House Of Commons
Wednesday, 12th May, 1915.
The House met at a Quarter before Three of the clock, Mr. SPEAKER in the Chair.
Private Business
Electric Lighting Provisional Orders (No. 1) Bill,
Electric Lighting Provisional Orders (No. 2) Bill,
Gas and Water Provisional Orders (No. 1) Bill,
Read a second time, and committed.
Local Government Provisional Order (No. 5) Bill,
Second Reading deferred till To-morrow.
Local Government Provisional Orders (No. 6) Bill,
Local Government Provisional Order (No. 7) Bill,
Read a second time, and committed.
Conway Fisheries Provisional Order Bill,
Reported, with Amendments [Provisional Order confirmed]; Report to lie upon the Table.
Bill, as amended, to be considered To-morrow.
Sea Fisheries (Cardigan Bay) Provisional Order Bill,
Reported, with Amendments [Provisional Order confirmed]; Report to lie upon the Table.
Bill, as amended, to be considered To-morrow.
Sea Fisheries (Poole) Provisional Order Bill,
Reported, with Amendments [Provisional Order confirmed]; Report to lie upon the Table.
Bill, as amended, to be considered Tomorrow.
Local Government Provisional Orders (No. 2) Bill,
Reported, without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.
Bill to be read the third time To-morrow.
Local Government Provisional Orders (No. 3) Bill,
Reported, with Amendments [Provisional Orders confirmed]; Report to lie upon the Table.
Bill, as amended, to be considered To-morrow.
Local Government Provisional Orders (No. 4) Bill,
Reported, without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.
Bill to be read the third time To-morrow.
Alien Enemies (Petitions)
I beg to present a Petition, signed by a quarter of a million of the women of our Islands, asking this honourable House immediately to take the necessary steps to ensure the safety of their homes, by interning all alien enemies of military age, and by removing all alien enemies—men and women alike—to a distance of at least 30 miles from the sea coast.
I beg also to present a Petition signed by a quarter of a million of women in these Islands, with a like prayer.
Agriculture (Scotland)
Copy presented of Third Report of the Board of Agriculture for Scotland for the year ended 31st December, 1914 [by Command]; to lie upon the Table.
Motor Car Acts
Copy presented of Order by the Secretary for Scotland, dated 20th April, 1915, partially rescinding the Motor Cars Regulation (County of Argyll) (No. 3) Order, 1905 [by Act]; to lie upon the Table.
National Insurance Act
Copy presented of Special Order, dated 7th May, 1915, made by the National Health Insurance Joint Committee and by the Scottish Insurance Commissioners, acting jointly, entitled the National Health Insurance (Special Customs Crown Employment) Order (Scotland) (No. 1), 1915 [by Act]; to lie upon the Table, and to be printed. [No. 231.]
Copy presented of Special Order, dated 7th May, 1915, made by the National Health Insurance Joint Committee and the Scottish Insurance Commissioners, entitled the National Health Insurance (Special Employers Custom) Order (Scotland), 1915 (No. 1) [by Act]; to lie upon the Table, and to be printed. [No. 232.]
Canada
Copy presented of Papers relating to the Amendment of the British North America Act, 1867 [by Command]; to lie upon the Table.
Trade Reports (Annual Series)
Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 5,443 and 5,444 [by Command]; to lie upon the Table.
Army
Copy presented of Amendments to Rules for Military Detention Barracks and Military Prisons [by Act]; to lie upon the Table.
East India (Financial Statement And Budget)
Address for Return "of the Indian Financial Statement and Budget for 1915–16 and discussions thereon in the Legislative Council of the Governor-General (in continuation of Parliamentary Paper, No. 232, of Session 1914)."—[ Colonel Yate.]
Oral Answers To Questions
War
Steam Fishing Fleets (Protection Against Submarines)
1.
asked the First Lord of the Admiralty if he can afford any further protection to the steam fishing fleets, on account of their being made a special object of attack by the enemy submarines because they are being so largely requisitioned for mine-sweeping and patrol purposes?
The question of affording further protection to fishing vessels from submarine, attacks has been closely considered by the Admiralty, in consultation with a deputation representing the owners of fishing vessels.
Admiralty Contracts (Guaranteed Profit)
2.
asked the Secretary to the Admiralty if any contracts have been placed on the basis of a guaranteed profit to the contractors, and to what amount; and whether any steps have been taken to check the costs in the interest of the taxpayers?
A considerable number of contracts have been placed on the basis of payment of actual cost, plus an agreed rate of profit. The costs are carefully checked by Admiralty officers.
Royal Dockyards (Wages)
3.
asked the Secretary to the Admiralty if he is aware that the inspectors of trades in His Majesty's dockyards have had no increase in their pay since 1907; and whether, in view of the increased cost of living, he will grant them an increase?
The answer to the first part of the question is in the affirmative. With regard to the second part of the question, it has recently been decided after full consideraton not to increase the scales of salary now authorised. I may add that during the War inspectors are being paid for overtime in excess of fifty-six hours a week.
4.
asked the Secretary to the Admiralty if his attention has been called to a resolution passed by the Gibraltar Dockyard Local British Work men's Association, in which it is stated that the minimum wage for labourers employed in His Majesty's dockyard at Gibraltar is 13s. 6d. per week, and that food prices, for example, have risen 33 per cent. since last July; and, if so, whether he has considered what ought to be done in the form of war bonus or otherwise to enable the Government workers in the Gibraltar dockyard to meet the increased cost of living due to the War?
Men sent from the Home dockyards for service at Gibraltar will receive the emergency increase granted in connection with the award of the Committee on Production. They have already received the increases granted in the replies to petitions to the different classes to which they belong as from 28th September. The case of the locally entered men is receiving careful consideration, and I hope that a decision may be reached very shortly.
Military Service (Age Limit)
7.
asked the Under-Secretary of State for War whether he is aware that both Germany and Russia have accepted the age of forty-five above which military service is not obligatory, and that in consequence male civilians above forty-five are being exchanged between those two countries; and whether, in view of this fact, the Army Council will now accept forty-five as the age limit of military usefulness and allow civilian alien enemies above that age to leave this country or be exchanged against similar British subjects?
I understand that the legal limit for compulsory service in Germany is still forty-five and that this age has been accepted by Russia as the basis of reciprocal exchange between the two countries. The Army Council are not, however, prepared to accept forty-five as the maximum limit of military usefulness.
Recruiting
8.
asked the Under-Secretary of State for War whether he is now in a position to give the number of men employed as omnibus conductors within the enlistment age in the Metropolitan area; and whether he can see his way to impress upon the employers of these young men that their services are required in the New Armies?
No, Sir, I cannot give this figure, but, as I stated on the 20th ultimo, special steps of the kind suggested in the latter part of the question are taken.
11.
asked the Under-Secretary of State for War if he has seen a copy of a letter appearing in a Manchester paper last week, signed E.H.L., sergeant in the Cheshire Regiment, in which the writer said that shirkers are either to enlist at once or that they are to be compelled to serve, and that he and others, when they get a squad of these recruits, will see that things do not go smoothly, but that they will get a bit of their own back; will he state if non-commissioned officers are encouraged or permitted to write such letters to the Press; if they have received any official authority to say that those men who have not enlisted are going to be fetched; and will steps be taken to identify the writer of this letter?
I have not seen the letter to which my hon. Friend refers. I am afraid that many letters making stupid and uncalled-for suggestions appear from time to time in the Press, and I am not prepared to take any steps to identify the writer. I may add that non-commissioned officers are, of course, not encouraged or permitted to write such letters as that described.
47.
asked the Prime Minister whether there are at the present moment a considerable number of able-bodied young men employed as clerks in the Army Pay and Record Offices; whether their work to a very large extent can be done equally well by women; and. if so, will he consider the advisability of making such arrangements as will allow of these young men joining the New Armies without further delay?
Inquiries are already in progress to ascertain whether it is practicable to increase the number of women employed in these offices, and the desirability of releasing suitable men who wish to join combatant units is not being lost sight of.
45.
asked the Prime Minister whether he is aware that the movement inaugurated by his address on 4th May at the Westminster Palace Hotel for promoting further recruiting in the distributing trades is handicapped by the fact that so many young men are now employed in Government Departments on work not of an urgent character; and can he by some process of adjustment introduce such changes in the administration of those Departments as will meet the difficulty complained of?
Heads of Departments have already been invited to make every possible arrangement for releasing those members of their staffs who are eligible for military service.
81.
asked the Financial Secretary to the Treasury whether at least 500 young men have volunteered to join the Colours in the various Civil Service Departments; and whether in many cases permission has not been granted?
Very large numbers of Civil servants have, as the hon. Member is aware, already joined the Colours, and I am sure that large numbers are still anxious to do so. They are, as I have frequently stated, being allowed to go whenever it is possible to make proper arrangements for the execution of the necessary work of their offices. I cannot state what is the number of those who cannot be allowed to leave their work.
Has a large number of them been refused permission to go?
Unfortunately, where it is impossible to arrange for a man's work to be postponed or to be done by somebody else, the man has to stay.
The men are wanted and yet you will not let them go.
Because, though it may be a regrettable necessity, the work of the Government must be carried on.
Is the hon. Gentleman aware that there are women willing to take the place of these men?
Yes. Accordingly I have only to-day sanctioned the employment of a hundred women to take the place of a hundred men to enable them to go.
Could not the work of the Valuation Department be entirely suspended until after the War?
I think that if the hon. Member knew how we were being overwhelmed with complaints as to people being discharged from the Valuation Department, he would not ask that question.
Could not the hundreds of policemen who are superannuated be engaged to relieve these young fellows?
South African Natives
14.
asked the Under-Secretary of State for War whether he is aware of the military instincts and fighting qualities of the Zulu, the Matabele, the Basuto, and other kindred races in South Africa, and that they are greatly disappointed that they have not so far been allowed to fight the enemies of Great Britain; whether the South African Government has deemed it inadvisable to allow these coloured warriors to participate in the War with the Germans now proceeding in South Africa; and whether the Secretary of State for War will consider the possibility of allowing these warriors to take their place along with our Indian and other troops in Flanders and France?
I am aware of the martial instincts of the races referred to, and their loyalty is unquestioned. It is a fact that General Botha has deliberately abstained from employing armed natives with him as combatants in German South West Africa. No trained military forces of South African natives exist, and their employment as suggested would be both undesirable and impracticable.
Is the right hon. Gentleman not aware that these South African natives, equally with the Indians and the Maoris, are British subjects, and that they are becoming restive at not being allowed to take their place in the fighting line? When they were savage nations fighting against England, were they ever guilty of the savage cruelties and outrages which the Huns have committed?
I have never made such a suggestion.
Crucifixion Of Canadians (Reported)
15.
asked the Under-Secretary of State for War whether he has any information regarding the crucifixion of three Canadian soldiers recently captured by the Germans, who nailed them with bayonets to the side of a wooden structure?
No, Sir; no information as to such an atrocity having been perpetrated has yet reached the War Office.
Is the right hon. Gentleman not aware that Canadian officers and Canadian soldiers who were eye-witnesses of these fiendish outrages have made affidavits? Has the officer in command at the base at Boulogne not called the attention of the War Office to them?
No, Sir. We have no record of it.
Will the right hon. Gentleman inquire into the matter?
Yes, Sir.
Army Chaplains
16.
asked the Under-Secretary of State for War if the Army chaplains are the only officers in the Army whose scale of pay has not been increased in recent years; and how their pay and pensions compare with those of Army doctors and veterinary surgeons?
No, Sir. There are other departmental officers in the same position. It would not, I fear, be possible to give the figures for which the hon. Member asks by way of answer to a question, but I shall be glad to send them to him if he so desires.
17.
asked if the scale of pensions for Army chaplains retiring after 20 and 25 years has been lowered from 12s. 6d. and 15s. a day, respectively, to 13s. and 10s.; and, if so, for what reason?
The reductions to which the hon. Member refers were made twenty-one years ago, on the ground that the higher rates favoured unduly the voluntary retirement of chaplains who were still in every way fit for their duties.
18.
asked how many Army chaplains are there now at the front for every 10,000 men?
I am afraid that I cannot state the exact proportion of chaplains now with the troops at the front, but the scale of provision is one chaplain to a brigade with an additional chaplain where three or more battalions in the same brigade each contain a majority of men belonging to the same denomination. Chaplains are also provided for divisional troops, field ambulances, and hospitals.
Motor Ambulances With Expeditionary Force
19.
asked the Under-Secretary of State for War whether there is a deficiency in motor ambulances for the carrying of British wounded from the front to the hospitals; whether this deficiency was particularly noticeable after the recent fighting at Neuve Chapelle; whether he is aware that charitable organisations anticipate no difficulty in purchasing such ambulances from the manufacturers provided sufficient funds can be collected; and, supposing the facts are as alleged, will he say why the Government fails to provide sufficient mechanical transport for the service of its wounded soldiers?
No, Sir, there is no such deficiency, nor is there any truth in the suggestion that it was particularly noticeable after the recent fighting at Neuve Chapelle. On the contrary, I am informed that the work of the motor ambulance convoys throughout this battle was deserving of special praise.
May I ask if it is not a fact that the Red Cross Association has made the allegations referred to in the question, and has asked for further motor ambulances?
I have no knowledge of any such allegation being made by the Red Cross Association, and I should be very much surprised if they have made it.
Press Censorship
21.
asked the Under-Secretary of State for War, seeing that there is no difference in substance between the principles, opinions, and advice contained in "l'Independance Belge" with reference to Belgium and the principles, opinions, and advice with reference to Ireland for which "Irish Freedom" and "Sinn Fein" have been suppressed, whether he will state the reason for this difference of treatment under the Defence of the Realm Act; whether the military authorities hold the merit or demerit of free opinion to depend on the country to which it relates or on the country in which it is published; and whether they are prepared to accord to an Irish Nationalist newspaper published in London the same measure of freedom that they are now according to "l'Indépendance Belge"?
The action of the military authorities in regard to publications circulating in the United Kingdom is governed by the Defence of the Realm Regulations, and the hon. Member may rest assured that newspapers containing matter contravening those Regulations will receive equality of treatment at their hands wherever they may be published.
The right hon. Gentleman has not accounted for the actual difference in practice, which is really the point of the question?
I am informed there is no such difference as the hon. Gentleman fears. There is equality of treatment.
22.
asked the Under-Secretary of State for War by whom the duty of censoring the Press on behalf of the military authorities is discharged in Ireland; how it happened that the printing machinery of Patrick Mahon was seized and taken to Dublin Castle for having printed the "Irish Worker," a paper which Mahon never at any time printed; what compensation has been paid for the loss and injury thereby caused; and whether he will specify the provision of the Act under which the issue is prevented of a paper which has not transgressed the Act by proceedings against a paper never printed in that office?
The competent naval or military authority is the person empowered under the Defence of the Realm Consolidation Regulations to take steps to prevent or deal with offences against the Regulations. The seizure of certain parts of the printing machinery belonging to Mr. Mahon was carried out in pursuance of the power thus vested in the competent authority because the machinery was being used for the printing of a newspaper which contravened the Regulations referred to. Those parts of the question based on the assumption that the offending newspaper was not printed by him accordingly do not arise. No compensation has been or will be paid to Mr. Mahon.
Can the right hon. Gentleman say what is the newspaper in connection with which this seizure was made?
Do you mean its name?
Yes.
I believe its name was "Scissors and Paste."
Welsh Regiments (Wearing Of Flash)
24.
asked the Under-Secretary of State for War whether, having regard to the fact that Welsh regiments have no other distinctive emblem than the flash, that Wales has raised more recruits during the War in proportion to the population than any other component part of the United Kingdom, that the Scottish Highland regiments are allowed to wear khaki kilts, which are not in any sense national emblems, and that the flash is worn on the back and so will never be seen by the enemy, the military authorities will reconsider their decision which has caused much disappointment and irritation and allow the officers of the Welsh regiments to continue to wear the flash on khaki as well as on scarlet tunics?
Yes, Sir, this matter has been reconsidered, and authority to wear the flash with the service dress will be given for the period of the War.
Union Cable Company
42.
asked the hon. Member for the Saffron Walden Division, as representing the First Commissioner of Works, if Moritz Kreemer is still a director of the Union Cable Company; where does he now reside; and what steps the Office of Works has taken to secure that no information about Government cables reaches Moritz Kreemer?
Moritz Kramer, so far as is known, is still a director of the company in question. His place of residence is not known. The cables are for electric wiring purposes only, and even if Mr. Kramer were to obtain any information as regards the order, there would be no detriment to national interests.
Co-Operative Societies (Income Tax)
32.
asked the Chancellor of the Exchequer if co-operative societies throughout the country are supplying large quantities of goods to canteens and to non-members of their societies; and if he will require them to be assessed for the purposes of Income Tax, and so relieve the general traders from this unfair competition?
I would refer the hon. Member to the replies which I gave to the hon. and learned Member for Warwick and Leamington on the 24th November last.
Estimates (Retrenchment)
33.
asked the Chancellor of the Exchequer whether the net result of the retrenchments effected by the Treasury in the Estimates for the current year in the three Classes II. (Salaries and Expenses of Civil Departments), III. (Law and Justice), and IV. (Education, Science and Art) is that the expenditure on purely local services in England, eliminating the United Kingdom services, has been increased by £409,034; that expenditure on Irish services has been in creased by £215,296, while expenditure on Scottish services has been decreased by £141,569; and whether he proposes to take any steps to secure an approximately equal distribution of retrenchment due to the War upon the services of England, Ireland, and Scotland?
If my hon. Friend will supply me with details of the calculations I shall be glad to have them examined. But it will be understood that a comparison between the provisions included in certain selected classes of the Estimates for a particular year is not conclusive.
Is the right hon. Gentleman aware that these three classes comprise all the purely local services in each of the countries?
I could not commit myself to that.
34.
asked the Chancellor of the Exchequer whether the balance in hand to the credit of the Agriculture (Scotland) Fund, in consideration of the existence of which the Treasury cut down the annual Grant to the Scottish Board of Agriculture for this year from £185,000 to £10,000, was a free balance available for new work undertaken by the Board, or whether it was ear-marked for liabilities in connection with work already-undertaken by the Board or with regard to which the usual steps have been taken or for necessary capital expenditure in connection with the development of agriculture in Scotland; and whether it is the view of the Treasury that the Scottish Board of Agriculture has during the past three years failed to utilise the funds provided by Parliament for the purposes of the Small Land Holdings Act, 1911?
It is true that the balance was to some extent earmarked, but the Treasury satisfied themselves (without expressing any opinion on the recent administration of the Scottish Board of Agriculture) that the money was more than sufficient to meet the needs of the year.
Are we to take it that the Scottish Office has not been able to spend the money which during the past three years has been granted to it by Parliament for the purpose of developing agriculture and similar industries in Scotland?
That is a question which my hon. Friend must put to the Secretary for Scotland.
Are we to understand clearly that this deprivation of Scotland is for one year only?
Is the right hon. Gentleman aware that the Scottish Board of Agriculture is already practically declining to consider, applications on the ground that the money is not supplied?
I do not know that.
Munitions Areas (Enlistment)
35.
asked the Chancellor of the Exchequer whether a number of competent workers in the munition areas have enlisted in the New Army, necessitating the employment of wastrels in their places; and, if so, whether he has considered, as a solution of the munitions of war difficulty, the restoration of the soldiers thus enlisted to the more urgent patriotic duty of increasing the supply of arms and ammunition?
I am authorised by my Noble Friend the Secretary of State for War to inform the hon. Member that the matter is receiving the attention of the Army Council, and that a considerable number of soldiers possessing the qualifications mentioned are already willingly working in the shops turning out munitions of war.
Broken Hill Company (Issue Of Capital)
36.
asked the Chancellor of the Exchequer the reasons why the Treasury refused to sanction the issue of a small amount of capital by the Broken Hill Company in order to carry out plans for capturing the smelting industry from German competing concerns?
I do not think it desirable that reasons should be given for the decisions reached in individual applications for approval of fresh issues. I may, however, say that the fact that a capital issue is proposed for the purpose of capturing German trade is far from being a completely adequate reason why it should be allowed, regard being had to the enormous demands in existing circumstances for capital for the purpose of prosecuting the War. Moreover, in the ruse, referred to there was reason to believe (as has been proved to be the case) that the whole amount required could be provided without the assistance of the money market of the United Kingdom.
Government Securities (Small Investments)
37.
asked the Chancellor of the Exchequer if he will try and arrange, on the issue of any further loan, that it shall be offered in such a way as to be available for the investment of the savings of the working classes and persons of small means; and if there is any insuperable difficulty in issuing bonds of as low a denomination of £5, payable by instalments, seeing that bonds of a still smaller value are always issued by the French Government with great success?
As the hon. Member is aware, the small investor has ample opportunity of investing in Government stocks in amounts from one shilling upwards through the Savings Banks. As I explained to the House on the 17th November last, the question of allowing would-be investors to apply for smaller amounts than £100 was carefully considered in connection with the War Loan, but it was not found possible to do so. The matter will, however, be further considered when the time comes for the issue of another War Loan.
Is not the right hon. Gentleman aware that the purchase of Consols through the Post Office Savings Banks has been a failure, and that the working classes have not the same opportunity, and have never been afforded an opportunity, for the safe investment of their savings?
The hon. Member is quite inaccurate in his assumption that investment through the savings banks is a failure. It is quite the reverse.
Land Valuation Department (Enlistment)
38.
asked the Chancellor of the Exchequer what number of Civil servants of military age are engaged on the land valuation; and, whether, considering the non-productive character of the work, there is any reason why they should not be spared for military service?
I am sending the hon. Member a copy of my reply of the 20th ultimo to a question by my hon. Friend the Member for Haggerston, in which I dealt fully with the subject raised by him. For the reasons indicated in that answer the number of employés of military age (at present 2,260) is continually decreasing.
Armament Firms (Taxation Of Profits)
39.
asked the Chancellor of the Exchequer the number of armament patents being worked by Messrs. Krupp, the Deutschewaffenfabrik, the Mauserfabrik, the Slodawerke, and other German and Austrian manufacturers of war munitions; will he consider the adoption of proposals for the special taxation of such royalties as may accrue to British firms; will he bear in mind that if any action be taken to tamper with the royalties on German patents worked in this country reprisals may be made by Germany on the royalties the German armament firms are paying to British armament firms; and in considering the question of special taxation of war profits on armaments, will he bear in mind the international character of the British armament firms; that shareholders in these companies live in enemy and neutral nations; and that close business relations do exist, or did exist at the outbreak of war, between the British, French, Italian, Russian, Austrian, German, and Japanese armament firms?
I understand that my right hon. Friend the President of the Board of Trade finds, after very careful inquiry, that the information asked for in the first part of the question is not available. As regards the royalties referred to in the second part of the question, I assume that the German Government would not allow any such payments to British firms. The question of special taxation in connection with such payments does not therefore arise.
Post Office (Temporary Sorters)
44.
asked the Postmaster-General whether he has received a request from the Temporary Sorters' Association for revision of the wages of temporary sorters, and also for a request for an interview to discuss the matter; and whether he is prepared to receive a representative deputation or whether the men's claims are to be referred to the Court of Arbitration on war bonus?
Yes, Sir, I have received such an address from the Temporary Sorters' Association. If my hon. Friend will put down his question again to-morrow, I will give him a fuller answer.
I will ask the question again to-morrow.
Alexandra (Military) Hospital, Cosham (Milk Supply)
25.
asked the Financial Secretary to the War Office if before the War the Alexandra Hospital (Military), Cosham, was supplied with about twenty gallons of milk per day by Taylor's Dairies, Limited, and that the same firm now supply the hospital with some 150 gallons per diem, but that the War Office is only paying for twenty gallons and is already indebted to the dairies company to the extent of over £1,000; and if and when it is proposed to pay off this debt?
This matter is now in course of settlement.
Army Civil Surgeons
26.
asked the Financial Secretary to the War Office, in view of the fact that the Admiralty are paying six consultant physicians and surgeons serving on shore in Great Britain at a rate equal to 3.9 times the pay of the highest-salaried surgeon-generals of the Navy, in addition to the earnings of a certain amount of private practice, whether any difficulties have thereby resulted in regard to the distinguished civil surgeons who so patriotically went to France at the ordinary rates of Army pay?
No, Sir, there have been no difficulties with regard to the pay and status of the consulting surgeons and physicians working with the Army in France.
War Office Contracts
27.
asked the Financial Secretary to the War Office what steps have been taken to keep down the costs in the £6,000,000 of contracts which have been given on the basis of a guaranteed profit?
The designs and qualifications, on which cost primarily depends, are in the hands of the War Office, and constant expert supervision is exercised over the work.
Romsey Camp
28.
asked the Financial Secretary to the War Office if the commanding officer at the camp at Romsey has reported on the alleged scandals in connection with the construction; whether the hon. and gallant Member for Widnes has inspected similar camps in other parts of the country; and whether he has been asked to visit this camp to report on the state of the work?
No, Sir, the report has not yet been received from the command, but I am asking that it may be sent without delay. The hon. and gallant Member for Widnes was asked by my right hon. Friend to visit various remount depots and report upon their management, but I understand that he was not asked to visit the camp at Romsey, as it had only just been commenced when he made his tour.
Will the hon. and gallant Member be permitted to visit Romsey in view of the admitted irregularities?
Perhaps we had better receive the report first.
Hut Camps (Labourers' Travelling Facilities)
30.
asked the Financial Secretary to the War Office if a number of the men employed at the hut camps that are being erected for the War Office are a long distance from their homes; that they have for months been working under uncomfortable conditions; that when they have visited their homes they have had to pay full railway fare; and whether, under these circumstances, he will make arrangements for them so that at Whitsuntide they may either travel free or at excursion fares?
31.
asked the Financial Secretary to the War Office if several carpenters resident in Plymouth and neighbourhood are employed in building huts for soldiers on Salisbury Plain; and will he arrange for these men to have free railway passes in order that they may visit their families at Whitsuntide?
I regret that it is not practicable for the War Office to issue free warrants. The question of excursion fares at Whitsuntide is a matter for the railway companies, but I am informed that the restriction of such bookings may be necessary to enable them to deal with their ordinary passenger traffic in addition to military movements.
Cannot the War Office use their influence with the railway companies and get them to give some facilities to these men to visit their homes? They have been away for six months.
It is a very difficult matter, and I am afraid it is not possible.
Army Officers (Promotion)
50.
asked the Prime Minister whether he can state the cause of the delay in promoting officers to substantive or temporary rank in accordance with his recent announcement; and whether the widow of an officer who is entitled to receive such promotion will be prejudiced in regard to her pension in case her husband is killed in action before his promotion is actually gazetted?
Some time must be allowed for administrative action in the case of an important change of this character. The change will have retrospective effect from the beginning of the War and the date of actual gazetting will not prejudice the widow's claim in a case such as that referred to.
Postal Servants (War-Service Button)
54.
asked the Postmaster-General whether, in a recent Post Office circular, he has laid it down that postal servants must not volunteer for military service, without permission, in any capacity with the exception of the Royal Engineers; whether he will state the number of volunteers for active service in the signal companies of the Royal Engineers and the Army Post Office; and whether it is his intention to issue a war-service button to all postal servants who are prohibited from joining the Colours?
It has for many years been the rule that a Post Office servant may not enlist in any military or naval unit without official permission. In view of the extent to which the skilled staff of the Post Office, already heavily depleted by enlistment, must expect to be further drawn upon for the postal and telegraphic requirements of the New Armies, as well as for similar purposes essential to Homo defence, I have recently found it necessary specially to call the attention of the staff to the rule. The total number of non-commissioned officers and men enlisted from the Post Office in the postal sections of the Royal Engineers is about 2,200, and there are about 640 applications for enlistment on hand. The corresponding numbers for the signal companies of the Royal Engineers are about 8,500 already enlisted and 1,100 applications for enlistment on hand. The question of issuing badges to Post Office servants from whom permission to enlist has been withheld is at present engaging my attention.
Code-Cabling
55.
asked the Postmaster-General whether he will again consider the matter of further relaxing the restrictions imposed on code-cabling, in view to promoting the dispatch of business and satisfying legitimate demands?
This matter has recently received careful consideration. There appears to be no general demand on the part of the commercial community for the admission of further codes of a general character. Suggestions have been made for the admission of published codes adapted to the needs of specific trades, but the number of trades claiming special codes would be so great as seriously to impede the censorship. Much diversity of opinion has been shown, even by chambers of commerce, as to the particular trades to be favoured and the particular codes to be selected. The admission of private codes would, no doubt, be welcome to business firms, but it would seriously increase the risk of improper use of the cables. Any attempt to discriminate between firms on the ground of good or bad faith presents insuperable difficulties, and for these reasons the military authorities are unable to agree to the admission of private codes.
Is the right hon. Gentleman aware that the reasons given by himself and the Assistant Postmaster-General during the recent Debate are not considered conclusive by business men concerned?
That may be so.
Postal Employes (Industrial Agreement)
56.
asked the Postmaster-General whether he is aware that the postal employés feel aggrieved that the industrial agreement entered into at the Treasury conference on 17th to 19th March is not made applicable to them by the promulgation of a memorandum similar to that promulgated by the Treasury conference, but bearing the signature of the Postmaster-General in place of the signatures of the Chancellor of the Exchequer and of the President of the Board of Trade; whether he is aware that the whole of paragraph 5 of the said memorandum, with slight verbal alterations, is claimed by the postal employés as being entirely applicable to the conditions of their service, and that the evidence given by the workmen's representatives, which was accepted by the Chancellor of the Exchequer and the President of the Board of Trade as sufficient to justify those Ministers in acceding to the demands made upon them, is held by the postal employés to be equally valid in their own case; and whether he will give this matter his attention in the light of these considerations now brought forward?
As explained in my reply to the question asked by the hon. Member on the 22nd of April, the terms of the agreement referred to are in many respects not applicable to the conditions of the Post Office service. The main provisions of the agreement are, however, to a large extent covered by the statements I have already made in this House that I have no intention of replacing permanent employés by casual labour or of determining questions as to employment after the War by reference to decisions arrived at in consequence of war requirements and necessities.
Telephone Operators (Split Duties)
59.
asked the Postmaster-General whether, it is his intention to introduce a system of split duties for the women operators in the Manchester Telephone Exchange; whether he is aware of the decision of a recent Committee in regard to these duties in the large centres; and whether there are any special features due to war conditions which justify such a departure from the established practice?
I would refer the hon. Member to my right hon. Friend's reply to a similar question by the hon. Member for Leigh on 16th March last. The circumstances are unchanged.
Flour Prices
61.
asked the President of the Board of Trade whether he can state the average price charged for a sack of flour by the Co-operative Flour Mill Company (Co-operative Wholesale Society, Limited), at Bristol, to their members and societies during the past month, and the average price or prices millers charged bakers in the same area or district for a similar sack of flour during the same period?
At present I have not the information desired, but I will see if it can be obtained.
Is the right hon. Gentleman aware that many bakers in a small way of business are in danger of having to close their shops by reason of the high price, and that it is notorious that in many instances millers have made enormous profits out of the necessities of the poor?
I do not know what the position of small bakers is, but we are keeping in touch with the large baking houses.
Is the right hon. Gentleman aware that the working classes of this country are being exploited to the extent of £700,000 a week in consequence of the high price of flour and bread, while the increase of wages last month were £72,000 a week?
I could not give a definite answer to a question based on those figures without notice.
Irish Railways (War Bonus)
62.
asked the President of the Board of Trade whether he has received communications from certain Irish railways signifying their willingness to meet the representatives of the workers to discuss the question of the War bonus; and whether he will be prepared to receive a joint deputation of the men's representatives and the railway managers to discuss the matter?
The answer to the first part of my hon. Friend's question is in the affirmative, and I understand that a meeting between representatives of the companies and of the men is taking place at an early date. The matter would seem to be one to be settled between the parties, and I do not think that a deputation to me would serve any useful purpose.
Ascot Races
63.
asked the President of the Board of Trade whether it is the intention of the South Western Railway and the Great Western Railway to run special trains in connection with the proposed Ascot race meeting; and, if so, whether he will make representations to those railway companies of the undesirability of making increased demands upon their staffs, and also of the necessity not to permit any special trains run in connection with race meetings to interfere with the ordinary services, with military exigencies, or with the carriage of goods and commodities?
I cannot say definitely if any special trains will be run for the Ascot races. The position of the railway companies with regard to the running of special trains was explained in the full reply given by me yesterday to questions by the Noble Lord the Member for the Hitchin Division and my hon. Friend the Member for East Northamptonshire.
Will the right hon. Gentleman inquire?
Yes, I have been making inquiries, but I cannot give any definite information to the House yet.
80.
asked the Secretary of State for the Home Department whether he will consider the desirability of introducing legislation so as to enable him to have the authority during the continuance of the War of prohibiting race meetings, with special regard to those meetings where the police in the immediate district where the meeting may be proposed to be held is deemed insufficient, as in the case of the Ascot meeting next month, for which a demand is being made on the Special Constabulary of Berkshire, and men who have volunteered as special constables are thereby withdrawn from their usual occupation?
I fear that legislation prohibiting race meetings is too contentious to be proposed at the present time. [HON. MEMBERS: "No!"] If I may judge from that expression of opinion which the House now gives, that answer might reasonably be altered. [HON. MEMBERS: "Hear, hear."] I understand, however, that the Special Constabulary of Berkshire will not be called upon to police the Ascot Racecourse next month.
May I tell my right hon. Friend that already demands have been made for their attendance at the Ascot race meeting?
I am unable to say what demands have been made upon them, but I can assure my hon. Friend that they will not be called on to police the Ascot race course.
National Reserves
46.
asked the Prime Minister whether the Government propose to mobilise our whole national resources, both of men and material; if so, when will that mobilisation begin; and is he prepared to make a statement to the House on the subject?
The Government, in conjunction with employers and employed, are taking all practicable steps to secure this object.
Mines (Eight Hours) Act
48.
asked whether His Majesty's Government proposes to suspend the Eight Hours Act in view of the difficulties resulting from the operation of that measure at the present time?
A Home Office Committee has been considering the question of the organisation of the coal industry with a view to meeting the national requirements, and hopes, I understand, to be able to report shortly. I am not in a position to make any statement on the subject at the present moment.
Government Wheat Purchases
49.
asked the Prime Minister when he will give the day promised for the discussion of the question of the purchases of wheat by the Government?
A day can be fixed in the ordinary way, but I do not think it would be in the public interest that the discussion should take place at an early date.
Is the right hon. Gentleman not aware of the increase in the price of bread, and would it not be well to have an early date so that any misunderstanding may be removed?
I am aware of all those facts.
Coalition Government
51.
asked the Prime Minister whether, in view of the present War and in view of the steps necessary to be taken in order to grapple with the rearrangement of industry and social life consequent upon a prolonged struggle, he will consider the desirability of admitting into the ranks of Ministers leading Members of the various political parties in this House?
The Government are greatly indebted to the leading Members of all parties for suggestions and assistance of certain specific subjects. The step suggested by my hon. Friend is not in contemplation, and I am not aware that it would meet with general assent.
Retired Civil Servants
52.
asked the Prime Minister whether he will grant facilities to those retired Civil servants who are willing to do so to resume work in the Departments to which they formerly belonged for the period of the War in order to release any existing Civil servants who are willing to undertake military service if permitted to do so?
This course has already been adopted in a number of instances, and it is open to retired Civil servants to make application to the heads of their late Departments should they wish to return to duty.
Bread Prices
53.
asked the Prime Minister whether his attention has been drawn to the fact that the price of the quartern loaf in London has been advanced to 9d.; whether he is aware that since the beginning of the War the price of a sack of flour has risen from 27s. to 53s.; whether he still anticipates a substantial fall in prices in June; and whether the Government is now prepared to reconsider its policy on this question?
I am aware of the advances in the price of bread and of flour to which my hon. Friend refers. I doubt whether there is any adequate reason for altering the policy hitherto adopted in regard to the regulation of the price of bread. I think my hon. Friend will agree that it is premature at the moment to attempt a definite forecast of the course of prices in June.
Is not the high price of bread and flour partly due to the fact that there is a large number of British ships which could be made available for bringing food to this country but are engaged on voyages between neutral ports?
I should like notice.
Why should it not have been considered premature to speak about the price in June, when the right hon. Gentleman did so, and it should be considered premature to speak about prices three or four weeks hence?
Because of the difference between four months and one month.
Food Cargoes (Congestion On River Tyne)
64.
asked the President of the Board of Trade (1) whether the cargoes seized by our warships comprising food-stuffs, much of which is perishable, will be immediately sold for the benefit of the community in the district; (2) what steps are being taken to relieve the congestion of goods and perishable food-stuffs (stored in the warehouses on the river Tyne) from the prize ships seized by our warships; and whether in one warehouse at Newcastle-on-Tyne there are 1,700 tons of green bacon and lard rapidly going bad?
I have been in communication with the Admiralty Marshal regarding the matter referred to in my hon. Friend's two questions, and he informs me that prompt steps are being taken to dispose of all perishable food-stuffs in his custody. He also informs me that commodities of this kind are examined on being landed and are periodically examined and reported upon by experts, and any necessary action is taken. As regards the congestion of perishable food-stuffs and other goods stored on the Tyne, instructions have already been given to brokers to sell large portions of these goods.
British Dyes, Limited (Swiss Negotiations)
66.
asked the President of the Board of Trade if he will state what was the subject discussed with the Swiss dye firms at the interview at the Board of Trade; whether the chairman of British Dyes, Limited, was present; and what is the attitude of the Government towards dye users who have not subscribed to the company?
The subject of discussion was the supply of Swiss dyes. The chairman of British Dyes, Limited, was not present. I know of no proposal to make any distinction between subscribers and non-subscribers as regards the subject of discussion.
Despatch Riders (Police Prosecutions)
69.
asked the Secretary of State for the Home Department whether he will give instructions to the police to refrain from prosecuting motorists or despatch riders engaged upon military or naval service who may be trapped by the police when exceeding the speed limit on wide straight open roads within the county of London or the Metropolitan area where there is little traffic and no danger to persons, animals, or property?
Prosecutions against persons in the naval or military service are only instituted after consultation with the Department affected. In view of the considerable increase of fatal accidents attributable to motor traffic, the police would not be justified in relaxing vigilance.
Cannot the right hon. Gentleman find some better occupation for young, able-bodied policemen, who have failed to join the Army, than in trapping motor men on an open road, where there is no danger, instead of such an occupation as trapping German spies or rounding up German aliens?
The hon. Member is asking the same question again, and not so concisely.
Metropolitan Police
70.
asked the Home Secretary whether he will give the number of men serving in the Metropolitan Police who are within the enlistment age; and whether he can see his way to allow a further number of these men to enlist in the New Armies?
I regret I cannot give the number of men serving in the Metropolitan Police according to ages. To collect this information would entail much labour. The Commissioner of Police has been in close consultation with the War Office and Admiralty and has left nothing undone to meet all their requirements. He will continue to give them all the assistance in his power.
71.
asked the Home Secretary if he can state how many of the Metropolitan Police have been superannuated since August last; and whether any of them have been prevented from taking up duties in any capacity?
Seven hundred and seventy-seven men have left the Metropolitan Police from all causes since the outbreak of war. As regards their subsequent employment, they are free agents and the Commissioner has no information as to the work they may have taken up.
Is the right hon. Gentleman aware that all these superannuated policemen since the War are being prevented from following any kind of employment of a useful purpose?
I am unaware of the circumstances stated by my hon. Friend. We have no control over them once they leave the force.
Is the right hon. Gentleman aware that these men have offered their services and have been refused, and at the same time old superannuated men have been taken on, getting £2 10s. a week other than their pensions?
I know nothing of the cases referred to.
Alien Enemies
Naturalisation Certificates
72.
asked the Home Secretary whether he will state the nature of the public advantage alleged to have been gained by granting certificates of naturalisation to nearly 100 alien enemies of German nationality since the commencement of the War; and, in cases where no public advantage was so gained, what was the nature of the special reasons why such certificates were granted?
I can only answer the question by giving typical examples. On the point of public advantage I may give as an instance the case of a person whose naturalisation was recommended to me by a public Department as necessary to secure his services in work essential for this country. The other reasons referred to would arise where there is a combination of such circumstances as long residence, complete identification with English life, a British wife and British-born children, and sons serving in the English Army.
73.
asked the Home Secretary whether German alien enemies to whom certificates of naturalisation have been granted since the commencement of the War are allowed to leave this country on the same terms as natural-born British subjects; whether they are searched before leaving this country; and whether they are permitted to take away with them any documents, papers, photographs, plans, or other information they may choose without search or examination?
Certificates of naturalisation are granted only to persons who make a statutory declaration of their intention to reside in this country, and the Foreign Office therefore, as a rule, refuses passports to recently naturalised persons. If any such person is allowed to leave the country he is liable to search and to the examination of his papers and luggage.
Is a search always made, and cannot British subjects go to Scandinavia without a special permit?
I am quite unable to say whether the officers search in every case, but the passenger is liable to be searched.
Can the right hon. Gentleman say whether the person applying for naturalisation is or is not bound to announce his foreign nationality?
I will deal with that on a later question.
74.
asked the Home Secretary whether, in view of the new revelations of German character which are continuously being furnished, he will give directions that no further certificates of naturalisation shall be granted to German alien enemies, or that, at any rate, no such certificates shall be granted to such persons unless they prove that they have effectually divested themselves of their German nationality and no longer owe allegiance to the German Emperor?
My experience of the strong reasons which arise from time to time for naturalising persons of German origin shows that it would not be of advantage to lay down a rule that no such persons are to be naturalised. The conditions under which any such persons are now naturalised—including the most exhaustive investigations—secure so far as is humanly possible that they have completely identified themselves with this country and are under no obligations to their original country.
Does the right hon. Gentleman satisfy himself that these alien enemies have renounced their allegiance to the German Emperor before he gives them certificates of naturalisation?
They have to swear allegiance to His Majesty. Of course, as far as we can, we do satisfy ourselves; but if there is untruth, deception, or any other means of avoiding speaking the truth, it is impossible to say in every case that you can be absolutely certain. So far as human ingenuity can go we do assure ourselves of the bona fides in every case.
Does the right hon. Gentleman require them to sign a statement saying that they have renounced allegiance to the German Emperor?
I will inquire further as to the actual statement which they have to sign. I am not sure whether there is any statement in that precise form.
Is it not the case that a German becoming naturalised here can apply to Germany and get denationalisation papers? I have often seen them. Does the right hon. Gentleman not ask for that before he naturalises them?
I will inquire further into the actual steps taken.
Does the German Government recognise the renunciation by a German subject of his German nationality?
I am not an expert in German law and am quite unable to answer that question.
Does not the right hon. Gentleman know that it is the case that the German Government does not recognise the competency of a German subject to renounce his nationality?
I have been informed differently, but am quite willing to accept that statement on the hon. Member's authority?
The Germans have given such orders of denationalisation themselves.
75.
asked the Home Secretary whether he will obtain information as to the number of naturalised Germans in this country who still owe allegiance to the German Emperor, and will he communicate such information to the House?
It is, in the nature of the case, impossible to obtain trustworthy information on this point either from the suspected persons themselves or from the German Government; but I have no reason to suppose that there is any considerable number of persons in the position indicated.
Will the right hon. Gentleman inquire from the naturalised aliens themselves for what it is worth?
That is done.
76.
asked the Secretary of State for the Home Department whether he will grant a Return showing the names of all aliens to whom certificates of naturalisation or readmission to British nationality have been issued since the 31st December, 1914, giving the country and place of residence of the person naturalised or readmitted, in continuation of Parliamentary Paper, No. 156, of the present Session?
The Parliamentary Paper referred to is an annual Return. The hon. and learned Member will find the particulars he desires of persons naturalised since 31st December in the monthly lists published in the "London Gazette."
Segregation And Internment
I desire to ask the Prime Minister whether, having regard to the strong public opinion in favour of the strictest supervision of alien enemies in this country, the Government propose to take any action in the matter?
No one can be surprised that the progressive violation by the enemy of the usages of civilised warfare and the rules of humanity, culminating for the moment in the sinking of the "Lusitania," has aroused a feeling of righteous indignation in all classes in this country to which it would be difficult to find a parallel. One result, unhappily, is that innocent and unoffending persons are in danger of being made to pay the penalty of the crimes of others.
From a military point of view, our advisers are of opinion that the steps which have been taken in the way of internment and otherwise have proved adequate for the purpose in view, namely, providing for the safety of the country against actual or apprehended danger, and preventing illicit communication between alien enemies here and their own Government abroad. Everything that has hitherto been done in the way of internment has been done on the responsibility of the War Office and Admiralty, and police registration and supervision is fully enforced in the case of all alien enemies who are not interned. But the Government are quite alive to the fact that recent events, and the feeling which they have created, make it necessary to look beyond merely military considerations. The Government are, therefore, carefully considering the practicability of the segregation and internment of alien enemies on a more comprehensive scale, and I hope to be able to-morrow to make a more definite statement.In the event of there being a general desire to-morrow, after the statement is made, that it should be discussed, will the right hon. Gentleman give an opportunity for that discussion?
Yes.
Women Typists And Shorthand Writers
84.
asked when the Government propose to carry out the specific recommendation of the Royal Commission on the Civil Service in the case of women typists and shorthand writers; and when the increase of salaries they proposed will take effect?
I fear I can hold out no prospect of these recommendations being dealt with in advance of the bulk of the other recommendations of the Royal Commission, the consideration of which is in abeyance owing to the War.
Child Labour
88.
asked the President of the Board of Education whether he can state the number of children of school age who have been withdrawn from school since the outbreak of War for the purpose of work in agriculture and other industries; and whether he will issue the reports he has received on the subject?
For the period 1st September, 1914, to 31st January, 1915, I may refer my hon. Friend to the White Paper recently issued [Cd. 7881]. I am now collecting figures from the county areas as regards agriculture for the further period up to the 30th April last.
When does the right hon. Gentleman expect to have that information?
About the end of the month.
Will those reports from the different counties show the regulations under which they are acting?
I do not want to trouble the local authorities who are overworked, as a very large number of their staff has joined the Colours, and at the present moment I do not think that I can supply the information for which my hon. Friend asks.
Will my hon. Friend ask each county authority to send in a copy of the regulations? That would involve no expenditure of time.
It would involve a great deal of time on the part of my own staff. However, I can obtain those regulations and see what I can provide.
Is the right hon. Gentleman collecting figures for the purpose of stopping this desirable development?
For the purpose of ascertaining facts.
Irish Volunteers
89.
asked the Chief Secretary to the Lord Lieutenant for Ireland whether any command has at any time since the formation of the Ulster Volunteers been issued to Irishmen in the Civil Service, under pain of dismissal, to withdraw forthwith from that force if already in it, and to undertake not to hold any future intercourse, directly or indirectly, with that organisation; under what authority such a command has been issued to Irishmen in the Civil Service with reference to the Irish Volunteers; seeing that the Ulster Volunteers, organised expressly to resist a certain law if enacted, were allowed to drill, arm, and equip themselves, and that the Irish Volunteers, organised for the purpose of defending the rights and liberties of all the Irish people, have been thwarted and prevented from arming themselves, whether he will account for the different treatment of the two organisations and of Civil servants in relation to them, respectively; on what grounds the Ulster Volunteers, described by the Lord Chancellor as an illegal force, has been adopted as one of the forces of the Crown; and on what grounds the Irish Executive strives to destroy the Irish Volunteers, a force never accused of illegality and never proclaimed as illegal?
The answer to the first part of the question is in the negative. Membership of the Irish Volunteers, who, under the guidance of their Committee, have endeavoured to obstruct recruiting in Ireland and to foment disloyalty, is regarded by the Government as incompatible with the position of a Civil servant of the Crown, and it is on this ground that certain members of the Civil Service in Ireland have been called upon, under pain of dismissal, to sever their connection with this section of the volunteers in Ireland. These considerations do not apply either to the Ulster Volunteers or to the National Volunteers, whose loyalty to the Crown in the present emergency has not been questioned and who have furnished a large number of recruits to all branches of His Majesty's Forces.
Will the right hon. Gentleman say when, by whom, and where the action against recruiting was taken, and why the persons taking it have not been brought to trial?
No. I think, on the whole, that the best thing which we can do is to require persons who are connected with a body of this kind and also with the Civil Service to make their choice.
American Publications (Confiscation)
90.
asked what American publications are confiscated in their passage through the Post Office by the Irish Government and not allowed to circulate in Ireland?
I would refer the hon. Member to the reply given him by my right hon. Friend the Vice-President of the Department of Agriculture and Technical Instruction on this subject on the 17th February last.
Then is there a refusal to give the names?
Probably, yes.
Charge Against Mr Bolger
91.
asked the Chief Secretary for Ireland whether the Irish Law Officers now act in accordance with the undertaking given by him on their behalf that jury packing would be discontinued in Ireland; whether the Irish judiciary have been consulted, and have unanimously approved of the new system of trial of political cases in secret Courts, closed against Press and public; whether he will state the statutory authority for each of those two systems; whether he will state the dates of the successive trials of Mr. Bolger, now suffering imprisonment for a political matter, the composition of the Court, whether public or secret, what facilities, if any, were given to the accused for self-defence, and the decision in each instance; and if he will specify the law under which Mr. Bolger is subjected to unlimited imprisonment for an alleged offence which the Crown is unable to prove?
I am unable to trace the undertaking referred to in the first part of the question, but I am satisfied that the Irish Law Officers use, with discretion, their powers of ordering persons to stand aside. With regard to the second part, the power of the Court to make an order for the exclusion of the public from the proceedings at the trial of an offence against any regulations made under the Defence of the Realm Act has not so far been exercised in Ireland. The Irish judiciary has not been consulted with regard to it. The reply to the remainder of the question is that Mr. Bolger, charged with a felony under the Defence of the Realm Act, will be put on trial for the first time at the next sitting of the Criminal Commission for the City of Dublin in June. He remains in custody because the Court to which he applied for bail refused it, and he will, of course, be afforded the usual facilities for being represented by counsel.
Inoculation
6.
asked if Sergeant Arthur Harris, late of the 4th Gloucestershire Regiment, has recently been discharged from the Army; if, in October last, following inoculation, he became very ill, with the further result that his mind became seriously affected and he was first placed in the Severalls Asylum, Colchester, and is now in the Gloucester Asylum; whether the allowance to his wife and four children ceased to be paid on 29th March, and his family are now in receipt of no income whatever; whether the War Office affirm or deny that his illness has or may have resulted from the shock to the system caused by inoculation; and what assistance it proposes to give to the family of this soldier, who served through the South African War and who afterwards, up to the time of the present War, acted as a postman and was always in good health?
A report has been called for, but has not yet been received.
12 and 13.
asked the Under-Secretary of State for War (1) whether he will state the name, date of enlistment, date of inoculation against typhoid, and date and place of death of a soldier in the 20th battalion, Northumberland Fusiliers (Tyneside Scottish), who was certified by a civil medical practitioner to have died from typhoid inoculation and pneumonia and heart failure; whether the entry in the register of deaths gives the cause as above; and, if not, will he explain why such an entry was not made; and (2) whether he is aware of a report by Sir Thomas Oliver, M. D., honorary colonel, 20th battalion Northumberland Fusiliers (Tyneside Scottish), that at one stage of the proceedings as regards inoculation for typhoid fever it was thought the preventive measure ran the risk of receiving a check as one of the men died shortly after the inoculation, but fortunately, although the civil medical practitioner who had attended the patient gave a certificate that death was due to typhoid inoculation and pneumonia and heart failure, the necropsy revealed heart-disease of long standing, chronic pleurisy, and an alcoholic liver; whether he has reason to suppose that many men whose bodily condition is alleged to have been so bad as in the case of this soldier are being passed into the Army by the medical examiners; whether the man was in a fit state of health for the typhoid inoculation to be performed upon him, and, if not, why was it carried out; and what action, if any, it is proposed to take against the civil medical practitioner if he gave an erroneous death certificate?
Inquiry is being made.
Volunteer Training Corps
9.
asked the Under-Secretary of State for War if he can see his way to lend for drilling purposes to the numerous Volunteer Corps who have been affiliated and inspected by the War Office some of the obsolete rifles, side-arms and bayonets now stored at the Tower of London and elsewhere?
I would refer the hon. Member to the answer I gave on the 29th ultimo to the hon. Member for the New Forest Division.
23.
asked the Under-Secretary of State for War whether the Secretary of State for War will reconsider the refusal made by him to the Central Association of Volunteer Training Corps to permit such railway companies as are willing to issue cheap tickets for drill and training to Volunteer Corps, seeing that many Volunteers are of the working class and have already made sacrifices in providing themselves with uniform and equipment without any assistance from the Government, and seeing that railway companies are permitted to issue cheap tickets for race meetings?
The cost of this concession would, in present circumstances, fall on public funds, and the recognition of Volunteer Training Corps by the Army Council was based upon the understanding that no burden should be laid upon public funds. No cheap tickets are now issued for race meetings; an enhanced fare is not infrequently charged.
National Reservists
10.
asked whether a National Reservist whose services had been taken over by the Admiralty and who is thus deprived of an enlistment bounty would be given facilities to resign his position in the Navy so that he may enlist in the Army in order to secure the bounty; and, if not, whether new regulations can be made to prevent the loss of the bounty in such cases?
The conditions under which men serving in naval establishments may leave them or if they continue to serve, may receive bounties, are a matter for consideration by the Admiralty, and perhaps the hon. Member will address his question to that Department.
First Lord Of The Admiralty
May I ask the Prime Minister whether his attention has been called to the statement that the First Lord of the Admiralty has recently been at the front; whether the statement is true; and, if so, what were the duties which the First Lord was carrying out there on behalf of the Government?
My right hon. Friend visited Paris last week on important Admiralty business, and on his way back spent the Saturday and Sunday at Sir John French's headquarters at the Commander-in-Chief's invitation.
Do I understand that the right hon. Gentleman was not discharging any duties on behalf of the Government when he was at head-quarters?
No, none. [HON. MEMBERS: "Joy ride!"]
Was the First Lord of the Admiralty carried across the Channel in a destroyer?
I am sorry such a question should be asked. The First Lord went on most important Admiralty business to Paris. Since the beginning of the War he has not been absent from the Admiralty more than fourteen days during the whole of these nine months.
Munitions And Transport Areas (Central Committee)
May I ask the Chancellor of the Exchequer if he will now inform the House precisely as to the constitution of the prescribed Government authority to be set up under the Defence of the Realm (Amendment—No. 3) Bill: whether a separate authority will be set up for Scotland, or whether representation will be given to Scotland on the Central Committee; whether local committees will be set up by the Central Committee in each district; and what powers will be given to these local committees to control the sale of liquor in each district?
I am not in a position to state what the constitution of the Committee will be. I have generally indicated the lines upon which the Government propose to set it up, but as to the names I am not in a position to give them to the House. I can answer the question about Scotland. It is not proposed to set up a separate authority for Scotland, but it is proposed to have a Scottish representative, or representatives on the Board. As to the question of the relations between the Central Board and local committees, I would like to be advised by the Board of Control before coming to any decision.
Does the right hon. Gentleman not think that before the Third Reading the House is entitled to have full information as to the machinery to be set up under the Bill?
Certainly. If my hon. Friend had been present at the Debate last night—
I was—
He would know that I gave full information then. There was not a single question put about the constitution of the Committee that I did not answer. If my hon. Friend had asked me for more information, I would have given it to him. I cannot give the names of the Committee until the Bill is through.
China And Japan
5.
asked the Secretary of State for Foreign Affairs if he will give the latest information in his possession as to the position of the affairs between Japan and China; and will he say if he has made any protest to the Japanese Government against their demands on China as being a breach of the terms of the Anglo-Japanese Treaty?
I would refer the hon. Member to the answer given to the hon. Member for Devizes on 11th May, to the effect that an Agreement has been reached between China and Japan; and I would add that His Majesty's Government have been in communication with the Japanese Government in regard to the possible bearing of the Anglo-Japanese Alliance on the demands, but that there has been no occasion for a protest in that connection. If and when the text of the demands conceded by China is published some misapprehension as to their scope or nature will be removed, but it is for the Governments of Japan and China to decide as to making them public.
House Of Commons (New Tea-Room)
41.
asked the hon. Member for the Saffron Walden Division, as representing the First Commissioner of Works, when the new Tea-room on the Terrace will be open for the use of hon. Members?
My hon. Friend has asked me to answer this question. It is not yet possible to give an exact date for the completion of the work in the room in question, but it is hoped that it will not be long delayed.
Lambs (Detention At Ports)
40.
asked the Parliamentary Secretary to the Board of Agriculture the names of the owners who were present when their hay-fed lambs, which had increased in weight during the period of detention, were weighed?
In reply to the hon. Member's question, I can quote the following as an instance: At certain weighings which took place at Holyhead, Mr. John Magee, owner, of Holyhead, and Mr. John Flanagan, acting for the late Mr. James Carter, owner, of Oldham, were present. The lambs had been fed on milk or milk gruel, the older ones on crushed oats, bran, or hay.
Dalkey Sub-Postmistress
57.
asked the Postmaster-General if he will specify the failure in duty, breach of rules, or other offence committed by Mrs. Somers, for which she has been removed from her position as postmistress of Dalkey, her sole means of living; whether he is aware that she is the widow of a telegraphic engineering inspector, who lost his life through a cold contracted when on special duty in the postal service; whether Mrs. Somers has always in the duties of her position given satisfaction to the Department and to the public; whether any charge has been made against her but one of service rivals relating neither to herself nor to her duties; how many years she has been in the service since her husband's death in it; and what provision the Department has made for her future?
Mrs. Somers was in the service of the Post Office for some twenty-three years, and on the whole performed her official duties satisfactorily. She was deprived of her position as sub-postmistress of Dalkley upon clear proof that she had permitted the sub-post office under her charge to be used as a centre for the distribution of seditious literature. She is not by the terms of her appointment entitled to any pension or other retiring allowance.
What evidence has the right hon. Gentleman of that charge?
I had evidence submitted to me by the Irish Government, into which I inquired most carefully before I came to a decision.
Was Mrs. Somers given an opportunity of defending herself?
Yes.
Whitsuntide Camps (Railway Facilities)
67.
asked the President of the Board of Trade whether any railways have given, or intend to give, special facilities for race meetings; whether he is aware that railway companies have withdrawn their usual facilities of reduced fares for Manchester lads' clubs for the annual Whitsuntide camps; and whether he will inquire into this discrimination against lads' clubs?
If by special facilities my hon. Friend means cheap fares, no railway company is giving or proposes to give special facilities for race meetings. In fact, as I announced yesterday, the question is at present under discussion whether the fares for such meetings should not be specially raised. My hon. Friend will thus see that he is under a misapprehension in thinking that there is any discrimination against lads' clubs. The whole question of the possibility of making any relaxation of the rule abolishing cheap booking facilities in favour of certain well-defined classes of cases of the nature of that to which my hon. Friend refers is now being considered in a sympathetic spirit; but my hon. Friend will appreciate the difficulty of making exceptions without giving rise to further demands which, if granted, would nullify the object of the new rule.
In view of the sympathetic reply, will the right hon. Gentleman bear in mind the great value to the nation in the increased health and efficiency due to the work of these boys' clubs?
Yes, the good work done by these boys' clubs will certainly be one of the facts taken into account.
Drunkenness (England And Wales)
77.
asked the Secretary of State for the Home Department whether the convictions for drunkenness in England and Wales for the first quarter of the year 1915 show an increase or a decrease as compared with the corresponding figures for 1914?
No figures on the subject are available. It is the practice to collect these figures at the end of each year; and I do not feel justified in calling for special returns at the present time.
Land Purchase (Ireland)
82.
asked the Secretary to the Treasury whether instructions have been issued to the Estates Commissioners to limit in every instance to £3,000 advances to purchasing tenants; and, if so, whether an arrangement could be made whereby, when a vendor was willing to accept payment in stock at its face value for the sum in excess of £3,000 and where the issue of such stock would cause no loss to the Treasury, he will, in order not to throw back land purchase, consider the advisability of part payment in cash and stock?
I have been asked to answer this question. The answer is in the negative.
83.
asked the Secretary to the Treasury whether he is aware that vendors of land to purchasing tenants where the price exceeds £3,000 are in some cases pressing the tenants for the excess amount in cash, plus a bonus on the amount, and threatening, if it is not forth-coming, to declare the sale off; and whether, having regard to the harshness of such a course during War time, he will suggest to the Commissioners to discountenance such proceedings until the War is over and the money market resumes its normal condition?
In cases where the landlord and tenant have agreed for the sale of a holding under the Land Purchase Acts for a sum exceeding £3,000, and the Estates Commissioners are only prepared to sanction an advance of £3,000, the provision of the excess is a matter for arrangement, between the parties and is not one in which the Estates Commissioners can interfere.
Boyne Canal
85.
asked the amount of the unexpended balance in the hands of the Treasury for permanent improvement of the Boyne Canal?
There is no such unexpended balance.
Ardee Medical Officers
92.
asked the Chief Secretary for Ireland whether, having regard to the prolonged controversy which has existed between the elected representatives of the people of the Ardee union and the Local Government Board regarding the appointment of local doctors and the area of their duties, and to the fact that numerous complaints have been made that the arrangements made by the Local Government Board have worked injuriously to the sick poor, he will appoint a small Committee to inquire into the matter and report on it?
The present medical relief arrangements in the Ardee union have been in operation for the past ten years and are satisfactory as regards the provision made for the medical care and treatment of the sick poor. Ardee union is more favourably circumstanced as regards the number of dispensary doctors employed than most unions in Ireland, and there is no necessity whatever for reopening this question. At the present time, when it is difficult to obtain medical officers for existing dispensaries, the creation of a new office is highly undesirable.
Orders Of The Day
Bill Presented
British North America Bill
"To amend The British North America Act, 1867." Presented by Mr. Secretary HARCOURT; supported by the Prime Minister and Mr. Attorney-General; to be read a second time To-morrow, and to be printed. [Bill 81.]
Defence Of The Realm (Amendment—No 3) Bill
Motion made, and Question proposed, "That the Bill be now read the third time."—[ Mr. Lloyd George.]
I cannot let this Bill leave the House without once more expressing my regret that the Government have not put into it any general temperance regulations for the whole country. We heard during Question Time the cheers which greeted the question of the Noble Lord with regard to race meetings, and I think that should show the Government what the nation at any rate thinks about its ordinary business during the War. I believe the people would have welcomed the restriction of the hours of the liquor traffic all over the country, and I am sorry that the Government cannot see their way to some such general provision, all the more so because I believe that in a very little time they will find themselves obliged again to deal with the question and to introduce another Bill. There is a good deal of anxiety in certain quarters of the House as to what the Bill does intend. In the course of the Debate the right hon. Gentleman gave to us certain undertakings on the part of the Government to which I wish to call his attention. He stated in the most emphatic terms that there is not to be nationalisation. He is taking power to purchase, but he did give a pledge to the House that that power should be used as little as possible. The right hon. Gentleman opposite (Mr. Chamberlain) put his statement into phrases which he accepted, indicating that he intends to purchase only where he finds it necessary so to do. That is a point to which a great deal of importance is attached. In the Debate yesterday the Amendment was not pressed, but the right hon. Gentleman gave the undertaking which I venture to remind him of now. There was another point, and that was the question of various social experiments to be made by the Government during the War. On this question we were assured, after a long Debate on an Amendment which raised the point, that it was not the intention of the Government to make those experiments, but, on the contrary, all that they were asking for was power to supply drink as part of a general scheme for supplying refreshments in the munition areas. That declaration went far to satisfy the anxieties some of us felt in regard to this Bill.
I do not wish to detain the House further; I merely draw attention to those two statements made by the Government. I point out to the Government that they would not allow us to proceed in the ordinary way to endeavour to get our views incorporated in the Bill by means of Amendment. I think they will admit we met them fairly in withdrawing our Amendments. I know that when it comes to the interpretation of an Act of Parliament statements made by Ministers are not binding, but I submit that we are not legislating in the ordinary way, and that the Government ought to receive these new powers at the hands of the House as conditioned and bounded by the undertakings which they gave during the Committee and Report stages. It is in that sense that I accept the undertakings and allow the provisions to proceed. I have no desire to prevent the Government having the powers defined in that way, but I ask them to remember that we refrained from pressing Amendments which met our views and that therefore those undertakings should be very strictly interpreted in the administration of the Act.The right hon. Gentleman the Chancellor of the Exchequer was not in the House yesterday when I made a suggestion which I desire to repeat. He knows the difficulties that will crop up in dealing with these areas, and in order to save himself and other people from large demands for compensation I suggest that in the control of those houses the existing position should be maintained as far as possible. I hope he will give that instruction to the local committees because I really think it is essential that that should be done, and that it is the only way in which this matter can be managed satisfactorily.
I quite see that there is good ground at this stage for the Government not being in the position to disclose the names. I would, however, ask can we get some indication of the class of party? I do not know whether the chairman has been fixed upon; if so, that would give us some idea of the kind of authority. I would also ask whether he is to be a Minister or not, and whether it is to be an independent authority or an authority subject to pressure from Members?
Seeing that so far there is no provision in the Bill for compensation, may I ask exactly where the guarantee of compensation comes in?
I repeatedly explained that the same Committee as under the other Defence of the Realm Acts will deal with the question of compensation. There is no special mention of compensation in any of them. We set up this particular Committee to adjudicate on all claims with a general instruction as to fair play to everybody in any way damnified by the operation of these Acts. I do not think there has been a complaint up to the present with regard to the Committee. With regard to the question put by my hon. Friend the Member for Pontefract (Mr. Booth), we have not yet appointed a chairman; we are considering various names, but this I can tell him—that he will not be a Minister. We propose to set up a perfectly independant body. We think it is very much better that that should be done. I have already indicated that there will be representation of labour. Labour has got a very direct interest in this question. We shall consider also the claims of Scotland in the matter. [An HON. MEMBER: "Ireland!"] If we propose to extend the Act to Ireland we shall, of course, put somebody on to represent Ireland. For the moment there is no intention of extending it to Ireland, but should it be found necessary we shall certainly put an Irishman on. My hon. Friend the Member for the Rushcliffe Division (Mr. Leif Jones) has given an inventory of all the pledges which I gave. I shall keep that inventory safe, and I have no doubt at all that we shall try to discharge them, and that he will find that the document will be duly honoured. With regard to the suggestion of the hon. Member for Ayr Burghs (Sir G. Younger) it is, of course, very desirable that there should be as little disturbance as possible consistent with the carrying out of our object. I cannot imagine the Committee not taking that view. I hope we will have a business body, and undoubtedly that is the intention of the Government. I am very anxious that the House of Lords should have every opportunity of considering this Bill, and I am very much afraid that they might have risen unless the Bill goes up very soon.
They do not sit until half-past four o'clock.
It takes some time to get across the Lobby, and I should be very much obliged to the House for the Third Reading now.
I do not wish to detain the House more than a few minutes, but I do wish to say that I think it is really unfortunate that we should give the appearance outside as if we were merely dealing with the question of drink, which is only a very small part of the question with which we have to deal. I should welcome an assurance by the Government that they are really taking steps to mobilise the whole forces of the country. It is really now quite evident that there is no step we must leave un-taken, and we must be ready for every possible sacrifice, both of personal feelings and personal opinions as well as friends, and money and everything else, in order to secure victory at the earliest possible moment over the greatest danger that has ever threatened European civilisation.
I entirely support every word uttered by the Noble Lord.
Question put, and agreed to.
Bill read the third time, and passed.
Ways And Means
Considered in Committee.
[Mr. WHITLEY in the Chair.]
Tea
Motion made, and Question proposed, "That the Customs Duty charged on tea until the first day of July, nineteen hundred and fifteen, shall be charged as from that date until the first day of July, nineteen hundred and sixteen, that is to say:—
| Tea, the pound | … | … | eight pence, |
and it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."—[ Mr. Lloyd George.]
On a point of Order. I would ask whether we are to have any statement from my right hon. Friend the Chancellor of the Exchequer. Changes have been made in the financial proposal since the last time we met, and I think a statement should be made, as the House has not been put in possession of the facts up to the present time.
That is not a point of Order. It is quite within the competence of the Chancellor of the Exchequer as to whether he makes a statement or not.
4.0 P.M.
I will not stand between the Chancellor of the Exchequer and the Committee for more than a very few moments if he is prepared to make a statement. With the consent of the Chair, it has been arranged that the Committee should be at liberty, on this Resolution, to resume the general Debate on the whole of the Budget proposals. I do not propose to avail myself of that latitude. I rise only to ask for some information on a specific point. At first sight it may seem that the point arises in connection rather with the third Order on the Paper [Immature Spirits (Restriction) Bill] than with this Resolution. But that, I think, is not the case, because, although it arises out of the third Order, the remedy of the difficulty in which we find ourselves is germane to, and must be introduced in, Committee of Ways and Means. I think, therefore, if I am permitted to state my case, and put my question to the Chancellor of the Exchequer, you, Sir, will find that my remarks are not irrelevant to this discussion. The Chancellor of the Exchequer originally proposed certain enormous increases in the Spirit Duties. He has subsequently abandoned those proposals, for reasons which I think were good and sufficient, and has substituted for them the restriction of the sale of immature spirits. It has been the avowed intention of the right hon. Gentleman, in dealing with the liquor trade for the purposes of the present condition of war, to do no injury to any individual, and to provide fair compensation for anyone who was deprived of the trade which, but for the War, he would have been allowed to do. I am afraid that in the provisions made by the Chancellor there has been a serious casus omissus which must have escaped his attention in the first instance, as it certainly escaped mine. The proposed provision for the compulsory bonding of all spirits for three years does not work equally on all parts of the trade. There is a particular trade associated with Belfast and the North of Ireland which is hit by this provision in a manner which is quite exceptional. The Chancellor of the Exchequer asks whether I would like to take the discussion on this Resolution. I am in the Chancellor's hands. If he can make a reassuring statement on the subject I think he will greatly facilitate the progress of business. It is for that reason, with an entirely friendly intention, I raise the question at the earliest opportunity. I only want to make it clear to the Committee, if I can, what the case is. I would be very glad to postpone the matter altogether, if the right hon. Gentleman would postpone the Immature Spirits (Restriction) Bill until the question is settled. There is some inconvenience in raising it at the present time.
I do not object at all. It is easier to talk the matter over in Committee rather than in a Second Reading discussion. With the consent of the Chair, it is generally permitted to discuss the whole of the Budget proposals on a particular Resolution.
This is a matter which interests not only Members on the Front Benches, but other Members of the House. I should like, therefore, to have a clear understanding of the import of what is going on. It was understood that this day was to be devoted to a general discussion of the Budget. I understand that now—I may be mistaken—it is proposed to restrict the discussion to the question of spirits, or at any rate that that point should occupy a considerable part of the discussion. If some arrangement could be made by which the general discussion would be separated from this particular issue I should be glad.
I want to do what is most convenient for the Committee, provided that if I forego my opportunity of raising the matter now, those on whose behalf I feel bound to speak are not prejudiced. If the Chancellor of the Exchequer will postpone the Second Reading of the Immature Spirits Bill, I am quite ready to remain silent now, and allow the general discussion to go on. I think that that would be the best plan; but if that cannot be done I must be permitted, acting within my rights, to raise the question now.
I did not question the right hon. Gentleman's rights at all.
The difficulty about postponing the Immature Spirits Bill is that we cannot take it to-morrow, because that is an allotted day; and if we postpone it to next week the Spirit Duties will have to be renewed or they lapse. The result of that would be that there would be neither Spirit Duties nor Bill to prevent spirits from being taken out of bond. Therefore the question must be settled one way or another by Monday. I should have thought that the right hon. Gentleman was well within his rights in raising the question now, because the Spirit Duties are part of the proposals of the Government. They are on the Paper; therefore, they are part of the general Budget scheme until they are negatived. I should have thought that the right hon. Gentleman was not only within his rights, but within precedent and practice in discussing something which still remains on the Paper as part of the Budget scheme and any alternative which he proposes.
Will there not be a Committee stage of the Immature Spirits Bill?
There will be a Committee stage. If the Leaders of the Opposition consent to take the decision of the House one way or another on Monday, and let the Bill through or get it withdrawn—the decision must be taken one way or the other—I do not mind postponing it; but the matter has to be decided by Monday.
An Amendment could be moved in Committee.
On a point of Order. I do not quite understand what the proposal is. The right hon. Gentleman has suggested that because there is some interest.
What is the point of Order?
Are we in this Debate entitled to discuss the effects of the Immature Spirits Bill? I have a number of matters that I wish to put before the Chancellor of the Exchequer, and I want to know whether I shall do it now or whether the Bill will be postponed?
I have nothing to do with the other arrangement. As a matter of order, the Chancellor of the Exchequer is quite correct. This is necessarily a part of the finance of the year. Therefore, if Members desire to do so, they can discuss it amongst other matters.
Sir THOMAS WHITTAKER rose—
Do you rise to a point of Order?
Other Members have been discussing the question of convenience.
Unless the right hon. Member wishes to put a point of Order, the right hon. Gentleman the Member for West Birmingham is in possession.
Other Members have been listened to on the question of convenience. The point I wish to put is that we have already once been switched off from the discussion on the general bearing of the Budget. It seems to me very unfortunate if—
That is not a point of Order.
It is not a point of Order, but other Members were not raising points of Order.
The right hon. Gentleman can intervene only if the right hon. Member for West Birmingham gives way.
I wish to consult the convenience of the Committee, but I think I must ask the Committee to bear with me while I state my case. I take the earliest opportunity in the hope that, if it is the intention of the Chancellor to withdraw his proposals, he may be able to give such a reply as will facilitate the further progress of business. The financial Resolutions before the Committee include very large increases in the whisky duties. The Chancellor of the Exchequer has expressed his readiness when the proper time comes to negative those duties if he receives in substitution the Immature Spirits Bill. The negativing of the taxing Resolution has so far been declared by the Chancellor to be subject to the acceptance of his other proposal. The right hon. Gentleman, in making that proposal, as in making all his proposals, has quite clearly and definitely stated that it was not his desire to injure unnecessarily particular traders, or to injure one section of a trade to the advantage of another section of the same trade. I am sure he has tried his best to fulfil those conditions, but there is, I think, a casus omissus in this respect to which his attention must by this time have been called. It arises in the strongest possible form in the case of the distillers of whisky in Belfast and the North of Ireland. Their trade is a peculiar one, carried on under peculiar conditions. Their custom is to put their patent still whisky on the market almost immediately. They have no reserve stocks in hand; they have no stores in which they could bond the stocks; and they have no casks in which they could place them. Their position is not that of improvident people in this respect; because the whole question of the wholesomeness of their whisky, and its suggested deleterious effect on the public, was thrashed out, in the years 1909–10, before a very strong Royal Commission, presided over by Lord James of Hereford. If at that time it had been found, as a result of that careful inquiry, that this whisky was deleterious, and that it did have a bad effect upon the consumer, the trade, given a little time, would have adapted itself to any recommendations that were made, and would not have been in the position in which it is to-day. But it was given a clean certificate of character by one of the strongest Commissions that ever sat, and it was not suggested that any changes should be made. If the provisions which the Chancellor of the Exchequer has suggested as an alternative to his taxing proposals are insisted upon as they stand, it means ruin to those trades. If they are not allowed to supply whisky which is less than three years old, they can supply no whisky. They have got no whisky of that age, or they have only trifling quantities of that age in stock. They would be absolutely unable to do the great bulk of their trade, and it would pass into the hands of rivals. Not only have they no stocks, but they have not sufficient storage to bond this whisky for this number of years, even if they had the casks in which to put it. Unless you deliberately mean to crush out the trade—which nobody does mean—you must make such modification of your proposals as will meet their case.
I put in the first instance the case of the North of Ireland trade because it is the strongest and most exceptional. But the considerations are not confined to that alone. I am informed that the Scottish trades have never agreed to the three years' proposal of the Chancellor of the Exchequer. They could not agree, because they also have not the facilities nor the stocks necessary for it. As far as I know—I do not speak with authority in their case—it is two years rather than three. There are certain spirits which it is not proposed to subject to this bond regulation at all. In order to preserve the equality the Chancellor of the Exchequer proposes certain impositions. I suggest to him that the way to meet the legitimate case of the Belfast and Scottish trade would be to apply the principle of the Surtax to whisky, as he is applying it to other spirits which he allows to be sold new. There again I say, as I did on an earlier occasion, that I think it is for the Chancellor of the Exchequer to get into direct consultation with the trade—I have no doubt he has done so—and to work out with them a satisfactory arrangement, as he has worked it out in other cases. I do, however, press upon the right hon. Gentleman that it is utterly indefensible on any principles which he has laid down, or anything contained in the Report of that Commission—and it has not been thought worth while to call for any such action in the intervening years—to hand over the whole of the businesses of particular distillers to their rivals in the trade. You cannot justify it. It is not what the Chancellor of the Exchequer intends to do. I hope that at this early stage he will be able to give us some assurance that it will not be done, and that he will make a satisfactory and reasonable arrangement with these people, as will, as I say, facilitate the further progress of his measure.I do not know whether I had not better deal with this matter now. No one knows better than the right hon. Gentleman how very difficult it is to adjust this difficulty. I think I am entitled to say this in reply to him: My first proposal was a proposal for a graduated scale, varying according to the age of the whisky. I had representatives of the whole trade in front of me—I do not say of every locality—but this is really largely a question between the pot still and patent still—the whole fight of Pot versus Patent.
Not wholly.
There is the special case of Belfast. I had before me the largest manufacturers of patent stills. I had the largest body of still manufacturers before me—the best known of them certainly. I had also the gentlemen who come between the two, the blenders. Probably, though, there were more patent still representatives present than pot still men. I thought, having got those two interests there and having blended them with the third set of gentlemen—a real blend!—I was perfectly safe in the particular beverage that I wanted to imbibe. It was their suggestion, not mine, that instead of having a graduated scale there should be compulsory bonding. It is perfectly true that at that meeting the two years' suggestion was put forward. Afterwards I had negotiations with these gentlemen, and the proposal was put forward for the three years, as it would be a better test of the rawness of the spirit than two years, and for that reason I substituted three years, but gave them twelve months in which to increase their bonding accommodation and their storage. The right hon. Gentleman says there is the special case of Belfast. What is the special case of Belfast? It is, as I have said, that they practically put this raw whisky upon the market straight away. In the case of the patent still and the pot still I believe they keep it four years in order to enable it to mature. [An HON. MEMBER: "Three to five."] The patent still manufacturers admit that it improves with age.
Not the flavour.
Not in flavour, but it is not so destructive of the tissues. If you have a strong, fiery quality of spirits it must have a very injurious effect upon the tissues of the stomach. That is what I am told.
What does the Commission say?
What the Commission said was this—I have been trying to find the actual words—there was no difference at all in their view on this point. The hon. Member will find it on page 43. This is all they say:—
"It was not established before us that any material change in the toxicity of the whisky is effected by age."
What does "toxicity" mean?
I suppose it means the poisonous quality of whisky, but that is not the point which is put now.
Intoxicating poison!
My hon. Friend knows nothing about whisky.
I have read the Report of this Commission through.
Well, then, my hon. Friend knows less than ever, because there was no real evidence put in this case. As a matter of fact this was one of those Commissions where it was no body's business in particular to put the other side of the case and the case was never really put, except by those who defended the provision of raw whisky. All the Commission said was the words that I have just quoted. There were no witnesses. It was not the business of any temperance association in particular.
The right hon. Gentleman surely does not mean to suggest that this Commission took no steps to ascertain whether this new whisky produced drunkenness because of its newness. They searched for a drunken man, drunk because of drinking what is called raw whisky, not because he had taken too much whisky, and they could not find him.
Yes; at the same time Commissions are not very good means of getting evidence.
They are better than hearsay.
There was a Commission where there was a good deal of evidence taken, a Commission which sat upon the whole licensing question, and that was the Royal Commission on the Liquor Licensing Laws. [An HON. MEMBER: "Whose Commission was that?"]
Lord Peel's.
Yes. Lord Peel's. This is what the Commission say:—
That is perfectly unanimous, and those who composed that Commission comprise representatives of the trade as well as representatives of the party opposite. The hon. Baronet for the Ayr Burghs (Sir G. Younger) was a member of that Commission. Undoubtedly it was a Commission that excited far more interest than any other Commission, and therefore witnesses were much more likely to give evidence before it. That is what they say—"We cannot resist the conclusion that newly distilled whisky is less wholesome and more intoxicating than whisky which has been recently matured."
They continue:—"cannot resist the conclusion that newly distilled whisky is less wholesome and more intoxicating than whisky that has been recently matured."
That was the point raised then!"We agree with those who advocate that some provision should be adopted to mitigate the evil caused by the consumption of new whisky by requiring it to be bonded for a certain period. We are aware that the Select Committee on British and Foreign Wines appointed by the House of Commons thought it was not desirable to pass any compulsory law in regard to the age of whisky, but the main ground of this conclusion seems to be that certain restrictions on commerce would impose an unfair burden upon particular classes of spirits."
"The evidence we received satisfied us that no hardship at all commensurate with the general advantage to be gained would be felt by the distillers if it were made compulsory to keep whisky for a certain number of years in bond."
What is the date of that?
1899.
It was the same question nine years ago as it is now. I want to point out, as my attention has been called to this Commission, and as a new inquiry has been instituted on the subject, that here is a Committee of—I will not say of a more important character, but it was a Committee which sat for years to consider the whole question of the drinking of intoxicating liquors, and that was the unanimous conclusion to which they came. I have made inquiries of men in the trade, of men who had no sort of interest in selling, men whose judgment I trust, and they say there is absolutely no doubt at all that the selling of raw whisky creates a good deal of the mischief which we have heard about. My hon. Friend behind me perhaps would say that alcohol in any form is bad.
Mr. LEIF JONES rose—
No, no; perhaps I had better not touch on that point.
I prefer to make my own speeches.
Yes, I know. At any rate, there is no doubt at all that that was, more or less, the general opinion of men who regard the whole question quite impartially. Let me point out to the hon. Member, and anybody who may just now be referring to this Commission's Report, that the toxicity is not quite conclusive. I do not think that that comes into the question. It is rather whether the whisky contains more poisonous elements, more poisonous chemically, which vanish with age. I do not think that was the suggestion considered by the Royal Commission. The first point was whether it was more wholesome, and the second was whether it was more intoxicating, and on both points they found against the raw, immature whisky. I defy hon. and right hon. Members to find anyone who has watched the effect on the Clyde of the drinking of these fiery whiskies who has not come to the conclusion that they are extremely mischievous in their effect. They drink it raw, and they drink it raw without food. They are trying, it is perfectly true, to meet that by providing food, but we cannot compel them. What I am told is that it burns the tissues. Now, mature whisky may be just as alcoholic, but it has not that effect. The maturing of the whisky deprives it of that fiery quality. I am not going to deny that there is some hardship in this particular case. It is very difficult in a state of war, so to make your arrangements as not to inflict some hardship upon somebody. One of my hon. Friends called attention the other day to the hardship inflicted upon fishermen on the coast of Scotland who are actually prohibited from fishing in certain areas where they were dependent entirely for their living.
And a thousand trawlers commandeered.
In that case compensation is paid. I am referring to something where compensation is not paid—the actual prohibition of fishing in certain areas in the public interest. There is no compensation paid to them. There are hundreds of them and their families. Now let us have the dimensions of this problem. There are two whisky firms who would be hit here—just two. I am sorry, and right hon. Gentlemen know perfectly well that I have racked my brain to find some means of accomplishing this purpose without doing any damage, and if anybody could find out for me a way in which it could be done, I should be glad.
made a remark which was inaudible in the Reporters' Gallery.
I am not at all sure that could be done without reopening the whole question. What I find here is, the moment I am driven from one position and I take up another to meet objections, I generally find I am creating absolutely new objections in the breast of someone else. Here you have reduced the grievance to these dimensions, that only two firms are temporarily injured by this action.
I do not agree with you.
I cannot find any firm, as far as two years are concerned, that would be injured except these two firms. If it is true that it is desirable in the interest of the workers, and, what is still more important, the work that they are now doing for the State, to stop the output of this raw, fiery whisky during the period of the War, I ask whether the interests of two firms ought to stand in the way altogether of that being done?
There are English firms besides these two.
I have not heard of any firms except these two.
Have you had a letter from a Scottish firm?
That is the point between two and three. The evidence given before the Commission by a good many of these whisky firms was entirely in favour of compulsory bonding.
The right hon. Gentleman knows that the whole case for the origin of Lord James' Commission was a trade dispute. A verdict was found in favour of one party, and you are now proposing to reverse it in favour of the other.
I am not proposing to reverse it at all. The right hon. Gentleman knows perfectly well that the whole sentiment of the House of Commons was in favour of stopping this raw whisky. I put it to the right hon. Gentleman that there is much evidence that raw, immature whisky is of a more intoxicating character, and the second Royal Commission never found that was not the case. They simply dealt with the question of its poisonous character—its toxicity. I do hope we are not going to allow the interests of just two firms—
May I remind the right hon. Gentleman that he has seen the same representatives whom I saw, and their statement is that they spoke for three-fourths of the whole distilling trade of Ireland?
If that means three-fourths of the output in Ireland, I am not in a position to dispute it, and I accept the statement at once; but it does not represent three-fourths of the whisky trade of this country. We cannot legislate separately for Ireland. This is really an Imperial question, and a very important Imperial question. I should have liked to have gone very much further with regard to spirits, because of the overwhelming evidence there is of the mischief done by whisky. What happened about that? I do not mind saying so at once: I should have thought it would have been very much to the national interest to stop the drinking of spirits and to pay compensation. Then comes the second proposal, that you should diminish the sale of spirits by the imposition of a stiff duty. I accepted the decision of the House of Commons on that subject. Now, the third alternative is put, to stop the sale of raw whisky. We are to be driven out of that again.
Are we really considering as paramount the interests of the country? The Noble Lord (Lord R. Cecil) made a very forcible appeal in the House a few minutes ago, and it was cheered from every part of the House. He said, let us subordinate everything to the one consideration of making ready for the successful completion of this War. Is there any doubt in the mind of anyone that the sale of these cheap, raw, immature whiskies on the Clyde does interfere with the output of equipment of war? I do not suppose there is a doubt in the mind of anyone. The right hon. Gentleman may say the percentage may be low, whereas, I think, the percentage is high; but, whatever the percentage is, I do not think it ought to be allowed to interfere with such a paramount consideration as this. Really, if the interests of two or three, or even four persons, are to interfere with what is vital at the present moment, all I can say is the nation is not in a fit condition to carry through a great war. Other nations have made sacrifices. Russia gave up everything in the way of alcoholic liquor; France gave up absinthe. What happened in France when absinthe was given up? We had exactly the same process as we are having here. The manufacturers of absinthe appeared in the House of Representatives and fought it. The representatives of the absinthe districts protested in the Chamber of Deputies. What happened? The whole of the Chamber of Deputies, without exception, voted them down. An inquiry was made for us over there in connection with munitions of war, and, wherever they went, they found that the suppression of absinthe had had a most admirable effect in increasing the efficiency of the workmen. That was the official report given to the Munitions Committee the other day. It is a pitiful spectacle for the House of Commons; it is really pitiable that, every time we attempt to deal with the situation, there is always some difficulty with some interest or other. Compensation I have always been prepared to face to deal with the situation, but here, in this case, we are simply asking them to take exactly the same position as anybody else.No.
It is true that in their special case there are special circumstances, but is it to be said that something which is obviously to the interest of the community, the stopping of this raw and cheap whisky, should not be proceeded with for this reason? All I can say is the responsibility on those who say so is a very serious one. I shall be very happy to leave it to the House of Commons. This is not a thing in which to call upon party loyalty; it is a matter which must be left to the House of Commons, and I should be very glad to leave the whole question to the House of Commons to decide one way or the other, without accepting any responsibility, except that of recommending it. If the House of Commons say they cannot do it, the responsibility is theirs, but I should not be doing my duty if I did not point out what is the position.
There is only one thing I say in conclusion. With regard to the bonding difficulty, we could meet those gentlemen from Belfast; we could find improvised warehouses for them, and we would undertake to do so. There must be buildings in Belfast which would do for temporary warehouses for the next two years. With regard to the making of casks, it is almost incredible that a sufficient number could not be turned out in this country for the purpose of bonding the spirits of two manufacturers in Belfast. I cannot believe it; it is a thing which to me is absolutely incredible. When we are prepared to meet them in regard to warehouse bonding, and I am sure the country will enable them to meet this other matter, I do appeal to their patriotic sense to make some sacrifice of convenience, and, if necessary, a greater sacrifice, in order to help the country to get through this present crisis.After the statement of the Chancellor of the Exchequer I should much prefer, if possible, not to intervene in a Debate of this kind. I have never up to now, since the War broke out, said a word in opposition to any proposal the Government have made; but on the present occasion the Chancellor of the Exchequer, at the eleventh hour, and without giving any chance whatsoever of proper discussion, has brought in a proposal which seems to me to be so absolutely unfair that I think we have a right to have the matter fully discussed in the House of Commons. Indeed, I think we owe it to citizens who are carrying on a legitimate trade, and who, on the faith of a report, after an inquiry into the whole of this subject—not into every subject, as the Peel Commission did, but solely into this subject—and on the action of the House of Commons and of the Legislature ever since, have gone on extending their businesses and increasing the investment of capital in those businesses. I am very anxious at the earliest moment to state the position of these firms. They manufacture two-thirds of the whole of the whisky produced in Ireland. If this had happened in the South or the West of Ireland, we should not have had to discuss the matter at all, but it happens to be in the North of Ireland. What is the position of these firms? I have seen their representatives, and they have not the slightest objection to the bonding of whisky. I do not want the position to be misunderstood. They have no objection whatever to the bonding of whisky. They have no objection to the Chancellor of the Exchequer, under the Bill which has just passed its Third Reading, prohibiting in the War areas, or the restricted areas, the sale of whisky of any kind. They have no objection, or at any rate, they would prefer a proposal that we should prohibit the sale of whisky altogether during the progress of the War, because then they would be put upon equal terms with every other whisky distiller in the trade. What they say is that in their present position, and acting on the faith of the present state of the law, they have carried on their business in a perfectly legitimate way. They have no stocks in hand, and if you lay down that they are not to sell anything until the stock is three or two years old, then they will have to shut up their businesses for three years. Of course, what you are really doing meanwhile is, you are handing over their business to the other distillers who happen to have stocks on hand. That is the whole thing. Put them in the same position in any way you can with the other distillers, and then they will withdraw every bit of opposition. Restrict the sale of whisky altogether if you like—[HON. MEMBEBS: "Hear, hear!"]—in the restricted areas, and they have no grievance because then you are treating them the same as every other distiller. It is all very well to say people ought to rise to the importance of the occasion. So they ought. But I ask ought you, as an emergency measure, to come down here at the last moment to carry out this proposal not because you really think it is for the safety of the Empire at this great juncture, but because you are driven out of the position which you thought was the right position to take upon this particular matter, which is going to ruin these companies, and then you say, "What does it matter? It is only two companies." I think that is a most unfair thing to do.
It is very easy to make a case and ask, "Are you going to set up raw whisky in a crisis of this kind as against the interests of the nation?" That is not a fair way to look at it, and you ought to take care that you treat the whole trade equally, and not make one or two, or three, of these firms, who represent two-thirds of the whole consumption of whisky in Ireland, pay alone for the injury which you are inflicting upon them. I think that the Chancellor of the Exchequer entirely misrepresents the position of these gentlemen and the whisky they sell. After all, this is a long-standing controversy between pot-still distillers and patent-still distillers, and we may as well face it, and the result of what the Chancellor of the Exchequer is doing is that the pot-still distillers, who produce by far the most deleterious whisky when it is consumed new, have gone away having got a victory over the whole controversy that has been going on for the last twenty years in relation to this matter. [An HON. MEMBER: "No!"] Of course they have, because these distillers have stocks on hand, and they drive these men out and get the trade for themselves, and the Chancellor of the Exchequer thinks he is meeting the trade by doing that. The whole question was gone into by the Commission upon whisky and other potable spirits. It was not like Lord Peel's Commission, which was inquiring generally into the liquor traffic, but it had its whole mind applied to this matter, and they issued a unanimous report signed by Sir Laurence Guillemard, the Chairman of the Board of Inland Revenue in this country. They said a great deal more than the Chancellor of the Exchequer has stated. They said:—Then the Report says:"It was also stated that new patent-still whisky is not injurious to health, and that less change in its flavour is developed in the course of ageing than in the case of pot-still whisky. Patent-still whiskies mature more rapidly, and many of them pass into consumption when only a few months old. Some, however, are kept from two to ten years in wood."
"In our opinion the evidence is not sufficiently positive to justify us in holding that it is necessary for the protection of the public health to detain any spirits for a minimum period in bond. We may add that, apart from the fact that the price of spirits would have to be raised in order to cover the loss of interest consequent upon their detention in bond, the practical difficulties involved in any system of compulsory bonding would, in any case, make us hesitate to recommend such a restriction.
and so on, and then the Report says:In the first place, new spirits are suitable for making into British gin and compounds, liqueurs, tinctures and medicinal spirits,"
Therefore you have the finding that, as far as wholesomeness is concerned, it has nothing to do with it. When the Chancellor of the Exchequer says that he wants some means to deal with these people at the present time engaged in those areas, or any other people who are connected with the Government service at the present time, I am not here to try and prevent in any way the right hon. Gentleman doing whatever may be necessary for that purpose; but I say that to come down here as a war emergency and to try and pass as a non-controversial measure here a matter which is going to ruin two-thirds, of the trade of Ireland in this respect, without a moment's notice to enable them to adapt themselves, and without the possibility of adapting themselves, to the new conditions, and to say that is a case which ought to receive consideration without compensation, is going in the teeth of everything which the Chancellor of the Exchequer has done in relation to all the legislation he has passed. Why, Sir, when the right hon. Gentleman shuts up a public-house in the new areas he is going to compensate them, and he is going to compensate the brewers; but when he is going to shut up these distilleries he is not going to give them a penny. What is the difference between the two? He shuts up the public-house and compensates the brewer because he takes away their trade in the interests of the country. [An HON. MEMBER: "He denies that."] He said he did not deny it, and otherwise his Bill would not have passed. What is the difference? It is quite true that we are somewhat isolated, and that we have got eighty representatives below the Gangway to stop the Bill. I say that the directors of these companies are as willing as any men in the kingdom to join the Chancellor of the Exchequer in helping him, but they see no reason why they should be alone, of all others engaged in the trade, the persons who are to be sacrificed. I appeal to the Chancellor of the Exchequer at this stage to give us, at all events, some hope, in the interests of the progress of business here, that this matter will be reconsidered; and I can assure him that he will find these firms absolutely reasonable, and if he finds any method of bridging over the difficulty, or enabling them to adapt themselves to the new circumstances, I will undertake at once that they will accept it."If compulsory bonding is considered as a means of securing the maturity and flavour, as distinct from the wholesomeness of spirits, it must be borne in mind that spirits of different character do not mature with equal rapidity."
I am sincerely anxious to meet the case made out by the right hon. Gentleman. There was one suggestion which he made at the end of his speech. He suggested that they were being deprived of their business practically during the whole of the next three years without any compensation at all. Do I understand that it would meet the right hon. Gentleman's views if the question of the extent to which they were injured by the application of this Bill were referred to this Commission? We feel, at any rate, in that case we should have done our best to meet his case.
I do think that it is in the highest degree pitiable that we should wrangle about a matter of this sort. I do not think, however, that it is our own fault, and this is a kind of question which ought to be settled beforehand if a grievance exists. We have done our best to arrive at a settlement, and we suggest that the Bill should be postponed. I do wish the House of Commons would understand the case as I see it. It is all very well to appeal to the patriotism of all of us in a crisis like this, but the right hon. Gentleman has no right, unless it is necessary, to make proposals which fall upon one firm or one class of firms only, and which
5.0 P.M. actually inure to the benefit of their rivals, and which, in other words, will absolutely destroy these distillers and will proportionately benefit rival distillers in other parts of the country. That, surely, cannot be justified unless it is absolutely necessary. I ask the Committee further to consider this: It is not as if this thing has been carefully considered and it is not as if the Government had arrived at a decision after mature deliberation and no other proposal was possible. It is nothing of the kind. The Government have been driven from pillar to post in this matter, and they suddenly arrive at this solution which seems, for the moment, to meet with the approval of the representatives of the-trade, and consequently they jump at it. Then we find that, without the right hon. Gentleman's knowledge, it is inflicting an intolerable hardship upon one class of people, and is the right hon. Gentleman not bound to meet them? It is not our case to argue that immature whisky may be bad. I happen to have read just now the Report of the Commission and it is worth something, but there is a universal feeling—an instinct, if you like—that immature whisky is bad, and I have been told it ever since I was a boy by chief constables and people of that sort. We do not wish on the ground of any theory to run against a feeling which appears to be so widespread, but, I ask, Is there no other way? Will the right hon. Gentleman say this is of such desperate importance that it cannot be met by some other method which will treat these people fairly? I do not see how he can say so. Suppose we adopt the suggestion made by my right hon. and learned Friend, is there anyone who will say it is not fair? Is there anyone who will say that it causes an evil so great that you cannot face it? That proposal was simply that for one year you should put a Sur-tax upon whisky sold in this way to give them time to adapt themselves to the new conditions. That is all they want. Put on a Sur-tax which will not interfere with the sale of it and they do not object. They are willing to stand that. Put this Sur-tax on for one year, and then at the end of that year bring into effect precisely the proposals which the Chancellor of the Exchequer suggests. Is not that reasonable? Does the right hon. Gentleman realise that this is not a case which compensation could possibly touch? It is no use offering these people bonding facilities; they have not got the stock. They have been accustomed to sell their output as they make it. Bonding facilities would not help them. Therefore what he proposes means that while they are waiting until they have the stocks of mature spirits of two years they have lost every one of their customers, who have gone to other people, and they have absolutely no means of recovering the trade which they have lost. I can assure the House that I hate discussing this matter, but, if there is one thing which an Opposition is bound to do, it surely is to try and prevent what they believe to be an act of gross injustice, apart from the district from which it comes, and that is what I believe this to be. It is not intentional; not at all. The right hon. Gentleman has no such intention, but he has been driven in such a way that he does want to get something, and he has arrived at this as the one thing he can do, and he says, "For Heaven's sake, on the ground of patriotism, let me at least have this!" That is not fair. The position from the national point of view is not so dangerous that you cannot meet it either by a Sur-tax, which is the only thing I can think of, or in some other way which will not deprive these people of their trade. I say further, and I am sorry to say it, that I do not think the Chancellor of the Exchequer ought to have made us make speeches of this kind. We have shown in every possible way that we are ready to meet him. We did not move the Adjournment of the House when he proposed something which we did not like, and I am bound to say that when, after careful examination of the facts, we who are responsible for the Opposition had come to the conclusion that it was an unjust thing, and had told him so, he ought not to have proceeded.I shall do my best not to conduct the discussion in an atmosphere of heat, because it certainly will not help anybody to arrive at a conclusion, and it is much too serious a matter for us to bandy taunts at each other, which could very easily be done, but which would serve no useful purpose. I am trying honestly to find a solution for a great evil. I have tried my very best, and I have tried to do it in such a way as to carry along with me as many interests as I possibly could, and if I have failed it is not through any lack of honest effort; it may be from the absence of capacity to negotiate, but I am certain it is not through any lack of desire to meet any reasonable complaint. If I went to the extent of saying that if these people, if they were really hurt, and I am not disputing it, were met in the same way as the brewers in the munitions areas, who for the moment have the whole of their business stopped, not two firms, it may be twenty, or even a 100.
They can sell in other areas.
We might give the people a taste for some other kind of beer. These brewers have not complained. They say, "Very well, we will stand it so long as you pay us compensation." I thought that when I went to that extent I was really meeting the whole case. The right hon. Gentleman said, "Why not put on a Sur-tax in order to enable them to sell? Does he not see what that means. If it is a Sur-tax heavy enough, they do not sell. That is why I put the duty so high in my proposals—but if it is a Sur-tax which is low, well then they sell, and a Sur-tax which enables them to sell this stuff is exactly what we want to avoid. If the thing is to be stopped at all, it must be a Sur-tax that will stop it. Then, how much better are they? They are worse off. On the other hand, if it does not stop their selling it, what do we gain by it? Now I come to the other point put by the right hon. and learned Gentleman. He says, "Cannot you stop it in the munitions areas?" That is just what you cannot do the moment it is out of bond. That is the only point at which you can stop it. How are you to stop it the moment it gets out of bond?
Stop all whisky in munition areas.
That very proposal was put in this House yesterday, and I am perfectly certain that if I made it it would not be carried. I should have had much more fierce resistance if I had proposed to accept the Amendment of my hon. Friend sitting behind me to exclude all whisky in munition areas. The right hon. and learned Gentleman puts forward a suggestion with which I agree, but if I had proposed it I should have met with the same amount of opposition, though, perhaps, in another quarter of the House. I thought that I made a fair offer when I suggested that they should be put in the same position as the brewers whose business will be stopped.
I have not had an opportunity of talking over these matters with these very large business concerns. Does the right hon. Gentleman mean that the compensation would include the consequential fact of their losing their business? If you stop their business for two years, of course the business is gone. Therefore if you give them compensation it is practically the same as if you buy out their business.
That is exactly the point which I have no doubt will be put by the brewers in these areas, and it is for the Commission to decide it. They are to take all relevant facts into consideration, and the only instruction which we have given them is that they shall pay what is fair to the man for the loss he suffers. We have given no other instructions whatever to the Commission. It is a perfectly fair Commission. The hon. and learned Gentleman the Member for Exeter (Mr. Duke) is in the chair, and I am perfectly certain that he will take all these things into account. If I began to lay down all the principles of compensation, we should have a Debate upon compensation. I am sure that they will take all these things into account. The brewers in the munitions areas have quite fairly put themselves in a position where their business may be destroyed, and we have said to them, "If that is the case, then the Commission must take that into account." They are bound to do so. If the same thing happens here—
Will not these brewers be able to sell elsewhere?
No; in England there are only one-tenth of the houses open to them because of the tied-house system. Take the sort of brewer whose business will be closed. They are small brewers, and they do not sell outside. They sell only in the areas. There are scores of them, and their trade will be destroyed. All they ask is, "If it does happen, will you compensate us?" and we say that we will leave it in the hands of the Commission. We only ask that these men should do the same.
I should be very glad to shorten this discussion at the earliest possible moment. May I say that this is a new proposal? I have only just heard of it, but I should hope in some way or other we might by that proposal find a way out of the difficulty. Certainly, so far as I am concerned, I shall do everything to promote that state of feeling which will assist in arriving at a solution. I suggest, therefore, that we should terminate the discussion now. So far as I am concerned I do not mind, after what the Chancellor of the Exchequer has said, if he gets his Second Reading, because we have still the Committee stage to take, but I should have hoped that there might be some way of getting out of a difficulty which is admitted.
May I also appeal to all sections of the Committee that for the time being we should resume the Debate upon the Motion before the House, which is the renewal of the Tea Duty—
I only meant this particular point.
That we should proceed to discuss the general finance of the year upon the Tea Duty, and that we should accept the suggestion of the right hon. and learned Gentleman and give a Second Reading at any rate to the Bill.
No one will be more anxious to respond to the appeal of the Chancellor of the Exchequer than myself, but I do want to point out that apparently we discussed these matters as if alcohol and whisky were synonymous terms, and as if when dealing with alcohol you are dealing with whisky. It would not have occurred to me to have raised the question at this particular point but for the fact that right hon. Gentlemen on the Front Opposition Bench, in the interests of two great distillers, have thought it wise to raise it. They are old Parliamentarians, and I can not help thinking as a youngster that there is some reason for their doing so. I do not apologise for a moment to the House for taking their minds from the great distilling interests and the interests of those who supply alcohol for the purposes of drink, and I am not here to ask the Chancellor of the Exchequer for compensation for any interests whatever. But I am here to point out to him something which has evidently escaped his attention, and that is that his modified proposals do affect very seriously the position of medicine. They will also affect the insurance scheme. About three or four weeks ago, when pharmacists learned that the right hon. Gentleman contemplated making some change in the rates of alcohol, they asked him if he would be good enough to see them. I am not complaining in the least that the right hon. Gentleman himself did not see them—of course, he could not be expected to do so. He referred them, however, to the Customs and Excise Commissioners, by whom they were received. [Interruption.] I am not talking about whisky. I am talking about medicine, which is a matter of interest to some Members of the House. The Chancellor of the Exchequer must be interested. The Insurance Commissioners have some concern in it, although other hon. Members do not appear to be interested. I wish to thank the right hon. Gentleman for having taken into consultation those who are in a position to advise the Government regarding the increased cost of medicine owing to the War. But they heard of these new proposals for the first time this morning, and I want to ask the Chancellor of the Exchequer not that he should give compensation to anybody, but that he should again ask his advisers to take into consultation those who can really help in this matter. They are not out for compensation. Apparently the only people who are to be listened to are the big distillers who get hold of the Front Opposition Bench, and through them barter with the Chancellor of the Exchequer across the floor of the House. The right hon. Gentleman has been so driven by this enormous interest that he has not had time to consider the effect of his proposals in other directions. I am not complaining of him at all.
In our new proposals we do not propose to put any fresh duty on medicines. It is rather our object to relieve them of duty.
I have read very carefully the Immature Spirits Bill.
There is nothing about medicine there.
We were told last night that certain exemptions were to be made to certain people, subject to such duties as Parliament might decide, and yesterday the Attorney-General distinctly stated that immature spirit would be obtainable on payment of a duty of 1s. 6d. per proof gallon. I am perfectly satisfied that the right hon. Gentleman and his advisers do not really understand at this moment the effect of that proposal on medicinal spirit, and all I am asking is that his advisers should consult the authorities in the country on the effect of these modified proposals. I venture to state that certain proposals in the Bill will not do, and, before they are again submitted to the House, I hope the right hon. Gentleman's advisers will consult those who are best able to give information as to the effect of them. I want the whole of these questions, in fact, to be thrashed out by the Chancellor of the Exchequer's advisers in consultation with those for whom I am speaking.
I propose now to discuss the general question, and not to revert to the question of spirits, which can be debated in the Committee stage of the Bill. The Chancellor of the Exchequer made an extremely important and interesting speech when he introduced his Budget. I do not mention what I am going to say with any desire to criticise the action of the right hon. Gentleman in the past, but merely in order to prove to this House that I have some little claim to be heard on this question. For the last four or five years, on every Budget night, I have stated that if we were to be involved in a great war we should find ourselves in an extremely awkward financial position, as we were using taxes which ought to be raised for war purposes only for a variety of purposes in times of peace. The Chancellor of the Exchequer has told us that our National Debt at the present moment is something like £1,160 000,000, and that, if the War continues until the 1st of next April, another £1,170,000,000 will have to be added to it. If you deduct from that the income derived from taxation, say, £270,000,000, it means that another £900,000,000 will have to be found by Parliament, and if you add the £900,000,000 to the already existing debt of £1,100,000,000, you arrive at the enormous total of £2,000,000,000 for our National Debt. The largest sum at which our National Debt has hitherto stood, in the history of this country, is £900,000,000, and therefore we have an enormous increase to face, concurrently with the enormously increasing expenditure of the country.
When I first came into the House the Liberal party, headed by Mr. Gladstone, who was then Prime Minister, were horrified at a Budget which would amount to £100,000,000. But now our ordinary peace Budget amounts to £209,000,000, and on the top of that, when the War is over, we shall have to find revenue to meet the interest on the £2,000,000,000 of National Debt. I have made a calculation. I do not presume to say it is absolutely accurate, but I do not think it is very far out. I take the interest on £2,000,000,000 at £80,000,000 a year that is at 4 per cent. and I very much doubt whether we shall be able to raise the enormous sum which we shall require at a less interest than 4 per cent. Then there must be a Sinking Fund to reduce an enormous debt like that, and taking the Sinking Fund at 1 per cent.—or £20,000,000—you get an Annual Debt Charge of £100,000,000. At the present moment our Annual Debt Charge is £24,500,000. When Sir Stafford North-cote, in the year 1876, established the Annual Debt Charge he put it at £28,000,000, so that the increase from the £24,500,000, at which it stands now, or the £28,000 000 at which it was first put, to £100,000,000 a year, represents an addition in round figures of £70,000,000; if you add that to the £207,000,000, your ordinary peace Budget, you will find that the Budget will work out at nearly £300,000,000 after the War. That is a very serious burden. I do not say it is a burden which cannot be faced, but certainly it is one that requires to be considered. I want to make an appeal of the sort which the right hon. Gentleman himself made a little while ago—an appeal to every class in the country to exercise economy in the future. The first people to set such an example should surely be the Government itself, and, after the Government, corporations and local authorities all over the country. But I do not find that the Government are giving any indication that they desire to inculcate economy. Take, for instance, the Civil Service Estimates. There we have an increase in round figures of £2,000,000 over the Estimates of last year. I have taken the figures from the Estimates, and the actual increase is £9,950,000.Can the hon. Baronet give separate figures for the different countries—for England, Wales, Scotland, and Ireland?
I am afraid I cannot. I do not want to take up the time of the House at any undue length. I only took out rough figures, because my object was to illustrate generally the lack of economy which apparently characterises Government Departments at the present moment. The total of the Civil Service Estimate for the year is a little over £59,000,000. Nine years ago, in 1906–7, the Estimate only amounted to £29,000,000, and I must say that the increase this year at a time when the nation is engaged in a big war, is very noteworthy. Surely those who framed the Estimate might have been content with the figures of last year, without adding another £1,950,000 to them. I notice that the Education Vote shows an increase of £397,000, and, as far as I can see, one of the worst offenders in this respect is the Board of Education. I am speaking from what I read in the public Press. Instead of doing as they should have done, instead of going round to the various local authorities who control the education of the country, and telling them that for the future they must be very economical, and that, though there may be certain classrooms in not such a good state as they might be if everything were absolutely perfect, and although in certain classes the number of pupils may be larger than the most critical educationists would desire, yet these things can not be remedied in the present year, but that they must economise their money, and not spend any more—the Board of Education have adopted a very different policy. They have asked the London County Council to spend more money—I do not care for what purpose—and I do suggest that money ought not to be spent on anything that is not absolutely necessary at the present moment.
Take the case of the local authorities. So far as I can gather very few, if any, of them have done anything whatever to stop the expenditure that is going on. They are talking about building houses. That may be very necessary, but we have gone on very well without them up to the present time, and surely we can do without them for still another year. If we began to build them now, they would not be finished for another eight or nine months, and people might well wait a short time longer before entering on this expenditure. It is not only a question of money; it is a question whether or not you are taking the men who ought to be employed in making munitions of war and in other directions, and are employing them on what may be all right in time of peace, but which is certainly not right in time of war. Only the other day I drew the attention of the House to the fact that in the park certain trees were being taken up by ten or twelve men and transported to another part of the park. The hon. Member who represents the Office of Works replied that he thought that buildings were going to be put up there. He must have relied upon information which was incorrect, because I walked by the same spot only two or three days ago and there was no sign of any building. The site is on a slope, and I do not think that any building whatever could be put up there. That is only a small thing, but it is a straw which shows which way the wind is blowing. It shows that in all the Government Departments, so far as I can ascertain, and in all local authorities, there is the same desire to go on spending money that existed before the War. All these different Departments are not the departments of the Chancellor of the Exchequer, although, of course, he can control them. If we come to his Department, what do we find? I do not take this case because there has been a controversy about it, but merely because it seems to be something which shows that the true spirit of economy is not being followed. Take the Land Taxes. They yield this year £350,000, while last year they were estimated to yield £700,000. I cannot find the actual cost, but I do not think I am exaggerating when I say that they cost £800,000. Included in the £350,000 is the Mineral Rights Duty, which is only another form of Income Tax. If you take the £350,000, including the Mineral Rights Duty, there is, if my figures are correct, and I think they are, a net loss of £450,000. It has been stated in the House—I think it was to-day—that there are over 2,000 men employed in this Department. Leaving out the question whether the Land Taxes are good or bad, there is no doubt that they are not profitable at the present moment, and are employing a large number of men who might be usefully employed on something else. At least these taxes might be suspended until the close of the War. They are not profitable, we are losing money on them and using men to collect them who might be used for other purposes. If it had not been for the truce, I might have made what, perhaps, would be called a critical speech. I have endeavoured to avoid all matters of party controversy, but I feel very strongly that if we are to come out of this War successfully—the Chancellor of the Exchequer himself has talked about silver bullets ending it—and if we are to raise the money that is necessary to enable us to do so, every man in this House must drop any particular hobby that he had before. I do not much care what the hobby is. I do not think I have any myself, but if the Chancellor of the Exchequer can show me one I shall be perfectly willing to drop it.The Dogs Bill.
That would not cost money. [HON. MEMBERS: "Yes, it would!"] At any rate I must drop it, because no private Member can bring in a Bill now. Therefore that is not a very good illustration. Every Member, whatever his hobby is—whether it is education, the housing of the working classes, or doing this, that, or the other—must make up his mind that he has to drop it if we are to find the money necessary to carry the War to a successful conclusion.
The hon. Baronet who has just sat down is as unconscious of his hobbies as he is of the many personal virtues he possesses. Those who heard the hon. Baronet's speech will agree with me when I say that he has upon this occasion, as he does upon most occasions when he addresses the House, been riding quite a number of his favourite hobbies. One of the hobbies he rode this afternoon was his opposition to the Land Taxes. Although other parts of his speech were a plea for financial economy, in that particular respect he advocated a sacrifice of a not inconsiderable amount of revenue.
No. I pointed out that they cost £800,000, while the yield was only £350,000; therefore I was advocating an increase in the revenue by suggesting that the taxes should be dropped.
The hon. Baronet is perfectly well aware that if the revenue were sacrificed the expenses incident to the valuation, and so on, would not be stopped at all.
Oh, yes, they would!
Nobody, at any rate no outsider, could have listened to this Debate and seen the present condition of the Committee and imagined that we are now faced with the gravest financial problem which this or any other country can be faced. The Debate, apart from the speech to which we have just listened, was concerned with the financial interests of one or two very rich distilleries, and since the Chancellor of the Exchequer gave the assurance that the interests of those distilleries would be protected, the interest which the Opposition had in the Budget appears to have evaporated. The Budget Speech which the Chancellor of the Exchequer made last week was remarkable and unique in three respects. First, it dealt with the most colossal figures ever presented to this or any other Parliament; secondly, it set forth—taking the estimate for the continuation of this War at twelve months—a deficit of something like £800,000 000; and, in the third place, it was remarkable in that the financial statement made no proposals for meeting this enormous deficit. I take it that the Chancellor of the Exchequer's speech last week was rather in the nature of a feeler. A considerable part of the speech was devoted to setting forth possible ways by which an increase of revenue could be secured if the whole of the deficit could not be made good. In considering this question I, like the hon. Baronet, do not want to be hypercritical or controversial this afternoon. In the present situation it is the duty of each and all to contribute whatever we are able to the solution of this very important matter.
The first thing we have to consider, and the thing we must bear constantly in mind when we are considering the question of raising additional revenue, is the fact that the wealth of the country and the income of the country from which the national revenue must be derived depends mainly upon maintaining the productive capacity of the nation, and that the productive capacity of the nation depends, in the main, upon leaving unimpaired the standard of life of the great body of the workers. The Chancellor of the Exchequer last week spoke in a very optimistic tone of the present industrial prosperity. He assumed that the savings of the nation this year will be considerably higher than they have been in recent years. It is a matter for universal gratification that serious unemployment has not, so far, been one of the results of this War. But we should be living in a fool's paradise if we were not to realise that the present apparent prosperity is not real, but, in a sense, fictitious. It is not due to the fact that there is a real increase in the material wealth of the nation. It is not, of course, a difficult thing to get a temporary prosperity if one is prepared to live upon one's capital. That is really what we are doing at the present time. We shall have to pay for this later, I am afraid, in commercial and industrial depression and a large volume of unemployment. There are two reasons, among others, which have contributed for the time being to this apparent national prosperity. One is the fact that something like two million of, perhaps, the most efficient of the working classes have been withdrawn from the ordinary channels of employment.More.
Yes, more if you include those engaged in the manufacture of munitions of war. That must have a very appreciable influence indeed upon the general state of employment in the country. Bearing in mind what I said a moment or two ago about the importance of doing nothing at all to impair the productive power of the nation and of keeping up the standard of living of the working classes, we are driven to this conclusion: That no part of the additional revenue ought to be raised by an additional impost or taxation upon the wage-earning classes of the country. The wage-earning classes of this country are paying for the War in a great many ways. They are paying for the War not only by the increased duty placed upon tea last year and the increased duty upon beer, they are paying for it not only by the sacrifice of their lives, but they are paying for it financially to a far greater extent than by the increase of taxation which was levied last November. The Chancellor of the Exchequer shakes his head, but I will give him one or two facts in support of the general statement I have made. I noticed in the "Economist" this week that the figures which are published regularly dealing with the prices of commodities—taking practically every article which enters into the economy of a working class family—show an average increase since August last of 30 per cent. That does not include rent. Probably there has been no increase in rent. Even if I were to take 20 per cent. as being the proportion of expenditure upon rent of the average working class family, the figures show an increase of 30 per cent. The total spending power of the wage-earning classes is about £800,000,000 a year. If we deduct 20 per cent., that leaves over £600,000,000 which is spent upon other commodities—food, clothing, coal, and the like; 30 per cent. increase upon that means not less than £180,000,000 a year. That brings us to being compelled to accept one of two conclusions. Of course, if there had been an increase of £180,000,000 in the total wages bill of the working people, then we should be financially in the same position that we were in before the War; but we know that no such increase of wages has taken place, and therefore there has been a reduction in the spending power of the working people since last August of not less than £180,000,000. That is part of the working classes' contribution to the cost of this War.
There is a considerable increase in wages, not only in the amount, but in the larger amount of employment given. The hon. Member has also left out the question of clothing.
The hon. Baronet is absolutely wrong in both points. There has not been an increase in the wages bill. There have been two million men withdrawn from wage-earning employment, and I agree that there has been in some industries an increase of wages, but last month the total increase of wages amounted only to £70,000. That is less than £1,000,000 a year. The total amount of indirect taxation which will be raised during the current year on the basis of existing taxation is about £82,000,000, and if we take four-fifths of that as being paid by the working people, that means that they are contributing, indirectly, through taxation, to the Imperial Exchequer during this year the sum of £65,000,000. The amount which is paid by Income Tax and Estate Duties is more than double that—about £150,000,000—but no one will maintain that to exact £150,000,000 from a very rich class like those who, in the main, contribute to the payment of Income Tax and Death Duties, is a fair proportion to the sum of £65,000,000 which is paid by the wage-earning classes. I submit that, whatever other means we adopt, we cannot afford to increase the taxation upon the wage-earning classes of the country. We have to consider by what means this enormous sum can be raised, and we have a choice of three courses—taxation, loans, or a combination of additional taxes and loans. The Chancellor of the Exchequer pointed out, I think last week, that the practice adopted at the time of the French wars and the Crimean war was to raise the sum needed in about equal proportions by revenue and loan, and he pointed out that at the time of the Napoleonic wars taxation rose to a figure which took two-sevenths of the national income.
That would fall on the working classes.
Two-sevenths of the national income at that time was a far graver impost than it would be now. Two-sevenths from an income of £140 a year would be £40. That would be a very heavy tax indeed upon such a comparatively small income, but to take, say three-quarters of an income of £50,000 a year would leave an income of £12,500 a year, and surely £12,500 a year is as much as any individual could expect to have to spend according to his own sweet will in such a time of national crisis as this. I see no insuperable obstacle to raising perhaps the whole of the deficit which the Chancellor of the Exchequer will have to meet by means of taxation. If he were as courageous as the Chancellor of the Exchequer in the time of the Napoleonic wars and took two-sevenths of the present national income, which he himself stated last week to be £2,400,000,000 that would give him just about the sum that he would want, say £800,000,000 a year. That is one of the suggestions I would make for the consideration of the Chancellor of the Exchequer.
I now come to the question of raising this money by means of a loan. It seems to me that there are only three favourable conditions under which a large national loan could be raised without inflicting very considerable injury upon the trade of the country, and particularly upon the working classes. If we were able to borrow in the foreign market, a loan would have no very serious consequence upon the industry of our country, or if it were possible to raise a loan out of savings which were not needed for ordinary commercial purposes, or if there was capital lying idle, and if a loan could be raised from that, no very serious consequences would ensue. Of course there would still remain the very serious objection to a large loan, that the interest upon the loan would be a permanent burden upon the prosperity of the country, and it would give to the bondholders a perpetual right to extort a certain proportion of all future wealth which was produced in the country. But not one of these favourable conditions exists at present. We cannot borrow in the foreign market; all the foreign markets are closed, there is no surplus capital in the country waiting for investment, and although the Chancellor of the Exchequer last week seemed to think that he might be able to appropriate, if not all, at any rate a considerable part of the current savings, he could not do that without its having a disastrous effect upon the industry of the country generally. There is an index by which we can test whether we could borrow without serious financial and commercial consequences. I believe it was Dr. Chalmers, some seventy years ago, who first raised this point, that a loan under such conditions as I have stated was a tax upon the working classes—a tax falling wholly upon the working classes—and that the total amount was raised out of the year's income. That condition has, I believe, been accepted as orthodox by every recognised economist since that time. Mill accepted it practically without any doubt or equivocation. What Mill says upon this point is so very important that I will read two or three sentences. This answers the interjection made by the Secretary to the Treasury a moment ago, when he said that the burden would fall upon the working people.I said the national income quoted by the hon. Member was included in the income of the working classes, so that when he was advocating that our expenditure should be raised by a tax on two-sevenths of that, he would have to include the working classes so as to get the money.
I did not limit myself to two-sevenths, because I had been pointing out how much better able we were to bear a large impost than we were at the time of the Napoleonic wars. This is what Mill says upon this point of a loan falling wholly upon the working classes:—
I say we can test whether the conditions which are stated to exist at the present time actually are existent. If the Government borrowed under other conditions than those I have stated, it would have no appreciable effect on the rate of interest, but when the rate of interest rises as the result of borrowing, it is proof positive that the amount that the Government borrows is being withdrawn from capital employed in industry, or that it is diverting capital which otherwise would be employed in industry, and therefore all that Mill says, supported as it is by every other recognised economist, applies to the circumstances of the present time. One word more about this burden in perpetuity of interest. Roughly speaking, the National Debt, ever since about 1820, has stood at between £700,000,000 and £800,000,000. Since 1820 the country has paid £3,000,000,000 interest on the National Debt. Every generation of taxpayers pays in interest the total amount of the debt, and this will go on from generation unto generation, or until the patient taxpayer develops sufficient intelligence to kick against it. 6.0 P.M. I turn now to the other possible course, and that is taxation. I have pointed out how undesirable it is that any part of the new taxation should be levied upon the working people. I mention one or two indirect taxes which have been suggested simply to dismiss them. Some people seem to be very strongly in favour of a tax upon mineral waters. I think it is bad national economy to have too many taxes. The fewer taxes you have the better. I think Income Tax and Death Duties are the two most ideal forms of taxation. I am quite sure that if the Chancellor of the Exchequer were to attempt to put a tax upon mineral waters the result would be very disappointing—to him at any rate. You must understand the difference between a tax upon mineral waters and a tax upon intoxicating liquor. People do not drink mineral waters because they like them, though they drink whisky and beer because they like those beverages; therefore if the price of mineral waters were raised on account of taxes imposed upon them, it is perfectly certain that people would cease to drink them. Even if there were only a little drop in the consumption of these beverages, the amount of revenue raised would not be worth the trouble of collection. I now come to another question, taxes upon wages. I gathered from what the Chancellor of the Exchequer said some time ago that he and his advisers had been considering this. I go so far as to say that if we were considering de novo the establishment of a system of taxation, then something might be said in favour of this proposal. Something is to be said in favour of it, provided of course always that you exempt a certain income from taxation altogether. There is, however, nothing to be said for it now, because that is not the alternative to the indirect taxation which is already in existence. It could only be proposed as an addition to the Tea Duty and the other indirect taxes. That, therefore, rules it out on the ground which I have already dealt with at some length. I am quite sure that any tax upon the wages of the working people would give to the revenue no very considerable sum. For instance, take an income of £200 a year. At the present rate of taxation that income would pay on £40, and £40 at 1s. 6d. amounts to £3 a year. Therefore a man with an income of £200 a year would pay £3 a year Income Tax. I do not suppose that those who advocate this tax upon wages would suggest that a man with £1 a week wage, or a man with 30s. a week, or even 40s. a week, should be taxed at the same rate as a man with £200 a year. Suppose we take it at half of that. What would the tax upon wages of that amount bring in? It would raise only £3,000,000 a year. And certainly when the Chancellor of the Exchequer is talking in hundreds of millions, and is approaching the time when he may be thinking in thousands of millions, it is not worth while to incur all the opposition which such a proposition would encounter for the sake of raising £3,000,000 a year. Then how can the tax be raised? I think it could be raised, or, at any rate, a considerable portion of it could be raised, by an increase in the Income Tax on high incomes. If the tax were raised to 15s. in the £ on very large incomes, not one of these persons would be reduced to a condition of starvation. I think that this national necessity will compel the Chancellor of the Exchequer to adopt the course which in times of peace I have often tried to impress upon him, namely, that we must reverse our ideas of imposing taxation. In the past we have looked at what we were taking from a man, to a great extent regardless of what was left. Now we shall have to say that no man shall be left with more than a certain amount, and that we are going to take all the rest. I gather from what the Chancellor of the Exchequer said last week that even that proposal would be received with enthusiasm by the class to whom it was applied. He told us how these people rushed, in the first days of the War, to pay, and that very often they accompanied their remittances with letters saying how glad they were to do that. Surely their enthusiasm and loyalty is not going to be damped because they are going to pay so much more. We have often heard, in debates upon these matters, from the other side of the House, that taxation, whether in the form of an Income Tax or a tax in the form of Death Duties, was injurious and harmful to trade. I have often tried to deal with that contention, and it was only a day or two ago that I was aware that the point which I have often brought before this House could be supported by the authority of a very eminent economist. I have repeatedly stated that the more you tax people, provided, of course, that you spend the revenue economically and wisely, the more you advance the prosperity of the country. I happened to be reading M'Culloch the other day, and I found that he stated that very point:"If the capital taken in loans is abstracted from funds, either employed in production or destined to be employed in production, their diversion is equivalent to taking the amount from the wages of the labouring classes. Borrowing in this case is not a substitute for raising the supplies within the year. A Government which borrows does actually take the amount within the year, and that, too, by a tax exclusively on the labouring classes, than which it could have done nothing worse if it had supplied its want by avowed taxation, and in that case the transaction and its attendant evil would have ended with the emergency; while, by the circuitous mode adopted, file value exacted from the labourers is gained, not by the State, but by the employers of labour, the State remaining charged with the debt besides and with the interest in perpetuity. The system of public loans in such circumstances may be pronounced the very worst which, in the present state of civilisation, is included in the catalogue of financial expedients."
There are other important matters involved in this. I think the experience of this War is going to alter a good many of the orthodox opinions we have had in the past. One thing it will certainly do. It will show that the existence of a rich class, having an enormous spending power, is from every point of view a danger to the community. The tendency for wealth to concentrate in the hands of a few people has produced this industrial and social disaster—it has drawn people away from productive work. If you refer to the Census returns, you will find this fact, and it is a fact which can be noticed in all the Census returns since 1871, that in proportion to population the number of people employed in productive work has been growing less and less. I know the late Mr. Chamberlain in the early days of his Tariff Reform crusade pointed that out. It is undoubtedly the fact that in proportion to population the number of productive workers each decade is shown to be less and less, and that the occupations which are increasing in number are those which are catering to the luxury and comfort of the well-to-do classes. That is not good for the community. Therefore, if by taxation, by reducing the spending power of those classes you can prevent them from employing people in these ways you are rendering a great national service. The taxation that I have been suggesting would have that result amongst many others, and it is all the more important at this moment because the Chancellor of the Exchequer pointed out last week another financial difficulty which is arising owing to the falling off of exports, which in a large measure is due to the fact that two million of workmen are being withdrawn from the ordinary trade to make war munitions. If, therefore, we can reduce the number of those who are employed in the parasitic industries, train them and put them to productive work, industry and the country generally will gain. There is one other suggestion I want to make. We have heard a great deal about abnormal war profits, and many of us expected that the Chancellor of the Exchequer would at least have had something to say about this matter, even though he were not in a position to make a statement in regard to what he proposed to do. This is a matter upon which the country feels very keenly indeed. In the early part of my observations I pointed out that there had been an increase of £180,000,000 in the price of commodities consumed by the working people. That simply represents so much extra profit which is going somewhere, and which has to be paid by the people. The indignation of the country was brought to boiling point a week or two back by the announcement of profits which had been declared by a certain firm of millers in South Wales. I have a letter which I may perhaps read to the House from a man, who is certainly not of my way of thinking politically, in reference to this matter. He encloses a newspaper cutting announcing the profits of this particular firm of millers. I will read what he says, because I am sure it expresses the feelings of millions of people in this country:"That taxation is a means by which you can increase the productivity of labour; that the more yon tax a person the more energetic you make him, because he works all the harder in order to keep his income at the point at which it was before."
The country is expecting the Government to do something in this matter. I now come to shipping profits. I do not know why outside Stock Exchange firms should occasionally send their circulars to me, but I sometimes receive them, and I invariably read them, and at times I get useful information from them. I had a circular sent to me recently advising me to put all my wealth in the shares of shipping companies, and the most alluring prospect of high returns was put before me. Extracts were given in this circular from a number of important daily papers, such as the "Daily Mail," and important weekly papers like the "Observer." I would like to mention one or two facts given in these statements. One statement says:"My own feelings and those of several of my friends in this district, are the excuse I make in asking if you will, at the earliest opportunity, call the attention of Parliament to the enclosed, needless to add, it has caused a feeding of intense revulsion amongst us. What is the use of being patriotic even unto death, if we are to be exploited in this manner by men who appear to have no conception of what is due from them to their country at such a time Bread may well be dear, when such are allowed to make such profits One would have expected less profits to such firms in face of high freights and scarcity of grain. I am only a middle class wage earner; my income is much less through less business done, and my only child, a son, is serving in His Majesty's forces. My blood boils at such contemptible trading."
Then in regard to South American trade:"With the rates at their present level a six thousand tonner is making a profit for her owner of £7,000 to £8,000 for every Transatlantic voyage. Such a steamer can make about five such voyages a year, so that at the present rates the owner will be making from £35,000 to £40,000 per annum."
I now come to the Mediterranean trade:"A steamer of this type—that is a 5,000 ton cargo boat—could make about four voyages per annum, so that running in this trade the owner would net something like £28,000 to £29,000 a year"
I want to give the House an even more remarkable statement. I happened to be in Newcastle recently, and I was talking to a man who is engaged in the shipping trade, and he told me that a friend of his who had two steamers had let them out on what they call "a time charter." I understand that to be that he had let them to some firm and he simply received rent for them. For those two steamers this man was receiving £5,000 a month. That statement is supported by an extract from a speech made by Mr. Laurence Phillips at a meeting of the Court Line, Limited, recently held. It appears that they have been doing this time charter business also. He was speaking of the purchase of a steamer for the Court Line, and he said:"The round voyage occupies about a month. Thus, the owner of a 6,00 tonner running in this trade could make something like £31,000 per annum profit."
I should think not, So much in regard to shipping profits. Take the leather trade. I will give this one instance. Attention was, I believe, called to it some time ago. A firm of leather merchants in Liverpool recently issued a prospectus. They are increasing their capital. Before the War the average yearly profits were £24,000. Since the War, between August and December, according to this prospectus, their profits were at the rate of £180,000 a year."Only a few weeks ago we bought a vessel, the "Ilvington Court." We got her fairly cheap or we should not have bought her. She has been chartered for twelve months with a loading French shipping company, and I believe she will be employed a good deal in the service of the Allies. She cost £56,000 and the freight payable to us on twelve months means £54,000. However, that is not all profit, but a decent slice of it is, and I do not think she will be a white elephant to us."
Will the hon. Member say what are the annual profits of the Royal Mail Steam Packet Company?
That has nothing to do with this. I said nothing about that company.
No, but it is a shipping company.
If a company is incompetently managed or is obviously over capitalised that is not to be taken as a typical instance. It would be interesting to the House if the hon. Member would be sufficiently confidential to tell us something about the profits of some of the companies with which he himself is associated.
I must challenge the hon. Member's statement.
The hon. Baronet the Member for the City of London said that the price of cloth had not risen. The fact is that few things have risen so much as the price of woollen clothing. I have some figures which cannot be contradicted with regard to the profits now made out of the making of khaki. Before the War the Government paid from 3s. 4d. to 3s. 6d. a yard for the khaki cloth of which tunics are made. Now they are paying about 2s. more than that. The price of the wool from which this cloth is made has risen, I am told, from 1s. 4d. a lb. to 2s., and I understand that in Yorkshire there was a great deal of fortunate buying before the prices reached the present figures, and that the profits which are now being made are simply enormous. Spinners themselves admit that they never had such a time, and there are plenty of cases where a man is making from 1s. to 1s. 6d. a yard clear profit on every yard of khaki cloth turned out from his factory. In regard to the increase in the price of food, I want to make a practical proposal. We all know that the price of wheat is from 24s. to 28s. a quarter higher than it has been in recent years. There are, I believe, from seven to eight million quarters of English-grown wheat consumed in this country. I do not say that all this crop has been sold at the highest figure—by no means. But suppose we take a much lower average of increase of value on eight million quarters and we say that the average increase has been 15s., that would give an increased profit over that of previous years to the growers of wheat of £6,000,000. Attention has been concentrated too much from this point of view upon wheat. But there has been an increase also in the price of barley, and there has been a large increase in the price of oats, and the number of quarters of oats grown in this country is nearly double the number of quarters of wheat. Therefore upon a very moderate estimate, if we are to take the increase in the price of English-grown corn, wheat, barley and oats, we should find that the growers of these commodities are taking no less than from £15,000,000 to £20,000,000 more in profit this year than they have done on the average of previous years.
I have a practical proposal to make. The form in which farmers have paid their Income Tax in the past is nothing less than scandalous. They have not paid their Income Tax on the increase on their revenue, but upon the assumption that the farmer makes only one-third as much as the landlord takes in rent. That, of course, applies only to farmers whose rent is less than £480 or something like that. Of course it applies to the great majority of farmers. The landlord is expected to take three times as much as the man who actually does the work. But to take one-third of the rental as a means of getting at the profit of the farmer is simply ridiculous. We have to alter that, and we ought to alter that now. Something has got to be done at once by which the farmer, like other business men, will pay not upon a fictitious, unreal and absurd estimate, but upon the real profits that he makes. That can be done by the abolition of the three years' average; and I suggest this as an all-round reform, and as a means by which we can get at some of the abnormal war profits—that is, to put the tax upon profits which are actually being made and put the farmer out of Schedule B and put him, like every other business man, under Schedule D. Those are practical proposals which I submit to the House. I have dealt with the three means of raising the money required—taxation, loans, and a combination of the two, and the conclusion at which I arrive is this: that as much as possible, and if possible every penny, of the money which is needed this year for the prosecution of the War ought to be raised out of the year's revenue. Of course, we all regret that it should be necessary to raise these enormous sums. As I said a moment ago, we shall learn many lessons from this War, and I shall be expressing the general sentiment of this House when I say that one lesson at least which the nations of Europe should learn from this War is the folly and futility of attempting to settle international differences by such an expensive and inhuman system as is now being employed.I do not rise for the purpose of following the hon. Member for Blackburn into the very important financial problem which he has raised. But I do feel compelled to second the appeal made to the Chancellor of the Exchequer by the hon. Baronet the Member for the City of London to keep a firm hand on the expenditure of the Departments. The Civil Service Estimates have gone up a great deal. Some of the expenditure was doubtless necessary. But I remember the Chancellor's appeal in his Budget speech to us all to be economical, that we may raise the money, which we shall pay cheerfully, to liquidate the expense connected with the War. The right hon. Gentleman has caused a circular to be sent round to the local bodies to study economy. The inspectors of the several Departments have not shown that they have realised the necessity of carrying out the admonitions of the Government on this point. Last year the Chancellor of the Exchequer, in discussing the burden of local taxation, admitted that the burden on the ratepayer had become intolerable, and must be relieved at once. We know that that has not been possible, because of the occurrence of this War. But we who are members of local bodies do contend that, during the War, in order to meet the expenditure necessitated by the War, local authorities ought to avoid all unnecessary capital expenditure. Yet—and I can give instances—the inspectors of the Local Government Board and the Board of Education have not acted upon that principle.
Five or six weeks ago we in Devon received an intimation from the Local Government Board that with the return of soldiers from the front, which we hope by and by will take place, there would be a danger of the recurrence of small-pox, and that hospitals must be provided in case of such an outbreak. The Devon County Council at once took action. We appointed a committee at the head of which was a medical man who was always in the forefront of any movement to promote the health of the people of the county. That committee consulted the county architect. He drew up a scheme for two hospitals. In the opinion of the chairman of the committee, who was a man of such progressive ideas, the buildings provided for, which would have cost £1,000 each, would be ample for the requirements. The county council applied for the Local Government Board's consent. The inspector came down and insisted on alterations which would necessitate the expenditure of £2,000 on each of the two hospitals. The county council felt that this was so contrary to the appeal, which we had received, to avoid unnecessary expenditure that, after full discussion, it was felt, in justice to the ratepayers, to be impossible to accede to the demands of the inspectors of the Local Government Board. That is a case in point which shows that it is most important for the Chancellor of the Exchequer to control the inspectors of the various Departments during the present crisis in the direction of practising all possible economy that will not interfere with the health of the people. Again, in the matter of education, we all know how enormously the cost of education has increased in recent years, largely on account of the demands of the education authority for the erection of very expensive buildings when less expensive structures would answer the purpose. I have brought before the President of the Board of Education a question which was sent to me from my own county only two days ago. The Education Board was pressing for the expenditure of something like £10,000 on a grammar school. The President, it is right to say, agreed at once that the demand for this expenditure should be postponed until after the War. I thank him for doing so. We, who are prepared to take a long pull and a strong pull, all together, to raise the money to pay for the War, feel that the Government ought to act on the same principle in the directions to which I have referred. Otherwise it will be a great deterrent to the ratepayers who see large capital expenditure being made, which might very well be postponed without any injury whatever to the public service. Not only on that ground do I ask for a temporary discontinuance of these matters of expenditure, but the cost of building is so great at the present time that that is an additional reason why this expenditure should be postponed. Further, when the War is over there will probably be considerable unemployment, and it would be well to have these works postponed until that occurs. I support therefore, the appeal of the hon. Member for the City of London to the Chancellor of the Exchequer, that he should give directions to his inspectors in the several Departments to be moderate in their demands for public expenditure by local bodies. In reference to what was said by the hon. Member for Blackburn (Mr. Snowden) about farmers' profits, I would point out that the agricultural community are prepared to bear their share of the burden of taxation. Everybody must admit that in the last two or three years there has been a very considerable improvement in the position of agriculturists, but the hon. Member at once demands that there should be a rearrangement of the system of levying Income Tax on farmers. That may be right or it may be wrong, but it is rather singular that the hon. Member for Blackburn has never raised this question during the years of depression.I do not think there has been one year of the ten years I have been in this House that I have not raised this question.
I am rather surprised to hear that, and I am bound to say that the hon. Member did not show that sagacity which he generally displays in his speeches; because everybody connected with agriculture knows very well that in the difficult year of 1879 and for twenty-five years afterwards the average British farmer never got a penny interest on his capital, and lost a quarter of his capital. How the hon. Member for Blackburn, in the face of those figures, could raise the question of making the farmer pay more Income Tax, is a surprise to me, I always thought that hon. Members below the Gangway opposite were in favour of a fair wage for a fair day's work, and I submit that this principle should be applied by them to the agricultural community. The hon. Member spoke a good deal about the increased prices of food. Although I am a farmer, I regret exceedingly that the poor should have to pay these increased prices for the necessaries of life. But, after all, it is one of the vicissitudes of War. Fortunately, owing to our strong Navy, the condition of things in this respect has not been so bad as there was reason to fear. I would observe, however, that part of the increased cost of the necessaries of life has been caused by the neglect of agriculture by this House for many years gone by; and no part of the House has displayed that neglect, I was going to say criminal neglect, of the work of raising the greatest possible amount of food for the people, and no part of the House has shown a greater lack of foresight on that subject than hon. Members below the Gangway opposite. [HON. MEMBERS: "Question!"] Yes, it is the question. I have been in the House now for some years, and I am bound to say that I have never heard from any Labour Member, except the hon. Member for Norwich, one word which showed me that he realised the importance and difficulty of raising food upon the land of this country. Whenever any proposal has been forthcoming to relieve agriculture, and thereby to increase the output of food, it has been opposed by hon. Members below the Gangway. [HON. MEMBERS: "No."]
In regard to the price of food, I would point out that most of the farmers sold their produce last autumn before the high prices took place. I admit at once, however, that there has been an increase of the farmers' earnings, but I should have thought, apart from the regret we must all feel that the poorer classes of consumers have to pay more for the necessaries of life, that the judgment of hon. Members below the Gangway at least would have been tempered with mercy, having regard to the difficulties of the agricultural industry in the twenty-five years following 1879. Be that as it may, I can only say that we want those who till the land to obtain from it as much as it is capable of yielding in the interests of the commonwealth. We as farmers have no less regard for the interest of the community than hon. Members opposite, and if we do not talk so much as they do I think we do a great deal more. Practice is better than precept. We hold that the man who makes two blades of grass grow where only one grew before is a public benefactor, and, consequently, we claim that we are working for the nation just as well and just as effectually as any other section of the community. I will not, however, follow the question any further, except to express my surprise that not only did hon. Members not sympathise with agriculture in the time of depression, but now that better conditions have arisen they seek to kill the goose that lays the golden egg, thinking in that prospect they will better the position of the working classes. We want to see more people living in the rural districts, and that can only be accomplished by making it better worth their while to stay there. I know that hon. Members will say that the landlords must suffer. I am bound to say that the landlord must feel that there should be a living for the farmer and good wages for the labourers, but it must be remembered that the landlord had to bear his share of the depression, for in one season alone the decline in rental amounted to £14,000,000. I would further point out that the agricultural value of land only represents the interest on the capital laid out in bringing that land from its prairie state into a state suitable for food production. Therefore the produce of the land is as much the fruit of labour as wages are the fruit of artisans' labour. What we want is to till the land and make it produce as much as possible in the interest of the commonwealth. Farmers do their best in devoting their energies, capital, and skill to the cultivation of the land, just as other members of the community devote their energies to production in other departments of industry; and, in so doing, the agricultural community as well serve their country as do others in other departments of industrial life. I think that those who criticise farmers could better serve our country than by carping at the agricultural classes. I do not wish to say very much about the way the money for the War should be raised. On one or two occasions I have asked the Chancellor of the Exchequer to put a very considerable tax on motor lorries, which are breaking up our roads, and making the rates imposed by county councils almost intolerable. The right hon. Gentleman promised, although he could not reveal his financial proposals, that he will in the near future remember that the enormously increased expenditure of county councils has been largely brought about by the introduction of motor traffic, especially that of motor lorries. Although I do not want to penalise any section of the community more than another, the owners of these vehicles have caused so greatly the increased cost of the maintenance of the main roads, that I think they ought to contribute a larger share to the repair of the damage that they have caused than they do at present. As a member of various public bodies I do feel that the point I have raised as to the Chancellor of the Exchequer controlling his inspectors in regard to making demands for expenditure by local bodies is one of very great importance. We who are members of those bodies are execrated by the ratepayer because of the ever-increasing burden we are putting upon them, and we say that it is largely the fault of the Government, who are constantly putting more work upon us. We, as business men, are anxious that public work should be done properly; we are jealous to protect the health of the people, and to provide a sound and practical education for all. We who are members of these local bodies are large ratepayers ourselves, and we know very well what is wanted, but we do object to representatives of the various Departments constantly coming down and over-ruling plans, matured and carefully thought out plans, in the faithful fulfilment of the duties which devolve upon us. I trust that the right hon. Gentleman will put a check upon the inspectors of the various Departments, and that he will encourage us to carry out his admonition to save our money for the War. If the Government itself will set an example in that direction, I am sure that we shall set about it, with a better heart, to carry out his request.I always listen with the greatest interest to the speeches of my hon. Friend the Member for Blackburn, and I think I have heard every speech he has delivered on this subject since I have been in this House. I always know what is coming. First of all, he gives us a great number of statistics—a sort of economic lecture which he might very well address to a London school. He gives us statistics which are fenced round so that the working classes should in no circumstances have more claimed from them. But I have seen too much of figures and of statistics, of proportions and percentages, and I know how unreliable they are when they come to be practically applied. In a general way they can be applied so as to work out anything or to lead anywhere. I do not put any great faith in general statistics. My hon. Friend's plan is to tax highly everybody except the working classes. That is not an ideal which we are able to adopt yet; what we may come to I do not know, but the idea that certain classes should pay the whole of the tax, or all the special War taxes, and that the workmen who have been earning very good wages of late, a great many of them at any rate, should not contribute, is one that could not be adopted.
I would like to make some reference to what took place in the earlier stages of the discussion between the two Front Benches. I agree entirely with the Chancellor in his desire to limit the sale of young raw whisky, and I am astonished that there should be any great opposition to it on the other side. In the time of the 1909–10 Budget, when this big Tax was put on, I think the House will remember that it was suggested that the spirit duty should be scaled according to the age of the spirit, and that the raw spirit should be taxed more than the older spirit. There is a good deal of nonsense talked about the intoxicating power of whisky. Raw spirit will intoxicate, and mature spirit will intoxicate just as much. The effect of raw whisky is more violent, and every year that it is kept in bond it loses so much of the fusel oil, and thus becomes less fiery and more palatable and less injurious, but at the same time quite as intoxicating. I think the Chancellor must begin to wish that he had kept his proposals in bond for another two years himself. I would warn him against attempting to start any negotiation for compromise with these distillers who sell whisky in its raw state, on the basis of compensation. They are not the only people who would have to be compensated. There are the blenders. The way the blenders deal with whisky is this—they take out of bond a six or seven or eight year old whisky, and they also take out of bond whisky which is a year or a year and a half old, and they blend the two of them together. If you compel the blenders to use older whiskies, then there will be so much less profit, attached to their business. I know that in the case of one of the biggest blenders in London, who has practically control over all the raw whisky sold in London, the process followed is as I have described. It is not whisky spirits alone which are to blame for all this trouble. There is a tremendous quantity of spirits distilled from potatoes, and rice, and other things which passes as whisky, as gin, and as brandy. I have actually seen in a hotel in England whisky, brandy, and gin in three classes and composed of the same spirit in each case. It is those spirits which are most over proof and which do most mischief. I think the Chancellor will make a very great mistake if he starts compensation on those lines, and he had much better drop the idea altogether, although I am entirely in favour of it, than start compensation because he would not know where that would land him. The hon. Member for Blackburn also spoke on the large profits made during the War. The Chancellor has indicated that he has some proposals in his mind and, of course, we must deal with them when the question comes up. I warn him that this is also a very thorny, difficult subject, and I will tell him why. I do not speak of houses which have made some extraordinary profits, bat there will be a great many houses which have made some profits this year in excess of their average, but you must not leave out of account this fact, that once the War is over there will be a tremendous slump in those particular businesses. There is then the particular case of a great many houses which have given up their usual business or restricted them for the purpose of making munitions. They have put in the plant and they have been pushing those munitions which will pay them very well this year. But in order to do so they have had to neglect their ordinary business, which will go away from them and which will take them years to pull up. So that anyone putting taxes upon those extra profits over the average will find themselves faced with this very great difficulty, that you will have great numbers of people making a little profit which will be more than absorbed in the years to come, in which there will be a tremendous slump. Six months after peace is declared always finds a great slump in a manufacturing country. I therefore hope that the Chancellor will be warned by his adventure into the spirit taxes, which have been withdrawn, not to go boldly on with the scheme of taxation of war profits, because that will be very controversial, and I am afraid he would find such difficulty with it that he would have to drop that as well.I desire to intervene to raise a matter of general importance. The hon. Member for Blackburn appears to be an advocate for the abolition of the three years' system which is adopted in the collection of Income Tax, and would be in favour of levying the tax year by year upon the profits of the year. That is a very old controversy, and a great deal has been written and said upon the subject and a good deal of evidence taken, particularly before the Royal Commission of 1905 and the Committee of 1906. Certainly the best opinion on that rather large subject is that the three years' average works justly as between the State and the individual Income Tax payer. Through the whole of the Income Tax we know that there are a large number of exemptions which have been from time to time engrafted on and made part of the system. Nearly all those exemptions are granted upon the initiative of the subject. The Income Tax is deducted in the first instance and the person affected claims the exemption, and, where he is entitled, is repaid the amount which has been so deducted. In normal times that system on the whole works well, and I think the Income Tax Commissioners may look with a certain amount of satisfaction on the way in which it is carried out. The present War has brought us new conditions and new circumstances in this matter. At the front there are a number of persons in the Army and in the Navy who would undoubtedly be entitled to exemption and to have the amount deducted returned to them. What opportunity will there be for those persons serving their country to fill up the necessary forms in order to enable them to secure the exemption? Under present circumstances I think there would be no opportunity, and I propose to suggest a remedy. Let me give a parallel case. There has always been in the laws of this country a special privilege granted to men who are serving their country in the matter of wills. Hon. Members know that in order to comply with the Wills Act it is necessary that a will should be made in a particular form and signed before two witnesses, with other conditions. The State has always realised that men who are undergoing the hardships of a campaign are quite unable to fulfil those conditions, and an exemption has always been made to enable them to have their last wishes fulfilled and carried out without the requirements which are necessary with civilians.
7.0 P.M. With regard to the difficulty as to exemption from Income Tax, I hope the Chancellor will accept a proposal which, whenever the Bill is brought forward, I, or one of my hon. Friends, will submit, and which will have the effect of dealing with this matter from a somewhat different point of view this year. Instead of requiring the exemption or amendment to be claimed, the proposal will be, in particular cases where payments are made to men actually serving in the Navy or Army or allied forces, that in the case of all payments which are made through the Admiralty or the War Office those payments should be made in full in the case of all payments which, we will say, run up to about £400 a year. I believe the amount lost to the revenue would be very small indeed, because in the case of a man receiving £400 per year he is entitled to an exemption of £150. If it is a smaller sum, he is entitled to an abatement of £160. Therefore, if he is receiving £300 per year, he would be entitled to the full abatement. But the tax he has to pay is a very heavy one, and the amount recoverable from the State in respect of these small incomes is of far greater importance, both relatively and actually, than it is in respect of the larger incomes. The abatement to which such people are entitled is one by which they rightly set much store, and it is very important to them. I have in mind a number of young professional men, possibly earning small incomes, who have engaged at remuneration which is in no wise adequate to their original scheme of life, and in whose cases it would be very important that they should secure the advantages to which they are entitled. But how shall they get them? It is almost impossible to imagine that men serving for a week in the trenches, and then having ten days or a fortnight in reserve, should spend their leisure in or have facilities for asking for exemptions or abatements. It seems almost a mockery to ask them, under the circumstances, to fill up exemption claims or to handle questions of Income Tax. We ought therefore to take care that their position is safeguarded, and that their salaries are paid to them free of Income Tax this year. I hope the Financial Secretary will look into the matter in order to ascertain the possible loss to the revenue. I have some ground for believing that it would be very small indeed. One cannot formulate any estimate from the Returns hitherto published, nor does one know how many persons are serving abroad, but from such information as I have been able to obtain it appears to me that the loss to the revenue would be comparatively small. I believe we should be meeting the wishes of this House and of the nation at large if we ensured the exemptions and abatements to those who are entitled to them, even if it did entail a small amount of extra burden on those dwelling in peace and comfort at home, and have the advantage of these men's services under difficult conditions abroad. I hope the Chancellor of the Exchequer will look into this matter, in order that we may prevent what seems likely, unless some special measure is adopted this year, to prove an injustice to men who are entitled above all men to the careful and sympathetic consideration of this Committee.The present condition of the House indicates, I think, the extreme undesirability of the course which has been adopted. The right hon. Gentleman the Member for West Birmingham "switched off" the discussion on the Budget to the purely liquor details, which we have had an opportunity of discussing on other occasions, and which we shall again be able to discuss when the Bill comes on. When the Chancellor of the Exchequer made his Budget speech, the same course was adopted. The Chair could not have interfered, even if it had wished to do so, as the proceeding was technically quite in order. But it is extremely inconvenient that on both occasions when discussing the largest expenditure of which this nation has ever heard, we should have no adequate or proper opportunity in a proper House of discussing the general question. Look at the condition of the Treasury Bench, and also of the Front Opposition Bench. The conditions are unfavourable. The questions raised by the right hon. Member for West Birmingham involve the absence of the Chancellor of the Exchequer in order that he may consider the difficulty in which he has been placed.
It is always interesting to listen to the hon. Member for Blackburn (Mr. Snowden), and it is exceptionally interesting to hear him, the ablest Member of the Labour party on these subjects, attempting to tackle the financial questions that arise from the teaching in which he and his Friends very much indulge; because when you get the proposals of the ablest Member of that party as to how they would raise the revenue, you see the farcical nature of the whole thing. Were ever such proposals submitted to a deliberative assembly? The hon. Member suggested that practically the whole of the cost of the War should be raised by taxation, and he referred to the fact that in the early days of the last century, during the French wars, the taxation represented two-sevenths of the income of the nation. Does he realise to what an extent that came out of the pockets of the masses of the people? The duties were extremely heavy, and in such cases the masses of the people paid more than two-sevenths of their income. He now proposes to reverse that entirely, and they are to be practically let off. [An HON. MEMBER: "No!"] To a very large extent they are to be let off. But if a man has £50,000 a year he is to be taxed to the extent of three-fourths. That is an impossible suggestion. This taxation is not suggested as permanent. It is to pay the cost of the War. What is a man with a large income to do? His income is practically committed. He has his houses and his servants; is he to get rid of them all? What is to become of them? The taxation is temporary. He cannot give up his houses or other places; what is he to do with them? This is interesting in connection with another statement of the hon. Member—that the raising of the money by loan out of savings would have disastrous consequences. How in the world does he expect that a man with his model income of £50,000 a year is to pay £37,500 out of it? He cannot pay it out of his income, because it is so committed. He can but pay it out of his savings or capital, but according to the hon. Member, to raise the money out of savings would be disastrous. The whole thing is inconsistent and impossible. The hon. Member quoted John Stuart Mill. Surely he remembers that at the very time the statement quoted was written, John Stuart Mill was advocating the wages fund theory—the very theory which has since been dissipated, and which the hon. Member for Blackburn would not accept. It was because he believed in the wages fund theory that John Stuart Mill enunciated the doctrine which the hon. Member now quotes to justify his proposed heavy taxation. The whole thing is inconsistent in every way. The hon. Member promulgated a doctrine which certainly was not new, but which he is now applying in another direction. That doctrine was to the effect that the more you tax a man the more energetic you make him. That is a very old doctrine. If the hon. Member will turn back to the writers on political economy and taxation of 250 years ago, he will find that that was the very argument which they used in advocating taxation of the working classes. They said that the working classes were lazy; that they only worked long enough to get food and beer; that if you only taxed them heavily enough, they would have to work longer in order to get food and beer, and that that would promote the wealth and well-being of the country. The hon. Member does not propose to apply this particular method of persuasion to the class which he is supposed specially to represent; he is going to apply it to someone else. I venture to say that it is fallacious in both instances. With regard to the taxation of war profits, in theory we should all probably be in favour of it. Anybody who is making special profits out of the War may, I think, legitimately be called upon to make special contributions towards the cost of the war. I admit that there are practical difficulties in the way, but I hope that the Chancellor of the Exchequer, with the assistance of his advisers, will be able to devise a method by which they may be overcome. But in connection with taxation you cannot legislate to hit one particular man or one particular firm. The scheme must be general and pretty easy to work. A simple suggestion is that you should take the average profits of an individual or firm for, say, the three years prior to the War, and if the profits during the period of the War exceed that average, you should impose special taxation on the excess. That is very nice theoretically, but there are many cases where it would not work. Take a case where a man has been building up a business—erecting premises, putting down plant, and all that kind of thing. He would have made very little profit while that was on the way, but as soon as he had got the whole concern into good working order he would make bigger profits. They would very much exceed the average of the preceding years, but they would not be war profits at all, and it would not be fair to tax that man as though he were making special war profits. There may be men in a particular business who have acquired another and amalgamated the two. The result is that the profits made on the combined concern are very much larger than the average of the previous three years. It does not, however, follow that they are war profits at all. The difficulty is to get at what exactly are war profits. I hope the Chancellor of the Exchequer will be able to do it. There are very great practical difficulties in the way. Reference was made to the case at Cardiff of Messrs. Spillers and Baker, who are millers, and whose balance-sheet shows a large profit. The hon. Member talked about exploiting—a very favourite word in some quarters—and he referred to a gentleman who had written him a letter, which he read. The writer said that bread may well be dearer. Really that shows a misapprehension of the whole position, even of that firm. Bread was not one farthing dearer because of the profits this firm made. They sold their flour at the market price, the same as anybody else. They made their money out of successful buying of wheat. They bought it early and it went up in price, and they made their profit in that way. Supposing that they had not bought that wheat early and well in advance, they would not have made the profit; they would have bought the wheat as they required it, within a month or two, to make into flour, and it would not have affected the price of flour one jot, but they would not have made the profit. Who would? It would have been made by the speculators out yonder in Chicago. As it was, they bought the wheat earlier and then made a profit owing to the rise in price. If they had not bought and made that profit, flour would not have been reduced in price a farthing, but the profit they made would have been made by men who held the wheat in Chicago. That is the position. The hon. Member used that as an example, and it really shows a misunderstanding of the whole position. There is one thing I should like to have done if it were possible, but I do not know that it is; that is, if we could have had a considerable levy upon the capital of the country to pay for this War. It is not easy to manage. If you could have raised, say, a levy of 2½ per cent. on the capital of this country you would possibly have got £250,000,000 upon which you would have had no interest to pay. Germany, just before the War, raised a considerable sum by a levy upon capital. It is an attractive proposal, but like many of these attractive things it is very difficult, because so few people in this country have any considerable amount of their capital in available cash. That is the difficulty. It is cash that we want. It is no use giving the Government a field, or a house. They cannot pay for munitions of war and for the cost of the War in houses, fields, factories, and railways, or even in railway shares. The real difficulty at the present time is that you cannot sell these things; you cannot turn them into cash. There is practically only one market open in the world, and that is the United States. That is not a very big market financially. It has, indeed, as much sent to it as it can well absorb; therefore, you cannot turn these things into cash. If you attempted to do so you would be depreciating securities to an enormous extent. That reminds me of another point. When people are considering the sacrifices which are being made in this country in the matter of the cost of the War and what people are contributing towards it, I should like to say, in the first place, that those who are better off as regards this world's goods are at least contributing their share in the men who are out at the front. Their sons are out there or they themselves are out there, and they are there equal in proportion in numbers to those of any other class in the community. As regards taxation, they are being hit pretty heavily indeed. They are bearing it well, and responding, as the Chancellor of the Excheuer has told us, more readily than ever before. The point I want to make is that on the top of this they are suffering very seriously in the depression in the value of the property that they hold. The loss in the depreciation in the value of what people possess is going to be almost as great as the direct cost of the War. It is a very heavy burden, and ought not to be lost sight of. In his Budget speech the Chancellor of the Exchequer said something about obtaining the loans of money required for the War out of the savings of the country. The right hon. Gentleman spoke with great force, and I thought very opportunely, about the necessity of making those savings as large as they can be made, because the nation will want them. You can only make savings large in two ways. The one is by producing more wealth so that there may be more to save, and the other is by being more economical and thrifty when you have got it. You must be more efficient and more industrious to produce more, and you must spend less. That is the secret. Then the problem which the Chancellor of the Exchequer may have to face is how to get hold of these savings when they are made; where to find them and how to get hold of them. I do not know what he contemplates; possibly he has not made up his own mind. But these savings will, to a large extent, drift into the hands of certain institutions, organisations, and societies throughout the country. If the Chancellor of the Exchequer is to get them he must get them, or make arrangements for getting them, as they come along. People will not put this money into a stocking and wait until the Chancellor of the Exchequer asks for it. We are, it is suggested, saving in the ordinary way £400,000,000 per year. That money is not available at the end of the year. As people save it they invest it somewhere. The smaller people put it into building societies, and into various societies, or institutions, or bodies. These societies invest the money in something else, and so it gets locked up. Insurance companies receive a good deal of money from year to year in premiums and in interest, but as they receive it they invest it and it gets locked up. If the Chancellor of the Exchequer wants it he must get at it before it is invested. The same applies to the banks, to the large investment companies, and all organisations of that kind. They invest their money as they go along. The suggestion I want to make to the Chancellor of the Exchequer is that if he has any intention, if his thoughts run in the direction of compulsorily, or by those means of persuasion which he possesses to such a liberal extent, of inducing bodies of the kind referred to to provide the money for these loans, that he should give them a hint, tell them what he wishes them to do. If he does not, when he wants the money he will find that it is being locked up. I believe a great number of people are taking Treasury Notes at the present time. That is one way of letting the Government have money, and of having that money available for putting into permanent loans if the country wants it. There is also a great deal more money passing through the hands of the various bodies representing the people's savings that will be going into securities, and be lost for the purpose of loans, because you cannot sell the securities again. If the right hon. Gentleman wants the money from those who may have it—though the rate of interest may not be what they like—I would suggest to him that he should make it known, that he should make it a little plainer, stronger, and more definite. There is one other point. I do not think the country realises the extent to which we shall need this money. The expenditure is something enormous. As I have said, we cannot pay it by houses, or fields, or railways, or waterworks, or that kind of thing; it has got to be in cash. Something has been done—I have the honour of serving on a Committee for the purpose—to assist in checking the passing of money out of the country, and not only that, but of checking the expenditure of money on permanent works that now are not absolutely necessary. We want to have money available, and therefore there has been a check put upon that kind of thing. I do want to urge the Government to apply the check where they only can apply it, in the matter of Colonial borrowing. We have had a number of Colonial loans issued on the market recently. It is no use checking small concerns in this country of £10,000, £25,000, or £50,000, and then letting £5,000,000 go the next morning out to the Colonies. Let them find their money out there, or somewhere else. We have not the money to spare to send out to our Colonies for them to spend on works and undertakings that at the present time we cannot spend on undertakings here. I hope that the Colonial Office and the Government will put a check on the sending out of money in that way. There has been something done—I would like more to be done—to check the expenditure of our local authorities. There is a tendency, as the result of the legislation of the last few years, to press local authorities to undertake works. I do not wish for a moment—for in a majority of cases those works are very desirable—to stop that work if you have plenty of money and nothing else to do with it. It is the same with public bodies as with individuals. There are many things that you like to do, that it would be very nice to do, or very beneficial to do, but you have to keep asking yourself, "Can I afford it; is it a wise expenditure just now?" I do feel that our local authorities have not yet been impressed sufficiently with the fact that all expenditure whatever that they can stop should be stopped at present, because they are direct competitors with the Government. When it comes to the matter of issuing loans, the money that they will get comes from the very persons who would invest it in Government loans. We should stop everything of that kind so far as practicable in every way during this War. There is another reason why we should do this. The first reason that I have given is that we shall want the money for the War, and we shall want it badly. Another reason is this: That when the War is over, sooner or later—it may not immediately follow, but it may—and when all these men come back from the front that can come back and the work that the War has caused is stopped and everybody is very much the poorer because of the taxation that has been levied, the lime will come that we shall have a great deal of depression, a great deal of unemployment, and very hard times. At present there is practically no unemployment. There is no necessity to undertake these local public works in order to give employment. In fact, the truth is that it will be better from the war point of view that you should not go on with these works, because you want the men who are thus employed elsewhere whore there is work to be done, and where you cannot get anybody to do it. Therefore we do not want to start further work, and further undertakings, and so take these men from work which is more pressing. When the War is over, and employment is slack, that will be the time to undertake these works. That will be the time for local authorities to spend money—wisely and well, of course—so that by that means our people may be helped to tide over the time of depression which we shall certainly have. Therefore, I do want to urge upon the Government very strongly to put pressure upon the Colonial Department, upon the Local Government Board, and upon my right hon. Friend at the Education Department—I know he will not like it—to curtail public expenditure that can be deferred for a year or two.I do not propose to follow the right hon. Gentleman into the various points of what I may be allowed to call his most interesting and practical speech, and the excellent advice he gave for the purpose of husbanding and carefully guarding our resources to meet our expenditure both during the War and afterwards. But there was one point to which I should like to refer. He spoke of the desirability of taxing, and perhaps heavily taxing, some of the profits which arise solely owing to the War. I think in principle there can be no objection to that taxation. I agree with the right hon. Gentleman that it may not be very easy to determine what profits are made as a direct consequence of the War and what are not so made; but I hope the Chancellor of the Exchequer will do his very utmost to apply the principle and discover some practical way of getting money out of it, because no one can object—at least he ought not to object, in my judgment—to giving to the State for the purposes of the War a portion of those profits which arise solely in consequence of the War.
The subject, however, on which I mainly rose to speak was the question of policies of life insurance, which are dealt with by one of these Budget Resolutions. I need hardly say that life insurance is one of those forms of saving exceedingly largely adopted by numerous classes in this country, both the rich and the relatively poor, and one of these Budget Resolutions in its present form is likely to have a prejudicial effect on certain forms of life insurance. I refer to paragraph (5) in the Resolution affecting insurance companies. I know what the right hon. Gentleman wants to do, and I entirely sympathise with his object. He is thinking, no doubt, of those endowment insurances made for short periods which are merely and obviously to evade the Income Tax. I dare say most Members of the House know how it is done. A man goes to a life insurance company and says, "I will pay a very large premium for five years, and, in return, you pay at the end of the five years, or, at my death if it occurs in the interval, a very large sum of money." Of course, that evades the Income Tax. At the end of five years he gets this large sum of money, collected entirely out of his income, on which he has not paid any tax. It is right that that artifice should be got over, and, in the right hon. Gentleman's attempt to do so, I entirely sympathise with him. But may I point out that in the form in which he proposes to hit those endowment policies for short periods he directly injures and prejudicially affects perfectly legitimate forms of policies? I am not going into details now, because I think a more proper time will be when the Bill is brought forward. But just let me indicate, for the consideration of the Chancellor of the Exchequer, the kind of thing involved. The Resolution, in effect, says that whereas, as the law at present stands, you can deduct from your income, so as to get at your taxable income, the full premium of any policy you take out, in future you shall only deduct a premium equivalent to, or not exceeding, 5 per cent. of the capital sum insured. In other words, if, to insure your life, you have to pay £5 10s., £6, or £7, you will not be able to deduct your full premium to get at your taxable income, but you will be allowed to deduct 5 per cent. and no more. May I point out to the Chancellor of the Exchequer that the limit of 5 per cent. really prejudices perfectly bonâ-fide forms of insurance, which I am sure he does not want to do. For instance, he will prejudice and injuriously affect policies of insurance taken out by men for their whole life at ages of fifty-two and upwards, and I am sure he has no desire to discourage insurance policies of that sort. Let me give him one other form of insurance, which I think is a perfectly good and legitimate one, that will be injuriously affected. Take the case of a man of fifty who is earning a good professional income. He may contemplate retiring from his profession at sixty-five, and may want to take out an endowment insurance which would be payable at the end of fifteen years, or at his death, whichever happens first; in other words, an endowment insurance of fifteen years' period. That, I think, the Chancellor of the Exchequer will agree, is a perfectly legitimate and proper form of insurance. I think he will find that that form of insurance will be heavily hit by the present proposal.What is the rate?
I think the rate would be about 7 per cent. If a man aged fifty wanted to insure for £5,000 payable at sixty-five or death, he would have to pay a premium of £7 11s. 9d. per cent., and if you work that out you will find that, owing to his not being able to deduct the whole of the premium from his income in order to get at his taxable income, he would have to pay an increased Income Tax of over £16. If the right hon. Gentleman will consider the matter between now and the next time this Resolution is before the House, I think he will probably see that the 5 per cent. ought to be 7 per cent., which would meet such a case as I have suggested, and also meet to a great extent a perfectly legitimate case of insurance where a man insures rather late in life, and has to pay a premium of 6 or 7 per cent. of the capital sum.
The hon. and learned Gentleman (Mr. Butcher) has put a question to me with regard to insurance, and I promise to consider the case, which, on the face of it, seems a perfectly reasonable proposition for consideration. There would be no difficulty in putting 6 or 7 per cent. in the Bill if we came to the conclusion that six or seven is a right figure, as we can decrease the charge upon the subject but not increase it, and, therefore, if the hon. and learned Gentleman can see his way to accept the Resolution in its present form, I will look into the case he puts, which, I must say, interests me because it seems a legitimate insurance, and not a device to escape Income Tax. With regard to the general discussion, I regret very much I was not in the House to listen to the whole of the speech of my right hon. Friend (Sir T. Whittaker), and I regret it all the more because what I did hear induced me to believe that it was an exceedingly wise statement of the general position of the Government in reference to finance. The advice which he gave was sagacious and weighty, and his knowledge, of this matter added a good deal of weight to his observations. I am not sure that the country sufficiently realises the point he put, that you cannot pay for a war with railway companies, houses, and land. You must have liquid assets for that purpose, and the difficulty of the Government is not that this country is not rich enough to wage a war for twenty years with the wealth it has accumulated, but the difficulty is to liquidise your assets to pay debts as you go along. You cannot say to a man to whom you owe a debt, "Well, here is a house," and transfer it to him. You have to pay it in cash, or the equivalent. The difficulty with which the Chancellor of the Exchequer is confronted is to raise £1,100,000,000 in the course of the year—£800,000,000 over and above the revenue for which he ordinarily makes provision. I wished to warn the country in the statement I have already made. It was not merely a warning; it was a hint. My right hon. Friend was perfectly right. I think it right to let those who have got the handling of national savings know in time the direction in which the Government—those who are responsible for the time being for the finances of the country—are travelling, so that if the call comes upon them, whether voluntarily or compulsorily, they will be in a position to respond to the call made upon them, to finance the war. But I again wish to emphasise that, even if you have the whole of the ordinary savings of the country, you would not be able to meet the finances of the War.
With regard to the expenditure of local authorities, in an appeal which I made to a deputation from the local authorities I warned them at that time where the strain would come, and that they could not indulge in expenditure. I made exactly the same appeal to the representatives of the Colonial Governments, and the country must have been misled by some of the advertisements that have appeared in the papers. Most of them are practically renewals of bills and obligations that have already been incurred. There is no fresh cash in them at all. It is purely a manipulation of the readjustment of existing liabilities. The only new liabilities they propose to incur, so far at any rate as this country is concerned, are liabilities in respect of contracts already entered into which they could not possibly stop. At any rate, that is the limitation which they have accepted upon their borrowing powers. If a railway has already been started you cannot leave these people in the wilderness. If you save all that money and the expenditure of the local authorities this year, and if you compare it with the money of the same period of last year, you will then see the extent to which they have responded. What would it amount to if you saved the whole of that money in every Department of the Government which has been criticised? The hon. Member opposite would like to save the whole of the Land Taxes, but if you save the whole of that, and the whole of the Colonial Governments borrowings, it would only be a mere infinitesimal percentage of the sum we shall require in the end. It is true it would be a contribution, but it would be a very small one. The only savings which will help us substantially are the savings of the people themselves, the savings of individuals, of families, and of the man who is getting an income in any shape or form—those are the savings which will be helpful in prosecuting a great war. Whether they invest those savings in Government securities or loans or in other securities on the market, it almost comes to the same thing, because those who sell securities may invest in a Government loan. The savings of the people at the present moment are vital to the success of this country, and every man who cuts down unnecessary expenditure in his own sphere is contributing something material and important towards the success of this country at the present moment. If the savings of the country could be doubled, and if instead of saving £400,000,000 we were saving £800,000,000 or £900,000,000, that means something of the very greatest importance to the interests of the country at this very critical juncture. I wish to emphasise the statement I made on this point this afternoon. I do not wish to indulge in reiteration, but it is important that it should get thoroughly into the public mind that every man, however small his income, who saves and cuts down unnecessary expenditure is helping the country at this moment. It is easier to save at a time like this than in ordinary times. One of the difficulties of saving is the question of pride. A man is afraid, if he cuts down his expenditure, that some people will think there is some reason for it connected with his private affairs, and in the case of a business man a word of that kind going round may damage his credit. I know that a good deal of expenditure is kept up for that reason. Another reason undoubtedly is that you do not like to cut down expenditure upon labour or your expenditure in the village, because you are afraid of being accused of meanness. This is not a question of meanness, but a question of patriotism, and this is the time when people can save without their motive being misinterpreted, and if men of influence would set an example in that direction they would be rendering a very great service to the country at a moment when every penny is required to finance, not only our own expenditure but the expenditure of our Allies. The Postmaster-General tells me that some of the observations I made in the course of my Budget speech have been regarded by some investors in the Post Office Savings Bank as an indication of the resolve of the Government to appropriate all those savings and to put them into a War Loan, and use them without a penny of interest. I was not thinking of that matter at all—in fact, I was thinking of something more important at the present moment, and that is of the savings of all classes of the community high and low, because I desire that the aggregate amount available for investment should swell to dimensions which will be helpful to the country. The hon. Member for Blackburn (Mr. Snowden) is not present, but he has delivered his usual contribution and his rather usual alternative Budget, and as you listen to him it all seems so easy. I want £1,100,000,000 this year—a stroke of the pen. All you have to do is to put 15s. in the £ on the Income Tax. The working classes will be no worse off, and the people with incomes of £150 and £250—and they are only a small group—if you take three-fourths of their income, they would not suffer; on the contrary, they would be all the better for it. That is not the sort of criticism that has been directed at me from the majority of the people of this country. May I just put this point to the hon. Member for Blackburn? Quite apart from the wisdom of taking away three-fourths of a man's income, you would not get the money I require. The whole of the income of those who have got £3,000 a year—I do not know whether he regards a man with £3,000 a year as a rich man—comes to £220,000,000. I will take three-fourths of that, and then the £3,000 a year men would have £750 a year. Supposing I took three-quarters of the whole of the income of those earning £3,000 a year, that would bring me in £165,000,000, and that is only about one-fifth of what I need. May I point out that I have already got from this source probably £30,000,000 or £40,000,000 at the least. Consequently, all I would really get by this method would be about £120,000,000, but I am short of £850,000,000, so that by the proposal of the hon. Member for Blackburn I get about one-seventh of what I am in need of. These magical ways sound all right, but they are not business. The hon. Gentleman said: "You must not go to the working classes, and you must not go to the people earning £200 or £300 a year, but you must go to the people at the top," and he spoke of a man with £50,000 a year. May I point out that if I took the whole of their income I should not be so much better off for financing a great war. If I take the whole of the income of the men getting £3,000 a year, I should only get about one-fourth of what I am short. I am glad the hon. Member for Blackburn has made this statement in the House of Commons, where it can be answered, because when such statements are made outside they are really mischievous. My hon. Friend says: "Here you are, one-third of the income of the country wipes out the whole of your deficit." My hon. Friend the Financial Secretary to the Treasury pointed out that the income of the country is £2,400,000,000, but what is that? That is the whole of the income, but the amount which passes for review under the Income Tax is only £1,150,000,000, and the total upon which income is actually paid is only £970,000,000. There is a balance of £1,400,000,000, and that balance represents the income of the people who receive less than £160 a year. That means the working classes, clerks, or men who are engaged in businesses of that kind. The hon. Member for Blackburn says he would not charge a penny piece more in taxation upon that £1,400,000,000. Supposing I took the people earning between £160 and £700 a year. If I took one-third of these incomes, they would only produce £300,000,000, and I am still £500,000,000 short. Where is the hon. Member going to get that amount? It is no use making sums of this kind, and the hon. Member should figure it out. No hon. Member should come here with statements of this kind without figuring out the whole thing. You cannot come here in a light and airy fashion and say: "I will get the money by taxing people with £50,000 a year." You cannot do it. How are you going to raise £800,000,000 in this country in the course of a single year? The hon. Member says you must not borrow, because that is wrong, and it hits the working classes. He says you must tax, but you must only tax people who have got thousands a year. If you took the whole of the money belonging to those people you would still be short. I hope the next time the hon. Member delivers a Budget speech to this House he will just make up the account, because it is a matter of arithmetic. If he would not mind, I should like him just to make up an account from the beginning to the end, and show me where I am going to get the cash unless everybody in this country contributes something. I say that everybody ought to contribute something. You cannot go into a great war and say to the vast majority of the people of this country: "You need not give up anything." You cannot do it, and it is not right to lead them to expect it. The working classes are making sacrifices by sending their sons to the War and going themselves. There is no class of the community which has not done that, high and low, middle-class, just as much as the working class, so upon that there is an absolute level of sacrifice. But when you come to the question of raising money, then I think everybody ought to contribute. I agree that they should do it according to their means, but let each contribute, and if that is done, and if all classes alike make a contribution, we shall be able to square the account. 8.0 P.M. One thing is perfectly clear. The standard of living in this country for all classes will perforce be reduced in one way or another. Anyone who has studied the standard of living during the last thirty or forty years must have seen how it has been rushing up at a prodigious rate. With the increasing wealth and prosperity of the country year by year, up has gone the standard of living. We shall find that this country will have to return to its old and simpler level of expenditure. It will be a good thing in itself. Had not we better face it at once? Men can make sacrifices of luxuries and comforts in a great war when they make sacrifice of life, so that this is the time when people will be prepared to bring themselves down to that level. There is the heat and there is the passion that will enable you to mould and remould a country and a society to some better form and fashion. You can do it in a great war, and I think that this is the time for us to do it. It will be kindness to us in the future. My hon. Friend said what was perfectly true. There is a great appearance of prosperity now. It is purely artificial. We are living upon borrowed money exactly like the man who mortgages his estate and instead of living upon his rent-roll lives upon the money he has borrowed on the mortgage he has effected upon his property. That thing cannot last. The rate of living is even going up at the present moment amongst the more prosperous classes. I am not referring to the working classes. We hear of men making great fortunes in certain businesses dependent upon the fortunes of the War and instantly beginning to spread themselves out. That is purely being done upon money which the country is borrowing. We are living on mortgaged money. We shall have to pay for it. When the War is over there may be a slight period of artificial prosperity in order to repair its ravages, but then will come a great collapse, and, if the nation is wise, let it be wise in time. If the nation is wise it will just look ahead, take advantage of this opportunity and lay by for that day when it comes, so that we at any rate will be able to face it without the distress, the misery, and the wretchedness which has ever followed upon a great war.The Chancellor of the Exchequer has pointed out the great economic effects of this War, but the country, I am afraid, will not appreciate sufficiently the economic effects of this War unless taxation is raised and each man feels it in his own pocket. I rise to urge upon the Government, or rather to express my regret that the Government has not increased taxation in the Budget already introduced. There is a spirit of self-sacrifice abroad to-day, and now is the time, it seems to me, that the Government should seize to place further burdens upon the people of this country. As the Chancellor of the Exchequer rightly said just now, business to-day is in a completely artificial state. Private enterprise is checked, the Treasury have stopped the issues of new capital, and capital and labour have been solely concentrated upon the successful prosecution of this War. Through the Government pouring out millions of money for contracts there has been an artificial state of employment created. While, on the other hand, the Government have been creating extreme employment and high wages and large profits, yet, on the other hand, they have not been taking sufficient steps to earmark and take a share of those profits and increase the taxation on the luxuries consumed by the working classes.
The Chancellor of the Exchequer rightly stated that the financial resources of this country would be strained to the utmost, not only during the later period of this War, but when in time the wreckage is being repaired. Then would be the time to reduce taxation. Now is the time to increase taxes very largely. Every penny spent to-day on luxuries is economic waste. The elimination of waste is a national duty, whether it be short time in shipyards and the making of munitions of war or the expenditure of money in the purchase of luxuries, and I regret extremely that the Government have not placed much heavier taxation on every luxury consumed by the people of this country. The Treasury have stopped the issue of new capital so as to conserve the capital of this country. It seems to me that high taxation of luxuries is a natural corollary. The horrors of war are known to the people of this country, but I am quite convinced that the financial effects of this War have not been brought home to them as a whole. Turning for a moment to the national revenue and expenditure, the Chancellor of the Exchequer last week stated that the revenue this year would show an increase of £43,000,000, while, on the other hand, there would be an increase in the fixed debt charges of some £30,000,000 per year. We are, in other words, by our present method of taxation, only raising some £13,000,000 to pay for the cost of this War. Practically the whole amount of the increased taxation is going to meet the debts which have already been incurred. I have figured it out, and the present taxation only yields one-tenth of 1 per cent. of the cost of this War. That seems to me to be quite an inadequate figure to be raised by taxation to pay for this War. The payment of the interest of debt will keep our rate of taxation at its present level, and it is quite apparent from what we have heard from the Chancellor of the Exchequer that year after year in the future the permanent debt charge of this country will be increased by some £60,000,000 per year. At present the increase of taxation is only £43,000,000. It is quite apparent, therefore, that the present rate of taxation must be increased, and the sooner it is increased the better it will be for all classes in this country. We have witnessed earlier in the afternoon the dangers of delay. The public have forced upon the Government the vital necessity of doing something in connection with the aliens question. The Government in this matter have delayed. Some few weeks ago the country might have been prepared to face the whole question of prohibition. We have seen during the last ten days that the Government failed to seize the psychological moment to press that point upon the country. I give these two instances in order to point out the dangers of delay, and I sincerely trust the Government will increase, and increase soon after the Whitsuntide Recess, the taxes payable by the people of this country. There has been, so far as one can see, no undue hardship caused by the increased taxes of last Autumn. I agree in many respects with the hon. Member for Blackburn (Mr. Snowden), but I differ from him acutely on this point. I think we should face a lowering of the Income Tax limit; we should increase the Income Tax and Super-tax; we should increase the taxes on tobacco, tea, and spirits; we should increase as well the rates of Estate Duty, and I hope that in the modified Budget which is bound to come before many months are out the Government will operate on these articles and on these first, and so by that means bring vividly before the people of this country the terrible financial consequences of this War.
I trust that I may be allowed to congratulate the hon. Member who has just sat down, on his excellent speech. The main point of it was the point which was made by my hon. Friend the Member for Blackburn (Mr. Snowden), that a far larger proportion of the present cost of the War should be borne by taxation and not by borrowing. It is because I agree with that I rise to answer in part some of the things which have been urged against the speech of my hon. Friend. I would like the House to consider what is going to happen after this War. We shall have a heavy burden of debt which will throw permanently a large amount of taxation on this country. Where then will come our schemes for social betterment. As a matter of fact, unless the Chancellor of the Exchequer accepts the advice given by my hon. Friend, and given by the hon. Member for Greenock (Mr. G. Collins), it would appear to me that all persons in the region of forty-five years of age may very well bid goodbye to some of the things they have hoped for most, and I say, and say deliberately, that by neglecting the psychological moment of taxing heavily those who have the wherewithal, the Chancellor will indefinitely postpone the coming of those social reforms which will make this country in days to come a better place in which to live. He spoke of the light and airy method of my hon. Friend the Member for Blackburn. It is the first time I have heard my hon. Friend spoken of in that way. His speeches always strike me as being too solid and close and hard with facts ever to be described as light and airy. I observe that those who criticise him sometimes talk about the farcical character of his suggestions, but at least they do now pay him the compliment of debating them at length. My hon. Friend has at least got to the stage where his utterances may be dismissed, but where his suggestions have seriously to be considered.
The Chancellor of the Exchequer warns us of a coming depression in the standard of living. What does that mean? Not that the hon. and right hon. Gentlemen who cheered him most will suffer from any lowering of the standard of living, for such a lowering would leave them, as it would also leave all hon. Members of this House, quite comfortable. But the lowering of the standard will hit people hard who to-day are making reasonably good wages. It means pushing them back to sweated conditions, with insufficiency of food, and driving them into houses into which some hon. Members would not put their horses or dogs. These are the people who will suffer from the lowering of the standard of living, if the Chancellor of the Exchequer proceeds with his scheme of drawing the main cost of the War from loans, instead of relieving the future by taxing the rich of the present. Everyone to-day has been screwed up to the position of facing willingly any sacrifice the Chancellor of the Exchequer may call upon them to make, and I feel he is letting off too lightly those who are in receipt of large incomes. He might take three-fourths of incomes in excess of £3,000 a year, and persons who suffered that deprivation would still be in an excellent position, so far as this world's goods are concerned, and as regards their standard of living. The right hon. Gentleman the Member for the Spen Valley (Sir T. Whittaker), in airily criticising the speech of my hon. Friend the Member for Blackburn, called attention to the fact that the local authorities must not go ahead with their schemes, because, incidentally, if they did, they would keep in their employment men who might be better employed at the War. But then he destroyed his own argument by suggesting that people in receipt of large incomes cannot dismiss their servants and cannot reduce their establishments. Why? Surely, if they reduce their establishments, and, so far as parasitic employment is concerned, reduce at least extravagant expenditure on luxuries, the right hon. Gentleman will observe that in that way they will just do, as far as they are concerned, what he is suggesting the local authorities should do—they will be limiting their expenditure to works which may be necessary. In warning the Chancellor of the Exchequer that local authorities should be thus restricted, the right hon. Gentleman the Member for the Spen Valley singled out particularly the President of the Board of Education. Why he should have done so, I cannot understand. As a matter of fact, the President of the Board of Education has already commenced to restrict the expenditure of local authorities in educational administration. The Grants which were given in recent years to local authorities to establish training colleges are gone. The suggestions which were made and pressed upon the President of the Board of Education to find more money for local authorities for that kind of thing has gone by the board. There ought to be a caveat entered against this suggestion, so far as the Board of Education is concerned. The right hon. Gentlemen should recollect that the War will come to an end—I hope soon, and successfully so far as we are concerned. It ought not to be forgotten that we have to rebuild, and in rebuilding we have to count most on the children at present in the schools. If they are to be prejudiced, as they are being prejudiced to-day, and prejudiced unnecessarily as I think, and if they should be further prejudiced as they will be if the right hon. Gentleman the Member for the Spen Valley has his way, we shall restrict the development of the children who are to rebuild the State in the years to come. I wish to refer for a few moments to the speech of the hon. Member for the Tavistock Division of Devonshire (Sir John Spear) who, somewhat strongly, criticised Members on these Benches for their attitude of indifference towards a question of agriculture and towards the well being of agricultural labourers. I observed that the hon. Gentleman singled out my hon. Friend the Member for Norwich (Mr. Roberts), and excepted him from his general condemnation. As a matter of fact, the Members who sit on these Benches have appointed a Commission, which has been in existence for some time, and which is charged with the consideration of rural affairs. Of this Rural Commission my hon. Friend the Member for Norwich is chairman. The Commission went to the trouble and expense of visiting Ireland and Denmark. I had the privilege of accompanying the Commission to Denmark, its object being to inquire into agricultural conditions there, and as a result of their inquiries they have produced a report which probably the hon. Gentleman has not seen. This shows at least in some small way that our interest in agricultural questions is active. What is more, it should be remembered that the bulk of the Members on these benches were not brought up in the rural districts. The conditions of their employment, the conditions of their nurture were associated with towns, and it was because the hon. Member for Norwich knew more than most of us of what happened in the country that we placed him in that position. But when he speaks on these questions, he speaks on behalf of the party which keenly supports him in the appeals he has made for more consideration for the agricultural problem. I rather fear that the hon. Gentleman's hostility is due to something which we urge on these benches; it is because we have directed the main point of our propaganda to increasing the wages of agricultural labourers. That may be the head and front of our offending. It touches those farming interests for which the hon. Gentleman speaks so often and so well. Our party has never neglected the agricultural question, and if we do direct our attention to the position of the agricultural labourer, it is because we feel that, in his low wages and in the wretched housing conditions he has to endure, you have the real set-back to any proper development of life in agricultural districts. Perhaps I may be pardoned if I say a word or two with reference to the speech of the hon. Member for Aberdeenshire, who suggested that the hon. Member for Blackburn had given us his annual speech—a speech which would have done well for the London School of Economics. I take that as a great compliment. If the speech of my hon. Friend was worthy of the London School of Economics, it was an excellent speech, and I think it contributed more to the Debate than what fell from the hon. Member for Aberdeenshire. The latter contributed nothing practical. He indulged merely in negative criticism; he was rather doubtful of any advantage accruing from attacks on immature whisky, and he was very doubtful of any advantage accruing from putting a tax on the exceedingly large profits now being made in certain industries as the result of the War. But my hon. Friend made a practical contribution to the Debate. I have heard hon. Members opposite speak of the Chancellor of the Exchequer as having sat at the feet of the Member for Blackburn and learned how to draft his Budgets on suggestions he has made. Anyone who has attended the Budget Debates of late years, will allow that a most notable contribution to the Debates has always been delivered by the hon. Member for Blackburn, and his main proposition, which he reiterates and repeats, using the illustrations which new events furnish, is one which cannot be too often reiterated in this House. The point of view to be taken, as far as taxation is concerned, is that we should look more at what is left in the pockets of those who are taxed and less at what we take from them. That is a point which I would reinforce, and I would like to see it borne in mind by hon. Members generally. May I also make a practical suggestion to the Chancellor of the Exchequer. Many suggestions have been made to him to-day, but the one I will make has not, so far as I know, been made in the course of this Debate. It is this: That in the banks of the country there is a considerable sum of money representing unclaimed balances. In equity, those balances are not the property of the banks. I suggest to the Chancellor of the Exchequer that he might by an Emergency Bill, take over the whole of those unclaimed balances, which would contribute at least some small amount towards the present great sums which are going out to meet the cost of the War. I expect there will be some amount of hostility to that proposal from those who represent the financial interests in this House. I imagine it will come from the same people who unite in saying that we should tax exceptional war profits, although with the exception of the hon. Member for York (Mr. Butcher), practically everyone who advocated that taxation desired to warn the Chancellor off because of the difficulty. We have competent men at the Treasury who might very well bend their energies to the solution of the problem of how to tax exceptional war profits, which everyone believes should be taxed, but which a good many Members of this House apparently desire should not be taxed for one reason or another. I rose chiefly to controvert some of the criticisms which have been urged against the speech of the hon. Member for Blackburn. I only regret he was not here personally to have an opportunity of answering them himself, but, knowing him as well as I do, I am sure he will take the first opportunity of replying to the criticisms urged against him in this Committee.I also desire to offer a few remarks upon the speech made by the Chancellor of the Exchequer and more particularly upon his criticism of the speech of the hon. Member for Blackburn. I heard the speech of that hon. Member and must confess it struck me as being most thoughtful. The Chancellor of the Exchequer was not fair in his criticism of the views expressed by the hon. Member. The hon. Member laid particular stress upon the necessity for taxation in the present Budget. The Chancellor of the Exchequer, in a very eloquent peroration, emphasised that point and spoke at great length upon the necessity for economy. He made, as he usually does, a very interesting speech, as he did when he introduced his Budget. He spoke then at great length when he diagnosed the financial position. One naturally expected, after that very interesting survey of the finance of the present position, that the right hon. Gentleman would have made some practical proposals for new taxation which we could have discussed upon the Budget. The hon. Member for Blackburn undoubtedly made a very interesting contribution to the Debate by emphasising the point of an increase in taxation which is entirely absent from the Budget now before us. It will repay us if we consider the figures showing the enormous proportion of borrowed money or loan operations as compared with taxation. The figures are out of all proportion, and are not in accordance with the principles of sound finance. When the Chancellor of the Exchequer introduced his Budget, he spoke of the sacrifices of the people during the Napoleonic wars and of the willingness with which they taxed themselves to a large and an increasing extent as the war progressed. The extraordinary thing about his speech then and his speech to-day is, that so much of it is in the air. Why does he not practice what he preaches, and why did he not offer us some, taxation proposals to discuss instead of lecturing us as delivering speeches suitable for the London School of Economics when proposals are made of a practical character?
I find that on the right hon. Gentleman's own figures of the cost, of a War for six months, the cost would amount to £786,000,000 or £790,000,000, while the Revenue from existing taxes, according to his own figures, would be £267,000,000, or a gross deficit of £523,000,000. If we take into account the Sinking Fund, which is the only item we can deduct, because he has withdrawn his wine, spirit and beer duties, the deficit on the six months' estimate would be £519,000,000 odd. Taking again his own figures on the estimate of twelve months' War, the estimated total expenditure would be £1,136,000,000. The Revenue from existing taxes would be £267,000,000, leaving a gross deficit of £869,000,000, and after deducting the Sinking Fund of £3,789,000 we are left with a deficit of £865,000,000. The amount of Revenue from taxation to meet that would be only £267,000,000, so that less than 25 per cent. of the cost would be paid out of taxes and the remaining 75 per cent. has to be raised from loans or borrowings. Contrast that with what happened in the Napoleonic Wars. The people began with taxes equal to one-seventh of the national income, rising to one-fifth, then one-fourth, and, finally, to two-sevenths. The Crimean War was comparatively a small one compared with the gigantic undertaking with which we are now engaged. I do not suggest, therefore, that the same proportion should be maintained, but the principles are the same. We find that the Crimean War cost about £70,000,000, of which about £38,000,000 was drawn from taxes and £32,000,000 from debt. I wish to emphasise the point that in the present War the proportion raised by loans is far too excessive and the proportion from taxation far too small. That was the main issue which the hon. Member for Blackburn desired to impress upon the Chancellor of the Exchequer. It was a point in accordance with the highest and soundest principles of finance, and it deserved much more consideration from the Chancellor of the Exchequer than he gave it. I pass from that to some proposals which I imagine one might venture to offer in regard to the increase of taxation. Many of the speeches made have referred to the necessity of taxing the abnormal profits derived from the War during the present year. I, for one, certainly believe that it ought to be, and is, possible to tap that abnormal source of profit. It should not be a very difficult matter for the Treasury to draw up some form, which might be introduced by the Government, say, in the Committee stage of the Budget, of war Super-tax or Income Tax which might be based, not upon the three years' average as at present with regard to ordinary Income Tax and Super-tax, but upon the actual income of this particular year. It would then catch these abnormal profits. It would be passed naturally, as all taxes are, just for the year, and it would apply only to more particularly war finance, and be on an ascending scale, and that, it seems to me, would be the means of bringing into the Treasury a very large accretion of revenue, and would, I believe, be a tax fairly placed upon those best able to bear it. I should like to draw attention to certain statements which were made by my right hon. Friend when he introduced his Budget. I was entirely at a loss to understand his reasoning with regard to certain statements he made, more particularly on what he called the financing of the difference between our imports and our exports. He spoke of the balance of £130,000,000. When you are dealing in peace time with this country, which is a creditor country, as compared with other countries which are more or less debtor countries, it is a good thing when your imports very much exceed your exports, and we had a margin of something like £130,000,000 excess of imports over exports in ordinary times. I cannot see what he means by any necessity to finance that. That surely finances itself. The fact that a creditor country, which is a large lender of money, has a very large margin of excess of imports over exports means, of course, that there is a great deal of accumulated capital which is invested abroad, and that money comes back to the country in the shape of interest and, of course, goes to swell the imports. It might be said that we had to finance this excess, but how is the interest paid on those loans which we have made to other parts of the world—to Argentina, to the Colonies, and to America? Of course we know it comes here in the shape of goods, because the holders of this capital spend their money, being the interest, in this country, which goes, of course, to swell the demand for various commodities and luxuries, which in turn is reflected in the increases of imports. But there is no necessity to finance it. It finances itself. Let us take, first, the actual interest paid. The interest is paid for in the shape of coupons in this country, which are readily disposed of in the City of London. Then it is not necessary to finance this balance that he refers to because American or Canadian coupons are like a bill on New York and they are readily bought up because people have to make payments to New York. We have at present this particularly adverse foreign exchange to which my right hon. Friend's remarks more particularly referred. The people abroad, say, in the United States of America, who have to remit this interest to this country for the investments which we have in those countries, are very desirable people to have at present, because they are really people that there is rather a scarcity of. They are buyers of these bills upon London which we should like to see increased. It is owing to our large purchases of munitions of war and so on, of which the right, hon. Gentleman spoke, and to the necessity there for us to finance the cost of these very large purchases, and our huge indebtedness to America to a very large extent, that we have this adverse foreign exchange at present. But to include this excess of £130,000,000 of imports over exports is, to my mind, really to confuse the issue, and when he, in his rather superior and airy fashion, gives us a lesson in economics, I suggest that he himself might give a little more study to political economy and what governs foreign exchanges. The whole argument is based on a fallacy, and, indeed, he does not understand the laws which affect and govern foreign exchanges between ourselves and other countries. I will pass on to what he further said on this very important question, because he gave a considerable amount of attention to it, and how he got over this difficulty which we have at present with regard to our Government purchases. On a former occasion I suggested that there was one contributing cause which accentuated this difficulty of financing these purchases, and I have never been able really to get him to meet the point. Through various engagements he has always been absent. The Financial Secretary very gallantly stepped into the breach on one occasion and endeavoured to meet the point, but so far I have never been able to get a satisfactory answer to it. It is that this difficulty of financing these huge purchases of ours from America, more particularly because we have there this adverse rate of exchange. Gold has been going across the Atlantic, and will probably continue to go in spite of agreements with France, because of the existing situation. The point I want to emphasise is one for which we are more or less responsible, and which accentuates this situation, that is the continual issue of paper money by the Treasury. When he first brought that measure before the House last August, when it was regarded as an emergency measure, the right hon. Gentleman pointed out that it was necessary to conserve our gold because credit had dried up almost entirely. We largely subscribed to it. I, for one, ventured to ask him whether there was any provision for the final retiring of those notes, because from my study of the subject, and it is well known by those who give any thought to it, that if any Government enters upon a period of continued issue of paper money, it dilutes the currency. The Chancellor of the Exchequer himself—and that is a most extraordinary thing about our Chancellor—comes in, makes most admirable speeches, and points out, as he did on a recent occasion, the effect of "paper girders" in Germany, where this process has been carried out to an abnormal extent. There the finance is more or less in a parlous condition, because of the fact that they have simply turned on the printing press. They will some day have to redeem that paper, and Heaven knows how they will be able to redeem it. But we in a minor degree are pursuing a somewhat similar policy. The latest currency note return comes out at the rate of about half a million a week, and now amounts to forty-two odd millions. If you continue this process of pumping currency into the country at the rate of half a million a week, there will come a time when something will happen. I ventured on a former occasion humbly to suggest that this was one of the contributing causes to the continued increase in the cost of living. And anyone who goes into a study of the question will agree that the increase from something like thirty odd millions of paper money a year ago to what must amount to something like seventy or eighty millions now must have an effect upon commodities and fall very hard upon the poor, whose wages do not increase to anything like the same extent. But the right hon. Gentleman, whilst speaking at considerable length on the disadvantages of "paper girders," does not practice what he preaches with regard to his own finance. The point to which I want to come back is that this continued issue of paper increases and accentuates the difficulties to which the Chancellor of the Exchequer has referred, in financing the purchases from America, because you undoubtedly depreciate the value of credit owing to various causes. That is, of course, accentuated and added to by the printing press of the Treasury. And while I quite appreciate the difficulties of a sudden withdrawal of some forty-two millions, I venture to suggest that it would be sound finance to gradually do so. The matter was very neatly stated in "The Economist" recently by a correspondent with regard to the Bank of England returns. Some time, very soon, the Chancellor of the Exchequer and the Government will come into the market for another loan. I would venture to suggest to them that if they wish to improve their credit and present a strong position in the City of London, it is well worthy of their consideration to consolidate the return of the Bank of England and the Treasury Return, and instead of showing these Treasury accounts to reserve against issues of Treasury Notes, that they should hand over to the Bank of England the control of those Treasury Notes, which it is more the business of the Bank to control than of the Government, and consolidate the ratio of gold against all liabilities to something like 28·7 per cent., as against 18·6 per cent. which it shows at present. The effect of this continuous efflux of gold is to reduce the only working reserve of the Bank of England and to create nervousness. This matter is well worthy of the attention of the Government if they want to conserve British credit and create as favourable a condition as possible for an issue of a loan. I should like to say I myself am not averse to the issue of paper money by a bank. The right hon. Member for West Birmingham and the Chancellor of the Exchequer seemed to believe that I was personally averse to the issue of small notes. That was a misunderstanding. I am not in any sense averse to the issue of such notes if they are issued by banks. The danger of this continuous issue by the Treasury is a twofold one. It has the effect of increasing the price of commodities, and it tends to interfere with the operation of the Bank of England. I hope I have made that point clear, and that it may receive the consideration of His Majesty's Government. There is one other point I should like to touch on, that is the new method of issuing Treasury Bills by the Treasury. While that undoubtedly is a great advantage, we have the tap turned on which requires very careful watching and great caution in operation. I suppose the issue now of Treasury Bills must amount to 107 odd millions. I understand that the issue of these bills is popular to the purchaser of the bills. The advantages of getting rid of floating debt and funding debt into a consolidated loan is very great because of the fact that Treasury Bills are a short dated security which mature after six, nine or twelve months, and when you come to refund them the time may not be as favourable as the present, whereas if you have funded your floating debt into a large loan operation the advantages of your loan being financed and got rid of would, I hope, appeal to the Government when they come to consider it. I suggest these two points, the, continual issue of the Treasury Notes and the necessity for caution with regard to the over issue of the Treasury Bills. In conclusion, I agree entirely with the sentiment expressed by the Chancellor of the Exchequer as to the necessity of economy and of trusting in the main to the savings of the people in this country for the carrying out of this great War. I do feel that while it is easy to increase our loan operations and while I recognise that it would be absurd to endeavour entirely or even approximately to finance this enormous operation by taxation, yet I would like to emphasise the supreme importance from many points of view of increasing the proportion of the revenue derived from taxation as against loans.Question put, and agreed to.
Resolved, That the Customs duty charged on tea until the first day of July, nineteen hundred and fifteen, shall be charged as from that date until the first day of July, nineteen hundred and sixteen, that is to say:—
| Tea, the pound | … | Eight pence, |
and it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of The Provisional Collection of Taxes Act, 1913.—[ Mr Lloyd George.]
Income Tax—Supplemental
Rate of Income Tax for the purpose of the Reduction of Tax on Earned Income and Small Incomes.
1. Resolved, That the rates of tax mentioned in Sections four and six of the Finance Act, 1014, in connection with the relief given in respect of earned income and small incomes, shall be doubled.—[ The Attorney-General.]
Ascertainment Of Total Income
2. Resolved, That an assessment to Income Tax on income from any source which has become final and conclusive for the purpose of Income Tax for any year shall, in estimating total income from all sources for the purposes of Super-tax for the following year or of any exemption, relief or abatement under the Income Tax Acts, be deemed to be the amount of income from that source.—[ The Attorney-General.]
Assurance Companies
1. Resolved, That it is expedient that assurance companies be assessed and charged to Income Tax separately in respect of each class of business carried on by them.
2. That, in ascertaining whether a company carrying on life insurance business has sustained a loss in respect of that business, any income of the company derived from its life insurance investments shall be treated as part of the profits of the company acquired in that business.
3. That the amount of annuities which a company carrying on the business of granting annuities is entitled, for the purposes of Sub-section (3) of Section twenty-four of The Customs and Inland Revenue Act, 1888, to treat as having been paid out of profits or gains brought into charge to Income Tax shall not exceed the amount of the taxed income of its annuity fund.
4. That an assurance company not having its head office in the United Kingdom, but doing assurance business through any branch or agency in the United Kingdom, shall be charged to Income Tax on its income from investments, wherever received, in proportion to the amount of business done by the company in the United Kingdom.
5. That a person shall not be entitled under Section fifty-four of the Income Tax Act, 1853 (as amended by any subsequent enactment), to deduct from profits or gains—
and the relief under that Section by way of repayment of tax, and the deductions from income allowed for the purposes of Super-tax under Sub-section (2) of Section sixty-six of The Finance (1909–10) Act, 1910, shall be accordingly limited.—[ The Attorney-General.]
Amendment Of Law
Resolved, That it is expedient to amend the Law relating to National Debt, Customs, and Inland Revenue (including Excise).—[ The Attorney-General.]
Resolutions to be reported to-morrow (Thursday); Committee to sit again To-morrow.
Immature Spirits (Restriction) Bill
Order for Second Reading read.
Motion made, and Question proposed, "That the Bill be now read a second time."
9.0 P.M.
The discussion which has taken place in Committee on the proposals contained in this Bill makes it unnecessary for me to go into the matter at any length, especially in view of the fact that the Government has been good enough to prepare the way for the discussion of some points, that I then brought to the attention of the Chancellor, by the Excise and Customs officials and representatives of the Pharmaceutical Society. The object of this Bill has nothing to do with revenue; its sole object is to restrict the supply of immature spirits, and it proceeds to do it by the operative Clause which prohibits the delivery, for home consumption, of spirits which have not been in bond for a period of three years. But to that Clause there are exceptions, and certain people are allowed to obtain immature spirits for certain purposes. But there is this significant condition, that those who obtain this immature spirit for this particular purpose are to pay a duty, I agree now only a modified duty, as I understood the Attorney-General to say yesterday, of 1s. 6d. a proof gallon. I take it that the Excise authorities, or rather the Government, in framing this Bill, are satisfied that immature spirit is not only permissible but is the right spirit to use in the manufacture of medicines generally. There is no advantage in inducing the manufacturer of medicine to use mature spirit. That being so, I cannot understand why you should say to the person who, you are satisfied, ought to be allowed to use immature spirit, "you shall not use it unless you pay a duty of 1s. 6d." I am told that the object of imposing this duty is to, what is called, level up the price of immature spirit to that of mature spirit. From the point of view of the Exchequer they get nothing by this Bill, for mature spirit can only be more expensive than immature spirit by reason of the fact that it has got to be kept in bond, and that there are charges due to keeping it in bond and charges due to the interest on the capital. I cannot understand, and perhaps the Attorney-General will explain, what possible reason there is for saying that immature spirit should not have an advantage in price over mature spirit for the making of medicines, when it is agreed that immature spirit should be used for that purpose.
What can be the reason of saying, "We won't let you buy immature spirits at their normal price, because if you do you will not use mature spirits"? If the Government get rid of this quite unnecessary and foolish extra tax upon medicines and upon other purposes for which this immature spirit is used, they will at the same time rid themselves of a very large number of difficulties which will arise. Supposing they do not, then it means that no one can obtain spirits for making medicines except at the increased cost of 1s. 6d. per gallon over the price they at present pay. They admit that there is no object in taxing medicines at all; that is agreed. And what is the result? The Government to-day are responsible for providing drugs and medicines for ten millions of the population through their insurance scheme. What can be the object of increasing the cost of that service? The result of this tax will be an increase of 4½d. or 5d. per lb. on tincture medicines. The result of the tax of 1s. 6d. will be, by the time it reaches the retailer consumer, an increase of 4½d. or 5d. per lb. It is an absolutely meaningless tax. From an intimation which the Attorney-General gives me it appears that I may leave that point, but no indication in regard to it has been given, and I may be forgiven, perhaps, if I thought it was necessary to raise the point. The other consideration I want to put is this: The Government have got to decide who are the people who should be allowed to use immature spirits, and they have tried a classification in the Bill, and they say that licensed rectifiers and manufacturing chemists and manufacturing perfumers may use immature spirits. Who is to define the manufacturing chemist or the manufacturer of perfumes? Any Member of this House may be a manufacturer of perfumes to-morrow or a manufacturing chemist, and these are the people who are to be allowed to use immature spirits. I would like to see this matter put into safe hands, and it would be much better to do it by means of a licence, containing such conditions as the Customs and Excise may impose. Let them have the power to grant licences to the people who can satisfy the Commissioners that they have special need of this immature spirit for special purposes, and let the conditions of the licence tie them in that way. I am a little puzzled about this: The first Clause of the Bill says that no British or foreign spirit shall be delivered for home consumption unless they have been warehoused for a period of three years. The definition of the word "spirits" is very wide. Spirits mean, according to the Bill, as it seems to me, spirits of any description, and includes all liquors mixed with spirits and all compounds mixed with spirits. You must not deliver spirits which have not been warehoused for three years, and they then go on to say to the manufacturing chemist, "You may have immature spirit in order to make tinctures with spirits"; but if I understand aright the Bill as now drafted, you tell the manufacturing chemist that he may add immature spirits in order to make tinctures, and, when he has made those tinctures with spirits, you tell him that he may not send them home for consumption unless they have been warehoused for three years. I do not know whether that is really meant. It cannot be meant. I have tried to look it up to see whether "delivered for home consumption" has some special meaning. Who can deny that if a publican supplies whisky over his counter that he is delivering spirits for home consumption? He is prohibited from doing that under this Bill. I am not concerned about him, or whether he is going to be responsible, or whether it is intended that the spirit that he sells shall have been warehoused for three years. But when we come to deal with the special exemptions of this Bill it is obviously absurd to say to the manufacturing chemist, "You may have immature spirits to make your spirituous medicines, and then, having made them, you shall not, under the Bill, deliver them unless you put them into warehouse for three years." This does seem to me a point which wants clearing up, and I would appeal to the Attorney-General not to rush the Committee stage. Pharmacists and doctors in the country are not going to place any difficulties in the way of the Government in trying to prevent raw spirits being sold. I am not attempting to deal with any number of technicalities which I can assure the House arise under the Bill, and I hope the right hon. Gentleman will not rush the Committee stage until he has consulted his advisers on these points. The Government and its advisers have been so driven by another interest, which they may consider the biggest, in dealing with this matter, that I think they have forgotten the facts bearing upon this other very important interest of the community, and I would ask the Attorney-General not to take the Committee stage until he has had an opportunity of seeing and consulting his advisers.When this Bill was previously debated it was treated as if the only firms that raised any valid objection, or were really seriously affected by the Bill, were spirit dealers in the North of Ireland. I want to know whether the Government are under the impression that other firms in the trade do not take exception to this measure. England has not been considered, Ireland has been considered, and Scotland is not much affected, because, they have such large stocks of mature spirits. I understand the position of the whisky trade in England to be that they are prepared for a two years bond period, and a preparation period of two years. They are not prepared at all for a three years' age limit and one year preparation. If the Bill stands in its present form they also, before the expiry of one year, will inevitably be hard hit. The fact is that all the smaller publicans throughout the country sell spirit of an average of about nine months' maturity. I should like to ask if the English case is under consideration, and if it is understood that they object altogether to the two periods mentioned for bonding and preparation in the Bill. I asked the Chancellor to-day as to the question of compensation. The Attorney-General will not be surprised if the persons affected are anxious to have this matter in the plainest possible terms. The Chancellor told me that compensation is arranged for under some general scheme to be administered by the Committee over which the hon. Member for Exeter (Mr. Duke) presides. I am quite sure that is all right, but I confess I do not quite know what authority the Government have to give compensation under a Bill like this when there is no provision in the Bill for compensation. Has the Government any general sort of authority for awarding compensation under the Defence of the Realm Act to cover all Bills, even though there is no provision in the particular Bill concerned? I dare say it is so, but as it was not explained to-day I shall be grateful for some explanation, and so, I think, will those affected by the Bill and who are, I think, a little suspicious about their treatment.
Since the extra Licence Duties have disappeared, any attempt to compare beer and whisky with vodka and absinthe has been abandoned to-day. I do not know what personal acquaintance the Chancellor of the Exchequer has with vodka, but I have lived in Russia, where I could get nothing else to drink. Vodka is a fiery, most deleterious spirit, and it is not fair to compare any whisky which is sold in this country, not even the cheapest whisky to be obtained in the meanest inn, with vodka. I do think to do so unduly prejudices this question, and it is unfair to a trade which is continually subjected to rather unfair criticism, to repeat that kind of comparison. Still less is it justifiable to compare even inferior whisky with absinthe—a poison which even slightly diluted destroys the body and the brain. The comparison has been abandoned as regards beer and French wines, I am happy to say, and I hope it will now be abandoned as regards whisky and the other drinks.May I ask what precisely "delivered for home consumption" means?
The hon. Member for Stepney (Mr. Glyn-Jones) mentioned, I think, three points, one of which is that just mentioned by the hon. and learned Gentleman. I will take the point last mentioned first. It is really a question as to whether the Bill is correctly drafted. It is a very proper point to mention, but not one on which to spend much time. I think it will be found that those are the correct words to be used in order to carry out the purpose intended. The hon. Member for Stepney referred to some definitions which are in a very complicated Statute—the Spirits Act of 1880—an Act which deals in the most elaborate way with the law relating to spirits. I looked through it the other day to see if I could find out what whisky was. The word "whisky" does not occur in the Statute, and I do not think that the law has ever descended precisely to define these different drinks one apart from the other, but you will find there a definition of British spirits, which really means spirits which are liable to Excise Duty, and you will also find a definition of foreign spirits, which means spirits liable to import or Customs Duties. What is meant when you say British or foreign spirit "delivered for home consumption" is spirits which are liable either to Excise Duty or to Customs Duty. That really would not include, I think, the compound to which the hon. Gentleman was referring, but I will very gladly go more closely into the matter before the Report stage, and I am much obliged to him for mentioning it.
The hon. Gentleman also asked what is the meaning of "delivered for home consumption." What is really meant is this: Under the authority of the Revenue Department you are at liberty to keep in bond without paying the duty for the time being those taxable commodities, but before they can be removed from the warehouse, yon have to pay. The removal from the warehouse is technically "delivered for home consumption." It is passing the barrier which means that they have paid the duty and are free. The hon. Gentleman mentioned two other matters, and certainly very important matters. The first he put was this: He said, "Are you not by the scheme of this Bill, proposing to put an additional tax and, therefore, in all probability, an additional price upon medicines and other compounds made by manufacturing chemists for the purpose of healing?" I say at once if that were the consequence of what we are proposing, everybody must admit that at any time it would be an unfortunate consequence, but at this time it would be a disastrous consequence. Nothing could be less calculated to promote the effective carrying on of the War than that we should do anything which made the means of healing and curing more expensive and more difficult to obtain. My hon. Friend will realise the difficulty of explaining everything in a ten minutes' speech. In addition to that difficulty, I had special difficulty that, of course, no taxation proposals are within the four corners of this Bill at all, but are necessarily in the Finance Bill. I feel sure I may repeat in the presence of the Chancellor of the Exchequer what I have been saying in his absence. I said it was no part of our intention by this scheme by increasing the tax to increase the price of medicines which are made out of spirits. What is necessary is this: You must have, for some purpose at any rate, equalising duties of 1s. 6d., or 1s., according as your spirit is new or is one year old. Otherwise a spirit which has got to be warehoused for three years is treated unfairly and you have provided these taxes as countervailing to the expenses of keeping and warehousing. That does not apply in the least to spirits used for medicine purposes. There is no advantage in making medicines out of mature spirits. Medicines ought to be made out of fresh ingredients, and I imagine that it is just as important to use fresh ingredients if the ingredient is spirits as if it is any other drug or poison. The hon. Member said, "I know what a licensed rectifier is, because he is a rectifier who has a licence; but what is a manufacturing chemist or a manufacturer of perfume?" I think there, again, that the hon. Member will find that there are words in the Bill which really have a bearing. There is a provision which says:—The suggestion which he made that it might be desirable to have some form of licence or authority or certificate which should be given to persons who really were manufacturing chemists is a very practical suggestion, and I shall be very glad, if I may, to confer with my hon. Friend as to how his suggestion might be carried out. With regard to the points raised by the hon. Member opposite (Sir J. D. Rees), we have had a very extensive general Debate on the subject, and it would not be useful to go over the ground again to-night. There is bound to be consideration of a very serious kind given to the subject-matter of this Bill before it gets through any further stage. The hon. Member spoke of consideration having been given to the Irish case, and it might be to the Scottish case, and he asked whether England, a portion of which he represents, was to be entirely left out of account. I can assure him that that is not so. In the consideration which has been given to this matter we have had fully in mind that we have to consult English opinion, and keep ourselves informed as to the facts of the case in England no less than in Ireland and in Scotland."Subject to the payment of such duties as Parliament may determine, and to compliance with such conditions as the Commissioners of Customs and Excise may impose."
Is it understood that the English traders object?
I do not know whether the hon. Member is authorised to speak as their sole representative on this matter. I am glad to assure him that there are some people who do not object at all, but who believe that some period to prevent raw and fiery spirit from being sold is a very excellent principle from the point of view of the trade itself. A further point raised by the hon. Member was as to compensation. He said, "I see nothing about compensation in the Bill. Where, then, is your authority for giving compensation?" That criticism, if it applies at all, would, as the hon. Member must see, apply to a great deal besides this Bill. It would apply to the Defence of the Realm Act itself. The answer is that the Commission to which reference has been made is to inquire and report to the Treasury as to the sum proper to be allowed. The Treasury will not pay such money away at its own will and pleasure, and the opportunity which this House will have of considering the matter will be the occasion when we have to get the authority for spending such money. It has to come under review in some form or other by the House. Having replied to the questions which have been put, I would urge the House, if it thinks fit, to let us take this stage of the Bill, it being quite clearly understood that, having obtained the Second Reading, we shall not afterwards turn round and say that the House has unanimously agreed beyond all dispute or question to the whole of these proposals, but rather that we are taking the Second Reading in order that, if we can arrive, as I hope we shall, at a happy adjustment of these difficulties, we may not waste the time of the House.
Question put, and agreed to.
Bill read a second time, and committed to a Committee of the Whole House for to-morrow (Thursday).
Consolidation Bills
Motion made, and Question proposed, "That so much of the Lords Message [11th May] as relates to the appointment of a Joint Committee to consider all Consolidation Bills of the present Session be now considered."—[ Mr. Gulland.]
I think we ought to have some statement as to what Bills will go to this Committee. As far as I know, there will be very little opportunity for it to get to work. I should like to know what Bills are in prospect.
The Bill for consolidating Statutes in regard to the Government of India, which has been introduced in another place, will, I think, be the first Bill considered by the Committee. Then there is on the paper the Milk and Dairies (Consolidation) Bill, which incorporates the legislation of last Session, which also will go to the Committee. Possibly there may be other Bills, but at any rate those two will enable the Committee to make a start.
Question put, and agreed to. Lords Message accordingly considered.
Ordered, That a Select Committee of Five Members be appointed to join with a Committee appointed by the Lords (as mentioned in their Lordships' Message of the 11th May) to consider all Consolidation Bills of the present Session.
Ordered, That Mr. Cave, Sir John Jardine, Mr. John O'Connor, Mr. Charles Roberts, and Colonel Yate be Members of the Committee.
Ordered, That the Committee have power to send for persons, papers, and records.
Ordered, That Three be the quorum.
Ordered, That the Committee of this House do meet the Lords Committee, as proposed by their Lordships.—[ Mr. Gulland.]
Profit Sharing
Motion made, and Question proposed, "That this House do now adiourn."—[ Mr. Gulland.]
In raising the question of which I gave notice yesterday, I desire to get information in regard to a very important statement made by the Secretary of State for War, in another place, nearly two months ago, but in regard to which we heard yesterday that the Government are not prepared to make any further statement whatever. As soon as I saw the statement of the Secretary of State for War, the House being on the point of adjourning for the holidays, I put down a question for the first day when the House re-assembled—the 14th April. I thought that by then the Government would have had time to consider the question, which no doubt had already received some consideration before this important statement was made. I was surprised that in answer to my question the Prime Minister said that he was not in a position to make any statement on the matter. Yesterday we got a little further information from the President of the Board of Trade. I do not want to pin him to the precise words which he used on that occasion, because they were spoken in answer to a supplementary question; but I would like, in passing, to call the attention of the House to those words. Before doing so, it may be desirable to read the precise statement made on a very important occasion towards the end of a speech by the Secretary of State for War. It was, to my mind, in view of the Defence of the Realm Bill, (No. 2)—now an Act of Parliament and about to be introduced into their Lordships' House—and also in view of certain difficulties which had occurred, particularly in the North, in regard to labour in certain localities. He said this:—
That statement, which is obviously an important one, divides itself into two parts. The Government were actually at that time considering the subject. The Secretary of State for War, who was certainly in this matter the official spokesman of the Government—if not a great deal more, as being intimately charged with great duties of which the production of armaments formed so large a part—stated that the Government were actually arranging a system of Government control for these important armament works, and that under that system they hoped to arrange for what, in fact, was a division of these special war profits between the two great classes which are co-operating together, as they should, capital and labour, form the aggregate of the personnel of these great industrial undertakings. Surely we are right in calling the attention of the House to the matter two months after that statement was made, and after two applications in practically identical terms to the Government, on both occasions being told that the Government have no statement to make. Yesterday we find the President of the Board of Trade saying this—"Labour may very readily ask that their patriotic work shall not be used to inflate the profits of the directors and shareholders of the various great industrial and armament firms, and we are therefore arranging a system under which important armament firms will come under Government control, we hope that workmen who work regularly, by keeping good time, shall reap some of the benefits which the War automatically confers upon these great companies."
On that I would say this: First of all that I am quite sure the President of the Board of Trade had not in mind the precise terms of the statement that had been made, because it was coupled with the fact that the Government proposed to take some control over these industrial undertakings. If they took control obviously they could carry out whatever conditions in regard to the division of the profits might seem to them most to conduce to the harmonious working of these undertakings. Beyond that, even if that were not so, it is at present an admitted principle of the Government that no Government contracts are given to any firm which does not, for example, pay the standard rate of wages. If a condition of that kind can be imposed in time of peace, surely in a period of national emergency like the present it is not impossible to imagine that the Government, if they choose, could meet this great difficulty of conflicting interests between capital and labour by saying that at the present time, in view of these contingencies, they propose to add to that usual condition that some share of these special War profits shall be handed over to those who so largely contribute by their work to the production of the munitions of war. That was clearly what was foreshadowed by the Secretary of State. I only wish further to say to the House that, as a matter of fact, it is a part of the programme about which the Government have talked a great deal, and about which, as a matter of fact, they have done extraordinarily little. Going back a month beyond the period when the Secretary for War made this statement in another place, we had a Debate in this House on two questions—the introduction of the Navy Estimates and the financial arrangements the Chancellor of the Exchequer was making in connection with our Allies for carrying on the War. In the second of these Debates the First Lord of the Admiralty said that he thought it necessary to remind the House that we were at war. In all these matters I have found that it is not the House of Commons, and it is not the country that requires to be reminded that we are at war, but constantly, whenever any of these cases arise which obviously require exceptional treatment, we are met by the same old routine reasons which show perfectly clearly that the Members of the Government, representing different Government Departments, do not realise for a moment that they have got outside the ordinary ruck of what would be their red-tape administration in time of peace. On that occasion the Prime Minister said:—"It is not a matter in which the Secretary of State for War is able to dictate to private firms."
The right hon. Gentleman was speaking of men, of finance, and of munitions of war—that each country in the Alliance was bound to produce the most they were able to produce in the most effective manner possible. Just after that we had these difficulties with labour in the north. Then we had this statement from the Secretary of State. Those of us who are interested—and there are Members on both sides of the House—in this great question of the alliance between capital and labour—which would do more towards economic production in time of peace, and which, however essential in time of peace is ten times more essential in time of war—felt that here at last was a statement made by a man possessing not only courage but the genius which enabled him to put his finger on the spot which raised all these difficulties in regard to capital and labour. That spot is this: It is the inherent jealousy between the two classes, jealousy on the one hand of what the workers believe to be excessive profits—and what in the present exceptional period I believe in many cases are excessive profits—to be made out of the national difficulties. It is that and distrust of the employing class. We felt that nothing could so absolutely remove that as to say that this was an exceptional period, that the Government were going to take control now, that they were going to teach the nation a lesson. That lesson is one which we are obliged to learn, because in a state of war you must unite the interest of capital and labour towards the common purpose of saving the country by producing as cheaply and rapidly as possible munitions of war that are absolutely essential to carry it on. I would not raise this question if it were not that the Government admit as recently as 29th April, in a speech by the Chancellor of the Exchequer, that there is a very great problem in regard to this question of the production of the munitions of war. The Chancellor of the Exchequer explained that the problem was divided into three parts. He was anxious to show that he had not placed excessive stress upon the question of drink, which has demanded and occupied so large a part of the time of the House—and no doubt the time of the Chancellor of the Exchequer during recent days and weeks—he said this:—"Alliance in a great war to be effective means that each country must bring all its resources, whatever they are, into the common stock."
I only refer to that speech to show that in dealing with this question the Secretary of State was dealing with the question that the Chancellor of the Exchequer put first—the question of mobilising the engineering resources of the country. That which he put first we have done very little with. It is true, with regard to his second proposition, the Government have asked the trade union leaders to advocate the abrogation of some of the rules which for many years they have built up. I do not think in making that appeal to trade union leaders they were dealing fairly with them. I do not think it would be fair to ask any class of man to say in effect that these rules, which they had taught those who follow their lead to regard as essential to the interests of their particular section of trade, should be swept on one side in order to produce munitions of war as rapidly as is necessary. I think it would have been very much better if the Government, at a much earlier stage, had realised what they said they realised long ago, but what they show little evidence of realising even today in a period of grave national crisis, namely, that it is the obvious duty of the Government to say this, and it is quite simple, that in order to prosecute this War successfully it is absolutely essential that every man in this country should be at his place, and should carry on the duties precisely which he is most capable of carrying on and contributing to the common stock. If they had done that they would practically have mobilised the engineering industry of the country. They would have done what they are now talking about. We should not have had 20 per cent. of our skilled shipwrights serving in the ranks as private soldiers. We should have had each man doing the work he is most fitted to do, and then, such a comparative detail as the rules under which the work was to be carried out would obviously have been put into effect most easily. The Government have proceeded in the opposite direction. Although we have this authoritative statement from the Secretary of State for War, we find, after repeated questions, it is somehow not a convenient question for the Government to take up. They are not prepared to back up the one man in the Cabinet who is mainly responsible for the conduct of the War, and I think we are right to ask why it is that a statement of this kind can be made so authoritatively and allowed not only to drop, but that we should hear in this House, practically from the President of the Board of Trade, that it is an unauthorised statement, and that it is one that cannot be put into effect because the Secretary of State for War has no power over private firms. If that is so, the sooner the Government take power and do whatever is necessary to conduct the War on the surest and safest lines towards the quickest possible conclusion, the better it will be for the country. Therefore I cannot apologise to the House for raising this question. I can only say we feel that here was a responsibility, and that one member of the Government, at any rate, saw how some of the evils could be turned to the permanent advantage of this country; how we could gain something after all by this War, and I, at any rate, am very disappointed to find that this most hopeful suggestion is turned down on what appears to me to be mere red-tape arguments which might apply to a time of peace, but certainly have no application to the present position."I was one of the first to call attention to this matter, and that was in a speech in which I put first the importance of mobilising the whole engineering resources of the country. The second difficulty I pointed out was the additional restrictions on labour—restrictions upon the production of munitions and armaments of war. In the third place I referred to drink."
I think it is desirable, after the speech of the hon. Gentleman, that I should at once inform the House of the steps which have been taken to deal with some of the difficulties described by him. It appears he misunderstood the language used by me in the House of Commons, and I think he also must have misunderstood what was said by my Noble Friend (Lord Kitchener) in another place. The questions which were put by the hon. Gentleman no doubt referred to profit sharing, and questions similar to those have also been put sometimes on the Paper, sometimes as supplementary questions, by the hon. Member for Sheffield. In each case I have no doubt that they had in their mind the possibility of applying to armament firms systems of profit sharing which in some other industries have been worked with success.
No.
Perhaps the hon. Member will explain at a later stage, but I had no doubt that profit sharing was uppermost in his mind when he put his question. My Noble Friend in no part of his speech definitely referred to profit sharing, and I am informed by him that he even went so far as to choose his language with great care, so that he should not be in a position of declaring either to workmen or to employers that he believed that profit sharing would be one of the solutions of whatever difficulties might have arisen. He said:—
And he used that language with the object of not binding himself down to profit sharing as one of the means of getting over this difficulty. When I was asked in the House of Commons more than once whether profit-sharing schemes were maturing for this class of labour and this kind of industry, I in each case was bound to say we had no announcement to make and could make no announcement. In our conferences with the employés of the armament companies we had discovered that, so far from profit sharing being regarded by the trade unions themselves as a solution of many of the problems by which they were faced, they could not waive any of their demands for the remuneration of labour on profit-sharing lines; that they were not prepared to divert their claims for extra remuneration to those lines; that they themselves did not put forward any demand for profit sharing; and that the one condition they made when they agreed with us to restrict some of their trade union regulations was that the profits of these firms should be limited. That at once takes away the idea of profit sharing for some other means of satisfying the demands which were made by the representatives of the big engineering concerns. It is quite true that my hon. Friend holds very strong views in favour of profit sharing, but what I am dealing with are not abstract ideas of profit sharing or the general principle. When meeting, for instance, the Amalgamated Society of Engineers, their request was based on different grounds. They did not put forward profit sharing as one of their claims; they asked that there should be a limitation of the profits of the firms, and then they themselves were prepared to waive their trade union regulations. That undertaking we gave them, and within the four corners of that undertaking we have been working. If it had been possible to institute a principle of profit sharing into the armament concerns I am sure no one would have been more pleased than myself, but it is absurd to imagine you can force profit sharing on to employers and employed if the employés do not want it. You solve nothing by doing it if they do not want it."We hope that workmen who work regularly by keeping good time shall reap some of the benefits which the War automatically confers on these great companies."
Are we to understand from the right hon. Gentleman that the employés distinctly declined to have a share of profits under a profit-sharing system if it had been offered in addition to other conditions?
I am not in a position to say that, and I have not said it. What I said was that the request made to us by the Amalgamated Society of Engineers did not proceed along profit sharing lines, and if they had wanted it I suppose they would have asked for it. They never asked for it, and if we had made that a condition of the arrangements which were being made, I will not say it would have been unpalatable, but at any rate it would have been giving the trade unionists that for which they were not asking. If the hon. Gentleman who raised this question suggests that we ought to say to the employers and employed, although they are not asking for it, that they must take it, then I say that that will not make for the harmony which the hon. Member in the course of his remarks declared to be essential for efficient production. We are bound to meet the views of the employés, and in so far as our conferences at the Treasury went, I think we were able to satisfy them on every request they made. It is quite certain that they had more in mind the limitation of profits, than they had the other side of the question referred to by my hon. Friend in the House of Lords. I fear the answers I gave to a series of supplementary questions yesterday led to some confusion on profit sharing and the limitation of profits. If what I said was thought to apply to a limitation of profits, then I expressed myself very clumsily, and I would like to clear up now once and for all what I ought to have said on that point, and it is this: We have been negotiating with the large armament firms, the principal Government contractors, with regard to a limitation of profits. We were bound to confer with them, not because we are going to accept whatever their views may be, but because if we are to do this efficiently and well and effectively, it is quite clear that the circumstances of each individual firm must be thoroughly understood by the representative of the Government, whoever he may be, who is conferring with these firms. Already I think nearly all the principal firms have been interviewed. They have been informed of the Government's intentions, in so far as they can be vaguely outlined at the present time, and in a short time I hope it may be possible for the Army Council and the Board of Admiralty to make formal communications to the large firms, showing the directions in which their profits must be limited.
We have made it quite clear from the first that a limitation of profits must mean, if there is any surplus over after the limitation, it must be used either for a reduction of the price of the commodities purchased by the Government or it is to be used merely as a return to the Exchequer. As I said yesterday, we have not been able to dictate to the big firms as to the use that is to be made of the surplus beyond that, and if it inures to the benefit of the State in these two directions, we shall be satisfied. But that does not relieve these great firms from the obligation of treating their workmen well and generously, nor does it indeed run counter to the statement made by my Noble Friend that the workmen should reap some of the benefit from their regular work and regular attendance, and the assiduity with which they have applied themselves to the engineering problems to be solved in the armament establishments. I think that before my Noble Friend sat down he made some reference to the granting of medals to those who had worked in these establishments, and he referred to the awarding of the medals to be granted on the successful termination of the War. That in itself is not unconnected with what I gathered was in his mind, that some of the benefits which the War automatically confers on some of these firms should be reaped by those who have kept good time in those concerns. But that does not bind him nor anybody to profit sharing, and it does not contradict the main principles agreed to by the Treasury Department. I hope hon. Members will refrain from asking for too many figures on this point, because we shall not be able to make a full statement. The time has not yet arrived when we can make a full return of all the concerns 10.0 P.M. that come under the Treasury agreement. The limitation of profits agreed to at the Treasury conferences could not affect every firm now doing Government work. The total number of firms now working for us runs into very many thousands. For ordnance work alone over three thousand firms are now executing orders directly or indirectly for the Government. In the course of the proceedings at the Treasury it was agreed that to apply this principle of the limitations of profits to firms which were only doing Government work as a subsidiary part of their ordinary work, or a portion of their ordinary output, would be unreasonable. The words published in the papers on the subject on 26th March have been widely canvassed, and they were as follows:—The reason I have drawn attention to these words is that I want to avoid any misunderstanding on this question. You cannot apply this principle, as I said, to firms which are not important firms, and which are not engaged wholly or mainly on shipbuilding work, but we do intend to apply it, and we are now in process of applying it, to all the firms which come under that definition. This covers the main contractors to the War Office and the Admiralty, and I hope it will be sufficient to assure those who are now working under great pressure in these great factories or workshops that the extra amount of work which they are putting into their labour is not going merely to swell the profits of the proprietors of those concerns. Those profits will not be abnormal, but will be strictly limited by State control, and they will know that their assiduous work is inuring to the benefit of the State and those who are serving the State. I have gone outside the subject that was raised in the questions which were put to me in the House of Commons, because the two topics are certain allied. I hope I have now made it clear to the House that the principles laid down by the Secretary of State for War have not been abandoned, and I hope I have also made it clear to the hon. Member who raised this discussion, that what was stated in the speech of my Noble Friend had not been neglected or ignored. It has not been ignored, because arrangements have been made and full details in due course will be published. Therefore, the representatives of labour need have no fear that the undertakings given at the Treasury will not be carried out to the letter by the Government. Arrangements have been matured harmoniously with those who are now carrying out Government contracts."It is the intention of the Government to conclude arrangements with all important firms engaged wholly or mainly upon engineering or shipbuilding works for war purposes, under which their profits would be limited."
Will the right hon. Gentleman say whether any of the representatives of the trade unions at the Conference expressed themselves in favour of establishing a profit-sharing scheme?
No, so far as I know, and I sat through the whole of the Conference, there was not a single statement made by any representative of labour in favour of a profit-sharing scheme. I said that earlier in my remarks. That does not mean that under other circumstances, if circumstances were more favourable, the Government is opposed to profit sharing. On the contrary, there are a good many of our difficulties that might be solved by it, but we cannot force on employers and employed a profit-sharing scheme in the middle of a great war if neither employers nor employed want it.
If the right hon. Gentleman will excuse me for saying so, I think that a very large part of his remarks were entirely beside the question. There is no question involved here of large schemes of profit sharing and of the limitation of profits, and so on. It is quite a simple matter. It is a question of what was understood to be an undertaking given, and I believe honestly and honourably given, by the Secretary of State for War. It was understood in that sense, as the hon. Member who represents another Division of Sheffield (Mr. James Hope) knows, and he himself has raised the matter again and again during the past two months. It was an undertaking given that some method would be found by which the workpeople doing long strenuous and valuable work at the present time could share in the enormous profits being made by some of the armament companies. That is quite a clear, simple, and definite point.
That is not what my Noble Friend said.
If that is not so, there has been a most unfortunate misunderstanding, and that misunderstanding has been allowed to last for months since the statement was made. Not only was it-understood in that sense by the workpeople, but it was so understood by the hon. Member for Sheffield opposite when he brought this matter forward, and it has never been in any sense repudiated by the Government until the present time. There is no doubt at all, therefore, that this matter has been very badly managed. This is entirely apart from any question of profit sharing. Probably we on these benches hold different views about profit sharing. There are many dangers bound up with it. We can, however, put that question entirely on one side. The point is that the workpeople did believe without any regard to abstract principles about profit sharing that their work was going to be recognised and was going to be recognised by some monetary gift. That is not a question of limiting profits. The two questions were put together by the Secretary of State for War, the question of limiting profits and the question of finding the means of letting the workpeople see that their work for the nation was going to be recognised in a special way. I say, therefore, that it is in that sense the matter has been understood. I do think that it is most unfortunate and most regrettable if the Government is now, after two months, going to run away from that which has been understood during that time. There has been a good deal of foolish lecturing of the workpeople in the meantime.
Hear, hear!
I did not associate the right hon. Gentleman with the lecturing, and I am glad that he agrees with me. In view of the overtime worked and the stress and strain endured, it would have been well if the Government had been able to carry out that which has been understood to be the spirit and meaning of the undertaking given by the Secretary of State for War. I believe that unless something is done in the sense in which it has been understood all that time there will be confusion and disappointment and that real harm will be done. I join with the hon. Member, and with other hon. Members, in pressing upon the Government to try and carry out this undertaking in the most generous way possible.
I should like to confirm absolutely everything that has been said by my colleague in the representation of Sheffield (Mr. Anderson). We never for one moment thought when the Secretary of State for War made his statement that he meant to impose profit-sharing schemes for all purposes upon any of the armament firms. I do not mind confessing that I thought it was a good precedent possibly for the future—I would not be frank if I did not say so—but I never thought that any more was meant than that the special war profits of these firms should be shared by the workpeople. I really cannot understand what this conference with the representatives with the trade unions has to do with it. I did not understand that the pledge was in any way contingent upon some arrangement to be made with the representatives of the trade unions. The thing is entirely apart. The statement was made to all the workpeople in the firms, whether trade unionists or not. Of course, I do not know exactly what passed at the conference beyond what was published in the papers, but I never thought for one moment that the two questions were to be balanced against one another, and that it was to be said, "You give up certain restrictions and we will give you a share of the profits."
It was distinctly stated at the time that it was in consideration of the Amalgamated Society of Engineers, who were mainly concerned, giving up their adherence to some restrictions they regard as necessary.
We must be at cross-purposes. All I was saying was that the statement which we understood as to the division of profits with the workpeople by the Secretary of State for War was not to be interpreted as being a bargaining counter with the representatives of the trade unions to induce them to give up certain of their restrictions. I understood that the two questions had to be considered entirely apart, and that the statement of the Secretary of State for War stood entirely upon its merits and was not contingent upon any arrangement to be made with the trade unionists at a subsequent conference. I understood that the question was simply this. Certain armament firms and other firms engaged on work in connection with the War were understood to be making great profits. The Secretary of State for War came down and said, "We will limit those profits and at the same time see that they are fairly divided among those workpeople who by regular attendance and hours of work qualify—
indicated dissent.
That was certainly the impression given, and I do not think that anybody could come to any other conclusion. I welcomed it, not because of the precedent, though I liked that, but because I thought that it went a good way to remove some of the difficulties in which we found ourselves at the moment. There is no doubt that a very wide impression had got abroad that certain people were getting far too much for themselves out of the needs of the nation. That impression was a very general one, and if it could be shown that those profits were not to be allowed to be excessive and at the same time that the workpeople who were doing their part and were doing it, as has now been acknowledged, with very few exceptions very patriotically and very well, were to share in those profits, limited as they would be, then I think a real harmony would be obtained between all those who were carrying on this great national emergency work. That is why I welcomed it, and that is why others welcomed it. I am perfectly certain that the impression generally created was this: Here is a great deal of national work to be done. It is now clear that nobody is to be allowed to make excessive profits out of it, and especially is it clear that employers and companies are not to make profit for themselves without the profit being shared by those who are carrying out the national work. That was understood as a perfectly definite policy, quite apart from imposing any general scheme of co-partnership or profit sharing, and quite apart from any arrangement made with the trade unions. The whole question as regards the bigger firms was the limitation of profits, and I did not understand that any division of profits was to go with it. The right hon. Gentleman has said that the workpeople must be treated fairly. But the whole gist of the Secretary of State's remarks was that they were to share in the profit that automatically goes to the employers. That is the plain meaning of the words he used. Do I understand now that these profits are to be limited, and the men are not to have a share in them? That is what the President of the Board of Trade gave the House to understand. If it is so, it is most deplorable in itself, and it is also most deplorable that, for two months, those who have taken an interest in this question, whether on behalf of their constituents or on behalf of the workpeople, or in the general interests of the country, should have been under this great misconception.
I would like to consider this question mainly from the point of view of winning the War—of getting as many munitions as we can, and as quickly as we can. The question of profit sharing is no party question. I do not think we need consider any special form of profit sharing at all. It is the principle at which we are aiming. The principle at stake is, are the workpeople to have a share of the profits over and above their wages, not in return for some concession they have made—that is not profit sharing at all—
He said so.
No, he said nothing of the sort. I have his words here. "The workmen shall reap some of the benefits that the War automatically confers on the great companies." Very wisely, indeed, for the interests of the country, the trade unionists met in conference the representatives of the Board of Trade and said to them, "You ask us to work very hard. We are doing so. We do not want our patriotic work to be used to inflate the profits of the directors and shareholders of the great industrial armament firms." That was a very natural, very proper, and patriotic thing to ask. Is there to be any drawback to anybody's patriotism? Would the workmen suffer anything, would the armament firms suffer, and would the country suffer if the principle here laid down were carried out? I will take Lord Kitchener's words: "The workmen shall reap some of the benefits that War automatically confers on the great companies." The President of the Board of Trade tells us that by arrangement the profits of these companies are to be limited. I have heard the figure 10 per cent. mentioned. I do not know if that is to be the limitation.
No.
Possibly the right hon. Gentleman will tell us later on what the limitation is to be. But the fact remains there is to be a limitation. We have already heard that on the authority of the right hon. Gentleman. I do not see at all why, because there is going to be a limitation of the profits, there should be no share given to the workpeople of these profits as well. It is not only morally right, but it is sound economically that the workmen should have a share in the profits. What is the case? We are continually told by the military authorities in every direction, as well as by Ministers in this House, that the question of munitions of war is an urgent one and is vital to our success in the War. What ought we to do? We ought to seek out the men and stimulate the production of these munitions. The Chancellor of the Exchequer has already brought before the public two faults or two hindrances more or less great—many people think they are less great than he has stated, but still they are things that have been admitted on all hands to have more or less affected the production of munitions of war. One is drinking. This House this very afternoon has passed nemine contradicente a third Defence of the Realm Bill, which will be an Act very shortly, and which puts greater powers into the hands of the Government to prevent the excessive use of alcohol. The trade unionists have very patriotically sacrificed, for the period of the War, certain rules and regulations they have established for the defence of their interests. They have waived them, not in return for payment, but as a patriotic act during the War. All credit and honour to them for doing it!
The real question for us to-night is, have the Government done everything, or have we done everything we can to stimulate the production of these munitions of war? I want to point out a very peculiar feature in regard to the production of the munitions of war. It is obvious to everyone, but it has a great bearing on the question of production in proportion to the machinery employed. Articles like food, fodder, clothing and transport materials are being produced always, and it is only a question, during a time of War, of diverting the ordinary sources of supply to the use of the military. The position is quite different in regard to the supply of munitions of war. Shells, rifles, cannon, and aeroplanes can only be produced by special machines erected for that purpose. There are two drawbacks in this connection; first, it takes a long time to prepare the machinery, and, secondly, we all hope that when the War is over there will be less use for the articles produced. The Government is always faced in time of war with very great difficulties. I consider that the Government have not been so far behind-hand as some people think. Those who have no connection with actual manufacture of any kind do not know how long it takes to prepare the machinery and plant for the production of these special articles. Let the House mark how important it is for this particular purpose of the production of the article that the machines should be kept at their highest possible point of efficiency. If you have special machinery to prepare it takes you a long time to get going, and you must run it at the very highest pitch while it is going. I do not at all justify the men working seven days a week. I do not believe in it. I believe special machines were necessary for making the various parts of the munitions of war—it is no good denying that we were behindhand in many respects, to my own personal knowledge—and it is necessary for the men to be kept going every minute of their time. I believe we should get more work done if the men did not work seven days a week. The men ought not to work more than six days a week in any circumstances, and Sunday shifts could be arranged. We want to consider not only the machinery, but the human factor. I can assure the House that in the trades where mechanical invention has been carried to any great extent, that that is the case. A good many people think it only depends upon the machine, but the human factor is of very great importance as well. I know from my own experience as a manufacturer that although we get the best machinery and the most automatic machinery that we can, when we have got it we have not got everything. The greater part of good, large, correct and accurate production depends upon the individuals who mind the machines. Machines are only machines. They wear out and want watching, and get out of order. You must have people whose hearts are in it. How can we get the workmen to do their very best? We can preach patriotism. That is all very good, and those who have anything to do with this do right to get the workpeople to feel that they are defending their country by working at Sheffield, Newcastle, and these other places just as much as those who are in Flanders and the Dardanelles. But we want to do more than that. We want not only to appeal to their patriotism to work. There is this idea abroad that extra profits are being made, and it is not only right, but it is good policy and will tend to the production of the munitions required if we give the workpeople a pecuniary interest in the success of the work and the amount of production. I am certain we are not entitled to look to people who are working hard for the best they can do unless we give them something over and above their ordinary remuneration. It is said they are earning high wages. It is not merely a question of wages. They are to reap some of the benefits that the War automatically confers on the great companies. I believe, from long experience and intimate knowledge, in the principle of profit sharing and in getting people to put their backs and hearts into their work. Evoke as much collective feeling and as much patriotism as you can. But we are all more or less selfish, and it helps a man to work better when he knows he is going to have some share in the profit that is the result of his work. I believe this principle is absolutely sound, and I commend it to the Government and the House, in addition to the other steps they are taking, as a very important and effective step in the long run for bringing home to the minds of the workers the fact that they are being considered as the human factor. I do not say take up any special scheme. This is not a cut-and-dried scheme. "The letter killeth but the spirit giveth life." This is a question of showing the people that you will give them an interest in their work. If the Government does that, and gives these people something extra based on the profits, I am certain that the country will not regret it, and when the President of the Board of Trade almost led us to believe that the workmen would object to a share of the profits on the top of something else, I cannot believe he meant that. I should object to it myself, as a workman, if I were required to give up any degree of my own liberty in exchange for a share of profits, but that is not profit sharing. It is bogus profit sharing. Sharing profits is giving a man something over and above what he would have had otherwise, and if the Government do that it will pay not only the armament firms, but pay this country, which would be best of all.
Two questions are really involved in this discussion which are really quite separate. There is the question of what the Secretary of State for War said, or was understood to have said, and, secondly, whether the particular proposal is a desirable one or not, or whether the Government method of dealing with this subject is best, or another proposal is better. I do not want to repeat what has been said about the Secretary of State's observations, but I have the Report here and I have read it several times. I cannot conceive how anyone reading that Report can have doubted that the Secretary of State indicated that he hoped some scheme would be devised by which the workmen should have a share representing part of the benefit which was to be automatically conferred on the owners of armament firms. An hon. Member opposite said it was very generally understood. It never occurred to me that it did not mean something of that kind, and I cannot understand what other meaning can fairly be given to it. I listened very carefully to the right hon. Gentleman's speech, and I still fail to understand what meaning he thinks was in the Secretary of State's mind, if it was not that in some way or another the workmen should share in the profits which the employers made. The right hon. Gentleman seems to think that was not the meaning and was not likely to be the meaning. Questions were asked to-day as to whether certain profits were not being made by the millers. It was said that they made £700,000 and the rise in wages was some very trifling sum. The implication has always been taken, and in my judgment perfectly justly taken, that in view of the enormous profits made by the employers, if those profits are to continue, or on any case the workmen should have some share in the amount of money which has been made. It may be just to limit the proportion—that is a different proposition altogether—but in any case these exceptional profits arising from the War ought not to be put simply into the pocket of the employer. What does the Government propose? The Government say we are going to limit the profits; we are going to fix some figure beyond which the profits of the employer are not to extend. And if in fact they do extend beyond that amount, what is to be done? Either the product is to be lowered in price, or the balance is to be handed over to the Exchequer. I cannot understand why the Government should have arrived at that conclusion. I do not know what figure they are going to fix as legitimate profits to the employer. They are going to fix, it may be 10 per cent. or 5 per cent. I do not care what figure they take. Employers even so will get certain benefits out of the condition of war, and surely it is right that before you come to make up that profit the workmen should have their share in the automatic increase in the prosperity of the industry.
I share fully with the right hon. Gentleman the view that this is not the time, in the middle of a great war, to try to reorganise industry. I am a very strong adherent of the principles of profit sharing or co-partnership; but I know very well that there are many Gentlemen opposite and on my own side of the House who do not share that view. But I believe that unless that system is adopted in some form or other we shall never arrive at the solution of the labour difficulty in this country. It would be a great mistake, however, to try and impose that system generally during the progress of the War, and I do not desire to do it. But I do say that the suspicion that the whole of the commercial advantage arising from the War is going into the hands of the employers, and that the workmen are to get none of it is a very unfortunate one.Can the Noble Lord explain how the system would work fairly as between workmen employed by a firm which earns no profit and by a firm which earns large profits?
I do not understand.
There are firms which earn large profits, which will have to be limited, and other firms which earn no profits; how can a system of profit sharing be made fair as between the workmen of these two firms?
I think it is quite clear. The point is this, that where great profits are earned by war conditions it is not fair that the whole of them should go to the employer. Where no profit is earned, then the matter obviously does not arise.
Oh, yes, it does.
If the employer does not make a great profit, there is no chance of any suspicion of unfairness.
But the men will be working equally hard in both cases.
It may be, but if that argument were to prevail it would mean that everybody is to be paid according to the work he does, and that nobody should be better off than anybody else. That is, unfortunately, an ideal which is unattainable. We do not want to go into theoretical considerations which are so dear to gentlemen that come from the North of the Tweed.
It is a very practical consideration.
We are anxious to deal with the actual difficulties which have arisen with the workmen who say in every labour journal and every paper that I have read on the subject that it is monstrous that these capitalists are making gigantic profits out of the War, and the workmen are not sharing in the amount that is being made. That is the grievance. There is no use in putting elaborate conundrums. We have got to meet a practical question. The practical question is whether the Government proposal for limiting the profits is the fairest way of dealing with it or whether some proposal for sharing the profit is not better. Personally, I believe in the sharing of the profits, but I believe still more that the Secretary of State having made the speech which he did make, and the speech having been understood for many weeks as containing a promise of that kind, it is unfortunate that the Government now announce that that is not the meaning to be attached to the speech, and that they have no intention of carrying out any part of it.
In the words that Lord Kitchener used in the first part he said distinctly that labour may very rightly ask that their patriotic work should not be used to inflate the profits, and in the latter portion he spoke of the men reaping some of the benefits which they were automatically conferring on the great companies. I think that any simple-minded man reading those words would think that profits and benefits referred to the same thing and that both meant cash, but the President of the Board of Trade has practically told us to-day that benefits means a medal, and I am not aware that the War or anything else automatically confers medals upon the great armament, firms. Whether you call it profit sharing or whether you call it gain sharing, or whether you stick more closely to Lord Kitchener's own words and say that it is some benefit to be conferred upon the men who work regularly by keeping good time, I do consider that it is a share of profit. The word at the beginning is "profit" and the word afterwards is "benefit," and I say that any simple-minded man will say that the two things refer to the same thing, and if a sharing of profit is to be given under one system or under another, whether it is to be in the way Lord Kitchener seems to hint at, it still remains as a share of the extraordinary war profits or benefits which are to be shared with the working men, and which share, in my opinion, has been practically promised to them by that speech of Lord Kitchener. I go further, and say that it is a perfectly proper and natural thing to recognise that if the men work well in this crisis they have earned a part of the result and they ought to have it. We have been told to-night that the trade unionists did not ask for it at the conference. Of course they did not. It is not the business of the trade unions to ask for profit sharing. That is not what they were formed for. They were formed to maintain a certain standard of life, of wages, and of conditions. But it is not right to say that they are opposed to profit sharing. Many of the greatest trade unionists have been, and are, consistently in favour of it. The hon. Member (Mr. Pringle) asked the question how are you going to reconcile the sharing of profit or benefit with the workmen in works where a rich profit is made with justice to the workmen who work equally hard in works where no profit is made. I would suggest in reply that he should ask that question of Lord Kitchener.
Possibly he has not considered it.
Possibly not. The hon. Gentleman no doubt has considered it more deeply than Lord Kitchener. At any rate it is a question of theory which is not a practical question in this great national crisis. In the present national crisis, if the Government are wise, they will recognise in some form or other the work of these men who work in these great firms with great and unusual results, in the form of profit or benefit, or whatever you like to call it, and they will take those words in a broad practical sense and will in some form or other carry them into effect.
Some allusion has been made to the theoretical ingenuity of the inhabitants north of the Tweed, but the advanced point was not a theoretical but a practical one. Anyone who has followed these matters knows that some of these firms are exceedingly prosperous, while others have not made a profit for many years. It is extremely doubtful that even with favourable conditions that those firms will be in a position to give a commission or to pay considerable dividends in the present circumstances. The Noble Lord and my hon. Friend are anxious that all the workmen who are engaged in this patriotic work for the benefit of the country at this time should reap some, special benefit. If that is the case, surely the men would be more likely to reap a just share one with another by obtaining enhanced rates of wages than by having a difference made between them by some men working for a prosperous firm and by others working for a firm which has not been profitable. The man in the firm where the masters are not making any profit at all is not likely to get anything out of it, and will have to be content with his wages. Seeing that the prosperous company is wanting workers, the man might say, "I will go to the other firm and get a share of the profits they are making."
Under those conditions you probably would have a desertion from firms which are equally necessary to the country with the works which are prosperous, and you may have the less efficient workmen segregated with the firms which have been unfortunate in the past. Surely it is better that each firm should have a fair share of efficient workmen, and that the firms less prosperous in the past may have an opportunity of reaping a proportion of the advantage with the other firms in the circumstances of the present War. I am not going to enter into an interpretation of the words of the Secretary of State for War. I agree that reading the words without careful attention to the terms which were chosen, the impression may have been conveyed which the Noble Lord has in his mind, and which has been advocated on both sides of the House to-night. I venture to submit that the consideration which I have put to-night is a practical and not a theoretical one, that the most satisfactory method of dealing with this question is first of all that the workmen, under all firms alike, should equally receive higher remuneration, and that if there is any margin in any firm the margin should not go to one particular set of workmen, but should go either in the shape of a reduction of prices or in a return which would inure to the benefit of the State as a whole.I do not rise with the view of imposing my presence on the House at any length, for the one thing that I have heard censured since I came here, and I may say especially outside the House, is the man who makes long speeches. A tactful man can take a sting from a bee without being stung, and if the right hon. Gentleman the President of the Board of Trade is wise and prudent and thoughtful, and wants to get the best out of the workmen in the present crisis, he will recognise their claim to a share in the profits. We are in a special crisis and serious danger, when munitions are required, and nothing will accelerate the pace of the production that is essential for the prosecution of this War to a successful issue more than to get the workmen who produce the articles into a good temper. If you have workmen sullen, sulky, and jealous that they are not getting what is right and just, they will not put their best into the work. I have gone through all the evolutions of the trade; I know that when men are working under the impression that they are getting their share of the profits they are more efficient. If they are under the other idea, they do not produce equal to their ability. I just have this desire to say that in the special needs of the nation you will get the best out of the men if you apply that principle on this special occasion. I am not now discussing the principle as a principle, but in the nation's crisis I feel sure that you will get most out of the men if you make them to feel that they are sharing in the large profits that are now being made. All men like money as all cats like fish, but, just as cats will not wait for fish, neither will all men dig for gold. At the same time, we want the best out of everybody, and I feel sure if the right hon. Gentleman will see the thing in the light in which the trade union people see it he will have nothing to regret if in the nation's emergency he applies this principle.
Question put, and agreed to.
Adjourned accordingly at Ten minutes before Eleven o'clock.