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Commons Chamber

Volume 141: debated on Tuesday 26 April 1921

House of Commons

Tuesday, April 26, 1921

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Private Business

Private Bills [ Lords ] (Standing Orders not previously inquired into complied with),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:—

Wandsworth, Wimbledon, and Epsom District Gas Bill [ Lords ].

Ordered, That the Bill be read a Second time.

Private Bills (Petition for additional Provision) (Standing Orders not complied with),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the Petition for additional Provision in the following Bill, the Standing Orders have not been complied with, namely:—

Metropolitan Water Board (Various Powers) Bill.

Ordered, That the Report be referred to the Select Committee on Standing Orders.

Colne Corporation Bill,

To be read the Third time upon Thursday.

Manchester Corporation Waterworks Bill,

Nuneaton Corporation Bill,

As amended, considered; to be read the Third time.

Doupe's Divorce Bill [ Lords ],

Read a Second time, and committed.

Oral Answers to Questions

India

Seditious Speeches

asked the Secretary of State for India if his attention has been called to the speech delivered by the agitator Mohammed Ali at Madras, reported in the Press of the 11th instant, in which he is stated to have said that he differed from Gandhi in that he favoured violence and that the English came to India like thieves and should be driven out like thieves; and what steps are being taken against the speaker and also to prevent the repetition and dissemination of seditious utterances like those tending to foment insurrection in India?

I have seen a newspaper report of the speech referred to. I will ask to be informed as to the steps, if any, taken or contemplated in the matter.

Elections, Madras

asked the Secretary of State for India whether the Governor of Madras has one Brahmin councillor and three non-Brahmin ministers; whether the anti-Brahmin agitation in the Madras Presidency has now been abandoned; whether in the Madras Presidency in urban districts from 43 to 72 per cent. and in rural districts from 20 to 59 per cent. of the electorate voted; and whether, in view of the novelty of parliamentary elections in India, these results may be considered extremely satisfactory?

The answer to the first part of the question is in the affirmative. As regards the second part, in so far as the differences between Brahmins and non-Brahmins last year were due to the apprehension of the latter that they would not secure adequate representation on the new legislative council, the grounds for these differences should have been removed by the results of the elections in which non-Brahmins secured over 72 per cent. of the seats open to Hindus. As regards the third part of the question, percentages as high as those quoted were reached, though there were smaller polls than those quoted in some areas. I hope to make available to Parliament a detailed return of the results of the elections this week.

Has my right hon. Friend information that the results of the elections have actually tended to reduce friction between Brahmins and non-Brahmins, or does he only infer that such would be the natural result?

I do not think I can usefuly add anything to the reply I have given. When the Members of the House are in possession of the Return, which I propose to issue this week, they will form their own conclusions.

Do not the results of the elections in Madras show that all those precautions provided under the Rules and Regulations, to give special representation to non-Brahmins, were mistaken, and at the same time showed a want of confidence in the people of India?

I do not think they were mistaken, because they removed apprehension. How far you can judge by the issue of one election it is for the House to say.

Is it not a fact that the number of the non-Brahmins elected is in no way excessive, looking at the comparative figures of population?

If I answered that, I should be expressing an opinion as to the wisdom of the electorate, which I prefer not to do.

Has the right hon. Gentleman read a book by the hon. Member for East Nottingham (Sir J. D. Rees) in which it is stated the Madras Brahmins always placed their heels on the necks of the lower classes and castes?

If my hon. and gallant Friend sees no objection, I would prefer him to address that question to the hon. Member for East Nottingham.

If the hon. and gallant Member puts a question on the Paper, I shall answer it.

High Court Judges

asked the Secretary of State for India whether it is proposed to modify the law and practice relating to appointments to the High Court benches so as to bring both into conformity with conditions of the present day when the vakil bar is equal to the supply of any number of judges of equal ability and greater experience than the barristers, who are usually appointed puisne judges from the English Bar, for whom four places are at present reserved, while in Madras, for instance, only one of twelve judges is a vakil?

The Government of India have undertaken, in accordance with views expressed in a debate in the Legislative Assembly on the 24th February last, to consult local governments, High Courts, and others as to the creation of an Indian Bar. If such a Bar were created, the matter referred to in the question would come under review, but I am not otherwise aware of any proposal the effect of which would be to modify the existing law and practice. This requires that where, as in Madras, there are twelve permanent High Court judges, not less than four should be barristers of England or Ireland or members of the Faculty of Advocates in Scotland, of not less than five years' standing.

Does the right hon. Gentleman not think that one Indian judge, out of an admittedly capable and large Bar, is a very small representation of that body, and is there not a case for reconsidering the rules applying to these appointments?

I will consider any representation made to me by my hon. Friend, but that was not the question on the Paper.

Trade Unions

asked the Secretary of State for India whether any legislation legalising trade unions in India has yet been drafted or introduced into the Legislative Assembly?

Legislation has not yet been introduced. I have not yet seen any draft.

Is the right hon. Gentleman taking any steps to urge the Government of India to introduce this very necessary reform?

The Government of India have already announced, on their own initiative, their intention to introduce legislation. I would remind my hon. Friend that the Legislature of India is not in Session.

Can the right hon. Gentleman say whether peaceful picketing will be installed under this system?

Dr. Kichlew and Rhambhuj Dutt

asked the Secretary of State for India whether he has yet any information as to the alleged arrest of Dr. Kichlew and Rhambhuj Dutt?

I have ascertained from the Government of India that these gentlemen have not been arrested.

Has the right hon. Gentleman considered that these two men were leaders of the rebellion of 1919, and can he say for what reason they were pardoned unconditionally and allowed to resume their anti-Government propaganda?

Cavalry Regiments (Reduction)

asked the Secretary of State for India whether the reduction of the 39 pre-war Indian cavalry regiments of four squadrons each to 21 regiments of three squadrons each is now being proceeded with; and, if it is, will he give directions that no further reductions are to be made pending the inquiry by the Sub-committee of the Committee of Imperial Defence?

I would refer the hon. and gallant Member to the answers which I gave him on the 6th and on the 19th instant.

Does that mean that these reductions are being carried out or does it not?

If my Friend will read these answers, he will see I have given an explicit statement.

Can he explain his meaning exactly, because I cannot get it out of these answers?

My hon. and gallant Friend puts that question weekly. I have tried to draft a different answer weekly conveying the same information. On this occasion I have failed.

Disturbances, North-West Frontier

asked the Secretary of State for India whether he can make any statement with reference to the fighting on the North-West Frontier; whether these disturbances are the direct result of Bolshevik money and propaganda; and whether this propaganda and expenditure of money still continues?

I would refer to the answer I gave to the hon. Member for Chesterfield on the 20th April, and to the answer given by the Prime Minister yesterday to the hon. and gallant Member for Bromley, of which I will send copies to the Noble Lord. I am not in a position to add anything to those replies.

Can the right hon. Gentleman tell us anything about the news of fighting which was in the Press last night and this morning?

No, I have not seen it. I am not quite sure to what the Noble Lord is referring, but I do not think I have had any information to-day.

Are there hostilities being carried out under war conditions or under peace conditions?

I will ask the right hon. Gentleman to ascertain whether the troops are serving in Waziristan under war conditions, or are they not, and whether they are allowed to fire on these men when they see them or not?

European and Native Troops

asked the Secretary of State for India what proportion of European to native troops was fixed after the Indian Mutiny; what was the proportion in March, 1914, and March, 1921; and what will the proportion be after the proposed reductions of the Army have been carried out?

After the Indian Mutiny the proportion agreed upon was one British to two Indians in the Bengal Army, and one British to three Indians in the Madras and Bombay Armies. In 1893 a uniform proportion for the whole garrison of India of one British to two and a half Indians was accepted. I am not able, without further investigation, to give the exact proportion in March, 1914, but in June, 1913, it stood at one British to 2·39 Indians. For the exact proportion in March, 1921, I should be obliged to refer to India, but the constant return to India of troops from overseas, and the disbandment in progress of temporary units of the Indian Army, must cause the figure to change from day to day. The proposed post-War strength of the Army in India is to be the subject of an inquiry by a Sub-committee of the Committee of Imperial Defence, and the proportion of British to Indian troops will necessarily be one of the factors.

Madras Military Fund

asked the Secretary of State for India whether he is aware that the increase of 25 per cent. granted to all pensions under the Indian military service family pension fund has been ruled by the director of funds at the India Office not to apply to pensions from the Madras military fund; and will he have this differentiation between widows and orphans dependent upon these two funds put a stop to?

I am aware of the differentiation to which the hon. Member refers. The increase of 25 per cent. was granted to pensioners under the Indian military service family pension scheme as a result of the increase in the rate of interest allowed on the half-yearly balances. The Madras military fund was closed to future entrants in 1862 and the assets of the fund were exhausted many years ago. As a matter of grace, however, an increase of 25 per cent. in the lower rates of pension has been sanctioned subject to a maximum income limit of £150. The cost of this falls on Indian revenues, and I regret that I do not see my way to make any greater concession.

Considering that the Madras pension fund is taken over by the Government, should not that fund be under the same conditions as all the other funds?

All the facts were taken into consideration in coming to this conclusion.

Questions

Deputy Chief Constable, Kent

asked the Secretary of State for the Home Department whether he has given his sanction to the appointment of Major Robert Lambton Surtees as Deputy Chief Constable of Kent, as recommended by the Standing Joint Committee; if so, whether Major Surtees' experience in the Army and as an inspector under the Board of Agricul- ture and Fisheries are regarded by his Department as specially fitting him for the post; whether the position was advertised; and, if not, whether any other steps were taken to obtain the services of a candidate from the police service sufficiently well qualified for the duties to be performed, as suggested by Section 9 of the Police Regulations of 20th August, 1920.

This appointment is governed by paragraph 7 of the Police Regulations, and as Major Surtees will be entitled to reckon his service under the Crown as approved service for the purposes of pension my approval is not required. Paragraph 9 of the Regulations to which the hon. Baronet refers relates only to appointments to the post of Chief Officer of Police, and does not apply in this case. I understand that the vacancy was not officially advertised, but it was generally known, and there were a number of candidates for the appointment, from among whom Major Surtees was selected as the most suitable.

May we take it that chief constables do not include the lesser or deputy chief constables, and did not the right hon. Gentleman's own Committee strongly recommend that in these cases except in special cases, they should only be appointed where they had gained their experience and training in the police forces of this country, and if that is so, will he see that in future this is done?

For the purposes of the approval of the Home Secretary, a deputy chief constable is not in the same category as a chief constable, and all the other circumstances were taken into consideration.

Would my right hon. Friend state the policy of his Department as to the appointment of chief constables, either Army officers or promoted policemen who have had practical experience of the work?

Police Pensions (Essex)

asked the Home Secretary whether he is aware that the Essex Standing Joint Committee have received 126 applications from police pensioners for increases under The Pensions (Increase) Act, 1920; that increases have only been granted in 26 cases; that the increases granted are graduated from 50 to 10 per cent.; and whether, in view of the fact that the Committee are under the impression that they have discretionary power in the matter, he will follow the practice of the Ministry of Health in applying The Pensions (Increase) Act, 1920, to all pensions paid under The Poor Law Officers' Superannuation Act, 1896, and issue an order to police authorities so that police pensioners may receive equitable treatment?

I am informed that the action taken by the Essex police authority under The Pensions (Increase) Act is substantially as stated by the hon. Baronet. The Order issued by the Treasury on 11th October, 1920, applying the Act to pensioners under the Poor Law Officers' Superannuation Act, 1896, applied it also to police pensioners, and I have no power to make a further Order such as the hon. Baronet suggests.

Is it not a fact that in one county at all events where they had refused to put the Pensions (Increase) Act into operation, the Law Officers of the Crown have advised that that Committee was wrong, and that it is not a discretionary measure; and, if that be so, will the right hon. Gentleman see that in all cases these authorities are informed that they must put the Pensions (Increase) Act into force at once?

May I ask whether it is not a fact that, in the case of the Worcestershire Standing Joint Committee, the Law Officers of the Crown have informed them that their action in refusing these pensions was ultra vires, and that when it was reported to the Committee their answer was: "Oh, bother the Home Office."

I do not think that was the answer. My recollection is that the Law Officers advised them that they must consider these cases.

Will the right hon. Gentleman see that the Essex Standing Joint Committee are fully advised by the Home Office of the state of the law as advised upon by the Law Officers of the Crown; will he make a direct communication to the Standing Joint Committee in Essex?

Is the Pensions (Increase) Act a discretionary Act, or must the authorities carry it out?

Of course they must carry it out, but the Act itself gives them a certain discretion.

Window Slashing

asked the Home Secretary whether he is issuing any special instructions to the police or warnings to the public in connection with the outbreak of window slashing?

The Metropolitan Police have received special instructions. They are warning shopkeepers observed to be neglecting precautions, such as the lowering of shutters, etc. As regards the public generally, the matter has been given quite enough prominence by the Press.

Would it not be better, when so much real crime exists in the country to-day, for the police to be taken off such work as tracking down dangerous criminals who are organising whist drives and charitable things for hospitals?

May I ask if there is any evidence to show that these stupid outrages have anything at all to do with the Sinn Fein organisation in Ireland?

Is the right hon. Gentleman aware that in the "Daily Express" this morning appears an advertisement of a certain firm offering glazier's diamonds at half-price?

Ireland

Motor Ambulance, Killarney

asked the Secretary of State for War whether the troops at Killarney still need a motor ambulance; and, if so, whether one will be provided by the War Office, so that the ambulance commandeered some months ago from the local health authority may be restored, as its absence is causing suffering to sick and infirm people?

I am informed that the military authorities took possession of the ambulance in question as it had not been used for any lawful purpose for a long time, and no permit for it had been applied for. It was last used for the unlawful conveyance of rebels to Killorglin Fair, where it was damaged. It is not proposed to hand it back to the local authorities.

Police Pensions

asked the Chief Secretary for Ireland what provision is made for reassessing the pensions of pensioners of the Irish police force who retired on pension before the War and joined His Majesty's forces and served during the War; whether he is aware that many of these men are in receipt of very small police pensions, which are totally inadequate for their support, and that owing to their service in the police and in the Army they are unable to obtain employment in Ireland; and whether he will take steps to obtain the sanction of the Treasury for increases of pension for these men?

Provision for increasing in certain cases the pensions of policemen who retired from police forces in Ireland before the War has been made by the Pensions (Increase) Act of last year. As regards the other matters mentioned in the question, I would refer to my reply to the hon. and learned Member's question of the 3rd March.

Could the right hon. Gentleman circulate a statement as to the amount of the increases of these pensions?

The amounts are contained in the schedules of the Pensions Act of last year.

British Army

Reserve of Officers

asked the Secretary of State for War whether members of the Reserve of Officers were promised by Royal Warrant a gratuity when called up in time of war or national emergency; and whether such a payment has been refused by Army Order 154 of 1921, dated 12th April, 1921, even to officers who had rejoined before the said Army Order was published, and, if so, for what reason?

There is no warrant providing for the grant of a gratuity to officers of the Reserve of Officers on being called up in a national emergency. If my hon. and learned Friend is referring to officers of the Special Reserve, I am prepared to consider the position created by the delay in issuing the Royal Warrant of the 12th April, which explicitly stated that the gratuity granted by the Special Reserve Regulations would not be issuable.

Military Mission, Finland

asked the Secretary of State for War whether the sum expended on entertainment by the head of the British military mission to Finland and the Baltic States was spent wholly in the public service; whether the amount of the original grant for such service was provisional and fixed without any real knowledge of the probable requirements; whether the expenditure in excess of the provisional grant was, judged by results, reasonable in amount and necessary to the admitted success of the mission; whether it was incurred in anticipation of covering sanction only because, through difficulties of communication, it was impossible to await special authority without jeopardising the objects for which the original grant was made; whether in those special and exceptional circumstances the decision to incur the expenditure in anticipation of sanction was right and proper; and, if so, whether he will give directions that the additional grant of £150 allowed in September last towards the extra expenses in question should be increased to £372 8s. 3d.

All the circumstances connected with the fixing and arranging of the allotment in question, including the facilities for communication with the War Office existing at the time, have been very fully considered by the Army Council, and it has been decided that no further grant can be made from Army funds.

Reserve, Class B

asked the Secretary of State for War whether a decision has yet been arrived at with reference to the question of making deductions in cases of pensioners who are in receipt of pay under Class B of the Army Reserve?

I presume my hon. and gallant Friend refers to disability pension. If the disability is so slight that the man is retained in Section "B" of the Reserve, both reserve pay and disability pension are issued without deduction.

Have cases not arisen where, after a few months of pension, a man has lost the pension and the reserve pay as well, some years before the normal term, and will repayment be made in those cases?

I have not heard of any cases like that, but if my hon. and gallant Friend can give me any information, I will look into it.

Government Staffs

Ministries of Shipping and Munitions

asked the Financial Secretary to the War Office to what other Departments 8,520 of the staffs of the Ministries of Shipping and Munitions have been transferred with effect from 1st April, 1921; and what extra work in these Departments has caused the necessity for this sudden increase in staffs?

Of a total staff referred to by the hon. and gallant Member, 7,764, including 5,100 industrial workers, are employed under the Disposal and Liqui-

Department.

Staff, 1914 (excluding industrials).

Estimated cost, 1914–15.

Staff, 1st April, 1921 (excluding industrials).

Estimated cost, 1921–22.

£

£

Ministry of Agriculture and Fisheries (including Ordnance Survey).

2,976

321,000

3,497

995,000

Board of Trade

6,733

1,122,000

7,660

2,269,000

dation Commission which is charged with the disposal of stocks of surplus war material in the United Kingdom and abroad, and the liquidation of outstanding commitments of the late Ministry of Munitions. The remainder, namely 756, were transferred to the Board of Trade for duties taken over by that Department from the Ministry of Shipping. These duties include the transport of troops and material, the management of Government-owned vessels, including ex-enemy tonnage, the preparation of British reparation claims relating to shipping and a considerable volume of liquidation work.

Ministry of Food

asked the Financial Secretary to the Treasury what is the extra work in the Ministry of Agriculture and the Board of Trade which necessitated the transfer to these Departments of 1,676 of the staff of the Ministry of Food when that Department was closed down; what has caused this sudden necessity for any extra work; what were the numbers employed in the Department of Agriculture and the Board of Trade in June, 1914, and at the present time; and what is the annual cost?

The staffs transferred to the Ministry of Agriculture and the Board of Trade are required for the performance of various duties taken over from the Ministry of Food. The Ministry of Agriculture will complete the inquiry into agricultural costs instituted by the Ministry of Food, and the Board of Trade is charged with the liquidation of the stocks and commitments of the Ministry of Food and the Royal Commission on Wheat Supplies and the maintenance of arrangements for distribution of food in an emergency. Particulars of the number and estimated cost of the staff employed at the Ministry of Agriculture and the Board of Trade in 1914 and at the present time are as follow:

Solicitors to Public Departments, Ireland

asked the Financial Secretary to the Treasury when effect will be given to the recommendations of the Joint Committee on the organisation, etc., of the Civil Service, referred to on the 2nd December, 1920, as affecting the non-professional staffs of the solicitors to the Public Departments, Ireland; by whom has the question of reorganisation been considered; what evidence has been heard; what conclusions have been arrived at, and when will they be published; and what bearing has the Government of Ireland Act, 1920, upon the recommendations of the Royal Commission on the Civil Service, 1914, in so far as they relate to the non-professional staffs of solicitors to the Public Departments, Ireland?

It has not yet been possible to consider the non-professional staffs of the solicitors to the Public Departments, Ireland, in conjunction with the recommendations of the Joint Committee on the organisation, etc., of the Civil Service. The matter will, however, be considered at the earliest possible date with a view to reaching a settlement in all cases before the appointed day of transfer.

Will the hon. and gallant Gentleman kindly answer the last part of the question?

As to the latter portion of the hon. Gentleman's question, it is scarcely for me to say, but in general these matters, after transfer, will be considered by the Irish Government.

Is the hon. and gallant Gentleman aware that these gentlemen are in a state of the very greatest apprehension, and regard themselves as being like Mohammed's coffin, suspended between Heaven and earth?

Salaries and Bonus

asked the Financial Secretary to the Treasury how many civil servants are in receipt of salaries of £1,000 a year and upwards; what is the total sum payable; and what are the proportions of salary and war bonus, respectively?

Steps will be taken to compile the figures requested, and they will be furnished to my hon. Friend in due course and circulated in the OFFICIAL REPORT.

Questions

Allotments

asked the Minister of Agriculture what further steps he is taking to protect the allotment holders in towns and cities, particularly as to security of tenure, assistance in procuring cheap soil-feeding materials, and the provision to such allotment holders of general training to enable them to procure growth in the vitiated atmospheres of many great industrial centres?

As stated in the reply given to the hon. Member for Duddeston (Mr. Hallas) on 20th July last, absolute security of tenure for allotment holders can Only be ensured by the land being purchased by the local authority or by the allotment holders themselves, but the capital value of land in the neighbourhood of a town, due to its value for building, is, as a rule, too high to enable the land to be purchased by the local authority for allotments, inasmuch as the allotment holders cannot afford to pay a rent based on the cost. In such cases the only alternative is to hire the land until it is required for building, in which case it is clearly impossible to guarantee the allotment holders absolute security of tenure. With regard to the second part of the question, the Ministry is endeavouring, as far as possible, to facilitate the import of such raw materials as are required to ensure adequate supplies of fertilisers at reasonable prices for home consumption, and it is for allotment holders themselves to set up co-operative societies in order to secure supplies at the lowest market prices. In reply to the last part of the question, there are no special arrangements for the training of allotment holders, but there are on the staff of most county horticultural committees and many borough councils, instructors with technical knowledge relating to the growing of garden and allotment crops, whose duty it is to advise allotment holders on all cultural matters. Complex matters, beyond the scope of these in- structors, can be referred to the scientific advisory officers at the provincial agricultural colleges.

Home-Grown Wheat (Grants)

asked the Minister of Agriculture whether it has been arranged that an appropriate payment will be made to the British miller for every quarter of British wheat which he mills before the 13th August to make it worth his while to buy British wheat at the average c.i.f. cost of all milling wheat imported during the two preceding months, together with the actual and anticipated arrivals in the United Kingdom during the current month, subject to necessary adjustments; and whether this monthly payment to the millers per quarter milled will be fixed on a sufficiently generous basis to ensure to the farmer the payment of the full price guaranteed for the 1920 crop?

Since the 31st March arrangements have been in force whereby a refund will be payable up to 13th August next to millers in respect of home-grown wheat of fair average quality of the season fit for milling into flour for human consumption; the amount of this refund is announced from time to time, and is so calculated as to make it worth while for the miller to buy British wheat at prices which will, on average, ensure to farmers the full price payable under the Government's undertaking.

Can the hon. and gallant Gentleman say when and where these grants will be announced, because at the present time farmers do not know what the figure is.

Has any calculation been made as to the cost to the taxpayer of the subsidy to this industry?

Perhaps the hon. and gallant Gentleman will be good enough to put that question down.

Is it not a fact that the taxpayer will not pay anything; and is it not a fact that, if the farmer had had the free play of the market up to the 31st December, he would have received £4,000,000 more for his wheat which he has sold, and which money has gone into the Exchequer?

Royal Air Force

Fleet Service

asked the Secretary of State for Air how many flying officers are now serving in the fully-commissioned ships in the Fleet; how many in aircraft carriers; what is the establishment of flying officers in each case; how many flight from fully-commissioned ships have been made since the 1st January, 1921; how many flights from aircraft carriers in the same period; and how many landings have been made on aircraft carriers in the same period?

The answer to the first part of the question is one, and to the second part, twelve. The remainder of the flying officers for work in co-operation with the Fleet are borne on the establishment of the Royal Air Force Base at Leuchers, the establishment of which for 1921–22 is 51, but this will not be entirely filled until later in the year. In addition to these, there is another squadron engaged in cooperation with the Navy, and available for embarkation. If the Noble and gallant Lord is interested in these experiments, I will show him full reports which deal with the latter parts of the question.

Airships

asked the Secretary of State for Air what is the first cost of the latest type of dirigible rigid airship; what is the cost of its hangar and mooring mast, respectively; what is the estimated annual cost for maintenance in commission; what is the number of the crew; how many persons are required in attendance at the hangar when the airship is setting out on or returning from a cruise in bad weather; what is the first cost of the latest type of long-distance scouting seaplane or flying boat; and whether any details of its speed and endurance can be given without detriment to the national interest?

I am having the calculations worked out, and will send the information to the hon. and gallant Member.

Questions

Bolshevist Propaganda

asked the Home Secretary if the attention of the Public Prosecutor has been, or will be, drawn to the activities in this country of agitators directly or indirectly paid or inspired by foreign Bolshevists with the object of causing or aggravating industrial disturbances; if the Public Prosecutor has found that the existing laws enable such persons to carry on a great deal of mischievous propaganda with impunity; and, if so, will the Government ask this House for such powers as may be necessary to check such activities?

The answer to the first part of the question is in the affirmative. In the existing state of the law, persons can receive money from foreign countries for the purpose of propaganda with impunity, and the law as to sedition is cumbrous and difficult to enforce. The question of strengthening the law is under consideration.

May I ask whether the right hon. Gentleman realises that, while the Government is leisurely considering this matter, these foreign-paid agitators are actively working to cause trouble?

Is it not a fact that a great deal of this industrial unrest, and to a certain extent the present coal strike, may be directly attributed to this revolutionary propaganda?

May I ask whether there is any proof that the coalowners have received anything from Bolshevist sources?

When is it proposed to present the Bill dealing with this matter to which the right hon. Gentleman has referred?

Scotland

School, Cowdenbeath

asked the Secretary for Scotland if the building of the new school at Cowdenbeath at a cost of some £44,000 is to be proceeded with?

I have now received a report by His Majesty's Inspector on this subject. I am informed that contracts have already been entered into, that the building is already far advanced, that the necessary materials are on the ground, and that postponement at this stage would probably involve penalties for breach of contract, the cost of which would fall upon the ratepayer. In these circumstances I feel constrained to allow this building to proceed.

Small Holdings

asked the Secretary for Scotland how many ex-service men have applied for small holdings in the Kinross and West Perth area; when the applications date from; how many have received holdings; and what steps have been or are now being taken to place these applicants on the land?

Applications from ex-service men in the area number fifty-nine. Four of the applications were made prior to the Armistice, and the others have been made at various dates since then up to February last. One applicant has been settled, and proposals for four schemes are at present under consideration.

Will the right hon. Gentleman do everything in his power to expedite the settlement of men?

Certainly. I have been endeavouring to do that for a number of years, but my hon. Friend will recognise that one cannot arrange those matters on a purely county basis.

asked the Secretary for Scotland whether the Board of Agriculture have come to any decision with regard to the applications for small holdings in North and South Uist?

The Board have submitted to the Treasury for approval a proposal for the acquisition of Balranald Estate, in North Uist. This estate is 2,512 acres in extent, and would provide accommodation for 16 new holdings and 32 enlargements. The Board is also negotiating for the acquisition of additional land both in North and in South Uist.

Post Office

Telephone Service

asked the Post master-General whether, in general condition 10 of the new agreements for telephone, he will consider the desirability of deleting the words, "and to all other premises under the subscribers' control," as being injurious to the interest of persons who are in the position of trustees or agents for clients' property, and who may lose their business if they pledge their clients' properties to a wayleave for their own private wire?

The words in question have been inserted in agreements for many years past, and so far as I am aware they have never given rise to any difficulties. They would certainly not be used to anyone's detriment in the manner suggested. If the hon. Member has any specific case in mind, I shall be happy to make inquiry into it.

asked the Post master-General the total number of telephones in service in the United Kingdom at 31st December, 1920, and the total number in service in the United States of America at the same date; and the ratio of telephones to population in the United Kingdom and the United States of America, respectively, at 31st December, 1920?

The total number of telephones in service at the 31st December, 1920, in the United Kingdom was 988,500, and in the United States of America approximately 13,500,000. The ratio of telephones to population was I telephone to every 47 inhabitants in the United Kingdom and one to every eight inhabitants in the United States of America.

Head Offices, County Boroughs

asked the Post master-General how many county boroughs there are in England with a population of 100,000 which enjoy the facilities of a head post office; and how many boroughs having the same number of inhabitants remain as sub-offices to a neighbouring area?

According to the 1911 Census Reports there are 35 county boroughs in England with a population of more than 100,000. Of these, 31 have head post offices, two are within the London postal area and, at the remaining two, the main office is a branch office subordinate to a neighbouring large head office.

May I appeal to the right hon. Gentleman to inquire into the serious disability of the county borough of Wallasey, which has now a sub-office?

Questions

Hollinwood Mill

asked the Financial Secretary to the Treasury whether the Hollinwood Mill, purchased by his Department for £180,000, was previously on offer for £40,000, as reported at a meeting of the Oldham Chamber of Commerce; and whether he has asked for any further information from the members of the Oldham Chamber of Commerce who were responsible for the statement?

The report that the Hollinwood Mill, prior to purchase by His Majesty's Government for £185,000, was on offer for £40,000 is entirely unfounded. The property was held for sale on behalf of the American Government by the Disposal Board subject to a reserve figure of £200,000, exclusive of site, which figure I understand, was fixed after a valuation carried out by a Manchester firm. It seems probable that the statements referred to arose from a confusion between this portion of the property and an adjoining portion, with temporary buildings only, which has been sold for £45,000.

Has the Ministry taken any steps to correct this report of the Oldham Chamber of Commerce?

Yes. Is the hon. and gallant Gentleman aware that in the Lancashire papers the statement was made on the authority of members of the Oldham Chamber of Commerce that they had had this particular building offered for £40,000; and is the Department taking steps to correct that inaccuracy?

We have thought it wholly unnecessary. Anyone with local knowledge would see that on the face of it the report was absurd, and unlikely to carry conviction.

Peace Treaties

German Reparation

asked the Financial Secretary to the Treasury whether he can state how much has been paid into the special account in respect of the German Reparation (Recovery) Act?

I would refer the hon. and gallant Member to the reply which I gave yesterday on the same subject to the hon. Member for South Hackney.

Can the hon. and gallant Gentleman say how long it would take at this rate to secure the indemnity declared necessary by the Government?

The hon. and gallant Gentleman will see that for that I would require time for calculation.

asked the Financial Secretary to the Treasury whether the amount payable by a British importer, under the German Reparation (Recovery) Act, is 50 per cent. of the invoice value of the goods or an amount equal to any amount paid to the German trader regardless of the value of the goods?

The German Reparations (Recovery) Act, 1921, diverts to the Commissioners of Customs and Excise one-half of the value of imported German goods, as denned in the Act. Such value is expressly defined as including the sum payable to the Commissioners.

Then are we to take it that the value of the goods on which the sum is payable is not the invoice value or the real value of the goods, but the sum, whatever it is, which is paid to the German exporter?

The hon. and gallant Gentleman will not require me to go into a legal definition of what may be "value" in the terms of the Act; that would obviously require higher legal judgment than mine; but as to the point of the invoice, though it may be some evidence, it is not conclusive evidence.

Austria (German Imports)

asked the Prime Minister whether Austria has been approached by France in order to induce her to place a tax upon all German imports; whether this demand receives the support of the British Government or any of the other Allies; and whether, in the event of a refusal on the part of the Austrian Government to accede to this request, any steps will be taken to enforce it?

I am unaware that any such demand has been made of the Austrian Government. Consequently, the second and third parts of the question do not arise.

German Art Treasures

asked the Prime Minister whether the Allies have suggested or considered the desirabilty of suggesting to Germany the sale of some of her vast art treasures, either in America or elsewhere, for the purpose of raising money towards the demand for reparation payments?

So far as I am aware, this suggestion has not been considered up to the present.

Upper Silesia

asked the Under-Secretary of State for Foreign Affairs whether an Inter-Allied Plebiscite Commission is sitting at Oppeln to determine, or otherwise provide for, the results of the plebiscite held in Upper Silesia, and to apportion the territories concerned between Poland and Germany; whether this Commission will have the final and determining voice in the demarcation of the new frontiers; who are the British and Allied members of the Commission; and on what date is it expected the final decision will be reached?

I am still unable to say precisely when the Allied Com- mission at Oppeln will report to the Allied Powers with whom rests the final decision as to the allocation of Upper Silesia, but I do not anticipate any long delay. The French President of the Commission is General Le Rond and the Italian and British members are General de Marinis and Colonel Percival.

Education

School Excursions

asked the President of the Board of Education whether in view of the fact that the number of school excursions, school camps, and bathing lessons is likely to be seriously curtailed by the recent ruling of his Board that contributions by children or parents to the expenses of such outings is inadmissible if these educational opportunities are to be counted as school attendances for the purposes of the grant, he will introduce a short amending measure to prevent this interference with these most desirable school activities voluntarily undertaken by many teachers?

The principle on which Section 26 of the Education Act of 1918 rests is that children attending a public elementary school should not be debarred from enjoying all the educational advantages provided in that school, by inability of the parents to contribute to the cost. Arrangements for excursions and camps can now be submitted to the Board for their approval under Section 17 of the Act of 1918, and may include a charge, though the Board would require to be satisfied before giving their approval that elementary school children otherwise eligible were not excluded from the benefits of the arrangement owing to their inability to pay such charge. As regards lessons in swimming, I think that in so far as they form part of the curriculum of public elementary schools they should be free in the same way as the other lessons; and I do not think a case has been made out for amending the Act of 1918 in the direction suggested.

In respect to the school excursions, is the right hon. Gentleman making local educational authorities, who have suspended these in view of the recent ruling, acquainted with the revised ruling to which he has now given utterance?

Do I understand—is it credible—that the rates and taxes are at present being legally used to teach children to bathe?

Continuation Schools, London

asked the President of the Board of Education whether he has had any correspondence or conversation with the London County Council with regard to the provision of further continuation schools under Section 10 of the Education Act, 1918; and, if so, will he inform the House of its nature?

Questions

Compulsory Arbitration

asked the Prime Minister if, having regard to the suffering and losses inflicted upon innocent people during industrial disputes, who are in no way responsible for such disputes, he will consider the advisability of amending the Industrial Courts Act to provide for compulsory arbitration, with juries drawn from panels of trade unions and employers' associations with independent chairmen, and the establishment of courts of appeal open equally to employers and employed, with provisions that the side which refused to accept a decision in a final court of appeal should not be allowed to use the resources of the State to carry on a trade dispute that inflicted loss and suffering upon others who have no voice whatever in such disputes; whether he is aware that compulsory arbitration in Australia has abolished 90 per cent. of their industrial disputes, and increased the membership of trades unions and employers' associations from approximately 37 per cent. to nearly 100 per cent.; and whether similar results would probably follow the introduction of compulsory arbitration in this country?

I have been asked to reply. The question of compulsory arbitration was considered by the Committee over which my right hon. Friend the Member for Halifax (Mr. Whitley) presided, and, after full consideration, was rejected. I think the consensus of industrial opinion is that compulsion in this matter is impracticable. Its success in other countries where it has been tried has been by no means conclusive, and in any case I am afraid that arguments from the conditions in other countries do not apply equally here.

Allied Teade Conferences

asked the Prime Minister if arrangements are in progress to inaugurate trade conferences, as also trade Government Departments, of the Allied nations, with the object of assisting financial schemes already discussed by the Allied Governments, and so bring about a more normal rate of exchanges?

I do not altogether understand what my hon. Friend has in mind, but so far as I do understand it, I cannot usefully add anything to the very full replies to questions upon this subject which were given by my right hon. Friend the Prime Minister on Thursday last.

Coal Industry Dispute

Defence Force

asked the Prime Minister whether an article suitable for newspaper publication, entitled the New Hundred Thousand, by Tan Hay, the author of the First Hundred Thousand, has been issued gratis to newspapers in the United Kingdom during the last few days by His Majesty's Government; what is the cost of this publication; which Department of the Government is responsible; on which Vote will the cost be borne; and what useful purpose is this expenditure expected to serve?

I must refer the hon. and gallant Member to the answers given to similar questions yesterday.

May I ask the Leader of the House whether it is possible to avoid comparisons with Kitchener's Army in future in any Government propaganda? [HON. MEMBERS: "Why?"]

It seems to me that certain comparisons naturally spring up in the mind in relation to the men who volunteered for service in an emergency?

Does the right hon. Gentleman think that this sort of deliberate propaganda is quite fair to the men of Kitchener's Army, especially those who did not return?

Does the right hon. Gentleman say that a proper comparison is made between beating the Germans and beating the miners?

No, Sir; that is not what I said. I would ask the House and other people to judge me by what I say, and not by the very unfair comment of the hon. and gallant Gentleman! [HON. MEMBERS: "Withdraw!"]

asked the Secretary of State for War whether he can explain how it is that certain circulars posted to members of the Institute of Electrical Engineers on 17th April were franked by the War Office and stamped London Official instead of a postmark?

The letters referred to dealt with recruiting for certain technical units of the Defence Force and were accordingly sent out by the War Office under the official frank.

Bunker Coal

asked the President of the Board of Trade whether, provided bunkering coal could be obtained from Dunkirk or other near-by Continental ports, a number of British ships now laid up could be sent in the course of a few days to bring supplies of coal from America or elsewhere to this country?

I have been asked to reply. I would refer my hon. and gallant Friend to the answer which my right hon. Friend the Secretary for Mines gave yesterday to the hon. Baronet, the Member for Twickenham (Sir W. Joynson-Hicks).

Is the hon. Gentleman aware that only a few days ago a firm of shipowners obtained some bunker coal from Dunkirk and when it was brought across it was commandeered by the Government authorities at the English port?

Distribution (Railwaymen's Action)

( by Private Notice ) asked the Minister of Transport whether the statements appearing are true that the railwaymen intend to refuse to distribute coal for purposes essential to the sustenance and health of the community, and whether he can say what action the Government proposes to take?

I regret to inform the House that the National Union of Railwaymen have taken the grave step of instructing their members to refuse to handle coal from any colliery sidings, and also to refuse to handle coal brought from overseas. The instruction is given without differentiation as to the purpose for which that coal is required.

It seems to me impossible that this great union can have realised the meaning or effect of this decision. The coal in question is absolutely necessary for the life of the community. It is required to provide a bare minimum for household use, and to carry on public utility services on which the health and welfare of the entire population depend, such as sewage, gas, water, electricity, and a minimum of transport. To prevent its delivery to the places for which it is intended can only be interpreted as an attempt to starve the nation. The Government, during this and previous disputes, has favoured no class and has secured the necessities of life to the community as a whole without any discrimination.

I have invited the general or the industrial secretary of this union to meet me this afternoon, and I trust that good will result.

In reference to the conclusion of the question, it must be apparent that no Government can allow the nation to be so coerced.

Arising out of that answer, may I ask the right hon. Gentleman this question? He says that the Government have treated both sides without discriminating between them, will he inform me why the Government have posted a statement all over London and the provinces to the effect that miners are getting a certain wage when even the coalowners themselves, in the public Press, are giving figures exactly contrary to the statements which the Government have published?

I understand that that allegation is not founded on fact, but, in any case, the question and answer refer to the distribution of coal for the life of the community, and not to the industrial dispute which is in progress. In the distribution of coal and food and the general supply of the necessities of life, there has been no discrimination whatsoever.

Questions

Bank Rate

asked the Chancellor of the Exchequer whether, in view of encouraging traders at a very difficult period, he can see his way to suggest an early reduction in the bank rate by the Governor and Directors of the Bank of England?

I would refer my hon. Friend to the answer (including answers to Supplementary Questions) given by my right hon. Friend, now the Lord Privy Seal, to his question on the 22nd March.

With every admiration for that great institution, the Bank of England, is it quite fair that the responsibility of changing the bank rate should rest entirely with it; and would the hon. and gallant Gentleman consider the formation of a small Committee, upon which are representatives of the Bank of England, the Treasury, Joint Stock Banks, and the trading interests of this country?

I would ask the hon. Gentleman to put down a question on the second point.

Income Tax

Effective Payers for 1921–22

asked the Chancellor of the Exchequer whether he has been able to form an estimate of the number of effective Income Tax payers for the present financial year?

The number of effective Income Tax payers for the year 1921–22 is estimated at 2,400,000.

Assessors

asked the Chancellor of the Exchequer what is the total number of assessors employed throughout the kingdom by the local Commissioners of Taxes; what is their remuneration whether such assessors are, as a rule, men having their residence or business in their own particular district and both well-known to the taxpayers therein and also well acquainted with the financial position of most of the inhabitants; and whether, under these circumstances, they are better able to estimate the financial position of the taxpayers in the locality than is possible in the office of a surveyor of taxes, who is frequently changed and is usually not resident in the district?

The assessors (who, generally speaking, are also collectors) of taxes, number about 4,500, and the total remuneration is estimated at £41,000 exclusive of bonus. In the event of the Revenue Bill becoming law it is intended to continue to make full use of the local knowledge which many of these officers have acquired, either in their capacity of assessor or in that of collector It is the fact that assessors are generally resident in or near to the parishes for which they act, but the general inferences which my hon. Friend draws from this fact are matters which cannot be satisfactorily dealt with within the limits of a Parliamentary answer. My hon. Friend will therefore perhaps await my statement on the Second Reading of the Revenue Bill.

Am I to understand then that these assessors are paid on an average less than £10 a-piece, exclusive of bonus, and does he consider that there is any likelihood of Government officials being prepared to do this work at anything like that figure? Will not the expenses of the community be very great indeed if those proposals are carried out?

If you consider the amount of the work to be done, I think there is every prospect of effecting economy in the administration.

Does the hon. Gentleman admit that they are only to be paid £10 a year each, which appears to be the case from his reply, and does he think that any Government official is likely to undertake the work for that amount of remuneration?

It is possible that, although I may admit the fact, I may not admit the inference which might be drawn from it.

Questions

Local Authorities (Salaries)

asked the Minister of Health whether in any case other than that of Harrow his Department has invited any urban district or other council to pay any of its employés any salary or allowance larger in amount than the sum such council, as the representative of the ratepayers, considered to be as large as was necessary or as much as their available funds could properly provide?

My Department has on occasion thought it necessary to invite local councils to increase the remuneration proposed for employés in whose appointments the Department is concerned where it appeared insufficient to attract and retain competent services, but there are very few and only quite exceptional cases in which it has been necessary to take such action.

Does my right hon. Friend not think that it is an exceedingly unfortunate precedent to invite or incite a local council to grant more than as the guardian of the ratepayers' money it thinks proper to pay?

It has been an old-established practice to draw the attention of local authorities to any particular cases where they think the salaries are too low. I agree that this practice should be adopted very sparingly.

Venereal Disease (Seamen)

asked the Minister of Health if he is aware that British seafarers still suffer under disabilities unshared by their fellow-countrymen or by foreign seamen in being penalised if they seek treatment for venereal disease, and that the British representatives at the meeting of the health section of the League of Nations are advocating international facilities for the free treatment of seafarers; and if the Government will consider the desirability of amending the Merchant Shipping Act, 1906, Section 34, Sub-section (1), as desired by all interests concerned?

I apprehend that the hon. Member is referring to the treatment of British seamen in foreign ports. I am aware that the same facilities as are provided in British ports for the treatment of seamen suffering from venereal disease are not available in many foreign ports. This matter is under consideration by the Committee of the Office International d'Hygiene Publique, and will in all probability be dealt with by the International Health Organisation which is now being established under the League of Nations. I will consult with my right hon. Friend the President of the Board of Trade in regard to the last part of the question.

Greco-Turkish Hostilities

asked the Under-Secretary of State for Foreign Affairs whether Greek military forces have landed in the Gulf of Ismid; and whether this is compatible with the neutrality that the Allies have declared?

Greek forces landed in the Ismid area last year, and were placed under General Sir T. Harington's command. He relinquished his command over them, however, before the outbreak of the recent Greco-Turkish hostilities. These troops are doubtless receiving reinforcements by sea, but the neutrality of the principal Allies in the present hostilities precludes them from interfering with the passage of such reinforcements except to the extent of preventing any territory or port in Allied occupation being used as a base for their despatch.

asked if our present policy in Asia Minor is in consonance with the policy of France and Italy; and if it is possible to bring the hostilities between Turkey and Greece to an end through mediation?

The House has already been informed that the principal Allies are pursuing in agreement a policy of neutrality in regard to the present Greco-Turkish hostilities. As regards the second part of the question, I would refer my hon. Friend to the reply given by the Prime Minister on the 21st instant to a question put by the hon. Member for North Newcastle.

Unemployment Relief Works, Willesden

asked the Minister of Labour why the Unemployed Grants Committee declined to make a grant to the Willesden urban district council in respect of relief works undertaken by the council in consequence of a letter dated 25th September, 1920, from the Ministry of Health as to the inception and extension of works suitable for the absorption of unemployed labour, and which would not have been started but for the request then made?

The Unemployment Grants Committee were authorised when they were appointed (on the 20th December, 1920) to make grants not exceeding 30 per cent.—subsequently raised to 60 per cent.—of the wages bill of additional men taken on for work on approved schemes of public utility. The Committee have therefore no power to make grants in aid of the schemes which were started before the Committee was constituted, and on which no additional, men could be employed.

Was not this work started expressly upon a letter received from the Government, in order that the men out of work might start work?

I am well aware of the letter promising assistance, but the powers of the Committee do not extend to a scheme of that sort. The Committee in question has granted for this particular scheme and other schemes assistance to the extent already of over £4,000.

Questions to Private Members

Arising out of some thing that passed at Question Time, may I ask whether it is not in Order, so far as the Rules of Order go, for a Private Member to put a question on the Paper addressed to another private Member, and whether you, Mr. Speaker, did not yourself, in 1906, allow questions to be put to the then hon. Member for Liverpool, now the Lord Chancellor, and to the hon. Member for Montgomery Burghs, who is now sitting for East Nottingham?

The hon. Member has a very much better memory than I have. Without referring to the record of the particular occasion referred to, I would like to say that the general rule is that one non-official Member is not entitled to put a question to another non-official Member as to general knowledge or any other matter. He is limited, if he does put a question, to putting it upon some Bill or Resolution with which the hon. Member to whom it is sought to put the question is connected.

I thank you, Sir, for your answer. May I be permitted to refresh your memory by saying that these two hon. Members were addressed in consequence of their having happened on that occasion to block a Bill.

Captive Birds Shooting (Prohibition) Bill

Reported, with Amendments, from Standing Committee D.

Report to lie upon the Table, and to be printed.

Minutes of the Proceedings of the Standing Committee to be printed.

Bill, as amended (in the Standing Committee), to be taken into consideration upon Tuesday next, and to be printed. [Bill 79.]

Croydon Corporation Bill

Reported, with Amendments [Title Amended]; Report to lie upon the Table, and to be printed.

Sunderland and South Shields Water Bill

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

Standing Committees (Chairmen's Panel)

Mr. JOHN WILLIAM WILSON reported from the Chairmen's Panel: That they had appointed Sir Halford Mackinder to act as Chairman of Standing Committee D (in respect of the Importation of Plumage (Prohibition) (No. 3) Bill); and Sir Samuel Roberts as Chairman of Standing Committee D (in respect of the Public Health Officers (No. 2) Bill).

Report to lie upon the Table.

Selection (Standing Committees)

Standing Committee D

Sir SAMUEL ROBERTS reported from the Committee of Selection; That they had discharged the following Member from Standing Committee D: Mr. Jesson; and had appointed in substitution: Mr. Frederick Green.

Report to lie upon the Table.

New Member Sworn

The right hon. FREDERICK GEORGE KELLAWAY, for the County of Bedford (Bedford Division)—[ after appointment as Postmaster-General ].

Bill Presented

Character Note Bill,

"to make compulsory the giving of character notes," presented by Mr. MYERS; supported by Mr. Clynes, Mr. Arthur Henderson, Captain O'Grady, and Mr. Tyson Wilson; to be read a Second time upon Wednesday, 11th May, and to be printed. [Bill 80.]

Orders of the Day

Mr. Speaker's Retirement

I beg to move,

As Chairman and as Speaker you have occupied these positions in six successive Parliaments and during five successive Administrations. During that period public confidence has been given to Parliaments and to Administrations, and public confidence has been withdrawn from them. Every Parliament and every Administration during their lifetime have witnessed fluctuation of confidence in opinion, but the confidence in your administration of your high office has grown from year to year and from Parliament to Parliament, and that confidence has ripened into gratitude for the notable service you rendered in that high office to Parliament, and, through Parliament, to the nation. It is that gratitude to which formal expression is given in the Resolution which I now move. Believe me, Mr. Speaker, it is not moved and it will not be carried as a matter of form, but will come straight from the heart of every Member of this House.

We feel grateful to you, each of us personally, for many kindnesses we have received at your hands—for your constant, urbanity and courtesy, for your accessibility to the humblest Member of this House, for the counsel which you have always been ready to give us, for the fact that every Member when he approached you felt that he was not approaching a disciplinarian who was to keep him in order, but a friend who was anxious to help him to discharge his duty to the people whom he came here to represent. But although this personal kindness which we have received at your hands adds, if I may say so, to our affectionate regard, our confidence is based mainly on other grounds. We have found in you always a true guardian of the privileges, and a faithful trustee of the traditions, which are interwoven with the liberties of this land. We have witnessed an unswerving impartiality—an impartiality which, if I may say so, is one of the assets of freedom; and nothing has in recent times strengthened the hold and the influence of Parliament upon all classes of the nation more than the scrupulous fairness which you have shown in that Chair. You have interpreted the Rules of the House and applied them with unerring justice; but no over-technical interpretation has ever been permitted by you to restrict the liberties of Debate or to narrow the breadth of discussion.

In every office there are occasions where no rules can guide, and where there are no precedents to illuminate; and the real test of excellency in every office is what a man does with heart and mind on those occasions. It has been the special glory of your Speakership that you have always risen to any emergency that has ever occurred in this House. The dignity, the reputation, and the honour of the House have always been your anxious care. For 600 years, I believe, your ancestors have been represented in this House, so that the honour of this House is in your blood; and many of us have noticed, when those stormy episodes have arisen which occur in the most dignified assemblies—when the House, swept by momentary passion, is on the brink of losing its self-respect—how anxious you have always been lest something should befall which would lower the high esteem in which this great Council has been held amongst the nations. We then felt unmixed admiration for the dexterity, the tact, and the mastery which you displayed. But we always also noticed something more, and that was the deep love you had for the honour of this ancient House, and for its reputation; and we thank you, as Members of the House of Commons, for that.

There are two qualities, if I may be permitted to say so, which you have displayed in an exceptional degree, apart from your great mastery of the forms of the House, your great impartiality, and the sense of justice and dignity which you have always exhibited in the Chair. One of them is that you always have seemed to possess the faculty of what I may call the discriminating ear. You knew exactly what to hear, and you also knew what it was best not to hear. You knew when to listen, and you knew when it was wise to be deaf. In another quality also you have achieved a unique supremacy, and that is in that gift of humour which dispels anger. It has been the delight and the security of the House. Your wit was genuine, but there was no sting or poison to rankle in it. It was always kindly; it was enjoyed almost as much by the victim as by the rest of the House; and I have heard its victims—and I am one of them—many a time boast that they were the occasion for provoking that particular witty sally. Many a thundercloud has been scattered when it was on the point of breaking with disastrous consequences to the dignity of the House.

4.0 P.M.

You have, however, rendered services outside the strict limits of the functions of the Chair, which have become part of the history of this country. The largest extension of the Franchise ever ventured upon in this country was due to your tact and to your direction and guidance. Your courage and wisdom solved a problem which had baffled many statesmen and many Parliaments, and the nation is now reaping the reward of that measure of supreme trust in the good sense and patriotism of its people; for, at a time of exceptional unrest, it has contributed to tranquillise and to steady the community, that the high tribunal which determines the conditions of their lives, in so far as laws can affect those conditions, is of their own choice. That bold and wise experiment is largely due to your skilful guidance. We all rejoice that no failure of mind or body is responsible for your retirement from the Chair. Yesterday, with characteristic modesty, you pleaded that you felt a certain loss of alertness and nimbleness of mind. I am going to take the unwonted liberty of challenging a statement of the Chair. I am sure that I shall carry the House with me in that piece of effrontery. We certainly had not noticed it. We know all the same that the work of Parliament for all its Members is becoming more and more intense and exacting. What must it be for the occupant of that Chair? We can therefore understand your desire for a more reposeful life, and in your retirement we wish you well. We do so because we admire you, we respect you, we honour you, and, will you permit me to say, Mr. Speaker, we like you. We know that in your case retirement simply means a change of service, and I am glad of it, because in the troublesome and anxious times through which the nation and the world are passing and the dark times which are confronting the nation it is a satisfaction to know that the country has at its disposal your calm judgment, your freedom from partisanship, your ripe experience, and your high prestige.

It is with a real feeling of sadness that I rise to second the Resolution that has been so eloquently Moved. I remember nearly 16 years ago coming into this House for the first time, and, being entirely inexperienced in political matters, one felt timid and hesitant when, Mr. Speaker, he first saw your dignified figure.

One really knew so little how to proceed, and there were so few of us who came into the House at the time in 1906 belonging to the party with which I am associated that it was difficult to go to anybody from whom you could be sure of receiving counsel and encouragement. I remember the first occasion approaching you, and I have never forgotten the helpful suggestions that you gave me at that time. I am quite sure that I speak for every Member of this party when I say that there is not a single one of us from 1906 till now but has received your continuous help, guidance, and encouragement. The Prime Minister has spoken of that faculty which you possess, I think in a pre-eminent degree—your saving grace of humour. How often indeed has it eased and soothed the troubles that were really dividing the House? Men whom we knew to be really good fellows in private life seemed almost ready to spring at each other's throat until the kindly wit and humour of our Speaker came to the rescue, and then all was well.

We have admired many qualities in you, qualities which, so far as my own knowledge goes, or indeed one's knowledge of history goes, have never been surpassed—your unexampled patience in these tumultuous days, because they were tumultuous, they were turbulent; your patience which gradually bore turbulence down and brought peace when peace almost seemed impossible, and your constant courtesy. I do not think that there is an occasion upon record in which you have shown any partiality. You have been truly the most impartial Chairman over the deliberations of this House that I think the mind of man can conceive, and all our thanks are due to you for it, because an impartial President over a great deliberative Assembly like this is the greatest treasure that we can possess. This House of Commons is an organism of constantly varying and even baffling moods, and only a man with a genuine love of Parliament, only a man with a genuine feeling of affection for the House over which he presides, could hope successfully to guide its deliberations. You have achieved success in a superlative degree. You have, if one may say so, to our virtues, "very kind," to our faults, "a little blind;" and I know that I speak the feeling of every Member in this House when I say that your departure will fill us with a genuine regret.

One of the most pleasing recollections of my life is that I served upon the Committee which under your Chairmanship brought about that unexampled development of the Franchise to which the Prime Minister has alluded. Everyone who sat upon that Committee saw in you, not merely the President of a great assembly, but a great statesman, a man who brought to the problem a breadth of vision and a grasp of affairs of which even we who had known him fairly well had hitherto possessed no knowledge. It will go down to history as one of the greatest tributes that can possibly be paid to you that a problem which had baffled so many Parliaments, and, indeed, so many generations, should under your wise and prudent statesmanship have been so successfully solved. I would like, before I sit down, to refer to another aspect in which you have been eminently successful. You have not been content with being the First Commoner of this realm, although that in itself is a position which might fill the spacious ambition of any man, but you have developed the sense of Parliamentary institutions in every Parliament of this great British Commonwealth, and the extremely effective work that you have undertaken in connection with the Empire Parliamentary Association is, I know, already producing the very finest results throughout the British Commonwealth. Every Member of the Parliaments under the Southern Cross, or in Canada, or wherever the British Commonwealth extends, feels that you are not merely the Speaker of the British House of Commons, but that in a very real sense you are also a Speaker for them. In that sense you have been casting seed upon the waters which will, I hope, bear fruit abundantly.

Before you leave us, may I say one word as to the visit which you are shortly to pay to the Canadian Parliament. I understand that within a few days you are going over to Canada to present to them the Chair, a perfect model of your own, subscribed for by the Members of the British Parliamentary Association in this House. We know that you will be received with the greatest acclamation. We know that all their hearts will go out to you when you pay them the visit. But great as is the pleasure with which they will receive you, and great as is the enthusiasm with which they will greet you, it will not be greater than the love which we give you and the esteem in which we hold you. I say that when you depart from this House and enter another realm of public service, because with the Prime Minister I still think that you have very many effective years in store, you will go from us with all our heartfelt good wishes, and I think of no public servant can it be said more truly than it will be said of you: "Here is a man who has done the State good service."

I should like to be permitted, before you put the Question for the last time from that Chair, to say two or three words in support of this Motion. I entered the House only two or three years later than yourself, and I have had as full opportunities as anybody of watching and appreciating your discharge of your duties to it during the 26 years, as the Prime Minister has reminded us, which you have sat first as Chairman of Ways and Means, and then as Speaker. I use the language not of flattery, but of sincerity and of truth when I say that in both capacities you have not only maintained the best traditions of the past, but, by the exercise of some peculiarly and happily endowed personal qualities, you have been able to transcend not a few outworn conventions, and to bring new resources to reinforce the authority of the Chair. It has been your fortune to be the trustee and guide of the House during a difficult period of transition. The House of Commons is in many ways a different place from what it was when you and I were among its younger Members.

I sometimes wonder whether some of the great men of the past, the survivors of the heroic age of Parliament who were here then, men who regarded the asking and answering of questions as a tiresome modern innovation, and who were accustomed to rise in a full House at midnight and rarely spoke for less than one-and-a-half hours, would feel quite at home in the House to-day. If the House, amid all the changes, external and internal, which you have witnessed, has preserved, as I believe it has, its continuous identity and its characteristic atmosphere, it is largely due to the good fortune which it has enjoyed in having in the Chair during your Speakership one who combined deep and accurate knowledge, quick judgment, dignity, urbanity, and tact, with a keen insight into human nature, and an unfailing dexterity in the employment of the lighter, as well as of the heavier, weapons in the dialectical armoury. I speak with a feeling, which I am sure is shared by every man on all the Benches, when I say that the House will not be the same place without you. It is with a full heart and a grateful and abiding memory of services, which will live in history and form the model for all those who succeed you in that Chair, that to-day we bid you farewell.

Question put, and agreed to, nemine contradicente.

I beg to move,

"That this Resolution be recorded as having been agreed to nemine contradicente."

Question put, and agreed to.

then addressed the House, as followeth ( all Members being uncovered ):—

I am sure I shall have the sympathy of the whole House in thanking it for the Vote which it has just passed nemine contradicente. No man can receive the unanimous thanks of this House without feelings of emotion. They are not freely bestowed and are only occasionally given. No man can close a great part of the work of his life without feeling considerable emotion, and that, emotion is deepened and intensified when he closes that portion of his life with the good will, respect, and esteem of all those among whom he has spent it.

I desire to express my sincerest thanks to the House for the great kindness which it has shown to me in passing this Vote of Thanks, and especially to the right hon. and hon. Gentlemen who, in such moving terms, have proposed it to the House. The House will excuse me if I show any shortcomings in addressing it. I have not for a quarter of a century had an opportunity of making a speech in this House. I am not sure that I might not even, after that lapse of time, claim the privilege which the House is wont to accord to new Members who address it for the first time.

The Prime Minister referred to the long connection of my family with the House of Commons. It may, perhaps, not be inappropriate if I mention the fact that my grandfather was, for 50 years, a Member of this House—from, I think, 1816 to 1866— and when he died he was the Father of the House, but so far as I have been able to ascertain from a search through the records of "Hansard," he did not address it on a single occasion. I am afraid that the OFFICIAL REPORT in my case will show a very different record..

The position of Speaker of the House of Commons is one of the greatest in this kingdom, but it is also one of the most responsible and the most exacting of positions; and it is one which I venture to say no man can fill unless he has gained, and maintained, the confidence of the House. Without the confidence of the House, the position of Speaker is a most unenviable one. Orderly debate suffers. The Speaker himself is deprived of that sense, of security without which he cannot adequately perform his duties. I have to thank the House most sincerely for the confidence which it has reposed in me. I won it, I think, at an early stage, and I am glad to believe that, never for an instant, has that confidence been forfeited.

This would hardly be a suitable time for a retrospect upon the great events which have passed during the years of my Speakership. A discursion into that matter would take me, far beyond the limits appropriate to this occasion. I will only say for myself that I have sought, during the time I have stood and sat in this Chair, most ardently and intently to preserve the authority and dignity of the House and the authority and dignity of the Chair. I have endeavoured to construe the Standing Orders and the Rules with common-sense, and without pedantry. I have exercised, I hope, proper patience, without undue laxity. I have endeavoured to soothe asperities, and to encourage talent in all quarters, and I have, I think, been slow to mark what is said amiss.

From my earliest youth—long before I entered this House—I had a deep respect and regard for this great Assembly. That respect and regard have been intensified as the years rolled by, and have ripened into affection. I have never ceased to be impressed by the knowledge displayed by hon. Members in all quarters, by their power of expression, by the assiduity and zeal which they have brought to the discharge of their duties, and, above all, by the high sense of justice which invariably actuates them. As has been observed already, twice since I entered this Chamber I have witnessed a very large extension of the suffrage, and twice a redistribution of political power. But, notwithstanding that—and I think possibly even by reason of that—the House has increased in usefulness and in authority. No man will claim that this House is a perfect human institution, but I will say that, in my judgment, it is, of all the institutions of a similar character which are known to the political observer, the most admirably fashioned for expressing the will of a high-spirited and a free people, and for promoting the welfare of all classes of the community. Those are the sentiments which I have long held, which I hold more deeply than ever, and which I shall never cease to hold as long as breath may remain in my body.

Before I say "Farewell," I would like to pay a tribute to the Gentlemen who sit below me, and to those, whom I never see, who sit above me. They are in the House, but they are not of the House. I desire to thank those who sit below me most sincerely for the great knowledge and zeal which they have displayed in assisting the Chair in solving some of the great and difficult problems which are sometimes presented to it. To the gentlemen above me, I desire to express my thanks for the admirable accuracy with which they have recorded, and sometimes improved, my rulings. In bidding a final farewell to the House of Commons, I trust that it will not be thought inappropriate or presumptuous of me if I use the words which I have often read from this spot when reading to the House the Gracious Speech from the Throne, and say, in the words of the concluding paragraph, "I pray that the blessing of Almighty God may rest upon your deliberations."

I beg to move,

"That the thanks of this House be given to Mr. Speaker for what he has said this day to the House, and that the same be printed in the Votes of this day and entered in the Journals of this House."

Question put, and agreed to.

I beg to move,

"That an humble Address be presented to His Majesty, praying His Majesty that He will be most Graciously pleased to confer some signal mark of His Royal Favour upon the Right Honourable James William Lowther, Speaker of this House, for his eminent services during the important period in which he has with such distinguished ability and dignity presided in the Chair of this House, and assuring His Majesty that whatever expense His Majesty shall think fit to be incurred upon that account this House will make good the same."

I beg to second the Motion.

Question put, and agreed to, nemine contradicente.

I beg to move,

"That this Resolution he recorded as having been agreed to nemine contradicente."

Question put, and agreed to.

To be presented by Privy Councillors or members of His Majesty's Household.

Ways and Means

Considered in Committee.—[ Progress, 25th April. ]

[Sir E. CORNWALL in the Chair.]

Amendment of Law

Motion made, and Question proposed,

"That it is expedient to amend the Law relating to the National Debt, Customs, and Inland Revenue (including Excise), and to make further provision in connection with Finance."

It is difficult for any of us at this moment to turn our minds to the ordinary business of the House. We all feel very much moved by what has just passed, and that must be the first feeling in all our minds. Therefore, I must ask the indulgence of the House to come back to the order of proceedings upon the Budget. I desire to call attention to one aspect of the Budget. We have all pretty fully in our minds the fact that the vast expenditure to which we are committed may be divided under three heads. There is the national debt service, national defence and civil expenditure. The national debt service is £345,000,000, and, infortunately, that great figure is quite inexorable and unelastic. We have to meet it, and the only way in which it can be reduced is by such a restoration and improvement of our credit as will justify a conversion scheme, quite apart from the payment of debt, and that is not yet within sight. The second item, national defence, amounts to £207,500,000. That I think we all feel should, if possible, be reduced; but we must recognise that there are outside influences at work which we cannot control and which must affect that total. The third item, civil expenditure, amounts to no less than £379,000,000. The whole of that figure of civil expenditure is within our control, and it is there clearly that the greatest reduction can be and ought to be effected. When it is realised what the burden of taxation is upon the country at the present time and what the consequences of that burden are and how it is aggravating the situation it is quite obvious that that expenditure must be reduced.

Let us look at our civil expenditure from one point of view alone. Very large sums are being expended in unemployment donation. Nobody will quarrel with unemployment donation in itself, but when these unemployment donations are obtained by super-taxation which is itself causing unemployment there can be no doubt that the situation is very unfortunate. I am not speaking from the point of view of hardship on the individual, but I am speaking from the purely national point of view, and it clearly cannot be sound from the point of view of national finance to cause the discharge of a man who is in productive employment, through super-taxation, in order to provide unemployment donation for a man who is out of employment and is producing nothing. That is the effect of super-taxation. Further than that, the rate of taxation has now arrived at a point when it is really unbearable, and I do not think that its actual bearing upon certain things and its consequences are appreciated. When we were discussing the Budget a year ago an hon. Member opposite said that it was a landowner's Budget and that there was not sufficient taxation put upon the land. I dare say other hon. Members are of the same opinion still. Have they ever thought what the burdens are upon agricultural property? Let me take something that will be of great interest to them, namely, the labourer's cottage.

In my part of the country, and I think it is pretty general throughout the agricultural districts of the east of England, the rent of a labourer's cottage is £4. The amount of the rent does not really affect the argument, but, at any rate, the rent is usually Is. 6d. a week, or £4 a year, for which the man gets a cottage and garden. It may be a very good house and garden or it may be an indifferent one. The rent will be in any case about £4. When it is stated that the rent of a cottage is £4, the natural conclusion is that the £4 goes into the pocket of the owner. That is not so. In the district where I live a £4 cottage is subject to an assessment of £4 5s., although the cottage is only rented at £4. The rateable value is fixed at £3 15s. and the rates in that district are 13s. in the £1, which, I believe, is now, unfortunately, the normal rate in rural districts. With a rate at 13s. in the £1 the rates on the cottage would be £2 8s. 9d., but as there is compulsory compounding, and the owner has to pay the rates, he gets an allowance of 30 per cent. for collection which takes off 14s. 7d., so the actual rate which the owner is compelled to pay, and which is not paid by the occupier, is £1 14s. 2d. Income Tax at 6s. in the £ is levied on £3 out of the £4, and that amounts to 18s. Then the owner has to insure the house, and supposing it is insured for £500, which is considerably below the present cost of rebuilding, that would be 7s. 6d. more. If it is an agricultural estate of considerable size there would be, in addition to that, 13s. 6d. Super-tax to pay. Therefore, if you add these sums together you will find that the rates and taxes on that house amount to £3 5s. 8d., and if you add to that 7s. 6d. for insurance you will see that the owner has to pay £3 13s. 2d., so that he only gets 6s. 10d. out of the £4. Has any hon. Member ever realised that fact?

When an owner builds a cottage at a rental of £4 the whole of that money is taken away, with the exception of 6s. 10d., and out of that 6s. 10d. he has to keep the cottage in repair and pay tithe and land taxes. That is not all. When the owner of the house dies, assuming the house to be valued at £500, there are death duties to be paid upon it. Hon. Members may say, "That is capital; you pay that out of the value of the house." Let us treat it as income, and take the interest upon it. Supposing that the death duties were 15 per cent., including not only estate duty but succession duty. Death duty of 15 per cent. on £500 would amount to £75. That would have to be paid in death duties, and the permanent interest upon that at 5 per cent. would be close upon £4. Therefore he owner for the privilege of having built a cottage for the occupation of a workman will have the privilege of paying £4 for the 6s. 10d. which he gets. If hon. Gentlemen opposite can tell me how the owner can do that they will solve very satisfactorily a great difficulty.

That is the sort of reply which is usually given in this House. I am not dealing with this matter from the point of view of the income which anybody gets, but from the national point of view, and whether there are houses or whether there are not houses, and why there are houses and why there are not houses. I am not dealing with it from the point of view of hardship upon the individual. I am dealing with it from the point of view of its natural effect. Who will build houses when he has to pay £4 out of the net amount of 6s. 10d. which he gets for the privilege of building them? Every penny that he receives is taken away from him.

He only builds the cottages for his workers. That is not in the ordinary commercial sense.

Perhaps the hon. Member will tell me how that affects the question. I do not see that it affects the question at all.

He built, the houses before these taxes were imposed, but he most certainly does not build them now. That is the point I am coming to. Who has to build the houses now? The State has to build the houses, and we know what they cost. The houses are costing £1,000 each. The State has to borrow money, say, at 6 per cent. in order to build houses costing £1,000. In other words, it costs the State £60 a year to get £3 5s. 8d. out of the private owner, who would build the houses if he was left alone. Is that good national finance? That is actually what happens. What happens because the State has to borrow the money and has to pay £60 a year interest? They will try to get 10s. a week out of the labourer. Suppose they succeed in getting £20 a year, which is a good deal less than 10s. a week. What is the position then? To get £3 5s. 8d. out of the owner in unjust taxation the State has the pleasure of paying £40 a year, and the labourer has to pay £20 rent instead of £4. That is the result of this species of national finance.

My remedy is that taxation should be put on a fair basis, and that it should be recognised that when you impose flat rate graduated taxation—of course, graduation cannot in itself be at flat rate, but the combination of the two systems, a flat rate according to income and graduation as incomes go up, is imposed wholly regardless of the character of the property upon which it falls, and you impose it at the crushing rate at which it is being imposed now. The hardship of graduation, or the hardship of a flat rate, where the natural rate of tax is comparatively low, can be endured, but when you put on the burden at the rate of tax which is now being imposed, and put it on on a flat rate system according to nominal income, and put it upon all kinds of property, it is clear that in dealing with taxation on that basis the House has been, and is, absolutely regardless of the national consequences of the crushing burden which falls upon the kind of property I have been referring to. The only remedy is to do what was done when Death Duties, for instance, were first imposed. More Members of this House then understood agricultural land than understand it now, and when the Death Duties were imposed the system under which agricultural land was dealt with was that, instead of taking the capital value of that house at £500 and charging duty upon it, under Sir William, Harcourt's Budget, the whole actual net income of the estate was charged at so many years' purchase of the actual income received, and by that means the burden, although it was then comparatively light, was tempered to the kind of property which was least able to bear it. Now you have not only trebled, quadrupled and quintupled the duty, but you have also removed the safeguard that people who owned agricultural land were only charged on the income they actually derived from it and you are charging it also upon its capital value. The result is absolutely crushing. Take any ordinary agricultural estate. When the necessary estate expenses and outgoings have been paid there is barely sufficient, if there is sufficient, money to pay the Income Tax which is demanded. Then, when the cupboard is bare, when there is not a penny left, when the whole of the money has been taken away for Income Tax, if the estate is a considerable one, a large bill for Super-tax is sent in in addition, which has to be found out of the capital or some source entirely outside the property. Is it reasonable, is it useful to the nation, that this House should impose taxation upon any subject—I am not speaking of the individual, but of the material subject—which is greater than the whole annual yield which that subject will produce? It really is not practicable. You are destroying the utility of that subject. You are destroying its function in the national life. You must destroy it. At the same time that this is going on, here is this House voting money for agricultural subsidies. One set of officials is employed in calculating subsidies and another set of officials is calculating at the other end in taxing out of existence the very industry to which the subsidies are granted. That is our system of national finance—waste at both ends and destruction in the middle. Only those who live under it know what it is, and it is time to let the House understand what it means. It is driving men out of employment.

I speak only of agricultural land, because I know most about that, and I can speak with practical knowledge, but the same principles apply mutatis mutandis to industries all over the country. Taxation is driving industries into the dust and driving men out of employment, and adding to the difficulties of the country from one end to the other. It has got to be reduced, not because we say so, but because the money will not be there. The tax this year that is called Income Tax is not Income Tax at all. A large proportion of it is being paid out of capital, and from no other source. Out of the Super-tax charged this year, certainly on agricultural estates, and, I believe, very largely on businesses too, an enormous proportion, I believe considerably more than half, has to be paid out of capital, and cannot be paid out of anything which can be derived from the source upon which the Super-tax is charged. And if Super-tax has to come out of capital, what about Death Duties? When we complained before that Death Duties were taken out of capital and spent as income, we were told that the amount of savings of income in any year from the subjects of taxation more than compensated for the withdrawals which were due to the levy of Death Duties. I believe that argument had a great deal of force in it, and one could not very well answer it, but now that even Super-tax has to be paid out of capital, the whole of the Death Duties are an absolute withdrawal out of capital, and the country has to take them and spend them as income. What no financier can do is to take money which is not there, and that really is the problem. The amount of taxation now being withdrawn from the nominal income of the country is greater than that income is possibly able to bear under present conditions. I am quite aware of the great importance of balancing the Budget, but there is a consideration which is at least equally important, if not more so, and that is that industry and trade, upon the growth and development of which all future increase of wealth depends, should not be so sterilised that our financial position has gone beyond control. I quite understand that we are carrying on, to some extent, the financial conditions of the War, and we have to find money out of capital and have to spend it in that particular year. People who have to spend capital in paying taxes which are nominally levied upon income may be willing to do it, and may be able to do it this year. I am not speaking in any spirit of complaint, but I am putting it purely from the national point of view. Individual hardship cannot be counted in this matter. It may be in the national interest to go on paying so-called Income Tax out of capital, but it is only right that the House should know what it is doing. It is very unfair that the House should be led to suppose that £413,000,000 which has to be levied out of Income Tax in this coming year can really be paid out of income. That certainly leads to grave misunderstanding. The country believes that we can afford these sums when it really cannot afford it, and they are actually being paid out of capital, and are not being paid out of income at all.

Hon. Members opposite quite rightly lose no opportunity of criticising what they call militarism, and they are the first to tell us, with a great deal of truth, that the creation of great military forces is not only an unwarrantable source of expense, but in itself brings about the danger of war. That is obviously true. I suppose we shall all agree that one of the main causes of the great struggle in which we have just been engaged was the creation of the vast military force in Central Europe which practicaly dragged the countries which created it into war by its own weight. Do hon. Members who are so bitterly opposed, and so rightly opposed, to militarism ever consider that there are other forms of militarism which are almost equally expensive and which they are partly responsible for? Is it not possible to have industrial militarism as well as what we call militarism with armies in the field, and is not the creation of great industrial fighting forces just as dangerous and just as likely to bring about industrial war as the creation of great armies is likely to bring about a military war? Hon. Members opposite cannot create these great industrial fighting forces without being driven to use them. They will be driven to use them by their own weight.

We all know that story. Never did anyone begin a war that he did not do it in defence. I do not look at what people say. I look at those who have created the forces. That is the thing to look at. Who created these great fighting forces, and with what object did they create them?

I am not saying the object is not good, just as Germany said her object was self-defence. I am not blaming hon. Members. I am merely pointing out for their consideration, and from the purely financial point of view, purely from the point of view of expense, that there is this industrial war, costing us money, just as the war we were engaged in before cost us money, and it is on the top of the other just as disastrous. We can as little afford, and it is as difficult for us to find the millions which are being daily lost in this industrial war as we could afford to lose the thousands of millions which were lost in the other because we are a poorer nation to-day. What is the use of fighting for what is not there? Do hon. Members opposite realise that the real trouble is the financial trouble? It is no use fighting to get millions of money paid in wages when there is no money to pay them out of. Hon. Members opposite are never tired of telling us that nothing will induce them to go back to pre-War conditions. The most terrible fate which could happen to them, and they will resist it with all their power, is that labour should be driven back to pre-War conditions. If this war goes on much longer everyone in this country will be very lucky to get back to pre-War conditions at all. They are wasting the only resources which can keep us above pre-War conditions, and if we do not take care we shall fall a very long way below them. That is the real position, and it is no use blinding ourselves to it, and the people who are really suffering from our financial troubles at present are those who are walking about the country unemployed. They are the men who are bearing the real burden. Anyone in this country who at any stage prepares for or does anything to encourage industrial warfare is the worst enemy of labour in this country, on whatever side of the House he sits or whatever his political views may be. I do not think it is unfair, without blaming those who represent Labour at all, to ask them to bear in mind the fact that however good their object may be in binding Labour together they must realise that the risk of creating this great force is that they will produce industrial war at a moment when it will be absolutely disastrous to this country.

5.0 P.M.

I greatly regret to see the Corporation Tax retained in the Budget. I sat for considerably over a year on the Income Tax Commission, which had two main objects. One was to avoid double Income Tax and the other was to graduate taxation as fairly as possible so that it should be apportioned according to ability to pay. Last year the Chancellor of the Exchequer very gracefully and kindly acknowledged the work of the Income Tax Commission, and introduced Clauses into his Finance Bill carrying out the recommendations of that Commission, one of which abolished the double Income Tax from which people were suffering and others which graduated the tax as far as it could be done according to ability to pay. Later on, in the same Finance Bill, he proposed the Corporation Profits Tax, which is nothing less than double Income Tax, and is not graduated according to ability to pay. I never felt more disappointed in my life. The Chancellor of the Exchequer proposes, first of all, an Income Tax, then he proposes a Super-tax, then he proposes Death Duties, then he proposes Corporation Profits Tax, and he brings them all out, one in one year and one in another, an increase here and an increase there, one tax picked out one year and another tax picked out another year, and they are brought out as if they were something new and were all going to fall on different people. The whole of them fall upon the same people; they all have to be added together and their effect is cumulative. When you get such a cumulative effect pressing on the same subject the combination is crushing and impossible.

I can only suggest to hon. Members opposite that in their financial policy they may, in what they consider their own interests, be pulling the wrong string in attempting to get what is called a steep graduation of Income Tax and all these duties, and in piling the heaviest possible burden on what they call the broadest shoulders, while at the same time they attempt to relieve all who are workers from payment of any tax whatever. My hon. Friend opposite (Mr. W. Graham) stands out rather differently from the others of his party. If he was Chancellor of the Exchequer I should feel quite safe in his hands, but I think he will admit there are others who do not hold his views. I suggest to hon. Members that in their own interests it is of the utmost importance to them that the reserves and accumulations from which industries have to be maintained and developed, and which are the sole source of their employment, should not be overburdened. If they are overburdened, hon. Members are doing more harm in depriving the workmen of to-day and of to-morrow of employment than they are gaining for the workmen of to-day by a nominal reduction of the taxes they have to bear. That matter is worth examination from the Labour standpoint. I agree that the greatest number should have the greatest consideration. If you can make a great many people happy at the expense of a few by all means do so, and I should be the last to suggest otherwise, but if in the attempt to do that you are going to make everybody unhappy, as has been done in Russia, it is about time, before that irrevocable step is taken and we are plunged into bankruptcy, that those who are responsible for the constant pressure and the piling up of graduated taxation upon the only source from which Labour can be employed, should realise that they are adopting a suicidal policy.

A good deal of our expenditure has gone and is going in subsidies. It is the most objectionable form of expenditure. When the question of subsidies to maintain wages in the coal industry or on the railways, for instance, has been discussed in this House and when the proposal has been objected to from outside, the very natural interjection has come from Benches opposite, "What about your subsidy for agriculture?" I say, again, what cannot be repeated too often, that agriculture never asked for a subsidy, that agriculture does not want it and desires its freedom. Give us our absolute freedom and you may have your subsidy. The subsidy was imposed, not because agriculture asked for it, but by this House in the national interest, because it was thought that by that means the nation could get more food grown within its own borders. It is not a subsidy given for the sake of the agricultural industry, but is a measure adopted deliberately by this House. It cannot be regarded as an ordinary subsidy for which agriculture is in any way responsible or for which any thanks are due from the agricultural industry. That is our position.

I apologise for detaining the House so long. I feel very strongly on these subjects, living as I do in a district where we are struggling to make both ends meet in these very adverse times. I cannot go into a field or on to a farm or into a wood without seeing something that ought to be done. I am anxious to do it; so is every owner and every farmer. We cannot do it, though we used to do it in the bad times of the past. Why cannot we do it now? Because every penny we can scrape together is taken away in rates and taxes, and improvements and necessary maintenance have to be neglected. You may look at under-wood growing up It cannot be cut because, owing to the Wages Board restrictions, men who are out of work are not allowed to cut it unless they get a wage which it is impossible to pay if the stuff is to be sold without loss. When you want to chalk your land and spend money on improvements in any direction you are stopped because every farthing is taken away by the rate collector or the tax collector. That cannot be in the interest of the country. I see the country groaning under the burden. I beg the House to pay a little more attention to that practical side of super-taxation, and not so much to the individual side or to the question whether this man or that is getting a larger or a smaller income. It is a minor consideration as to what an individual is getting. The important thing is what is the nation getting. If a single individual is prevented, because of taxation, from doing work which is in the interest of the nation, the taxation is bad for the individual, but it is ten times worse for the nation.

We are discussing, two years and five months after the Armistice and in a time of peace, a Budget of £1,058,000,000, five times as much as our Budget before the War, when we were a richer nation. I agree with the right hon. Gentleman who spoke last that at the present time a very large amount of the taxation that is imposed and is to be imposed by this Budget must be paid for out of capital. I do not think there is the smallest doubt about that. I rose to protest against the enormous scale of expenditure with which we are faced. I am certain that if it continues the standard of life of the nation must be lowered. We cannot continue being taxed so heavily and at the same time maintain such a high standard of life as that we are at present enjoying. Taxation has got industry in an iron grip. There is not the capital available for that expansion which is essential to the trade of the country and as a means of giving employment. This is a matter of vital interest to the workers. The House had a very moving scene this afternoon. Naturally, the House is almost empty at the moment, but the feeling of the House as shown by the benches now is not at all the feeling of the country outside. If there is one thing more than another that the country outside is feeling it is the tremendous crushing weight of taxation. Go where you like, wherever you meet two or three men gathered together you will find that their one and constant cause of complaint is the burden of the rates and taxes and the high cost of living, and rates and taxes are a potent factor in relation to the cost of living.

The Chancellor of the Exchequer yesterday congratulated himself that he had made a very accurate estimate, I can only say that I think it was a very lucky shot, for many parts of the expenditure were up compared with the Estimates and others were down, but on the average he came out all right. He fired into the burrow and winged his bird. I want to ask the Financial Secretary to the Treasury whether he is certain that the Treasury have got the fighting services in order. The Chancellor of the Exchequer said yesterday that they had increased the expenditure last year over the estimate by only £10,000,000. Is it not something like £62,000,000? If we look at the item Army and Navy and Air Forces, we find the Estimate £230,000,000, and that the amount issued to meet the total expenditure was £292,000,000. It does not seem to me that the Treasury has the finance of the fighting forces in hand. It is now estimated that there is to be a reduction of debt by £84,000,000. Last year the Chancellor of the Exchequer estimated that there would be £300,000,000 this year for reduction of debt. We have extra liabilities which will undoubtedly diminish the £84,000,000. Can the Financial Secretary say how much is due and will be due to be collected this year? The Chancellor of the Exchequer told us last year that there would be £400,000,000 due to the Exchequer on the 1st April this year. How much will be left? You were going to collect £130,000,000. Stores last year were estimated at £300,000,000. You are going to get £158,000,000 from them this year. How much have you left of these stores, which are treated as revenue? I wish to put it to the Financial Secretary that at present we are not paying our way out of income. I say quite frankly and most sincerely, that we cannot live under this system of finance, paying our way out of current revenue. I would like to ask, are the employment insurance doles which are being paid to-day coming out of the Budget, or do they come out of any reserve fund piled up during the War, or since the Unemployment Insurance Act passed two years ago?

There is the Unemployment Insurance Fund, which is due to accumulation. That is a capital asset or something in the nature of a capital asset part of which is devoted to these payments and does not come out of revenue.

That strengthens my point. We really are not paying our way if we are paying the unemployment dole out of capital. Then there is the Excess Profits Duty which is going to be abolished and which in many cases no firm would be able to earn this year. I wish to enter my protest against what I think is the great over-estimation of the revenue that is going to be derived during the coming year. I do not believe it is possible that the Chancellor of the Exchequer, even though he has such skilled advisers, has taken into account the terrible trade depression through which we are passing. He estimates he is going to get £323,000,000 from Customs and Excise, or only £10,000,000 less than last year. I do not believe he will get anything like it. I go back to the 1913–14 Budget, and I find that Customs and Excise then produced £75,000,000, and to think that you will have no more than 10 per cent. reduction on the receipts from Customs and Excise as compared with last year seems to me incredible. A small increase is expected in respect of Death Duties. Does anyone believe that that is justified considering the enormous depression there has been in capital values? Then take the case of the Income Tax. I cannot believe that the Chancellor of the Exchequer will increase the amount he gets from the Income Tax by £16,000,000 over last year when we know what trade depression exists. Next year one will be able to test one's statements, but I believe the Chancellor has overestimated his revenue in this Budget by over £50,000,000. Unlike my hon. Friend opposite (Mr. Pretyman), I do think there can be a reduction in the fighting services.

I am perfectly certain that we cannot afford to spend £207,000,000 a year on the fighting services, the cost of which before the War was only £77,000,000. That represents an enormous difference. I know full well that extra pay has been granted to soldiers and sailors, and I say they thoroughly deserve it, but you will have to keep fewer soldiers and fewer sailors if the country is to pay its way. I do not understand the Government's attitude in this matter at all or their keeping up such enormous fighting services, considering what the Prime Minister and his colleagues did in connection with the Treaty of Versailles. We assumed they had made a Treaty which would keep the peace for a great many years, but instead of that here we are undertaking an enormous expenditure on fighting services—unproductive services, except so far as they concern the purposes of defence—and I do not believe the country can afford it. There is another matter which is withdrawn from the attention of the House, and that is the Navy. I cannot get any information from the Admiralty as to what is to be the cost of the new capital ships. I do not know if my right hon. Friend can inform me, but I am told they may be from £10,000,000 to £12,000,000 each. If so, that is an enormous sum, and again I believe it is one which the country cannot afford. Are we really going into competition with America as regards the Navy? I sincerely hope not. If I am to be allowed to give my right hon. Friend some little advice, I would advise him to send some practical shipbuilder down to the dockyards to see whether the taxpayers' money is being well spent there.

I can quite understand my hon. Friend's views regarding the dockyards. It is to his success in regard to them that he owes his seat.

I would also like to ask if we can have the estimated cost of the expeditions to, or the maintenance of forces in, Palestine and Mesopotamia, I have never known the House treated with so little consideration in regard to the giving of estimates of figures which run into gigantic totals. Mesopotamia and Palestine are costing millions, but we get no estimate of the Government expenditure. Apparently it depends on the sweet will of the Colonial Secretary as to what policy he proposes to present to the House. I do not think it is right or fair to the House of Commons, and it is certainly not fair to the country, that we are unable to know something of what is going on with regard to this enormous expenditure in distant parts of the world. There is also the question of social reform. The Government prides itself on social reform, and if anyone says a word against its policy in that respect he is regarded as attacking the Ark of the Covenant. The social reform of the Government is costing a great deal of money, in many cases. In housing some people, I believe they have robbed others of a large amount of employment, because the rates and taxes that will be imposed on the community, through their social policy, will draw away money which would otherwise go in productive work and productive employment. Here again I would ask my right hon. Friend what is the total liability incurred by the country through the housing policy of the Government. Can he tell me? I can get no answer.

I have heard that before, but it is not a very satisfying doctrine to one who really wants to know. Again, let me take the question of education. No one for one moment would begrudge education for the uplifting of the bright and intelligent boys and girls of the country, but education is costing us £60,000,000 this year, with another £40,000,000 of rates. I am perfectly willing to vote for and advocate the spending of money on education, but are we getting full value for the £100,000,000 a year we are spending at present? We have got to get value for our money in these days. I also take the Pensions Department. The disabled must be cared for. Had it not been for them we should not be here as free as we are to-day. But there is one serious complaint I hear very often, and it is that men who are in full wage-earning capacity are getting pensions, whereas others who are broken are getting nothing at all. I would ask whether it is not possible that some scrutiny should be observed as regards the Pensions Department, in order that the men who are broken shall get relief, and also to ascertain if there are any men of full wage-earning capacity who are receiving pensions? I think that would be very useful.

I know it is sometimes said that the House of Commons is not economical, yet I have never known the House to fail to respond to the appeal of a courageous Minister. The difficulty is to find Ministers who are courageous enough to tell us exactly what the country can stand in regard to expenditure. Wherever there has been a grievance it has always been settled by some sop or some subsidy. Take an answer given a day or two ago by my right hon. Friend. Does it really illustrate the attitude of mind of the Government in dealing with national expenditure? Government officials number 295,000. There are salaries amounting to £36,000,000 a year, and in addition to that war bonuses of £45,000,000 a year. When you go outside and talk about that to people who have small fixed incomes it makes them absolutely savage, because all the people in this country have not made war fortunes. A very large number indeed are doing without many small luxuries and without some of the necessities which they were able to have before the War. In fact, it is this which makes them a little sceptical as to the Government's ability to deal properly with the miners. If it is said to the miners, "You must have your wages reduced by 30 or 40 per cent.," whereas Government servants are to have their salaries increased, it does not seem quite right. I was told only yesterday of another matter, and it is that we are paying at the rate of 1s. 11d. an hour for doing such "unemployment work" as the widening of roads to keep men employed who would otherwise be disengaged while the agricultural labourer and the surface miner had to work for a shilling an hour, that is not right. There is something wrong somewhere. I cannot help thinking that the Treasury, in spite of what we were told yesterday as to its being greatly strengthened, has failed to keep a rigid control over expenditure. We were told we were to have a new Estimate Committee. I do not think an Estimate Committee will be of any service for the reduction of taxation unless it can deal with policy, for policy governs everything. Lord Beaconsfield said, "Expenditure depends on policy," and he was a very acute Parliamentarian. We are told that the Government are calling together all the Departments to find out what economies can be effected. It is not the Departments in themselves who are extravagant. It is the policy forced upon them by the Cabinet which makes them extravagant. You may pare off £100 here or £100 there, but it is the policy entailing costs running into millions which is the real cause of great expenditure. I conclude, as I commenced, by saying that this country cannot maintain this gigantic expenditure without unnecessarily hampering industry and causing grave unemployment.

My right hon. Friend the Member for Chelmsford (Mr. Pretyman) made what may have appeared to many Members of this House a very violent attack on Labour policy in regard to taxation. As one who has served with him on various Committees, I am quite willing to regard it as a friendly attack, and I shall endeavour to approach it in that spirit. In the course of his speech he made, what seemed to me, the remarkable statement that Labour, or at any rate some exponents of Labour, had argued that the workers should bear no taxation at all, but that the taxation should be piled as heavily as it could be imposed upon other classes of the community. May I say in reply that I have never heard any responsible advocate of Labour submit any such doctrine? The beginning and the end of our case is to try to secure such a distribution of the annual burden of taxation as will make it easiest and best for all sections of the people, as will contribute to economic efficiency, and as will maintain some kind of reasonable standard of life for the community; and that is very different indeed from the description given by my right hon. Friend. I have a great deal of sympathy personally with his defence of the old landed aristocracy, the old landowners of Great Britain, and I have often argued on other platforms that they are the only people in this country who are only entitled to plead dilution. The aristocracy has been heavily diluted in recent years, and there is no doubt whatever, according to the testimony of one of our most advanced Socialist writers, that they are carrying a burden to-day—in fact, they constitute one section of the new poor—out of proportion to their ability to pay. But we must clearly distinguish between the poor landowners in so far as they have survived, and their estates have not been purchased by the new rich created by the War, and the farmers, and I am going to suggest to my right hon. Friend opposite that our inquiries in the Royal Commission on the Income Tax and in other bodies in this country show that farmers have no reason to complain of the manner in which they have succeeded during the War, that many of them have been able to purchase their farms, and that a larger number are paying Super-tax, or what approximates to that, at the present time than ever before. That there are farmers who have had difficulties I do not deny, but in judging the land question let us try to keep in mind the distinction between the burdens on small landlords and the farming classes who have enjoyed enormous advantages since 1914.

I want to be as brief as possible in trying to define the attitude of Labour to this Budget. I agree entirely with my right hon. Friend in his objection to the continuance of the Corporation Profits Tax. Apart altogether from what that tax brings, it violates one of the ordinary principles on which we all proceed, that taxes should be few and simple and that we should not introduce any refinement of Income Tax, because that is all it appears to me to be. We should not embark upon unnecessary refinements of that kind, because we know that if we do there is a tendency to play off one tax against another. Numbers lead to confusion, and it is very difficult to ascertain exactly what is being paid. Above all, the Corporation Profits Tax is a tax on aggregates, which seems to me to depart from the principle of taxing an individual on his ability to pay. For these reasons, I join very cordially in opposing this tax, and I cannot believe that the Government, if it seriously considers the Report of the Royal Commission on the Income Tax, will be willing to continue an impost of this kind. I also agree entirely in the matter of subsidies. Subsidy is uneconomic disease. It blinds the people to what is really going on in the great economic forces which are of such importance to the country.

We do regard it as in many ways remarkable that we should be asked today to find £1,200,000,000. There is no doubt whatever that that is a staggering figure for any country to provide. It is six times, roughly, what we were called upon to provide in pre-war times, but the ravages and the expenditure and the vast cost of war are undeniable. The debt is there; the services must be met; we have got to find the money; and our duty is to discuss the ways of finding it and above all to discuss the method of making the burden easiest for the great body of our people. What are the principles which we in Labour try to lay down? I think, first of all, we should agree that so far as possible drastic economies must be effected, with consequent reduction in taxation. In the second place, we must try to make our taxation, or the apportionment of our burden, such as will best contribute to economic efficiency and the recovery of our markets abroad, which has a profound bearing on employment in this country. In the third place, we should work to distribute the burden in such a way as to make any reduction in the standard of life as small as we can possibly make it. I take the view—perhaps hon. Members on this side may differ—that we are faced with a certain reduction of standard. I believe that to be absolutely inevitable, that is, compared with 1914, but I think there are innumerable devices we could employ in this country to make a reduction in standard comparatively easy and something which might for great sections of our people pass almost unnoticed. That is the kind of ideal we have in mind.

On the first point, I think Labour will endorse the policy of the Government in the repayment of debt. We have never subscribed—at all events, I hope we have never subscribed—to that idea which indicates that there is no real burden in a National Debt. There is a very great and onerous burden on the industry and commerce of this country, and something which is lying like a deadweight on British employment and British industrial efficiency. Let us reduce it at the earliest possible moment, and in that policy, provided we do not sacrifice what we believe to be necessary services, the Government will always have our support. I am, however, perfectly sure that a large number of hon. Members of this House will regret, whatever their political faith or party, that this country has not seen fit to adopt one of the devices Which have been recommended by way of levy on accumulated wealth. I know quite well that this doctrine is profoundly distasteful to many of the old-fashioned financiers of this country, but we are confronted by a situation which is in every way exceptional. If we had been told in pre-War times that we should have at the end of four or five years a national indebtedness of £7,000,000,000 or £8,000,000,000 and that the industry and commerce of this country could still survive, hardly any member of the public would have believed such a statement, and yet that is actually the position to-day. May I plead most strongly that this question of a levy on capital or on accumulated wealth has not been urged in the main by labour thinkers in Great Britain, although they have certainly supported it. In point of fact, a levy on accumulated wealth was advocated, and is to-day advocated, by some of the most distinguished economists that this country has known. They have said that it is simply a matter of weighing, up the advantages and the disadvantages. No one denies for a moment that there are profound disadvantages, and even dangers, in any levy on accumulated wealth, but there are even greater dangers in the continuance of a burden of £400,000,000 per annum or thereabouts by way of interest on debt, and that is what we have got to consider. It is a question of some drastic or immediate stroke which no doubt would occasion difficulty and even suffering on some classes, as against a continuing burden during the years that are to come and when this country is fighting for its very life in the markets and economic effort of the world.

It may be suggested that the time for a capital levy or a tax on accumulated wealth has gone, that having allowed the boom period of 1919, however artificial it was, to pass, we cannot in a time of industrial depression embark upon any such device, but I am going to suggest most strongly that the day is not yet past for the consideration of some form of enterprise of this kind. After all, it was not the Labour party that reported that there were at least £4,000,000,000 which might be quite correctly attributed to the growth of wealth during the War, and very largely due to war circumstances. No hon. Member opposite denies the growth of the trust, and the monopoly, and the combine in this country, and I have never met anyone who disputed for a moment that there is a growing element of wealth in Great Britain which is almost automatically earned, which flows to the people who receive it without any very definite enterprise or effort on their part. That is not peculiar to this country. It is found in practically every country in the world. It is an international movement which we must take into account in framing our Budget and in imposing our taxation. We know at the same time that in the midst of the most trying circumstances of the War, and since the Armistice was concluded, there has been an amount of luxury which no man in his senses would seek to defend. I do not dispute that we can find luxury even amongst the poor. It is not confined to any section of the people, but there has been a regrettable luxury, and what I should call purely luxury expenditure, among people of great accumulated wealth, who have set a most mischievous example in the early years of the peace. No hon. Member will dispute that. Is it unfair to suggest that a special impost on that accumulated wealth would have checked that luxury expenditure? It might have given us sufficient to have enabled the local authorities to obtain money at easier rates and it might have facilitated many schemes of reconstruction.

In the second place, I am going to say that we on this side are very much interested in the importance of reducing our expenditure, and restricting taxation, but before I deal with this, I want to reply to a point made by my right hon. Friend opposite. He said, "How can you look for any improvement while you have all this industrial war, while the great trade unions are federating and combining, and while you have a kind of industrial militarism in this country"? No one will accuse me of fomenting industrial trouble. Everybody on this side recognises that the strike is a barbarous weapon. All hon. Members on this side have every reason to know the suffering and the loss and the chaos that the strike involves. That is all recognised, but I hope that in this matter we are going to be perfectly fair and just in our judgment. It is quite true that an industrial organisation may abuse its powers, and every trade unionist is conscious of the danger—

The hon. Member must not travel too far, otherwise I can see difficulties ahead with other speakers.

I bow to your ruling, but I really wish to make this point, that the industrial militarism, of which my right hon. Friend complains as adding to the burdens of the country, is not confined to labour. We find the same thing in the operations of many of the trusts and combines, and that was all on that point I wanted to bring out. May I come, under this head, to a severely practical point? Why do we find a marked indisposition among great bodies of workers in this country to-day to any real support or genuine or hearty co-operation in the reduction of expenditure? They say, "Let us economise; let us make all the sacrifices we like, a very large part of what we save will be used for the purposes of military and naval preparations." I am merely giving the argument. We are two years and more distant from the Armistice, and yet we are providing in these Estimates for £207,000,000 for military and naval preparations. Many of us hoped that we should get, under the League of Nations or under some, kind of international structure, a state of affairs in Europe which would make this great expenditure unnecessary, and, indeed, impossible. That hope has not been realised, and, rightly or wrongly, we attribute the cause, or at least the cause in part, to the action of the Government in international affairs, and to a failure to adopt what most of us believed to be he ideals which would be put into practice at the earliest possible moment after the War concluded. That is the difficulty. It is urged on practically every Labour platform in this country. It has been supported from the Front Opposition Bench to-day by the right hon. Member for South Molton (Mr. Lambert), who says candidly and frankly that this country cannot afford that expenditure in present circumstances.

One of the disappointing features of the speech of the Leader of the House yesterday was his reference to possible reductions of expenditure in the Civil Services. Let me say on that point that, in so far as expenditure can be reduced, or in so far as money is wasted at the present time, he will always have our cordial support; but I think it is correct to say that there is a difference between this year and last as regards these Estimates of approximately £120,000,000, and that appears to be a reduction of which account has not been sufficiently or adequately taken. That has been already effected. It is true that education is accounting for £63,000,000—an increase of £7,000,000 on last year. But a very large part of that expenditure is due to the quite necessary and overdue improvement of teachers' salaries. It may be true that we are not getting value for all our expenditure on education, but that is due or traceable to weaknesses in the system. It can never constitute any attack on education itself, and what we press most strongly in this connection is that it will be simply suicidal for this country and suicidal for the great masses of our people to cut down our expenditure on education, and particularly on technical education at a time when other countries, notwithstanding their difficulties, particularly on the Continent of Europe, are spending a lot of money in this sphere, which will have inevitably the effect of helping them to gain, or regain, markets for which we are almost vainly competing at the present time. A badly educated people degenerates Very rapidly into a mob. That is a grave danger to this country in the present political and economic circumstances. We, therefore, press the Government not to yield on this point, but to make their reductions in spheres in which reductions can be made, notably in those which are unproductive—the £207,00,000 which now goes to military and naval preparation. This last class of expenditure is undoubtedly barring the way to a recovery of economic efficiency. It is creating an attitude and a disposition among large numbers of the people which make economy impossible. It is preventing us from securing that good will and united effort so absolutely essential in finance as in every other sphere, if we are going to achieve that which this country urgently requires.

The last point which I am going to make leads to the familiar question as to whether the rich are becoming richer in this country and the poor poorer. Very much depends on the way we answer that question as to the attitude we shall adopt towards the Budget. There can be very little doubt that, on the range of incomes in this country up to £2,000, direct taxation is very heavy at the present time. It is true to say that a married couple with three children, which is the kind of average or standard case, with £2,000 of earned income, pay approximately £411 in Income Tax. That, on the whole, is a pretty serious burden. Take, however, the case of a married couple with no children, and with precisely the same earned income. They pay £438 in Income Tax, and it becomes perfectly plain that there is not a sufficient distinction between the people who have to provide for young children and those who have not so to provide on at least that range of income up to £2,000. I recognise that the Chancellor of the Exchequer adopted a number of our recommendations in the Finance Bill of last year, but I am going to suggest that, from the point of view of easing the burden of direct taxation, a good deal yet remains to be done. My right hon. Friend opposite made a very strong point of the burden of the Super-tax in this country, and he said that it was of such a nature that it was practically paralysing all effort, and was leading to a state of affairs which would make a large part of our industrial recovery impossible. It is always well to come down from broad, general statements of that kind to the actual facts, and I am quite willing to concede that some of the facts are very impressive indeed. If we take a very high income, that is, an income of, say, £150,000 a year—I have taken one which will relieve most hon. Members of this House of all anxiety—the total burden in Income Tax and Super-tax is about £87,000. I recognise that almost every hon. Member would at once say that that is a tremendous slice to take out of £150,000. But I am going to suggest in that connection that it is our duty to look not merely at what is taken, but at what remains, and there can be little doubt that the £60,000 or £70,000 which remains is, on the whole, ample for the needs of most people, and, in the present state of affairs, a very stiff rate of Super-tax is undeniably necessary in Great Britain. We do not forget the burden of the Death Duties, but there again, I believe, there is room for a stiffening of the rate. After all, it is only 40 per cent. on estates of £2,000,000 and upwards, and there can be no great injustice in asking the successors of people who leave these vast sums to do perhaps a little more to earn their own living, and make their own way in the world, and to depend a little less on that large wealth which comes to them from those who have gone before.

I am going to conclude by asking my hon. and gallant Friend opposite whether he will not take the opportunity, either now or in the near future, of dealing with the very great loss which this country sustains by evasion of Income Tax and other duties. Do not let us overstate the case. I am prepared to rely entirely upon the results of official investigations. The surveyors of Income Tax estimated that, during about four years of the War period, we lost at least £100,000,000 by evasion of Income Tax, Super Tax and Excess Profits Duty. That test may be a little unfair, because it is applied to a war period. But let us take the annual loss on a perfectly conservative estimate under this head. The Chambers of Commerce, who will not be accused of the slightest sympathy with Labour doctrine, estimated that we were losing at least £8,000,000 annually by Income Tax evasion. The Board of Inland Revenue itself thought that, with better administration, a slightly increased staff and more stringent penalties, we could get an additional £5,000,000 to £10,000,000 a year. I suggest that most hon. Members will agree on at least two points. They will agree that it is our duty to try to reduce the burden of indirect taxation if we possibly can, especially upon the very poor; and, in the second place, it is also our duty to afford certain improved concessions to widowers and dependants and others, who are now liable to Income Tax payment in this country. The invariable, reply of the Chancellor of the Exchequer in Debate is that he cannot afford to sacrifice sums which the taxes at their present level are now bringing in, and we find it very difficult indeed to meet that argument on this side of the House when we remember the great obligations the country has to bear. Here is a very simple change, recommended by the official side of the Inland Revenue, supported by British Chambers of Commerce, which points to £5,000,000 or £10,000,000 at least, and probably more, which could be obtained by simply calling upon the classes to pay who are now evading payment by one device or another under our Income Tax system.

6.0 P.m.

That is the last point I am going to make, but I am going to press this consideration, that my right hon. Friend the Member for Chelmsford (Mr. Pretyman) failed to appreciate the real burden which the great body of workers in this country are carrying at the present time. Wages have fallen. A report the other day indicated that 200,000 textile workers in Yorkshire and Lancashire had had their wages reduced under the sliding scale method, and that is going on all over the country. That is too often forgotten when we are considering these burdens of direct and indirect taxation. I respectfully urge that we should remember that at this time there are 2,000,000 people known to be unemployed, that the working-class income of this country has fallen, and that it is our duty to afford every relief we possibly can in that indirect taxation which always tells with the greatest pressure upon the very poor.

The House has listened to the hon. Member for Central Edinburgh (Mr. W. Graham) on the principles of taxation which he has enunciated, and I imagine he has found sympathy and support in all quarters of the House except when he referred to the subject of the capital levy. Later in his speech he quoted the case of an individual whose income was £150,000 a year, which was reduced by taxation by £87,000. I think the hon. Gentleman will agree with me on the question of that particular individual and the large sum taken from him, that if a capital levy was put on by this House it would be difficult to take from that individual a much larger sum than at present is being taken. Consider the subject of a capital levy. The advocates of it have always urged that time should be given to pay. If that be so, the capital value dwindles down to deferred Income Tax. In other words, it is a yearly burden spread over a certain period of years, and levied—I agree—not on the income of the individual, but on the capital that he possesses. At a time when this country is being strained to the utmost, any pro- posal such as has been mentioned in this House on previous occasions of a capital levy would tend to shake confidence even further, and would not bring about that state which, I am sure, the hon. Member desires, that state of increased prosperity for our country, leading to work for our factories, and so on.

In an earlier part of his speech the hon. Member argued against the Corporation Tax. He was supported in that proposal by the right hon. Gentleman the Member for Chelmsford (Mr. Pretyman). The fact is the Corporation Tax is a bad tax. It violates, as has already been mentioned, the fundamental principle of "ability to pay," and I hope, if and when an Amendment is moved later in the year repealing that tax, the House will throw the tax out, and if further sums are required press upon the Government that that money should not be taken by a tax out of the pockets of the people, but that instead the Chancellor of the Exchequer should insist that the money, £30,000,000, should be provided by the expenditure being reduced in the various Departments of the State.

I have, however, risen this afternoon to say a word or two on the speech delivered yesterday by the Lord Privy Seal. The main point in that speech was towards the close, when the right hon. Gentleman mentioned for the first time the proposal to convert 5 per cent. Exchequer Bonds into the new proposal—in other words, to give holders of this stock not a 5 per cent. yearly interest, but an interest of £5 12s. to £5 14s. per cent., not for five years, but for the long period of 40 years. I ask the House to consider two points in connection with that matter. Two and a half years after the peace, when this country had taxed herself more heavily than any other country in the world—this Committee has admitted the high taxation and has borne the burden of that policy in the constituencies—that in addition the Government, by their policy in not having reduced expenditure, are being forced to pay a higher rate of interest than they did two and a half years ago. The Government, by their policy announced yesterday, have distinctly lowered the credit of the British Empire. That is a strong statement to make, but I will venture to support it by a résumé of the situation.

In all former wars taxation was imposed during the war and prices rose. After the war, say that of 100 years ago and after the Boer War, when peace came prices fell and the rate of interest fell. Under the present policy, however, the rate of interest has been raised, and this country is going to be asked to find large sums of money out of the pockets of the taxpayer to pay a rate of interest of 5¾ per cent., not for a short period, but for the long period of 40 years or more. I have no doubt that the Government have taken the very best advice they can get on the subject, but the advice they sought they sought in the City, and they sought it from those who had money to lend. Not that I suggest that in the slightest degree there was any improper motive on the part of these, whether they be people who have their living to get, manufacturers who have their commodities to dispose of, or financial interests who have money to lend. It is justifiable that these people should desire to keep up the rate of interest, or the price of goods, or the price of labour, or the price of money, but it should not be kept up unduly. I notice even the "Times" this morning, which so often voices the City's views, considers the terms offered as too generous.

The point of view I wish to put to the Committee is this: They are too generous. They are no doubt good and pleasant to the holders of these bonds, but the money has to come out of the hard-earned money of the taxpayer. From all quarters of the House this afternoon pictures have been drawn of the bad state of trade. The right hon. Gentleman the Member for Chelmsford drew a picture of the agricultural industry, and the position which faces it to-day. From all parts of Great Britain we hear of depression. The increased rate of interest will amount to at least £4,000,000 a year, and larger sums in the years to come, which will come out of the pockets of the taxpayer. If I had asked the House of Commons a week ago this question: "Is it necessary for Great Britain to offer the high rate of interest, 5¾ per cent. practically, for 40 years?" I wonder if any hon. Member would have risen in his place and stated the credit of the British Empire was such that it was necessary to offer that rate of interest for that long period? I can hardly imagine a single Member rising in his place to support such a proposal. I am tempted, therefore, to go further and ask the Government why they have pledged our credit to that extent? Why they have offered this high rate of interest without first consulting the House of of Commons? I know in war time the Government announced their loans in this House, and an hour or so afterwards the proposals were made public, but I am rather doubtful whether in pre-War days that policy or habit was adopted by the Government of the day. I think the House of Commons has some right to feel strongly against the Government offering this high rate of interest, and by offering it admitting that the credit of this country was going back. Not only that, but admitting that it was necessary to offer that high rate interest for the long period of 40 years.

I pass to the second point, with which I will briefly deal. The Lord Privy Seal yesterday divided the Budget into two—his ordinary Budget and his extraordinary Budget. In the ordinary Budget of the year he included Excess Profits, and added that sum to the ordinary revenue of the year. When he asked the House to consider the expenditure of the year, he very properly deducted a large sum for War charges, and by so doing presented to the House the ordinary Budget, which shows a surplus. The point I am anxious to put is this: That if, on the one hand, the Chancellor of the Exchequer deducts War charges from his expenditure, he should at the same time deduct the proceeds of the Excess Profits Duty from his revenue. If you take this year the total taxable revenue, the total profits of the Post Office, on the one hand, and, on the other hand, you take the ordinary expenditure of the year and deduct the War charges, instead of the surplus which the Government announced to the House, there is a large deficit. The total taxable revenue, including the receipts from the' Post Office, is £904,000,000. The total expenditure of the year, excluding the War charges is £974,000,000. If we look at this financial year as a complete unit and deduct the War taxation, on one hand, and the War charges, on the other, it is true to say that the country, under the proposals of the Government, is not paying its way. That, I think, is a further point which has not yet been mentioned in Debate, and I am very anxious to know what reply the Government will give on the subject. The Chancellor of the Exchequer, later in his speech, mentioned that there was a surplus on the two Budgets of £177,000,000, but, in reply to the right hon. Gentleman the Member for Paisley (Mr. Asquith), he admitted that that £177,000,000 surplus would dwindle down perhaps to £80,000,000, and it might be less. This so-called surplus of £177,000,000, by the Government's own admission, made later in the Debate, in reply to the speech of the right hon. Gentleman the Member for Paisley, falls to the ground. It is not £177,000,000 surplus. It may be a surplus of £80,000,000, and it may possibly be, if the policy of the Government is pursued of force abroad, and force at home, and force in Ireland, that that surplus will altogether disappear.

May I point out to the hon. Gentleman that my right hon. Friend very carefully stated to the House in his original speech that the amount was £80,000,000?

I am obliged to the hon. and gallant Gentleman for his interruption, but what I ask is, if £80,000,000 is the correct figure, what was the object of mentioning to the House the figure of £177,000,000? I was sitting back in the Chamber and did not hear the first figure. However, I accept the statement that there may be a surplus of £80,000,000. Hon. Members who spoke yesterday and hon. Members who have spoken to-day have each one considered that the Government have been too sanguine so far as the revenue is concerned, and that the surplus of £80,000,000 will disappear altogether. I have already referred to the fact that this surplus will probably disappear. Reference has been made to the cost of armaments. It is seldom realised that in every pound of taxation this year the cost of armaments amounts to 4s. That is the present burden of our armaments. This country cannot afford to spend such large sums of money. Our people have come through a great struggle, the country has been impoverished and the Government have not determined their policy from that point of view. The Government are now relying on force to execute their judgment and will, and policy, and such a state of things cannot possibly continue whether at home or abroad. The interest on our debt costs 7s. in every pound of taxation, and we have 4s. in every pound of taxation for cost of armaments as well, and it will be seen by the policy which the Government announced yesterday that it is now proposed to standardise a high rate of interest over a long period.

In the Estimates, which on the Government's own statement hold out no hope of relief in the coming year, we are standardising a high cost of armaments for years to come. On both these points, I think, the policy of the Government is wrong and opposed to the best interests of this country. We want to see peace at home and peace abroad, and the best way we can prepare for a future war is to place our finances in sound order as early as possible. Yesterday the Government, as they have done on former occasions, told the House of Commons that they had sent instructions to the various Departments to economise. I think it is the duty of the Cabinet to force economy on the Departments. We have heard something about an Estimates Committee to cut down expenditure. I have had some experience of that Committee in bygone years, and I ask the House to place no reliance whatever on the power of such committees so to reduce expenditure that it will find expression in any reduction of taxation. During the War period, when the whole resources of the nation were organised for War, criticism of administration was helpful, and if the administration was highly efficient, if we lost in one quarter we were able to save in another quarter, and we were able to obtain a victory at an earlier date. In peace time, however, one question only largely determines the amount of our expenditure, and that is the policy of the Cabinet of the day.

It is not for the Government to turn to the House of Commons and say that the House of Commons is responsible. I submit that if you could get inside the true mind of every Member of this House you would find a much more earnest desire for economy than there is in the mind of any member of the Cabinet. The Members of the House of Commons are in close contact with their constituents, and their constituents are heavily burdened with taxation. In the very nature of things hon. Members have more time and are more able to visit their constituency, and so keep in touch with public opinion. I hope the House of Commons will not be led astray by this promise of a strong Committee on Estimates being likely to effect a reduction of expenditure, because this can only be done by a change of policy for which the Cabinet, and the Cabinet alone, are responsible. You find translated in the Budget the £.s.d. of the Cabinet policy, and it is excessively unfair to the taxpayer and unfair to this country, and I regret to say that I shall oppose it at every stage.

We must all have been struck during the arguments used on this Budget with the fact that there has been some deep analyses in the minds of those who have uttered their thoughts as to suggestions that might be made to the Government in regard to taxation. I should like to make some critical analysis of the Budget in the sense that has already been made. These vast sums which have been called for by the Chancellor of the Exchequer from the public are of such enormous weight that they cannot continue, firstly under low prices of commodities, and secondly on a low range of wages. As one who has studied the speeches and statements from Chancellors of the Exchequer for the last 10 years, I have been amazed during the last three years with the enormous figures submitted, and as a business man I have been further amazed at the readiness with which the Revenue has responded when great calls were made upon it.

I think if we analyse the position in which we find ourselves as a nation from the financial point of view, we must admit that during the 4½ years of the War we have burned up practically the savings of the nation for many previous years. No one can estimate what that £6,000,000,000 spent upon the War meant in savings, because they were the savings of the generation that went before. The difficulty is to a certain extent made plain to me when I realise that the spending of that £6,000,000,000 in wages and other ways in the country carried forward with it such a wave of current prosperity that when the Chancellor of the Exchequer years ago called for vast sums they came easily, because the trader had a large margin of profit, and the wage-earner had the means by which to pay more for beer and tobacco and necessaries of life.

I submit that this has now happened. Having burned up such an enormous amount of capital this state of things is still going on, and the effect of that vast sum of money has not yet spent itself. Therefore we are in this position, that while last year the call for £1,000,000,000 in the Budget was readily responded to, the call for another £1,000,000,000 this year would produce disaster, because you are taking capital to that extent out of the impoverished traders and wage-earners. If we are going to make any constructive criticisms on this Budget we must say to the Government that there is a means whereby some of this burnt-up capital may be brought as fresh life-blood into the national purse. Everybody is asking, "Where is it to come from?" The only way is to pass through five or ten years of suffering and saving until the capital that has been burnt up is replaced, and then we may get back again to our pre-War state of trade.

By the burning up of this capital the credit by which merchants, manufacturers, and all our commerce move was to a very large extent annihilated. The money was issued in the form of bonds, but those bonds are not liquid assets to-day for credit, and they are called frozen assets. I hear of men even in New Zealand saying that out of their patriotism they put aside into the War Bonds of New Zealand a large percentage of their total capital, and that is frozen credit to them, because they cannot sell it. We in this country are coming to the same position, that a great deal of the money subscribed during the War is frozen credit, because it cannot be used to anything like the extent we hoped for. Is it possible for us to find some means of bringing back a large amount of the capital that has been burned? Fifty years ago Lord Rothschild, speaking in Paris, when the question was debated as to whether what had happened for seventy years should be given up, that was the coinage of 15½ ozs. of silver to 1 oz. of gold, made this remark: taking silver away from the power to use it at 15½ to 1 with gold, a certain portion of the capital of the world was destroyed. Is it too bold a suggestion to make that we can recreate by again getting back to what happened during the seventy years and keeping silver and gold at a fixed ratio? The trouble of our finance to-day is in connection with the foreign exchange. The centre of the trouble of exchange is between East and West—between the 700,000,000 peoples in silver-using countries and the 1,000,000,000 peoples in the gold-using countries without any fixed exchange. I claim that if America and France would join with us we could immediately establish a permanent exchange between China and London. It remained at 60d. for one ounce of silver practically for seventy years. The exchange became stable, and I can understand that the people in America have always been willing to come back to that state of affairs. Strange to say, only yesterday I came across a copy of a cable sent by four Senators at Washington to the Lord Mayor of London on the subject when the matter was being discussed in 1894. It is a most extraordinary cable. It was in these terms: by the absorption of money during the War that the banks cannot give sufficient credit to trade or supply the money necessary for enterprises as in 1913. I do not think I am offering any wild solution to the commercial people of the world when I suggest that we should go back again to 1873 and say that the great financiers shall settle some basis between the two metals, so that we may get the foreign exchanges put right again. Lord Beaconsfield, who in this House and in the whole country has always been regarded as a man of miraculous foresight, when the divorcement of silver and gold took place in 1873, speaking in Glasgow, used these words: The depression that is now on the minds of the people through this excessive taxation is so great that I am afraid that the resilience which naturally comes after a time of depression will not be there if we go on as we are going. We cannot find £1,000,000,000 per annum. I am not talking of what has never been tested and tried. I remember when I was a boy the American Civil War, and what was done by the people of the United States. In that war they spent £500,000,000, and when they were through with the war they were in the same position as we are to-day, as their credit and their capital had been exhausted. They deliberately budgeted for a loss for seven years. I have a statement here giving the facts with regard to this matter. It is a statement by Mr. Robert Benson, the Chairman of the Merchants' Trust, who said: 1920, was £17,150,000, in March, 1921, its shares on the Stock Exchange has a value of only £4,400,000. That is a fall of from £17,000,000 to £4,500,000 in nine months in the case of one company alone. Take the produce of the earth. The depreciation is beyond belief. When we come to think of the farmers and producers in different parts of the world sending their products home to this country, we realise that the depreciation is so great that utter stagnation has been brought about. On the West Coast of Africa 602 miles in the interior from Lagos the natives produced ground nuts. A year and three months ago these nuts were selling here at from £45 to £50 per ton. The actual cost of railway carriage and freight on ocean steamers and quay costs in this country amounted to about £15 per ton. To-day these beans are selling freely at £15 per ton, so that there is nothing left for the merchant, or for the native, or for anyone who handles these goods.

Take an article such as wool or cotton. Prices have fallen in the wholesale market to one-fourth or one-fifth of the prices which ruled 15 months ago. I am hearing stories from all over the world of money offered in London and Liverpool for commodities which will not pay the bare cost of gathering them and bringing them here. We are up against the position that in spite of low prices consumption does not improve. A man in Liverpool stated only last week that if the whole of one year's cotton crop was burnt the world could get through without it, because the consumption has fallen to such a low ebb that there is sufficient raw cotton in the world to carry the world on for another year. These things are terrible. The mills, and every class of factory in the country are in a most terrible state of depression. In Dundee, I hear, the jute workers making gunny bags are only having one and a half days' work per week. The gunny bag is used to carry almost every kind of article, and you could not have a better instance of depression than that these bags are not wanted, for it means that the commodities of the earth are not in demand. Again, when you hear of steamers being laid up to the extent of 5,000,000 tons throughout the world, is not that a weighty indication that the bankers of the world cannot finance the products of the world? It is not that the products are not there; it is not that there are not buyers in other parts of the world; it is that there is no means of exchanging the surplus in one place to meet the desires in another, because we have reached such a condition that we do not trust other nations' money. We want to barter goods for goods. The banking and financial facilities of 10 years ago are gone. How are we to get them reinstated and replaced? The suggestion that I have made as to going back to 1873 is a practicable one, and a real way of re-establishing confidence. The next thing is to do what the Americans did in their time of stress and strain, that is to say, not to be afraid of being in debt. To-day we are in good credit, and we should use some of that credit to develop the resources of the Empire. The Americans at that time pushed their railways, like the great Union Pacific Railway, and opened up millions of acres that could not be used before. There are great works awaiting the powerful hand that we can put forward to develop them again. I hear of one great scheme for making It possible for big steamers to come right through from Duluth to Liverpool without any transhipment of cargo at the St Lawrence, the Great Lakes, and so on. That alone would open up thousands of acres—nay, of square miles—of fertile soil, and the very fact of its being possible to bring those goods through at a reasonable freight would give employment and development in many directions.

The world is full of opportunities if the finance is there to back it. We who know something of these things say that we will not accept a week-kneed policy of sitting still and letting this great gulf of debt swallow us. We will not look at the black side. If there is to be a meeting in June of the Premiers of our Dominions, let us give them some message of hope. The Premier of Australia is reported as having said that Australian finance was in a dreadful state, but not so bad as that of the Motherland, England. All these men will be coming to that meeting. Let us be prepared to advocate, not a weak, trembling, nervous policy of Empire development, but to follow what they did in Washington in 1865—to say that there shall be no payment of capital debt for seven years. Let us develop for seven years, and then begin to pay off our debt. Let us have no sinking fund, and let us use that money, as wisdom and sound business acumen may decide, to develop the resources within our Empire. That will give employment to thousands of people, and within a reasonable time that money will come back. One of the great Presidents of the United States said that he believed that, on every dollar the States paid for the development of their resources within a generation, four dollars came back. No Empire in the world was ever fraught with such magnificent opportunities for development in all directions as ours, and money well spent to-day, instead of burdening our children with the awful weight of this continued debt in future Budgets, will cause their debts to be lightened. It is for the House of Commons and for the country to choose whether they will simply allow this taxation to lie upon them and do nothing, or whether they will call a conference of our French and American friends, and put it to them internationally whether it is possible to do something to stabilise or to prevent the tremendous fluctuations in exchanges, and whether it is possible to take joint action for the prevention of the terrible losses arising from the debasement of the exchanges of the world. However much wages may be reduced in this country, we shall not be able to fight in competition with the countries whose exchanges are debased. It is for us to look for relief in other directions, rather than to the humdrum way in which this Budget has been put before the House of Commons, and before the country. If we can only stimulate the initiative of our Government in taking up some new and fresh line, I believe we can pay our debts honourably and more rapidly than by the policy which the present Budget discloses.

Those hon. Members have had the good fortune to be present in the Committee this afternoon have had the opportunity of listening to a very wide and comprehensive, as well as an interesting Debate. I have listened to the last four speeches with very great interest, but, if I were to venture to embark upon any one only of the great topics which my hon. Friends have brought forward with such skill, I am confident that I could not get through under half an hour at least; and, as I see that several Members desire to speak. I will confine my contribution to the Debate to one simple point. All through the Debate on this Budget, and all through the previous discussions that we have had on the subject of economy, it has been perfectly clear that the man in the street is out for a reduction of expenditure. He does not care much about sinking funds or the repayment of debt—he does not understand them; but he thinks that what he does understand, as it is reflected directly in the taxes which the Revenue officials come to collect from him, is the question of the expenditure of the country. That fact was never better expressed than it was yesterday afternoon by the right hon. Gentleman the Member for Paisley (Mr. Asquith), in his remarkable though short speech, or by the right hon. Member for South Molton (Mr. Lambert) this afternoon. As a fellow sufferer with the man in the street, I have great sympathy with that view of the subject, but, in the interest of a better understanding of this part of the subject than has, I think, been presented to the public by the Press, or is yet understood by the public, I should like to suggest the possibility that, in considering the great figures for expenditure which are included in the Budget this year, a certain factor has not been given sufficient weight, and that factor is the difference in the purchasing value of the £.

7.0. P.M.

I think it is generally agreed that the purchasing value of the £, as compared with 1914, is now about 10s. If you apply that fact to the expenditure of the current year and of the years since the War, either in gross or in detail, the figures wear a very different aspect. I should like to apply that to the figures which have been quoted several times this afternoon, that is to say, the figures relating to expenditure on armaments. They were quoted by the right hon. Gentleman the Member for South Molton, and again by the hon. Member for Greenock (Sir G. Collins), who has developed from the friendly critic of last year to the candid critic—[HON. MEMBERS: "Opponent"]—and possibly even opponent, of this year; and they have been referred to by several other speakers. This year the expenditure on armaments is estimated. in the Budget at rather over £200,000,000, while the figure for last year was £286,000,000. That, I think, under the circumstances, is no mean reduction. Comparing the figures, however, with those for the last year before the War, we find that the total expenditure on armaments for the last year before the War was £86,000,000. Taking into account the change in the value of money to which I have referred, and doubling the £86,000,000 in order to bring it to the same category as the estimated expenditure for this year, we have £172,000,000. The difference between £172,000,000 and £207,000,000 is £35,000,000, and I venture to suggest that that £35,000,000 of additional expenditure on our Army, Navy and Air Forces does not indicate that the Government have been neglectful in the matter of endeavouring to keep the expenditure on armaments down—having regard to all the additional obligations which have been thrust upon the Empire arising directly out of the War, to all our obligations in regard to Ireland, Mesopotamia, Palestine, and the Rhine Army of Occupation, and to the fact that our Air Force, which only existed in embryo before the War, has been left to us by the War as a legacy which we must accept and must keep. My view is that the present Secretary of State for the Colonies is undoubtedly to be congratulated that he has kept the Estimates for the Armed Forces of the Crown down to the amount that he has. If you take the same principle and carry it through all the different items included in the present Budget practically the same thing occurs. I do not propose to take them all, but very much the same thing is to be found in regard to each item of expenditure. Perhaps it will be a little refreshing to my hon. and gallant Friend on the Treasury Bench (Lieut.-Commander Young) to hear a note of commendation. I do not think we have heard one direct word of commendation this afternoon, so perhaps he will not object if I make a slight one. Although I sympathise with every word uttered yesterday by the right hon. Member for Paisley (Mr. Asquith) as to the need of examining all possible items of expenditure, however desirable they may be, with the greatest possible care, before embarking upon them; although I have intense sympathy with the man in the street, who is faced with great obligations, and with the economy campaign in all its aspects, I cannot forget these things, and I think they are worth remembering. The Government, during the three or four years which have elapsed since the Armistice have reduced expenditure from the high-water mark of £3,146,000,000 a year at which it stood in 1918–19, to £2,100,000,000 in the succeeding year, 1919–20, and, in the following year, to £1,282,000,000. It is now suggested, and I hope it will prove to be correct, that the expenditure for the present year will be as low as £1,040,000,000.

It is undoubtedly true that these figures are in themselves large, and I do not suggest that my point as to the change in the value of money should be looked upon as other than an element and one factor in judging the Government—which is what we are doing to-day. I think, however, the Government have undoubtedly done their best to keep expenditure down, and that, these figures clearly show that. If it be the fact that the Government can do better in the coming year than they have done in the past, I am sure they will do all possible in that respect. I hope the House will support the Government in that spirit, and will do everything possible by avoiding putting forward proposals for expenditure which, as we heard last night from the right hon. Member for Paisley, are very frequently the cause of expenditure by the Government. I trust that in that and in every other way the House will help to do what it can to keep, the Estimates down in the coming year to what I believe, in the circumstances, cannot be described as other than reasonably satisfactory.

My hon. Friend who has just spoken has congratulated the Government on making the national expenditure as low as £1,040,000,000. The necessity of raising nearly £1,000,000,000 for ordinary expenditure, without including in that sum one penny for repayment of debt, is appalling to all who realise the extent to which heavy taxation has been the cause of the depression in trade from which the nation is suffering at the present time. When we look down the items of expenditure there are the legacies of the War, such as pensions and interest on debt, which no one can disclaim, but a moment's thought shows us that concerning the remainder of the items the question whether they can be reduced depends on Government policy. An Estimates Committee may do its best, the Government Departments may try to reduce expenditure here and there, but no real reduction of national expenditure can take place without the Government themselves setting the policy. My hon. Friend was perfectly satisfied that £217,500,000 should be spent upon armaments, having regard, as he says, to the Government's obligations. Surely the obligations are the result of Government policy? There can be no reduction in the expenditure on armaments in this country until peace is secured in Europe and in Ireland. It is the failure of the Government in this respect, both jointly with the other nations so far as Europe is concerned, and singly so far as Ireland is concerned, that is responsible for the swollen figure of armaments which appear in the Budget of this year.

We are told, too, that the surplus of the ordinary revenue of £80,000,000 over the ordinary expenditure for the current year will be drawn upon as a result of the-coal stoppage. There, again, we see the result of the Government policy. The precipitate passing of the Goal Mines Decontrol Bill, enacted ostensibly for the purpose of saving the taxpayer and the country, is going to result, either through the reduction of revenue or the increase of expenditure in the loss of many millions. The Government policy in insisting, against the obvious view of the House of Commons last year, in retaining the Excess Profits Duty in last year's Budget has undoubtedly denuded the industrial firms of the country of much of the capital which to-day would have been available for the purchase of raw materials and the payment of wages. The Government in this way have added to the number of unemployed workers at the present time. The fact that the Government failed, in its first two years, to realise that as a result of the War we were a poor nation has had its effect on our financial position. By the passing of legislation which neither the taxpayer nor the ratepayer could finance, and by the creation of new Departments which have become an intolerable burden, the financial position of the country has been jeopardised. Beyond that, the bad example set by the Government in national affairs has caused the people of the country, in their individual capacity, to maintain a rate of expenditure which is not justifiable.

There are two ways in which the burden of taxation can be lightened. Firstly, by reducing expenditure, and, secondly, by-increasing trade, and thereby accumulating annually a larger pool of profits of the earnings of companies, firms and individuals upon which taxes may be levied. To achieve both of these, peace of two kinds is necessary. First, there must be peace in Europe. For 2½ years since the Armistice the belligerents have been haggling over terms. What a commentary upon the statesmen of Europe! To us, an island people, depending upon our exports and the even flow of international trade, there is no hope of a revival of business or of a future prosperity until goodwill is established between the nations of Europe. Besides this, we need peace at home. There is no royal road to prosperity; the only way is by hard work. We shall not get the will to work until satisfactory relations are established between employers and workmen. Instead of things improving they are getting worse at the present time. This is not due to the presence of Bolshevism in our midst. If the unfortunate dispute of the past month has proved anything it is this, that Bolshevism has few supporters in this country. The Prime Minister saw fit, a month ago, to launch an attack upon the workers, whom he denounced as Socialists who would ruin the country. He scoffed at the leaders of the Labour party as being generals who are led by corporals. He said that if the Labour party were successful at a General Election

There was one distinctly good point in the Budget speech made yesterday, and that is that we now have two balance-sheets instead of one. It is easier for the public to understand these big figures; and I think the more easily you can get the public to understand figures the better for the Government and the country as a whole. It must indeed be difficult in good times to make up Budget figures, and I cannot help thinking that the Lord Privy Seal is to be congratulated on the figures which he produced in the last Budget. The figures for the new Budget, with a revenue of £1,200,000,000, are indeed great. I cannot help thinking that this is going to affect our trade and possibly the future of the country. We are a peculiar country; we are different to any other country. You cannot compare us with France, Germany, Russia or even America. We are dependent on getting most of our raw materials from abroad, and on obtaining a large portion of our food, in fact, four loaves, I believe, out of five, from abroad. Therefore, to liken us with other countries is not the right comparison in a discussion on raising this money which is so necessary for us to balance our Budget. I quite agree that it is necessary to balance the Budget, but at the same time there are certain points, to which the hon. Member for Birkenhead (Mr. Bigland) alluded, such as not paying the balance of account to redemption of the debt which is shown by the Budget figures, which I cannot help thinking might be considered very carefully by the Chancellor of the Exchequer. I think it would be of benefit to our country if we were to do everything possible to pay off our debts to America. We owe them, I believe, about £800,000,000. An amount of that sort can only be paid by the export of goods. The export of goods would encourage our industries, and I suggest that possibly some subsidy might be given to manufacturers who send goods to America. I do not suggest that it should be an actual cash subsidy, but the manufacturer might be subsidised by giving him some reduction on the freight between here and the United States of America. The right hon. Gentleman (Mr. Chamberlain) said yesterday:

"The worst debt, however, is the foreign debt. The internal debt transfers wealth, whether in the form of interest or in the form of repayment, from one pocket to another, but it does not diminish the total. Foreign debt is a drain upon the national resources. It lowers the exchanges, it reduces our purchasing powers and it affects our world credit."—[OFFICIAL, REPORT, 25th April, 1921; col. 71, Vol. 141.]

Those are very important words. It might be advantageous to even increase our debt with a view to paying that off. I cannot help thinking we should be in a better and more independent position. We cannot realise here the terrible extent of this strike—all the blast furnaces closed down, or most of them, the shipping tied up and all of them depreciating. It will cost this country far more than possibly the Chancellor of the Exchequer realises. I know he stated that there would possibly be a surplus of £80,000,000. That is a large amount, but it is not large when you consider the thousands of millions of debt we owe. I cannot help thinking that the new Conversion Loan is an asset if most of the National War Bonds and Exchequer Bonds up to 1925 exchange into that loan. The yield is very tempting. The hon. Member for Greenock said it is too attractive, but if you compare it with other loans, such as the India. Loan, which was issued recently at 7 per cent., I think the Government will be getting their money cheaply, and it will be a good bonus to anyone who exchanges, and one benefit the Government will get is that it is more or less a perpetual loan. I think we have to consider together, the Government, employers and employed and how the country can be brought to ruin unless there is peace, and then when we have peace we can consider the necessity of reducing this great debt.

I think we have arrived at a point in the Debate at which it would be of some value if I were to seek to illuminate, as far as I can, some of the many difficult points which have been raised upon the Budget, and to reply to such criticisms as have been passed. I have noticed the difference in the atmosphere of our Debate yesterday and to-day. Yesterday the speeches showed a kindly disposition towards the Budget. To-day the tone of the proceedings has been perhaps of a more critical and less kindly description. I like to think that on this occasion, at any rate, the first impressions were the true ones, and it is only that thought, which has not unnaturally come to hon. Members, that, after all, we must not give the impression that all is too much for the best which has led to the revival of criticism to-day. But as I have listened in the most earnest endeavour to discover that critical assistance which is of so much value in the course of carrying out in a humble administrative sphere the scheme of the Budget, I have found some help, but not much. Criticism of the sort that makes one realise the failures and deficiencies of past time is, no doubt, very beneficial, but, also without doubt, that which is more welcome is the criticism that assists one to do better in the future. There has been some, but there has been perhaps not so much as one might have hoped.

Let me deal, in the first place, rather more in particular with some of those criticisms of the more technical and closely applied sort which have been directed against the scheme. I have noticed recurring again and again, both in the actual observations and in the implications of the speeches of critics, a hesitation to accept the Estimates of Revenue for next year. As to that there are two propositions. There is, first of all, the proposition that taxation is being imposed at too high a rate and in too many directions. That is, of course, the major proposition, which I will leave on one side for the moment. There is the minor proposition that, on the basis described, the Estimates have been cast at too high a figure and are not likely to be realised. I believe closer examination will show that on this, as indeed on every occasion it must necessarily be the case in estimating for Revenue, the Estimates have been cast upon a conservative basis. It is indeed foolish and idle in the region of estimation of Revenue to attempt to establish absolutely what can only be in the nature of a prophecy, although we may be encouraged by the remarkable result of last year to suppose that prophecies cast with the full knowledge and in the scientific manner in which Revenue is estimated have a certain degree of value. The estimates of Revenue are indeed this year cast upon a very conservative basis. We estimated for £10,000,000 less from Customs and Excise, a reduction to £323,000,000, and in the other region which is affected so much by the variations of trade, the revenue from stamps, the Estimate is reduced by a much higher percentage and by a total of £5,500,000. These are very substantial reductions for the sake of safety from last year. Further, all these reductions are made upon estimates for a year in which the returns were reduced by special circumstances. Those reductions are upon figures returned in a year which was itself subject to exceptionally bad circumstances. In the first place we had the coal strike of last year and in the second place there was the beginning of the great trade slump, which took place last year and affected the receipts for the year, so that the estimates for this year in these respects are in themselves reductions and they are reductions upon a low baseline. There are two factors for safety there. In only one respect do the estimates of revenue venture upon any increase, I think, and that is in respect of the revenue due from sugar, where a larger revenue may safely be expected in view of the larger supplies available in consequence of the restoration of more normal conditions and the effect of decontrol upon prices.

There is one other region in which I have heard substantial criticism advanced, and particularly yesterday by the right hon. Gentleman (Mr. Asquith), as regards the contention that the estimates of revenue had been pitched too high for the coming year, and that was in the direction of the Corporation Profits Tax. There there is a very striking difference in the Estimates for last year and for this which leaps to the eye, and must have some explanation. For the first year the Estimate, if I remember rightly, was only £3,000,000, only a small part of which was realised, and for the current year the Estimate is £30,000,00. The explanation is simple. The Corporation Profits Tax is assessed not upon the period of the financial year, but, as was the case with the Excess Profits Duty, upon accounting periods, about 50 per cent. of which may be said to wind up in the December quarter, so that only a very small proportion of the businesses and persons assessable had an accounting year which came so early as to enable the collection to be made in time for last year. The consequence is that for last year it was possible only to estimate for one-tenth of a full year's yield. This year it is possible to estimate for a full year's yield. But it may be said as against that, is it wise or prudent to estimate for so much as that in view of the great depression in trade? There we enter into a region in which exact figures cannot be foretold, but it has to be remembered that against any possible reduction in the estimate of Corporation Profits Tax there has to be set this circumstance, that in the future the cessation of the Excess Profit Duty will bring in for assessment under the Corporation Profits Tax a considerable increase of assessable income. Moving in the region of future surmise, it is possible to set one against the other, and to imagine that an estimate of £30,000,000 from the current year is not in excess of what is reasonable.

Let me pass from that subject, the question of the exactness and prudence of the Estimates of Revenue and Expenditure for the next year. I trust I have satisfied the Committee that they are doubly based upon conservative calculations with due regard to the probabilities, and that in view of the very remarkable foresight and power of foretelling and setting one circumstance against another which the Committee is accustomed to observe in those who are responsible for their preparation, it is not too much to expect that these Estimates may be realised. I pass from that, which is one aspect of the taxation for the coming year, to the wider question of the burden of taxation which is cast upon the taxpayers as a whole. It has been impossible to listen to this Debate, as I have listened to it, without becoming aware that that is the matter which is at present in the forefront of the minds of every hon. Member who has spoken, and I have no doubt of every hon. Member who has remained silent. I realy feel that in this respect there is very little for me to add. There is nothing that I can add to the emphasis which was laid upon this aspect of national finance by my right hon. Friend in his speech in opening the Budget. As I followed what I might call the accents of that speech I became conscious that where special stress was laid on what he said, and where he most closely claimed the attention of the House, was in his reference to the heaviness of this burden, and in his warning as regards the necessity of the reduction of expenditure before the full weight of that burden becomes felt, not in the current year, but in the coming year. We are all conscious of the gravity of the burden, but what serves it to exaggerate it and to make statements which are not warranted and may be liable to mislead?

There was an observation made by the right hon. Member for Chelmsford (Mr. Pretyman) which ought not to go without immediate challenge. Dwelling, and dwelling rightly, upon the dangers of run- ning taxation down to the narrow point in which it becomes taxation upon capital, thereby devouring the essential margin for saving, and so on, he said, in a speech which moved the House, that the burden of Income Tax of £410,000,000 this year is so great that it cannot be paid out of income and must be paid out of capital. It must not be allowed to go out without immediate contradiction that this country is unable to pay an Income Tax of £410,000,000 a year without drawing on its capital. The actual amount of income under assessment in the year in question is £2,350,000,000. The machinery of no tax is perfect. The machinery of Income Tax is not perfect, but it is not so grossly imperfect as to exaggerate the assessable income of this country from £410,000,000 to £2,350,000,000. That is an absurd proposition. It is in this region that I have looked and waited and hoped for constructive alternatives as to what can be done by way of improving the revenue system of the country. I received in the course of the Debate only two substantial suggestions. There was a suggestion from the hon. Member for Central Edinburgh (Mr. W. Graham) as to the capital levy. I do not think the occasion would suit or the time would serve for a discussion of the question of a capital levy on its merits; but this proposition should and must be stated at the present time, that whatever may be said about a capital levy there can be no dispute, and I think there is no dispute, between those who advocate and those who oppose it, that its impact, the bad effects of the disturbance which it would create, would come most heavily in the year in which it is first initiated. It is a proposition of common prudence that you should not in one of the worst years in trade that the country has ever known, subject that trade to the great disturbance and impact of a new scheme of that sort.

What other means of improving the finances of the country were advanced in the course of the Debate? There was a constructive suggestion from the hon. Member for Birkenhead (Mr. Bigland), who put forward the view that the chief cause of the evils of the time was the deflation of credit and currency, and his remedy was that we should return, to the process of inflation. That argument appears to me to be like that of the man who had been exceeding over night, and who woke in the morning with a severe headache, and said to himself, "This headache is entirely due to this accursed sobriety; let me get drunk again as soon as I can, and then we shall all cheer up." The hon. Member's further remedy lay in the region of that difficult question, the theory and practice of bimetalism. Upon that path I will not be tempted to-night. Whether the present moment would be opportune for trying to establish a ratio between gold and silver may well be doubted by anyone who has had to watch the extreme fluctuations in the price of silver which have taken place in the course of the past seven years. I think that everybody who considers the possibility of establishing a firm ratio between these two metals may be discouraged once and for all by the difficulties which arose and the breakdown that occurred in the effort to link the Indian rupee to gold.

Of the more detailed criticisms that have been advanced there is one other direction of criticism of very great importance, perhaps second to none in the Budget, on which I should like to address a few words. There have been two currents of criticism, one criticising the proposals for the redemption of debt for going too fast, and the other, as I understood it, criticising them for going too slow, circumstances which encourage one to believe that my right hon. Friend has chosen the happy mean between the two. In particular I would refer to the very valuable contribution made yesterday by the right hon. Baronet the Member for the Ecclesall Division of Sheffield (Sir S. Roberts). As I understood his observations they crystallised in the shortest form the criticism against the Government for the too-hasty redemption of debt, and he advanced the theory that we should reduce the amount set aside for debt redemption to the sum of £58,000,000 a year, which he calculates to be enough to redeem the debt in 50 years. As to that there is this position to be considered that State finance has not to bind itself ahead, not to commit itself to a long programme extending over many years, during which the value of money may vary very greatly.

That would be impossible for the State to do, because one House cannot bind its successors, and were it possible it would be most imprudent. Therefore, I should imagine that our task in considering a programme of redemption is the more humble hand-to-mouth one of every year deciding what it is best to do, with due regard to the effect on future years. If we look at it in that way, the answer to anyone who desires the reduction of the sum for the redemption of debt to so small a sum as £58,000,000 a year or less must necessarily be that we are bound to a bigger redemption fund than that by contractual obligations, which we cannot afford to disregard. Take the obligations in the coming year. There is the depreciation fund for the 4 per cent. and 5 per cent. War Loans, a contractual obligation; the sinking fund for the Funding Loan, and the Victory Loan, a contractual obligation; the sinking fund necessary for the redemption of bonds tendered for Death Duty and Excess Profits Duty, again a contractual obligation. Then there are maturities during the year of Exchequer Bonds and foreign debt, which I think the House has always agreed is one most essential for redemption. We are committed to this amount of debt redemption, or at any rate for a very large percentage of it, not by any ambitious programme to cover a period of years, but simply by the fact that we have contracts to keep and the contracts must be kept.

That brings me quite naturally to the criticism that has been advanced in some quarters, though I think there has been a more general appreciation, as regards the terms of the Conversion Loan. Here I would pause in order to refer to some observations made upon this subject by the hon. Member for Greenock (Sir G. Collins). His principal objection to the conversion of the loan was that it offered too generous terms, and, by these terms, he said the Government had lowered the credit of the British Empire, which is a large result to have followed from comparatively so small an operation, but I was encouraged to believe that the effect of this loan has been not to lower the credit of the British Empire when, on looking at my newspaper this morning, I saw that the immediate effect which followed on the declaration of our loan was a cheerful, and though slight yet appreciable, rise in the price of Government securities. If the issue of the loan is having the evil effects predicted by the right hon. Baronet, at any rate, there is a no sign of it, judged by the test of pounds, shillings, and pence.

The right hon. Gentleman the Member for Derby (Mr. Thomas) wished to know what benefit the loan was to be to the taxpayer. I do not think that I can add anything to the very clear account given by my right hon. Friend of the necessity for dealing with these bonds in this manner and of the benefit which would result to the taxpayer. Taking the direct test of pounds, shillings and pence, the immediate effect of the conversion is a slight rise in interest charged, but that is only the immediate effect upon the national accounts. As regards the pounds, shillings and pence, of course, there is an apparent increase in the amount of debt, but that is only a mere matter of bookkeeping. As against the slight increase in interest charges there has to be set the point of view that this step is an essential preliminary one towards funding the floating debt. If that is so, it is also an essential preliminary towards reducing the interest charges on the floating debt, and when the debt is funded the interest charges can be reduced and will be reduced. Until this conversion operation is undertaken there is little hope of achieving that. Therefore in the long run we have the benefit of a reduction in the interest on floating debt which is very much higher than any immediate increase of interest.

Then it is said, "If it is a good thing to do, why not do more of it? Why not keep on and make provision for conversion of Exchequer Bonds, even further than the year 1925?" There are two very substantial reasons, one in principle and one in practice. The first reason in principle is that the necessity for the whole operation, as the Committee has already apprehended, is to prevent what amounts in practice to an increase in the floating debt. As the period at which the life of the Exchequer Bonds runs out becomes more distant, that does not apply. The longer the life remaining to the bond the less necessity there is for dealing with it in this manner to prevent it from coming on to the short loan market. There is a natural grouping in the future history of these maturities before the years 1928 and 1929, and after these years, and if you look to the two epochs of maturities, those before that period are the ones which have to be dealt with to prevent an increase in the floating debt and those beyond that are not part of the prospective floating debt of the country. That being so, it is obviously a very strong practical reason why we should not deal with bonds by way of conversion any sooner than we need, because why should we anticipate the price of money so far ahead? Nobody can foresee it. It may well be that later on, even when there is still ample time to deal with later maturities, it may be possible for the Government to get money cheaper than now. At any rate, it would be imprudent for the Government to commit the Exchequer to a programme of conversion any longer ahead than is absolutely necessary in order to deal with the bonds maturing in the near future. The criticism was advanced in this regard, I think, by one hon. Member that the Government ought to have reduced the Bank rate before it made the issue. Let me take this occasion to repeat that the Treasury and the Government do not fix and have no control over the Bank rate.

I think that it was I who made that statement, and I wish to withdraw what was apparently a slip of the tongue. I know that the Government have no control over the bank rate, but the Leader of the House once said that his views would be considered very carefully if he gave expression to the opinion that the bank rate ought to be reduced. I wish to remove the impression that I was so ignorant as to think that the Government could control the bank rate, but they could express on the point an opinion which would be of weight.

I think that what the hon. Gentleman said was that he hoped that the views of the Government would not be wholly without influence. But apart from that question, which is rather one of surface than of substance, I am given to understand that there are many in the city who rightly or wrongly have made up their minds that a fall in the bank rate is anticipated. Whether they are right or wrong is for the future, but the rate at which the Government makes its conversion issue is, of course, fixed in relation to the actual price of the stocks at the current time in view of the anticipation, rightly or wrongly as it may be, of the reduction of bank rate, and the price of stocks has been already discounted and the market has been adjusted to the circumstances already, and therefore indirectly the price at which the new issue has been made has also been adjusted to the circumstances.

Speaking yesterday the right hon. Member for Paisley (Mr. Asquith) expressed some surprise at the failure to realise the Post Office revenue in the course of the preceding year. As to that I fear that there is no more subtle or novel explanation to give than that the revenue from the Post Office suffered like all other revenues from the bad trade which commenced in the past year, leading to diminished activities and to higher prices which had to be paid on the expenditure side of the account. One other circumstance of course there was which had to be taken into account in considering why the Post Office revenue failed to attain what was expected of it. That was the circumstance that the higher telephone charges which were imposed were expected to come into force rather earlier than they did, and the Estimate was prepared on the expectation that there would be a longer period for the higher telephone charges than actually proved to be the case.

The right hon. Member for South Molton (Mr. Lambert) asked as to what was expected of the Excess Profits Duty in the course, not of the current year, but of next year, 1922–23, and what was expected from the realisation of War stores in the coming year. The Committee will remember that the matter was dealt with by my right hon. Friend in his speech in which, after making a number of references to the impossibilities of giving an accurate estimate or forecast for 1922–23, he said that it is impossible to estimate how much Excess Profits Duty would be, or how much would be realised from War stores in the year 1922–23, but in making out his own forecast as regards the more remote period he himself set off this exceptional revenue as against exceptional expenditure remaining over from war expenditure, and he assumed that any slight surplus there might be of exceptional revenue for that year over exceptional expenditure would be a windfall which would be to the credit of redemption of debt. More than that it is impossible to say with accuracy, as the period is so distant and the conditions are so uncertain.

The general course of the Debate made very clear that in what my right hon. Friend announced as his intention in the speech in which he opened the Budget, to secure the essential economies in order that the national finance in the coming year and the more critical year 1922–23, might be on a sound and satisfactory basis, my right hon. Friend and the Chancellor of the Exchequer need have no doubt or fear but that the strong support and co-operation of the House are behind them. Never has there been a more unanimous expression of sentiment from all quarters and all parts of the House to the effect that this occasion of the discussion of this Budget serves well to announce the proposition that we realise on behalf of the nation that it not possible, after the War, with its great losses and injuries, that we should be able to continue on the same scale of generous expenditure as that to which we were accustomed before the War. We may, and indeed we do in this year's Budget, propound such a necessary palliative for dealing with the worst and immediate evils of the financial situation as the Conversion Loan, a great and necessary palliative to help us over a minor danger, the danger of the Floating Debt; but it must be present ever to the mind of anybody who shares the high responsibility or even the lesser responsibility that in finance, as in every other region of human interest, things are as they are and will be as they will be, and that it is no use at all, by device or expedient, trying to get over the simple fact that when you get to the bottom of a column of receipts and expenses they will balance or not balance.

8.0. P.M.

No expedients, useful and valuable as they may be, will ever enable you to spend more than you have got or to make both ends meet if you do The proceedings upon the Budget have been, as it were, in the nature of a declaration of an intention, and the confirming of that intention by the general opinion of the House speaking on behalf of the nation. The intention is that our finances must be reduced to some level at which we spend no more than we can afford, and no more than we get. To achieve anything in this direction is a great task.

No task so great as this could possibly be achieved by any Government, however strong, unless it was supported and carried along by the public opinion of the nation as a whole. There can be no task so great as to persuade people to do without things, good in themselves, which they are accustomed to have. Nothing less than that lies before us, so far as finance is concerned. Failure cannot always be imputed to the follies and incompetence of the Government. No Government, however wise and strong, can achieve these higher objects, with great difficulties involving self-denial, unless supported throughout by strong public opinion, interpreted into practical action in the way of self-denial in this House. There is where aid must be prayed. If all combine to call for and to aid economy it is good. But what use is it if, while all are exercising their forces of economy over the whole field of expenditure, each is exercising a little personal force to maintain expenditure in his own immediate region? It is a simple mathematical proposition. If that is the state of affairs, the forces of economy and of expenditure are about equal and nothing is done. Let me conclude with a humble appeal that while not diminishing that strong force for economy which, believe me, is the mainstay and strength of financial administration, each will do his best to abate that minor and more local and more individual and more personal force for the maintenance of expenditure.

We have been told that this House must take care, while advocating economy, not to advocate what is perhaps trivial expenditure in certain quarters. I have always taken up the position that if one is sincere, one must be sincere throughout, and I can say that on no occasion have I advocated any expenditure which I would have voted for had I allowed my own inclinations to take me away from consideration of the general financial situation. Realising how grave is the financial position of the country, I have voted against Departments and services which I have at heart, and I have voted against them all because I believe that the first reform necessary for the country is reform in the financial department. The Financial Secretary to the Treasury referred to the speech of the right hon. Member for Chelmsford (Mr. Pretyman). I was in the House when the right hon. Member spoke, and a very excellent speech he made. On that speech I put an interpretation quite different from that of the Financial Secretary. I gathered that what the right hon. Member for Chelmsford meant was, and certainly what I mean is, not exactly that Income Tax was taking capital away from individuals, but that with the Income Tax and Super-tax, the Corporation Profits Tax and all the other smaller taxes added together, and with the high cost of living, it is impossible for many people nowadays to live on their incomes, and that they are forced each year to draw upon a portion of their capital, whereas in pre-War days every year so much of their incomes, after payment of taxes, was put aside and reinvested. Another hon. Member compared the present Estimates with those of 1914. Many times have I heard them compared. I think there is a point that is always missed, and that is that you must keep in mind the wealth of the country to-day and the wealth of the country in 1914. No one can say that we are as prosperous to-day as we were in 1914. Exactly what the difference is I will not go into now, but it is a very large fraction. When you compare the Estimates and say, "Well, counting the cost of living and the high pay, pensions, etc., it is necessary to have this increased amount for this service or reform, or whatever it is," it must be remembered that the country is not as prosperous now as it was in 1914 and it cannot afford many things it had in 1914.

I have been comparing the speeches I heard to-night with the speeches I heard when the last Budget was being introduced, and I noticed an extraordinary difference of opinion. On the last Budget there were practically no hon. Members who realised that depression in industry was about to come. To-night we have heard practically every speaker say that the state of depression is here and that we have to face it. Again hon. Members do not look ahead and ask themselves what the state of affairs may be when the next Budget is introduced, or the one after that. That is what I wish hon. Members would do. I wish that Members of the Government also would look ahead more. I do not believe in living from day to day; it is not statesmanship at all. You must keep in mind the years to come, and what effect any legislation may have on the years to come. There have been many suggestions that the revenue will not come up to the expectations of the Chancellor of the Exchequer. I think that very likely the revenue will come up to his expectations. But it is the two years after this year that are to be the critical years for this country. We have this year a great many sources of revenue which we shall never have again. This country may produce a great deal in taxation this year. Although people may pay Income Tax and Super-tax, Corporation Profits Tax, and all the rest, they are every time drawing upon the capital of the country, and you must eventually reach a position when the revenue will greatly decrease. I think that the next three years, more especially the two years after this, are to be critical years. I ask the Chancellor of the Exchequer and the Financial Secretary, when sanctioning expenditure for this year, to look ahead to the years to come, and realise that if we do not save now we shall not then be able to save. If you drain your resources to-day, when there is something to save and re-invest, in a year or two there may not be anything to save.

I take a very much more serious view of the matter than I have ever even ventured to express in this House. If the House now, or in the near future, would face the facts and realise what the position of the country is, I would be optimistic, but when I listen to speeches on finance and to the replies made then I become pessimistic. Until the Government is made to realise by the voice of the House that the financial condition of the country is still going from bad to worse, even as it has gone between last year and this year, I do not see what hope there is. The Budget of last year contained taxation which in a great measure produced the slump. It is very curious that the slump took place exactly after the Budget was introduced, and I think it was caused mostly by one tax. We have something to be thankful for in the fact that this tax has now been left out—the Excess Profits Duty. There were two courses open to the Chancellor in regard to the last Budget. One was to go in for small taxation and to encourage business and industry; the other was to go in for heavy taxation. I urged him to take the course which I thought was for the country's good, and to go in for light taxation. I believe if he had left off the Excess Profits Duty last year, and, when this year came, had taken off some Income Tax and Super-tax, we would have a totally different state of affairs to-day. Depression was bound to come after the War, but it was not bound to come in the way it actually did come, nor with such a slump, and I believe the Excess Profits Duty and the other heavy taxation produced by the Government was responsible.

I agree that you must have taxation to meet expenditure. It all comes back to expenditure. You have to economise before you can reduce taxation, and I do not wish to see a Budget with a deficit. I want to see the Budget balance and have something to credit, and therefore it comes back to the one point of reducing expenditure in every Department. I would urge on the Government to prune the Estimates of every single Department, and I would urge the various bodies in the House of Commons to come together and arrive at an agreement on a policy of economy. When a particular subject such as that of the Forces comes up you will find one who urges more expenditure on the Army, while another advocates the claims of the Navy, and the third those of the Air Force. Other Members advocate spending on education, on health, or on places like Mesopotamia, and curiously enough we find the same people who urge expenditure on education or health swearing at the people who urge expenditure on the Army or Navy, while those who desire the expenditure on the Army and Navy do not desire increased liabilities in other directions. They are all perfectly sincere in their several views. Cannot they all come together and agree to reduced expenditure on the objects they have particularly at heart. I am perfectly alive to the necessity for the Army and Navy and also to the necessity for education, but for the sake of the financial condition of the country the different forces in the House should unite in a common policy of economy. I am in perfect agreement with the Financial Secretary to the Treasury as to the difficulty which the Government is in when the House of Commons urges expenditure. Sitting in this House I have realised how hard it is for the Govern- ment, and, while the Government has its responsibility, the House of Commons is also responsible, because it is always urging expenditure in some form or another. I would urge the Government to take no notice of these pleas, but to think only of the national finance. If they take that view and economise on everything—not heeding the critics who are crying out to spend more on this and on that—I believe in the hearts of the majority of Members they would find absolute support. There should be economies in every single Department and on every single Estimate.

Regarding the general financial state of the country I have already made a reference, in some words which I spoke on the Consolidated Fund Bill, to a very serious feature. I pointed to the export trade returns and urged the Chancellor that they should be gone into with a little more care. During the last twelve months the export trade returns have been steadily falling, and in the last six months the fall has been very swift. This country, more than any other country in the world, depends on its export trade, and since I spoke on the matter previously the last trade return shows that it is falling further still. That above everything else indicates the lessened prosperity of the country at the present day, and that it is still lessening. I do not know how many hon. Members study these trade returns, but if every Member studied them and took consideration of the fall that is occurring every month they would realise with me the gravity of the whole problem. The Chancellor said many things last year which I think he would not wish to be reminded of, and I certainly agree that many business men and people on the Stock Exchange did not forsee the depression that was coming. I do not wish to criticise the Chancellor because he did not forsee the depression, but I am sure he would not say to-day that twenty more such Budgets as he then introduced would wipe out all debt. Twenty more such Budgets could not be raised.

The hon. Member is in error in supposing me last year to suggest as a practical policy that we should have 20 more Budgets of the kind which we voted last year. He has entirely misunderstood me. I never laid down such a policy as that.

I merely wish to state that the country cannot afford any more Budgets of that kind. It could not afford that one, and still less can it afford 20 more. The greatest need of the country at the present time is more capital, and as I said at the opening of my remarks the taxation at the present day makes it impossible to save so as to produce more capital. Capital is only produced by work and by saving, and if you work and spend all you make, no new capital is produced. Whilst the State takes all the country's savings, how can it expect the country to create new capital? Capital creates capital, and money produces money, and this country, as I am continually pointing out, is becoming poorer week by week and month by month. I would urge the Committee not to have the same apathy on the whole financial question as it has had in the past. I know the dryness of it. It is one of the driest questions, but at present it is the most important question, and I wish that apathy would be dispelled and that hon. Members would realise the condition of the country. If this House would only realise and act drastically, making the most drastic cuts in the Estimates or urging the Government to make those cuts, the Government would do it, but until they do I cannot feel optimistic about the future. I would urge as my last words that the House should make a stand before it is too late. If it is not done this year it may, and very likely will, be too late.

I hope it will not be considered impertinent on the part of an Irishman to intervene in this important Debate. I would like first to say how much I appreciated—and I am sure the Committee did too—the reply of the hon. and gallant Gentleman the Secretary to the Treasury, and I trust the Lord Privy Seal will convey to him the sense of the Committee of the fact that he dealt so sympathetically with all the various speeches that have been made in connection with the Budget and of the very lucid way in which he dealt with the various questions connected therewith—perhaps not to our entire satisfaction, but at all events very much to his credit indeed. With regard to that part of the country to which I belong, I have been looking at the Estimates and at the revenue which it is hoped to receive in the coming year, and I would have thought, from what I have heard and read, that on the question of Excise a larger estimate would have been put down for this year than for last year. We have a variety of industries in my country, and one of the largest is the distilleries and the breweries. I believe they are the largest of the kind in the world, and from what I have heard of the shipments of that type of commodity to the dry States of America, I would have thought that the Excise item would have been largely increased in the coming year. I am particularly interested in what we call the staple industry of Ireland, and particularly of the part from which I come. I do not think the officials of the Treasury thoroughly appreciate what has been said several times by hon. Members in regard to the state of trade. Some hon. Members have referred to the cotton trade and others to the woollen trade, and I think the Treasury officials would be well advised to look well into the future conditions of trade generally and the possibilities of the future when forecasting Estimates.

I see that although Excise is down as an estimated revenue, Income Tax is up. The estimated Income Tax last year was something like £385,000,000, and the estimated Income Tax for this year is no less than £410,500,000. I have no doubt whatever that the Treasury officials are fairly accurate in that estimate from the figures in their possession, because those figures are made up from what is known as the three years' average. From my knowledge of my own trade, I can distinctly state that, in order to get that Income Tax, the Treasury will certainly draw on capital, and the condition of other trades is similar. May I give one example? Shortly before I returned to the House, I was informed that the valuation of the position of a certain company a year and a half ago represented £150,000; at a recent stock-taking valuation it was put down as £60,000 on the wrong side. I think it right that I should explain why a thing like that should occur, but I would like to point out that that firm will be assessed on its three years' average, which were good years, and in this year of loss they will have to pay on that large average of profits. Where will they get it? Their accounts show a balance on the wrong side. Where is it to come from? It certainly cannot come from the profits of this year, and that is where the incidence of the three years' average taxation is injurious. The year in which there may be a tremendous loss and in which the balance-sheet comes out on the wrong side is the year in which they may have to contribute a large tax. Consequently it cannot be from the profits of that year and must certainly be contributed from capital.

The linen trade is peculiar, perhaps, in one sense, because the Government during the War actually almost took entire possession of the trade. They took possession of the mills and factories; they took possession of the material and of the manufactured article; they took possession, in fact, of the people themselves, and sent the men out to the War; and after that they took possession of the Excess Profits Duty. They did this quite rightly, because it was absolutely necessary that the Government should have the production of the looms and the spinning mills of Ulster to win the war, and Ulster did not grudge it. They were glad to give it, but the result of it all is? that, because of the great demand and the shortage of supply of raw material, the price of the finished article went up to a very high figure. Material, as manufactured, has increased seven, eight, and, in some cases, ten times its pre-War value. The result is that huge stocks have been accumulated at very high prices. Those stocks are in the hands of spinners and manufacturers, and are not being sold. They have been holding them for a long time, with the result that there has been a tremendous depreciation in the stock. One can easily see, then, how a concern that might have had a flourishing existence during the War is now almost faced with bankruptcy. But, in spite of that, that concern will have to contribute, because of the three years' average, in spite of its losses. I wish to emphasise that it would be impossible, so far as that trade is concerned, to pay its proportion without drawing on its capital.

There is another matter, which, I think, calls for remark, and that is the question of the incidence of the seven years in which the accounting period shall end. Take, for example, a concern whose accounting period ends on the 30th November last, as compared with a concern whose accounting period will not end until 31st July next. The former, whose stock is still depreciating, will not have the advantage of being recouped for the Excess Profits Duty paid in excess, but the concern whose accounting period ends in July next will have the advantage if there is any depreciation in stock. The incidence falls very heavily on the individual or on the concern whose accounting period ended last year, whereas in the other case the individual or concern will be very favourably considered, particularly owing to the depreciation in trade at the present moment. The depreciation in trade means that all these stocks are depreciated to that extent, and the longer the depreciation continues the greater the advantage will be to the individual or concern whose accounting period is postponed until 31st July. I have no doubt nearly everyone has some idea as to how we may get back to our pre-War state of credit. Undoubtedly the War must be paid for, and nobody is going to do it but ourselves. I have listened to the various suggestions as to bow this is to be accomplished, and really the suggestion that seems to create most sympathy in the House is that of saving. I think we all heartily agree that that is an admirable method. Spend less money; but, as has been remarked quite truly, each individual, or perhaps each section of the House, looks round to see where, for the benefit of a particular part of the country, a little more money spent would be a very useful thing, and by that means, no doubt, from time to time, our expenditure will increase, and it should be the duty of every section in the House, and of every individual Member of the House, to do the utmost to prevent expenditure in future, and more particularly Supplementary Estimates.

I have listened with great sympathy to those Members, particularly Members opposite, who object to any savings being made on education. I think the state of Ireland at the present moment is one of the saddest commentaries on education in that country. I believe it is largely responsible for the situation in Ireland, and this House is not entirely without blame. Since I have been a Member of this House I have, in season and out of season, done my utmost, and my colleagues from Ireland on both sides in the House have done their utmost, in order that education might be looked after in Ireland and more help given from the Government. Therefore, I say in the future, as far as expenditure on education is concerned, be very careful how you curtail that expenditure. If we had had in Ireland our proper share, there would have been still more money given to education. But the House has seen fit in the past not to give us satisfaction. I say it is a sad state of affairs. I believe that if this House had been more free with expenditure on education in my country it would have been very much more helpful.

A great deal has been said on the question of wages, and the possibility of reduction in wages. I have always felt, in connection with my own trade, that any advance the workers have had in wages during the past few years they are justly entitled, and we do not begrudge it. But the House will hardly believe it when I say that wages boards are still sitting, and only a few weeks ago an additional advance was put on the wages of people who are actually out of employment, where all factories and mills are stopped, where it is impossible to sell the material, and where this condition of things must seriously affect the revenue of the coming year. It is not in that way that we shall be able to assist the revenue, and get rid of our material. It is a material that has been of inestimable benefit to the revenue of the country, and we are looking forward to the time when again our trade may be prosperous. We cannot see it for the moment. We cannot say how the stocks which have been accumulated at these high prices can be immediately dealt with and taken up, but we are looking forward to a better day in our trade. Perhaps with the help and friendship of this country, which we are glad to have, we shall be able to tide over difficult times, and in our own way, so far as we are able, contribute to a reduction of the debt brought about by the War.

I am quite sure that those who have listened to this Debate are firmly convinced that if good advice could bring about a change in the affairs of the country, then we should have prosperity at no very distant date. The hon. Member for Thanet (Mr. Harmsworth), who has just left the Committee, is one whose zeal no one doubts, but he seems to assume that by expressing pious hopes that you are going to get rid of all your obligations. He made an appeal for unity in this House, while at the same time he sits in a small party by himself. Had he been here I should have said to him "Physician, heal thyself," and try and get with a larger crowd so that we may get the crowds together and, animated by the best intentions, present them to this House. It is a truism that we are all for economy. It is possibly more than a truism that we are all watching the papers. So are our constituents! When I came down to the House this morning I saw the placard of a well-known paper, which had on it, "More Mad Finance," As I looked through the paper I was hoping that we should have a corrective to that Mad Finance. All I found was abuse, abuse, abuse, and not one scintilla of recommendations except against those things upon which, as the hon. Member has just said, certain Members of this House feel very strongly.

Take the question of education. Surely not only the experience of Ireland but the experience of every other country is that if you cut down your education and starve the youth of the nation, then you are laying up troubles for generations to come. I do not mean to say that the Departments are spending the money as wisely as they might do. In fact, Sir Edwin, I would like to make a suggestion on this matter. I believe civil servants, because they are spending the money of other people, are very prodigal in that spending, and in the matter of economy I should like to see a scheme adopted in which there will be a panel of Members of this House allocated to the various Departments, whose duty it would be to visit those Departments, without invitation, at any moment, and see what was being done inside. At least this would put those inside on the alert, and there would not be so much time wasted, and possibly a good deal of money could be saved.

Having said that we all want to be economists, I want to strike the other note, and want to make an appeal to the right hon. Gentleman to spend a bit more money. It is not on education, but in a direction which, I think, will repay a hundred-fold the employers, the workers and the country at large. During the War, and under the necessities of it, we had an extension of buildings and amenities for social welfare in our great industries. Many large undertakings, because they had brought people from their homes, from distances, were encouraged by the Government to build and equip institutions for social welfare amongst their workpeople. I am here to say from my own observations that the money thus spent has been of untold value in the health and contentment of the great mass of the workpeople. So effective has it been that many other employers are seeing the advantage of it. They know, and indeed common-sense tells everybody, that where the best conditions are there will the best workers flock. Employers, because some of their competitors under the ægis of the Government, and almost by Government money, were able to set up these centres of social welfare, canteens, and so on, are themselves anxious to follow, because they want to get the best workpeople, and they do not object to spend more money in this direction.

What is the position? The Leader of the House set up a very strong Committee dealing with taxation. In connection with this Committee I had a letter from Treasury Chambers. It is pointed out in the letter that this Committee did not make any recommendations for allowances for structural alterations for social amenities in the factories. But if the spending of money in this direction has led to contentment amongst the workers, to better conditions of health, surely it is false economy for the Chancellor of the Exchequer to put forward this cheeseparing policy rather than give them some encouragement to employers to give their workpeople what has been forced upon other employers out of the exigencies of the War? I want to make this appeal: that the right hon. Gentleman will not close his mind because of the recommendations or non-recommendations of a strong Committee. That Committee simply took what I would call the financial side of the matter. There are, however, some values which you cannot measure in £ s. d. If you can preserve or improve the health of the community you are reducing the costs of the country, for a healthy people is less expensive to the State than an unhealthy people, and I know my right hon. Friend on the Front Bench (Dr. Addison) will endorse that sentiment.

If the employers of this country are prepared to spend some of their wealth in making social centres for their workers, surely it is an ill-service on the part of the Treasury to penalise them for so doing. I trust the new Chancellor of the Exchequer will not close his mind to my appeal, but will reopen the question before the Budget reaches its final stages, and if necessary hear what a deputation of employers has to say upon the matter. I believe that 31 Whitley Councils are supporting the appeal that moneys spent upon structural alterations to factories for social welfare purposes shall be free from taxation, and that thus encouragement will be given to those employers who are wishful that these advantages should be shared by their workpeople. I trust the right hon. Gentleman will meet a deputation to discuss the matter, for I am quite sure that the small financial loss to the Treasury will be repaid a thousandfold in the health and contentment of those engaged in the great industries of this country.

I feel there is a certain amount of sympathy between myself and the hon. Gentleman who has just spoken. I listened to the speech of the hon. Member for Thanet (Mr. E. Harmsworth), who accused the House of Commons—everyone of us—he made no distinction—of apathy on this question of national finance. He has not been so long here as I have been—and that is not very long—but I can assure him—and I wish he had not gone out so soon after making his speech—that there are Members of this House who are far from being apathetic on the question of national finance. We share those apprehensions, but there is this difference. There are some of us who really have no axe to grind, journalistic or otherwise, in these matters, and do not mind what the papers say about us. We know the hon. and gallant Member's speech will be reported in a great many organs of the public Press, probably in heavy type, and most likely any few remarks we make will not be listened to. All the same, I object to an hon. and gallant Member accusing us of apathy. He said we must economise on everything and not care about the critics. He said we must economise on every single Department and every single Estimate.

9.0. P.M.

I take an interest in one particular Department, the Admiralty. I should like to ask, in what direction would you start economising in the Navy? Would you put more ships out of commission or on the scrap heap? I asked a question the other day as to how many ships we had scrapped as compared with other countries, and I find that we have scrapped 10 times as many as any other country since the Armistice. We have scrapped in all 300 destroyers and over 100 submarines. I hold strongly that the scrapping policy has already gone too far. We have done away with one squadron altogether, and is it suggested that we should do away with more squadrons? I wonder how the Harmsworth Press would view this question if the flag is not shown adequately in all quarters of the globe? It is all very well to say, "Economise in every single Department," but those who say that cannot have studied the question so closely in connection with the Admiralty as I have done. We have been asked by one hon. Member how many of us have studied the trade returns. A good many of us have done so. I do not profess to realise their import in every direction, but I do study them with the greatest possible concern. I am entirely with the hon. and gallant Member when he urges economy, and there is no greater advocate of economy than I am. I hold very strongly that we really must look upon things from the point of view of what the country can afford. We have been accused of advocating our own pet schemes, but I maintain that it is our duty to try to approach all these questions from the point of view of what the country can afford. I have never been able to ascertain exactly what the country can afford. I have heard the hon. Member for Wood Green (Mr. G. Locker-Lampson) put repeated questions on this point, and I have never heard him receive a satisfactory answer. His question has generally been: "Has the Cabinet had any estimate of what the country can really afford to spend?" I think it would really help us, not only in this House, but in the country as well, if we could be given some idea of what the Cabinet really considers the country can afford to spend. When we do get to know that figure, then we must really come down to it. I daresay it is necessary to guard the oil wells of Mosul and other places, but the real question is whether we can afford to do so. I submit that the Government must really give us a little more information on this question.

There is a tendency on the part of the Government to be extravagant, and the only hope is that there will be sufficient hon. Members of this House to join with me and others to press for economy. The only way to impress the Government is to consistently vote against them on this question. I know there are many red marks which go against hon. Members outside who dare to vote against the Government, but I have voted repeatedly against the Government on questions of economy and finance, and shall continue to do so until I get an assurance that we can afford to spend the amount of the Estimates they bring in. We get estimates from various Government Departments. I quite agree that they are excellent, but they lack explanation, and until the Government are in a position to give a satisfactory answer to the question as to what the country can afford, I shall continue to vote against them. I do hope the Government will be able to answer this question some day.

There is an innovation in this year's balance sheet which I should like to see extended, because it would make the national accounts more clear to the people—I refer to the separation of the balance sheet into two sections, one ordinary receipts and expenditure, and the other special receipts and expenditure. With regard to the latter, you have one particular kind of revenue allocated to one particular kind of expenditure. I believe in a certain sense that is going rather back upon the principle which has guided us in dealing with our balance sheet. Before the Consolidated Fund came into existence, it was the practice to allocate the product of certain taxes to particular forms of expenditure, and that was found to result in considerable inconvenience because the tax did not always raise the amount required. Therefore the Consolidated Fund came into existence as a sort of pool into which all the revenues were paid and out of which all expenditure came. I do not think we can go back on that and we must retain the Consolidated Fund, for the purpose of balancing, but I am not sure it would not be a good thing to take some other form of expenditure and treat it as a particular item and earmark a particular tax for it.

Here I wish to say what a pleasure it always is to listen to the speeches of the Secretary of the Treasury, because both in matter and style they are everything that is required in order to make a financial statement attractive. I am quite sure that not only from myself, but from all hon. Members on this side of the Committee, there is agreement in saying that the qualities which distinguished him when he sat on these benches have not deserted him now he has become an occupant of the Treasury Bench. And if I am making propositions now which are grave heresies I hope I am putting him into a frame of mind in which he will be rather tender towards me. I think there is some room for improvement in the presentation of the balance-sheet, and I am rather encouraged to that opinion by something which the Lord Privy Seal said when he was making his speech. He was referring to internal debt which, he said, does not lessen the pool of national wealth, as it simply transfers wealth, whether in the form of interest or in the form of repayment, from one pocket to another; it does not diminish the total. I said the same thing last year. It struck me at the time that what I said did not make the slightest impression on the Chancellor of the Exchequer, but, apparently, it did and perhaps unconsciously, it now appears in his speech.

If it be true that paying for internal debt, whether in the form of interest or of repayment of capital, is only transference from the pocket of one person to the pocket of another, it does throw a rather new light on the Budget statement, because if one looks at the first item of expenditure one finds there is a sum of £345,000,000 paid away in interest, taken out of the pockets of everybody in this country and paid into the pockets of some people. If one looks at the other side one sees that the revenue from Income Tax, including Super-tax, is £410,000,000. It would not be true to say that the whole of the money paid in interest goes into the pockets of those who are paying Income Tax, but it is roughly true to say that some sections from whom we get Income Tax and Inland Revenue are also sections to which we pay the interest on the National Debt. It really means then that the Chancellor of the Exchequer is taking £410,000,000 from a section which is receiving £300,000,000 in the way of in- terest, leaving himself in credit to the tune of £110,000,000. It seems to show, perhaps after all, that the burden of Income Tax not on the individual—for I quite realise there are many individuals who pay heavy Income Tax who do not get any share of the interest—but the burden of Income Tax is rather more apparent than real. What I want to suggest for consideration is this, whether it would not be a proper thing to present this debt service as an item entirely apart, and to allocate some kind of direct taxation for the purpose of raising the money to pay this interest.

I remember a discussion taking place in this House on Capital Levy. It is rather a matter of encouragement to those who favour the principle of a Capital Levy, that the Financial Secretary to the Treasury made one of the best speeches ever made in this House on the subject of its practicability, a speech to which I listened with a great deal of pleasure. The hon. Gentleman, in dealing with the matter to-day, has not dealt with the question whether it is sound or not; he has simply pointed out that even if it be sound it is not appropriate to the present Bill. I say that the people who receive the interest are the people who are finding the money by paying Income Tax, and, if that is so, it would be an advantage to make that clear, and it might remove the whole question of a Capital Levy from debate if that national service fund was taken outside the general Budget and dealt with separately, a special form of direct taxation being ear-marked for the purpose. I am not sure that an extension of the same principle might not be made in regard to Customs and Excise, which produce the enormous sum of £323,000,000 this year. Taking a very rough estimate of the number of people paying it, it would appear that every family in this country, assuming there are 10,000,000 families, is paying at the rate of something like 12s. 6d. a week in indirect taxation towards this revenue. That is a very serious and formidable item in a working class Budget. It has to be borne in mind, when one is considering the question of the reduction of wages, that that burden has to be faced, and I would like to say there is no ground for optimism as to either maintaining or increasing the revenue either from Income Tax or from Customs and Excise in view of the fall in prices and lowering wages. These make the future not at all hopeful.

Then there is the question of the repayment of debt which the Chancellor of the Exchequer also says is a transfer from one pocket to another. There is a surplus on the year's account of something like £84,000,000 which if not encroached upon, although it is very likely to be, will be available for the repayment of capital debt. We have in our revenue system capital taxes producing altogether something like £71,000,000, and the section of the people which finds this £71,000,000 is receiving the £84,000,000. I venture to suggest that in dealing with this question of capital repayment it might be wise to have a new form of capital taxation to meet it, and it should not be outside all possibility to increase the death duties to such an extent that they will provide this Sinking Fund for the repayment of debt. I think considerable advantage would result. Take the question of Customs and Excise. As against the £323,000,000 which the general body of people in this country are paying, they are receiving considerable services from the Government. £63,000,000 is being spent on education, £26,000,000 on old age pensions, £28,000,000 on health, £18,000,000 on the Ministry of Labour—in other words, about £140,000,000 a year is being spent, the direct advantages of which do go to the working classes of this country. In spending that sum, the Chancellor of the Exchequer is really only acting as a kind of agent for the people—paying their teachers and doctors, and so forth. That amounts to about 5s. 6d. a week per family, so that, while they contribute 12s. 6d., they receive 5s. 6d. If these things were made to balance, you might get aroused in this country a proper sense that things have to be paid for, and that if, on the one hand, large sums of money are to be spent on education and the like, the money for them must be found, and can only be found by indirect taxation. I do not wish to dogmatist on the matter, but in that way there might be presented to the people of this country a really clear picture of the national finances.

The hon. and gallant Gentleman who spoke for the Treasury this afternoon received with indignation the suggestion of the right hon. Gentle- man the Member for Chelmsford that the taxable capacity of this country was being exceeded in the present Budget.

I am sure that the hon. Member does not wish to misrepresent me. The only proposition of the right hon. Gentleman the Member for Chelmsford to which I referred was the, proposition that the Income Tax was being paid out of capital, which was a very different proposition.

I apologise if I have to a certain extent misrepresented the hon. and gallant Gentleman. I do not know if he takes up the attitude that it is. conceivable that a large part of the taxation which is now foreshadowed will be paid from capital? If so, that seems to be a rather remarkable attitude for the representative of the Treasury to adopt.

I hope the hon. Member is not suggesting that that proposition is mine. I have spoken no word on the subject this afternoon.

I understood that the hon. and gallant Gentleman did not refute the suggestion that the taxable capacity of the country is being exceeded.

It must not be presumed that I accept all propositions which I have not refuted.

It would be very difficult to obtain from the Government a reasoned refutation of that particular proposition. Hon. Friends of mine and myself endeavoured on a previous occasion to elicit from the Government a reasoned contravention of the proposition that the taxable capacity of the country is being exceeded to-day, and I desire to present once again to the hon. and gallant Gentleman a case which is entertained by, many of the leading bankers of this country—by Mr. McKenna in particular—namely, that the financial proposals advanced in the present Budget do in fact exceed the taxable capacity of the country. I know that it is argued by the Government that it is quite impossible to arrive at any estimate of the taxable capacity of the country. They say that it is impossible for experts in conclave to provide even an approximate estimate of the country's taxable capacity, but I think that it is possible to arrive, at any rate, at an approximate estimate. It is difficult, in the present conditions, in the circumstances of fluctuation which prevail to-day, to calculate from our post-War circumstances what is the country's taxable capacity, but I think it is legitimate to draw an analogy between the pre-War position, where the factors were more certain, and the position to-day, and on that basis I will endeavour to consider certain factors from which the country's taxable capacity may be estimated.

Most hon. Members will accept the proposition that the taxable capacity of a country is represented by the surplus of its production over the consumption of its individuals. Before the War, the annual Budget of this country amounted to some £200,000,000, and the annual savings of the community were estimated at approximately £400,000,000. There was practical accord in regard to that among all economic authorities. That meant that the surplus of production over consumption, before the War, amounted to some £600,000,000 a year. Taking the value of the £ in pre-War days as about two and a third times what it is to-day, and translating that pre-War surplus of production over consumption into present monetary values, we arrive at the figure of £1,400,000,000 as representing our present surplus, if we accept the factors conducing to that surplus as being the same as they were before the War. Many factors, however, enter into the situation to-day which tend in the direction of a decrease rather than an increase of that surplus. To begin with, it is universally recognised to-day that our production is considerably lower than it was before the War. It is usually computed as being about 80 per cent. of our total pre-War production. Again, the consumption of the community has materially increased. The standard of life has been raised—and I think rightly—and the community as a whole are consuming more to-day than they did before the War. Furthermore, our foreign investments, the interest on which provided a very substantial portion of the national income before the War, have vanished, and in place of them we are actually faced with the prospect of paying interest on foreign debt. The rates of the country, too, must be considered before we estimate its taxable capacity. They have doubled as compared with the pre-War standard, and to-day they approach £150,000,000—not far short of the total pre-War Budget. Then we have to consider the increased dislocation of industry—the industrial disturbances which are militating against the recovery of our trade towards its pre-War standard of prosperity; and we have to remember the European conditions, which re-act so unfavourably on trade in this country, in estimating the country's taxable capacity. We must certainly have regard to the fact that many of our pre-War markets are closed, and that, as a consequence, the trade of this country is not in the same condition of prosperity that prevailed before the War. Many factors to-day are all tending towards a reduction in the pre-War standard of surplus of production over consumption which then represented the taxable capacity of the country. If we translate that surplus into the present monetary value and arrive at a sum of £1,400,000,000 we must subtract a very large sum indeed in consideration of those various factors which are all tending to-day towards a reduction of that amount. Considerations such as these led Mr. McKenna, one of the greatest financial authorities in this country to-day, as long ago as June last, when conditions were considerably better than those that prevail to-day, to estimate that the maximum taxable capacity of this country amounted to no more than £1,000,000,000. He went so far as to say that even that amount in taxation would allow no money whatsoever for the annual replenishment of capital which is vital to the progress of industry. If we take the annual savings of the community before the War, which were utilised then in the replenishment of capital, at £400,000,000 and translate that into the present monetary value we arrive at over £900,000,000 a year. Does anybody in this Committee seriously suggest that such a sum as that would be available to-day? Our pre-War surplus of production over consumption, translated into the present monetary values, gives us a sum of £1,400,000,000, and to maintain the same standard of annual capital replenishment as prevailed before the War you must have £900,000,000. That leaves something less than £500,000,000 a year available for taxation.

Such a standard is no longer possible, and that is one of the many reasons which tend to the present lamentable conditions of industry in this country, at a moment when a replenishment of capital for industrial purposes is more vital than ever before. This case was advanced at the beginning of this year by all the leading bankers in this country—Mr. McKenna, Mr. Leaf, Lord Inchcape and others. The Financial Secretary to the Treasury smiles with the superior wisdom that always dictates the attitude of the Treasury towards the City, but after all we are dependent upon these men, who ought to know their job. I do not pretend to know it; I am not dogmatising on this subject, I am merely trying to reiterate some of the views they have expressed at the annual meetings of their shareholders, views which have never been met in this House by reasoned contravention from the Treasury Bench. It is no use the hon. and gallant Gentleman coming here and saying, "The Treasury is doing very well; we have economised over the Estimates of this last year; they are still ruinous, we admit, but still we are doing better." We are face to face with a situation of the utmost danger and difficulty. The great bankers of this country are constantly uttering the opinion that taxes to-day are being paid out of capital and that the nation is living on its capital resources. Of course, the ultimate fate awaiting it is that which awaits an individual who adopts the same ruinous course.

The right hon. Gentleman who introduced the Budget held out great hopes of the re-establishment of Treasury control in the near future. It is fully time that that control was re-established. At present it is virtually non-existent. Only the other day, on the Air Estimates—I am glad to see the right hon. Gentleman the Secretary of State for Air is present—I ventured to raise a case where Treasury control was entirely lacking. It was the case raised in the report of the Comptroller and Auditor-General, a servant of the Government. He said that an expenditure of £3,000 had been sanctioned by the Treasury for the establishment of an air route from Cairo to Cape Town. The next thing that the Treasury heard about the transaction was that £76,000 had been spent without any reference of any sort to the Treasury asking for an increase of that amount. The sum had actually been paid by raising money through local administration according to the report of the Comptroller and Auditor-General, a servant of the Government. To-day Treasury control is absolutely non-existent. During the War, in the exigencies of the situation and in the vast ramifications of the Departments which were constituted to meet that situation, the small Treasury staff created for entirely different purposes, which sufficed Mr. Gladstone in the days of a £150,000,000 Budget, was entirely unable to cope with the position. All the strings of national finance slipped through the fingers of the Treasury and they have never succeeded in re-establishing their control upon our finances.

To-day, perhaps in a less degree, the situation still remains. The Treasury is without effective control upon the great Departments. Instances of the nature which I have just recited abound in the Report I have mentioned, and are constantly being raised by hon. Members. Surely the moment has come when it is vital that some drastic, some root revision of the whole system of national finance should be instituted by the Government. It is really possible to make out a strong case, and one which has never been refuted as yet from the Treasury Bench, and which has been advanced by all the leading bankers in this country, to the effect that the taxable capacity of the community is to-day being exhausted and that as a nation we are living on our capital, while the Treasury, the House of Commons, and the other great checks of the past on a reckless and profligate expenditure of the national finances are reduced to a position of utter impotence by the ramifications of the great Departments. I ask the hon. and gallant Gentleman, if he cannot present some reasoned refutation of the case of the great bankers, to reassure the business community and at the same time hold out some definite hope of a real revision of our national system of finance that will restore the old control of this House over the public purse and constitute some instrument that this House may use for that purpose.

I should like to associate myself with a number of hon. Members in their congratulations to the Financial Secretary to the Treasury on this his first important appearance in his new office. I had a certain opportunity of observing him upstairs in connection with public accounts, and I felt sure when this promotion came to him that he would fully justify the choice that was made of him as Financial Secretary to the Treasury. He has dealt in the most lucid way with all the speeches delivered in the course of the afternoon. I was glad that he discarded entirely all the quack remedies which have been suggested. I regretted that, whilst he did that, there was one part of the Debate which he seemed entirely to evade. I listened to quite a number of speeches in the course of the afternoon, many of which ended up with the observation that after all policy dictated expenditure. My hon. and gallant Friend did not touch upon that ground. What I really rose for was this—the Lord Privy Seal, particularly in his capacity as Chancellor of the Exchequer, has often spoken in this sense. He has said that the House of Commons is at one time a great advocate of economy, but as individuals and in sections it is constantly demanding expenditure. He has repeatedly made appeals to us to make the national financial interest a serious matter of consideration in preference to and above these sectional considerations. We all agree with him about that. But I find that there is a good deal of concern in the country and in this House as to whether the Office of Chancellor of the Exchequer is to-day the powerful office that it was in years gone by. Formerly the acknowledged business of the Chancellor was to sit on the Treasury Chest and prevent calls and claims upon the Treasury. I am very anxious to know what is the position of the Chancellor of the Exchequer in relation to Government proposals on expenditure. There are such expenditures, for instance, as the large amount of money that we have been spending and to some extent are continuing to spend in Mesopotamia. There is the large amount of money that we have been spending and are continuing to spend in Palestine.

These are controversial subjects, and I do not propose to enter into any controversy upon them, but I should like to know whether the Chancellor of the day views these subjects in their financial bearing in connection with the extremely serious financial position of the country. I rather gather that he does not. Surely the time has come, and special circumstances have arisen, when the duties and the powers of the Chancellor of the Exchequer, whoever he may be, should be enlarged, and even on questions of policy he should be asked what will be their bearing on the general financial situation, because after all there is very little use in the Government lecturing us on the need for economy, and there is still less use in us offering the Government our support in a policy of economy, if the Government itself does not adopt a policy which would tend to economy. I realise that any Chancellor of the Exchequer who took the line that his first business was economy might, looking back on the past, have some fear of what happened to a past Chancellor of the Exchequer who, I think, forgot Goschen. We want to-day to have a Chancellor of the Exchequer who trusts the House of Commons, who realises that even against the Cabinet, with a strong case for economy, he would have the support of this House. I am sure if we are to have economy we must first have economy and wisdom in high places. The Government are really the power which can bring the national finances within the national compass. In listening to the Budget speech I had rather the feeling that there was a certain air of artificiality about the whole thing. I had rather the feeling that the Lord Privy Seal was trying to put forward the best case, and trying rather to impress the world with the sound financial position of the country. I set very little store on any impression which any speech can make on the world of finance to-day. Facts alone will impress the world of to-day, and on the whole that Budget speech seemed to me to be widely apart from the real position of the nation at present. Here you have all your great staple industries working at the most two days a week. You make estimates of income based on a normal condition of trade at a time when the condition of trade is absolutely abnormal and depressed. Under all these circumstances we want to have, and must have, a Chancellor of the Exchequer who will return to the conditions of old days when the business of the Chancellor was to prevent his colleagues from entering on a policy which would add to the expenditure of the nation.

There is only one question that is troubling my mind, and only one question that ought to trouble this Chamber. There is nothing in the Budget to meet our case. I was asked by the Labour party to speak on the Budget. It is a matter one could speak about, but I repeat there is only one matter that concerns me. I want, if I can, to convince the House that there is a serious omission in the Budget. I am not going to talk about Income Tax nor tea, nor wines, nor cigars. We have a million and a quarter of our men locked out. This is the blackest time I ever knew in the coal mining industry. It does not matter how clever a man may be at speaking or how eloquent or learned he may be, that will not help us. The county that I represent has been asked to suffer 7s. 6d. a day. Another big coalfield has been asked to suffer something like 11s. 7d. a day. Some coalfields have been asked to suffer 3s. 9d. a day. It is unthinkable. It is because the money is not in the coalfields. It is said we are £79,000,000 short. The general average reduction asked in Britain is 4s. 1d. a day from every portion of the employed, men and boys, in the mines. This Chamber ought not to have a smile on its face. It is too serious. Any man or body of men who can solve this question ought to have their names written in letters of gold. Who is going to bring us together? We meet again to-morrow. If the coal-owners forego £18,000,000 we are prepared to forego our share, and the Government will have to unloosen the purse-strings. Who do the Government represent? The Government represent the people of this country. It is a well-known fact that the policy of the Government during the last four years lessened the coal bill by £758,000,000. I want to speak to the Government, through the Leader of the House. You are killing the goose that lays the golden egg. Every day the pits are idle we save five human lives. The right hon. Baronet the Member for the City of London (Sir F. Banbury) talks about economising. I suppose it would be cheaper for me to go without boots than have any boots, but that would not last long, because my health would give way. It would be cheaper for me to have one suit of clothes, but it is better to have two. That is false economy, and it is false economy to withhold a subsidy for helping on the coal industry in this great difficulty. You are not only killing the industry but you are killing the cognate industries. It is the Government that is doing it. [HON. MEMBERS: "No, it is you!"]

The hon. Member is entitled to use these illustrations for the purpose of the discussion on the Budget Resolution, and, in so far as they apply to the Resolution, he is in order, but we must not get into a discussion on the general industrial position of the country.

I am amenable to your ruling. My sole purpose in rising was to appeal to the Leader of the House. Every day the pits are closed down the position gets worse. You would increase the revenue of the country if the pits were working, and I think that after the splendid sum of money which you have got from the mines of this country you ought to put your hands deep down into your pockets to-morrow. [ Laughter. ] It is all very well for hon. Members to laugh, but those who laugh last laugh best. I sincerely hope that the Government will help the miners and the owners to raise the £79,000,000 in order to put the industry on its feet again.

I think the Committee sympathises with and appreciates the gloom in the mind of the hon. Member who has just spoken, and I think we share it; but we could hardly have a discussion on the coal dispute in connection with the Budget, although there is one material point of substance, and that is that the dispute does re-act on the figures of the Budget, and the longer the dispute exists, to that extent do the figures of the Budget become less accurate. I should like to associate myself with the compliments which have been paid to the Financial Secretary to the Treasury. It was a pure delight to hear his speech. I did not agree with all of it. I remember speeches from the other side when his spectacles were not quite of as rosy a colour. The Financial Secretary either did not understand or hardly appreciated the weight of the argument of the right hon. Member for Chelmsford (Mr. Pretyman). The right hon. Member was speaking about land, and said that it was quite conceivable that taxes had gone beyond income, and would have to be paid out of capital. I believe that is true. I believe that so far as land is concerned it is quite conceivable that the revenue out of the land is less than the taxation on the land. I will give a concrete example. I am the unlucky possessor of some land. I will offer that land to the Financial Secretary to the Treasury if he will pay the taxes and gamble on any profits there may be after the taxes are paid. If I am right, to that extent the right hon. Member for Chelmsford was right. The Financial Secretary quoted a phrase of Butler's that things are as they are, and the consequences will be what they will be. That is a very wise saying. I wish it had been the slogan at the election of 1918. I wish that at the time we went into that election we had adopted that maxim instead of the wild promises that were made. I can only hope that the Financial Secretary will instil that maxim into his colleagues.

We have been asked for helpful criticism, and I should like to make one criticism that may be helpful if it has not already been made. I hope the Chancellor of the Exchequer will resist the pressure which is always made inside the House for reforms or schemes which involve further levies and further taxation. It is a very difficult thing to resist. During the last hour, while we have been talking economy, one or two or three suggestions have been made not for economy but for schemes involving further taxation. I admit that that is one of the main difficulties. The pressure does not come from the innumerable Members of the Government alone. It comes from outside, and for every economist you can find two people who have some panaceas in their pocket which would commit the Treasury to further expenditure. One further suggestion, if the Financial Secretary can get the ear of the Chancellor of the Exchequer. There should be some attempt to ration the different Departments. Unless you do so I see he hope for economy. It is all very well to say that the different Departments have been invited to put in curtailed Estimates for next year. They were invited in 1918, 1919, and 1920, and now they are invited again. They find it very difficult, to do so. There is not a single head of a Department whose geese are not all swans. It is futile to expect cutting of expenditure unless in some way you ration the expenditure. I shall have many opportunities probably of speaking in detail about the items in the Budget. I should like to associate myself with what one hon. Member said. I think that the Treasury is simply gambling in forecasting Customs and Excise at only £10,000,000 less this year. Prices are falling, exports in this country are going to be much less and imports are going to be barred with all sorts of fanciful restrictions and tariffs. How in the name of Heaven you can expect Customs and Excise in those conditions to be within £10,000,000 of last year I do not know. [ Interruption. ] That is not the way to put a man down. I shall resume my seat if let alone, but I inherit some qualities which prevent me from being put down by barkings from the other side. I think that the Estimates are fanciful, I think that they will not be realised or that they can only be realised if you do not yield to the suggestions of Members with panaceas in their pocket and if you ration your Department.

Question put, and agreed to.

Resolution to be reported To-morrow; Committee to sit again To-morrow.

Adjournment

Resolved, "That this House do now adjourn."—[ Colonel Leslie Wilson. ]

Adjourned accordingly at Ten o'clock.

All the Members present filed past the Chair, and bade "Good-bye" to Mr. Speaker.