland Cable Repairs

asked the Postmaster-General why the Danish vessel "Oersted" was hired to carry out repairs to the Shetland cable while an English vessel, which had originally laid the Shetland cable was lying in the Thames and was capable of undertaking such work?

The hon. Member is probably referring to the cable ship "Dacia," but she is not so suitable as the "Oersted" for work in the tides of the Pentland Firth, and would have cost twice as much. The "Oersted" is frequently employed for work on the Anglo-Norwegian cables which are jointly owned by the two countries.

Was there not an English vessel lying at that time unemployed in the Thames?

I suppose the vessel referred to in the question is the "Dacia." I do not know by whom she is owned.

Questions

Royal Decorations

45.

asked the Prime Minister whether he is aware that postmen, policemen, and other public servants are each awarded a special Royal decoration for acts of heroism and initiative; and, if so, whether he will recommend that such a Royal decoration should in future be given to officers and men in the British merchant service in similar circumstances, looking to the fact that this country is the only country in the world that does not reward the officers and men of its merchant service by some distinction from the head of the State for acts of bravery and devotion to duty?

The question is addressed to the Prime Minister, and I do not see him present.

My right hon. Friend has asked me to reply to the question. He is afraid the Noble Lord has been misinformed as regards rewards for acts of heroism by officers and men of the British merchant service. He would refer him to the answer given by my right hon. Friend the President of the Board of Trade to the hon. Member for the Devizes Division upon this subject on the 17th March of last year, of which he is sending him a copy.

Government of Ireland Bill

Volunteer Forces

asked the Prime Minister whether his attention has been called to the appeal to the Irish United League of America for money to provide arms and equipment for the Nationalist Volunteers; and will he take special steps to prevent arms sent from America entering Ireland and increasing the danger of civil war?

asked the Prime Minister whether he is aware that an appeal has been addressed to citizens of the United States of America to give financial support to the arming and equiping of the Irish National Volunteers in order that the Irish people may be in a position to defend their country from an armed force which stands between Ireland and the decision of Parliament to give her liberty; and whether the Government proposes to make any representation to the Government of the United States in the matter?

My right hon. Friend has seen what has appeared in the public Press. The Proclamation as to the importation of arms and ammunition applies to Ireland generally, and steps, which he hopes will be effective, are being taken for its enforcement. His Majesty's Government do not propose to make any representation to the Government of the United States of America on the subject.

Are we to understand that the Government will continue in political alliance with a party whose Volunteers are armed by the deadly enemies of this country?

Are we to understand that the Government concur in the chivalrous idea of the party opposite that they and their friends are to have pistols in the duel and that the other side are not?

Has the right hon. Gentleman ascertained how much money has already come from America to Ireland to foment civil war there through the agency of American heiresses?

Will the right hon. Gentleman consider whether he can confine the prohibition of the importation of arms to the port of Larne and other Ulster ports?

Questions

Local Loans (Repayment)

asked the Prime Minister whether he has received a resolution from the county borough council of Stoke-on-Trent asking for an extension of the time allowed for the repayment of loans taken up by local authorities to meet the cost of making up and paving private streets from seven years to twenty years; and what is the nature of the reply, if any, he has made to the town council upon the matter?

My right hon. Friend has received the resolution referred to, and an acknowledgment was sent. The matter lies within the province of the Local Government Board, and my right hon. Friend the President, to whom a copy of the resolution was also sent, dealt with it in answer to a question on the 18th May.

Nantyglo Church, Monmouthshire

asked the Prime Minister whether the living of Nantyglo, Monmouthshire, is in his gift; whether the living has been vacant for more than two months; and, if so, when an appointment will be made?

The answer to the first two branches of the question is in the affirmative. An appointment has now been made and announced.

Would it not be possible to give the reason why the delay in making the appointment has been so long?

If other livings become vacant, will the right hon. Gentleman consider that it would be a good thing to leave them vacant until the people themselves can fill them, and not the Prime Minister?

East India Revenue Account

asked the Prime Minister when the East India Revenue Account will be taken?

Income Tax

asked when the Commission on the Reform of the Income Tax laws which he has in contemplation will be appointed?

The question of an inquiry into this matter is under consideration, and I cannot at present say whether it will or will not be instituted.

Chancellor of the Duchy of Lancaster

had given notice of the following question: To ask the Prime Minister whether his attention has been called to the continued absence of the Chancellor of the Duchy of Lancaster from this House; and what steps he proposes to take to give the House the benefit of that Minister's assistance in debate?

Before the right hon. Gentleman answers that question may I ask him whether he is aware that this post of Chancellor of the Duchy has been held frequently by gentlemen who are not Members of the House of Commons, and whether he is aware that Mr. Gladstone, when a Cabinet Minister, was out of Parliament from December, 1845 until July 1846?

In answer to the first part of the question of my hon. Friend (Mr. Swift MacNeill) I believe that the facts are as he states. In reply to the hon. Member for Brentford (Mr. Joynson-Hicks) my right hon. Friend can add nothing to the replies which he gave on this subject on 11th June.

Would it not be possible for the right hon. Gentleman to arrange for one of his doubtful supporters to go to another place?

Suffragist Outrages

asked the Prime Minister whether he has yet consulted with the Home Secretary as to the unconditional release of Miss Sylvia Pankhurst; and, if so, what conclusion has he come to in the matter?

The answer to the first part of the question is in the affirmative. My right hon. Friend informs me that he has always been willing and is still willing, to recommend to His Majesty the remission of the remainder of Miss Pankhurst's sentence if she will give an undertaking to abstain in future from criminal actions and incitements to crime and disorder.

Has my right hon. Friend read the reply of the Prime Minister to the deputation the other day, and is he aware that the East End women are not advocating violence, and have separated entirely from the W.S.P.U., and seeing that Miss Pankhurst has been arrested eight times can he not see his way to grant the full remission of her sentence?

British Army

Special Reserve

asked the Secretary of State for War whether he is aware that, as a result of the Infantry soldiers of the Special Reserve not being supplied with dubbing, their boots get so hard that the men get sore feet after walking a few miles and cannot go on; and could he have dubbing for their boots provided for them in the future?

No complaints in the sense mentioned has been received. The boots, as issued to Special Reservists on joining for training should be in a thoroughly dubbed and pliant state, if proper regimental supervision is exercised, as I believe it is. Special Reservists, like Regular soldiers, are provided with blacking and the issue of dubbing in addition is not contemplated in either case.

Is the hon. Gentleman aware that men are frequently punished for not having their boots clean?

I am not aware of that. There may be isolated cases, but there is no sort of general condition of this kind.

If the hon. Member will give me any material on which I can inquire I will certainly do so.

asked the Secretary of State for War whether be is aware that men in the Infantry of the Special Reserve are compelled on all parades, including field days, to wear a thick pair of trousers, and also over them a still thicker pair of putties even in the heat of the summer; and, seeing that this sets up irritation from the heat caused as a consequence and that discomfort is the result, will he inquire into the matter and get the Regulations altered?

The trousers and putties worn by Special Reservists on parades are of the same kind as those worn by Regular and Territorial soldiers. No complaints have been received and no representations have been made by the medical authorities who are concerned with the suitability of the soldiers' clothing.

Is the hon. Gentleman aware that the putties have to go around the legs and have the effect of stopping ventilation, and interfering very seriously with a man's walking powers? If the hon. Gentleman wants to find out, will he try himself walking a few miles on a hot day dressed as a soldier?

Medical authorities who have inquired into the matter do not agree with the opinion of the hon. Member.

Royal Flying Corps

asked the Secretary of State for War if he will explain why so many accidents have occurred with the B.E. aeroplanes of the Army; why the rudder has no stays to strengthen it, and why the main spars of the machine have such large bolts drilled through them to take the strut sockets, when other types of machines do not have their spars weakened by having such large holes drilled through the main spars; and whether he will do away with the use of this type of machine in the Army?

If the number of accidents in connection with B.E. aeroplanes appears to be large, that is because there is a large number of them in use and because they are continuously in the air. The details of construction are based on most careful and long-continued calculation, and the strength of these machines is in every way satisfactory. There is no intention of doing away with this type until it is superseded by some superior pattern.

Is the hon. Gentleman aware that Army officers have a great dislike to using this type of aeroplane and that they are considered very dangerous? Will he inquire about it? Is he aware that instead of being tied in the ordinary manner they are tied with holes drilled through the wood, which is what makes them dangerous, and will he inquire into the matter?

I would suggest to the hon. Member that he should incorporate his supplementary questions in his original questions and then there would be an opportunity of making inquiry.

I have already inquired into the matter, and I think that it is quite untrue that officers have any dislike to this kind of machine.

asked the Secretary of State for War if he will state on what principles officers are gazetted to the Army Flying Corps; whether he is aware that officers have left the Flying Corps because, though experienced flyers themselves, they have been put under officers with far less ability and experience of flying; and whether he will take steps to alter this condition of affairs?

In reply to the first part of the question, I would refer the hon. Member to the answers given to the hon. Member for Brentford on the 12th and 18th March. The answer to the second part is in the negative.

asked the Financial Secretary to the War Office whether it is proposed to give Members of Parliament an opportunity to visit the Army aviation camp on Salisbury Plain?

Arrangements can be made for hon. Members to visit this camp on Monday next. If those who desire to do so will give me their names, I will endeavour to see that their convenience is consulted.

Aliens

asked the Secretary of State for the Home Department whether deported aliens are frequently regaining admission to this country; whether this is due to insufficiency of inspectors or laxity of supervision; and whether he is prepared to adopt any additional methods to prevent a continuance of this evil?

The aliens who are from time to time found in this country after having been expelled from it form a very small proportion of the total number expelled. There is no reason to think that the reentry of this small number is due to the causes suggested in the second part of the question, or could be prevented by any precautions which could reasonably be taken.

Pit Ponies

asked the Secretary of State for the Home Department whether his attention has been called to the charges under the Coal Mines Act made in a recent case at Nottingham against the Digby Colliery Company; and whether he proposes, by more strenuous supervision of the pit ponies, to prevent a recurrence of the treatment to which they were subjected?

Yes, Sir. The proceedings in question were taken by my direction in consequence of reports received by me from the inspector. I hope that the thorough inspection which has been made of the mine and the substantial penalties imposed upon the owners and management for the offences discovered will have a salutary effect. The inspector has been specially instructed to keep the mine under observation.

Questions

Reformatory and Industrial Schools

asked whether the proposed Grant of £22,000 for reformatory and industrial schools, mentioned in the White Paper (No. 212), is to be in addition to the increased sum of £50,000 mentioned in the circular letter of the Home Office to managers of reformatory and industrial schools dated 26th March last?

The answer is in the affirmative, but it will be understood from the statement made last Monday that the proposed Grant of £22,000 cannot come into operation during the present financial year. The sum of £50,000 is included in the Vote for reformatory and industrial schools for 1914–15.

Does that mean that next year they will get £72,000 above what they got last year?

Criminal Justice Administration Act

asked the Secretary of State for the Home Department whether he proposes to recognise under Clause 7 of the Criminal Justice Administration Bill any of the existing societies which provide probation officers, or whether such recognition is to be confined to a new society to be formed in the future?

The hon. Member's question is premature. The matter will properly come up for discussion on the Report stage of the Bill.

Children Act

asked whether it is the custom in London and elsewhere to take all children apprehended under the Children Act to remand homes immediately they have been formally charged at the police station; and, if not, what cases are exempted?

No, Sir. The ordinary course, in accordance with Section 94 of the Children Act, is that a person under sixteen arrested on any charge is released on bail if he cannot be taken before a Court forthwith; but where for any reason he cannot be released he is taken to a place of detention (sometimes called a remand home) under the Act, except in the cases provided for in Section 95 of the Act.

Coal Mines (Shot-firing)

asked how many of the 1,854 shot-firing accidents that occurred in coal mines between 1903 and 1913 can be ascribed to accidents due to examinations or operations of any sort consequent upon a missed shot?

The number of accidents which occurred during the years 1903 to 1913 in the unramming of shots which had missed fire was eighty-nine, of which three were fatal. Any other accidents which may have occurred in connection with such shots are not classified separately, and I am unable to give the figures.

asked the Home Secretary whether he has received copies of any resolutions passed by miners or their trade union representatives calling upon the Government to make compulsory the use of some safety shot-firing appliance in coal mines; and, if so, whether he can state which are those miners' trade unions, and how many men were represented in each case?

I have received copies of resolutions of this character from various associations or branches, including the chief firemen's associations, and South Wales Miners' Federation, and branches or committees of the Derbyshire, Durham and Nottinghamshire Miners' Federations, but I am unable to say how many men are represented in each case.

Tonypandy Riots (Police Allowance)

asked the Home Secretary whether the Metropolitan Police officers who were sent to South Wales during the Tonypandy troubles on 9th November, 1910, and who remained stationed there until 9th February, 1911, have yet received the whole of the pay due to them as sustenance allowance; and, if not, whether he will inquire further into the matter with a view to the sums being paid forthwith?

The officers referred to received the whole of the allowance due to them some three years ago. When Metropolitan Police officers are sent on special duty in the country they receive a special allowance, and usually their food and lodging are provided, but, if food and lodging are not provided, subsistence and lodging allowances are given. In South Wales ample food was supplied and there was no question of giving any subsistence allowance; but the lodging was so bad that, in addition to special allowances, a lodging allowance was granted. The extra emoluments of each constable amounted to 5s., sometimes to 8s. 6d. a day in addition to food and lodging, and, as I have already said, they were all paid long ago.

As there appears to be a strong feeling that this is not entirely accurate in regard to many cases, will the right hon. Gentleman make inquiry personally?

That is what I have done, and the result of my inquiry has enabled me to give the answer I have just read to the House.

Local Education Authorities (Grants)

asked the President of the Board of Education whether the conditions, if any, to be prescribed by the Board for the payment of Grants to local education authorities for education other than elementary under the Finance Bill will be published before the Bill is passed by the House?

I do not think I could issue Regulations governing the Grants contemplated for education other than elementary before authority has been given by the passing of the Finance Bill. I have, however, already indicated in my speech on Tuesday last the amounts provisionally allocated to these services.

How then is the House of Commons to have any control over an expenditure of the object of which it has not the least idea?

These moneys, when they are to be voted, will come before the House in ordinary Committee of Supply, and on that occasion the House will have an opportunity of criticising the amounts.

Are we to take it that we are called upon to pass this Finance Bill, by which considerable sums of money will be left to the sole discretion of the President of the Board of Education?

The Regulations have to be laid before Parliament before they can come into force.

I cannot lay the Regulations until the House of Commons has authorised the expenditure of the money. That has to be done, and it is impossible for me to put the cart before the horse.

Could not the right hon. Gentleman lay the Regulations in draft, so that the House might have indication of what are the intentions with regard to this money which we are asked to vote?

It is difficult for me to do that, because I desire to take into consideration any representation that may be made to me by the local education authorities in connection with these matters, or any views that hon. Members desire to place at my disposal in regard to these Regulations. There are so many considerations that I am afraid any draft Regulations of the kind suggested by the right hon. Gentleman would not really be very effective, and might be misleading.

Will the right hon. Gentleman circulate a White Paper giving his general views about this money and how it is to be expended?

On a point of Order, Sir. Is it in order to circulate a White Paper containing the general views of any Minister and lay it before the House, and if we embark on that course where are we to stop?

Is the right hon. Gentleman aware that the security he now offers for the control of the House of Commons was a perfect fraud in connection with the allocation of the balance for Scottish education?

Will the right hon. Gentleman give any instance where Regulations have been laid before Parliament and the House has had an opportunity of discussing them?

Fatal Accidents (Scotland) Act

asked the Secretary for Scotland if he is aware that under a regulation relating to the payment of witnesses cited to appear to give evidence under the Fatal Accidents (Scotland) Act the Procurator Fiscal is limited to a maximum payment of 4s. 6d. to workmen so called upon; is he aware that this means a loss to most workmen so cited and who would be liable to fine and imprisonment if they failed to obey such citation; is he aware that the coroner in the English Courts has power to recommend a higher payment so as to secure that workmen shall not lose by their compliance with the order of the Court; and will he therefore take such action as may be necessary by the issue of new regulations to prevent any workmen suffering loss in wages by obedience to the order of the Court?

The figure given in the first part of the hon. Member's question is correct, except that in some cases train fare is allowed in addition; I am aware that in many cases the payment does not adequately compensate the witness for the loss of a day's work. I am not aware of the system obtaining in the English Courts. It is proper to add that the scale referred to is not peculiar to cases under the Fatal Accidents Act, but is the scale adopted by Exchequer for the payment of all witnesses for the Crown in the Sheriff Court. I have no power to issue regulations to fix the amount of such allowances, but I shall bring the matter to the notice of Exchequer.

Workmen's Compensation Act (Expenses)

asked the Secretary for Scotland whether his intention has been directed to the proportion which the expenses awardable under the two scales of the Workmen's Compensation Act, 1906, often bear to the amount awarded, and to the fact that in England the expenses payable are much smaller in similar cases; and whether he will take measures to introduce a uniform scale of costs for both countries based on the English scale?

A memorandum has been sent to me containing statements similar to those contained in the first portion of the question. The fixing of the limits of costs in such proceedings in Scotland does not rest with the Secretary for Scotland, but with the Court of Session, and I am unable to take any such action as my hon. Friend suggests.

Glasgow Corporation

There is an omission in this question which I ask the Secretary for Scotland, whether he is aware of cases in which such legal expenditure as took place in London recently, in connection with certain unsuccessful projects of the municipality of Glasgow, the necessary proceedings could, under the existing law, have taken place in Scotland if the local authorities wished this to be done; and, if so, whether he can state how much money in this way has been spent in each of the last ten years in England instead of in Scotland through the choice of Scottish local bodies?

The meaning of the first portion of the hon. Member's question is not altogether clear, but if it has reference to applications by local authorities for Parliamentary powers, I would point out that under Section 2 of the Private Legislation Procedure (Scotland) Act, 1899, it rests with the Chairman of Committees of the House of Lords and the Chairman of Ways and Means to decide whether any provisions in a draft Order shall be dealt with by Private Bill and not by Provisional Order. The answer to the first portion of the question, if I have correctly understood it, is therefore in the negative, and the second portion does not arise.

I think, perhaps, the right hon. Gentleman did not quite follow the question, partly owing to my fault. May I be allowed to put a supplementary question to make the matter a little clearer. Is the right hon. Gentleman aware that the Parliamentary agent of the Glasgow Corporation, acting on the instructions of the corporation, definitely requested the Chairman of Committees to take the Glasgow Water Bill in London instead of in Scotland, and may I give him this information—

The hon. Gentleman is not entitled to make a statement; he may put a question.

That may have happened, because it is the practice of the Chairman of Committees in the House of Lords and the Chairman of Ways and Means to hear the parties interested before they come to a decision, but their decision is not conditioned by any request that is made, but by other matters which they have to take into account — matters coming under the Statute.

Finance Bill

asked the Secretary for Scotland if, in view of the changes in the Finance Bill, he can give an assurance that the Education Department will not press for a reduction of the size of classes until Grants are available for the expense involved?

The Minute of the Scotch Education Department dealing with the size of classes is suspended until 1st August, 1915. When the time comes to reconsider the matter, due regard will be had to the financial position. I would, however, remind my hon. Friend that, as I stated in the House on Tuesday, a substantial additional sum will be available for education in Scotland even in the present year.

Does the right hon. Gentleman propose to proceed with the matter in regard to payment of Grants by instalments?

That is a very controversial matter as to which the school boards have different opinions.

Railway Rates Act, 1913

asked the President of the Board of Trade whether he has given orders for Returns to be furnished from each railway station showing the amounts raised by the additional rates charged under the Railway Rates Act of 1913; whether he has also required the additional wages paid to railway employê s to be furnished; and, if so, whether the results of such inquiries will be laid before Parliament?

The Board of Trade have not ordered any Returns of this nature. The question of the reasonableness of the general increase of railway rates in July last is at present before the Railway and Canal Commission.

Steamship "County of Devon."

asked the President of the Board of Trade whether the Board of Trade have yet come to any decision as to proceeding against the managing owner or owners of the steam ship "County of Devon"?

The question whether proceedings shall be instituted in this case is still under consideration. I will inform the hon. and gallant Member as soon as a decision is arrived at.

Can the right hon. Gentleman give any indication as to when the decision is likely to be arrived at?

Deck Loads

asked the President of the Board of Trade whether he is aware that his predecessors stated that the question of the proper regulation of deck-loads, other than timber deck-loads, was a matter receiving the attention of the Board of Trade; and whether, in view of the fact that dangerous deck-loads are still being carried consisting of articles other than timber, he can reconsider his decision to only refer the question of timber deck-loads to the International Load Line Conference?

I am aware of the statement referred to, and the carriage of deck-loads other than timber is being carefully watched, but as I informed the hon. and gallant Member on 9th June, I do not think it would be practicable or desirable to refer this question to the International Conference on Load Line.

May I ask the right hon. Gentleman if it is possible for this country to bring in Regulations dealing with this matter until it has been put before the International Convention?

I do not think that the bringing of any particular matter before the International Convention precludes this nation on its own initiative from doing any particular thing.

As a matter of fact is not the answer which is always given—that no steps can be taken until an international agreement is arrived at.

That is so, but we thought one fish at a time was good business, and that we had better have the International Convention on timber deck loads before proceeding with any other question. Considering what the Board of Trade has done during the last twelve months, that we have arrived at a Convention Bill concerning safety of life at sea, and that we have an International Convention on deck loads, I think that is a reasonable amount of progress.

As to deck loads, will the right hon. Gentleman come to some decision shortly as to the regulations?

Wheat Imports

asked the President of the Board of Trade the quantity of wheat received in this country from our Colonies and from foreign countries, respectively, annually, for the last ten years?

Particulars of the total quantity of wheat, of flour, and of wheat and flour in equivalent of grain imported from foreign countries and from British possessions in each of the years 1898– 1912 will be found on pages 174– 177 of the last issue of the Statistical Abstract for the United Kingdom. In 1913 the imports of wheat in the grain amounted to 55,141,000 cwts. from foreign countries, and 50,737,000 from British possessions, whilst the corresponding figures for wheat and flour taken together in equivalent of grain were 65,500,000 cwts. from foreign countries, and 57,014,000 cwts. from British possessions.

Vaccination Officers

asked the President of the Local Government Board whether he has received a letter from the National Vaccination Officers' Association enclosing a return showing how, in thirty-one cases, vaccination officers had lost gross sums of from £478 to £7 10s., although the Local Government Board had dealt with each case, owing to the operation of the Vaccination Act and Order, 1907; and, if so, whether he will at once issue the general Order that will ensure that vaccination officers shall receive approximately the income they received for the average of the years 1903 to 1907?

I have received the communication referred to, which, however, does not identify the cases quoted. I would refer the hon. Member to the answer which I gave on 30th April, in which I stated that, while I did not propose to take any general action in the matter, I would willingly consider any individual case that might be brought to my notice.

When the Local Government Board make recommendations in individual cases, do they take any steps to see that the guardians attend to their recommendations and give effect to them?

No, Sir, we cannot coerce the guardians. We do not wish to interfere with the proper liberty of local governing authorities.

Is it not the fact that the guardians in Bermondsey union have practically defied the Local Government Board in this matter, and have not only not granted the salary which they recommended, but imposed conditions contrary to the Vaccination Order of 1908 on their officers?

I should like to have notice of that particular case. If that is so, it is an argument for allowing Government Departments rather more control than they at present possess, and which might be effected through Grants-in-Aid or otherwise.

Would it not be an argument for the Government to issue a general Order on this question?

I doubt whether I have the power to make any order on the boards of guardians. After all, these are not officers of the Local Government Board, but are officers of the guardians.

Was it not stated by the representative of the Government in another place that the Local Government Board had ample power in these cases to make their will effective?

Bee Disease Bill

asked the President of the Board of Agriculture whether it is his intention to reintroduce the Bee Disease Bill during the present Session?

The answer is in the negative.

Have the conditions changed since last Session to make it unnecessary that the Bill should be passed?

My information is that bee disease is much less this year than was anticipated last year, and the feeling in favour of the Bill has, therefore, diminished.

If this Bill had passed a year ago would not all this have been attributed to the Act?

Small Holdings

asked the President of the Board of Agriculture what is the number of advisers as to small holdings and the average salary to be paid to each?

It is contemplated that either the county organiser or some other member of the staff appointed in each county under the Farm Institute Scheme will give special attention to the needs of small holders in the county. The salaries paid will vary according to circumstances. The Board have already discussed the question informally with representatives of some county education authorities, and it is now proposed to communicate officially with all the counties with a view to bringing the scheme into operation throughout the country without delay.

Will they be servants of the Board of Agriculture or of the local authority?

asked the President of the Board of Agriculture which county councils under the Small Holdings and Allotments Act, 1908, do not charge the amount of the sinking fund in the rents payable by the occupiers of small holdings and allotments purchased under that Act?

In the case of small holdings provided by the county councils of Glamorgan and the West Biding the charge in question does not fall on the tenants. I think the hon. Gentleman refers by inadvertence to allotments, which are not provided by county councils.

asked whether at 31st December, 1913, more small holdings had been provided under the Small Holdings and Allotments Act, 1908, in Norfolk than in any other county in England; and whether this is one of the low-wage counties?

Persian Oil Contract

I desire to ask the Chancellor of the Exchequer a question which I understand it would be convenient for him now to answer. The First Lord of the Admiralty, speaking on the oil contract agreement the other day, announced that the portion of the money needed for that transaction would be formed by the surplus of the financial year. That is a sum of £750,000, and I wish to ask the right hon. Gentleman if he can inform the House under what authority that sum of three-quarters of a million would be diverted from the Old Sinking Fund to the new purpose?

Would it not be in accordance with precedents of His Majesty's present Government that a Clause should be inserted in one of the Bills before the House, either the Finance Bill or the Revenue Bill, and was not that the case in regard to the loan to East Africa?

We have considered that matter, and we thought it was very much better that it should be inserted in the Oil Bill, and that the whole transaction should appear on the face of that Bill.

Trade Dispute—Burton-on-Trent—Charge of Assault

May I ask the Home Secretary whether he is now in a position to say what decision he has come to with regard to the imprisonment of Mr. Rawlings, of Burton-on-Trent?

I have now received a report in this case. It appears that the clear and definite evidence of the prosecutor was supported by that of two constables, while the evidence called by the defence was not in the opinion of the magistrates "independent," and broke down to some extent in cross-examination. Of the three magistrates who heard the case, two are not employers of labour, the third is a tradesman employing about twenty hands and in no way concerned in the matter in dispute. The magistrates appear to have heard the case carefully and fairly, and I have no evidence before me that would justify my interfering with their decision. I have no power to order a suspension of sentence.

I beg to give notice that this evening, on the Motion for the Adjournment, I shall call further attention to this matter.

Labourers' Strike, Cambridge

May I ask whether the Home Secretary has any information about the charge of blacklegging brought against some policemen at Cambridge?

In consequence of the question put to me by the hon. Member, I caused a telephone message to be sent at once to the borough of Cambridge police, but I was informed that there was no strike at Cambridge. It appears I was misled, quite unwittingly, as the hon. Member said "Cambridge," meaning not the town but the county. I was informed for the first time this morning that there has been some uneasiness, as described to me, on the part of the labourers on the borders of Essex and Cambridge, but there is nothing in it at present and no prospect of any great refusal to work. Later than that, just before I came into the House, I received a telegram stating that the secretary of the Rural Workers' Union has complained this morning about a constable assisting in a hay field, and the chief constable states, "Am investigating into truth of this. Labourers behaving very well." That is all the information I have.

Standing Committees (Procedure)

Arising out of what happened yesterday in connection with the absence of a quorum on Grand Committee A, may I respectfully ask you, Sir, whether any and, if so, what "steps" can be taken to suggest to the Chairmen of Grand Committees that in cases where no quorum is present at the first two meetings of a Committee to which is referred a private Member's Bill, the Chairman, after waiting for a period not exceeding half an hour, shall be empowered to direct the Committee, due notice having been given, to proceed with the consideration of the Bill next on the list. This is a suggestion with a view to saving the time of Members. [HON. MEMBERS: "No, no!"]

It would require a Standing Order to enable the Chairman of a Standing Committee to take that step. If the hon. Member brings the matter before the Committee on Procedure they may ask him to give evidence, and as the result of that evidence they may decide to recommend that a Standing Order to that effect should be passed.

May I ask in reference to the suggestion of my hon. Friend would it not be possible for an opposition by merely abstaining from a Committee to override a decision arrived at probably after a Division of the Whole House?

Perhaps the hon. Baronet would give evidence to that effect before the Select Committee, and persuade them not to recommend such a Standing Order.

May I put it to my hon. Friends that if the supporters of a Bill can obtain the presence of twenty members to form a quorum, the possibility which he suggests would not arise?

May I ask whether, under existing circumstances, any Chairman of a Standing Committee has any power whatsoever to require the attendance of Members who are in the neighbourhood of the Committee Room but refuse to come in?

Business of the House

I desire, to ask you, Sir, a question, of which I have given private notice, relating to the order in which private Members' Bills are put down on Fridays after Whitsuntide, and the interpretation of Standing Order No. 6. The question is: Whether your attention has been drawn to the fact that the Children (Employment and School Attendance) Bill, the Report stage of which was begun last Friday, has been set down third on the Order Paper for to-morrow, and two Bills, the Report stage of which has not been entered upon, have been given precedence; whether that is in accordance with Standing Order No. 6, which states:—

"After Whitsuntide, public Bills, other than Government Bills, shall be arranged on the Order Book so as to give priority to the Bills most advanced,"

and whether a Bill, the Report stage of which has been entered upon, ought not to have priority over Bills, of which the Report stage has not been begun?

The hon. Member did not read the whole of the Standing Order. If he had done so, he would have found what I believe is the answer to his question. The Standing Order goes on

"and Lords Amendments to public Bills appointed to be considered shall be placed first, to be followed by Third Readings, considerations of Report, Bills in progress in Committee, Bills appointed for Committee, and Second Readings."

That shows exactly the order in which Bills are to be placed. This Standing Order has never been construed to mean that as between a number of Bills which stand for consideration on Report, the Chair or the Table is to say which of them is the more advanced. We have to take all these Bills in groups, and a group of Bills standing for Third Reading comes first, a group for Report second, and so on, and the Bill put down first for a given day takes precedence of any put down subsequently. The hon. Member will see that there would be a great deal of difficulty in apportioning the amount of progress made by different Bills. A Bill of 100 Clauses, of which two or three had passed, might be considered to have made very little, progress, whereas a Bill of two Clauses, of which the first had passed, would be considered to have made a great deal of progress. It would be an almost impossible task for the Chair or the Table to distinguish as between the amount of progress which had been made by different Bills. The practice has always been to interpret this Standing Order as meaning that Bills should go down in groups, the precedence of which is easily known.

May I submit that a Bill upon which some progress has been made must be further advanced than a Bill upon which no progress has been made?

I do not know that that always follows. A Bill in the course of its passage through the House may have developed warm opposition. But that is a matter which is still open to the Procedure Committee. If they think that this Standing Order is obscure, and could be improved, they can make a recommendation to that effect.

On Monday and Tuesday, we shall take Supply, and the Votes will be announced on the Motion for Adjournment to-night.

On Wednesday and Thursday, the Committee stage of the Finance Bill.

Friday's business my right hon. Friend will be glad to announce at the beginning of the week.

Ordered, That the proceedings on the Finance Bill have precedence this day of the Business of Supply.—[ Mr. Lloyd George. ]

Bill Presented

Workmen's Compensation Act (1906) Amendment (No. 2) Bill

"To amend the Workmen's Compensation Act, 1906." Presented by Mr. GILL; supported by Mr. Bowerman, Mr. William Thorne, Mr. Sutton, Mr. Tyson Wilson, and Mr. Albert Smith; to be read a second upon Saturday, 25th July, and to be printed. [Bill 297.]

Private Bills

Brentford Gas Bill [ Lords ],

Leigh ton Buzzard Gas Bill [ Lords ],

Reported, with Amendments; Reports to lie upon the Table, and to be printed.

Private Bills (Group G),

Major Baring reported from the Committee on Group G of Private Bills; That, for the convenience of parties, the Committee had adjourned till Tuesday next, at half-past Eleven of the clock.

Report to lie upon the Table.

Private Bills (Group H),

Mr. Hugh Law reported from the Committee on Group H of Private Bills; That, for the convenience of parties, the Committee had adjourned till Tuesday next, at half-past Eleven of the clock.

Report to lie upon the Table.

Private Bills (Group F),

Sir John Barran reported from the Committee on Group F of Private Bills; That, for the convenience of parties, the Committee had adjourned till Monday next, at Four of the clock.

Report to lie upon the Table.

Sea Fisheries (Yealm) Provisional Order Bill,

Reported, with Amendments [Provisional Order confirmed]; Report to lie upon the Table.

Bill, as amended, to be considered Tomorrow.

Rhymney and Aber Valleys Gas and Water Bill [ Lords ],

Reported, with Amendments; Report to lie upon the Table, and to be printed.

London County Council (Money) Bill,

Reported, with Amendments; Report to lie upon the Table.

Aire and Calder Navigation Bill[ Lords ],

Reported, without Amendment; Report to lie upon the Table.

Bill to be read the third time.

Chelmsford Gas Bill [ Lords ],

Reported, with Amendments; Report to lie upon the Table, and to be printed.

Message from the Lords

That they have agreed to:—

Marriages Provisional Order Bill, without Amendment.

That they have passed a Bill, intituled, "An Act to confirm certain Provisional Orders made by the Board of Education under the Education Acts, 1870 to 1911, to enable the councils of the administrative counties of Cambridge, Cumberland, and Surrey, and the county borough of Swansea, to put in force the Lands Clauses Acts." [Education Board Provisional Orders Confirmation (Cambs., etc.) [ Lords. ]

Also a Bill, intituled, "An Act to authorise the transfer to the Mayor, Aldermen, and Burgesses of the borough of Swindon of the site of portion of the Wilts and Berks Canal and the Coate Reservoir, and the abandonment of the remainder of such canal, and the sale or disposal of the site thereof; and for other purposes." [Swindon Corporation (Wilts and Berks Canal Abandonment) Bill [ Lords. ]

Also, a Bill, intituled, "An Act for authorising the West Gloucestershire Water Company to construct new works; for extending their limits of supply; and for other purposes." [West Gloucestershire Water Bill [ Lords. ]

And also, a Bill, intituled, "An Act to extend and define the limits of the harbour of Poole; to authorise the Poole Harbour Commissioners to construct works, to acquire lands, and to raise additional money; to confer further powers upon the Commissioners; and for other purposes." [Poole Harbour Bill [ Lords. ]

Education Board Provisional Orders Confirmation (Cambs., etc.) Bill [ Lords ],

Read the first time; Referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 296.]

Swindon Corporation (Wilts and Berks Canal Abandonment) Bill [ Lords ],

West Gloucestershire Water Bill [ Lords ],

Poole Harbour Bill [ Lords ],

Read the first time; and referred to the Examiners of Petitions for Private Bills.

Orders of the Day

Finance Bill

Local Authorities (Grants)

Order read, for resuming Adjourned Debate on Amendment [ 23rd June ] to Question [ 22nd June ], "That the Bill bee 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. Hayen Fisher. ]

Question again proposed, "That the words proposed to be left out stand part of the Question." Debate resumed.

4.0 P.M.

The hon. Member for Great Yarmouth (Mr. Fell), in the Debate last night, spoke of the effect of the 1909 Budget, and referred to the amount of emigration from Scotland since that year. I was in Glasgow for some years before 1909; I well recollect shiploads of men leaving the banks of the Clyde before that date, so that I think the hon. Member must seek elsewhere for the causes which forced these men to leave their native land. The Finance Bill, as a whole, has not been criticised, except in detail. The right hon. Gentleman the Member for East Worcestershire (Mr. Chamberlain) and other speakers have made merry as to the alteration outlined by the President of the Local Government Board on Monday last. That statement, however, did not involve any change of policy, but merely an alteration of method. It affected Parliamentary time and Parliamentary machinery. So far as the public are concerned the only difference now is that these Grants will not be received by the local authorities until the 1st April, 1915, and the Income Tax will be 1s. 3d. instead of 1s. 4d. in the £. In the financial Debates this year the party opposite have shown extraordinary devotion to the principles of Gladstonian finance. Many Members, especially the right hon. Gentleman the Member for the Strand Division (Mr. Long), have held up Mr. Gladstone as a model for my right hon. Friend the Chancellor of the Exchequer. No man was more bitterly attacked or more bitterly opposed by the party opposite than the late Mr. Gladstone. Evidently twenty years' reflection have changed the opinions of hon. Members on that matter, and I think the Chancellor of the Exchequer may take courage and find consolation in that fact. I can well imagine that twenty years hence a Tory democratic Chancellor of the Exchequer —may be he will sit for the Walton Division of Liverpool at that time— [An HoN. MEMBER: "God forbid!"]— coming down to this House and proposing an increase in the Increment Tax from 20 per cent. to 100 per cent., and Members on all sides rising during the course of discussion and recalling to the House the moderate proposals in 1914 of the right hon. Gentleman the present Chancellor of the Exchequer. The second part of the Amendment moved by the right hon. Gentleman the Member for Fulham raises a very clear and definite issue between the two parties. Hon. Members opposite seek to give doles to the local authorities subject to no control, which money is bound to filter through to the pockets of the property owners. They seek a repetition of the experience they have gained under the Agricultural Rates Act. On the other hand, we on this side seek to give £11,000,000 to widen, improve, and speed-up local and national services which are locally administered. Let me endeavour to analyse the ultimate results of this State expenditure along those two lines. This Budget is to shift the burdens from the occupiers of houses on to the shoulders of those who possess extreme forms of wealth. In discussing the problems of public expenditure it is necessary to draw a clear distinction between productive and unproductive expenditure. Let me give a business simile bearing upon my point. In a manufacturing business the cost of an article is always analysed under two heads; there is first the productive outlay, which includes the wages of all those directly employed in the production of that article. There is the non-productive cost, which includes the wages of foremen, timekeepers, and all those directly employed in or about the factory. It is the duty and aim of the factory manager to reduce as far as possible his non-productive wages. He welcomes an increase in the number of those employed on productive labour. So, too, it is the duty of the Government to reduce as far as possible all non-productive expenditure, but to approach in a different spirit and from a different standpoint) expenditure for productive purposes. If I apply that analogy to the increased State expenditure in 1914, and the coming years, what, do I find?

I find £5,000,000 extra provided for education. Every pound spent on education is well-spent public money. Better roads will make for improved transit. Attention to public health will increase the productive power of this country. With these factors at work, however trade may ebb and flow, special and specific advantages accrue to the property owners. The good government of a town and local activity will increase in the future, even more than in the past—the price of land. Why not, therefore, endeavour to tap and intercept these new sources of profit which this new public expenditure will create? If rates are lowered from the operations of the Finance Bill, the Revenue Bill ensures that the relief is to be given on the rate levied on the value of the building, thus ensuring that occupiers will receive immediate relief. They may not receive enduring relief. Grants-in-Aid may give immediate relief to the occupier, but not enduring relief, for on the next assessment of rent this Grant will be taken into consideration. Those are not my words. They are the wise words of a Tory Chancellor of the Exchequer, well versed in economic problems—the late Lord Goschen. In the Amendment put down on the Paper by the party opposite, hon. Members desire that the landlords in the future should be able to take these Grants-in-Aid into consideration when the rents are fixed. It is for this reason I welcome the provisions of the Revenue Bill. It secures a valuation of land suitable for rating purposes. It will clear the way for the Rating Bill, which I hope will enable the local authorities to tax, tap, and levy rates on the capital value of land whether developed or undeveloped. I would like to ask the Chancellor of the Exchequer, if I may, whether in the new Rating Bill local authorities will have this power given to them? It may be considered that England is not right and ripe for this reform. I can assure the right hon. Gentleman that Scotland demands this reform. I hope we may have some assurance as to the policy of the Government on this matter.

I have endeavoured to trace the ultimate effect of this new State expenditure. Let me now ask two questions: Firstly, is the money required? and secondly, has the best method been adopted to raise the necessary revenue? It is admitted on all hands that the money is required. The first part of this Amendment is an admission of that fact. The existing method of raising rates has broken down. The 1909 Budget was to raise revenue to finance the Old Age Pensions Act of 1908. This Budget is to finance the local authorities on account of demands made by this House in previous years. It is a payment for services demanded by the House of Commons in previous years, the expenditure for which was not met by this House at that time. This Budget is in striking contrast to that of 1909. That was a wealth-distributing Budget. The State then said to the men owning large sums of money, "We require a share of your surplus income; we know a better way to spend your money than you do." [An HON. MEMBER: "Oh!"] That was the ultimate result of the 1909 Budget. Unless the Government have that thought in their minds, I venture to say they had no right to ask these men for their money, and to tax them accordingly. This Budget is a wealth-distributing Budget. The State says to men holding large incomes, "We require a further share of your surplus income. Again we know a better way to spend it. We intend to spend this money to make the nation, to make each individual in the nation a more efficient economic unit—by improved education, by improved public health the nation will become more alert, and so become better producers of wealth." In this Budget the State is following the example of a successful commercial concern. It is yearly setting aside out of revenue large sums to modernise their plant and to meet with success the competition of the future. This Budget is a big step forward in this matter. It will enable this country in the future to meet international competition. In the race for commercial supremacy this country has but two competitors—America and Germany. We have in this country two natural advantages—in the character of our people and in their adaptability, but we have lagged behind in our educational standard. This Budget finding, as it will, several millions for educational purposes, will enable this country in the future to compete successfully in the industrial markets of the world.

In discussing financial problems in the last century, this House was mainly concerned with questions of non-productive expenditure, in the sense that the money spent on the Army and Navy is non-productive. I admit it creates a sense of security upon which it is difficult to place an economic value. During the last few years the House of Commons has deliberately determined, with the consent of all parties, to incur expenditure to cope with our problems at home. This Budget is the concrete expression of public opinion. Whether it be for the needs of the Navy or the Army, raids are made upon the Chancellor of the Exchequer. Frequently he is criticised for his lavish expenditure. It is well to bear in mind that he alone has borne the responsibility of raising the necessary revenue; and I think it is undoubtedly true that this money is required. Let me turn from this last point to the question: has the best method been adopted to raise the necessary revenue? Here, I hope, to enlist the support of the Leader of the Opposition. I find that, speaking in this House on 18th July, 1912, referring at that time to the 1909 Budget proposals, he said concerning those proposals:— this expenditure being entirely for local purposes, no one will deny that local taxation bears heavily upon the working classes. Our present rating system is a tax upon one of the primary necessaries of life, namely, housing. This tax should not be increased. That is, in my opinion, the justification for the Chancellor of the Exchequer not having increased indirect taxation. The statement of the Chancellor of the Exchequer on the subject of national revenue has revealed the mistake made by the party opposite in attacking his 1909 proposals. At that time we were told on every platform in the country that these, proposals would check and retard commerce, but in the broad light of experience these proposals have neither checked nor retarded commerce, but illustrate, in a favourable degree, the political history of this country.

My reply to that is that for people anxious to buy Consols, it is a very good thing that they are cheap, and it is a very good thing for all those who are saving money and have money for investment purposes. Hon. Members opposite always see the dark cloud upon the horizon. They remind me of the dark horizon seen at sea which, recedes as rapidly as one approaches it. So, too, the apparently dark cloud seen, by hon. Gentlemen opposite recedes front year to year. The party opposite are in favour of broadening the basis of taxation. There is only one way of broadening the basis of taxation, and that is to deepen the pockets of the British taxpayers. That can only be achieved by economic and personal freedom combined with the development of our national resources and well spent money upon education and public health. We are bound to inquire as to the policy of the party opposite when discussing additional methods of raising revenue. The Mover of this Amendment and several other speakers always state that they are in favour of the policy of taxing foreign imports. I look in vain for any reference to that subject in this Amendment. Now is the time, and this is the appointed day for the party opposite to formulate their proposals upon that subject. I would like to ask them where is the emblem of their programme? It seems to me their policy has passed another milestone on its weary journey. They apparently think that the Tariff Reform argument is good enough for indoor meetings of agricultural labourers in the South of England, and perhaps good enough for outdoor meetings in industrial centres in the north, but it is not good enough for the House of Commons, and as they have not formulated their proposals, the only possible policy of raising the necessary revenue is contained in the Finance Bill before the House. I have endeavoured to make three points: firstly, that the money is required; secondly, that the best method has been adopted of raising the necessary revenue, and thirdly, to trace the ultimate effect of that State expenditure. Because I believe in all these three points, and because I believe that the Government are following out a well-considered policy, I shall support their various measures throughout all their stages.

Before I follow the hon. Gentleman who has just sat down into his examination of the question before the House, I should like to say a word or two with regard to the particular position in which this House finds itself, and especially with reference to the speech which the Chancellor of the Exchequer made yesterday. The speech of the Chancellor of the Exchequer yesterday consisted of two parts, neither of which had any reference, if he will allow me to say so, or at any rate, very little reference, to the contents of his Bill or to the subject of the Amendment. The first of those two parts was an attack upon some of my hon. Friends, especially upon my hon. and learned Friend the Member for St. Pancras (Mr. Cassel) for having, as the right hon. Gentleman called it, prevented relief being given to the local authorities by digging in Parliamentary dustbins for musty precedents. The first comment I have to make upon that is this: The right hon. Gentleman and some of his supporters always talk about giving relief to local authorities as if the whole of this money was to be purely in relief of local authorities. The real fact, of course, is that when you give this money you give it on the obligation of entering upon increased, and very largely increased, commitments, and therefore it is a mistake to talk of the whole of the Grant as if it were in relief of local taxation. The other part of the right hon. Gentleman's accusation against my hon. and learned Friend was even more remarkable. He accused him of digging in Parliamentary dustbins for musty precedents. What are these musty precedents? They are the Rules and Standing Orders of this House, and it is against the Rules and Standing Orders of this House that the right hon. Gentleman is directing his attack. It is with these he is quarrelling, and not with my hon. Friend. The right hon. Gentleman no doubt would find it much more convenient if he had been able to ride roughshod over the Rules and Orders of this House. These are musty precedents. There is really a Cromwell touch about that. The Prime Minister is going to speak later on, I understand. I wonder what the Prime Minister thinks about his chief lieutenant's opinion of the Rules and Orders of this House. Would he share the idea that they are musty precedents, and that it is offensive to drag them into the light of day at all. It shows the whole policy of the Government and the way they look at things in the House of Commons at the present moment. Anyone who attempts to cross their will is to be trodden down if possible. It is not only that. In all their Bills, and in the Bill which the right hon. Gentleman introduces now, the same symptoms manifest themselves. Wherever you have a difficult point they say, "Never mind the House of Commons. Set up a Board or Commission of gentlemen with £2,000 a year each, and £500 for their assistants. Let them settle it. If they cannot do it, do it by Order in Council in some office downstairs in Whitehall, but not in the House of Commons." That is the position to which the right hon. Gentleman and his Friends have brought this House.

The second part of the right hon. Gentleman's speech consisted exactly of that form of attack which he has deprecated in others—producing Parliamentary precedents. He has been ransacking pigeonholes in some Government Department, and he has extracted from them a Bill, which my right hon. Friend the Member for the Strand had at an earlier stage of our Parliamentary history been responsible for. And the right hon. Gentleman had the effrontery—because I say it is nothing else—to compare the proposals made in that Bill with his present proposals. My right hon. Friend proposed that you should have a centralised assessment committee with a local surveyor sitting to assess. That is not the right hon. Gentleman's proposal. The right hon. Gentleman's proposal is that one of his paid Government Departments is to control the valuation system on the ground that central control means economy. I do not know whether the right hon. Gentleman has seen a very interesting and remarkable little pamphlet which was put into my hands the other day, published by some surveyors, with regard to this question of local rating. In that pamphlet they make themselves responsible for the statement that in one of the metropolitan boroughs in the last quinquennial valuation the cost of the valuation worked upon at 6d. per cent. per annum. What is the right hon. Gentleman's cost? The Valuation Department, so the Financial Secretary to the Treasury told us, is estimated to cost this year £761,718. The total rate-able value of Great Britain is about £240,000,000, and the particular valuation is not a valuation for once and for all. It is an annual valuation; it is a valuation on annual value and not on capital value. Taking the figures at that, if the right hon. Gentleman works them out, he will see that in place of 6d. per cent. per annum, it is 6s. per cent. per annum, though he says this system is to be preferred because it gives increased purity in administration.

I think there will be a good deal of resentment in the country owing to the attacks he made upon assessment committees, which will recoil upon his own head; but, apart from that, I put it to him and to the House; Are you sure, if you have centralised control, it will give invariably this purity of administration of which he speaks? You are taking the control away from the local authorities; you are taking in this Bill power to give or withhold Grants to these local authorities whose members are responsible to the people who elect them, and you take or withhold that money at the caprice of some gentleman who is not elected, but who is appointed, and who cannot be got rid of and can be got at. I have no reason to believe that pressure of the kind which I have indicated will not take place. There is that form of political pressure which has taken place before now. If the right hon. Gentleman would only turn his mind to the case of the poor schools in his own country, who have suffered by administration Orders of Departments, to cases like that of the Swansea and Towyn Schools, he would know the sort of pressure which a Government Department can put on. The other remarkable thing about the right hon. Gentleman's speech was the entire omission to say one single word about the new situation caused by the new Budget. The only thing he said about that was that he thought it was going to be quite an easy matter for the State to adjust the extra difficulty caused by the removal of the penny on the Income Tax. All I can say to the right hon. Gentleman is, if he spent his morning in the City, as I have, he would not come to that conclusion. If he imagines for a moment he is not going to have trouble in that direction, he will find he is mistaken.

There is one other matter which I think is really worth referring to. As I understand the proposal with regard to Ireland, in regard to this Bill, it is that the existing Grants under the Local Government Ireland Act of 1898, and under the Agricultural and Technical Instruction Act of 1899, amounting to about £1,250,000, are to stand along with the £679,500 in the Bill under the control of an Irish Parliament. I do not want to go into that, but I wish to call attention to this great contrast between the way the right hon. Gentleman is treating Ireland and this country. In the case of this country the right hon. Gentleman says he has so little confidence in our local authorities that the supreme control must be centralised, while in the case of Ireland the control of this money is to be put under the Irish Parliament. I ask the Attorney-General, who, I understand, is going to speak in this Debate, what guarantee has the North of Ireland that it is going to get its fair share of these contributions? There was an occasion when we did propose in connection with another Bill an Amendment which would have had the effect, at all events, of preserving for local authorities at least that proportion of the contributions which they get now, and I am not sure it will not be possible at a later stage of this Bill to move that Amendment again. The Government would not take it up or give their blessing to it. The fact is that while you have no confidence in the local authorities in this country you are giving the new authority to be set up in Dublin supreme control over the disposal of the whole of this money.

Let me contrast valuation. Here the old system is not considered to be good enough, and is said to be out of date and you must have a new one, and you say that until you have this new system the local authorities shall not have the Grants. In. the case of Ireland Griffith's valuation, made on the price of corn seventy years ago, is considered good enough. Are you going to have a new valuation for Ireland? No; you say you can get along very well there with Griffith's valuation. I think that is a comparison which is not very creditable under the circumstances to the Government. I wish now to say a few words upon the general aspect of this question. I want to say something about the Prime Minister, because I understand that he is going to speak later on in this Debate. I do not know whether he will have any recollection of the campaign which he waged in Scotland immediately before the General Election at the end of 1905. The whole substance of that campaign was a strong advocacy of the policy of retrenchment. That was the word which was going to be placed on the banner of the Prime Minister's party. I know the character of the speech made by the right hon. Gentleman at Leven, because I remember very well that I was attacked for nearly an hour by a Gentleman whose only mental pabulum was the Prime Minister's speech at Leven. The right hon. Gentleman said in that speech:— the Post Office. May I point out, however, that the Prime Minister took it into account in the figures which he used, but taking out the figures of the Post Office they are still very remarkable. May I here state that I think the hon. Member for Northampton (Mr. Chiozza Money) was betrayed into an error in stating, as he is reported to have stated, that the profits of the Post Office had increased £10,000,000 or £11,000,000 in the ten years from 1904–5 to 1912–13? The actual fact is that the gross receipts in 1904–5 amounted to £19,930,000, and the cost of the operations of the Post Office was £14,858,000, or a profit of over £5,000,000. At the present moment the profits for the year 1912–13 is a little over £6,000,000. Therefore the increase has only been £1,000,000, and not £10,000,000 or £11,000,000 of which the hon. Gentleman spoke. I will eliminate altogether, for the sake of comparison, the Post Office figures. Some hon. Members opposite are in the habit of talking about the increase in our expenditure, and they put it all down to armaments. They look only at the expenditure upon armaments and they say this increase is due to bloated armaments. But that is not the case and the Chancellor of the Exchequer knows it perfectly well.[An HoN. MEMBER: "Who said it?"]

I do not know that it has been said in this Debate, but I have heard it said often. The real fact is, if you compare 1897–98 with ten years later, 1907–8, you will find that our naval expenditure has risen from 20.9 millions in 1897–8 to 31.1 millions in 1907–8 and 51.6 millions in the present year. That is an expenditure per head of the population of 10s. in 1897–8, 14s. in 1907–8. and £1 2s. in the present year. I will now compare the Civil Service expenditure. This has risen from 21.6 millions in 1897–8, or 11s. per head of the population, to 61.1 millions, or £1 5s. per head of the population in the present year. I do not hesitate to say that a very considerable proportion of that increase is due to the passion of the Chancellor of the Exchequer for inspectors. Between 1906 and 1913 there has been a total of 7,812 patronage appointments made by the present Government without any examination whatever. In the case of the Land Valuation Department 4,153 officials have been appointed, and £1,393,000 has been paid in salaries for performing duties which have brought in £223,430 to the Treasury. [An HON. MEMBER: "NO!"] An hon. Member opposite denies that, but I can tell him something about the appointment of Labour representatives. According to the same Return 374 trade union officials, members of the Socialist or Labour party, have been given appointments with annual salaries amounting to a total of something between £71,000 and £108,000. No wonder that the Labour party eats out of the hand of the Government in this House, and I confess that I shall be a little curious to see, in spite of what has been said on behalf of the Labour party that they are going to refrain from supporting the Government in the Division Lobby, whether they carry out this intention, and I should not be in the least surprised if in the course of the day they find some reasonfor supporting the Government. The whole of this system of finance is being bolstered up by doles on the one hand and patronage on the other. The Chancellor of the Exchequer goes to Ipswich and other places and brags about this. The hon. Member for Northampton said we had changed a good deal from the time of Mr. Gladstone, and I quite agree with him. I think we have changed, and I do not think the change is for the better.

I wish to say a few words about the other side of the account. The hon. Gentleman who has just sat down said something about the balance of direct and indirect taxation. It is not uninteresting to look at the figures on this point. Take the figures for the same year, 1897–8. In that year the indirect taxation was £1 8s. per head and the direct taxation £1 1s. In 1907–8 the amount was £1 11s. indirect and £1 8s. direct taxation. For the present year the proportion is £1 13s. indirect and £2 2s. direct taxation, an increase in indirect taxation of 5s. as compared with 1897–8, and an increase in direct taxation of 21s. There is no doubt whatever that the pressure of this indirect taxation is felt very heavily. As long as you place indirect taxation upon commodities it is bound to be felt, because there is no chance of escaping the burden. Take tea, for example. Hon. Gentlemen opposite make very attractive speeches on the platform about food taxes. It is said that if you look at the figures for the Tea Tax you find that the consumption of tea per head in 1910 is 6.39 lbs. per head, and the duty paid per head per annum is something like 2s. 8d. Even the wildest dreams of the wildest food taxer, or the wildest construction hon. Gentlemen opposite could put upon it, could not show that it ever amounted to a figure such as that. The hon. Member for Northampton and the hon. Gentleman who spoke last in this Debate made a comparison with Germany, and the former quoted some German figures yesterday and stated that taxation in Germany, including Imperial and local taxation, amounted to £229,000,000 against £244,000,000 in this country. If you work that out per head you get the result that the taxation per head in Germany is £3 13s. over the whole field, while in this country it works out at £5 6s. per head. It is admitted by the hon. Member for Northampton as well as by Members of the Labour party that so far as real wages are concerned, and taking into account the purchasing power of wages, the worker in Germany at this moment is infinitely better off than the worker in this country.

The real truth of the matter is that in this question we are working more or less in a sort of vicious circle. You have got increased expenditure, followed by increased taxation, increased taxation bringing in its turn a rise in the cost of living, and then a long way behind, and getting further and further behind every year, lagging behind, comes a corresponding rise in wages, and because it lags behind, and because it is smaller and slower, you have again to increase your expenditure and increase your taxation in order to provide relief. Why does that happen? I put it to the right hon. Gentleman and to the House: Is it not reasonable to suppose that it happens because you take no account whatever in adjusting your taxation—on the contrary, you set your faces against it—of pursuing a course which will add to employment in this country, whereas every one of your competitors pursues a course designed to add to employment. I saw that one of the Chancellor's admirers compared him the other day to Bismarck. I do not know that it is an apt comparison, but the contrast between Bismarck's methods of tackling the problem, because it is a problem which every other country has to face, and the right hon. Gentleman's methods is complete. Bismarck said, "The German people are poor; the German people want employment. I will endeavour to frame a system of taxation which will add to employment." The right hon. Gentleman says, "Our people are poor, and want more employment. Let us tax the employers more." Bismarck said, "Our people in Germany are poor. Let us try to frame a scheme of taxation which will make the foreigner contribute something." The right hon. Gentleman says, "Our people are poor. Let us put some more taxes on them." Under this very Budget he is saying, "If a man sells British goods abroad and makes a profit out of them, let us tax him," But if the foreigner comes to this country and makes a profit out of selling his goods in Great Britain, not a halfpenny is obtained from him. That is the contrast between the right hon. Genleman's methods and the methods of Bismarck. Whatever you may say of Bismarck's methods, they have undoubtedly led to the great commercial prosperity which Germany enjoys at the present day.

Is there anyone who really supposes that by piling up all these taxes on land, which, remember, is the raw material of every industry, and by piling up all these fresh burdens on capital, this Pelion on Ossa of taxation, and by maintaining the crushing burden which our present indirect taxes are upon the necessities and simple luxuries of the poor, you are really increasing employment in this country? You are doing nothing of the kind. It is no use talking about relief. It is not relief you want, but a remedy for the problem. All this system of relief and all this system of doles is really only trying to feed the dog with bits of its own tail. It is only trying to prop up the house with bits taken out of the foundations. It may suffice for the time, but, sooner or later, you come to the end of the possibilities in that direction. Every fresh addition you make to the burden of taxation in this country is pro tanto an increased handicap in your competition against some man who has not to bear that burden of taxation. Our national trade union, if I may put it in this way, is being black-legged, and we are actually having to levy very largely increased amounts, increasing amounts every year, from our own members in order to go on providing unemployment benefit. That is the position in which we find ourselves; that is the real moral of the Budget, and the sooner people realise the position and the moral, the inevitable moral, from the present financial position, the better for the country and all those who share its prosperity.

( who was indistinctly heard ): At last there has been found a man on the benches opposite who has had the courage to speak of Tariff Reform. I congratulate him on his courage, but I cannot congratulate him on his arguments. He has chosen a very unfortunate time for them, because the figures for unemployment have never been so low. I was talking to a very powerful and prominent Tariff Reformer yesterday, and he said to me, "I am a Tariff Reformer, the very strongest Tariff Reformer you can have, but I am not such a fool as to suggest Tariff Reform to-day. What is happening? The country is as full of employment as it can be. We are working practically twenty-four hours a day, and it is impossible to do anything more than that. Therefore, strong as I am in Tariff Reform, I would not venture to be so foolish as to suggest at a time when we are absolutely full of employment anything of the kind." [HON. MEMBERS: "Name!"] I say that he was a prominent Tariff Reformer. I do not propose to follow the hon. Member in his arguments on that subject, but he did slightly touch on the question which I have most in mind, the question of armaments. I agree with him that the question of armaments does play a very important part in the matter we are discussing to-day. In fact, had it not been for the gigantic increase in the expenditure on armaments since 1909, we should not be discussing the question of new taxation at all. The Budget of 1909–10 would have provided fully, adequately, and completely, not only for the whole of the Grant to the local authorities which it is proposed to make next year, but also sufficient to do away with the Sugar Duty, and to leave us a surplus besides.

It is important when the House is dis cussing the finances of the year, and this is the only opportunity we have of discussing them as a whole, and not merely in separate compartments, that we should consider the situation in which we find ourselves, and which I think is a striking one. We have had two years of abundant prosperity, such as this country has never enjoyed in all its past history, and that prosperity has been reflected in a revenue which has literally been increasing by leaps and bounds. The Chancellor of the Exchequer estimated that he would have an increase in the preceding year of £6,000,000. He has had more. He has had £9,000,000, and yet to-day we are considering a very serious additional burden, and also a proposal to raid the Sinking Fund, a small sum this year followed by a larger amount next year. The time has really come when we ought to look this question in the face, and see what are the causes which have led to this position, and whether we are justified in proceeding on similar lines. The Budget of 1909 was to provide revenue for social reforms and for the Navy. It was the first Budget which completely abandoned the old well-established principle of annual finance. It was to provide a revenue which was to grow with the growing requirements of social reform. The Chancellor of the Exchequer, in introducing that Budget, told us that it was a war against poverty, and that it was to provide for the growing cost of a number of social reforms which he outlined. Let us just see what has happened under that Budget? We all defended it on those grounds. We had a great campaign, the greatest campaign ever carried on in this country, on the question of finance, and we followed the Chancellor of the Exchequer in urging that these social reforms were necessary, and that a large sum of money was needed for the purpose, and we supported the Budget. To sum up the position, the total sum yielded by the additional taxes of 1909–10, as given by the Chancellor of the Exchequer in answer to an hon. Member opposite, in the five years, 1908–9 to 1913–14, was £111,175,000. How much of that has gone to these purposes? He told us in the same answer that there has been an additional expenditure on the Army and Navy in the same period of no less a sum than £55,860,000, or more than half the total sum yielded by the additional taxation of the Budget of 1909–10.

5.0 P.M.

The position is even worse than that from this point of view, because, while in the first year, 1910, an additional sum of £3,500,000 was required on the Navy, this year we are proposing to spend on the Army and Navy no less than £21,500,000 beyond the sum which we spent in 1908–9, so that, whilst the yield of the taxes for the current year is estimated to be £29,200,000, we are spending an additional sum on the Army and Navy of £21,354,000, or 72.4 per cent. of the total increase yielded by the taxes of 1909–10. I say that is a result which was certainly not anticipated by us or by the Chancellor of the Exchequer. We were led to expect that the great majority of that money would go for social reform. The Chancellor of the Exchequer, in fact, in making his financial statement the other day, admitted that it was the expenditure on the Army and Navy which had falsified the prediction he had made. He had been disappointed in the result, and that was the reason why he had to come forward and take the unpopular course of proposing additional taxation. It is a well recognised principle that to get money easily is fatal to economy. When you provide great sums of money, the most voracious Department always gets the largest share. It has never been different. In this case it is the Army and Navy. Whenever, as Cobden pointed out so frequently, you have prosperity, the country runs into extravagance on armaments, instead of husbanding its resources for a rainy day. This appears to me to be a serious warning to us against the policy of providing large sums of money, and then deciding how you will spend them. All experience has shown that economy can never be attained when you proceed on those lines. Our economists have always laid the greatest stress on that fact. I know that we have to-day, and unfortunately very largely on this side of the House, a new school of economists, whom I may call the apostles of extravagance, who seem to regard taxation as being very good in itself, and who have no concern as to what proportion the total amount of our taxation bears to the resources of the country. As soon as it appeared we should get this year a surplus on the Budget, what happened? We had a Navy Supplementary Estimate of £2,500,000—the biggest Naval Supplementary Estimate ever presented to this House or any House in time of peace—and we found, when we came to discuss it, that the money had already been spent. But the fact remains, the sum being in hand, the most voracious spending Department takes it. There, again, have we not just seen, in regard to the Persian Oil contract, a considerable sum withheld from the Old Sinking Fund, and a sum of two and a quarter millions suddenly produced out of the pocket of the Chancellor of the Exchequer, who had announced that he was going to keep £1,500,000 in reserve, it being the result of serious underspending owing to labour troubles. In fact, we had provided for underspending in the ordinary Estimates, and yet this money has been given in that way. The only safeguard we can have when large sums are needed is to come to this House and ask it to impose additional taxation for the purpose. Does any hon. Member think we could have reached the point of spending so many millions on the Navy if every year when there was a fresh demand we had to come to this House and justify it? All this has happened through the immense automatic supply of money being thus taken possession of. We ought to give this our very serious consideration. Mr. Gladstone pointed out the dangers of having an easy means of basing taxation on Income Tax, and he said that, in his opinion, the facility of raising the Income Tax was such as to tempt the House and the country into extravagance. Not only has that facility been resorted to, but we have had the further facility and further danger of easily resorting to the Death Duties, and we have made enormous additions to them. It must be a matter of grave consideration whether those Death Duties have not reached a point which entrenches on the capital of the country. There is no expansion of that source of Revenue, and yet we are raising the amount which we are taking from it very considerably. Further than that we are imposing a heavy tax on thrift, and would it not be better to face this question now and raise our Income Tax rather than put enormous duties upon that which is distinctly a portion of the reproductive capital of this country?

I want to draw attention on this point to the fact that the method pursued by the Budget of 1909–10 of providing these large sums of money has, at any rate, not been successful in promoting economy in the two services to which I have alluded. I should like frankly to acknowledge the concession which the Government have made in this respect to the feelings of a number of their strong supporters. The Chancellor of the Exchequer himself, as we know, has deplored this great increase in the amount of money devoted to these services. It has disappointed him, and yet by the methods adopted he has not been able to prevent the great increase which has taken place. I should like to refer to an interview given by the Chancellor of the Exchequer to a journalist only so recently as the 1st of January last. What did the right hon. Gentleman then say? He told us that if we would only spend a moderately reasonable amount on our naval and military armaments we should have ample money for all purposes for which we now need it. Let me quote one or two passages in that interview, as they throw considerable light on the subject. He said—at least he is reported to have said:— is really raising a very great question, because it goes to the whole root of our position. What were the sources from which we were led at that time by our Leaders to expect we should derive the funds needed for social reform. Was it suggested that we should have an enormous and gigantic increase of taxation? Not at all! Sir Henry Campbell-Bannerman, in his great speech at the Albert Hall, in 1905, a speech quoted all over the country—I circulated it amongst my Constituents—told us it was to be the saving on naval and military expenditure which would achieve for us these important social reforms, and this is what he said, after dealing with the fact that we were spending on the Navy and Army twice as much as ten years before. His words were:— chequer is not in a position to carry out the promise made by the Liberal party to abolish taxation on sugar. If he had not to meet the immense expenditure on armaments he could have done it. Yet we are leaving this taxation on sugar—one of the most important foods of the people and of the children of this country—while in the very same Budget we are voting a sum of money for the feeding of poor children. We see constant illustrations of how this gigantic expenditure defeats our object—the amelioration of the condition of the people. The Chancellor of the Exchequer yesterday referred to this, and said that if the House as a whole were polled, he did not think it would be in favour of reducing our naval and military expenditure. The Chancellor of the Exchequer is not justified in throwing the responsibility upon the whole House in this matter. If this expenditure is not necessary or essential to us, if it is not imposed upon us by our obligations with regard to defence, a reduction ought not to be a question of a Vote in this House, but it should be the duty of the Chancellor of the Exchequer to tell the House so and to propose a reduction. He would be supported by the bulk of the Liberal party, who have already said that they are in favour of no increase being made in armaments.

I said something just now about the new race of economists in this House. I have been rather pained and grieved to listen to the language used by Members on this side with regard to the old economists in this House—Mr. Gladstone, Mr. Cobden, and Mr. Bright, and even our own Prime Minister himself. The hon. Member for East Northamptonshire (Mr. Chiozza Money) quoted language used by the Prime Minister himself in regard to economy. I notice that the hon. Member for the Ince Division, who is a member of the Labour party, was the first to defend the action of Mr. Gladstone as a statesman and patriot throughout the whole period of his life. It would ill become us to leave the defence of these men entirely to members of the Labour party. We were returned largely on the cry of supporting the policy of economy, and the policy of Mr. Gladstone, Mr. Cobden and Mr. Bright. I think we all came in upon that cry. We cannot turn round and tell the people that those men were cheeseparing in their policy and did not spend enough money, and that they did not know what they were doing. When we look at the immense triumphs of their finance and see how they liberated this country from enormous burdens, how the cost of living went down and the cost of commodities fell, and the enormous improvements they made in the conditions of the people from 1846 up to the end of last century, we are doing very unwisely in blaming them for not doing more, having regard to the gigantic nature of the work they did. A little while ago the hon. Member for Blackburn made a very interesting speech. He is not at all afraid of big Budgets. In 1909–10 he said he was not afraid of seeing a Budget of £300,000,000 or £400,000,000. I am glad to think that on this occasion he reduced the figure to £250,000,000. That hon. Member is a Socialist, and, of course, if all the means of production, distribution, and exchange in this country are to be in the hands of the State I can quite understand that a Budget of £300,000,000 or £400,000,000 might easily be reached. We do not take that view.

I always listen to the hon. Member with interest, but I listened to him on this occasion with a great deal of surprise, because I thought his political economy was somewhat sounder than it seems to be. He used the remarkable argument that if a man had £10,000 a year there was no harm in taking £5,000 from him, because it did not make any difference whether he had £5,000 or £10,000 to live upon. That seems to be a very crude view of our national resources. If a man with £10,000 a year spends it upon himself, it may not do any harm to take £5,000. As a matter of fact, the reproductive capital of this country is produced by the savings of men who have large incomes. All capital is the result of saving. The incomes of the people of this country do not consist in realised money. They consist in great enterprises, great manufactories, and great businesses employing enormous numbers of men. A manufacturer said in my hearing only the other day, "For every £100 I can save I can employ another man and expand my business." That is not the view of the hon. Member for Blackburn. When all the means of production, distribution, and exchange are in the hands of the State it may not be so, but in this country it is the enterprise of individual saving which has produced the wealth of the country, and not the Government. You have men enjoying gigantic and princely incomes all over the country. If those men had spent it on themselves disaster would have followed to the country. They did not spend their incomes on themselves, but exercised prudence and thrift and put it into expanding businesses. It is true to say that those businesses provide a great deal of employment for this country, and add a great deal of wealth to this country. We may get to a Socialist State, but we have not got there yet, and I think the hon. Member for Blackburn, when he used that example, was very shallow in his views.

The hon. Member for East Northamptonshire is the principal apostle of this extravagance. He has turned right round. I remember being returnd to Parliament in 1906, in the same year as the hon. Member. What did I find him doing then? I found him preaching the gospel of the old economists. He moved to reduce the Navy Vote by 5,000 men, and he pointed out that the maintenance of these men raised a great social question because all the workers in the country would have to work harder because they had to maintain those 5,000 men. He also pointed out that unless we secured some saving social reform would not be possible. What does he say to-day? That we need have no care in regard to the expenditure of this country, and that as to the expenditure on the Army and Navy, it is a splendid thing, it doubles employment, it fills up the gap when there is a deficiency in employment, and that altogether it is a magnificent thing. He said it is good not only for this country but for other countries. I wish the hon. Member would follow the course of affairs in France, which is a lesson to any man who thinks that even the richest country in the world can afford to trifle with its economic principles and meet with success. We see that there a great financial difficulty has arisen which has led to serious and recurring crises. We see Minister after Minister going down because of a gigantic difference between income and expenditure, and they are unable to meet it, so great has it become. Mr. Gladstone once said that if we once allowed the spirit of extravagance and the want of economy to enter public departments, we should find ourselves met with gigantic amounts of expenditure. The richest country in the whole of Europe has already been brought to this position of financial crisis. Therefore, my hon. Friend's reference to other countries was rather unfortunate. We should view it, not as an encourage- ment, but as a warning not to interfere with the financial position taken up by the old economists. It is much too soon to ask us to abandon them. We remember Mr. Cobden, Mr. Bright, and Mr. Gladstone and the present Prime Minister, who has followed in their steps, and who, when Chancellor of the Exchequer, paid off £46,000,000 of Debt in three years and reduced our taxation by £6,000,000 a year, and yet was able to put by a nest egg for old age pensions. The right hon. Gentleman has pointed out the enormous importance of saving. He said:—

Ministers are overburdened with the enormous work which they are called upon in all the administrative Departments to perform. The Cabinet is a very large one, and it is impossible to have joint consultations—at least, Lord Morley tells us so. Surely it becomes more important to have an automatic check, such as the Treasury was in the past, upon all this expenditure! We are not at all reassured by what has occurred recently. I have referred to the Navy. Look at the other expenses; they are much the same. We never can get a clear, concise Estimate which will be adhered to. If we get an Estimate, it is of the most provisional character. Every year we have to add to that, and we really do not know where we are. I can illustrate it from the Navy. There is the question of oil. We were committed without our knowledge or consent to oil, which has led us into a gigantic expenditure. No Estimate was ever put before us, and no idea was ever given us. Now we find it is running into millions, and may have the most enormous political consequences. It is the same with the Insurance Act. That was to cost us £6,000,000. The cost is now nearer £9,000,000. We must have what we have had in the past, an automatic overhaul of these Estimates.

Then, again, I think we should go back to the safe and sound system of our annual finance. Let the years ahead provide for their own requirements. Mr. Gladstone was very insistent upon that. He pointed out how impossible it was for this House to really keep control of this expenditure once you departed from that, and how it would be necessary to resort to an entirely different machinery. I prefer to go back to the system of annual finance. Let Parliament realise every year what it is spending, and do not let it spend money which comes in automatically. With regard to naval expenditure, the Chancellor of the Exchequer has held out a sort of suggestion that we are going to have a reduction of naval expenditure next year. That hope was held out in the year 1911, but it has not been realised yet. Let us get the saving before we spend it. Again, I think we should have some guarantee that effective economy will be secured. There should be no new taxes for services until we have settled what those services are and what they are going to cost. I cannot see why we should not pass these measures, ascertain their cost, and let them come into operation at a time when you can conveniently provide in your annual Budget for the expenditure. That is a calm, clear, and collected way of providing for them. The other way leads to great confusion. Changes are made at the last moment, and we do not know exactly where we are. We have not yet had any discussion whatever of the greatest naval Estimates which have ever been presented in the history of this country. We have not heard a single word about them, yet we have had an enormous programme thrown down before us late in the Session of matters of enormous importance and of a most contentious character. We shall have to give more attention and supervision to the finance of this country. These are a few suggestions I make in response to the invitation of the Chancellor of the Exchequer.

I will not follow the hon. Member through his explanation of the failure of the Budget of 1909–10, but I cannot refrain from expressing the great satisfaction which I feel in hearing views advocated from those benches such as those to which we have just listened. I could not possibly have framed a more severe indictment of the general financial policy of the Radical Government than in expressing views such as we heard from the hon. Member. I am sure the hon. Member is far too consistent not to back up the attitude which he takes by his vote in the Division Lobby this evening. I desire to call attention to a particular aspect of the case which is before us, and that has to do with the proposal for a new valuation which is to be based on the old valuation under the Budget of 1909–10. Yesterday the Chancellor of the Exchequer spoke in very unflattering terms of the way in which assessments are made at present, and he spoke of there being made by a couple of overseers, and he asked what they knew about it. He spoke of the overseers and the assessment committees throughout the country as if they had no experience whatever of the land which they had to value, and he had still less confidence when he came to the appeal which is open to Quarter Sessions. He seemed to think it was impossible for Quarter Sessions to be fair when they were appealed to. I have only once been rash enough to appeal against an assessment committee to Quarter Sessions, and I got soundly beaten on that one occasion, and have suffered under a grievance, which I believe to be well founded, ever since. But the point is, what does the Chancellor of the Exchequer propose to substitute for the assessment committees which now do the work? What is the improvement he is going to give us? He proposes to send down some of these famous land valuers, of whom there is an enormous number appointed throughout the country, and he would suggest by implication that these gentlemen who are sent down from London will have greater knowledge of the subject of valuation than those who have hitherto done it. I do not think there is any justification whatever for supposing that you will get a fairer or better valuation by these Government officials than you have had in the past.

What, after all, is the method which these valuers under the old Budget are employing at the present moment for valuing agricultural land? They are in most cases simply taking the rent of the farm and multiplying it by so many years' purchase. There is no valuation whatever. Here is a particular instance which proves what I say. I have here the particulars of two farms which adjoin each other, and which are in almost every respect identical. One is 333 acres and the other 392. In one, the grass is 244 acres, and in the other 228. They are both used as dairy farms, but in the one case the farm buildings are actually within about 150 yards of the station, and in the other case they are about two-thirds of a mile away. If there is any difference in these two farms which affects the real site value, it is obviously the greater proximity of one to the station. Yet the valuation of these two farms comes out in the one case at £10 an acre, and in the other at £19 10s., or double. Why is that? The one great difference in these two farms is the rent. In the one case the rental is £391 a year and in the other £570, and the valuation is twenty-two and a-half years' purchase of that rental. The question is whether that is a valuation at all. You may ask reasonably why the rent is different. In the one case the farm came into my hands about ten years ago, and the present tenant came there and made me a very good offer, and is still paying the same rent. In the other case the farm has been occupied for sixty years by the same family, father and son. During the bad times last century my predecessor reduced the rents, and I have never cared to disturb the existing tenant and raise them. Therefore, from a mere caprice on my part, perhaps a foolish one, of not getting what I know to be the fair rental of the farm, I am accepting a rental which, everyone will admit, is under its value, and for that reason the valuation is made to come out at £10 an acre instead of £19 10s.

The other point to which I should like to draw attention is this. The valuation which we are going to have based on the old one is to be ascertained by a glorified Form IV., which is, I think, far more inquisitorial and troublesome, but is drafted in very much the same sort of way. The information to be got in that way is for the purpose of adjusting full site values which were got under the Budget of 1910. On that Schedule the information which is to be asked for is, of course, troublesome and inquisitorial, and will be a considerable amount of bother and expense to landowners, but that is not the worst point about it. It proposes to ask for information of an extremely troublesome kind from statutory companies, such as railways, canals, water and gas, and other industries of that kind. It proposes to ask these companies for the first time to furnish a very considerable amount of information, for what purpose? Under Clause 1 of the Bill it appears that it is for the purpose of adjusting values obtained under the Budget of 1909–10, but under that Budget statutory companies were not subjected to any valuation at all. Therefore, how is it possible to adjust the valuation, and, if it is not possible, for what reason is this information demanded from these companies? It is the fact that, under Section 38 of the Budget, statutory companies were made exempt from Increment Duty, Reversion Duty, and Undeveloped Land Duty, and, under Sub-section (2) of that Section—

"The Commissioners shall not require a statutory company to make any returns with respect to any such land for the purpose of the provisions of this part of this Act as to valuation other than as to the actual cost to the company of the land, and that cost shall, for the purposes of this part of this Act, be substituted for the original site value of the land."

I say if these companies were exempt from the valuation in 1909–10, and if this information has been asked for the purpose of adjusting that valuation for new purposes, then it is quite unfair to ask them to go to the trouble of giving the information which they will be asked to give under the Schedule. I think one of the great objections to the proposal in the Budget is that there is absolutely no finality about it. The valuation under the 1909–10 Budget is not finished, and in many parts of the country it is nothing like finished, and here we are saddled with many more questions on the top of that valuation. That is not the worst. Under the present proposal the Treasury is to have power to vary and add to the request for information. If that is the sort of trouble to which not only individuals but statutory companies and the industries of the country are to be subjected, I say that if they are to be harassed in this way to supply inquisitorial information a great deal of which will be injurious to their interests, then I think it is difficult to expect that the industries will not suffer by this kind of legislation.

The Second Reading of the Finance Bill has always been regarded as an appropriate occasion on which to review the whole of the financial arrangements of the year, and, as far as they are relevant to that review, the financial arrangements for the past and for the immediate future. Though the Amendment which is now before the House is limited in its scope and deals only with the immediate situation—perhaps I may say with only one aspect of that situation—I hope I may be allowed in the few observations I am going to submit to the House to preface my criticism of that Amendment by one or two remarks of a more general character. I observe that the Budget of my right hon. Friend is widely represented as a fresh and more adventurous step than any that even he has yet taken in what is called the "rake's progress," which, if it continue, threatens to advance along an ever more downward slope, and will land us in national bankruptcy, and even, as some people think, in Imperial ruin. I see it was reported in a quarter which not long ago, at any rate, carried authority and weight—and they now fortify themselves by the testimony of American experts—that both by the growing volume of our expenditure, and, perhaps, still more by the confiscatory character of the taxation which we impose to meet it, we are undermining the foundations of the credit of the country and the confidence upon which all systems of credit in the long run depend. That diagnosis is not new. The predictions founded upon it, as everybody acquainted with our financial history is aware, have been put forward with the same pretensions and, I am bound to add, have been falsified, and even made ridiculous by the results during the lifetime of at least two generations.

At the time of the repeal of the Corn Laws, as far back as the year 1846, we were told that that measure was heralding the death-blow not only of our trade, but of our whole social system. In 1853, when Mr. Gladstone produced a very modest, and what in these days would be regarded as a homœopathic dose in the Death and Succession Duties, the world was again told that, as far as the landed interest was concerned, a fatal blow had been struck. My own political memory does not go as far back as that, but it does include very vividly what was said in 1894, at the time when Sir William Harcourt's Budget was produced by a Cabinet of which I was a member. I recall that we were then told that as the result of that Budget twenty years ago country houses would be closed, servants would be dismissed, employment would be curtailed, and another blow dealt at the accumulation of wealth. And finally, in 1909, when my right hon. Friend laid his hand to the plough, it was announced once more, I think by no less an authority than Lord Rosebery, that all was over, and that capital was about to take the wings of the morning and fly to the uttermost parts of the earth. What has happened during those years? I venture to say that, taking the twenty years since the Budget of Sir William Harcourt was introduced in 1894, they have been years as compared with which the whole of our history does not give a period when there has been a larger investment of capital both at home and abroad. Our home industries have adapted themselves with unfailing energy and skill under the new conditions, and the capital which has gone abroad has brought to us in return an ever-growing influx of food and of the raw materials upon which our industries depend. That capital has found itself—may I not say with accuracy?—in its new home exposed to exactions from the State in the way of Income Tax, in the way of Death Duties, and in the way of other forms of impositions which, both in the rapidity of their growth and in the extent of their range, throw into the shade the most audacious expedients of my right hon. Friend. In all these cases the experts have been refuted by experience.

Leaving, as I will, foreign comparisons aside, I would like the House to examine for a moment—it is most relevant to the question before us—the history of our own case during the last ten years. I take, first of all, our expenditure. When I say ten years ago, I mean the financial year 1905–6—the year when the present Government assumed office. Ten years ago the national expenditure was a little over £150,000,000, and the estimated expendi- ture for the current financial year 1914–15 is £207,000,000. In other words, there has been a growth in that period of time of £57,000,000. What are the items which account for that growth? Expenditure upon the Army has practically been stationary. If it has increased, it has increased only by a very insignificant sum. The expenditure upon the Navy has risen from 33.3 millions to 51.5 millions, a growth of eighteen millions. The expenditure on the Civil Services, which include all the new heads of what we designate as social reform, has risen from rather less than, but roughly, £28,500,000 to very nearly £59,000,000. It has risen by £30,500,000 sterling. Of that £30,500,000, £20,000,000 are due to Old Age Pensions and Insurance, and something like £2,500,000 are due to the growth in our Imperial expenditure upon Education. I need not remind the House that this is relevant to the Budget of my right hon. Friend. That additional £2,500,000 which we have spent out of the Exchequer on National Education does not in any way represent the increased burden placed upon the community, because the growth in the expenditure derived from rates has been much larger during the same period of time. That is the state of the case as regards expenditure.

6.0 P.M.

I ask the House for a moment to look at the other side of the picture, and to see how we have been faring in the matter of revenue—the revenue derived from taxation. One often sees most confused and ignorant statements in regard to national revenue, because people do not distinguish between that part which is derived from taxation and that part which is derived from other sources. The revenue derived from taxation in the year 1905–6 was, roughly speaking, £130,000,000. It is estimated for the present financial year at £171,000,000—again a rough estimate, showing a growth of £41,000,000 sterling. In the same time the revenue not derived from taxes, to which, of course, the Post Office is the main contributor, which was in 1905–6 £24,000,000, is now £35,000,000. It has risen by £11,000,000, or nearly 50 per cent. There is one fact with regard to the revenue derived from taxes which I should like to bring to the notice of the House, because I think it has some bearing, at any rate, on the proposals I see put forward that my right hon. Friend should devote the extra penny of the Income Tax, which under his re- vised Budget he does not need for the purpose of assisting local taxation, to the relief of the Sugar Duty. In 1905–6, roughly speaking, direct and indirect taxation almost exactly balanced. I think it was 49.7 indirect to 50.3 direct. You may say for all practical purposes that they were the same, and that half of our tax revenue was derived from one source, and half from the other. What is the state of things to-day under the provision made in the Budget of the present year? Indirect taxation which ten years ago contributed practically 50 per cent. now only contributes 40.5 per cent. Direct taxation, which at that time contributed just a fraction over 50 per cent., now contributes 59.5 per cent., and is getting on to 60 per cent.

There has been, in other words, an enormous upsetting of the balance or, at least, a readjustment of the balance—"upsetting" is a revolutionary term—as between direct and indirect taxation, with the result that the indirect taxpayers, the consumers, to whatever class of the community they may belong—they do not all belong to the working classes—contribute a much smaller proportion to the revenue of the country than they did ten years ago. It is further interesting to observe, and I think it is well to bear in mind, that of the 40.5 per cent., which is still paid by the consumers in the shape of indirect taxation, only a little over 7 per cent. is derived from non-sumptuary taxes. The House will realise what I mean. A sumptuary tax is a tax upon alcohol and tobacco. Non-sumptuary taxes are those on tea and sugar, and smaller taxes such as those on cocoa, and so on, and other articles of consumption. Only 7 per cent. of the 40.5 per cent. is contributed by articles of consumption which are of a non-sumptuary character. To my mind that is a very material circumstance when you are considering what is the fair adjustment as between different classes of the community of the increased burdens which our new expenditure imposes upon them.

During the time that this great growth of expenditure and revenue has taken place we have made efforts which are quite unexampled in the reduction of the capital amount of the debt of the nation. When almost every other country in the world has been and is borrowing, we, almost alone, have every year been devoting a large amount of the proceeds of taxation to the reduction and extinction of our National Debt. Upon those facts, which are beyond dispute, two main questions seem to me to arise, both of which are very relevant to any financial proposals in existing circumstances which might be made from any responsible quarter. The first is one which was dwelt upon at considerable length, of necessity, by my hon. Friend behind me, in the speech to which I listened a few moments ago, and it was also dwelt upon yesterday with a great deal of ability and fair-mindedness by the hon. Member for Sheffield. That is whether this growth of expenditure is justified, or whether there are items in it which might reasonably either be omitted or curtailed. I may fairly claim, I think, to take a rigid view of this matter—theoretically, at any rate. My practice may not have been as good as my principle. That is the case with most of us in all Departments, both in morals and in politics. But in principle, in theory, ostensibly I have always been an economist. I think that when I was Chancellor of the Exchequer I did something to give effect to those principles. When I was Chancellor of the Exchequer the growth of expenditure in the spending departments was very small. I do not claim any credit for it. The situation then was different from that with which my right hon. Friend has to deal. But I was in the happy position in which I do not think any successor of my right hon. Friend is likely to be, of being able both to reduce debt and to remit taxation.

I am always glad to have the hon. Baronet's good opinion, though I do not know that I deserve it, and I doubt whether his view is shared by all his Friends on that side of the House If I had stopped, or if anybody had stopped there, or if the hon. Baronet himself had been in the position of the Chancellor of the Exchequer, I would ask which of those items of expenditure that now swell the adverse side of our national balance-sheet would not have been present, or would have been present in substantially diminished dimensions?

That is an excellent maxim for many purposes, but there are some things for which we cannot wait. We see them here and now before our eyes, and we have got to account for them and to dispose of them as best we can. What of these items of expenditure—I am not making any argument ad hominem to the hon. Baronet, but to the ideal economist who has practised public economy, in which of these items, for instance, if the right hon. Gentlemen who are on that Bench now came into office to-morrow, could they make any substantial reduction? We know that they would not make any reduction on the Navy. We are told by my hon. Friends behind me that we have been very extravagant in regard to the Navy. I do not think so. I do not think that we have spent, or are spending, a penny on the Navy which is not required by the exigencies of national defence and national security. I think that any Government which spent more than that would have been guilty of a gross abuse of its duty, and that any Government which spent less than that would have been guilty of an indefensible dereliction of trust. As far as expenditure on the Navy is concerned, I am prepared at any time to justify it, and I am sure that hon. and right hon. Gentlemen opposite, at any rate, will not quarrel with that. The figures which I have already given speak for themselves. What is the main cause for the residue of our growing expenditure? It is the money which we are spending on Old Age Pensions, Labour Exchanges, National Insurance and Education, and some minor branches of what is called social reform. Whatever may be said, and a great deal may be said legitimately, by way of criticism of particular provisions in various Acts of Parliament by which those forms of expenditure have been warranted and authorised, nothing can be more certain than that they have come to stay. No substantial reduction in any one of them is possible to any Government of whatever political party or political complexion it may be.

The right hon. Gentleman may be right about that, though I believe that the chances are that that may be less. But I agree that these services must cost more. There is not one of them in which we can look forward to any substantial abatement. As everybody knows, whatever opinions he may have of the particular channels in which expenditure on social reform ought to flow, demands will increase, and must increase, as people become more acutely alive to the necessary and inevitable evil of a complex society, as the social conscience is more vividly aroused, and as people get clearer views of that which the State can do, and that which the State cannot do in the way of social and philanthropic reform. In all those directions I venture to predict, with the utmost confidence, although I quite agree that every proposed head of new expenditure ought to be closely sifted and scrutinised, that the Chancellor of the Exchequer of the future has got to look forward to budgeting for larger and not for smaller sums. My hon. Friend behind said something about what he considered the relaxing grasp of the Treasury upon the supervision of Departmental expenditure. I quite agree with him that the Treasury ought not to become a spending Department. So far as national insurance is concerned, that no longer falls within the domain of Treasury adminisration.

I think that the Treasury ought, except under transitional and provisional circumstances, such as may from time to time arise, be confined, or be mainly and substantially confined, to its old function of acting as the watch-dog over the expenditure of the other Departments. And I can testify from my own knowledge with regard to the various spending Departments that that control is most vigilantly and carefully exercised by the Treasury at the present day. I say again, what I have said often before in this House—and every year's experience makes me more convinced of its truth—that the mainspring of the additional expenditure is not to be found in the Departments, but is to be found in the House of Commons. If anybody were to scrutinise the history of every one of these various measures of social reform in which we have been engaged during the last ten years—Old Age Pensions is the most remarkable instance—he would find that the expense caused to the taxpayer at the present moment is very largely due not to the original proposals of the Government—they were much more modest than that—but to extensions and expansions forced upon them—I am not saying without good reason—by public opinion expressing itself through its representatives in this House.

The other question to which I want to give just a moment's attention is this, and it is an equally important one: Is the mode in which taxation has been imposed to meet these growing charges inequitable as between classes or unduly burdensome to the community as a whole? How has the expenditure been met? As far as indirect taxation is concerned it has been met by an increase in the duty on sumptuary expenditure by all classes in the State. Not a single additional penny has been imposed upon any article of necessity. When I was Chancellor of the Exchequer I was able—I take no credit for it; as I said a few moments ago, I acted under much happier conditions than those which prevail now—to remit a small amount, at any rate, of the Tea Duty and to take off more than half the Sugar Duty, which I have always said, and I say it as strongly as ever to-day, is an objectionable duty, as it imposes at the same time a tax upon food and upon raw material—a necessary food and an important raw material. We did reduce the duty on sugar by more than one-half. We reduced the duty on tea by a penny. The new indirect taxation which my right hon. Friend the Chancellor of the Exchequer has imposed to meet these new exigencies has consisted altogether of taxes of a sumptuary kind. For instance, alcohol, as well as the licences for the distribution of alcohol and the taxes on tobacco, are things which might be regarded as taxes on articles of luxury; but if we are to have indirect taxation at all, that is the safest and most equitable form it can assume. This accounts for the large advance in revenue which is being made by direct taxation in the way of adjustment of Income Tax and the Death Duties, and the imposition, for the first time, of the Super-tax. I do not think we shall ever go back upon that. The Income Tax by universal consent has become a permanent instrument in our fiscal armament. It is no longer regarded, as Sir Robert Peel and Mr. Gladstone regarded it, as a temporary expedient to deal with any emergency like a war, or the reconstruction of tariff, or rearrangements through the conclusion of commercial treaties, or any matters of that kind. It has come to be regarded by all parties in this State, and by every financial authority, as a necessary and indispensable ingredient of British finance.

The changed conception of the Income Tax brings with it the necessity of a large reconsideration not only of the basis on which it is imposed, but of the conditions and regulations which accompany it. When I was Chancellor of the Exchequer I thought it was a very great reform—and it was so regarded up to that time—that there should be discrimination between earned and unearned income. It was adopted in the first instance in an experimental form, and it is capable of a great deal of readjustment. My right hon. Friend since he has been Chancellor of the Exchequer, both by the imposition of the Super-tax and by the readjustment of the scale of the Income Tax itself, has endeavoured to establish a more equitable incidence as between the different classes of incomes in the community. But I repeat the opinion which I have expressed more than once in the country, that the time has come when we ought to have a thorough inquiry into the whole basis on which our Income Tax is levied, with a view to simplification and to greater equity. At present the Income Tax Law is in a ghastly confusion of chaotic provisions which even skilled lawyers find it extremely difficult to interpret, and which to the common-sense ordinary man is as unintelligible as a Chinese puzzle. I am quite sure the time has come—and I hope we may have the aid of all parties in the State, for it is not necessary that it should be a party question—when we ought to try to put the Income Tax legislation on a scientific as well as a simple basis. Everyone wishes, and no one more than the Government, that during these years we could have reduced expenditure and remitted taxation. But given our responsibility, both for national defence and social reform, and given, as I think everybody will give from the argumentative point of view, the necessity for making a substantial reduction in our capital liabilities, which have been enormously increased by a great war, and, in a less degree, by what some think a bad habit, by charging to capital what ought to be paid out of revenue, I am prepared to maintain that we have met this problem without either unduly checking accumulation of capital or burdening the springs of industry or by fiscal expedients adding to the cost of the necessaries of life.

I hope the House will not think that I have travelled too far beyond the actual Amendment before us, in making these general observations, for I believe that it is necessary that the Government, on the Second Reading of the Finance Bill, should take the opportunity to review the general financial situation. Let me deal with the problem which faces us this year. We perceived that we had to meet in the Budget of the present year two sets of burdens, both of an extremely urgent character. One was the increased expenditure upon the Navy, and the other was the fulfilment of pledges long given— to which both sides of the House were parties, and the present Government have repeated over and over again—long given but delayed in redemption, for the relief of local taxation. In the Budget, having regard to those two exigencies, the financial provisions proposed by my right hon. Friend, when he introduced his Budget, and which, in principle, is absolutely unchanged, was founded, if I am not using a too ambitious expression, upon three principles. I leave outside the question of the Navy—that is provided for, of course—I am speaking on the question of the relief of local taxation; and the first principle on which these important proposals were founded was that the most equitable manner in which the admitted injustice of our present system of local taxation could be met was by increasing the Income Tax and the Super-tax. The matter has been referred to again in these Debates. It is familiar to every Member of the House, and I am not going to refer to the details and the obvious inequalities and absurdities of our present system of local taxation. Under the old system, which is now become obsolete, the conception was, and it was so arranged, that a man had no security whatever that he contributed to the local burdens in a proportion which bears resemblance to the advantages derived and to the profits which he makes from the community.

Nobody disputes that the rating is largely in discharge of burdens which are not of a local but of a national character, such as main roads, education, and other matters, and they continue to be rated for matters which are only incidentally local and are essentially of a national character. This system of rating is now recognised in every quarter by every authority, by every tribunal, or instrument of inquiry by which it has been investigated, to be entirely irreconcilable with reason or practice. Personally, I have always commended the view, and theoretically I believe it is the right view, that we should have the imposition of a local Income Tax. It is advocated as a practical measure by so great an authority as Lord St. Aldwyn, and it is incapable of dispute that it would be the fairest way in which you could carry out the principle of Personalty paying its proper share of the contribution for the relief of local burdens. But, unfortunately, one is driven to the conclusion that it is absolutely impossible in a state of society such as ours, whatever may be the case in more primitive countries, to frame a basis on which you could levy a fair local Income Tax. If that be so, it appeared to me, to the Government, and to the Chancellor of the Exchequer, especially having regard to the admitted fact that a large number of these charges are thrown upon the rates for purposes really not local but national in their character, that much the fairest way was to exact from personalty its proper contribution and throw it on the Income Tax and Super-tax payers. That is my right hon. Friend's proposal and that of the Government.

The second principle is that where you are going to give this large contribution from the central fund for services which are locally administered, whatever may be their character—and certainly the community as a whole derives advantage, and there is some local benefit—you must take security for the efficiency of your local administration. I think this Amendment rather suggests that we are contemplating some interference with local autonomy. The Amendment uses the words, "subject to conditions destructive of local autonomy." There is a suggestion there that the Government have in view in regard to these matters some interference with local autonomy. I speak for my colleagues when I say that nothing is further from our intention. There is nothing new whatever in the suggestion, but when you are making from the Imperial Exchequer contributions to local purposes, locally administered, some security, some safeguard, should be exacted on the part of the taxpayer to see that his money is not wasted, or that it is not diverted to purposes for which he never intended it should be used. As my right hon. Friend pointed out yesterday in his speech, we have an example of this in the case of the police. When I was Home Secretary, I remember very well that the contribution to the police forces of the country was very nearly half the total expenditure, and the contribution was conditional upon the certificate of our own inspectors, appointed by the Home Office, who went round to the police forces of the country in every locality in order to ascertain that they were in a proper state of efficiency. We are all familiar, of course, with a similar procedure in regard to the Education Grant, where an Army of skilled inspectors are employed by the right hon. Gentleman the President of the Board of Education to see, in that quarter also, that there is no unnecessary and avoidable waste. I am not for the moment going into the question how they perform their duties, but those are the duties they are intended to perform. I am perfectly certain that in regard to public health, under which general head a large number of these new contributions may well go, it might be possible and ought to be possible to devise, without any infringement of local automony, some system of inspection which would safeguard the taxpayers of the country from waste. That was our second principle.

What is the third principle? The third principle was this: That increased subventions to local authorities should be accompanied by a new system of valuation. There, again, there is no real difference of opinion between the two sides of the House—none whatever. Commission after Commission, Committee after Committee which has investigated our present system of valuation recommended unanimously that it was unequal and full of every kind of anomalies, and as unfair between individuals, between classes, and between communities, and not really productive of the best results either from the point of view of yield or of efficiency of administration. The right hon. Gentleman the Member for the Strand (Mr. Walter Long) when he was last in office, as the Chancellor of the Exchequer pointed out last night, produced an elaborate measure for a new system of valuation which was founded on those admitted facts. It is not my purpose to weary the House by going into any unnecessary details, and it is not my purpose to go into any minute comparison of the provisions which the right hon. Gentleman made and those which we propose to make in regard to the same matter, but I do take note of this, that he agreed that the central authority, as represented by the surveyor of taxes, was to have a voice, and a very important voice, in determining local valuation. There is no other way in which you could get rid of the caprice, sometimes the ignorance, possibly in some cases the partiality, of local authorities, particularly in small areas, acting on imperfect information and subject to special local considerations. I can assure the right hon. Gentleman, and I can assure hon. Members in every quarter of the House who think, as this Amendment seems to suggest, that it is our intention to override, or, as I have seen it put, to eliminate local authorities from the work of valuation, that that is not our intention. We do not want to see them superseded, but we do want to give them the advantage, and every advantage if possible, in the first instance, in the preparation of the valuation list itself by expert advice from the central authority and the officers of the central authority.

Under the right hon. Gentleman's scheme—I remember it well, and, if he will allow me to say so, it had a number of most admirable features—there was, at any rate, these obvious possible defects. While within the area of a county, it did a great deal to get rid of inequalities and the preferences and anomalies of the existing system, there was no provision as between county and county. You might have one county valued on one system, and another county on a totally different system, and while everybody would admit that that might not be so great an evil as is this chess-board system, yet, in so far as it went, it was an evil that wanted to be removed, and our proposals get rid of it. As part of the third principle—that the relief to local taxation must be accompanied by a, new system of valuation—my right hon. Friend insists on it, and I think rightly insists, that security should be taken to see that in the long run the new contributions should go to the relief, not of the site value, but of the improvements. Those were the principles on which the Budget was founded. Those are the principles on which we still ask the assent of the House. It is a part, not an essential part of our scheme, that temporary Grants should be made during the current year to local authorities. That we have had to abandon under the stress of Parliamentary time. We have had to abandon the general system of Grants under the stress of Parliamentary time, with the result that my right hon. Friend has been able to reduce his proposal for the increase of Income Tax to Is. 4d. down to Is. 3d. That extra penny is not abandoned, it is only postponed.

That would be my answer, if answer were necessary, to those of my hon. Friends who are asking that it should be applied to the relief of the Sugar Duty. I have said some hard words about the Sugar Duty. I think it is a bad duty in principle, but I cannot say, revised as it is now, and having regard to the figures already given as to the relation between direct and indirect taxation, that the Sugar Tax, as it at present exists, imposes a serious burden on the consumers of this country. I am not in any way blocking the way of any fortunate Chancellor of the Exchequer who can see his way to remove it, and, though I should be very glad to see it removed, and though I agree that so far as it goes it is a bad duty, yet I am perfectly certain we have got here a much more urgent need for the expenditure of the penny. If that penny were absorbed this year by the reduction or abolition of the Sugar Duty, the only result would be that we would have to impose an additional penny on the Income Tax next year in order to make things right.

What I want to point out to the House is this, although we have abandoned for the present year those temporary Grants, for the last four months of the present year, with the consequence that we are able to ask the House to impose, not 1s. 4d. but 1s. 3d. of Income Tax, we mean to obtain, and we hope we shall obtain, with the assent of the House this year, three distinct things. I want to make this perfectly clear. The first is that the abandonment or rather the postponement, of those temporary Grants does not involve, and, on the contrary, they remain intact, the provisions which we intended to make during the current financial year for the relief of the necessitous school areas, for the feeding of school children, for nursing, for tuberculosis, and for what needs to be made good in the matter of national insurance. All those things reaiain absolutely intact, and can be provided for, and will be provided for, although the extra penny on the Income Tax is dropped. Secondly, we desire, and it is our intention to obtain during the present Session statutory power for the new and more generous system of payment of Grants during the next financial year. We must obtain that authority from the House this Session because, if we do not do so this Session, then practically next year is a wasted year, and unless that authority is obtained, as hon. Gentleman below the Gangway opposite will be interested to hear, the Grant to Ireland cannot possibly be made.

We, therefore, attach the greatest and highest importance to the getting of statutory authority from Parliament during the course of the present Session to authorise the payment of those Grants in future years, and we desire, and we intend to obtain, if the House will give it to us, statutory authority also during the present Session for laying the foundation of a new system of valuation which will separate site from improvement value, and will, as we believe, prevent inequalities and preferences in the distribution of what is granted from the Exchequer, and secure that the relief so given shall' inure to the benefit, not of any one particular class, but to the growing needs of each community as a whole. That is our plan as we now present it to the House of Commons. Anyone who supports this Amendment, I say, without imputing any kind of motive, and who votes for this Amendment, is doing what in him lies to wreck that plan, and directly to put off—I do not say for how long—but to put off indefinitely the realisation of the most hopeful prospect we have seen in our time, not only of a long needed adjustment between local and Imperial burdens, but of a real and solid step in advance in housing, public health, the better development of education, and, in a single word, in every department of social reform.

It is a source of great satisfaction to Members on both sides of the House to see that the right hon. Gentleman realises the obligation of the Imperial Exchequer in the matter of local taxation, and to see how fully the right hon. Gentleman appreciates the debt owed on the matter of rating by personalty to realty. But also there will be great disappointment to hon. Members on both sides that the right hon. Gentleman holds out no hope that this matter will be rectified during the current financial year, I am going to endeavour to approach this question in a less controversial spirit than has obtained during most of the Debates on this Bill. My object in rising is to make an appeal to the Chancellor of the Exchequer to reconsider his position in regard to the temporary Grants. It would appear from some of the right hon. Gentleman's speeches that he suffers a certain measure of disappointment in so far as he thinks that his proposals with regard to local authorities have not been received by those authorities with the gratitude and appreciation that he had hoped. Let me say at once that the local authorities in the country, especially the municipal corporations, when he first introduced his Budget entertained very warm feelings of gratitude towards him. They felt that at last we had at the Exchequer a Chancellor who did realise, not merely the nature but also the urgency of the grievances under which we have been labouring for a great number of years. But that gratitude received a very rude shock when we discovered that the Grants by which the right hon. Gentleman proposed to meet that obligation were subject to two very far-reaching conditions. Those two conditions have been described and restated with renewed force by the Prime Minister this evening. I do not propose to discuss those now, but I should like to point out, however, that the first condition with regard to the readjustment of rating in this country has introduced a matter of very great controversy, and whether its effects will, in the long run, be beneficial or not, is a matter which must engage the attention of the House and of the country, and of those local authorities whom it interests more particularly for a considerable period of time.

With regard to the second condition, the test of efficiency, which is to be applied before Grants are paid, I would point out that that really cuts at the root of local government in this country. The Prime Minister stated the case for that test of efficiency as gently and with as much consideration for the feelings of local authorities as it is possible to state the case. He pointed out, what is perfectly true, that in certain individual services an efficiency test had crept piecemeal into our local government system. He quoted the cases of education and the police; I think there is a third instance, the medical officers of health. I would point out that Parliament has never considered what effect this test of efficiency will have upon local government generally, if it is indefinitely extended. Local authorities—I think, with a certain amount of reason—are afraid that, if it is indefinitely extended, as is proposed under the present Budget, it will have the effect of impairing the whole spirit of local government, and that it will introduce into this country the reality and the dangers of bureaucratic Government without any of those safe- guards which have been so carefully incorporated into the systems of those countries which have gone in avowedly for bureaucratic Government. The point that I wish to emphasise is that when the right hon. Gentleman introduced the system of temporary Grants by the incorporation of that Clause in his Bill, he admitted the urgency of the claim which local authorities have in this matter. It was in fact a recognition, and a very eloquent recognition, of the necessity for some immediate relief. Although the Prime Minister gave the stress of Parliamentary time as a reason for dropping these Grants this year, and although the Chancellor of the Exchequer suggested that the Grants should be conditional upon the reconstruction of the system of valuation and upon the efficiency test, I would suggest that it is quite possible for the Government to give this relief during the current year without any prejudice at all to the permanent settlement of the main question.

We have two distinct propositions before us in the Bill as originally drafted. It is impossible to lay too much emphasis upon the far-reaching nature of the right hon. Gentleman's proposal with regard to local government. If he carries his second condition with regard to the efficiency test, he will be settling, we hope for a considerable period of time, the whole relations between local authorities and the Central Government. The effects of his proposal in that direction are, we believe, as important and as vital as the proposals contained in the Local Government Act, 1888. The mere fact that they are not segregated in a Local Government Bill, but incorporated in the Budget, must not lead hon. Members opposite to minimise the importance of their effect. The new scheme of the right hon. Gentleman may or may not be a beneficial scheme, but it is wholly distinct from his second proposal to give a measure of immediate relief and an ad interim payment to meet the obligations which he himself has acknowledged, and which the Prime Minister this afternoon has acknowledged in such forcible terms, to be a very urgent and pressing claim. The local authorities do not approach this question in any sordid spirit. I do not deny that they will welcome the Grants when they come, and in whatever shape they may come; but the reason we are so anxious that the right hon. Gentleman should do something during the current year is that we see considerable danger of the efficiency of the services at present entrusted to us being very seriously impaired.

The Government ought to realise that the local authorities are elected bodies, dependent on the votes of the ratepayers. They are dependent on the votes of the individuals who feel from day to day the very heavy pressure of the rates. Anybody who has had any experience of municipal elections in any part of the country will admit that during the last few years those elections have been turning on the question of economy, and economy alone. There is a general outcry amongst the ratepayers in the areas of the larger corporations—in the county and non-county boroughs—not for efficiency, not for the development of municipal enterprise, but for economy and the reduction o£ the rates. Against that we have had this very large claim, which the Prime Minister has acknowledged this afternoon, against the Imperial Exchequer. If we want to develop municipal enterprises in these areas, our only hope of doing so lies in the Imperial Exchequer meeting what they admit to be our just claim. When the Budget was introduced we thought that at last the Government realised their obligations in the matter. We thought that at last we were going to receive the money which one Chancellor of the Exchequer after another has admitted to be our due. We thought that at last we were going to be able, not merely to increase our efficiency, but to press forward the development of the great municipal services which have been entrusted to us. It was only when, at the beginning of the Second Reading Debate, the President of the Local Government Board announced the intention of the Government to drop these temporary Grants that we realised that the right hon. Gentleman was no more sincere in this matter than his predecessors in office had been.

I appeal to the right hon. Gentleman to consider the point that it is perfectly possible to pay these tempory and ad interim Grants this year without in any way prejudicing the decision of the House or the decision of the Treasury with regard to the permanent solution of the question. When the Prime Minister pleads that he is obliged to drop these Grants on account of the pressure of Parliamentary time, he is really entering a plea which is not valid. The pressure of Parliamentary time may make it difficult for him, unless he has an Autumn Session, to pass the proposals with regard to the valuation system and the efficiency test, but there is no difficulty at all, from the point of view of Parliamentary time, in the right hon. Gentleman's giving ad interim Grants to the local authorities. There is furthermore no reason why these temporary Grants should be made dependent upon the two conditions which the Chancellor of the Exchequer has put forward. I can assure the right hon. Gentleman that if the Government are prepared to make these ad interim Grants now, without prejudice to the settlement of the main question, when the main question comes up for solution, it will be approached by the larger corporations of the country in a spirit of fair but not hostile criticism. The mere fact that the Income Tax has been reduced by a penny does not in itself justify the right hon. Gentleman in with-dra-wing these temporary Grants. The Prime Minister has told us that one of the chief reasons why Income Tax and Supertax have been so largely increased is because the Government recognise the necessity of readjusting the relations of realty and personalty in the matter of rating. We have the privilege now of paying increased Super-tax and increased Income Tax, but as inhabitants of the areas ruled by local authorities, we do not get the promised equivalent benefit of the temporary Grants-in-Aid.

My appeal to the right hon. Gentleman is that he should place himself for the time being in the position of one of these great local authorities who wish to press forward the development of their municipal services, but are prevented from so doing by the urgent outcry of their constituents, and who feel that the whole matter might be rectified if the Government would approach the question on a business basis. I would ask the right hon. Gentleman to approach the matter in the same cordial spirit that has characterised all his relations with the Association of Municipal Corporations. The municipalities of the country are grateful to the right hon. Gentleman for the cordial way in which he has always received their representations. They are grateful for the sympathy which he has constantly expressed in regard to the various matters that they have brought to his notice. They are also grateful to him for having cultivated intimate relations between the Treasury and the association of the great corporations, which intimate relations, I venture to think, have reacted as much to the benefit of the Treasury as they have to the benefit of municipal government. But the time has come when we are entitled to expect that the right hon. Gentleman's sympathy should take a practical form, and I suggest that it could take practical form no more acceptable than that he would reconsider his position with regard to the withdrawal of the temporary Grants.

The Prime Minister has poured oil on the troubled waters this afternoon, and the Debate is now being conducted in a much calmer atmosphere. I should be sorry to introduce the apple of discord, if I may change the metaphor, but I think that something ought to be said on this side of the House with regard to the attitude which certain Liberals have adopted in respect of the proposals of the Chancellor of the Exchequer. I want to deal first with the speech of the right hon. Baronet the Member for Swansea (Sir A. Mond). The right hon. Baronet is not an owner of land. He is a Gentleman who rejoices in a business which from time to time pays on its original capital, I think, something like 100 per cent. This is what the right hon. Baronet said in respect of the proposals of the Chancellor of the Exchequer. Referring to what the President of the Local Government Board stated last week, he said:— 7.0 P.M.

The right hon. Baronet then proceeded to quote the views of an economist who said that "any tax placed on personal property was an injustice to the State and unjust to the people, but that land had had to bear the obligations that had been thrown upon it in the past, and land was sold subject to certain services." That is perfectly true. We all recognise that, but at the same time that is no reason why other people who live in the district and live in large houses should contribute practically nothing to the rates—should not contribute their proportion to the local rates in the same way as other people.

They bought their land subject to certain burdens. If you pay their rates for them and relieve them of their burdens, you are making them a present at the expense of other people.

Yes, but having regard to the fact of the enormous growth of the rates, which my hon. Friend ought to bear in mind, surely it is not reasonable or just to throw the whole burden of this increase on the landowners, especially in purely agricultural districts!

They got their land subject to certain conditions, and to relieve them of their burdens would be to give them a present equivalent to twenty-five years' purchase of the rate remitted.

I am suggesting nothing of the kind, but we are now living in the twentieth century and we have very large ciaims made upon the taxpayer for social reform. What the Prime Minister said to-day, with which I am sure the bulk of the House agreed, was that people ought to pay in accordance with their ability to pay.

I will quote Adam Smith, as the hon. Member dissents from my view. Adam Smith may not be living in the twentieth century, but he is one of the authorities that land taxers quote. He says, concerning luxurious men—and I commend this to the hon. Baronet the Member for Swansea—

What is a business standpoint in the House of Commons? You have a certain sum of money which Members on all sides have agreed is due to the local authorities. The question was: How was this money to be devoted, how was it to be allocated? The only matter in dispute was whether the money should be granted for the purposes specified until an Act had been passed conforming to the Rules of the House authorised the expenditure. No business house or business man could carry on their business if they had to conform to rules of that kind. Suppose they decided to spend £1,000, £100,000 or £1,000,000 they might not be able to say or to set forth in full detail how the money was to be spent, but they could form some criterion; and it surely should not be possible to say that the principle having been approved by the House that we could not devote the money for four months of this year, because we had not gone through some old procedure of the House of Commons, which it has taken a good deal of work of a number of people to find out exactly. For this reason people claiming to be Liberals and speaking in support of social reform are the very people who have done their best to prevent localities getting this Grant, rightly due to them, merely on the ground that the procedure of the Government would not conform to the time-honoured practice of the House of Commons. Time-honoured practices of the House of Commons are all very well for people who are politicians. I am not a politician at all. I do not profess to be a politician. I am a business man who comes here when he can to do his best to represent the constituents who sent him. Therefore, being a business man I do not care to be hide-bound by all these forms.

The proposition of the Chancellor of the Exchequer was a perfectly businesslike one, and I regret very much the time and time only has prevented him carrying out what he desires. I had a good deal of complaint against the Chancellor about his valuation forms. I think I called him a, pickpocket and every possible thing I possibly could in my own Constituency on account of the valuation forms which he had sent broadcast amongst my Constituents. These went to hundreds and thousands of my Constituents. Is this process to be gone over all again, because, if it is I want the Chancellor of the Exchequer to say that when he wants to carry out a reform he must pay for that reforms? It must not fall upon the shoulders of people who are not able to bear it. In my Constituency the chief form of investment of many years of working men has been the purchase of the house in which they live. A man buys his house and a garden attached. In hundreds and thousands of cases in my Constituency the whole property that the man possesses is his house and the land attached to it. They had to pay all the expenses of going to a solicitor to deal with these forms. I want the Chancellor to give his attention to the matter, and see whether he cannot make the thing easier. He has given relief in this Grant of Increment Duty and Land Duty in respect of men who are not receiving £160. As the Chancellor of the Exchequer very rightly pointed out to the House, there are gross inequalities in the system of rating; therefore it is essential, before these Grants are made, that we should have some kind of uniformity in the system.

We have heard a great deal about popular control. The Local Government Board is one of the best managed Departments in the State. I have always found it to be so. I can always get more out of the Local Government Board, and more quickly and expeditiously, than out of any other Government Department. If this money is to be granted to the local authorities, and if the control of the House of Commons—of which it cannot divest itself—is administered in the same way as the Local Government Board have carried out their supervision of the work of the local authority, I do not think that the House will really be able to complain of how the money is spent. We have heard a great deal about another matter. The Prime Minister referred to it. The right hon. Gentleman the Member for East Worcestershire said that the Chancellor was one who tried to get votes by offering bribes in every direction, that he had brought the country to the verge of ruin, and was bringing the country to the verge of ruin. What I want the Chancellor of the Exchequer to take into consideration is this: We have had a bribe— with which I am quite willing to associate myself if you term it a bribe— of old age pensions, and for my part I think it is absolutely necessary that the Government should make provision, especially in the Northern districts, to see that this amount is increased. You may be able to live on 5s. a week in the South of England: you certainly cannot live on it in the North country. Therefore, I am hoping that before long the Chancellor of the Exchequer will be able to divert some of these new sources of revenue to the purpose of further bribes—as our Friends on the other side of the House have called them. I only hope the Chancellor of the Exchequer will continue this system of bribery and corruption, for in doing so he will really be carrying out what I am sure is the desire of the majority of the electors.

Before the Chancellor of the Exchequer carries that out, he has got to deal with one problem in the Government Department. The Prime Minister said that the expenses of the Navy has been undue. But to-day the armament firms, in conjunction with the Intelligence Department at the War Office, and the Admiralty, largely determine our expenditure; it turns upon what the experts of these Departments advise the Government. While all our policy is based as it is today on the naval and military authorities, working in conjunction with the Foreign Powers, while we are providing for an Expeditionary Force to march somewhere into Europe, we cannot have that reduction that we wish in our expenditure upon armaments. Whilst we are devoting this enormous sum of £80,000,000 a year for the purpose of armaments, there is no hope that I can see of any great step forward in social reform. Therefore, if the Chancellor of the Exchequer can use his persuasive powers amongst his colleagues, and the Cabinet itself, to take more hold on policy, instead of being guided by these strategists as to what the policy of the Government has to be— for it has been under their guidance largely during the last two years— I think we should have in sight a reduction of expenditure.

I have no belief in the economy of the First Lord of the Admiralty. He will use up all the money the Chancellor of the Exchequer can give him, and spend a great deal more if he can get it. Therefore I hope that the Chancellor will act as the "watchful dog," to use the words of the Prime Minister, and will keep control of the money given to the First Lord of the Admiralty. There is only one thing I should like to say in conclusion, and that is a word in reference to the speech made by the hon. Gentleman the Member for the Central Division of Sheffield last night. If the Chancellor of the Exchequer could only see his way to carefully consider the proposals put forward by the hon. Gentleman, I think it would be well, and I need not weary the House by repeating them. I say to the Chancellor of the Exchequer that, although he lost part of his Budget, he need not be dismayed. Let him go forward with his social reforms, and if he only keeps down expenditure on armaments he will find both the House of Commons and the country in support of his policy.

I quite appreciate the difficulty of the Chancellor of the Exchequer, with some of his hon. Friends behind him glorying in the amount of the expenditure and the rate at which he has been giving money to the working classes of this country and condemning expenditure on armaments. The Prime Minister told us that the principal offenders, as regards the expenditure of this country, are Members on both sides of the House. I am afraid that is true. But, after all, we here are tempted to ask for the expenditure of public money by reason of the appeals and views of the people we represent. I, for one, believe it would be very difficult for any Chancellor of the Exchequer to diminish or control to any serious extent the expenditure of this country, unless he made the general body of the people realise that they cannot have increased expenditure without paying something towards it themselves. I think really the great mistake in this Budget is that although it may be quite right to increase the taxes upon the holders of property, you ought at the same time to put some additional burden upon the poorer classes of the community, either by some additional form of indirect taxation or else by taking off some of the present direct taxation and levying upon everybody in this country some form of direct taxation.

The Prime Minister led us to believe that the imposition of the taxes under the 1909 Budget had done no harm to this country. He told us that the Death Duties had no effect upon the owners of agricultural estates, and those they employed about them, and that it did not matter if capital left the country. I think it is untrue to say that the Death Duties had no effect upon the revenue of agricultural estates. I think you will find a great many have been shut up and a great many instances where people, through no fault of their own, have been turned out of employment, and that the ordinary expenditure upon improvements upon agricultural properties has been very much diminished owing to the burdens which the successors to those estates have to bear. Then as regards the flying of capital abroad, that has been one of the results of these very high taxes and Death Duties. One of the Clauses of the Budget this year is an example of the harm that is doing. It demonstrates that when taxation reaches a very high figure, people will use perfectly legitimate means of evading these taxes if they can, and obviously find some parts or the world where Income Tax and Death Duties are smaller than here, and that is why the Chancellor of the Exchequer now makes provision to make people in this country give a return of the whole of their income abroad as well as in this country.

I once heard the Prime Minister apply the epithet "sloppy" in reference to some procedure or matter in this House. The epithet "sloppy" might well be applied to the present Budget, because if the Chancellor of the Exchequer had only given more consideration to the rules and procedure in this House, and had devoted a little more time to the study of his own Budget, he would have discovered before the other day that if he intended to pass the Budget in its entirety by the 5th of August, which I believe is the statutory time by which it has now to be passed under the Gibson Bowles Act, it would be absolutely impossible to give any consideration at all to his proposals with regard to the Grants to local authorities, owing to the amount of time that must be taken up in Supply days between now and the 5th of August, and therefore he ought to be extremely grateful to my hon. Friend the Member for West St. Pancras for the service he has done him in compelling him to divide the Budget into two parts, and so give the House an opportunity of later consideration for the second part of the Budget. I must also point that the sloppy method of introducing this Budget has been a matter of very great inconvenience indeed to public companies. A great many public companies pay their dividends in the month of July, and there are hundreds of secretaries of companies at an absolute loss at the present moment to know what particular rate of Income Tax they are to deduct from the shareholders in July. The Chancellor of the Exchequer says they can adjust these dividends on the 1st January, but I venture to say that the correspondence which this will entail between the individual shareholders and the secretaries of companies and between individual shareholders and the Board of Inland Revenue will total an extraordinary amount in the next few weeks, and the epithets and curses that will be heaped upon the Chancellor of the Exchequer would make him blush for the amount of attention paid to him. All that could be avoided if the Chancellor of the Exchequer only took the ordinary amount of time in considering the details of his Budget before it was introduced into this House.

I want to say one or two words in reference to the general scheme of readjustment of revenue and finance. My complaint is that the Government have not really met to any extent at all the grievances that real property in the past has been paying far more than personal property towards the national services, which are admittedly locally carried out by the rates. I think both the Chancellor of the Exchequer and the Prime Minister admitted that the most equitable way of deriving revenue for the purposes of local administration would be by means of a local Income Tax. I was rather surprised to hear the Prime Minister airily dismiss the theory of a local Income Tax by saying that it might suit some primitive countries, but that it would not suit this country. That is all very well, but a local Income Tax is carried out in a great country called Prussia, and if they can carry out a local Income Tax there, apparently with satisfaction to the taxpayers, it cannot be possible that there is less capability and resource in the people of this country to organise some form of local Income Tax here than in Prussia. As they have not done that the Chancellor of the Exchequer sought to get over the difficulty by putting an additional Income Tax and Super-tax upon the holder of personal property. They have done that, and I for one am grateful for the additional amount of Income Tax that is to be used towards the local rates. But they put the same tax and Super-tax upon the owners of real property as well, and I cannot see therefore that the owners of real property are any better off as regards the unfair position they were in before than under the proposals of the Chancellor of the Exchequer. And in addition to that he now proposes, quite contrary to the expressed opinion of his Local Taxation Committee, to put a further burden upon the owners of real property by levying an additional site value rate upon the fair value of the land. Of course, I understand the enthusiasm of the land taxers for this, because we all know what they want to do is to put the expenses not only of local government but of Imperial Government as well, upon the owners of land, simply in order to relieve the rich manufacturer and professional man with large incomes of their fair share of the expenditure of this country. I am glad to find, however, that there are some Members of the party opposite not prepared to adopt that course.

Is there any justification for this new site value taxation throughout the country? The right. hon. Gentleman's Local Taxation Committee pointed out that by the imposition of Increment Value Duties, and the Undeveloped Land Duties, the Government has already imposed quite sufficient taxation upon this particular class of land in urban districts. What justification is there for this additional form of taxation in the rural districts? I venture to say in the first place, the cost of the valuation of the land, if it be a true one, will be an enormous burden upon the general taxpayer, and will further impose a very real difficulty and hardship upon both the owner and occupier of land if he is to make out in any coherent manner this new kind of Form IV. to be served upon occupiers and owners. And in addition to that a very real grievance will be felt by owners and occupiers of agricultural land if they are only to be allowed for improvements executed in the last fifty years. I venture to say that with regard to agricultural land in this country, all these improvements which have turned waste bogland into fertile agricultural land, such as it now is, are the result of expenditure not incurred fifty years ago, but in some cases incurred 100 or 200 or 300 years ago; and if you are to have no count taken of that, and of the really good and efficient expenditure upon agricultural land in the country beyond the last fifty years, you are giving a direct discouragement to anyone to spend money in future upon real and lasting improvements. Any addition to that site value rate upon agricultural land will be very unfair indeed to the farmers and occupiers as compared with the owners of industries. The farmer and landholder will have to pay upon a very unfair valuation of the whole of his farm, while the railway company or big industrial concern which happens to be situated in a rural district will have to pay a comparatively very small sum upon the unimproved site of their premises. I do say that the Government should say exactly what they mean to do. They seem to blow hot one moment and cold the next with regard to their valuation. The Chancellor of the Exchequer told us that they were going to have a Government valuation, and that they have got a very able and efficient body of officials who are able to carry it out. I have a kind of feeling that the whole idea of this Government valuation is to give a job in five years' time to some of the present Government land valuers, whose occupation ought by that time to be finished. That I believe is the sole foundation of this fresh Government valuation of land.

The Prime Minister said that the representatives of the Government Valuation Department were only to be there to give advice. I would like to know if the assessment committees are to be the assessing authorities, and is the Government valuer to be there only in the form of a person to give advice? If so, that is a very different thing from what the Chancellor of the Exchequer told us on the introduction of the Budget. I think the local rating authorities throughout the country are quite prepared to enter into any scheme which will lead to a more uniform scheme of valuation than that which is in force at the present time. The Chancellor of the Exchequer gave a very glowing description of some mysterious assessing authorities, which I think everybody will agree was very much exaggerated. I think at the same time everybody agrees that our present system of valuation could be made much more uniform in character, and we could very well retain our present rating authorities. We might improve them very much by having upon them a representative of the Government, such as the surveyor of taxes, or some revenue official, and a representative of the county council. In this way we might ensure that the whole of one county would have a uniform basis, and we should not then have one assessment for taxation purposes and another for rating. I do not think the local authority would object to something of that kind, but it would have a very serious objection to any form of valuation for the purpose of rating which is to be carried out entirely by paid Government officials instead of the voluntary and, as far as I can make out, the more satisfactory service given by unpaid people Once again I must express my regret that the Government are going to do nothing during the present Session to relieve the overburdened ratepayer. I believe they could have done something in this direction if they had chosen to omit the proposals with regard to the new valuation, and the new kind of control by the central authority over local expenditure.

I wish to refer to two or three points in regard to which Ireland is specially concerned. I am one of those who, as an Irish representative, regret that the temporary Grants for the last four months of this year are not to be paid to Ireland. It is true that we are to get the new Grants for the four months of this last financial year to be devoted to tuberculosis, insurance, and nursing, and some new educational services. I think the chief point upon which I congratulate myself, and upon which we congratulate ourselves, is that the whole proportion of the sum to which we are entited will be secured to us by this Bill, if the promises of the Government are carried out. Therefore, any Irish Member, no matter to what party he belongs, who votes against this Bill votes against the granting of nearly £700,000 a year to the Irish Parliament for the future. I hope that will be perfectly understood by the constituents of those who intend to take a course against the Government on this matter.

Earlier in the Debate this evening, the hon. Member for North Down (Mr. Mitchell-Thomson) made a criticism on the action of the Government, I presume, to create prejudice against them, for he referred to the manner in which Ireland was being treated in this matter in comparison with the English local authorities. I suppose it was natural for him to complain or suggest that the Irish Parliament, which would have the disposal of these sums, would refuse any Grants to the North of Ireland at all. That is an indication that the hon. Member is an opponent of Home Rule and an utter disbeliever in the fairness, or even the common sense of the Nationalists of Ireland, and therefore I have no complaint to make, so long as it is understood that the hon. Member speaks as a representative of the Orangemen in Ulster. The Government have a very good defence, and, at any rate, they are perfectly consistent. They believe in the justice and expediency of an Irish Parliament for the management of Irish affairs. They believe that no injustice or oppression will take place, and therefore they are perfectly logical in leaving the disposal of this money to the discretion of the Irish Parliament, elected under a democratic franchise. The same hon. Member complained that the Government were requiring the system of valuation in Ireland to be altered before this Grant is given. Griffiths' valuation is one of the oldest in Ireland, and it ought to be reformed; and the Government having full confidence in the Irish Government of the future, have left this matter to its discretion, and in doing that they are perfectly consistent, for having done so. I, for one, thank them, and they deserve the thanks of the majority of the representatives of the Irish nation.

I desire to refer to two matters in which the Irish take particular interest. I desire to renew the protest I made in the discussion on the Budget Resolutions in reference to what I am convinced is a serious, and indeed, a very obvious injustice done to Ireland in allotting that country its share of the Grants which this Bill proposes to make. What I allude to is the refusal of the Chancellor of the Exchequer to make any Grant in respect of police and primary education. As I view the matter, it is impossible to justify this action of the Government. The proposal of the Government is to make Grants in respect of services to the cost of which the local rates contribute, and it is said that no such contributions are made in Ireland in respect of police and education, and on that ground we are denied a relief corresponding to that given to Great Britain. I challenge the accuracy of the statement on which the Government founds itself in this matter. It is true that except in the case of the extra police force drafted for special temporary services, the rates in Ireland do not contribute to the upkeep of the constabulary, but as regards the constabulary, I want to make it perfectly plain that I am making no claim. The claim I am making is in respect to the Dublin Metropolitan police. How does that matter stand? I really think the Chancellor of the Exchequer did not know the facts, or else he had forgotten them when he was drawing up his scheme. For a good deal over half a century a police rate has actually been levied in the Dublin Metropolitan area, which, by the way, includes not only the city, but also parts of the county of Dublin, and a very considerable part, too. It is a tax of 8d. in the £ on the valuation of the area which is mostly urban, and is therefore a fruitful source for taxation. If this police rate had been fixed at 8d. in the £ at the start, and upon the valuation as it then existed, the grievance would not be so great as it is to-day. The rate is fixed on the valuation, and the valuation has grown steadily year by year, and necessarily the produce of the rate has grown as well. In 1850 I think the valuation of the city was £645,000, and it is now three times that sum and, of course, the amount realised by the tax of 8d. in the £ has gone up proportionately. The figures are clearly indicative of what has been going on during that period. In 1901–2 this rate in the city furnished £25,000 a year. In the present year it will yield nearly £32,000, and within the next two or three years this sum will be increased to the extent of about £6,500, owing to the revaluation of the city which has recently taken place. But this is not all. The local contributions are not confined to the contributions on the rates, because in addition there is a revenue from the carriage duties, pedlars' certificates, Police Court fees and fines, and all these go to the fund for the payment of the City Police. That is entirely exclusive of the contribution made by the rest of the Metropolitan area. To this must be added a sum of £15,000 a year altogether, as I make it out, and I have taken some trouble to verify the figures. The entire contribution of the area amounts to something like £55,000 a year. It is possible that the Chancellor of the Exchequer and his advisers did not notice that fact, or did they forget it? I thought the defence would be of a different sort, and it is one which has been made before. Some years ago we brought this question before Parliament, and it was admitted by the Chief Secretary of the day. They justified the increase of charge by pointing out that, though the local contribution was large, the contribution of the Government was larger still.

What is the explanation of this fact? It is exceedingly simple. It is that for Imperial purposes Dublin is over-policed and grossly over-policed. It is no use denying this undoubted fact. I do not think that the Chancellor of the Exchequer can be aware of the fact, but it has been admitted by the present Chief Secretary for Ireland, and he himself made use of the very instance I am going to mention. He pointed out that Liverpool, with a population of 700,000, had, in 1905, only 200 more police than Dublin, with only something more than half that population, and that Manchester, with a population of 200,000 more than Dublin, had actually a smaller proportion of police by, I think, a couple of hundred. I have a list which I can furnish to the right hon. Gentleman of fourteen or fifteen other towns in England and Scotland, an analysis of which will show, broadly speaking, the same result, namely, the over-policing of Dublin, as compared with these towns. A further analysis will show the effect of the over-policing of Dublin to be that, while the police rate in Dublin is 8d. in the £, the highest in Great Britain, including London, is 3d., while most of the other towns of Great Britain have never had a police rate higher than 4d. or 3½d., with some of them down to 1½d. in the £. I say, with the utmost confidence, that a case for a Grant in aid of the Dublin Metropolitan Police is fully made out, and that to refuse such a Grant would be gross injustice.

I come now to education. In this case, again, a Grant is denied on the ground that no contribution comes from the rates in aid of the cost of primary education. This allegation is true in one sense, and I might say only in a technical sense. Apart altogether from the general system of primary education which is aided by the State, there is the school system of the Christian Brothers. I am not able to give an estimate which, perhaps, will be accurate of the amount contributed for the maintenance of those schools, but I think, on the whole, it would be fair to set it down at not less than £120,000 a year, and no part of the cost of the system is borne by the Imperial Government. Apart from the case of the Christian Brothers' schools which are so maintained, a very large sum —I do not think the Chancellor of the Exchequer can really have given attention to these facts—has been and is being spent on primary education in Ireland, all of which has been and is supplied at the present moment by voluntary subscriptions. It will be found by referring to the Report of the National Education Commissioners, that in 1912–13 a sum of £127,956 was spent on the national schools, and £18,201 19s. 8d. on teachers' salaries, spent, not out of the rates, but out of the voluntary subscriptions of the people, not necessarily by the parents of the pupils, but by their neighbours of all classes, who came to their aid in response to appeals annually made for that assistance which in England is contributed out of the rates. There are two sets of schools, as the right hon. Gentleman knows. There are the vested schools, and the non-vested schools. I am informed, on what I believe to be good authority, that one-third of the whole cost of the vested schools is borne by local subscriptions, and the cost of erecting the non-vested schools, of which there are 5,000, has been wholly borne by the people, and represents, as I am informed, an annual payment of £100,000. In Great Britain, if I do not mistake, the school boards provide pupils' books, pens—

Would the hon. and learned Gentleman mind explaining that last figure of £100,000? Does it represent money paid in respect of loans, or is it collected for the purpose of repairs? I followed the other items closely, but I should like the hon. and learned Gentleman to explain that last item.

If I am not mistaken in my recollection, it represents the annual payment for sinking fund and interest for the loans that have been raised for the building, and, I suppose, the equipment of these non-vested schools.

Do I understand the hon. and learned Gentleman's statements to be that these voluntary subscriptions in Ireland represent what the rates represent here, that there is no power in Ireland to raise rates, and that these are practically voluntary rates?

That is very nearly the case. My whole case is that you have compulsory rates in England, and you have voluntary rates in Ireland. If they do not pay compulsory rates, they make voluntary payments. If they do not pay in one form, they pay in another form. I am bound to say that those better off amongst the people do help the poorer classes in making these payments. The great majority of the school boards in Great Britain provide the pupils' books, pens, ink, stationery, and other school requisites. In Ireland, the parents, by a voluntary rate, provide all those requisites. I do not like, as I have not made the computation myself, giving it as absolutely accurate, but an estimate has been made that, if you take 5s. per pupil per annum, the amount raised every year would be about £170,000 in respect of that item alone, and in England it is provided out of the compulsory rate. Under a recent arrangement, again, the Treasury provide half the cost of keeping the outside of the schools clean. The other half is borne by the locality, and it comes out of the rates voluntarily imposed and paid by the people themselves. The fact is that if the Irish people do not pay in one form they pay in another. I say emphatically that to refuse a Grant-in-Aid would be nothing short of great injustice. There is, fortunately, still time left for the Chan- cellor of the Exchequer to retrace his steps in this comparatively minor matter, as compared with the wide outlook which he has to take, but a matter of great importance to Ireland.

I know that the hon. and learned Gentleman is usually very accurate in his statements, but I should be very glad if he would furnish me with full particulars of all these payments and any authorities he may have to substantiate the very important statements which he has made. He will see that it is very necessary that I should investigate them.

I shall be very glad indeed to accept the invitation of the Chancellor of the Exchequer, and I thank him for making the suggestion. I will endeavour to supply him with all the information at my command.

8.0 P.M.

It is very natural that the Government should do all they can to minimise the blunder that they have committed in introducing into this Finance Bill proposals which are not authorised by the Resolution of the House, and should also attempt to conceal the completeness of their surrender to a certain section of their followers. Those attempts have not been crowned with success. Indeed, no amount of explanation will conceal the fact that they have met with a very severe rebuff. The reasons given by the President of the Local Government Board for dividing the Bill into two parts deceive no one. They are too much like the answer of the little boy who, when he was asked, "Why did you cut that worm in two?" replied courageously, without convincing, "It seemed so lonely." Certainly, the two parts of the Finance Bill may seem more lively after the operation of being bisected, but the unsympathetic person may be pardoned for considering that greater liveliness is due to the dissolution of one or other of the two parts. The right hon. Gentleman, in a very significant passage of his speech last Monday, declared that it was highly desirable, in view of possible contingencies, that the Government should not introduce definitely Grants for local taxation until it was quite settled that the Finance Bill would be passed with its new Land Valuation Clauses. What are the possible contingencies that might prevent the new Bill passing into law? Do they include a General Election in August or some earlier date? If that is the case, and the Government do not want to take up more than they wish for the year, it would be quite intelligible. But if the Government's position has been weakened by inability to enforce their proposals as regards Part IV. of the Finance Bill, they have been severely shaken by their unconditional surrender to the hon. Member for Hexham (Mr. Holt). It is idle to assert that the reduction of a penny on the Income Tax has been introduced because of the impossibility of carrying through the temporary Grants to local authorities. What the man in the street will say is that a certain section of the Liberal party have kicked against taxation on wealth, and that the Government have given way to their pressure, and the conclusion he will draw is that, although the plutocrats of the Liberal party are only too glad to vote for taxation on land which they do not own, they are the first to kick when they are taxed themselves. It may be very wrong and suspicious on the part of the man in the street to take that view, but nevertheless he has very good grounds for doing so. He will have noticed that the avowed reason for this revolt was that money was being raised in Parliament for proposals which had not been authorised; but the revolt quickly subsided on the concession of £2,500,000, although it was perfectly clear that the actual revenue raised on this basis of taxation is far in excess of the sum itself.

The man in the street will note that the criticisms of the hon. Member for Hexham dealing with the policy of the Government in adding £56,000,000 or £58,000,000 to the country's expenditure in the last six years, went by the board when he declared himself and his Friends to be perfectly satisfied with two and a half millions being taken off the taxes they themselves were going to pay. He will not have overlooked the fact that the hon. Member and his Friends withdrew their opposition, although they were convinced that, wherever and whenever given effect to, the Government proposals would not result in any relief to the ratepayers. The man in the street will ask why this is so, and he will probably himself answer that it is because of the rebate of £2,500,000 given by the Government to the rebels. He will say it is all pretence about their being in favour of the rich being taxed in the interests of the poor, when it is they who are the rich who are being taxed; and it will not be surprising if the man in the street loses confidence in a Government which indulges in practices of that nature. Perhaps his disillusionment will be hastened by the unfairness of the present distribution of the ratepayers' burdens which the Government have professed to be so anxious to remedy, and which they have done nothing to remedy, because they have got mixed up with some fantastic scheme of a double valuation. What is the justification for the Government's new proposal. The President of the Local Government Board said that the existing system of taxation was a direct step upon building and improvements. These were the words he. used:— local authorities to absolute impotence. Their assessment committees are to be superseded by a Land Valuation Department, a body whose ghastly inefficiency has disgusted even its own parent, and their activities are to be controlled by a central authority which will command their obedience by possessing the purse. Nearly all these proposals show that the tendencies of the Government are towards a sort of centralised bureaucracy which is at variance with the views and rights of the British people, and this tendency would be all the more regrettable if it were not certain that it will soon meet with the condemnation of the electorate.

The hon. Member who has just spoken attributed certain motives to the hon. Member for Hexham (Mr. Holt) and those associated with him for their action in bringing about a reformed Budget. As one of those associated with the hon. Member I should like to inform the hon. Gentleman that he is entirely wrong in his statement that my hon. Friends were animated by any desire to get a reduction of the taxes which press upon themselves. I was present at nearly all the meetings, and at the deputation which waited on the Prime Minister, and I can assure the hon. Member that no question of kicking against taxation which pressed upon the wealthy members of that body was ever raised.

I did not say that I thought so. I said that that would be the view of the man in the street.

I hope the man in the street will not be misled by the hon. Gentleman, and, if my words could reach him, I should like to assure him that that idea has never, so far as I am aware, entered the heads of those who took part in this particular movement. The movement was due, as is well known, to the irregularity of being asked to vote money without knowing definitely to what purpose it would be applied. One or two speeches that have been made this afternoon, and particularly those by the hon. Member for North Down (Mr. Mitchell-Thomson) and the hon. Member for Tewkesbury (Mr. Hicks Beach), made reference to the inconvenience caused, in the City of London more particularly, by this alteration in the Income Tax. I should like to say that those who took part in the movement for what may be termed the reformed Budget must not be regarded as responsible for the decision come to by the Government to reduce the Income Tax. That is a different matter altogether from the agitation which they engaged in. It is the remedy suggested by the Government to meet the position brought about by being unable to go forward with their own proposals. The Government, therefore, are responsible for their own remedy, and I entirely agree with the criticisms made by the hon. Members to whom I have referred, that the remedy is of a very questionable character. The banks themselves are not enamoured of it, and rich people are not particularly enthusiastic about it. The mere suspension of the Income Tax for a few months will not make any great difference to them. But it is going to bring about, as has been well pointed out, an immense amount of inconvenience, and an immense amount of additional labour to those engaged in the collection of revenue of this description.

Let me give only one concrete instance. I was talking the other day to the managing director of a company. He informed me that they had just made their Income Tax deductions. The Income Tax has to be deducted on an average, and the calculation of the average is on the difference between 1s. 2d. and 1s. 4d. Usually the average works out at 1s. 3d. as the amount to be deducted, and the warrants have been sent out to shareholders on that basis. Now it is proposed to decrease the nominal rate of 1s. 4d. to 1s. 3d., and that will probably bring out an average of 1s. 2½d. Hon. Members can easily imagine what an immense amount of labour will be entailed by the company having again to refund this difference to the shareholders. The responsibility rests with the company. It has deducted the amount, and it will have to see that the sum unjustly withdrawn is returned. It has been suggested that the Chancellor of the Exchequer should visit the City of London just now, and meet a few of the bankers and of the managing directors of companies. It is not certain that he would be allowed to return alive. He has no conception of the feeling of irritation and unpopularity which has been created by his proposal, or of the trouble which it has caused in the City of London and to great mercantile houses throughout the country. In view of that fact I would like now to offer a suggestion which I hope is a practicable one, and perhaps it is not too late. I understand this decrease in the Income Tax has to be confirmed by the Committee, and, therefore, there is time for this trouble possibly to be avoided, without injury to any interests involved.

The right hon. Gentleman the Member for East Worcestershire (Mr. A. Chamberlain) asked a very interesting question of the Chancellor of the Exchequer, namely, if the amount which was necessary for the Persian oil concession was to be drawn from the existing balances of the Sinking Fund. I spoke against that a few days ago as being an irregular proceeding, because that money, according to the conditions of the Sinking Fund, should automatically go to the reduction of debt. The First Lord of the Admiralty explained that that was the source to which they were looking for the £2,000,000 odd necessary to pay for the oil-fields in Persia. As the Chancellor of the Exchequer has explained, he will have to come to this House for authority to go back on the conditions of the Sinking Fund, and to use that money for the purpose of paying for the oil concession. I suggest that he should let that money remain in the Sinking Fund and go automatically to the reduction of debt—it ought to do so, because it is in accordance with our regular procedure—and leave the Income Tax at 1s. 4d., at which figure it would produce the £2,000,000 odd, which is the sum required and which could be produced out of revenue to pay for the oil concession. By that means he will get rid of the irritation and unpopularity of his other proposal, and, at the same time, remove a great deal of inconvenience to the trading, mercantile, and banking community. He will also be carrying out the traditions of this House by using the balances in the Sinking Fund for the repayment of debt, and he will be paying for the Persian undertaking out of his regular income. If it is not too late, I ask the Members of His Majesty's Government who may be present to seriously consider that proposal. This is not a party matter, but a matter of business. Let them put themselves in the position of those companies who have gone through most elaborate, calculations of fractions and decimals in connection with an Income Tax averaging 1s. 2½d. or 1s. 3d., and who will now have to do all that over again.

I pass from that to the Budget generally. I am sorry to say that I find myself unable to support this Budget, not altogether for the reasons given by Mem- bers of the Labour party, but for another reason which is embodied in the Amendment of which I have given notice, which is to the effect "that this House declines to proceed with this Finance Bill, which proposes to levy additional taxation, without a definite statement with respect to a reduction in naval expenditure." I agree entirely with the admirable speech of the hon. Member for Dumfriesshire (Mr. Molteno), who said that if we go on voting and are prepared to support this levying of taxation we are bound to find, as we found after 1909, that the greater proportion of the revenue with which we supply the Government is being used for purposes of unreproductive expenditure. The only possible check on this vast unreproductive and sterilising expenditure, as it has been well described by the Prime Minister, is to put some check on the means whereby the Government obtain the necessary supplies. Therefore, until we get some definite statement and some definite action on the part of the Government, and until there is some movement towards a reduction in this branch of expenditure, we are justified in refusing to vote further Supplies. The hon. Member for East Northamptonshire (Mr. Chiozza Money) made a long speech in which he compared the figures of 1904–5 with those of the present year. He took a period of ten years. That was a very misleading comparison, because the late Conservative Government when they went out of office had brought about a reduction in naval expenditure for 1904–5 and 1905–6 amounting to some £3,000,000. The actual figures were: 1904–5, £36,800,000; and 1905–6, £33,151,000. It will be apparent to the House that if you make a comparison between 1904–5 and 1913–14, as the hon. Member for East Northants did, and then make certain deductions, as he did, of certain amounts for naval works, you get a much more favourable aspect of the increase in expenditure than you would get if you took, as you ought to take, the years for which the present Government have been responsible. The present Government came into office in 1905–6, after the late Conservative Government had very materially reduced naval expenditure, and it will be found that the increase is something nearer £20,000,000 since that time.

The hon. Member also argued that the Continent of Europe had increased their expenditure, that there had been an enormous increase going on everywhere, that we had been enjoying a vast and ever-increasing prosperity, and that the fact that these other countries were also increasing their expenditure should be some satisfaction to us. The hon. Member would like us to believe that he understands finance. He surely must know that finance is an international affair, and that if there is a vast waste going on on the Continent of Europe it closely and adversely effects us just as if we had indulged in that excessive expenditure ourselves. Turn to France, for example, and see what the result of this tremendous expenditure has been there. What do we find now going on in France? You can only frame your Budget by surveying the whole position and having regard to the financial position both at home and abroad. We find that France is now about to place a loan for some £32,000,000. She has a deficit of more than that sum to face. Let us face that appalling fact. That has been brought about by expenditure of this character on armaments, the Morocco expedition, and so on, and she has to do this on a more or less depleted money market.

Although the; value of money may have fallen because of the shrinkage in trade, the supply of loan capital is undoubtedly rather scarce. We see that in the case of loans recently placed and in the price of Consols. It is due to a variety of causes. We have had great prosperity in trade. There has been great investments in Canada and abroad, which capital, we hope, may in time become reproductive, and there has been an enormous transference of floating capital into fixed capital, and loan capital is unquestionably rather scarce. Yet here we are faced with France coming forward with a loan for £32,000,000 paying 3½ per cent., and that is a position which is very significant—a rich country like France which enjoys excellent credit and which has not been a borrower for many years now, coming forward for this enormous sum. That should make us pause when we consider the enormous extent to which our national expenditure has grown. No notice is taken of these facts. We spend up to the hilt, and we proceed gaily with our increased taxation. I do not take exception to the fact that taxes are placed, as they ought to be, upon those best able to bear them, but I take exception, not to the size of the Budget, but to the character of the Budget. If you find huge sums being drawn from the people in the shape of taxation and spent, as I believe over-spent, in a wasteful manner, even if you indulge in social reform you have to have regard to cutting your coat according to your cloth. Money does not drop like manna from Heaven, and if you have this enormous taxation going on, your schemes of social reform are off-set by the increased cost of living and the other causes which have brought about this wasteful expenditure. If we turn to other countries we find more or less a similar state of affairs. The last official returns show in nearly every instance, with the exception of the United States, consecutive increases in naval expenditure during the whole period to which I have referred.

It may be said that it is impossible to have a reduction, and that it is a progressive expenditure. That is not so. There have been periods in our history when there have been reductions, and it is very curious that in 1847 and 1848 an almost similar state of affairs existed to that which we have to-day—that is to say, we had abounding revenue, and we had great prosperity at the Treasury, but there was a state of affairs existing calling for a halt in this direction, and sooner or later it brought about the result of failure and financial trouble, as the result of the Governments not foreseeing the destiny and the goal towards which they were going. I should like, therefore, to ask the Government to weigh well this state of affairs, to have some regard to the existing state of money matters abroad, to look for example, at Canada, where there has been an enormous increase of capital and where there has been the beginning of financial trouble, and to notice the abnormal demands for capital in Brazil, South America and other places, where also there is some question as to financial soundness, and to consider if it is wise on our part to spend up to the hilt, and to tax ourselves up to the hilt, always having regard to the character of that expenditure. It is not a question whether you agree or disagree as to the actual amount which should be spent upon armaments. If you pursue that course, you are bound to suffer from it. Whether it may be desirable or not is another thing. I submit, therefore, that we should have some regard to these facts, and that at a time of great prosperity, which we have been enjoying and which now shows some signs of coming to an end, we should not be left with a huge expenditure, high taxation, and a declining trade. It is these lean years which may be coming upon us that we should foresee and take some pains to be prepared for, and not be left with a high ratio of expenditure and a possible decline of revenue. I hope I have said enough to make good my case and to emphasise this particular point.

There was one speech on the Debate on the Money Resolution by the hon. Member (Mr. Mills), a Conservative banker. He made quotations from speeches by the Prime Minister and the First Lord of the Admiralty as to what they were going to do when the Liberal party came into power with regard to economy, and more particularly in naval and military expenditure, showing that he was in sympathy now with the views which I am now expressing. Even naval experts themselves are now divided in opinion as to the advisability or not of pursuing this excessive building of large warships. But, apart from that, I believe there are many Conservatives, and perhaps more particularly among bankers and others, who are the first to see the tendency of things, and are, therefore, in a position to give an opinion, who feel that the time has come when our real strength does not depend on excessive over-building and exceeding our monetary and financial resources by overspending in that direction. I was immensely impressed by the fact that that speech emanated from the Conservative Benches. I have long waited for such a ray of light to come from that side of the House. There have been many statesmen in. the past, such as Disraeli, Sir Robert Peel, Lord Gosehen, and others, who have fought the battle of economy, and have had the courage to face this problem in its entirety. You cannot have economy if you always qualify your desire for economy by saying there is one Department of the State on which you are prepared to spend up to the uttermost shilling, just as I have no sympathy with extreme Friends on this side who imagine that this world can do away with armaments and can do away with the British Navy. I have always supported an adequate defence, but I believe that we must survey this question as a whole, and we have to have regard to an adequate naval defence, to a reserve of taxation and to a financial reserve, and I believe it is having regard to the position all round as a whole, that our real strength more particularly lies and depends. I believe, therefore, that if hon. Members on both sides of the House will be prepared to consider this question, not in any narrow or partisan sense, or in any desire to make party capital out of it, but either as business men or as statesmen, or as politicians, or as ordinary men of common sense, they will agree that the time has come for us to narrowly scrutinise our Budgets, and to narrowly look into the character of our expenditure. You cannot have the best of both worlds. You do not benefit the working classes by schemes of social reform if you are hurting them in another direction by wasteful expenditure which is increasing the cost of living, and which is not benefiting them in the material sense. Mr. Gladstone once said in a most eloquent passage that if you wish to benefit the working classes, you should not only reduce taxation on the articles which they consume, but that you must operate on the industries in which they are engaged by reducing the burdens. If you wish to increase employment you must reduce the charges on industry, and thereby stimulate the industry and create a demand for labour.

We have had discussions on the increased cost of living. We are one of the most prolific causes of that increase. Some people ask for an inquiry into this matter. It is not necessary to have a Government inquiry. We must realise that if this country and the other countries of Europe engage in the tornado and orgy of naval expenditure, it must lead to an increase in the cost of living. Our relations with Germany, which has been held up as the particular enemy opposed to us, and not only with that Power, but also with Russia and France, have never been so happy. When we know that what in the name of common sense is the object of pursuing this policy of ever-increasing naval expenditure? The hon. Member for Dumfriesshire (Mr. Molteno) well said that in last year alone the increase in the Naval Estimates was £7,000,000. That is appalling when you have regard to the comparative position of ourselves and other countries against whom we are arming. When you compare the figures you find that this country is spending double the amount of Germany and far ahead of France, Russia, or Japan.

I must remind the hon. Member that we are not now on the Navy Estimates.

I am sorry that I was led in my zeal for economy to say so much on that question. I think it ought to be before us when considering the Budget, because in giving authority to Ministers to levy these taxes we have to keep in view the purposes upon which the money is spent. If the Government cannot give some outline of a policy for the reduction of expenditure, then I say we are not justified in continually voting for these high taxes when we consider to the field in which such a large proportion of the money is spent.

I wish to refer to the question of Imperial taxation and local rating. I hope that the particular arrangements which are to be made between the Imperial authorities and the local authorities will take this form. I admit that there must be some measure of control over the Grants, but I hope the control will take the form of powers to intervene in the event of there being abuse of the Grants, rather than direct control over the administration of the Grants. I believe local authorities will be most jealous of any interference from a central authority in their administration of the Grants, whatever they may be, allocated to them. I do not think they can take exception to powers being reserved by the Imperial Government for the central authority to intervene if the money is misspent. I think it is in accordance with justice that where money is supplied there should be some measure of control. I hope that these powers can be discussed in this House, and that they will be thought out by the Government. I personally regret that this question has been left so late, and that the Grants are not to be made this year. I hope the suggestions which I have ventured to submit to the Government with regard to the Sinking Fund and the levying of the Income Tax at the present figure, will receive their best consideration.

We have been much gratified on this side of the House by the announcement made by the hon. Member for Coventry (Mr. D. Mason), that he has seen a ray of light in the speeches made by hon. Members on this side of the House. Not wishing to be outdone in generosity, I may say that we, too, on this side have seen a great light appear among hon. Gentlemen on the other side. I should like to recall a few words which the Prime Minister used at an earlier period of the Debate this afternoon, when he gave expression to his reasoned conviction—a conviction which must carry weight with all of us, coming as it did from one in the high position which he occupies—that we could look for no remission of taxation in future, and that the height to which the expenditure of this country had now come would be maintained, and when he said, over and above all that, that there would be the constant pressure of public opinion, which would not only maintain expenditure at its present height, but might force it up still further. Speaking for myself, and I believe for hon. Members on this side, I say that we agree emphatically with what the Prime Minister said. With regard to what he said about public opinion, I do feel very strongly that in these days—these democratic days particularly—it is of the very highest importance that men who occupy great positions in public life, and who call themselves leaders of the people, should really be leaders of the people, and not wait for pressure to be exercised on them from the outside. In other words, I think it ought to be an integral part of a statesman's duty to-day, when speaking on platforms, not only to point out to the people the benefits that may accrue to them by expenditure on social legislation, but to point out with equal candour and fairness what the charges on the nation will be for such benefits, so that the people who have not got the necessary training to form a judgment in these matters may be able to obtain some reasoned judgment as to whether the expenditure the country has to undergo is justified by the benefits they may expect from that expenditure—that is to say, to judge whether the net result of legislation for social purposes is going to be a gain or a loss to the community as a whole. I regard that as a matter of very high importance.

In dealing with the expenditure of the country, the Prime Minister spoke with some feeling of the. position of Chancellors of the Exchequer in the future, and I feel sure that the general sense of this House will be with him in this, that there are three canons that might be laid down for the guidance of Chancellors of the Exchequers in the future if the finances of the country are to be managed with economy and with understanding. The first and most important canon is that it should be a whole-time job for one man to act as Chancellor of the Exchequer and manage the finances of the country; that the man who undertakes that office can have no time for any other work in this House or out of it; that he ought not to expect to have it, and his colleagues ought not expect him to have it; that he should know something of finance, and that it may never be said of him, as I heard it said of the present Chancellor of the Exchequer by an old supporter of his, "It is no new thing to have a Chancellor of the Exchequer in England who knows nothing of finance, but it is a new thing to have a Chancellor of the Exchequer who thinks that there is nothing to know." Secondly, I think that the Chancellor of the Exchequer of the future ought not to be the Minister in this House who is the originator and the pilot of social legislation that means expenditure. This point has been touched upon by many speakers on the other side, and I earnestly hope that the example which we have had during the last few years of the same head of the Treasury being the person who has to raise the expenditure of the country and the person who has to direct the expenditure—I hope that those two functions may never again be brought together in the same hands. I think a third canon is that it should be quite impossible for the Chancellor of the Exchequer of this country in the future to leave his work to carry out a tearing propaganda in the country, tearing from one end of the land to the other like a meteor, making unexpected apparitions among everybody, and then returning unexpectedly to look after his business in this House.

One most interesting development of this Debate has been a kind of rustling of the dry bones of the business men on the other side of the House. If only the breath of life could be breathed into those dry bones, it would be a good thing for the Liberal party, and for the finance of the country as a whole. We heard in this Debate for the first time, after the usual pinch of incense had been offered on the altar of the Chancellor of the Exchequer, some admirable and sensible comments from Members on those benches who have practical experience of the commerce of the country. I do not wish to see men putting themselves in the unhappy position of having to vote against their party, but I cannot help thinking that if men of the character which I have tried to describe would only speak out in time, and make their opinions known to the Leaders of their party, we should have had a great deal less of reckless finance during the last few years. I always feel that the greatest need in this House is for men with a practical business knowledge on both sides to combine to keep their Leaders in order in reference to a great many matters in which commerce and finance are concerned. It has struck me with regard to the management of national finance during the last few years that we have suffered very much from the knowledge of the Chancellor of the Exchequer being somewhat wider in matters connected with social legislation than in matters appertaining more strictly to his own Department.

In matters connected with social legislation many of us on occasions can feel sympathy with him, but the desire to ameliorate the lot of the people of this country is not confined either to his bosom or to the men who sit behind him; and in spite of whatever he may say, either in this House or on the platform, there is no one I know that would complain of the amount of taxation inflicted upon himself if he was satisfied that the taxation was expended wisely and for the benefit of the people. Speaking for myself, I am quite sure that as long as I am convinced of that, I am perfectly ready to shoulder my share of whatever Income Tax he may deem desirable, and for this reason I believe Income Tax on the whole to be the fairest tax there is, and the one that can be collected with the least harm to the industry of the country. I make a very broad distinction in modern methods of taxation between Income Tax and Death Duties as to which I should like to say a word by-and-by. But with regard to what I was saying as to the Chancellor's knowledge and sympathy with social legislation, I cannot say that he has either knowledge or sympathy in financial matters. That is what we have suffered from in this House. We have had no lead from the Chancellor of the Exchequer in meeting any of the great financial problems which face not only this country, but as the hon. Member for Coventry said, face all the countries in the Civilised world at the present moment. We are going through a very remarkable and interesting time Having listened to all the Budget speeches which the Chancellor has made since he took office, I am quite convinced that, though he may realise the social changes that are going on around us, he fails entirely to realise the financial changes that are going on around us, and which are proceeding all over the world with almost greater rapidity than the social changes. We are faced throughout the world, and perhaps in this country particularly, with a rise in the interest on capital. We see capital year by year increasing its earning power, by a slow process of involution. We see it, in other words, becoming dearer. The demand for it is increasing everywhere, and the demand is world-wide and international.

The earning power of labour is not increasing in anything like the same ratio. Probably its earning power is stagnant. Apart from that, the demand for labour is not international, as is that of capital, but it is national. It is a much more limited demand. Capital increases in liquidity every year, and must necessarily do so at a far greater rate than labour can do. That is the problem with which we are faced. What the statesman has to do is to try by his methods of finance to retard that motion, and not to accelerate it; in other words, to see whether it is possible, by his financial administration, to curb this rise in the earning power of capital, and to increase the demand for labour. I would like incidentally to mention this very remarkable fact—I have no doubt that Members of this House realise it as fully as I do, that whereas the earning power of capital has increased in recent years and in consequence the prices of stocks have become depressed, it is a commonplace very often among our opponents on the platform, and sometimes in this House, to say that this is a worldwide movement and may be found to a greater extent in other countries even than in England. But I noticed in the last number of the "Quarterly Journal of Economics" a very striking comparison showing how, during the last seventeen years, the 3 per cent. Debenture Stock of our second great English railway, the London and North Western Company, had fallen from a mean price of 119.9 in 1896 to 78.8 last year. While in the same time the 3 per cent. obligations of the Northern Railway of France, which in 1896 stood at 95, a far lower price than the English price, which meant that we were able then to raise capital on much more favourable terms, has fallen last year to 80. That is 1½ points in excess of the London and North-Western stocks—showing that this fall in prices, and the consequent rise of interest which have been going on in Europe have actually brought this to pass, that you have two great railways, one in England and one in France which, for bor- rowing purposes, are to-day practically on the same basis.

On a point of Order. Is the hon. Member entitled to discuss French railways in a Debate on this Finance Bill?

I think that it is fairly part of the hon. Member's connected argument in reference to the rise in the amount of taxation.

I had quite finished what I wanted to say in reference to French railways. The point it was bringing me to is that if there is one way— putting Tariff aside for a moment—in which English finance Ministers should at least try to help the people of this country and the English working classes, it is by trying to cheapen capital, which would be in itself of inestimable benefit to English industry, and would lead directly to more employment, which is the only way in which the wages of this country can be raised permanently and securely. It seems to me—and here I do not expect to take hon. Members opposite with me—after giving the best consideration I can to this matter, that the finance of the present year and of the last few years has been directed, not to cheapening capital in this country, but to make it scarce; and the world movement, in a direction which none of us desire, has been actually helped by the methods of the British Exchequer over a period of years. I think this movement has been helped in three directions from the time of the Budget of 1909. In the first place, I think a blow at cheap capital was struck by the whole series of tactics in connection with the land duties. For this reason, that they interfered with the building trade, they checked progress along those lines, they told against the employment of labour in the building trades, and undoubtedly caused a feeling of apprehension amongst the holders of mortgages and people who had loaned money in connection with the building trade, making them thereby less anxious to lend their capital, and undoubtedly heightening to a certain extent the rate of interest.

9.0 P.M.

The second way in which the Government helped this process has been by the reliance they placed on the Death Duties as opposed to any other form of taxation. I would point out once more, as I have pointed out many times before, that, quite apart from the doubtful policy of employing capital in the ordinary expenditure of the year, the mere fact of the enormous obligations of capital means constant dribbling sales from year's end to year's end on the stock exchanges of the country, and those constant dribbling sales tend to depress the price of securities, and depression of the price of securities means a rise in the rate of interest, which would affect the borrowing power of this country should she be in the unhappy position of having to borrow for the purposes of war. I was very much astonished at the statement made by the hon. Member for Greenock earlier in the afternoon, that one of the benefits that this Government have conferred on the country is that they have cheapened the price of consols; yet it was one of the principal points of the indictment which the Chancellor of the Exchequer brought against Mr. Balfour's Government, that it had cheapened Consols. There is one further point, and it is in reference to the Sinking Fund. In my view, it is not so much the amount taken from the Sinking Fund which is to be considered, but the great feeling of insecurity which it causes among all men of business when they see that the public officials responsible for the finance of this country do not realise the importance of maintaining rigidly the provision laid down year by year for the preservation of the Sinking Fund. I think it is that, coupled with speeches of such levity as the Chancellor of the Exchequer sometimes delivers on financial matters, which has caused a great deal of apprehension and nervousness among people with capital. I would only reiterate, in closing, my earnest desire that whichever side comes into power, the Chancellor of the Exchequer will make it his boast that he is a man who devotes his whole time to the duties of his office, and is not to be diverted from them.

My hon. Friend who has just sat down has expressed the feeling which prevails in the City in regard to the financial policy of the Government, which is not only driving capital out of the country, but, what is almost equally serious, is preventing capital from coming into this country. The effect of the financial policy of the Government is to depress the price of stocks, and this is largely due to the Death Duties and their increased severity, and to the fact that they force the sale of no less than half a million's worth of stocks every week in the market. The effect of this policy is bad, not only for those who have to sell the stocks, but for those who are interested in the particular class of stocks.

We are interested in national finance, but not interested in stockbrokers. The points which my hon. Friend has raised are such that I should like them to have been dwelt upon to a greater extent during this Debate, fixing our case more and more on the fiscal proposals contained in the Bill. I think it is admitted on all sides of this House that we cannot look for any diminution in the burdens thrown upon the taxpayers, whether in regard to the cost of defence or in other matters. There seems to be a general expectation in the House that we have not by any means reached the maximum of national expenditure. Efforts have been made in this House, and by Members outside—and mostly by the hon. Member for Northamptonshire (Mr. Chiozza Money)—to show that huge as is our national expenditure it is largely counterbalanced by the great increase in our national income. I fear that our anxiety will not be allayed when we see this tragic expenditure, which is being watched in the country. It is not correct to say that our national income has kept pace with our national expenditure. In the period since 1880 we have had an increase of income of 9 per cent. In 1890 the income was thirteen hundred millions. We have to set against that an increased expenditure of 150 per cent. Our income has only increased by 90 per cent., while the national expenditure has increased by 150 per cent. To a certain extent this increased expenditure contains certain expenditure on reproductive masters due to the policy of the old Liberal Government and of the old Liberal party. On the other hand, in view of the recent expenditure which we have incurred in time of peace and in time of good trade, we should see that we should not encroach too severely on those resources on which we may have to rely in the case of national emergency. In 1880, our national expenditure was £75,000,000, or 5.8 of the national income. To-day it is £184,000,000, or 9.2 of the national income. I omit from those calculations in both instances the revenue from the Post Office which is from a source producing revenue.

Those amounts do not, in my opinion, represent all the burdens which rest on the people of this country. The hon. Member for East Northants made what is, in my opinion, a very sanguine estimate of our national income in putting it at 2,000 millions. The hon. Member has omitted one of the most important factors in dealing with national expenditure, and that is the question of rates. While our national expenditure since 1880 has risen from seventy-five millions to 184 millions, our rates have risen from 28 millions to 75 millions, or, in other words, our rates have risen in the last thirty years by as much as the national expenditure was in 1880. The total amount that the people of this country were asked to find in taxation in the year 1880 was 103 millions, and it is now 259 millions, which means an increase from 7.9 to 13 per cent. of the national income, instead of 9 or 8.5 per cent. as stated by the hon. Member for East Northants. Then there is the amount raised from the direct taxpayers consisting of a small minority of about a million and a quarter of people. In taking that direct taxation we should be very careful that we do not take from them a proportion that would greatly hamper the resources on which we have to rely in case of national danger, and they are the people on whom we would have to rely in case of the shock of war. I made a small calculation that this class pays in direct taxes 98½ millions, and, also taking a moderate estimate, they pay 20 per cent. of the indirect taxes, amounting to 15 millions, so that in Imperial taxation the direct taxpayers of this country contributes £113,000,000. Out of the total rates that are raised I think it is a reasonable estimate to say that they are providing about £55,000,000 out of the total of £75,000,000. I have based my estimate, taking 7,500,000 houses in this country which have a value of less than £20, or in other words, a rateable value of £3 10s., which gives a yield of £25,000,000. The total burden therefore that the direct taxpayer, that is those million and a quarter people has to bear amounts to £165,000,000 in rates and taxes, or a sum of £130 per year from each direct taxpayer in this country, or an average of £2 10s. Per week.

It seems to me that that is a very considerable proportion to bear, and I would ask whether we should not reconsider our whole financial policy, bearing in mind, as I have already pointed out, that it is on that minority we have to rely in case of emergency. In this connection I would like to point out a matter which came under my observation in inquiring into a case in Germany. There I found that in the case of an estate that involved an income of £1,500 per year that the total Income Tax and everything included in respect of that particular estate, amounted to 20 per cent. less than in this country, that is taking into account not only the Income Tax, but the local Income Tax and the other taxes imposed in Germany. That income of £l,500 was £500 unearned and £l,000 earned, and yet the taxation there was 20 per cent. less than in this country. Thus comparing the method of taxation you realise more and more that the system of taxation in Germany, for instance, is simpler and more equitable than the system in this country. I am very anxious indeed that we should have some Committee, a Budget Committee or some other form of Committee, to carry out the ideas that have been promulgated by the Prime Minister, namely, that it would be to the advantage of the State to inquire into the whole system of taxation with a view to either broadening it or equalising it or making it more equitable, and in order to deal with the great anomalies which exist in the whole Income Tax laws which are still based on the archaic principles of 1842. We have consolidated the Companies Acts, and why should we not consolidate our Finance Acts. We know that the whole administration of Income Tax in this country is extravagant and wasteful, and faulty in many respects. [An HON. MEMBER: "No, no!"] I could point out that the administration of the Income Tax is very, very faulty indeed. We have the inequalities in connection with abatements and other matters, and I think a graduated system could be introduced doing away entirely with schedules and with the Super-tax and equalising the charge; beginning with small amounts and starting, say, with 3d. in the £ on a sum of £160. I believe that if some such inquiry were instituted, and if the House would decide to form some committee to deal with this great question, that we would not be in the position in which we are to-day, and that the producing confusion and chaos, due to the unforeseen circumstances with which the Chancellor of the Exchequer had to deal, would be overcome.

There is, rightly, I think, nothing that this House hates more than demagogy. It is a vice which is rightly reprobated in this House, but I cannot help thinking, listening to the speeches to-day, that if there is one thing which is worse than demagogy it is "plutogogy." We had quite enough of "plutogogy" to-day, although I am not quite certain how you spell it. We had speeches about high finance, and explaining that in advocating the claims of the unfortunate Super-tax payer, you are really advocating the claims of the gardener, the chauffeur, and the people employed by the person who pays Super-tax. That is "plutogogy." We should set our hearts as strongly against that as against demagogy itself. The hon. Member who has just spoken brought forward the objection against the Income Tax, which was brought forward by many other speakers in this Debate. It is simply this, that a tax on capital or a tax on anything that is produced by labour, let it be machines or wheat, or anything else, merely increases the cost of the capital to the people who use it. That seems to be sound economics, and I think we have seen in the last few years that it works out in practice as well. We know quite well that the tax upon the employers under the Insurance Act is not now paid by the employers, but is transferred and passed on to the consumer. A tax on capital which restricts the production of capital must necessarily make capital scarcer than it would otherwise be, and therefore the capital which is in the market secures a higher rate of interest than it would otherwise secure. That is my economic objection to such taxes as the Income Tax at the present time. I think we have seen during recent years, in the ever-rising rate of interest on capital, that it has had the effect of making capital scarce and dear. Although these taxes may appear at first sight very simple and attractive, in the long run they have a damaging effect on the trade of the country and on employment, and as employment gets scarcer either wages go down or the cost of production goes up, and the purchasing power of the wages is diminished.

But however true it may be that any tax levied upon that which is produced by labour reduces the amount of the useful things produced, and therefore increases their price, I wish the House to grasp the fact that a tax on Land Values has not that objection. Land is not produced by labour. The land is there, and no rate upon the value of the land has any effect in reducing the amount of land in the market. It certainly will not reduce the amount of land, and therefore it cannot increase the price obtained for the land. In fact, it has exactly the opposite result. We have a tax on dogs. For every dog that is unused its owner has to pay 7s. 6d. If it is a dog used in trade you do not pay the tax. If it is an unused dog you pay 7s. 6d. If the tax on unused dogs were doubled in amount, the House knows perfectly well what the result would be. There would be a slump in unused dogs; they would be thrown, not upon the market, but into the canal, and consequently the price would come down. In the same way if you impose a rate or tax upon the value of land, whether it is used or not, though you cannot throw the land into the canal, there will be a slump in land for exactly the same reason that when you double the tax on dogs you cause a slump in the value of dogs. Your Income Tax—which is so ably advocated by hon. Members opposite— when it is a question of local taxation, and so severely denounced by them when it is a question of national taxation, adds to the price of capital, and therefore restricts production and increases the price; but your tax upon land values, on the contrary, will not increase the price of land, but actually bring it down, because there will be more and not less land in the market available for use. On exactly the same ground that I deprecate taxes on capital, which are specious and attractive at first sight, but which result in the capitalist casting the burden on to the consumer, I advocate a rate on land values because it will not increase the price of land, nor burden the consumer, nor increase the price of any article. On the contrary, it will reduce the price of land, break the land monopoly, provide additional opportunity for labour to get to its raw material, which is so necessary to all labour, and thereby increase the production and increase employment.

We have had many able attacks upon this proposed change in the basis of rating. The Government are going to make doles to the local authorities. They are going to present them with the sum of £2,500,000 at first, rising to £10,000,000 later. Complaints have been addressed to us by hon. Members opposite, and also by some hon. Members on this side, because we are not going to make these doles without insisting that the money shall be so applied that it shall not merely Increase land values and go into the land- lords' pockets. If these doles were made to a particular locality by some American millionaire, if, for instance, Mr. Carnegie freed the town in which he was born— Dunfermline—from rates for all time, by giving them an annual gift equal to the amount of the rates levied at present, everybody will realise what the immediate result would be. The people of Dunfermline would not benefit, except in so far as they owned real estate in that town. The only result would be that the value of real estate in Dunferm-line would rise by the capitalised amount of the rates remitted on the property. Is not that so? If the annual burden to which you are liable on real estate is removed, and put on the shoulders of somebody else, the value of that real estate in the market rises by twenty or twenty-five years' purchase of the rate remitted. [An HON. MEMBER: "Not at all."] It is because we realise that that is so that we, the Land Values group, resist any idea of there being given to local authorities Grants which shall be frittered away and absorbed into the pockets of the landlord in that way. We are told by hon. Members opposite that we are lunatics, and by our Front Bench supporters that we are fanatics. As a matter of fact, the view I have put forward seems to me to be sound sense and sound economics, and if this were not a party question, if we could get round a table and talk the matter quietly over, I do not believe that any hon. Member would deny the truth of my statements.

It is urged by hon. Members opposite that these doles should be given unconditionally, while Members on this side contend that we should welcome very heartily the change proposed in the present Budget. We are glad that these doles are not going even temporarily to the local authorities, because, if they went temporarily—it is very difficult to get butter out of a dog's mouth—we are afraid the doles would go permanently. Therefore, we are very well content to wait another year before these doles are given, so that when they are given they shall be given on sound lines. I think that the lines suggested by the Chancellor of the Exchequer and by the President of the Local Government Board the other day are perfectly sound. They say that the doles shall be used for the relief of rates upon buildings and improvements. What would be the result of that? We were told by the hon. Member for East Northants (Mr. Chiozza Money) that this would be merely a gift to the landlord, and that the occupiers would not benefit from it in the least. On the contrary, if the dole is made in that way, if it is granted solely as a relief to the rates on improvements, the effect will be just the same as the effect of relief from taxation upon products of industry in every other sphere of production. There will be more of the article produced which is relieved from taxation—just as if you take the tax off wheat there will be more wheat in the market, and therefore cheaper wheat for the consumer; or, if you reduce the rates on houses or factories, there will be more houses and more factories produced, and therefore more opportunities for labour in the factories, and more opportunities to get decent houses at reasonable prices.

If you cease to tax improvements and take the rates off improvements, even if it is only to the extent of Is. 6d. or 2s. in the £, you will pro tanto cheapen houses, and thereby reduce the amount of rent which the owners, not only of the new houses but also of all other houses, will obtain, because the larger the supply in the market, the lower the price of both old and new houses. You bring the houses down to a level: wages rise in purchasing power by reason of the fact that housing is cheaper. I wish particularly to insist upon this fact, that it is not only additional houses that will be built by reason of the reduced tax, but also that the houses will be cheaper, just as the wheat is cheaper when additional wheat comes in. For that reason I do welcome this proposal of the Government, the proposal to allocate doles strictly to relieving the rates on improvements, because there will be more improvements created, a larger supply in the market, and cheaper prices. There is more than that in it. I particularly want the House to get away altogether from the idea that we want to penalise the landlords, or want simply to create more houses. The whole object of this change, so far as my Friends and myself are concerned, is this: there is no penalising of improvements; you not only get more improvements, but also more employment. After all, it is more employment that we want rather than even more houses.

Obviously, if we want to improve the present state of society, we have got to increase the number of useful workers in the community, who support all the rest upon their shoulders. Practically all the reforms we have had recently—all the so-called social reforms—have proved fallacious. What they have meant is to take 2s. 6d. out of one pocket and put 2s. 6d., less expenditure, into the other. Without a general increase in productive capacity and power, without a general increase of employment, they did not produce more wealth in the country at all. Here, by this change, we are not merely changing half-a-crown into two and sixpence; what we are doing is throwing open more opportunities for production, and thereby producing opportunities for useful work instead of making useless work for unemployed people in labour colonies, or street sweeping. That is why I am particularly anxious to see this change. We have not only been attacked by hon. Members opposite on the ground that it is desirable to make these Grants without any condition whatever and without distinguishing between the rates on improvements and the rates on land. We have also been attacked, and attacked very ably I think, by the hon. Member for East Northants (Mr. Chiozza Money). He says that any attempt to relieve houses and factories from rates is bad, because it is a relief to the capitalist from some of the charges he bears at the present time. I do not understand how that statement can have been made by a man professing himself to be a Free Trader. I am very anxious to give the House the exact words used, because I cannot help thinking that on calm consideration the hon. Member, who is no mean economist, as well as statistician, will see reason to modify his view. He says:— pense of the landlord appears to me to be nothing less than sheer lunacy. That term has been applied to me, and I think I may also apply it to others. Obviously the cheaper capital is the better for the people in the country. The same applies to houses. It is not the owner of the house, nor the owner of the capital, nor the owner of the factory who will benefit by reducing taxes upon those articles. It is easier in every case for the man who lives in the house and for the man who buys the goods made in the factory. These are the people who in the long run, and I think in the short run too, will benefit by any reduction in these rates for improvements. The hon. Member for East Northants, and I regret to say the hon. Baronet for the Mansfield Division (Sir A. Markham), made a violent attack upon us on the ground that we were plutocrats anxious to shift the taxes from our shoulders on to the shoulders of the landlords. The hon. Baronet the Member for Mansfield, when he had a by-election in N.E. Derbyshire and found that he had a stiff fight in front of him, wired to the Whips here, "Send down the Land Values Group."

Some of my colleagues, who did not know the hon. Baronet as well as I did, went down and spoke for him. Now the hon. Baronet has the effrontery—for I can call it nothing else—to come here, within a month of that by-election, when he had thanked my friends profusely for their help, appeared on their platforms, and echoed their sentiments, and makes an attack upon my hon. Friend the Member for Swansea on the ground that he wanted to shift the taxes off his shoulders on to the shoulders of the landowners, who look after their tenants so much better than the hon. Member for Swansea looks after his workmen. I do not mind a certain amount of hypocrisy in politics, but this really is the limit. I am afraid I interrupted the hon. Baronet in his speech hastily and angrily. But I ask the House whether it was not a case of necessity for interruption in an attack such as that which was made upon the group which so recently helped the hon. Baronet at his by-election. [An HON. MEMBER: "Some of them!"] Some of them. Surely the fact of the matter is this, none of us are in a position to throw stones. We do not at tack individual landlords opposite. We do not even attack landlords, but what we say is—

The hon. Member and myself if we were the Duke of Sutherland, would act exactly as the Duke of Sutherland does, and we should be perfectly justified in acting in the same manner too. Every man who lives under the system in vogue in this country is at liberty to use that system to the best of his ability. What we want to do is to change the system so that it is not possible to act as these landlords or capitalists. I do particularly want hon. Members opposite to understand that we believe they hold their views perfectly honestly on this subject. We do not attribute to them— certainly I do not—any personal advantage in the arguments they use or. in the policy they follow. I believe when hon. Members speak as they do that they believe it is in the interests of the country and not of their own pockets. I hope hon. Members will treat us with the same confidence in the honesty of our intentions. We believe that we are right in trying to shift the burdens from the producers to the landlords. We believe if you open up the land of this country, and make it unprofitable to hold the land for idle or unproductive use, so that you increase opportunities for employment in the country, you increase the production of wealth in the country, and thereby you will injure the capitalist just as much as you will injure the landlord. You will put the capitalist no longer in the position of making men work for him at any price he chooses to offer. We believe that the larger opportunities for employment the higher the wages will be. Speaking for myself and my colleagues, we of the Land Values Group can honestly say that we are not in Parliament to shift the taxes from one man on to another. All we are here for is to increase the opportunity for employment, and to increase the production of things we all want to see in use, and by doing so we believe that we shall secure for the workers, not the pittance they get at the present time, but the full reward of their labour. The hon. and gallant Gentleman the Member for Ohelmsford did me the honour to call me a lunatic earlier in the Debate.

The hon. and gallant Gentleman referred to my lunatic proposals, but he himself made the statement that in a new country this system we are proposing would be an ideal system to go upon.

I am sorry to be obliged to interrupt the hon. Gentleman, but I am afraid he is falling into the habits of the Chancellor of the Exchequer by using rather exaggerated statements. I did not say anything of the kind. I said I did not think that that was a system which in a new country would be necessarily a bad system. I did not say it was an ideal system or use any words of that meaning.

Yes, these were the words, "not necessarily unjust," but that is a very different thing.

I am sorry if I mis-represented the hon. and gallant Gentle man. He said, "not necessarily unjust." That, at any rate, shows that the hon. and gallant Gentleman has changed his opinion in our direction, because formerly I am afraid he was never tired of charging us with gross injustice in the changes we were proposing. Yet in a new country he admits such a change would not necessarily be unjust, but even in a new country land is bought and sold. The first settlers have a better chance than the second. In a new country this change would upset the same vested interests as here, and when I hear the hon. Gentleman talking about injustice to vested in terests—

I never used the words "vested interests." If the hon. Gentleman quotes me, I hope he will quote me correctly.

I used the words "vested interest." When defending vested interests you call them "property"; when attacking them you call them "vested interests"—and I am attacking them. I am sorry if I have misquoted the hon. and gallant Gentleman; I did not intend to do so. The hon. and gallant Gentleman admits that under certain conditions this system would be just. I think if he goes as far as that he will finally come to agree with the Noble Lord the Member for Hitchin, who admits that so far as rating is concerned in this country, some change in the lines of rating land values would be just. We do not argue this change for the purpose of expediency. I should not argue it if I thought it unjust, but I say that the injustice is not to the people who bought the land under the old system, but I say that the injustice is to the people suffering under the present system. I hope the House will forgive me if I tell them a short story as indicating what I mean by injustice. It seems to me that hon. Members opposite suffer from an inverted morality. It is a hard thing to say, but they will see what I mean. A lady showing her daughter some pictures came upon one of Prometheus chained upon a rock, and she commenced explaining the story of Prometheus to her daughter and how the vultures came every morning and devoured his lungs and liver, which were never diminished though constantly devoured, and having described all those moving details to the little child, she paused to hear the child's comment, and the child looked up at her and said, "Oh, mummy, poor vultures, the same breakfast every morning." That little girl suffered from the same inverted morality as the hon. Member for Chelmsford, who has permanently in his mind—and I do him the justice to say without the slightest regard to his own interests—the position of people who would lose a certain amount of privilege enjoyed at the present time if this change, was made. But we have to consider, not the interest of those people who happen to have purchased land pleading their title to it as immune for all time from a change of rating, but we have got to consider the point of view of the whole of society which would benefit by an entire change, and those people often kept out of work because the land is withheld from use and is lying idle. These are the people suffering at the present time. These are the people whose grievances I desire to voice, and it is for these people that the Land Group in this House welcome the changes in the Budget of 1914–15.

I have listened, as usual, with considerable interest, to the speech of the hon. Gentleman who has just sat down. He has certainly, as far as one can judge, very much convinced himself, and I could not help wondering what kind of audience he expected to convince by the arguments he addressed to us to-night. I am not going into the subject which he has made his own. I notice that he spoke of some of his colleagues in this House, and said that they had a certain amount of hypocrisy, and he paid us the compliment, just before he sat down, of saying that we had an inverted morality. Well, after his experience of politicians, it is something to know we have morality of any kind. I intend this evening to follow the example set by the Prime Minister this afternoon and to address myself to some of the general considerations connected with the financial methods of the right hon. Gentleman—financial methods so unique that he has given his own name to them, a name which, I think, will last for a considerable time. Before coming to those subjects, I should like to make one or two observations in reference to the subjects that have occupied most of the time of those who have spoken in this Debate. I notice that the Radical Press has tried to give the impression that the complete change which has taken place in the Budget of the right hon. Gentleman is due to the ruling of the Chair, and I notice that the right hon. Gentleman yesterday, while not explicitly making that statement, added a certain amount of colour to it. Of course, everyone knows there is not a word of truth in that suggestion. Everyone knows that the ruling which was given by Mr. Speaker on Monday, arising out of a point of Order raised by my hon. Friend the Member for West St. Pancras could have no effect whatever in making it more difficult for the right hon. Gentleman to carry out his original proposal. Even if it were the case that it was in deference to Mr. Speaker's ruling that the Budget is to be divided into two, instead of making it more difficult to carry out the original intention, it makes it easier. For if there was only one Budget, it would have to be finished by the 5th August, while under the new arrangement there is unlimited time.

Why, then, does the right hon. Gentleman give that impression? The explanation is not difficult to find. He preferred, and the Press which supports him preferred, that their Radical supporters should think this change was made in deference to the ruling of the Speaker, and not, as we all know, in consequence of the pressure put upon him by the millionaire Friends who sit behind him. There is another observation I would like to make with reference to the pledge about the relief of local rating, to which the right hon. Gentleman has so often referred. That pledge was given very early, and whenever we called his attention to it he always justified himself for not redeeming it by saying that he was waiting for the Report of the Royal Commission. The Commission has reported, and has reported dead against the proposals which he has asked the House of Commons to adopt. Not only the Minority Report, but even the Majority Report gives no sanction for these proposals. In this connection there is another fact which at the time seemed to me interesting. My hon. Friend the Member for Chelmsford (Mr. Pretyman) gave it as his opinion that the Government had not in their own minds any system of valuation which could possibly work, and he was rather under the impression that no such system could be found. What was the answer of the right hon. Gentleman? It was, "What nonsense! The system is in complete working order now in other countries." If that is so, why does he not put the system into his Bill, instead of stating that there is to be an inquiry? Here again the explanation is not difficult to find. I fancy the Cabinet, or the majority of the Cabinet, believe in this new system just as much or as little as I do, and they are not at all willing to commit themselves to putting it into a Bill, but they have no objection to get the support of hon. Gentlemen like the hon. Member who has just sat down if they can get it by merely promising an inquiry.

The Chancellor of the Exchequer in his Budget Statement told us practically that this wonderful valuation committee of his had all the information already, and that it is all there ready to be used. If that is true, what in the name of common sense is the use of putting in an Act of Parliament that every owner of every heredit-ment and every occupier in the United Kingdom is to be asked to answer impossible questions in order to supply information which he already has. The right hon. Gentleman is original as a financier, but nowhere is his originality shown so much as in his dealings in any shape or form with land. Now I come to another subject upon which I wish to address the House. The House will perhaps remember that the President of the Local Government Board, in introducing this Bill, used a phrase which I have seen very frequently in Radical papers of late—he spoke of the new Liberalism. If the substance is correct, the description is accurate, because if it is Liberalism at all it is certainly new Liberalism, and in that new spirit the right hon. Gentleman will be regarded by everyone as the leading exponent, for nowhere is it shown in so marked a degree as in the finance over which he has control. I shall give my reasons for making this statement that there is no principle which has ever been regarded by any Liberal financial expert as essential which has not been broken by the right hon. Gentleman during his term of office. I would remind the House that all the best authorities on finance, not only Liberal, but to whatever party they belong, have regarded regularity in our procedure and in our methods as essential to any sound system of national finance. Of this no one was a more striking example than Mr. Gladstone, and the service which he rendered to the finance of this country was not shown so much in 'his Budgets, to which the Prime Minister referred this afternoon, as in the effort he made to systemise our procedure, to hedge it round with precautions, to prevent irregularities, and to give the House of Commons control over our expenditure. That is regarded not only as essential to national finance, but as essential to any sound business undertaking.

However enterprising a firm may be in its business, however little it may regard sound financial methods, yet there is one particular in which every sound business permits no irregularities, and that is in its book-keeping and its accounts. What has been the position of the right hon. Gentleman in this respect? He has utterly despised every restriction of that kind which his predecessors have adopted. He has not taken the trouble, as is quite obvious, to understand it, and what is more important, he does not understand the necessity for it. It would be easy after what has happened during the last few years to give illustrations of this, and if the right hon. Gentleman wishes it, I am quite ready to give them, but I think it is hardly necessary. The muddle in which we stand in regard to the Finance Bill to-day is a proof, and sufficient proof, of that. I do not think anyone who was in the House of Commons when you, Mr. Speaker, gave your ruling in answer to the point of Order raised by my hon. Friend who addressed you—he spoke of this irregularity which is to be corrected by one method, and, secondly, the irregularity which is to be corrected by another method, and another which is to be corrected, but how it is to be done we do not at present see—and who listened to that ruling, can believe for a moment either that the right hon. Gentleman understood our procedure or realised the importance of regularity in connection with it. The best proof of his views on this subject was the way in which he treated my hon. Friend the Member for St. Pancras (Mr. Cassel), for he could not conceal his anger at my hon. Friend having had the audacity to raise such a consideration, and he accused him of rummaging in the dustbin of ancient precedents. But what does it mean? That the right hon. Gentleman, unlike every one of his predecessors, to whatever party they belonged —every one of them not only recognised the value of these restrictions and submitted to them, but often added new restrictions to get increased security— regards them as utterly intolerable when they presume to interfere with what he, in his discretion, thinks right.

The second difference between the new and the old Liberalism, to which I would like to direct the attention of the House, is the question of the financial control of the Treasury. I have myself referred to that more than once, and it has been referred to often in this Debate. I shall not dwell upon it at any length, but, Mr. Speaker, it is a fact that the financial control of the Treasury is the keystone on which our whole financial system rests. It has from the beginning been its foundation. The Chancellor of the Exchequer has always been regarded as the guardian of the public purse, but when he himself becomes the representative of the chief spending department, who is going to guard the guardian? How in the world can there be any control? It is quite obvious that any of his colleagues cannot be trusted to exercise control over him, and therefore any expenditure for which he is responsible is absolutely uncontrolled. It does not end there. How could any Chancellor of the Exchequer at a Cabinet meeting have the face to insist upon restrictions on the expenditure of his colleagues when every one of those colleagues knew that they were subjects in which his own amour propre was involved. Under these circumstances there has ceased to be any financial control by the Treasury. I should like, if I may, to give a concrete case. Take the Insurance Act. The first measure of social reform for which this Government was responsible was old age pensions. As it happened, and I think to some extent from the necessity of the case there, a burden was thrown forward to a greater extent than was borne on the scheme as it was originally. They then introduced their second reform, the Insurance Act. Surely any prudent Chancellor of the Exchequer would have said, "The Exchequer is in a good condition now. Taxes are giving a larger amount of revenue than we can always hope for in the future. Let us make sure that this position will be reversed, that, if anything, the present Government will bear more than its full share, and that we shall not throw additional burdens on Governments which succeed." What happened? He brought in his insurance scheme; not on. a principle in which employers and insured persons pay with them their share at once, but he delayed the contributions of the State until the benefits commenced. In other words, he deliberately rolls forward part of the burden that should then have been borne to make it be borne by succeeding Governments. I venture to say if there had been any Chancellor of the Exchequer who was free to act, even if the right hon. Gentleman had himself been in that position, that is a system of finance which would not have been permitted for a single moment.

10.0 P.M.

It did not end there. Look at what has happened since. We have contributed already large additional sums to the Insurance Act. There was £2,000,000, or something like it, paid for the doctors. There was an amending Bill last year which took a large sum of money. Supposing there had been a Chancellor of the Exchequer who was exercising control over expenditure when this Estimate was made for more money, would he not have said, "What is this money? Let us look into it. Let us see the extent of it. Is it all? If not, how much more is there?" Any Chancellor of the Exchequer who was controlling expenditure would have taken that line. What happened? He gave that money. There is another million in this Budget, and the Prime Minister said this afternoon that whatever is necessary for the Insurance Act will be provided. Has he any idea what is necessary for the Insurance Act? It is my belief—and time will show whether I am right or not—that its whole financial basis is unsound, and that to deal with it in this way without facing the problem is like pouring water into a sieve. The Prime Minister said "We have altered that. Now the Insurance Act is under the control of a Department independent of the Treasury." What is the good of that when the evil has been done? The whole reputation of the Chancellor of the Exchequer is bound up with the Insurance Act, and so long as he is at the Treasury we may be sure that this evil will go on unchecked, and that the House will be committed to an expenditure the end of which no one can foresee. The third point on which I wish to emphasise the difference between the new and the old Liberalism in finance is in the nature of one particular tax. It was always regarded by all experts upon the subject as essential that no tax should be imposed the cost of collecting which bore too great a proportion to the amount of revenue derived. That is a universal rule. The Prime Minister, I remember, when the Land Taxes, which are the special claim to genius in finance which the Chancellor of the Exchequer has the right to make, were going through, used these words in regard to them:—

My hon. Friend behind me the Member for Sleaford (Mr. Royds) pointed out last night that in the seven years before this Government came into office the annual increase of houses was 135,000. Since the "People's Budget" it has been 61,000—a falling off of something like 70,000 a year, at a time when houses are so much needed!

When my hon. Friend asked, "What good have you done?" the hon. Member who last spoke (Mr. Wedgwood) gave the answer. He said, "They have lowered the value of land." What an achievement! It is easy for a Government, if it pleases, to lower the value of anything. The Chancellor of the Exchequer has lowered the value of Consols during his term of office. He will never himself claim that as a merit, but, if I understand one of his followers rightly, he considers that that is a benefit which the right hon. Gentleman has conferred upon mankind. It may be true that it does lower the value of land, but if, at the same time, it prevents the building of houses, what is the good of that to the people "who need houses? Even the hon. Member who spoke last—and I am not going to join with any of those who say that he is not very sane in his views—made the very same remark. He said that the rents of houses will depend on the number of houses. Therefore, it is quite plain, since the right hon. Gentleman has succeeded in diminishing the number of houses being built, he has done all he could to make the rents of houses as dear as possible.

The last of the differences between the old and the new Liberalism to which I shall refer is the contrast between economy and extravagance. The old Liberals used to appeal for support on the ground of retrenchment—on the ground that they would keep taxes down, and allow them, as Mr. Gladstone said, to fructify in the pockets of the taxpayers. That is not the new method. The new Liberals go down to by-elections and try to get support, not by promising economy, but by promising extravagance—by saying to the particular town, "I," not the taxpayer, not even the Government, but "I, your fairy godmother, have given you, or am going to give so many thousands of pounds to your particular town," and the plea is not made any better because, as a matter of fact, it turns out not to be correct. That is the new Liberalism. But the old Liberalism is not so old after all. Everyone who took an interest in politics at the time will remember that, before the General Election of 1906, there was no charge more frequently made against the Unionist Government, than the charge of their extravagance. [An HON. MEMBER: "And there was none more deserved."] None more deserved! Then what do you think of the present Government? We were attacked because we had spent money badly. We were attacked on that ground, and also because we had spent too much money. The Prime Minister at that time made a great many speeches, and I should like to read an extract from one of them:— control, he is trying to force it on the local authorities over whom he has no control. The hon. Gentleman the Member for the Hexham Division (Mr. Holt) said that if the local authorities think they are going to get any additional relief they are fools. They will be easily fooled if they do think so, for the Chancellor of the Exchequer has made it plain that the use which he intends to make of the Grants which he has given is to compel the treasurers of local authorities to follow his example and cure every difficulty by pouring out money like water. The right hon. Gentleman is very interesting to us all, and I have often tried to understand what is the theory, if there is one, at the back of his mind, on which his financial system is based. I remember that at the time of the "People's Budget" I ventured to say that whatever philosophy of taxation the right hon. Gentleman possessed he had derived from a little book which had just been published by the hon. Member for Blackburn (Mr. Snowden), called, I think, "The Socialist Budget." If that is true, as so often happens, the pupil has far surpassed his teacher, for, unless my memory deceives me, I saw in a speech or an article that the hon. Member for Blackburn had spoken, and very accurately, I think, of Lloyd Georgian finance as a system of feeding the dog with a bit of its own tail. The right hon. Gentleman has got far beyond the hon. Member for Blackburn. I think the philosophy of taxation of the right hon. Gentleman is this: He tries to use Budgets to correct the inequalities of the division of wealth. Well, I am not one of those who are satisfied with the way wealth is distributed now. I think that the main social problem, not only in this country but in all civilised countries, is to find some means of obtaining a fairer distribution of wealth without drying up the springs from which that wealth comes. That is my belief. [An HON. MEMBER: "Come over here."]

I think the hon. Member will find that that view is held quite as strongly on these benches as by the hon. Member for Swansea (Sir A. Mond), or other hon. Members opposite. But I differ from the right hon. Gentleman. I do not believe it can be achieved by taxation. That is my view of it. The theory of the right hon. Gentleman, so far as I can understand it, is that the thing to do is to take from the rich in taxation and to give to the poor in doles. That is his theory. Well, if that is such a good plan, it is a wonder it never occurred to any one, at least anyone in his position, before the right hon. Gentleman. On the face of it, it seems so simple. It has nothing but advantages in every direction. It is good, of course, for the poor, for they get the money; it is equally good for the rich, for, like a man who is fat, they are all the better for being reduced; and it is best of all for the Minister who advocates it, for it enables him to keep in office and enables him to get his share of wealth. The theory of the right hon. Gentleman really is that of the bee-keeper, who sends out his hive of bees to collect honey. When they come in he takes the honey from them and leaves them only enough to live upon, or else he gives them sugar and water instead. The bees are built in such a way that they go on collecting honey, but it might not work so well with the human bee, and if you took this honey away from him you might find that he would not collect it, and that would upset your whole system. That is, as I understand it, his theory of taxation. I understood how the right hon. Gentleman had arrived at that theory a little better after I read his speech at a garden party last Saturday. We then saw what his theory of life was. It is based on the strictest system of predestination. Everything is luck. If you inherit wealth that is luck. If you have brains, moral character, force of any kind, and collect wealth for yourself, that is luck. It is all a pure case of luck whether a man is industrious and thrifty or idle and a wastrel. That is his theory of life, and under those circumstances it is no wonder that he tries to bring it into practice, and lay it down as the duty of the industrious and thrifty that they should support the idle and the wastrel.

What is the defence, apart altogether from any other consideration of this increase in the expenditure of the country? It was given by the Prime Minister this afternoon. He said: Which of these objects would you do away with now, or do you say ought not to have been carried out? If he wants an answer to that conundrum I should refer him to his own speeches before the election of 1906. We put forward the same defence. He demolished it by the very simple process of saying that Governments like other people have got to cut their coats according to their cloth. If the view of the right hon. Gentleman is correct, as my right hon. Friend (Mr. Austen Chamberlain) said yesterday, where is it to end 2 Everyone of the colleagues of the right hon. Gentleman—I am sure the President of the Board of Trade will agree with me —could produce schemes better than those of the Chancellor of the Exchequer, and for everyone of which a case quite as good could be made as that which could be made from the schemes of the right hon. Gentleman. I agree with what has been said by everyone, that there is no likelihood—indeed, no possibility—of expenditure being reduced, and I agree, also, that expenditure which is necessary should be borne by those who are best able to bear it. I think those who pay have the right to ask two things, and I fancy that because they have not got those two things the Gentlemen on the benches opposite for the first time showed some glimmering of appreciation of financial necessities, and made their protest against the policy of the Chancellor of the Exchequer. These two things are, I think, first, that there should be no waste, that there should be strict economy; and, secondly, that in choosing what subjects of social reform the Government is to deal with, it must have regard not only to the value of that reform in itself, but to the state of the Exchequer at the time the reform is proposed. I think they have a right to ask that the Government should always realise that only a certain amount of money can be spent in that way, and they have a right to demand that proper care should be taken that that money is spent in a way which will give most benefit to the people of this country.

Can anyone pretend that that has been done in this case? The best proof of it is the proof which was pointed out by the hon. Member (Mr. Holt), that in every case the estimate as to what the expenditure would amount to has not only been exceeded, but ridiculously exceeded. That in itself shows that it had not been carefully thought out. But apart from that, does anyone who knows the position of the Insurance Act to-day, who remembers the way in which it was rushed through this House with a reckless ignorance for which there has never been a parallel, say that proper care was taken to see that that vast sum of money was spent in the way which would give most benefit to the people of this country? Where is all this to end? I really would like hon. Gentlemen opposite to put that question to themselves. It is very easy— I think the Chancellor of the Exchequer has found it easy—to get what money he wants by taxing the rich. I suppose every one, even the Chancellor of the Exchequer, will admit that there must be some limit. When are we going to reach it? The right hon. Gentleman the Member for the Spen Valley Division (Sir T. Whittaker), who, like everybody else who spoke on the benches opposite, except those, who spoke on the Front Bench, did his best to warn the Government. He pointed out that taxation had already almost reached the limit in that matter. He argued that once it reaches a scale where evasion is considered not immoral, as happened in the days of smuggling, the Treasury will find that the money does not come to it. There is another and a greater risk. It is quite true, as the Prime Minister said to-day, that there has been during the last twenty years an immense increase in the wealth of this country as in every other industrial country. But it is far truer of us in this country than of the people of any other, that a large part of the increase of wealth has not been due to the production of wealth in this country. [An HON. MEMBER: "No!"] A large part of it! I think that is self-evident. A large part is due to financial profits through this country being the financial centre of the world, providing money for developing industries in other countries. I do not think anyone can deny that. There is nothing in the nature of this that makes it inevitable that that kind of wealth should continue to come to this country.

Apart altogether from any question of fairness, if you regard those wealthy people simply as a milch-cow from which the State is to get all it can, is it not evident that if you put burdens on them greater than are imposed in other countries, you will find ultimately that you drive that kind of wealth from this country to other countries? That has happened. I think that is proved by the necessity which the Chancellor of the Exchequer has found for taxing foreign investments. When the Prime Minister told us this afternoon that in other countries similar burdens are placed on wealth, I am sure he was speaking without having looked into the facts. I am not in a position to give the actual facts, but I have spoken to very rich men in the United States and Canada, and they have both told me that there is no taxation of wealth in their countries at all to be compared with that in this country. That is all I wish to say on that subject except this. In addition to the burdens you place upon wealth, a great deal of damage has been done by the way in which you have attacked it. We had, for instance, an example of the difference of method this afternoon. No one who listened to the speech of the Prime Minister to-day, and that of the Chancellor of the Exchequer yesterday, could have believed that they were defending the same proposals. The Chancellor of the Exchequer is not content when pursuing his electioneering to get support by promises to the poor, but he relies quite as much upon getting it by attacking the rich. Well, is that wise from any point of view? Surely the least you can do is to treat them as though you love them, and, if you are to take their money, not to frighten them unnecessarily, and get the money sent away.

There is only one other consideration which I should like to put before the House. What would be the position of this country to-day if we were suddenly faced by a great war? Has the Chancellor of the Exchequer ever thought of that" [An HON. MEMBER: "What has been paid off the National Debt?"] What an example that is of the views of the hon. Gentleman opposite. He assumes that they have paid off £100,000,000 of Debt. They have not. But suppose that they had, that would be an annual saving of £3,000,000. They have added an annual outgoing of £50,000,000 to set against that. What would happen? Where would we get taxation which would raise the revenue that is necessary? Even the Prime Minister—I am speaking from memory but I think that I am accurate-told us when he was Chancellor of the Exchequer that an Income Tax of Is. in time of peace was something very much to be deprecated. It is from the Income Tax that everyone used to expect to get the necessary money in time of war. Where would you get it now? Look at another aspect. At what price could you raise a loan if you were at the beginning of a war? I do not think that I can put this more clearly to the House than by giving them a contrast between the price of our national security at the time that the right hon. Gentleman took office and the price at which it stands to-day, and a contrast with the change which has taken place in the same time in the national security of Germany. At the time that the right hon. Gentleman took office Consols stood at 87. They are now at 74, which is a fall of 13 points. In the same time, although Germany in the interval has built up a navy, and as the Prime Minister reminded us, has built it partly out of borrowed money, while we have not been borrowing. [HON. MEMBERS: "Hear, hear!"] Yes, look at the result. In the same time while our national security has fallen 13 points, the national security of Germany has only fallen 5 points.

The only answer that I can give to the hon. Member is to say that I think that he is qualifying for a place on the Front Bench. A fall of 13 points, in what in time of war would be our greatest national asset, is the contribution of the right hon. Gentleman to the security of the country.

We have reached very nearly the end of a four-days' Debate on the Amendment to the Second Reading of the Finance Bill. I will not occupy the time of the House for more than a very few minutes, because I am sure that most Members here are prepared to go to a Division. An official Amendment of the Second Reading of the Finance Bill is to be expected year by year when the Finance Bill comes to be proposed, and it is to be observed at the end of this Debate that neither the Amendment, which is proposed, nor the speech to which we have just listened, contains any criticisms as to the objects on which we have proposed to spend the money which this Finance Bill raises, or yet as to the sources from which it is proposed to raise the necessary funds. Time was, before the right hon. Gentleman became the Leader of the Opposition, whenever there was an official Amendment to the Second Reading of the Finance Bill, one used to hear about broadening the basis of taxation. Year after year, in the time of his predecessor, we were told that there was a more excellent way. But now it would be true for any Tariff Reformers who sit on the benches opposite, to say:— There is one exception I must in honesty make. In the peroration of the hon. Gentleman the Member for Christchurch (Mr. Croft), we may be quite certain that Tariff Reform will find a place; and in that speech which he made in the Debate yesterday—I am sorry that he had not a larger audience, therefore I shall be excused if I repeat what he said—he observed in his final sentence:— wasteful is a thing which we are perfectly willing to leave to the judgment of our fellow countrymen. [HON. MEMBERS: "When, when?" "Do it now!"] Then the right hon. Gentleman referred to the Insurance Act, and he told us that he was much concerned because there had been some difficulty in determining what would be the precise future of the finance associated with the Act. I am not surprised that the right hon. Gentleman showed a little delicacy on that subject. If I do not mistake, it was he who once observed, in a crisp and clear-cut sentence, with regard to the Insurance Bill:— belonging to that person passes. That is the moment when it is possible by means of this valuation to cheek the true value of such estates, and there is not the slightest inconsistency or the slightest absurdity in saying, as the fact is, that the Valuation Department has enabled Death Duties to be collected with very much greater accuracy than it was ever possible to collect them before.

Finally, the right hon. Gentleman preached from the text that in the old days Liberalism used to mean economy, but nowadays it meant extravagance. What is the Amendment in support of which the right hon. Gentleman was speaking? He denounced us as extravagant on an Amendment which he was supposed to be speaking in favour of and which complains that in this year we are only exacting an Income Tax of 1s. 3d., whereas according to him it ought to be an Income Tax of 1s. 4d. I remember a Tory leaflet, which had a popularity, a temporary popularity, at by-elections, which explained what the Conservative party, or, at any rate, the Conservative candidate, was prepared to do to improve the Insurance Act, and on a reasonable and moderate calculation one could see, if you believed the leaflet, that the Tory party was prepared to add something like an additional £12,000,000 to the expenditure on the National Insurance Act. It is under those circumstances that the right hon. Gentleman comes forward and says, following the Prime Minister, who made a general review of the financial situation, that he too would make a general review, and the general effect of what he has to say is that now there is extravagance on the part of the Government, whose expenditure he wants to increase. What is the real fact about the situation created by this Amendment? It is not an Amendment which complains of the objects to which we propose to devote the money; it is not an Amendment which complains of the sources from which we propose to raise this money; it is an Amendment which complains of two points—first, that we do not make certain temporary Grants to local authorities in the present financial year, and, secondly, that we make the valuation which we propose a condition of the Grants in future. As regards the first point, hon. Gentlemen opposite, I know, wish to be fair about it. It is not accurate to speak of what we are now doing: as denying to local authorities some Grants to which they had previously been entitled. They had their old Grants, and we proposed to abolish those old Grants and give them certain new Grants. We find that, in the conditions in which we stand, we must proceed with those old Grants for the period from the 1st December of this year to the 1st April of next year. But though that is so, we still are able to provide the £1,000,000 required for national insurance and the like, the £600,000 required for necessitous school areas and the feeding of school children, and the further £250,000 for nursing and, I think, laboratories. So that so far from denying that which we had hoped to be able to provide in this interval of four months, we are actually providing a total sum of nearly £2,000,000 in respect of these very matters. That is the extent to which a modification must be made on that point.

Then I come to the second point. Complaint is made because we propose to make a proper valuation a condition upon which these further Grants shall be distributed. Is that really opposed by the mass of the party opposite? Very good and high authority comes from the other side to support the very principle which we are endeavouring to enshrine in our Bill. The late Leader of the Opposition (Mr. Balfour) said this in 1909:— Division (Mr. F. E. Smith), who represents Liverpool, which is interested in these matters, said in 1910:—

right hon. Friend the Chancellor of the Exchequer?

The real truth is that any man who in this Division is prepared to refuse to assist the Second Reading of this Bill by resisting the Amendment, is prepared on his part to stand aside while we are engaged in certain advances with which he must surely sympathise. What is it that these-Grants are designed to do? They are designed, for the first time, to bring a contribution from rich people by a graduated Super-tax, to the assistance of the oppressed and poor local authorities. They are designed to give assistance to areas where you find a great expenditure on education, due, on the one hand, to a low rateable value, and on, the other hand, to a multitude of workmen's children, which makes the carrying on of the work of education. nearly impossible. They are designed to do something to equalise the position that is now so unequal between areas where great sums need to be spent on housing, and areas filled with people who live in rich houses and are clothed in fine linen every day. Hon. Members opposite do quite right to resist that. They want to resist it. They wish to resist it. But I want to know whether there are people on this side of the House who are prepared to join them in resisting it—as they most unquestionably do—whatever their motive—if they put obstacles in the way of the Second Reading of this Bill.

Question put, "That the words proposed to be left out stand part of the Question."

The Housedivided: Ayes, 303; Noes, 265.

Main Question put, and agreed to.

Bill read a second time, and committed to a Committee of the Whole House for Monday next (29th June).

Affiliation Orders Bill

Considered, as amended (in the Standing Committee).

CLAUSE 1.—(Appointment and Duties of Collection Officer in respect of Affiliation Orders.)

Amendment made: In Sub-section (2) after the word "satisfied" ["satisfied it is undesirable"] insert the word "that."

Motion made and Question, "That the Bill be now read the Third time,"— [ Captain Jessel ]—put, and agreed to.

Bill read the Third time, and passed.

The remaining Orders were read, and postponed.

Business of the House

Motion made and Question proposed, "That this House do now adjourn."—[ Mr. Gulland. ]

On Monday we shall take the Foreign Office Vote, and on Tuesday the Salary of the First Lord of the Treasury and the Inland Revenue Vote.

Trade Dispute, Burton-On-Trent

Charge of Assault

I desire to call the attention of the Home Secretary and of the House to what has become known as the Burton case. The Home Secretary to-day gave a reply to a question of mine in which he declined to interfere with the sentence, and he did so on the ground that all the formalities of the case had been properly carried through by the Court, and there was, therefore, no ground for his interference. I desire very briefly to direct his attention to the preliminaries which led to the alleged assault, and to ask him whether these will not justify him in considering the whole question afresh. As the Home Secretary and the House knows there is a strike proceeding of some very ill-paid work girls, and Mr. Vale Rawlings, who is not a paid official of any trade union, was assisting the girls to conduct their strike. The employers had agreed to receive a deputation. About the time of the deputation, from twelve to fifteen girls— this is the statement of the inspector himself, and I have here the transcript of the official notes of the trial; doubtless the Home Secretary has them, too—were in the street with Mr. Rawlings, who was making a note of the points put for the employers when the deputation waited upon them.

There was no disturbance. There was no crowd, and, so far as I know, there was no charge or complaint of obstruction or anything else, but Inspector Oulton of the police happened to be passing. The inspector, I understand, made a jocular remark to one of the girls, which was responded to in the same spirit. Mr. Rawlings, not knowing what had happened, made reply to the inspector to the effect that he had better go and mind his own business. Thereupon the inspector charged him and the girls, but particularly him, with obstruction. The only extract I shall read from the Report of the case is one paragraph on that head. Mr. Bretton, who prosecuted, made this statement:—

Notice taken that forty Members were not present. House counted, and forty Members not being present, the House was adjourned at Twenty-two minutes after Eleven o'clock till To-morrow (Friday).