House of Commons
Monday, May 14, 1923
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
Private Business
Ebbw Vale Urban District Council Bill, Lords Amendments, considered and agreed to.
Mersey Docks and Harbour Board Bill, Nottingham Corporation Bill,
Read the Third time, and passed.
Thornton Urban District Council Bill— ( King's Consent signified ),
Bill read the Third time, and passed.
City and South London Railway Bill, As amended, considered; to be read the Third time.
River Wear Watch Bill [ Lords ],
Read a Second time, and committed.
Oral Answers to Questions
India
Finance Act, 1923
asked the Secretary of State for India, how soon the Indian Finance Act, 1923, will be laid upon the Table?
I hope that the Papers will be laid on the Table and copies available for distribution within a few days.
Murders, Khyber Pass
asked the Under-Secretary of State for India whether he can state the steps that have been taken to apprehend the murderers of Mrs. Ellis and the two officers recently killed on the Khyber Pass; and how far have these efforts been successful?
The supposed murderers are in both cases outside British administered territory. In the Kohat case, tribal pressure was brought to bear at the earliest possible moment, and it was reported some time ago that the guilty parties and their associates had already been attacked, and had suffered some casualties. In the Landi Kotal case there is reason to think that the murderers have sought refuge in Afghanistan, and the British Minister at Kabul has taken the matter up with the Afghan Government. I have no doubt that every possible step is being taken to bring the guilty parties to justice as speedily as possible.
Raids, Islamkot
asked the Under-Secretary of State for India whether he is aware that the residents of Islamkot (Taluka, Mithi, District Ihar and Parkar, Sindh) have petitioned His Excellency the Governor of Bombay for immedite and adequate protection against the frequent and unchecked raids of the dacoits upon their territory and property; whether he is aware that these unarmed people live in constant terror of plunder and violence; and whether he will communicate with the Governor of Bombay, or other appropriate authority, with a view to giving the protection asked for?
I have seen no reports upon this matter. If, as the question states, it has been brought to the notice of the Governor, the hon. Member may be sure that the steps that are necessary and practicable have been taken.
Will the Noble Lord wire to the Government of Bombay and see if any action can be taken?
I rather deprecate sending a wire, which would mean considerable cost to us and to the Government of India, but if the hon. Member wishes a wire sent I will consult my Noble Friend the Secretary of State.
Has the Noble Lord not seen the petition about this particular question?
I have seen a petition which has been sent round to Members of this House, but that petition, I think, relates to events which took place some time ago.
Is it not the case that the Legislative Council have done their best to cut down the police forces in India, despite all protests, and that it is to their action in this matter that the people referred to are deprived of the protection now asked for?
That hardly arises out of the question.
Army Units (Indianisation)
asked the Under-Secretary of State for India how the new scheme for the Indianisation of certain units in the Indian Army is progressing; whether volunteers are coming forward; and how many applications he has already received?
I regret that the information for which my hon. and gallant Friend asks is not available. The Indianisation of eight units of the Indian Army was announced as recently as 17th February, and while the measures taken will be watched with the greatest interest, I venture to hope that results will be awaited without impatience.
Colonial Medical Practice
asked the Under-Secretary of State for the Colonies in which Colonies it has recently been considered necessary to amend the Ordinances regulating medical practice in order to enable persons not holding qualifications registerable in the United Kingdom to practice medicine; and whether this modification of the standard required for registration or licensing of medical practice has the approval of the Secretary of State for the Colonies?
The only three Colonies in question (including Dependencies) are British Honduras, Turks Islands, and St. Vincent. His Majesty has not been advised to disallow the Ordinances in question, but in two of the three cases the Governor has been instructed not to use the power conferred upon him without previous reference to the Secretary of State, except in emergency. The Secretary of State attaches great importance to the maintenace of a high standard of professional qualification in the Colonies, but he recognises that there may be circumstances in which rigid adherence to the rules in force in the United Kingdom are impracticable in some of the poorer or less developed communities.
Government Departments
Colonial Office (Communications)
asked the Under-Secretary of State for the Colonies what steps are taken by the Colonial Office to ensure that communications addressed to the Secretary of State through the ordinary official channels shall not be subjected to an unreasonable delay locally before transmission to him?
The Colonial Regulations require Governors to forward communications addressed to the Secretary of State with all reasonable despatch, together with such report as their contents may appear to require. If a Governor failed to comply with this requirement, his attention would be drawn to the Regulation.
If communication takes place for nine months, and no reply is received, what is the practical effect of any such recommendation?
I should be glad to have particulars of any such rather unaccountable delay.
Prime Minister (Secretariat)
asked the Prime Minister if he will state what are the numbers of the personal secretariat of the Prime Minister and the cost thereof to the public Exchequer; and how the numbers and charge compare with those in 1913 and in 1922?
As the answer is in tabulated form, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
Following is the answer:
The total staff borne on public funds during the years mentioned, including clerks and typists, and the cost to the public Exchequer, are as follows:
In 1913, four, costing at the rate of £1,017 a year.
In 1922, for the first quarter, 20, costing at the rate of £9,318 a year; subsequently reduced to 13, costing at the rate of £6,024 a year.
In 1923, 11, costing at the rate of £5,283 a year.
Cabinet Secretariat
asked the Prime Minister what is the total staff of the Cabinet secretariat and the cost thereof to the public Exchequer; and how the numbers and cost compare with 1918 and 1922?
With the hon. Member's permission, I will circulate the reply in the OFFICIAL REPORT.
Following is the answer:
The Cabinet secretariat with the Committee of Imperial Defence constitutes for staff purposes a single unit. The total staff and cost at the present time and at the corresponding dates in 1918 and 1922 are as follows: —
Total staff. Cost. £ 1918 98 19,600 1922 137 36,800 1923 38 15,750
The historical section of the Committee of Imperial Defence, which is a separate entity, is excluded throughout.
Iraq (Constituent Assemblyelections)
asked the Under-Secretary of State for the Colonies when the elections for the constituent assembly of Iraq will be held; whether a bull has been issued forbidding Shiahs to vote; and whether the protocol signed between the British and Iraq Governments must be ratified by the constituent assembly before becoming effective?
For the first and last parts of the question I would refer the hon. and gallant Member to the answer given by my right hon. Friend the Chancellor of the Exchequer to the hon. and gallant Member for Hull on the 9th May. A fatwa was issued on the 8th Novmeber, 1922, by three Shiah divines to the effect that participation in the elections was unlawful. One of the three signatories qualified this prohibition by adding the words "at the present moment." The hon. and gallant Member will observe that the fatwa was issued some months before the recent declaration of policy by the British and Iraq Governments.
Can the hon. Gentleman say whether the Constituent Assembly will be held within a reasonable time, and, if not, what becomes of the Treaty and our position?
The Treaty has been agreed to by the Iraq Government and ourselves. We shall act under the new Protocol as the declared policy of the British Government. The Assembly will meet when it can.
Is it not the fact that the Protocol has to be ratified by the Constituent Assembly? If the Assembly never meets, as seems to be likely, what will happen to us?
We shall not be asked to ratify until they ratify. We shall carry on.
In that case, the safeguard of evacuation in four years' disappears, and we shall remain longer?
No. The pervious Treaty, fixing 20 years, has not been ratified. The hon. Member completely misunderstands the position.
West Indies (Yaws Disease)
asked the Under-Secretary of State for the Colonies what payment has been made to the medical officers in the West Indian Colonies who have carried out treatment of yaws on an intensive system during the past four years; and what saving to the revenue has been effected by closing the hospital in Granada, owing to the success of this treatment?
The Medical Officers in Grenada undertook to perform this work without additional remuneration; but as the Committee appointed to inquire into the Windward Islands Medical Service have recommended that some special allowance should be granted, the matter, together with the other recommendations of the Committee, is receiving consideration. The Yaws Hospital was closed at the end of 1921. The cost in that year was £902; but as a certain amount of treatment is still being carried out, I am unable to say what proportion of this sum represents a saving.
Is "Yaws" a disease or a people?
A disease.
Land Settlement (Rhodesia)
13 and 14.
asked the Under-Secretary of State for the Colonies (1) whether there are any Crown lands reserved in Rhodesia or whether they all belong to the British South Africa Company; if the latter, does he propose to take any steps to meet the needs of Rhodesian ex-soldiers in the direction of land settlement;
(2) whether he has had any official request from the British Empire Service League, Bulawayo, Rhodesia, that ex-service men now residing in Rhodesia should have an opportunity of a land settlement scheme on similar terms to those which have been given in other Dominions and Crown Colonies?
Although the unalienated lands in Southern Rhodesia belong to the Crown, the disposal of the lands rests with the British South Africa Company so long as it continues to administer the territory, and the company is entitled, under the Privy Council judgment, to look to the proceeds of these lands for the reimbursement of its past administrative deficits. The company after the War set apart 500,000 acres of land (half in Southern and half in Northern Rhodesia) for the purpose of making free grants to ex-service men from this country or elsewhere overseas, but the scheme did not extend to returned Rhodesian soldiers, as the company came to the conclusion that there were administrative difficulties which made this impossible. Representations on this point were received subsequently from branches of the Comrades of the Great War in Southern Rhodesia, but the company did not feel able to alter their decision.
Will the hon. Gentleman re-open the matter and see whether, in view of the great anxiety displayed in Rhodesia by ex-service men, some method of settling these ex-service men on the land could not be arrived at?
At the present time we have no power. These lands are under the control of the British South Africa Company, and the Secretary of State has no power of interference. When the chartered company's administration terminates it will be a matter for the responsible Government of Southern Rhodesia.
If representations are made, would it not be possible to get the British South Africa Company to reconsider the matter?
I would advise my hon. Friend to make representations to the British South Africa Company.
African Colonies (Pensionrules)
asked the Under-Secretary of State for the Colonies whether an amendment of the pension rules is contemplated to cover the case of transfer of an officer from a West African to an East African Colony, so that the pension may be calculated solely on the basis of the total number of years served and the emoluments of the office held at the time of retiring?
A proposal for dealing with pensions for service in different Colonies is under active consideration. The possibility of devising an arrangement which will, as between West and East African Colonies, have substantially the effect indicated by the hon. Member is not excluded.
Kenya
Land (Alienation)
asked the Under-Secretary of State for the Colonies whether His Majesty's Government have taken steps to alienate lands in the low lands of Kenya; and whether, seeing that this proposal, if carried out, is a contravention of definite written pledges by both the local government and by Mr. Churchill, the Government will delay action in the matter until the question has been further examined?
The answer to the first part of the question is in the negative. With regard to the second part, the Acting-Governor has reported that no action in the direction of alienating land in the lowlands will be taken without the permission of the Secretary of State. It is understood that he is reporting on the matter by mail.
Taxation and Education
asked the Under-Secretary of State for the Colonies the amount raised by taxation in Kenya Colony during each of the last two years for which accounts have been received; and the expenditure on education of the native races of the colony during each of those years?
For the year 1920–21 the general taxation amounted to £1,257,242, and the expenditure on native education to £10,931. For the next financial period, namely, the nine months ended the 31st of December, 1921, the figures were £896,567 and £21,029.
How much of that taxation is paid by the natives?
A very considerable proportion.
22 and 23.
asked the Under-Secretary of State for the Colonies, (1) the area of Crown lands in Kenya Colony still remaining in Government ownership; whether it is intended to alienate these lands; if so, on what conditions;
(2) the area of Crown lands in Kenya Colony hitherto alienated to individuals; the number of grants made; the number of individuals who have benefited by these grants; and the conditions under which the grants have been made?
I regret that I have not the information necessary to answer the hon. Member's two questions, but inquiry will be made of the Acting Governor of the Colony, and I will communicate with the hon. Member as soon as a reply has been received.
Tanganyika
Government Departments
asked the Under-Secretary of State for the Colonies the cost of the under-mentioned departments of Tanganyika territory in the years 1919–20 and 1920–21; His Excellency the Governor, secretariat, printing office, district administration, treasury, customs, legal department, police and prisons, and railways?
As the answer is necessarily in tabular form, and contains a great many figures, I will, with the hon. Member's permission, circulate the answer in the OFFICIAL REPORT.
Following is the answer:
1919–20. 1920–21. £ £ The Governor 7,432 11,989 Secretariat 6,857 12,879 Printing and Stationery 3,895 13,606 District Administration 107,014 167,294 Treasury 6,716 13,028 Customs 9,865 22,995 Legal Department 2,556 13,338 Police and Prisons 59,565 108,751 Railways (Ordinary) 262,240 349,611 Railways (Extraordinary) 16,351 49,356
In explanation of these figures, it may be stated that the Civil Administration of the Tanganyika Territory was not placed on a regular basis until the latter part of the year 1919–1920, after the signature of the Treaty of Versailles. Until the decision to place the country under British Mandate was taken, only a provisional organisation was in existence, and the arrangements for providing the whole machinery of government for this large territory took a considerable time to carry out.
Government House
asked the Under-Secretary of State for the Colonies what was the actual cost of the Governor's palace at Dar-es-Salaam, including fixtures and furniture supplied by the Government; and if a zoo is now being added thereto?
asked the Under-Secretary of State for the Colonies what was the actual cost of the Governor's palace at Tanganyika, including new furniture and fittings: whether a zoological collection is now being formed; and, if so, at what cost and at whose expense?
As regards the cost of Government House at Dar-es-Salaam, I would refer to the reply which was given on the 7th of May to the hon. Member for Wells. The sum of £54,000 is understood to include the cost of the building (the ground floor of which is devoted to Government offices) and fittings. The cost of furniture was £3,000. I have no information regarding a zoological collection, except that no money has been provided for such a pur- pose from the funds of the Tanganyika Territory.
Is not the figure given a mere estimate of the cost of this palace? Could we not have the actual figure of what it has cost?
It is very improper to describe it as a palace. It is a Government office. Most of the buildings are nearly completed, but not quite. The payment is spread over three years. This is the last year, and the exact amount will not be known until the end of the period referred to.
Steamship "Lord Milner."
asked the Under-Secretary of State for the Colonies whether the ss. "Lord Milner" is kept primarily for the use of the Governor of Tanganyika Territory; whether, when not required by him, a special suite on her is kept locked, with the result that passengers who are willing to pay first-class passages cannot be carried; and whether the cost of this is borne on public funds?
asked the Under-Secretary of State for the Colonies whether he is aware that a special train was constructed last year for use on the Central Railway, Tanganyika, exclusively for, the Governor and, if so, at what cost; that the steam yacht "Lord Milner" is primarily reserved for His Excellency the Governor to the exclusion of other passengers; and will he consider the advisability of discontinuing such expenditure at present?
No special train has been constructed for the special use of the Governor of the Tanganyika Territory. The s.s. "Lord Milner" is a Tanganyika Government vessel employed in carrying mails, cargo and passengers between the coast ports of the Territory. It is only occasionally used by the Governor, and I have no evidence or reason to suppose that the ship has been utilized by him to the exclusion of other passengers.
In the interests of the mandated territory, is there any reason why the Governor should not use the ship?
It is necessary when he is visiting different parts of the Colony that he should use the ship, as it is the only means of getting to certain parts of the Colony.
Is there any reason why special accommodation should be reserved to the exclusion of other passengers when the Governor is not on board the ship?
No, but when he has occasion to use the ship it is necessary that the Governor should have the right to this accommodation.
Revenue and Expenditure
asked the Under-Secretary of State for the Colonies what is the actual aggregate expenditure in Tanganyika for the years 1918–19 to 1922–23, inclusive, and the revenue for the same period?
The aggregate figures for the five years in question are as follow: —
Will the hon. Gentleman tell the House what benefit the British taxpayer may expect from the extraordinary difference between the expenditure and revenue?
We shall have established good government, and we shall have discharged our national obligations as the mandatory Power under the League of Nations.
Is the hon. Gentleman aware that the nation has an obligation towards the people resident in this country?
That is constantly borne in mind. We are endeavouring to carry on this trust for the government of 4,000,000 natives in a in a large and difficult country with the utmost economy that is consistent with decent administration.
Nigeria (Liquor Tradecommission)
asked the Under-Secretary of State for the Colonies if he will state what was the cost of the Commission of Inquiry into the liquor trade in Nigeria in 1909; and whether this fell, either in whole or in part, upon the Colony of Nigeria or upon the Mother Country?
The cost of the Committee of Inquiry was borne partly by the Colonial Services Vote and partly by the Southern Nigeria Government. The amount charged to the Colonial Services Vote was £460 3s. l0d. I am not aware how much the Committee cost the Southern Nigeria Government. In addition to the cost of the Committee itself, expenditure on printing the Report and Evidence was incurred. This was borne by the Stationery Office.
Empire Settlement
asked the Under-Secretary of State for the Colonies whether he is aware that, under the Government-assisted scheme of emigration for boys to Australia, no adequate system of supervision exists whereby an independent and sympathetic welfare officer visits the lads from time to time, giving them advice and necessary assistance, and generally acting in loco parentis; and whether he will arrange with the Commonwealth or the various State Governments for the introduction of a scheme similar to that which obtains in Canada whereby every juvenile immigrant is visited, advised, and reported upon to the home authorities at regular intervals?
I have been asked to take this question. I am in complete agreement with the hon. Member as to the importance of supervising the welfare of lads and indeed of all land settlers who have received Government assistance to proceed to Australia. The question how far the existing system of supervision is adequate and in what respects, whether by the appointment of special welfare officers or otherwise, it requires improvement will be considered by the delegation from the Oversea Settlement Committee, which has now arrived in Australia, in consultation with the local authorities.
Is the hon. Gentleman aware that these lads are met on the landing stage, welcomed, and taken to a hospital for rest and refreshment, and are subsequently sent into training, and thereafter all official connection with and supervision of them ceases for good?
That is not in accordance with my information.
Will the hon. and gallant Gentleman give special instructions to the delegation in Australia to give special attention to this particular matter?
That is one of the terms of reference to the delegation.
Is the hon. and gallant Gentleman aware that there are men in Australia who look after these boys extremely well?
asked the Under-Secretary of State for the Colonies if he is aware that there is a steady and increasing return flow of emigrants back to this country from Australia; that Mr. Hughes, the late Premier, recently commented publicly on the number of persons he had observed on departing boats; that the immigration department of the Commonwealth Government has failed or refused to publish definite statistics as to what has become of immigrants, as to how many have gone on to the land, how many have flocked to the cities, how many have migrated from the country to the towns, and how many have left Australia; that the recent electoral redistribution on a population basis showed an increase in the city constituencies and a decrease in rural areas; and that the latest available figures, published in December, 1922, showed that while 87,938 immigrants arrived in Australia in 1921, no less than 72,422 returned to this country; and whether he will issue a warning that none but men accustomed to agricultural work and prepared for a life of hardship should contemplate emigrating under present conditions?
The hon. Member's question is based on a misapprehension, and I, therefore, do not deal with it in detail. The figures which he quotes relate to emigration and immigration between Australia and all other countries, including foreign countries. The Board of Trade returns for 1921 show that in that year 27,751 British subjects migrated to Australia from the United Kingdom with a view to permanent residence in the Commonwealth, whilst 8,861 came from Australia to this country. Careful inquiries show that the majority of those who return from Australia do so for the purpose of temporary visits.
Is not the last line of the question, to one who knows Australia, hopelessly misleading and incorrect?
Irish Free State
Malicious Injuries (Compensation)
asked the Under-Secretary of State for the Colonies whether he is aware that Mr. Travers R. Blackley, under-sheriff of County Cavan and a Southern Irish loyalist, was murderously attacked at his residence near Cavan on the night of 8th April, 1922; that he succeeded in driving off his assailants, and that this gentleman has consequently been obliged to leave Ireland and relinquish his business, in respect of which he has not received any compensation; and whether, in this and similar cases, the British Government intend to use their influence with the Government of the Irish Free State in order that their injuries shall be included in the Damage to Property Compensation Bill?
I understand that the facts of this case are generally as stated in the first part of the question, but that arrangements are being made by the Free State Government which it is hoped will secure the continuance of the payment of Mr. Blackley's salary as under-sheriff. I regret that any other losses arising out of Mr. Blackley being compelled to leave Ireland are not such as lie within the scope of the Damage to Property Compensation Bill.
Is it not a fact that this man, when gallantly defending his home, killed two of his assailants and had to leave the country, and can we allow him to starve?
I gather that he has been already helped substantially by the Free State Government.
27 and 28.
asked the Under-Secretary of State for the Colonies (1) if he is aware that persons resident in England who have received awards from the Irish Compensation Commission for substantial sums have, on applying to the Irish Grants Committee for advances over £1,000, been refused; what steps the Government intend to take to enable these people to get a more substantial advance pending their payment from the Free State Government;
(2) whether, in view of the fact that some of those who hold awards from the Irish Compensation Commission in respect of injuries to property suffered more than three years ago, and with whom the Free State Government are unable at present to settle, are urgently in need of obtaining an immediate advance on a portion of their award, and also to the fact that these awards carry interest at 5 per cent., he will consult the British Treasury as to advancing a substantial portion of the award, and charging the holder of the award 5 per cent, interest until the total award is met by the Free State Government?
The Irish Grants Committee is empowered to recommend such advances in the cases referred to as the circumstances of each case appear to warrant, and the terms of reference to the Committee impose no restriction upon the amount of the advances they may recommend on these awards. These arrangements were intended to mitigate the hardship arising out of the unavoidable delay in the payment of compensation, and my Noble Friend is not aware that these arrangements are in fact proving inadequate.
Will the hon. Gentleman answer the latter part of the question?
That question does not come within the province of the Colonial Office. It is entirely a matter for the Chancellor of the Exchequer.
Status and Flag
asked the Prime Minister whether, in view of the establishment of the Irish Free State as a Dominion, and in order to avoid a confused state of mind in His Majesty's subjects, the Government will introduce legislation prescribing a corrected designa- tion of the State as at present comprised, with appropriate alterations in the design of the Union Jack, assigning to Ireland her legal and constitutional status as a Dominion and a Free State?
I have been asked to answer this question. His Majesty's Government are not aware of any sufficient reason for the changes proposed by the hon. Member.
Fiji (Legislative Council)
asked the Under-Secretary of State for the Colonies whether he will make a statement as to what comment there has been from the elected members in Fiji regarding the reply of the Secretary of State to the recent situation in the Legislative Council?
The Governor has forwarded a further communication from elected members, which reached the Colonial Office on Saturday, and will receive consideration forthwith.
May we know at an early date what the communication is?
It is one of the longest telegrams I have ever seen, and it will require consideration. If my hon. and gallant Friend will later consult with me, I will endeavour to meet his wishes.
Russia
British Trawlers (Seizure)
asked the Under-Secretary of State for Foreign Affairs whether he has any information regarding the position of the officers and men of the "James Johnson"; whether he has any further information regarding the ship herself; whether the British Note to the Soviet Government has been received by them and, if so, whether he can give the terms of the Note; and whether any time limit is attached to it for a reply?
I have good reason to hope that the master and crew of the "James Johnson," with the vessel herself, will be allowed to return to this country very shortly. In answer to the second part of the question, I would refer the Noble Lord to Command Paper No. 1869, which was laid upon the Table last week.
Is it a fact that the ship and crew are to be released only on payment of a sum of money? Is that payment to be made?
Is it not the case that the "James Johnson's" captain and crew are already well on their way home and that the vessel is to be released when a small sum is paid?
I cannot say whether or not that information is strictly accurate.
Does His Majesty's Government propose to recognise the payment of this sum of money to piratical people?
I would rather not answer a question of that sort at this moment.
Is the hon. Gentleman prepared to take similar steps with hon. Members of this House who break the law?
asked the Under-Secretary of State for Foreign Affairs whether he has any further information with regard to the arrest of the steam trawler "Lord Astor" by the Russians and as to the fate and safety of the crew, and as to the result of the steps which the Government are taking in the matter?
I have good reason to hope that the "Lord Astor" and her master and crew will be allowed to return to this country very shortly.
Would the hon. Gentleman assure us that the case of the "St. Hubert," which was a vessel captured before the "James Johnson," and also compensation for the "Magneto," will not be lost sight of by the Government?
Certainly, I will give that assurance.
Is there any payment to be made in these cases?
I cannot say that.
British Property (Confiscation)
asked the Under-Secretary of State for Foreign Affairs what action has been taken since the conferences at the Hague and Genoa to secure the recognition of the rights of or effective compensation to British nationals in respect of property confiscated by the Soviet Government; whether he proposes to take any further steps; and whether, failing any satisfactory settlement, the sufferers from Soviet legislation may look to His Majesty's Government for compensation?
I have frequently stated that His Majesty's Government intend to pursue British claims against Russia by all the means open to them. I cannot usefully say more at this critical moment. The reply to the last parts of the question is in the negative.
asked the Under-Secretary of State for Foreign Affairs whether, in view of the repeated statements of His Majesty's Government that recognition of the Soviet Government must be preceded by recognition of debt and return of properties or payment of effective compensation to British nationals dispossessed by Soviet legislation, the Government will consider fixing a time limit within which the Soviet Government must comply with these conditions; and whether he will consider the advisability of making the continuance of the Anglo-Russian trade agreement dependent upon the acceptance of and performance within a stated period of those conditions?
asked the Under-Secretary of State for Foreign Affairs whether, in view of the Note recently sent to the Soviet Government, and bearing in mind the losses sustained by British nationals as a result of the Soviet revolution, His Majesty's Government will make the payment of adequate compensation for such losses a direct issue with the Soviet Government; and whether, in the event of no satisfactory steps being taken by the Soviet to settle this matter, His Majesty's Government will itself accept responsibility for such compensation, and make subsequent arrangements to recover the amounts from the Soviet Government under the terms of the final Treaty of Peace, as foreshadowed in the Trade Agreement?
I do not think the objects which these questions contemplate would be secured by adopting the course suggested. The reply to the second part of No. 37 is in the negative.
Can my hon. Friend state any alternative course which would have that effect?
That will be debated before long.
asked the Under-Secretary of State for Foreign Affairs whether His Majesty's Government will consider the granting of advances to companies and persons suffering from the action of the Soviet Government in confiscating their property, such advances being secured upon the claims against the Russian Government for losses through confiscation of property which have been lodged with the Foreign Claims Department?
The answer is in the negative.
asked the Under-Secretary of State for Foreign Affairs whether, in view of the judgment given in the Sagor and Kenesta appeal case, His Majesty's Government propose to take any steps for altering the law whereby goods confiscated from British nationals can be legally dealt with by the Soviet Government in this country; and whether in any prolongation of the Russian Trade Agreement the rights of owners of such goods will be protected?
His Majesty's Government have come to no decision on either of the points raised in the question.
asked the Under-Secretary of State for Foreign Affairs whether, in view of the fact that His Majesty's Government, through their representatives, agreed with the representatives of the non-Russian Powers at the final plenary session at The Hague on 20th July, 1922, that they would not assist the acquisition by their nationals of the property of foreign nationals confiscated since 1st November, 1917, and that this recommendation was subsequently made by the Governments represented at The Hague to all Governments not so represented, he will say whether any decision was arrived at jointly with those Governments?
The answer is in the negative.
Soviet Government (Recognition)
asked the Under-Secretary of State for Foreign Affairs which States have recognised the Russian Government de facto and de jure, respectively?
So far as His Majesty's Government are aware, the following countries have extended de jure recognition to the Soviet Government:
Afghanistan,
Esthonia,
Finland,
Germany,
Latvia,
Lithuania,
Persia,
Poland,
Turkey (Government of the Grand National Assembly).
De facto recognition is understood to have been given by the following countries, in addition to Great Britain:
Austria,
Czecho-Slovakia,
Denmark,
Italy,
Norway.
Territorial Waters
asked the Under-Secretary of State for Foreign Affairs whether a reply has been received from the Russian Government on the question of fishing in territorial waters in answer to our previous note (that is the note before the most recent one); what is the nature of this reply; and whether it will be laid before Parliament forthwith?
His Majesty's Government still await the Soviet reply, of which they have, up to the present, received only a telegraphic summary. The remainder of the question does not, therefore, arise.
May we have the telegraphic summary on this question, which affects my constituency?
A telegraphic summary is always subject to a certain amount of inaccuracy. I think it would be much better to wait until we get the whole reply.
May I ask whether, in the course of negotiations with the Russian Government, the hon. Gentleman will remind them that while Soviet trawlers can trawl in the Moray Firth, near the three-mile limit, our trawlers cannot, and that our trawlers are not allowed to get within 13 miles of the Russian coast?
Perhaps my right hon. Friend will take an opportunity of bringing that before the House to-morrow.
China (Loans)
asked the Under-Secretary of State for Foreign Affairs whether he can state what the attitude is of His Majesy's Government towards the recent request of the Chinese Government to the Consortium for advances to meet current expenditure; and whether His Majesty's Government is prepared to make a general announcement of policy with respect to new Chinese loan obligations?
His Majesty's Government have been unable to support the request made by the Chinese Government to the Corsortium representatives in Peking. The declared policy of the Consortium has always been not to grant loans for administrative purposes except to a unified China, and the present moment seems inopportune for modifying this policy. The situation in China is too uncertain to permit of any rigid declaration of policy in regard to future loans; but, in general, His Majesty's Government would not favour any proposals for the creation of fresh obligations until effective steps have been taken towards the consolidation of existing unsecured or inadequately secured obligations and the provision of suitable security for that purpose. The four banking groups which constitute the Consortium are, with the approval of their respective governments, about to examine the question of the consolidation of these obligations.
Liquor Regulations (Unitedstates)
asked the Under-Secretary of State for Foreign Affairs in view of the recent legislation passed by the state of New York repealing the prohibition law in that State, if he has any information as to the present attitude of the United States of America with regard to the carrying of alcoholic beverages on the high seas outside the territorial waters of the United States of America?
I have not yet received the full text of the Supreme Court's decision, but I understand that it laid down that the prohibition amendment does not preclude United States ships from carrying liquor outside territorial waters. I am unable to say what action the United States Government intend to take in pursuance of this ruling.
Can the hon. Gentleman say what are territorial waters in this connection?
The three-mile limit has been accepted by the United States Government.
Lausanne Conference
Murder of M. Varovski
asked the Under-Secretary of State for Foreign Affairs whether he has received any information about the reported murder of Monsieur Varovski, the head of the Russian Trade Delegation to Italy, at Lausanne, and the attempted murder of two of his staff; and whether the effect of this crime on public opinion in Russia will be taken into consideration in our immediate negotiations with the Government of Russia?
Sir Horace Rumbold's report of this abominable crime confirms the main facts reported in the newspaper. The reply to the second part of the question is in the affirmative.
Can the hon. Gentleman say why no public expression of regret was made to the colleagues of this gentleman after the murder?
Is it in order for the time of this House to be wasted in discussing the murder of one Russian by another Russian in Switzerland?
That is not a point of Order. The supplementary question seems to raise a new matter, and it had better be put on the Paper.
asked the Under-Secretary of State for Foreign Affairs whether, in view of the murder of the chief representative of the Russian Government at Lausanne, he can say if he has received information showing whether the protection accorded to the delegates of other States at the Conference was withheld from the delegates of the Russian Government?
I have received no information on this subject.
Will the British representatives express the regret of this country; in conformity with the action of the Italian Government and other Governments? [HON. MEMBERS: "Why?" and "Why not?"]
I do not know to what action the hon. Member is referring.
Straits Convention
asked the Under-Secretary of State for Foreign Affairs whether the secretariat of the Conference at Lausanne informed the Russian Government that its delegates would not be admitted unless it agreed to sign the Straits Convention drawn up by the Allies?
The Secretary-General of the Lausanne Conference, acting on the instructions of the inviting Powers, informed M. Vorovski on 12th April that, since the Turkish Government had accepted the draft Straits Convention as agreed on between the Turkish delegation and the delegations of the Allied Powers on 1st Feburuary last, there was no question of reopening the discussion of the question of the Straits. He added that if the Soviet Government should reconsider its decision not to sign that Convention, it would be given due notice of the date of signature. The attitude of the inviting Powers towards the participation of Russia in the resumed conference at Lausanne was clearly explained in the reply which I gave to the hon. and gallant Member for Central Hull (Lieut. -Commander Kenworthy) on 18th April.
Was there a Clause in the original invitation to Russia, when the Conference first met, limiting her right to participate until the Straits, question was settled?
The hon. Member will find that all very fully explained in the answer to which I have referred him.
Do not all those points refer equally to Rumania? Surely the interest of Russia is greater than that of Rumania in this question?
Perhaps the hon. Member, if he has any particular information with regard to Rumania, will put a question on the Paper.
Industrial Disputes(Arbitration)
asked the Prime Minister whether he will set up a Commission to inquire into Dominion and other systems of arbitration and conciliation in industrial disputes, with a view to the adoption of some means that will tend to lessen loss and suffering and promote peace and prosperity in industry?
The legislative action taken by other countries to minimise industrial disputes is under the constant attention of His Majesty's Government. As the hon. Member is no doubt aware, the experience which had been gained by the working of legislation in the Dominions was utilised in framing the provisions of the Industrial Courts Act which was passed in 1919. I do not think that a further inquiry is necessary at the present time.
Airships
asked the Prime Minister when a decision will be announced in reference to the establishment of a company to run airships; and what Department of State will control such a contract?
As stated in the reply given on the 7th May, negotiations are proceeding with the parties interested and no decision has yet been arrived at.
Will the right hon. Gentleman say when a decision will be reached and whether it has been decided what Department of State will be responsible?
That has not been decided. I do not anticipate a Very early decision.
Passenger Vessels (Liquor) Bill
asked the Prime Minister whether the Government intend to grant facilities for the Bill to provide for the supply of liquor on all vessels carrying passengers in British waters introduced by the hon. and gallant Member for the Rye Division of Sussex last Wednesday?
I am at present not in a position to make a statement as to facilities for any private Bills. It would not appear desirable to do so until all opportunities for the discussion of such Bills in the time allocated to private Members has passed.
Business Premises (Security Oftenure)
asked the Prime Minister whether, in view of the great hardship and loss suffered by tenants of shops and other business premises through having to remove from their premises after the usual form of notice, he is prepared to introduce legislation providing compensation for unreason able disturbance on the lines of the Town Tenants (Ireland) Act, 1906, and also security of tenure under conditions which would safeguard the interests of both landlord and tenant?
I would refer the hon. and learned Member to the reply which was given to a similar question by the hon. Member for the Elland Division of Yorkshire on the 14th March last.
Rent Restrictions Act (Smallowners)
asked the Prime Minister whether, in the promised legislation affecting the extension of the Rent Restrictions Act until 1925, the Government will give special consideration to the cases of small owners who bought with a view to occupation, many of whom are ex-service men?
Yes, Sir.
German Foreign Creditbalances
asked the Parliamentary Secretary to the Overseas Trade Department if he will request the British commercial secretary in Berlin to furnish an estimate of the present amount of German-owned foreign credit balances and securities held abroad on German account?
I would refer my hon. Friend to page 18 of the Report on the Economic and Financial Conditions in Germany to March, 1923, by the Commercial Secretary to His Majesty's Embassy at Berlin, which has just been published by my Department. Mr. Thelwall states that the figure usually mentioned in German industrial circles as representing the total value of German otsh and securities abroad is £50,000,000. He adds that account should also be taken of sums standing in the names of non-German persons and holding companies, which are in reality German-owned. The current view in Germany is that even with this addition the total is not likely to exceed £200,000,000.
South Africa (Britishpreference)
asked the Parliamentary Secretary to the Overseas Trade Department whether the Dominion of South Africa grant any preference tariff on British goods imported into that Dominion from Great Britain or other Dominions; and can he state what the preference amounts to in each case?
Customs preference is accorded in the Union of South Africa to most classes of goods produced or manufactured in the United Kingdom. In most cases goods are subject to ad valorem duties, and in such cases the preference amounts to a rebate of 3 per cent, ad valorem. The preference thus accorded to goods the produce or manufacture of the United Kingdom is extended to similar goods the produce or manufacture of Canada, Australia and New Zealand.
West Indian Colonies (Beitishpreference)
asked the Parliamentary Secretary to the Overseas Trade Department whether all or any of the British West Indian Islands give any preference on their tariffs on British goods imported into the islands from Great Britain; and can he state approximately how much the preference amounts to on duties imposed?
All the West Indian Colonies, except Bermuda, grant a preference to goods produced or manufactured in and imported from the United Kingdom. The amounts of this preference are fixed in most cases by the Canada-West Indies Trade Agreement of 1920, as the preference granted to Canadian goods by the various West Indian Colonies under that Agreement have been extended in each case to similar goods produced or manufactured in this country. Bermuda refused to ratify the Agreement. The preference amounts roughly to 50 per cent, of the duties levied on foreign goods in the case of Barbados, British Guiana, British Honduras and Trinidad; to 33½ per cent. of these duties in the case of the Leeward and Windward Isles; and to 25 per cent. in the case of Jamaica and the Bahamas.
Agriculture
Wages Boards
asked the Minister of Agriculture whether, having regard to the fact that the Agriculture Tribunal has made a set of proposals of which agricultural wages boards are an essential part, he will state for what reasons relief is proposed to be given to the farmer alone while, despite the recommendation of the Tribunal, relief is withheld from the farm labourer?
I am not prepared to admit that the proposals of the Government will bring relief to the farmer alone. In my view, the only sure means of improving the position of the labourer is to increase the prosperity of the industry as a whole, and in the opinion of the Government the establishment of wages boards would not have that result.
Is the right hon. Gentleman keeping in mind the fact that when agriculture was at its highest level of prosperity in the last century, wages were at their lowest?
Is this a decision of the Government arising out of the Report of the Agriculture Tribunal, which recommended wages boards and a fixed minimum?
It is a decision of the Government.
Canadian Cattle
asked the Minister of Agriculture whether the Canadian representatives who discussed the question of the embargo came to a definite arrangement with the British Government under which Canadian breeding cattle would be admitted into this country; and, if so, what were the precise terms of that arrangement and when and by whom, on behalf of the British Government, was it made?
The answer to the first part is in the affirmative. The arrangement referred to was made by my predecessor at the Conference with the Canadian representatives held on 14th, 18th and 20th October last, and the terms of the agreement reached were announced in my reply to the question addressed to me on 30th November, 1922, by the hon. and gallant Member for Kincardine and Western.
Is the right hon. Gentleman's reference to the answer which he gave on 30th November limited to that part in inverted commas—the terms of the agreement?
I am afraid I should have to look at the answer to see where the inverted commas are.
If the right hon. Gentleman makes such an Order, will it be laid on the Table, so that the House will have an opportunity of discussing the introduction of Canadian breeding cattle?
Yes, certainly.
Was the agreement between Sir Arthur Boscawen and the Canadian representatives reduced to writing; and, if so, will it be published?
The agreement was published. The terms of the agreement were included in the answer to which I have referred given by me on 30th November.
Was it not understood that the agreement would apply only to highly qualified breeding cattle and not to breeding cattle as a whole?
The hon. and gallant Member asks was it understood. The whole question is by whom it was so understood.
Was it not understood that the bargain with the Canadians was that they were to have no less favourable conditions than we give to Southern Ireland?
That is not so; not as regards breeding cattle.
asked the Minister of Agriculture whether he has any intention of imposing any restrictions on the importation of Canadian cattle other than such as are calculated to prevent the spread of disease or other than such as are applied to imported animals from Ireland?
I understand the hon. Member to refer to the Regulations under which the admission to this country of breeding cattle from Canada will be allowed, and as these are under consideration, I cannot at the moment make any statement on the subject.
Cottages (Ejectments)
asked the Minister of Agriculture whether he is aware that certain county agricultural committees grant certificates of the necessity of the occupation of cottages for agricultural purposes on the application of the landlords and without giving the tenants the opportunity of stating their cases, and that magistrates on hearing cases of ejectment accept such certificates as conclusive evidence of the fact of necessity without hearing the tenant thereon; and whether instructions will be issued so that the tenants in these cases may have an opportunity of appearing and stating their cases before such committee?
I have no information as to whether the facts are as stated in the first and second parts of the question. County agricultural committees act in this matter under statutory powers conferred directly upon them, and I have no power to issue any instructions upon the subject. I may add, however, that where, in a county borough, the Ministry itself has to deal with an application for a certificate, it is the invariable practice to hear the views of the occupier before coming to a decision.
Eggs (Imports)
asked the Minister of Agriculture whether he will furnish statistics showing the respective quantities and values of the imports into the United Kingdom during the years 1921 and 1922, in respect of the following: eggs in shell, eggs not in shell, liquid and yolk, albumen, and dried?
As the reply is in the form of a statistical statement, I propose, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.
Is the Ministry considering any steps by which we might possibly increase the use of home-produced eggs in this country and rather discourage the use of foreign imported eggs?
The hon. Member should put that question down.
Following is the statement:
The quantity and value of eggs imported into the United Kingdom in the years 1921 and 1922 were as follows:
Description. 1921. 1922. Quantity. Value. Quantity. Value. Gt. Hundreds £ Gt. Hundreds £ Eggs, in shell 10,557,504 11,395,828 13,661,671 11,301,652 Eggs, not in shell.— cwts. cwts. Liquid and yolk 454,108 3,201,127 424,112 2,123,998 Albumen 35,341 551,760 37,828 542,794 Dried 29,970 640,829 10,645 124,905 Total, eggs not in shell 519,419 4,393,716 472,585 2,791,697
Poultry (Imports)
asked the Minister of Agriculture whether he will furnish statistics showing the quantities and values of the imports into the United Kingdom during the years 1921 and 1922 of live poultry and dead poultry, respectively?
Description. 1921. 1922. Quantity. Value. Quantity. Value. No. £ No. £ Poultry, Live 60,658 10,208 238,513 24,033 Poultry, Dead 85,534 568,941 171,771 1,218,142
Unemployment
Relief Scheme (King's Brook)
asked the Minister of Agriculture if he is aware that in the year 1921 the Notts Commissioners of Sewers forwarded to the Ministry of Agriculture for approval, under the unemployment relief scheme, a scheme for the King's Brook, which divides the counties of Leicester and Nottingham, which scheme was approved by the Ministry and carried out by the Commissioners; that the tenants on both banks of the brook were not consulted before this scheme was approved by the Ministry, and that the Ministry's inspector only saw the brook after the work had been done, and on that inspection gave a certificate that improvement (of which he could not judge, not having
As the reply is in the form of a statistical statement, I propose, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.
Following is the statement:
The quantity and value of poultry, live and dead, imported into the United Kingdom in the years 1921 and 1922 were as follows:
seen the previous state of the brook) was satisfactory; and whether, seeing that the work, executed partly at the cost of a Government grant and partly by a rate levied on the occupiers, who have obtained no benefit from the work done, was useless and unnecessary, he is prepared to recommend that the whole cost of the work is borne by the Exchequer?
The answer to the first part of the question is in the affirmative. As regards the second part, I am not aware as to how far the tenants were consulted by the Commissioners, but the point appears to be immaterial. The Ministry's inspector saw the brook very shortly after the work was begun and again after it was finished. I am not prepared to recommend that the whole cost should be borne by the State, as suggested by the hon. Member in the third part of his question. I may mention that this scheme is only one of several hundreds carried out during the last two years for the alleviation of unemployment, and, as I have already explained to the hon. Member, I have no power to interfere between a drainage board and their ratepayers in the exercise by the former of their statutory powers.
Why should the ratepayers' money be used for providing work for the unemployed when it is a national duty?
Because it is the law.
Insured Persons (Statistics)
asked the Minister of Labour what is the latest estimate of the number of women who are insured persons in the unemployment insurance scheme; how many of them are estimated to be now unemployed; and how many of them were in receipt of unemployment benefit at the last date for which he has statistics?
The estimated number of women in Great Britain who are insured persons is 2,575,700. At 23rd April the number of women whose unemployment books were lodged at Employment Exchanges was 219,817, of whom about 130,000 were in receipt of benefit. There were also about 10,000 women, not included in the 219,817 referred to, who were in receipt of benefit in respect of systematic short time.
Kew Gardens
asked the Minister of Agriculture what is the total number of gardeners employed at Kew Gardens; and what is the number of park keepers?
The total number of staff employed on gardening at Kew Gardens is 152; and the number of park keepers or constables is 38.
asked the Minister of Agriculture what is the total annual outlay, including all salaries, together with expenditure of every kind, on the upkeep of the grounds, glasshouses, etc., at Kew Gardens?
The total annual expenditure of all kinds at Kew Gardens, including Office of Works services, charged to Class I, Vote 3, is estimated at £56,000 for the year 1923–1924.
Are we to understand from that answer that there is no intention of reducing the staff of gardeners at Kew?
I do not see why the hon. Member should understand that?
Has the number of gardeners been increased?
I must have notice of that question.
Royal Navy
Contracts (Fair Wages Clause)
asked the first Lord of the Admiralty whether he has now had inquiries made into the allegations made against Messrs. Powell Duffryn Colliery Company, contractors to His Majesty's Government, in respect to the violation of the Fair Wages Clause; whether such inquiries confirm the allegations; and, if so, whether he has sought, and received, assurances from the company of their willingness to ob serve the agreement into which they have entered as contractors to the Admiralty?
The matter is still under investigation.
Contributory Pensions (Widows Anddependants)
asked the Financial Secretary to the Admiralty whether he will consider the possibility of the early introduction into the Royal Navy of a contributory pension scheme for widows and dependants of all officers and men?
I am afraid the early introduction of such a comprehensive scheme is impossible, owing to financial considerations, although the Admiralty has every sympathy with the principle.
Pension Money Orders
asked the Financial Secretary to the Admiralty whether lie will direct that naval pensioners' money orders be made out so as to be payable at sub-post offices in the village in which they reside, and as shown on their declarations; and is he aware that, as money orders are made payable at the nearest county town, much inconvenience is caused to old pensioners who have to walk several miles to cash their money orders?
Naval pension money orders are made payable at the money order offices of the United Kingdom specified by the pensioners in their declarations. In the event of a pensioner asking for payment at a post office that does not transact money order business, his order is drawn for payment on the money order office nearest to his place of residence. If hardship has arisen in any particular case through the village post office not being a money order office, I shall be glad if my hon. Friend will give me full particulars of the pensioner's name, pension number and address.
Dockyard Pensioners (Receipt Stamps)
asked the Financial Secretary to the Admiralty whether he is aware that pensioned dockyard men have to provide receipt stamps when receiving their monthly pensions if the amount is over £2; whether he is aware that in the case of a man drawing an allowance for accident and pension for service the cost to him is fourpence per month; and will he direct that the payments be treated as wages when receipt stamps are not required?
As the reply is somewhat long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
The reply is as follows:
The answer to the first part of the question is in the affirmative. With regard to the second part of the question, injury allowances, awarded under the Workmen's Compensation Act and schemes framed thereunder, are usually paid weekly. A receipt stamp is not, therefore, required, as the maximum payment of compensation is £1 15s. a week. In some cases, however, the men, presumably for reasons of personal con- venience, do not draw their compensation allowances weekly, but apply for it once every month or every quarter. A receipt stamp is then required by Statute if the amount paid as compensation is £2 or upwards. It is under consideration, however, to arrange, where men draw both a pension and a compensation allowance, that one receipt, and consequently one stamp, only be required.
Education
Teachers (Lowestoft)
asked the President of the Board of Education the number of teachers appointed to schools in Lowestoft during the past two months; the number whose past record is unsatisfactory; and whether, in these cases, he has confirmed their appointments?
I understand that the number of appointments made by the local education authority to schools in Lowestoft during the period of the present dispute is 112. The qualification of these teachers is now being examined by the Board. The appointment of teachers does not require confirmation by the Board, but under the Code every school is required to have a sufficient and suitable staff.
Senior Oxford Examination (Fees)
asked the President of the Board of Education if, in view of the fact that higher elementary pupils who have not been successful in obtaining posts as pupil teachers have now to pay their own fees, amounting to £2, for the Senior Oxford Examination and that the fees for those accepted as pupil teachers are paid by the education authority, and in view of the great hardship inflicted on numbers of young persons who are unable to enter for this examination owing to their parents' financial position, he will consider the possibility of waiving these fees in all cases?
The examination referred to is conducted by the Oxford Delegacy for Local Examinations. The fees paid by the candidates are fees charged by the Delegacy, and the Board have no power to waive them.
Rates
asked the President of the Board of Education the total amount levied by local authorities in respect of education rates in the year 1922, and the amount to be collected for the same purpose in respect of the year 1923?
The amount levied by local education authorities in respect of education rates during the financial year 1922–23 was, approximately, £32,400,000. Returns of the estimates of local education authorities for 1923–24 are not yet complete.
Local Authorities' Schemes
asked the President of the Board of Education what steps are being taken to ascertain the needs for well-ordered educational development over the next 10 years, having regard to the fact that Sections 11 to 16 of the Education Act, 1921, which deal with the submission of schemes by local education authorities to the Board, are only in partial operation?
I may refer the hon. Member to the reply I gave on the 10th May to my hon. Friend the Member for Fulham West (Sir C. Cobb).
Open-Air Schools
asked the President of the Board of Education the number of local education authorities who have established open-air schools for the reception of children suffering from physical disability, and the total number of such schools now established throughout the country?
Twenty-nine local education authorities have established 37 day open-air schools, and nine have established 13 residential open-air schools. In addition, voluntary managers have established 12 residential open-air schools, making a total of 62 open-air schools in England and Wales.
Poison Gas (Experiments Onanimals)
asked the Under-Secretary of State for War what species of animals are being used in gas-poisoning experiments at the Porton experimental station, near Salisbury; how many animals have been employed in the research since 23rd February, 1922, when the figures were given in reply to a question by Mr. J. F. Green: and whether any of the experiments have consisted in dropping bombs containing poison gas among these animals?
The species and numbers of animals which have been employed in the experiments referred to since 23rd February, 1922, are as follow:
Can the hon. and gallant Gentleman say how many of these animals were killed in the process?
I could not do that without notice, but the ordinary provisions in regard to experiments on animals apply in these cases. They are always under an anæsthetic if it is in any way possible, and they are destroyed as soon as the objects of the experiments have been attained.
Can the hon. and gallant Gentleman say how many ex-Ministers were among them?
Crude Oil (Imports)
asked the President of the Board of Trade the total imports of crude oil for the year 1922, and the value of the same, and the countries from which these products were exported?
The answer contains a tabular statement, and, perhaps, the hon. Member will allow me to have it circulated in the OFFICIAL REPORT.
Following is the statement:
The following statement shows the total quantity and declared value of crude petroleum imported into the United Kingdom during the year 1922, distinguishing the principal countries whence consigned:
Consigned from: Gallons. £ Persia 191,618,429 2,639,825 Mexico 24,673,029 365,788 British West India Islands 753,851 16,958 United States 75,606 3,805 Other Countries 13,000 776 Total Imports 217,133,915 3,027,152
Scotland
Shale Oil (Lothians)
asked the President of the Board of Trade what was the total output of oil product derived from shale in the Lothians of Scotland during the year 1922, and the value of the same?
The output of oil shale in the Lothians of Scotland in 1922 was approximately 2,600,000 tons, and I understand that the yield of crude oil products per ton is about 20 gallons. I have no information as to the value of this production.
Contribution to Imperial Funds
asked the Under-Secretary to the Scottish Board of Health whether he will consider the desirability of following the precedent established some years ago in the case of Ireland, and appointing a Royal Commission to inquire into the financial relations of Scotland with the rest of the Kingdom, with a view to ascertaining whether Scotland contributes more, or less, than it fair proportion to Imperial funds, and, if found necessary, to recommend such alterations as may be required to secure equitable adjustment of financial burdens?
I do not think an inquiry of this nature can be usefully undertaken until public expenditure has reached what may be regarded as a normal post-War figure.
Lunacy Acts
asked the Attorney-General whether any steps have been taken by the Board of Control to inquire into the number of instances in which the managers of mental institutions run for profit have themselves taken measures, in contravention of the Lunacy Act, to summon doctors and magistrates for the incarceration of voluntary boards; and in the case in which one such offence has been brought to light in the Law Courts, have any disciplinary measures been resorted to by the Board to check the recurrence of abuse.
I have been asked to reply. The Board of Control have no record of any instance in which such action has been taken in contravention of the Lunacy Acts.
also asked the Minister of Health in how many cases during the year 1922 have private patients been committed to mental institutions or single care without having been seen by any judicial authority; in how many has a prejudicial certificate been sent up; in how many has a notice of right of appeal been served upon the patient within 24 hours of admission and a statement procured from him as to whether he wishes to exercise this right; and have the Board of Control inquired into any delinquencies in respect to the proper administration of the Sections of the Lunacy Act bearing thereupon?
It will require considerable labour and rather elaborate investigation to obtain exact information in regard to all the points raised in this question; but the necessary inquiries and examination of documents shall be made, and I will furnish the hon. Member with the result as soon as practicable.
Income Tax (Crown Colonial,Officials)
asked the Chancellor of the Exchequer whether, under Clause 10 of the Finance Bill, 1923, it is intended to deduct Income Tax at the full rate from the pay of Crown Colonial officials who become chargeable to Income Tax when on leave; and, if so, whether, before making such deductions, regard will be had to the liability of the officials concerned to pay the tax at the full rates or at all?
The hon. Baronet may rest assured that, in computing the liability to tax of the officials concerned, full effect will be given in the normal manner to the various allowances and deductions to which they may be entitled.
House Property (Income Taxassessments)
asked the Chancellor of the Exchequer whether he is aware that, owing to the most painstaking and detailed way in which the last quinquennial valuation for London was carried out, there was relatively little complaint against the assessments under Schedule A; and whether in future care will be taken to carry out the provincial reassessment on the same lines, thus obviating the present widespread need for appeals and the large expenditure of money and time in promoting them?
I have no reason to believe that the Income Tax reassessment now in progress is being carried out in a less painstaking and detailed manner than the valuation in the Metropolis to which my hon. Friend refers.
Does the hon. and gallant Member agree that hundreds and thousands of appeals are being put in every day?
That is not my information.
Are not the officials practically the same for the inner ring as for the outer ring of London?
I am afraid I could not answer that question without notice.
Transport
New Liverpool-Manchester Road
asked the Parliamentary Secretary to the Ministry of Transport whether the scheme for the new Liverpool-Manchester road may be regarded as still in suspense or defunct; how much money was earmarked for this undertaking, since it was in relief of unemployment; whether, in view of the difficulties in the way of enabling this project to materialise, the money so set aside has been employed in any other way; and, if so, how?
The scheme for the construction of a new arterial road between Liverpool and Manchester is at present in suspense. The local authorities concerned have been informed that the offer of a contribution from the Road Fund equivalent to one-half of the approved cost of the work will remain open for their acceptance up to September next. The sum provisionally allocated from the future revenues of the Road Fund for this purpose is £1,500,000.
Would it be possible, if the money was not spent on this road, to devote some of it to some project in Barrow-in-Furness?
Will the hon. and gallant Gentleman include a provision in regard to that harbour that only British granite is to be used, and not Norwegian stone, as suggested?
Bakerloo Railway (Overcrowding)
asked the Parliamentary Secretary to the Ministry of Transport whether he is aware of the overcrowding between 8.30 a.m. and 9.30 a.m. of the Bakerloo Tube trains running between Paddington and Piccadilly; and, if so, will he take such steps as will ensure the provision of greater accommodation?
The railway company inform my hon. and gallant Friend that on the portion of their railway referred to by the hon. Member trains are run every two minutes during the rush period, and that in their opinion the capacity of these trains is adequate having regard to the traffic, but that it is impossible to avoid the overcrowding of particular trains when passengers from trains on other railways adjoining the line at Queen's Park, Paddington, Marylebone and Baker Street happen to be concentrated on the same train.
Liquor Traffic (Statemanagement)
asked the Secretary of State for the Home Depart- ment the name of the part-time Member of the State Management Districts Council for whom an allowance of £400 is provided in the Estimates for the current year; whether any such payment has been made to any member of the Council in previous years and, if so, out of what specific funds such payment has been made; what duties are attached to the office now created; and whether it is intended to set up a permanent salaried Council or other body to carry on the State management schemes in Carlisle and other areas?
Sir John Sykes is the member of the Council in question, who is in receipt of an allowance of £400 for his part-time services. This payment has been made out of the Vote for the State Management Districts since 1st November, 1922, when Sir John Sykes ceased to receive the remuneration previously paid to him when serving first as Secretary to the Central Control Board (Liquir Traffic) and afterwards as member of the State Management Districts Council. No similar payment has been made to any other member of the Council. The duties of the Council are, as was stated by the Home Secretary's predecessor on 8th March, 1922, collectively and personally to assist the Secretary for Scotland and the Home Secretary in the administration of the State Management Districts. My right hon. Friend does not contemplate any change in this organisation.
Is it intended in future to have salaried members on the Council, or only in exceptional cases?
Not that I know.
Pension Life Certificates(Attestation)
asked the Minister of Pensions whether he is aware that officials of the British Legion and other recognised organisations of ex-service men, have lately been disqualified from signing the life certificates of pensioners; and if he can state the reasons which have prompted his action on this matter?
The hon. and gallant Member appears to be under a misapprehension. Officials of ex-service organisations have never been included in the list of persons authorised to attest life certificates. I may, perhaps, add that the list of qualified attestors has recently been widely extended by the inclusion of members of war pension committees, accredited voluntary workers attached to committees and members of the Central Advisory Committee and Standing Joint Committee.
Is the hon. and gallant Gentleman aware that in the South-West of Scotland officials of the British Legion have been attesting these life certificates for the last two or three years, up to three months ago?
I am not aware of that, but I will look into the matter.
Deportations to Ireland
House of Lords' Judgment
asked the Chancellor of the Exchequer whether the House of Lords has to-day come to a decision on Habeas Corpus appeal on the Irish deportees, and whether the Government can now state what they propose to do, first of all regarding the deportees as a body, and, secondly, what action they propose to take by way, say, of a Bill of Indemnity, for Ministers who have made mistakes?
With reference to the first part of the question, the House of Lords have decided by a majority that no appeal lies to them. With reference to the second and third parts of the question, this information was only conveyed to me within the last half hour, and the Government will consider their course of action this afternoon, and make an announcement to-morrow.
Does that mean there is any doubt about the willingness of the Government to release the people?
I think that is rather a surprising question. My hon. and gallant Friend knows quite well that any action taken must be taken by the Government.
What high office has been prepared for the right hon. Member for Oswestry (Mr. Bridgeman)?
When the Cabinet is considering this question and their action thereon, will they also consider the question of compensating the families whose breadwinners have been illegally taken away from them?
In view of the reply that there is no appeal to the House of Lords on the question of the Irish deportations, will the Government consider an appeal to the country?
Wireless Broadcastingcommittee
asked the Postmaster-General whether, as the interests of music are the most seriously threatened by the broadcasting system, more so than any other artistic profession, he will see that they are represented on the Committee of Inquiry, especially as the broadcasting industry, with which the musical profession is the most in conflict, have already their representatives on the Committee; and whether, since for similar reasons the theatrical interests ought also to be represented, he will revise the composition of the Committee?
Before appointing the Broadcasting Committee, I duly considered the position of the various interests likely to be affected; and since its formation I have consulted with the Chairman as to the desirability or otherwise of adding to its membership. The entertainment industry is by no means the only interest which desires to be represented; and, in view of the many similar applications which have been received, I feel it would be impracticable to comply with their request.
Orders of the Day
Finance Bill
Order for Second Reading read.
Motion made, and Question proposed, "That the Bill be now read a Second time."
I beg to move to leave out from the. word "That" to the end of the Question, and to add instead thereof the words
"this House declines to proceed with a Bill which makes no adequate provision for the reduction of the National Debt, which gives relief of taxation in disproportion to the ability to pay, which makes no reduction of the heavy duties on the necessaries of life, and which fails to apportion taxation in such a way as to increase the effective purchasing power of the people and to stimulate trade and industry."
The criticisms of' the Labour party are condensed in the terms of the Amendment to the Finance Bill which I now move on behalf of the. Labour party. There are three grounds upon which we desire to ask the House to reject the Second Reading of this Bill. The first ground is that even within the limits of I the financial policy laid down in the Bill it fails to make adequate provision for the reduction of the National Debt. The second ground is that the reduction of taxation proposed in the Bill does not relieve that section of the taxpayers upon whom the burden of taxation presses most heavily. The third ground of objection to the Bill is that in selecting the taxes for the reduction the Chancellor of the Exchequer has not chosen those taxes where the reduction would be calculated to stimulate trade and industry and would consequently increase the amount of employment. I propose to deal with each of these three points. In dealing with the first, namely, the matter of Debt reduction, I shall confine what observations I have to make to considering this question within what I described just now as the limits of orthodox financial policy. It is well known that the Labour party has a somewhat drastic proposal for a, considerable reduction of the National Debt. I do not propose this afternoon to deal with that proposal in view of the fact that the Government have offered a day—I hope an early day—for the exclusive discussion of the Capital Levy.
Is that the official programme of the Labour party, the Capital Levy? [HON. MEMBERS: "Order, order!"]
Yes, yes!
If the hon. and gallant Gentleman who has interrupted me had prepared himself adequately for the last election campaign, and had read the official manifesto of the Labour party, it would have been unnecessary for him to put his question.
Some of the candidates have repudiated the Capital Levy!
4.0 P.M.
It is prominently and expressly stated in the programme. It will be remembered in the course of the general Debate on the Budget that the controversy ranged between the relative merits of Debt reduction and taxation reduction, and, of course, the Labour party emphasised the importance of Debt reduction. Because we did that the impression seems to have been given in certain quarters that we were opposed to taxation reduction. That is quite a mistake. Our proposal for a reduction of the National Debt was the outcome of our desire for a larger provision for the reduction of the National Debt than is made in the Bill before us. We realise that there can be no considerable reduction of taxation so long as it is necessary to raise such a large sum every year, through taxation, for the benefit of interest upon the National Debt. As a matter of fact, the amount required in the current financial year for the payment of the interest upon the Debt absorbs the whole of the expected receipts from Income Tax and Super-tax.
There is on the Paper an Amendment standing in the name of certain prominent members of the Liberal party, No. 2, criticising the reduction of taxation on the ground that it is not sufficient. I shall await with considerable interest for the sponsors of that Amendment to show how it will be possible to make a more considerable reduction of taxation so long as the burden of interest on the National Debt remains. I congratulate the Chancellor upon having resisted the demands made to suspend the provision for the reduction of Debt on the part of those who would even go so far as to add to the debt by borrowing in order to get temporary relief of taxation.
What does the Bill propose by way of Debt reduction? It proposes to provide a sum of £40,000,000 this year, £45,000,000 next year, and a- maximum of £50,000,000, and this provision is to continue until and unless Parliament otherwise determines. There is the temptation for an embarrassed Chancellor of the future to do what former Chancellors have done when in a difficult position, to suspend or raid the Sinking Fund. In the course of his Budget speech the right hon. Gentleman referred to this matter, and he made what I thought was a somewhat curious statement. He said that the proposed provision for the reduction of Debt was some £40,000,000, and that that roughly was the amount of the receipts from Death Duties. Are we to assume from that that those receipts from Death Duties are to be allocated to Debt reduction? If that be so, it is a new departure in national finance to hypothecate an uncertain revenue for very definite purposes! This provision of £40,000,000 or £50,000,000 a year for Debt reduction is, I understand, to be a flat rate, not cumulative as is the provision for Sinking Fund redemption in connection with the old National Debt. Assuming, therefore, that to be a maximum of £50,000,000 a year, it will take 150 years to clear off this National Debt. There is one argument put forward for a small annual provision which I have never been able to understand. It is that because the Debt is large and, therefore, the amount of taxation necessary is correspondingly large, the provisions for Debt reduction should be small. It seems to me to be the very opposite course that we should adopt, if we are anxious for Debt reduction. We ought to be making a larger provision for Debt reduction, one corresponding to the magnitude of the National Debt. In the years before the War the amount of provision for the then comparatively small National Debt was over one percent. If, therefore, we made no larger provision than that for the redemption of the present Debt, we should be providing, not from £40,000,000 to £50,000,000, but £80,000,000 a year, and that is a sum of £20,000,000 a year less than the minimum figure which was considered to be desirable, nay, necessary, by the two predecessors of the present Chancellors of the Exchequer. I have no doubt that they expressed that view on the advice of the Treasury experts, and I should like to know—we have had no answer to this question—why it is, if two or three years ago a minimum provision of £100,000,000 a year was considered to be necessary, the present Chancellor of the Exchequer, who is quite as good a Debt reductionist as either of his predecessors, now considers a sum of half that minimum amount to be all that is necessary? There is one minor, but still important, matter to which I should like to give one word of reference. The Chancellor of the Exchequer stated that the total Debt figure on the 31st March last was £7,773,000,600,000, "but," he added, "as is customary, we have not included in this figure the accrued premiums on National War Bonds and the accrued interest on National Savings Certificates."
In reply to a question put a few days ago, the right hon. Gentleman stated that this accrued interest and these accrued premiums amounted, roughly, to £100,000,000. The only reason given why these figures were not included in the total National Debt was that it was customary not to do so. It may be customary for the Treasury not to do so, but I venture to say that it is the custom of any reputable business concern, and that there is no auditor who would pass the balance-sheet of a company where these accrued liabilities were not stated. An excuse has been offered by the Chancellor of the Exchequer, namely, that it may be possible by conversion to avoid the liability of the premiums upon the National War Bonds. That does not apply to the interest upon the National Savings Certificates. But in any case this ought to be stated as a liability in the figures of the National Debt, and should the anticipation of the Treasury afterwards be realised, then the accounts could be adjusted accordingly. There is a rather serious aspect of this, perhaps upon the face of it, rather insignificant matter, because this accrued interest and these accrued premiums, which will mature in about five years' time, represent £20,000,000 a year. If, therefore, it is the intention of the Chancellor of the Exchequer to regard these as part of the provision for the reduction of debt, it really means that we are fixing the reduction, not at £50,000,000 a year, but at only £20,000,000 a year This is all that I propose to say upon the first point in our Amendment, namely, the insufficient provision which is made in the Finance Bill for the reduction of the National Debt.
I now come to the second point in our Amendment, which refers to the disproportion of the relief which is given to the different classes of taxpayers by the reductions of taxation proposed in this Bill. It proposes to relieve the Income Tax payers in a full year by £26,000,000. The Chancellor of the Exchequer was addressing a large audience of his peers a few days ago. The Chancellor of the Exchequer then justified the reduction of the Beer Duty on the ground that beer was an article of general consumption, and that, therefore, the benefit of the reduction was widespread. There is much to be said by way of criticism of that statement, but perhaps the criticism will be best reserved until we come to the discussion of the Beer Duty on the Committee stage of the Bill. I may say, however, that it is not the fact that the consumption of beer is universal. The Chancellor of the Exchequer was probably not aware of the fact that there are over 7,000,600 pledged abstainers in this country.
But when the Chancellor of the Exchequer defends the reduction of the Income Tax, he uses quite a different argument. He does not say that the reduction of the Income Tax will diffuse its benefits widespread. No, he says, the Income Tax payers have borne the heat and burden of the day during the last few years, and the time has come to give them some relief. He mentioned that in one year the amount raised by direct taxation paid by that class was 80 per cent, of the total tax revenue of the year. Yes, but the Chancellor of the Exchequer omitted to say many other things that might have been said in that connection. He omitted, for instance, to say that in the year to which he referred £290,000,000, included in the 80 per cent, of direct taxation, was represented by receipts from Excess Profits Duty. What were excess profits? They represented additional profits made during the War out of the circumstances of the War and out of the necessities of the nation. After that £290,000,000 had been taken in Excess Profits Duty, there still remained very considerable excess profits in the pockets of these taxpayers. Apparently, the right hon. Gentleman, when he made that statement, had not in mind the financing of the first two or three years of the War. I know of nothing so staggering, indeed so criminal, as the way in which rich people and war profiteers were permitted to escape taxation during the first two years of the War. It became notorious in the first few months after the outbreak of war that colossal profits were being made, and these for a considerable time were left untaxed. I am not blaming the right hon. Gentleman. I blame those who were responsible for the financing of the country in the early days of the War. I have no hesitation in saying that, if adequate taxation had been levied in the first two years of the War, the National Debt would have been £3,000,000,000 less than it is to-day.
Then there is another fact which was apparently forgotten or omitted by the Chancellor of the Exchequer when he was pleading the case of the harassed and overburdened wealthy Income Tax payers, namely, the authority of his own Treasury that, notwithstanding the fact that in one year direct taxation did provide 80 per cent, of the total tax revenue, this class managed to make themselves £4,000,000,000 richer at the end of the War than they were at the outbreak of the War. Yet the Chancellor of the Exchequer gives "this harassed and overburdened class of taxpayers," for whom his sympathy has been excited, the greater part of that which he can afford during the current financial year for the relief of taxation. When I spoke in the general Debate upon the Budget, I gave some figures showing the relief that would be given to different categories and grades of Income Tax payers, and I safeguarded myself on that occasion by saying that I was basing my estimates upon figures which were two or three years old, no later figures being then available. Since then, within the last fortnight, up-to-date figures have been given in reply to a question, and I have, in the light of these later figures, looked at what I said in the general Debate upon the Budget, and I find that I erred, as I usually do, on the side of under-statement.
If the House will permit me, I will give the figures revised in the light of the latest information provided by the Chancellor of the Exchequer. We are told that there are 2,250,000 persons among the Income Tax-paying class, and of these one and three-quarter million are below £475. Now these 1,750,000 taxpayers get out of that £26,000,000 of reduction a total of £3,000,000; £23,000,000 out of the £26,000,000 goes to 555,000 persons who have over £450 a year. The Super-tax payers gets on the average £150 each of relief or, altogether, £12,000,000 out of the £26,000,000, while the Super-tax payers with incomes of over £5,000 a year get an average relief of £300 a year. I do not know whether hon. Members have examined a very interesting and a very illuminating White Paper issued by the Treasury a few days ago, which gives tables illustrating the effective rates of Income Tax under the proposals of the Chancellor of the Exchequer for 1923–24.
The analysis given from the point of view of the redistribution of the relief is most luminous. The Chancellor of the Exchequer told his audience of peers last week that he was providing relief where it was most deserved. Let us see how far his claims on analysis are realised. From this official table, for example, I notice that a single man with an income of £250 a year earned will get relief to the extent of £1 2s. 6d.; but a single man with an income of £250 a year unearned, and who is returned as a gentleman living upon his income, will get relief, not to the extent of 1s. 2s. 6d., as in the case of the man who has to work hard for such a comparatively moderate income, but he gets a relief of £l 8s. 9d. Take the case of a single man with £500 a year earned. He gets relief to the extent of £5 1s. 3d. If he does not earn it he gets relief to the extent of £6 6s. 3d.
Take the case of married people. Take a married couple without children with an income of £500 a year. If that income be all earned they get a relief of £2 16s. 3d., but if they have an income of £500 a year all unearned they get a relief of £4 1s. 3d., or something like 50 per cent, more than the relief given to a married couple who have to earn their living. Take the case of married people with families. Take, for example, the case of a married couple with three children who have an income of £500 a year earned. The relief they get under this reduction is £1 13s. 6d. On the other hand, if the income be wholly unearned they get a relief of £2 6s. 3d., or 27 per cent. more. I am sure that there is no hon. Member of this House who will defend a tax which in its effect gives relief where it is least deserved, and gives the least relief in cases where undoubted hardship exists.
I want to deal with another point. The Chancellor of the Exchequer is constantly saying that he has reduced the Income Tax by 6d. in the £, but as a matter of fact he has done no such thing. Are hon. Members aware of the fact that it is not until you get to incomes of £7,000 or £8,000 a year that the full 6d. reduction becomes effective. Take the case of a single man with an earned income of £250 a year. The amount of reduction that he gets upon his income is an effective rate of l½d. and in the case of £500 a year, 2d. and £1,000 a year 4d. in the £. It is much worse in the case of married couples without children or with children. In the case of a married couple without children the reduction is l½d., while in the case of a married couple with 3 children and an income of £500 a year the effective rate of their reduction is only ½d. in the £.
The Chancellor of the Exchequer, in reply to these figures which I gave in the general debate on the Budget and which I have repeated to some extent to-day, said that it could not be otherwise, because you cannot reduce a tax without those who pay the most of it getting the biggest reduction, and the right hon. Gentleman said that that applied to every tax. On this point the right hon. Gentleman was quite mistaken, and when he studies certain Amendments amongst the 40 or 50 which we shall place upon the Order Paper to this Bill, he will see that there are a great many ways by which a tax reduction can so operate as to give relief in the lower ranges of income. Those are the criticisms that we offer in regard to the operation of the proposed reduction of the Income Tax made in this Bill. The predecessor of the right hon. Gentleman last year reduced the Income Tax by £52,000,000 in a full year. Taking last year and this year the Income Tax payers have in the aggregate obtained a relief to the extent of £78,000,000. Last year the Tea Duty was reduced by £5,500,000, and this year the Chancellor of the Exchequer proposes to reduce the Beer Duty by £16,500,000. Therefore in those two years direct taxation has received relief to the extent of £90,000,000, indirect taxation to the extent of £23,000,000.
There is one point which is often overlooked which I should like at this stage to emphasise. There is a tendency to regard Income Tax payers and the payers of indirect taxation as two separate and distinct classes. It is quite true that the Income Tax payers are classed apart from those who do not pay Income Tax, but who pay taxation on the commodities which they consume. Therefore the Income Tax payers have not only got relief of taxation to the extent of £90,000,000, but they have also got their proportionate share for the reduction of indirect taxation. In the speech of the Chancellor of the Exchequer, to which I referred a moment ago, when he was urging the claims of Income Tax payers, he seemed to overlook one fundamental fact, and that is the relative capacity of different classes of people to contribute taxation.
I have already given figures to show how wealthy certain people became during the War, and how wealthy certain people are still. May I give one other fact. A fortnight ago the "Economist" newspaper analysed the returns of public companies reported during the first three months of this year, as is their custom, and they compared these with the profits of the same companies during the corresponding three months of previous years, and the result is to me astounding. This, I am quite sure, will be cheerful news for the Chancellor of the Exchequer in regard to the prospect which he holds out of his anticipated yield from the Income Tax being realised. The balance sheets of 406 companies were analysed, and last year the total profits of those 406 companies, after paying debenture interest, and so on, amounted to £28,000,000. This year the profits of the same companies reached a total of £41,000,000, showing an increase of no less than 41 per cent, in the year. These dividends, of course, go, in the main, to that class of people who pay Income Tax, and it proves that their capacity to pay is not getting less, but is very rapidly and very considerably increasing.
What of wages? In the last three years, according to the official figures of the Ministry of Labour, the total wages have fallen by no less a sum than £700,000,000 a year, that is to say, wages to-day are £700,000,000 a year lower than they were three years ago. A few days ago, the Minister of Labour advised Members of the House to turn to an article in the current number of the "Labour Gazette," dealing with variations in wages during the last few years and comparing wages to-day with wages at the outbreak of War. I have followed the advice of the right hon. Gentleman, and have carefully examined that article, and what do I find? I find it stated in the same number that the cost of living is still 74 per cent, above the figure for August, 1914, and that the average of wages to-day is 70 per cent, above the figure at the outbreak of War. Averages, however, are misleading. The fact that wages may have been fairly maintained in certain industries does not lessen the hardship of those whose wages have been very considerably reduced, and the average reduction in wages since December, 1920, has been no less than 40 per cent.
Let me give two or three special cases. According to these official figures, the wages of engineering fitters are only 45 per cent, above the pre-War figure; the wages of ship joiners are only 27 per cent, above, those of shipwrights only 18 per cent., and those of riveters 20 per cent. And yet the cost of living is 74 per cent, higher than it -was in August, 1914. The cotton trade, the largest of our manufacturing industries, comes out in comparison fairly well. Wages in that industry to-day are 61 per cent, above the pre-War figure, that is to say, 13 per cent, below the increase in the cost of living; and it has to be remembered that the cotton trade suffered severely in the early days of the War, and was the last field to experience the movement of rising wages. I might also cite the miner, whose wages, judged by the cost of living, are very considerably below the pre-War figure. Let me take just one other case, that of the agricultural labourer, whose wages are now, as we have often been told from that bench lately, about 25s. a week.
If the average is taken throughout the country, it is considerably higher than that.
I will take the case of the man with 30s. a week. There are some with less, but it will not materially affect my point of view, because, if you make the comparison with the cost of living, you will find that their wages, even in the cases referred to by the hon. and gallant Gentleman, are below the pre-War wages. [HON. MEMBERS: "NO, no!"] In the case of a wage of 25s. a week—
That is only in one of two counties. In my county the wages are 30s., and in Yorkshire and Lancashire they are 35s. and 40s.
Well, I will take the case of 30s. a week. I am quite willing to gratify the right hon. Baronet, although there are tens of thousands—and this statement will not gratify him—there are tens of thousands considerably below that. Take the case of 30s. a week, which is about 16s. or 17s. a week, calculated in pre-War values.
That was the pre-War wage.
The right hon. Baronet ought to be ashamed to mention it. If a century of Toryism can do no more for the agricultural labourer than to give him, at the outbreak of War, a wage of 15s. or 16s. a week, then Toryism and the Tory party have lost all claim they ever had to the support of the people.
We had had 15 years of Liberal Government.
Will the Labour party assist us to induce the town people, so that we may be able to give the farm labourers a better wage?
I will pursue my argument, and take the case of a wage of 30s. a week, of which the pre-War value was 16s. or 17s. The farm labourer often has a large family, but I will take an average family of three children—that is to say, there will be five persons to keep out of 30s. a week. If that man be a non-smoker and a teetotaller, and his family consume an average of taxable commodities, that man is paying in taxation Is. 9d. a week. As a matter of fact, he is paying more, because I have not included in that figure the increase as between the time when the article is taxed and when it reaches the table of the consumer, but I will take it at 1s. 9d. Now 1s. 9d. a week of taxation, out of an income of 30s. a week, is the taxation of starvation. As a matter of fact, his family do not consume an average of commodities, simply because they cannot afford to do so, and the wife and children, and the husband too, are deprived, by this iniquitous taxation upon the necessaries of life, of what is necessary for the husband's sustenance and the proper up-rearing of his children. We have heard, during the last few weeks, the old, I will not call it argument, but the old contention put forward that there ought to be an even balance between direct and indirect taxation. The protagonist of this contention is the hon. Member for Ilford (Mr. Wise), a man of very wide and deep economic knowledge, and one to whom we always listen when he speaks on economic questions, because he has always something of interest, at least, if not of value, to contribute. The hon. Member for Ilford came forward a week or two ago as the protagonist of what I might call the half and half system of taxation—half direct and half indirect. The hon. Member belongs to the Victorian era. May I tell him that those ideas are quite out of date?
Paleolithic.
When I hear the contention that taxation ought to be half direct and half indirect, I am reminded of the story of the [butcher who had a shop next door to a horse knacker, and suspicions arose in the neighbourhood that some part of the bye-product of the knacker found its way into the rabbit pies of this butcher, so he issued a public disclaimer, in which he said it was quite true that there was a certain amount of horse-flesh in his rabbit pies, but he kept strictly to the proportions of half and half, 50 per cent.—one rabbit to one horse. That is precisely the position of those who argue that half the revenue ought to be raised from indirect taxation and half from direct taxation. It ignores altogether the relative capacity of the different classes to contribute. It is only within the last 25 or 30 years that this argument about half and half has been brought forward. May I inform the hon. Member for Ilford—perhaps he is already aware of the fact— that, so comparatively recently as 1884, out of £58,000,000 of tax revenue, £46,000,000 was raised by indirect taxation, and less than £13,000,000 from the Income Tax and other direct taxation. We heard no demands in those days from the predecessors of the hon. Member for Ilford about the need for half and half taxation. It has only been owing to the fact that the relative proportion has changed to the advantage of the indirect taxpayer that we now hear this contention that there should be a fixed proportion between the two kinds of taxation.
I remember an interjection made by the hon. Member for Ilford when an hon. Friend of mine was speaking during the Committee stage of the Resolution, and I believe he had made the same point in his speech previously. He said—and, although I am not giving his exact words, I do not think he will dispute my, shall 1 say, paraphrase of them—that there was a very close connection between the relative proportions of taxation and unemployment, and that, the more revenue was raised by direct taxation, the worse it was for trade and the more unemployment there was. May I ask the hon. Member, however—the figures are available—to take, in certain years, say, during the last 40 years, the proportions of direct and indirect taxation in each year, or in selected years, and then the amount of unemployment in that year? He will find that that will knock his argument completely out of court. The hon. Gentleman pointed to America, and said that America, during the last year, had altered slightly—only very slightly, to the extent of about 3 per cent, each way —the relative proportions of direct and indirect taxation, and had abolished her unemployment. I know, however, that the hon. Member is far too intelligent to believe that the recent improvement in American trade is due to this slight change in taxation. As a matter of fact, he knows that it is not so. There are a great many causes, the two principal ones being the restriction of immigration and the arrest of the policy of deflation. May I give the hon. Member this conclusive fact? Under normal conditions, before the War, nearly the whole, or a vast proportion, of the Federal revenue of the United States of America was raised by indirect taxation, and yet the United States of America had always from two to three times more unemployment than we had in this country.
Just one word more about the claim that a larger proportion of taxation should be laid upon those who can only pay it indirectly. It ignores altogether the rela- tive capacity of the two classes to pay. There are two main canons of taxation which every sound financial student should follow, first, the ability to pay of the class upon whom the tax is laid, and, second, the taking into consideration of the benefit which a particular class receives from the protection of the State. If you apply those two tests to the present state of things, the great and growing poverty of the wage-earning classes and the increasing riches of the wealthy classes, there is only one thing to do and that is to relieve those upon whom indirect taxation, especially upon food, presses most heavily, and not to give it to those whose capacity to bear taxation remains unexhausted, unimpaired and undiminished.
The third point in our Amendment is that we ask the House to reject the Bill because the proposed alterations in taxation are not calculated to stimulate trade and industry, and consequently employment. I am not going to deal with the point which was argued very fully in the general Debate as to whether this remission of taxation will be saved or will be spent beyond saying that I do not believe it will be saved except to an infinitesimal degree. I saw an advertisement soon after the Chancellor of the Exchequer announced this reduction of Income Tax from one of the societies which advertise that they can get people's Income Tax back, and it was headed "More money to spend." That tax repayment society understood far better the psychology of the Income Tax payer than the Chancellor of the Exchequer does. It is far more likely that this remission of taxation will be spent than invested, and it will be spent in such a way as not to encourage employment. May I quote a very wise observation the hon. Member for Ilford made in the Budget Debate. He said it is not enough to operate on articles consumed by the people, but articles which will give the maximum of employment. I entirely agree with him, and if he accepts that he is bound to vote against this proposed relief to Income Tax payers and to admit that if relief can be afforded it should be transferred to those who will spend it in supporting those industries which will give the largest measure of employment. Employment itself, just as employment, is not a thing always to be desired. It depends upon the kind of employment. There is what I might call quantitative and qualitative employment. A vast amount of the employment we have to-day is of no special trade or commercial advantage whatever. It is parasitic on the community. It is a drain upon the industry of the country, and where you have, as we have in this country, a large class of people with an enormous spending power, you thereby give encouragement to the development of pernicious employment which withdraws labour from useful work. Perhaps the strongest argument that can be advanced, apart, of course, from the necessity of raising revenue to meet unavoidable expenditure, in favour of using taxation as an instrument for social reform, is that by it you can lessen the spending power of the rich and transfer it to those whose reasonable needs are unsatisfied, and it is only in that way that you can really encourage trade and industry and thereby increase the volume of employment.
May I say a word upon a matter which is exciting a good deal of interest just now, judging from what one sees in the newspapers and from the number of questions which are addressed every day to the Chancellor of the Exchequer. I refer to the new assessments for the purpose of Schedule A. This outcry is coming from people who have been escaping their fair share of taxation in the last eight years. The last assessment was made 13 years ago. Values have altered almost out of recognition, and those people who are not paying upon the value of and the income from their property to-day are not making their fair contribution to the national Exchequer. In point of fact, this is little more than a Press agitation supported by certain Income Tax repayment societies, who hope to find a gold mine for exploitation. The purpose of these societies is always to represent the Income Tax people as sharks extorting from the community something they have no right to get. This seems to me to be a very simple question, namely, should the owners of property pay their just share? If the revenue authorities are asking any property owner to pay more than he ought to pay, that person has a grievance and it is the duty of the revenue authorities to see that it is removed. There are always individual hard cases in the levying of any form of taxation, but it is the business of the authorities to reduce them to the lowest possible extent.
From inquiries I have made I believe these stories we hear of extravagant estimates—I do not deny that there are such cases, because there has been a very considerable increase in the number of officials of the staff of the Income Tax Department rendered necessary of recent years, and therefore the inspectors who are doing this work have not the experience the inspectors had in the days before the War, but I believe on the whole the assessment is being carried out reasonably, and I ask the Chancellor of the Exchequer to be lenient to this extent, not to stand by the exact letter of the law in regard to the time for putting in appeals against the assessments. There seems to be an impression abroad—I have found it amongst some of my own colleagues—that because these forms are being sent to the occupiers of houses, it is the occupier who is assessed to this tax. No such thing. The owner-occupier has now taken the place of the well-worn war widow. He is the stalking-horse of the wealthier classes in this agitation. I fail to see "that the owner-occupier has any grievance at all provided his assessment be reasonably made. As a matter of fact, if the owner-occupier has recently taken money otherwise invested in order to purchase his property he is better off from an Income Tax point of view than he was before he made the purchase. I think the Chancellor of the Exchequer will be perhaps somewhat surprised at receiving this support from an unexpected quarter, and I hope he will be correspondingly grateful.
What, I think, is the most serious aspect of this re-assessment is that it may bring into the charge for Inhabited House Duty houses which so far have been exempt. I think the Inhabited House Duty is an abominable tax. It ought to have been swept away 50 years ago. It is a survival of our old iniquitous, pernicious system of taxing everything. Even the light from Heaven was taxed. I am glad to say instructions have been given to the assessors that they are to be lenient in this matter and, where a slight addition to the assessment would be likely to bring a house into Inhabited House Duty, they are to take that matter into consideration. These are the grounds on which we ask the House to reject the Second Heading of this Bill. We might have brought forward other reasons, namely, that it makes no provision for any expenditure on much needed measures of social reform. One would gather from the replies which are being given by the Government to every proposal we put forward for better pensions, better education, better housing, that the limit of expenditure upon these matters had been reached. It has not been reached, and it never will be reached so long as the position of such a vast mass of our population remains what it is to-day. They have kept hope up to the present, but if it is to be the declared policy of the Government that we have reached the limit of expenditure on social reform that hope will be superseded by despair, and despair is the mother of revolution, and no one, I do not care to what political party he may belong, wants it to come to that. If that be the policy of this Government, if they declare that no money is to be found for much needed social reforms, the days of the advent of a Labour Government to those benches will not be very long delayed. For these reasons I ask the House not to assent to the Second Reading of the Bill.
Whether Members of the Government and hon. Members opposite agree with my hon. Friend or not, they are bound to agree that he has delivered a very striking and lucid exposition on the subject before the House. Therefore, without adding anything further, I beg formally to second the Amendment.
5.0 P.M.
I have listened as attentively as I possibly could to the hon. Member for the Colne Valley (Mr. Snowden), who has moved the Amendment. I appreciate very much his referring to my speech on the Budget. I have more or less studied the position, and I considered the figures very carefully before I put any proposal before the House, and in no way have I altered my ideas owing to any of the hon. Member's arguments. In his first point, on the reduction of the Debt, I understand that he stated that if we reduced the National Debt £50,000,000 a year, it would take 150 years for that reduction to take effect. I wonder if he has considered at all what would happen if we could pay off the National Debt in a month or a year? It would be the greatest calamity that we could possibly have if we reduced this National Debt beyond a certain maximum every year. I contend that reducing it £100,000,000 last year was possibly too great an amount, but I do contend that the more we can reduce it by small amounts, even if it takes 150 years, we shall be better off, and must be better off, than by reducing it by large slices in a few years. [HON. MEMBERS: "Why do not you explain?"] I will explain later. With regard to the premium on bonds, I understood the hon. Member for Colne Valley to say that the premiums on bonds were mentioned in the balance sheets of commercial companies. I do not agree with him. I can mention several companies where the premiums on bonds, which bonds can be paid off at a given date, are not shown in the balance sheets.
With regard to the Income Tax, I am sorry I could not quite follow the hon. Member, but I advocated that the Royal Commission on Income Tax should be set up again, and I feel that that Royal Commission, which gave its Report about two years ago, was only a start in going into this Income Tax question to see that it is carried on in a fair way to everybody, both rich and poor. The hon. Member for Colne Valley also referred to the wealthy classes. I wonder if he has compared the proportion of wealth now to the proportion in 1801? I have just taken that date promiscuously, and I find the proportion of wealth to population was almost the same in 1920 as it was in 1801. I did not know the hon. Member was going to argue on these points, but perhaps he will forgive me if I give these figures to show that the proportion in 1801 was more or less the same as in 1920. In 1801, 26·3 of the population had incomes of between £1,000 and £2,000 a year. In 1920 it was 27·3, just 1 per cent, of difference. In 1801 17·7 of the population had incomes of £2,000 and over. In 1920 it was 17·5. That must show that the wealth of the country is as evenly divided to-day in proportion to the population as it was in 1801. After the wars of 1815 the country had a debt of £800,000,000, and we started the big War in 1914 with about the same amount of debt—roughly, practically the same amount of debt. What have we done? We have increased the wealth of the country, and it is more important to increase the wealth of the country in the proper proportion than it is to consider paying off the National Debt in large slices.
The hon. Member for Colne Valley referred to direct and indirect taxation. I argued that if you could get direct and indirect taxation more or less on the same basis it would be better for unemployment. I gave instances from the United States of America, and I quite agree that there is not a very great difference there, but I also gave France and Switzerland, and I also gave the State of Victoria. I think that, although the United States may not have a very great difference, if the hon. Member studies the other two countries I name and the State of Victoria, he will realise it has something to do with unemployment, and I do advocate it from the unemployment point of view. An hon. Member opposite asked how the National Debt should be redeemed. In Clause 18 the Chancellor of the Exchequer puts his main point to be the Sinking Fund. It is the foundation of this country to have a Sinking Fund, you must pay your Sinking Fund out of your revenue when your revenue is greater than your expenditure. What does it do? For argument's sake, supposing that the £100,000,000 by which we reduced the National Debt last year had not been used in that way, what would the position have been? Roughly, it would have meant another penny on the Income Tax, for the interest on the amount of £100,000,000 would have come to £4,000,000 to £5,000,000 a year. We must reduce the Debt by the Sinking Fund and reduce our interest in the same way. One of the big problems of the Chancellor of the Exchequer is a new conversion loan. That is one of the big things before us. Roughly there are £3,500,000,000 of debt which the Government have the option of paying off in the next six or seven years. How could it be paid off? It could only be paid off by permanent money becoming cheaper so that you may be in a position to float a new loan at reduced interest. The Chancellor of the Exchequer only six weeks ago floated £15,000,000 at a reduced interest, which saves this country about £150,000 a year. That all assists the conversion of the big loan when money gets permanently cheaper on the permanent loan, so that we can save perhaps 1 per cent, on our big National Debt which will make a difference of about £35,000,000 a year.
What happened 100 years ago? I am sure the hon. Member for Colne Valley has studied that. If you take exactly 100 years ago you find that the income of this country was £57,000,000 and the expenditure £50,000,000, and there was a great argument in those days as to what should be done with the surplus. The Chancellor of the Exchequer, possibly similar to the one we have to-day—[HON. MEMBERS: "Not half so good!"]—I quite agree with that—but the Chancellor of the Exchequer of that day insisted on the same policy, that £5,000,000 of the £7,000,000 should be put to the Sinking Fund. A deputation from the counties went to wait on the Chancellor of the Exchequer to ask that of that £7,000,000, £5,000,000 should be allowed to be used in industry. The petitioners stated as follows:
Did the hon. Gentleman include the Window Tax among the direct taxes?
The chief tax was the Land Tax, which was the biggest tax in those days. I do not think I have any other criticism to make with regard to the various points raised in this Debate, but I would emphasise to the hon. Member for Colne Valley, who has kindly referred to me, that the absolute necessity for the stabilisation of this country is that our Debt should be reduced, but that it should be reduced out of income instead of out of what we may have the opportunity of debating later, the capital levy.
Neither the speech of the hon. Member who moved the Amendment nor the subject-matter of the hon. Member for Ilford (Mr. Wise) have very much bearing on the few remarks that I intend to address to the House on the Second Reading of the Finance Bill. The Amendment which I have put on the Paper really deals with both branches of the subject which we have been discussing, the necessity of reducing both direct and indirect taxation, and it seems to be rather beating the air at this stage to discuss the relative importance of the burden of the one or of the other on the community. The burden of both on the community, I contend, is much greater than the industrial progress or the life of the people of this country can bear. Instead of the hon. Member for the Colne Valley (Mr. Snowden) devoting his energy in proving that high Income Tax is not injurious to trade, he would be much better employed in joining hands with those who wish to reduce taxation generally, which involves a much bigger question of principle, namely, the taxable capacity of the country as a whole. You cannot run the finances of the country on the special circumstances of any particular country with which you happen to be connected. That is no way of dealing with a big problem of this kind. The real question, which is fundamental, is what ought to be our policy regarding the reduction of taxation in relation to the reduction of Debt. When I spoke on the Budget Resolutions I then indicated that, in my opinion, until you get tax reduction to a much more normal figure, both direct and indirect, you can very well leave your Debt reduction alone.
Why do you want to crush the country by taxation in order to wipe off the relatively small amount of £40,000,000 a year —relatively small compared with the enormous amount of our Debt—instead of leaving the country first to recover a position in which it can really pay off its Debt? The process proposed seems to me an entirely false economic process. It is a process somewhat similar to that which one might adopt in connection with a firm which is in financial difficulties, and instead of allowing it to get through its difficulties and to discharge its liabilities you insist upon putting it nto the bankruptcy court first. That, surely, is absolutely unsound from a business point of view, and no business man would proceed on those lines. The internal Debt is very largely a bogey. It is money which we owe to each other, and however you deal with it you are simply handing money from one lot of people in this country to another.
You are taking from the poor and giving to the rich.
The hon. Member says that we are taking from the poor and giving to the rich. By tax reduction you reduce indirect as well as direct taxation. You reduce the burdens of the poor.
You would decrease the purchasing power of the poor and increase the purchasing power of the rich.
By keeping up heavy taxation you are decreasing the purchasing power of all classes, and by reducing taxation you increase the purchasing power of all classes. That is economically true. We are not, however, dealing with that question, but with the question as to whether it is a good thing or a bad thing, ultimately, to pay off Debt. The point I am dealing with is whether it is advisable now, or for the next year or two, to put heavy burdens on all classes of taxpayers in order to bring about Debt reduction. On that point I can give an interesting quotation from a Conservative financier, who once was Chancellor of the Exchequer, Sir Stafford Northcote. In his book, "Twenty years of Financial Policy," he says:
"Although the main brunt of war expenditure ought to be borne at once, some aid, at all events, can be not unreasonably expected from the succeeding ages or, at least, from the succeeding years."
That is exactly my point. This Debt has been accumulated during a great war which has demoralised the markets of the world; the demoralisation of the markets of the world affects our industries and, until those markets have become more normal and industry has had a chance to re-establish itself, we, surely, can delay reducing our Debt until we have reached a state of normality. That is entirely in accordance with Sir Stafford Northcote's view, and also with a statement made by Mr. Gladstone. The real way in which we can reduce Debt most effectively is by increasing wealth. We are diminishing the capacity for increasing wealth by imposing heavy burdens of taxation. The increase of wealth will, in itself, automatically diminish the real burden of Debt in the country. Take the position after the Napoleonic Wars. This country had then the relatively small population of 12,000,000, almost purely agricultural, and relatively poor, and it had a Debt of £1,000,000,000. What enabled us to bear that enormous Debt? Not by taking £5,000,000 a year from the Sinking Fund.
They did it.
But that did not enable this country to bear the burden. What enabled us to bear the burden was the development of our industrial system, thereby increasing the wealth of the country so greatly that the Debt of £800,000,000 or £1,000,000,000 became insignificant. So it will be if we develop our industry to-day. I can see no reason why the proper ratio of progress should cease, and if invention goes on progressing—and I think we are only on the fringe of invention at the present time —the burdens which to-day seem so enormous will in a much shorter period form a relatively small burden on our national wealth. Debt is a question of proportion in relation to assets. A man whose liability is relatively small compared with his assets does not consider himself in a parlous condition, and he is not very particular how soon he pays off the Debt. If the assets increase the liabilities become less. Therefore, I take a much less gloomy view than do many hon. Members as to the largeness of the amount of our burden, provided we give the country a chance to develop its industries on sound business lines. That is why I always maintain that we cannot afford an Income Tax of 4s. 6d. in the £. It is an enormous amount. Income Tax does not merely fall upon the rich, it falls on a great many people who are not rich. It falls upon the working classes also. There is indirect taxation of tea and sugar, which is a colossal and crushing burden, diminishing consumption, and that in itself produces unemployment by reducing the consumption of the millions of people in this country. If you diminish the consumption of the millions of people in this country you probably produce as much, if not more unemployment than by taxing the richer classes. These things both tend in the same direction. Therefore, we ought to consider very seriously the question of tax reduction before we begin Debt redemption.
The Chancellor of the Exchequer in his Budget speech said that he was going to charge to revenue £40,000,000 a year for Sinking Fund. Considering that he reduced the Debt last year by over £100,000,000, by an accidental surplus, he has already in that one year reduced Debt more than two and a half times the amount of his Sinking Fund. Are we to get no credit for that sum of £100,000,000 which has been taken out of the pockets of the taxpayers, and which was never intended to be taken? We ought to be entitled to a refund. That is obviously impracticable; but, surely the taxpayers ought to be allowed some credit for it, when we are dealing with the question of Debt redemption for future years. The Chancellor of the Exchequer is not at all sure that he is not going to have a large surplus on the Budget which he has presented. Last year it was estimated that there would be a surplus on the Budget of £700,000, but when we came to the figures the surplus turned out to be about £100,000,000, largely due to reductions of expenditure which had not been expected. Does not the Chancellor of the Exchequer expect that, with his vigilance and energy, there will be an even greater reduction of expenditure than has been achieved in the past? If so, I am rather puzzled by the figures presented in the White Paper. To my astonishment, I find, in comparison with the actual expenditure of 1922–23, the estimated expenditure on the Army, Navy and Air Force for 1923–24 shows, not a reduction, but an actual increase of £5,000,000. That seems very unsatisfac- tory. Before the earthquake came which put us on opposite sides of the House, the Chancellor of the Exchequer and I were engaged in the task of endeavouring to reduce the expenditure on the Army and the fighting Services, and we had a fruitful field of exploration. Therefore, I am astonished to find that we are proposing to spend £5,000,000 more in 1923–24 on the fighting Services than in 1922–23. I am still hoping that the right hon. Gentleman will be better than his Estimates, and that a considerable reduction will take place.
I am also surprised to find that the Land Tax and House Duty revenue is estimated at exactly the same figure for 1923–24 as for 1922–23. In view of the fact that the new assessments, about which so much has been said, are now being made, is that to have no effect on the amount that the Exchequer is going to receive in the next financial year? Moreover, what is going to become of the vast amount of money collected in Excess Profits Duty? The right hon. Gentleman's Estimate for 1923–24 is £12,000,000 only. Is that the balance on what he has to pay out and what he expects to receive, or is it a very conservative Estimate? There is a large balance of unpaid Income Tax and Super-tax, which is collected from year to year. That provides a kind of carry forward which may falsify any Budget Estimate at any time, and really removes from this House that control over finance which it ought to have. Although difficulties have undoubtedly arisen in collecting revenue, the sooner the amount is diminished and brought down to a figure which no longer weights the Budget, one way or the other, the sooner we shall know where we stand.
On the statement of my right hon. Friend, I am concerned with the fact that not only shall we be asked to adopt a Sinking Fund of £40,000,000, but that at the end of the year he will have another Sinking Fund of £60,000,000, which will again give him two and a half times more than the amount he requires. So convinced am I that that is likely to happen that I am not prepared to give him the £40,000,000 that he asks for in this Finance Bill. He ought to have applied it in the reduction of direct and indirect taxation. I am putting down an Amendment to deal with a matter which I raised on the First Reading of the Bill, and which also deals, incidentally, with the point raised by an hon. Member, and that is, the reduction of Income Tax on such parts of dividends which are not distributed to shareholders, which cannot be said to be spent by the recipients in riotous living. That money remains in the industry and it fructifies for the benefit of the business. I think that an Amendment of that kind should be received with the utmost sympathy—[An HON. MEMBER: "What about the Corporation Profits Tax?"] The Corporation Profits Tax ought to be abolished. By general consent, it is a bad tax. There are two other questions which call for attention. One is the funding of pensions, and the other is the Sugar Duty. The funding of pensions stands almost on a footing of its own.
It means really that you take the possible charges of pensions over the number of years during which these charges will exist and will expire. It is a very simple, natural, and sound financial operation, and I have never been able to understand why it is argued that there is an objection to carrying out this procedure. Why should people who are living at the present time, just after the War, with all the burdens of the War, have to bear the peak of expenditure of a charge which must in time diminish and eventually disappear, instead of spreading this charge obviously and naturally over a number of years? I am glad to say that for that idea we have precedents. For instance, under Lord Liverpool's Administration in 1822–23, in dealing with the great debt left by the Napoleonic War, a funding scheme was adopted and carried out satisfactorily, and I cannot understand why we should not revive this process now. It is a very natural step which has the approval of the present Prime Minister, for in a speech made on 22nd May, 1922, he said: That is exactly what some of us have been advocating. If you do that, as far as I can make out, instead of having a charge of £73,000,000 a year in a Budget under this heading, you would reduce that charge to £33,000,000 and save £40,000,000. This £40,000,000 I would gladly hand over to the Chancellor of the Exchequer if he would relieve direct taxation to the extent of £40,000,000. What he is doing at present is taking £40,000,000 a year out of taxation in Debt reduction, for the pensions portion of the War Debt, and £40,000,000 out of taxation for other reduction of the War Debt, so that there is £80,000,000 a year besides smaller Sinking Funds amounting to about £5,000,000, or almost £85,000,000 a year taken out of the taxation of an overtaxed country for this purpose. I am amazed that this House tolerates proposals of this character. I am astonished that the industry of this country, and the people and taxpayers of this country, allow themselves to be seduced by the honey-tongued words of my right hon. Friend into shouldering a quite unnecessarily high burden of so grave a character as that in the present circumstances, with the unemployment which we have which costs such vast sums of money.
We are actually spending £100,000,000 a year in keeping people unemployed and we are taking £80,000,000 a year which could be used in industry in order to pay off Debt. This is supposed to be wonderfully sound finance in the City. I do not belong to the City and I am not in its secrets, but such procedure does not appeal to me, looking at the matter from the broad point of view, as really the last word in finance. Mr. Gladstone once said, and truly, that the evil of heavy taxation was that money fructified much more in the pockets of the taxpayer than it did in the pockets of the Treasury. If you diminish their funds in order to carry out this unnecessarily heavy reduction of Debt, it is said that this money flows back through various devious ways, slowly and in interrupted stages, to industry. Still, that process is one as to which no one can determine the rapidity with which it occurs or the amount which does come back. Therefore, I have ventured to put on the Paper an Amendment inviting the House to say that the policy proposed is not one which should be carried out.
Now a word as to the Sugar Duty. The chief argument used by the right hon. Gentleman against reducing the tax on a prime necessity of life, and one of the most important of raw materials of manufacture in this country, namely, sugar, was that sugar was in the hands of a ring in America, and that if he reduced the Sugar Duty the ring would merely put up its price, but the consumer would not benefit. I doubt whether the general economic law that a reduction of tax would lead to a reduction in price of the article could be entirely circumvented by speculators in Cuba or America. I do not believe it. I have a report from some of the largest sugar refiners and manufacturers in this country, who say that they do not believe it. A very important circular has been issued, signed by the head of the firm Tate and Lyle, the head of the Manufacturing Confectioners' Alliance, Cadbury Brothers, and Cross and Blackwell, representing these various industries. They do not agree with the aspect of the case which the Chancellor of the Exchequer argued in this House. They say, quite truly: Sugar Tax in its present Budget. Evidently it is not deterred by the belief of this gang of American speculators that they will be able to increase the price of sugar. Therefore I think that the views of the right hon. Gentleman would scarcely hold water.
I do not know whether this was the argument which was really at the back of his mind or whether it was the best argument which he could find. He naturally feels, as anyone who studied the financial figures must feel, that a reduction in the Sugar Duty means a considerable reduction in revenue. In connection with the tax on beer he has succeeded in making no doubt what looks like a somewhat advantageous bargain, and also in pleasing a certain section of the electorate, on whose support his party is always very glad to rely. But if you have a serious chance, as between beer and sugar, or even as between Income Tax and sugar, of reducing taxation, I would say that the Sugar Duty ought to be reduced. Very few people realise the enormous figures which are involved. It has been said that the Minister does not know the great importance of sugar as an article of diet, especially for children, while for younger children it is almost as important an article of diet as bread and milk, and therefore it is one which has a very first claim on tax reduction, almost above any other tax, even tea or beer or any other form of indirect tax. Therefore I hope that the right hon. Gentleman will still see his way to modify his attitude on what is really a blot on his Budget, as he could apply, towards meeting this very legitimate demand, the £40,000,000 a year to which I have referred.
I have had a calculation made by an expert that to pay off £4,000,000,000 Debt in 25 years at 5 per cent., paying half-yearly between principal and interest, you would require for Sinking Fund £41,032,240 and for interest £100,000,000, or a total yearly charge of £141,032,240, or taking it at 4 per cent, the Sinking Fund would be £47,000,000, and interest £80,000,000. making a total of £127,000,000. The question is whether you are going to pay off £4,000,000,000 Debt in 25 years which is a very large amount to pay off in such a short period. I do not know if that is the. principle on which the right hon.
Gentleman has been working. I think that these points are really worth very serious consideration, for they are a fundamental factor of our whole industrial position and the whole life of the people of this country. Whether we persuade my right hon. Friend to take up an attitude more in consonance with the views which he held when he was not representing, as he does now, the revenue of the country, and was still more in sympathy with the industrial position of the community, or whether he feels he must stick to the letter of the law, I consider that the people of this country and taxpayers and electors of this country would be well advised to devote more thought and attention to the very fundamental and important question as to whether it is not much more advisable, as I have argued, first to put our house in order, first to get our industries going and our unemployed population once more at work, and then, with renewed prosperity and a new springing force, be able to make an assault on our Debt, than to carry this heavy taxation round our necks, as the old man of the sea had to carry his burden, and to look round, as he had to do, and view a sea which has no ripple of wind on the waves to blow the ship of commerce into the harbour of prosperity.
As this is the first time that I have had the honour and temerity to address the House, I trust that hon. Members will extend to me their usual kindness. I am not going to embark on the dangerous sea of high finance. Other hon. Members who have spoken have already done so, and each has met with the fate that he deserved. I leave the House to interpret that oracular statement as it may seem good to each hon. Member. I would like to say a few words on a subject of which I have had some experience, and that is Income Tax administration, particularly lately as chairman of a body outside this House, the Income Tax Payers' Society, and I must thank the hon. Member for Colne Valley (Mr. Snowden) for giving the society such a splendid advertisement in his speech. As chairman of that society I have learned to what a large extent Income Tax payers require protection, both in this House and out of it, and I never so much appreciated the utility of that society as I do now, after having listened to the speech of the hon. Member for Colne Valley. I propose to confine my few remarks to such parts of the Finance Bill as deal with the Income Tax question.
All Income Tax payers are, of course, very grateful for the relief of 6d. in the pound. I only wish that it had been a larger amount. But I must say that I feel that the interests of the smaller Income Tax payers have not been sufficiently regarded. When the Bill reaches the Committee stage I hope that certain Amendments will be moved, for the purpose of removing certain grievances which the smaller Income Tax payers undoubtedly feel against the present Income Tax law. With the consent of the House, I would like, in advance of the Committee stage, to mention two or three matters about which Amendments will, I hope, be moved, and, without going into details to-day, I would J ay that I trust the Chancellor of the Exchequer will take note of them. First of all, I would like very much to see an increase in the personal allowance made to widowers, who, under the present conditions, when they lose, their wives, at a time when their expenses become heaviest, have their allowances very considerably reduced. Then I would very much like to see an increase of the allowance for dependent relatives. With the cost of living what it is, the present allowance is totally inadequate. I would also like to see an increase in the allowance made on earned incomes, particularly with respect to the smaller earned income. I would like also to see an allowance for travelling expenses to and from business, as that would be a boon of inestimable value to hundreds of thousands of workers of both sexes, and particularly precious in these days of housing difficulties.
Of course, I know that these suggestions would cost the Exchequer something, but I feel convinced that the Exchequer would be amply compensated by the measure of content which would exist amongst a- large mass of taxpayers, who are now borne down by the heavy load of taxation. Never has the cumulative effect of the Income Tax pressed so hardly upon Income- Tax payers as it does to-day. The universal agitation throughout the country in connection with the new assessments under Schedule A must have brought home to the Chancellor of the Exchequer the fact that Income Tax payers are on the point of exhaustion and I am sorry to say that there is evidence to show that in some cases they are on the point of renunciation of their ancient political loyalty. I hope, sincerely, that the Chancellor of the Exchequer will give them some relief. I was not aware whether it would be in order to discuss the assessments under Schedule A to-day, but perhaps I may be permitted to say that in many cases the whole advantage, and in some cases more than the whole advantage, of the 6d. reduction of Income Tax will be taken away by these new assessments, and, in fact, the one advantage to which the taxpayer had been looking forward will disappear completely. I think the Chancellor of the Exchequer would be well advised to take into serious consideration the undoubted, and in many cases the justifiable, complaints which are reaching hon. Members from all parts of the country.
All hon. Members will agree with the Chancellor of the Exchequer's expressed intention of doing something to prevent the evasion of payment of Income Tax. No one can have any sympathy with persons who deliberately evade payment of taxation and so place larger burdens on the shoulders of other people. The temptation is great, and I have no doubt that it is yielded to in many directions. If the Chancellor's suggestions are to diminish these evasions, I am sure that every Member of the House will wish him success with them. In my opinion, how-eer, they will not have that effect. If it is wrong for a citizen to evade taxation— of course it is wrong—it is still more wrong for the State to take from its citizens taxes which have been paid in error and which the State refuses to return to the citizen. That is frequently happening. I think the House will agree that a law which permits this, and permits its officials to refuse to rectify an injustice when discovered, should be amended at once. The Income Tax Society, to which I have referred, has received many complaints of this, and has been unable to obtain redress from the Income Tax inspectors, who in many cases stand rigidly upon the letter of the law which permits the Crown to refuse to re-open an assessment if an appeal has not been lodged within twenty-one days.
The House will remember that the hon. Member for South Kensington (Sir W. Davison) has asked several ques- tions this Session upon one such case, that of a lady who has paid Income Tax upon a very considerable amount of money—Income Tax which was paid in error. Actual injury is now being added to insult, for she is being required to pay Super-tax upon it also. That is nothing short of a scandal, and it should be stopped. The action of the Government in this matter is comparable to that of a man who pleads the Statute of Limitations when he is pressed to pay his just debts. The Chancellor of the Exchequer, with that sense of justice which I know is his, may have had this matter in mind when in his Budget Statement he proposed that the time for making claims for repayment should be extended from three years to six years. That proposal is carried out in Clause 16 of the Bill. But let me assure the Chancellor that it is quite an empty advantage and does not touch the case of injustice to which I have referred. The suggested concession applies only to repayments on insurances, allowances, bank interest, and such things, which may be omitted when a man is making his Income Tax return—a mistake which very seldom happens compared with the very numerous cases of assessments made for too large an amount, against which an appeal must be lodged within 21 days. In fact the Chancellor's words seemed deliberately to exclude these cases of injustice, for he said: human nature. I do not expect that all parties in the House will agree that the Super-tax payer has any cause of complaint. However much some hon. Members may disagree with me in principle, I know that they all want to be fair. In two directions the incidence of Super-tax is distinctly unfair. At present the Super-tax payer pays the tax, which is a second Income Tax, upon his gross income, or, in other words, he pays the second Income Tax upon an income which he has never received. He is not allowed to deduct from his Super-tax return the allowances which are made to all Income Tax payers.
This matter was always of such great importance to Super-tax payers, and never having been definitely settled legally, the Income Tax Payers' Society sought a decision in the Courts of Law. In spite of the brilliant advocacy of the right hon. Member for Spen Valley (Sir J. Simon), they lost the case, both in the High Court and in the Court of Appeal. It must, therefore, be now accepted that the law of the case is settled as it exists to-day. Nevertheless, that does not prove that the law is just. I hope that in this matter also the Chancellor of the Exchequer will take into consideration the suggestions which I have made, and will take action accordingly.
6.0 P.M.
It has been a refreshing and inspiring experience to listen to the Debate this afternoon. I have listened to three financial geniuses—my hon. Friend the Member for Colne Valley (Mr. Snowden), who may in the future be the Chancellor of the Exchequer; the hon. Member for Ilford (Mr. Wise), and the right hon. Gentleman the Member for West Swansea (Sir A. Mond), and they have all disagreed. That is a great consolation to me, because I think, therefore, that I must know something about finance as well as they do, and at any rate, I cannot differ from them more than they differ from each other. The hon. Gentleman who has just sat down has my sympathy even more than the three hon. Gentlemen who spoke before him, because he made use of this phrase, which appeals to me very strongly, that "the taxpayer requires protection from the Chancellor of the Exchequer." That is my doctrine exactly, and I congratulate the hon. Gentleman upon his maiden speech, which was terse and to the point, and I hope he will make many such excellent speeches in the future. It would appear that all those prophets who prophesied woe to this country have been mistaken. We were told that after the War Bond Street would be a waste and Piccadilly a grassy promenade, but instead of that I see with amazement the apparent prosperity of the country. If you go to any sports fixture you find a crowded attendance. There is as much expenditure on luxury as before the War, and probably more. The race courses and all places like that seem to be full of money. I do not understand it, and I leave it to my financial friends to elucidate the problem, but of one thing I am perfectly certain—and I am sorry my right hon. Friend the Member for West Swansea is not here to listen—that if you permit the Chancellor of the Exchequer to spend money the taxpayers will have to pay for it, and the late Government was pretty liberal in spending the taxpayers' money.
Is this prosperity real or fictitious? I candidly confess I should like an explanation from the Treasury authorities as to whether the country is really enjoying the prosperity which we seem to be enjoying at the present moment. Taking the trade returns as compared with 1913, we see that the volume of our imports is just 85 per cent., as compared with 100 per cent, prior to the War, or 15 per cent, less, but the volume of our exports shows an enormous decrease, the figure being 68-9, compared with 100. What is the reason of that? Why is it our exports are down? I observe that another financial genius whom we formerly had in this House-Sir Eric Geddes—recently offered an explanation of this, but I have got a notion that it is due to the dearness of the goods we produce, and that is due again to the very high taxation imposed upon the producers of those goods. I do not believe that the country knows with anything like accuracy what taxation it is paying on the price of commodities as a result of the taxes of the Chancellor of the Exchequer and the rates of the local authorities. I observe that the other day my right hon. Friend the late Chancellor of the Exchequer gave some figures as to the enormous cost of producing a ton of steel owing to rates and taxes. I know full well as a producer of wheat that we are not getting anything like the price for our wheat that the consumer is paying for his bread. In the iron and steel trade they have to sell at a much lower price than the consumer is paying, and the coal trade is in exactly the same position. The coal miners complain that they are receiving low wages, but when the consumer wants to buy a ton of coal he has to pay something like double pre-War prices.
Where is the money going. A very large amount of it goes in indirect taxation to the Chancellor of the Exchequer. If the producer is hampered by heavy internal charges, he must place those charges upon his product. The distributors not only put the extra taxes they pay but a profit on those taxes as well, on the articles they sell, and that is why all the distributing trades to-day are, apparently, doing so well, although the producing trades are not enjoying anything like that amount of prosperity. I have always been, and I am not ashamed to say here that I am now—after the experience of the War and after much thought on our peculiar insular position —a strong Free Trader. We must do a foreign trade in this country or we must die—at any rate, a large portion of the population must die. If we have to place, as we are placing, enormous burdens of internal taxation and rates on the producers of commodities, we shall be hampered in competing in the markets of the world against other countries which are more lightly taxed. Therefore, what we want to-day, in order to secure a reduction of taxation, is a reduction of public expenditure, and we cannot get that reduction of taxation until we do get a reduction of expenditure. I was interested the other day in a letter from Lord Montague of Beaulieu on motorcars. In this Budget there will be a tax of 33⅓per cent, upon foreign motor-cars, and yet, for all that, the motor industry is in a state of despair. Why are foreign competitors able to bring their cars into this market, leap over the 33⅓ per cent, duty and sell them cheaper than British manufacturers?
Because they are cleverer.
It is for us to be as clever as the foreigners; if we are not, we shall go down. But all these artificial protections should be swept away.
We are economising on education. You cannot have a clever people and cut down education expenditure.
I will not go into that point, but I could say a good deal about education, and I think a good deal of money is wasted, not on real education, but on what is called education. To return to the matter with which I was dealing, it appears that in the "Times" of 21st April last, the Renault Motor Company of France were actually advertising for good fitters, trimmers, electric fitters, milling machine hands, spring polishers, and the like, for their motor works in France. Why should they advertise in a British paper for these hands? I do not understand. Yet they are going to export their products to this country in spite of the 33⅓ per cent, tax, and although we have had this tariff for the last six or seven years, foreign cars still come in. Apparently our motor manufacturers to-day are not as clever as the foreign manufacturers, and apparently this duty does not serve any purpose of efficiency in the motor car industry. We were very spendthrift in time of war, and the late Government was very spendthrift in times of peace. The right hon. Gentleman the Member for the Hillhead Division (Sir R. Home) placed the prince of spendthrifts in the position of looking after economy and there is no doubt about it that Sir Eric Geddes had very large ideas at the beginning of the last Parliament, did great work as an economist in the latter part. We have to meet a new situation to-day, however, and the new situation has brought about the enormous taxation which the producers of the country are paying. When I hear my hon. Friends of the Labour party demanding more State aid, I always think to myself that more State aid means more taxation, and more taxation means a greater hampering of our producers, and if there is no production, then labour will not be employed.
I do not observe in the Budget that there is any credit taken for reparation payments or payment of Debt from OUT Allies. I know there are certain—what I would call—" high-brow" financiers, who believe that it is better for us to pay than to receive, but I am one of those simple people who do not agree with that doctrine. If the Chancellor of the Ex- chequer were able to announce certain reparation payments, or certain payments from the Allies, he would be able to lighten our taxation, and if he lightened our taxation, we would be able to produce with greater facility and at cheaper prices. I allude to this matter with a certain amount of confidence, because we have been told in some quarters that it would ruin our country to receive reparations, and my answer is that in that case I do not understand why Germany does not pay. The French are logical; they did not take that line, and they want to have reparations. America does not seem to think that she is going to be ruined in that way, because we are going to pay her £30,000,000 or £40,000,000 a year.
They have not got it yet.
I think the Chancellor of the Exchequer has made an arrangement with America for these payments.
They have not received it yet, and we do not know what the effect will be.
My hon. Friend is a Devonian, and most Devonians prefer to receive money rather than pay it. I am not sure that my hon. Friend is right; I think a certain amount has been paid to the American Government already. I certainly am not one of those who say we should give up the whole of our claim on reparation and the Debts which our Allies and others owe us. I do not agree, and I am going to say it here because this is the proper place in which to say it. The Chancellor of the Exchequer has issued a White Paper which shows that we are owed altogether something like £2,000,000,000—some of it bad debts of course—and we owe America about £900,000,000, and to my amazement the other day the Financial Secretary to the Treasury gave me an answer showing that the proposals of the Government at Paris, in order to settle Debts, were that while we are owed £2,000,000,000 and while we owe less than £1,000,000,000 we are going to settle by paying £100,000,000 more than we receive. I do not think that is business, and I do not understand it. It seems to be a kind of financial Bedlam. The taxation of this country in February was £16 per head, in France it was £6 8s., and in America £6, and I ask the House seriously to consider those figures. When we get to more normal times, how will the British producer be able to compete with his more lightly taxed competitors? If we can afford to dispense with all reparations and all payments of debts owing to us, we must be heavily taxed, and our competitors in the neutral markets of the world—and we must do a foreign trade— will be lightly taxed. Certainly, then, our manufacturers and producers here will have to work harder than they otherwise would, and labour will have to receive a lower rate of wages. I do not see- any other way out of it.
I will turn from that, and survey the expenditure, for which the Chancellor of the Exchequer is providing. Listening to the earlier part of this debate, when the House was not very full, I thought that all the prophets of 10 years ago would have been confounded. If you had told the House of Commons 10 years ago that they would be voting now four times as much as they did then, that the Chancellor of the Exchequer was now going to raise in taxation £800,000,000, they would have been dumbfounded. We are spending too much. The Chancellor issued a White Paper last Saturday, from which I see that in 1913–14 our expenditure on the fighting forces was £86,000,000, whereas the Estimate for this year, 1923–4, is £145,000,000. That is nearly £60,000,000 a year more on the fighting forces, after we have been through the terrible War, and we are not getting protection either. The Government are not spending our money to the best advantage, and I ask my right hon. Friend to go into it with the Army and the Navy. The Navy has a personnel reduced from 145,000 to less than 100,000 men, and it is costing something like £11,000,000 more. The numbers in the Army have been reduced from 174,000 to 156,000 men, yet the expenditure has gone up from £35,000,000 to £65,000,000 a year. Why is it? I ask the right hon. Gentleman to make a rigid inquiry into the expenditure of these Departments, for I am certain that they are capable of very great reduction without any reduction of efficiency.
Does the right hon. Gentleman want the private soldier to go back to Is. a day?
No, I do not. I want him to be properly paid, but when my hon. Friend has been in Devonshire longer he will have more financial acumen. I have just told the House that the numbers of the Army have been decreased from 174,000 to 156,000, yet the expenditure has been increased from £35,000,000 to £65,000,000. That is a very large sum.
How much has the daily pay of the private soldier been increased % It has been increased five times.
If the hon. Member will be good enough to give us that information later on, when I have finished speaking, I shall be delighted to listen to him. I ask the Chancellor of the Exchequer to cast his eye over these points. Now let me take the Civil Services, which are costing infinitely more than they were before the War. Then they were £55,000,000, but to-day they are £285,000,000. Taking away the War pensions, the Civil Services this year amount to £211,000,000, as compared with £55,000,000 before the War, and I say that that is too much. Much of what we call social reform to-day is casting too great a burden on the taxpayer, and the people must learn to do for themselves what they are now asking the taxpayers to do for them, and it will be done very much better and very much more cheaply. There is no justification for the Civil Services to-day, putting aside War pensions, costing four times more than they were before the War.
I ask the House, and particularly my Labour Friends, to remember that we are a poorer nation and that this taxation falls with especial severity on those who work for a living. We must remember that we are a much poorer nation, and that directly we ask the Government to undertake any new enterprise or to do any new work it always means increased Government expenditure. That means increased taxation, and increased taxation is crippling the trade of the country at the present moment. I know there are hon. Members on the other side of the House who think that industry can be made prosperous by Government action. They believe that by Protection, or some other device of that kind, you can make industry prosperous. [HON. MEMBERS: "Hear, hear !"] That is Socialism, and if I want Socialism I am not going to that side of the House for it; I am going ' to this side for the pure milk of the gospel, but I am not going to have any Socialism. May I appeal to the right hon. Gentleman the Chancellor of the Exchequer to scrutinise with the utmost severity the expenditure, not only on the fighting Services, but on the Civil Services, and I hope that next year he will be in a position to announce even greater reductions of taxation than those for which we have to thank him this year.
I have listened to most of this Debate, and I must say, most humbly, that there is nothing in the speeches I have heard so far which makes me differ from my previous belief that the wise men come from the East, because the speeches we have heard from the West Country, while full of complaints, have offered, to my thinking, no remedy and no real solution of the great difficulties which the Chancellor of the Exchequer has to face. I want very briefly to call the attention of the Chancellor of the Exchequer to one or two facts, and I should like to ask him to bear favourably in mind the question of relieving agricultural shows in regard to Entertainments Duty. We hear so much in this House of doing something to bring people back to the land, and to make life on the land more happy and contented than it is to-day, and here is an opportunity of doing something to help these agricultural shows, which want some relief from the Entertainments Duty. It would do a lot to maintain the life of the villages where those shows are held, and I think the Financial Secretary to the Treasury, after the interview he was good enough to give us on this question, will bring it to the attention of the right hon. Gentleman, who, I trust, will bear the matter in mind.
Hon. Members opposite seem to take the general view that the party they represent pay all the indirect taxation, while what are called the employing classes are responsible for the direct taxation, but I want to remind them that everybody pays indirect taxation, from whatever class they come. Therefore, when they talk about the balance of direct taxation against indirect taxation, they should remember that those who are paying direct taxation are also paying their share of indirect taxation, which is very often forgotten, as though the working classes were the only people to pay in- direct taxation. That is not a fact, and we ought to remember it.
There are two other points I wish to mention, and they both arise from the very interesting speech we had from the hon. Member for Colne Valley (Mr. Snowden). He was dealing with the question of Income Tax and the way it fell on certain taxpayers, and he argued, I think, that the people on the lower level of income only got £3 relief, whereas the bigger people got very considerable relief. The fallacy of that argument was absolutely apparent, I should have thought, to most hon. Members, for this reason, that the class of person to whom the hon. Member was alluding was exempt from Income Tax altogether. Owing to abatements for children, and so on, they get complete exemption altogether, and therefore, when the hon. Member quoted figures showing that that class of person only obtained a relief of about £3, was he really expecting that that kind of person should get relief on income on which no Income Tax was being paid at all? If he was, it is a new doctrine altogether, and I shall be interested to hear whether anybody will substantiate that doctrine later on in the Debate.
The only other point to which I should like to allude has reference to when the hon. Member came to the question of standard wages, in relation to indirect taxation and ability to pay. In the course of his argument, he came to agricultural labourers. I happen to have by me—and for this reason I am very glad to have the opportunity, through catching Mr. Speaker's eye, to make these few remarks—some figures relating to the standard minimum wages of agricultural labourers. Nobody will say for a moment that they are satisfactory, and everybody will say that they are miserably low. I agree most heartily, but the standard minimum wage worked out for last March was 27s. l0d. for the lowest class. That was the average right throughout the country, and that did not include stockmen, cowmen, horsemen, and shepherds. I will venture to say that half the agricultural labourers on the farms, where the minimum wage is 27s. or 28s., are averaging nearly 40s. per week, because they are in a different position. The hon. Member argued that that type of labourer is paying an indirect taxation, I think, of 1s. 9d. I cannot see how he got his figures, but supposing they do, I want to point out that those men's wages can be paid only out of the produce of the farms on which they work, and the rates of wages of agricultural labourers as a whole are to-day 55 per cent, above pre-War level. The value of the produce which is being sold, and on which those men's wages depend, is to-day 54 per cent. above pre-War level, and, therefore, taking the average of the two—and that is the vital average on which you must work out all these bases of wages—we find that value of the produce is 54 per cent, and the wages are 55 per cent, above the pre-War levels.
I would point out, to show the difficulties of the situation, that the value of agricultural produce is falling every month. For instance, in January last it was 68 per cent, above pre-War level, in February it was 63 per cent., in March it was 59 per cent., and in April it was 54 per cent. The fact that the average value of the produce upon which these men's wages depend is constantly falling must be realised, and their difficulty even in meeting the charges of indirect taxation. I mention those facts, because the House must realise that in all these questions, when dealing with taxation and cost of living, of course one has got to consider the cost of the produce on which the man's welfare depends, and that seems to me to be the bed-rock of the whole argument.
I support the Budget as a whole. I happen to be the first Member this afternoon, I think, to give general support to the Budget, except my hon. Friend the Member for Ilford (Mr. Wise). On the other side, we get two very divergent lines of thought, one asking for more taxation of income and the other for lightening taxation, and it will be very interesting, when the time for the Division comes, to see whether those different lines of thought are all gathered together in one Lobby in the endeavour to defeat a wicked Tory Government. But while we realise, on this side of the House, at any rate, that we have not got all we want in this Budget, and we would have liked to have seen a reduction of the Duty on sugar, and more off beer and the Entertainments Duty, I for one am confident that the Chancellor of the Exchequer has made a start in the policy of the relief of taxation, which, I venture to say, in the next three years will bear good fruit, and when the time comes, in three or four years, for the Government to go to the country, they will be able to show a reduction of taxation, which, I think, will give them a right to demand a further term of confidence from the electors of this country.
I listened with very great interest to the speeches of the hon. Member for Ilford (Mr. Wise) and the right hon. Member the late Minister of Health (Sir A. Mond). It appears to me that the purport of their argument was to justify the existence of a heavy National Debt. The hon. Member for Ilford pointed out, and rather took a. certain amount of pride, in the fact that the National Debt of this country at the outbreak of War was very similar in amount to what it was in 1815. The late Minister of Health even went further, and argued that there was no financial utility in reducing the National Debt at all. I wish to support the Motion for the rejection of this Bill, because I believe this Budget is inequitable in its incidence and is quite unsound finance. What is more, I think that both the hon. Member and the right hon. Member in their own individual business adopt a principle entirely opposite to that contained in the Budget. No business man in this country justifies or takes pleasure in any debt upon his own business, or would attempt to get any satisfaction out of a liability against which there can be set no asset, but that is exactly the position in which this country is at the present moment, through having this enormous National Debt, which is draining the country in taxation and gives in return no useful service to the community.
I wish to address my remarks, in the first instance, to the necessity for a reduction in the Sugar Duty. The- right hon. Gentleman the late Minister of Health would have convinced me more of his sincerity in the desire for a reduction of indirect taxation, if the Government, of which he was a member a few months ago, had practised what he has preached here to-night. The Budget introduced last year in its incidence was even more unfair than the Budget introduced this year. In last year's Budget, £53,000,000 was given to the richer taxpayers of this country, and only £5,500,000 in relief of tea, coffee, cocoa and such commodities. In this Budget we can see the same sequence of policy, namely, the greatest amount of relief in taxation going to the rich and comfortable section of the community, and the lesser amount to the indirect taxpayers. Under post-War finance, the whole of the tax paid through the Income Tax and Super-tax is being cancelled in repayment of interest on the National Debt. The Income Tax payers of this country, through the Income Tax and the Super-tax, are paying this year a little over £300,000,000. Last year the contribution from the Income Tax and Super-tax amounted to 36·1 per cent. of the annual revenue. But, on the other side of that account, 37·8 per cent, of the annual expenditure of the country went in repayment of interest on the National Debt, and although you cannot state without qualification that the whole of this interest goes to the direct taxpayer, one can state quite fairly, and quite justly, that the people who pay Income Tax, and particularly those who pay Super-tax, are those who have the largest holdings in War Loans and the National Debt generally.
Therefore, taking the figures broadly, I think we are justified in stating that the interest being paid yearly upon the National Debt goes back to the same class of the community who pay the Income Tax and the Super-tax, and that class, as represented in the last two Budgets, are shirking their legitimate obligations to the people of this country. They are paying in with one hand 36 per cent., and they are taking out with the other hand 37 per cent. When we turn to indirect taxation, 27 per cent, of the revenue of this country is raised in that form. What benefit from State expenditure are the working people of this country receiving? Although I admit, as the hon. Member pointed out just now, that the direct taxpayer also pays indirect taxation, it must be borne in mind that the amount expended on food and such forms of commodities that bear their share of indirect taxation, by those who pay Income Tax and Super-tax, is much lese in proportion than is paid by the working-man, who spends all his income on the necessities of life. The services of the State that primarily bring benefit to the masses of people of this country are public health, education, unemployment insurance, old age pensions, and matters of that description, and yet only 13 per cent, of the expenditure of our State revenue is for such social services at the present moment. Therefore, I say that undoubtedly, on the facts I have submitted, it cannot be controverted that the party opposite are taking to themselves practically all the reduction of taxation that we are able to effect.
It is no use saying that a reduction in the Income Tax will benefit trade. Trade is not suffering because of the lack of capital. Any successful firm floating a new capital issue on the market at the present time is over-subscribed in a matter of 24 hours. The argument for reducing Income Tax could only be justified if there were a shortage of capital, and hon. Members opposite know that that is not the case. Trade is, suffering first, because of the international chaos caused by the foreign policy of the party opposite, and, secondly, because of the reduced consumption in our home market, brought about by the reduction of wages of working people, who are the consuming population in the home market. On top of that, when you give a relief of Income Tax, and swell the incomes of the 2½ million fortunate people of this country, their expenditure of that additional income does not produce the same amount of employment as it would if it were diverted to the indirect taxpayers, because it is obvious that the more luxurious and costly an article, the less the proportion of labour power expended on that article, and the more you reduce the necessaries of life,, and stimulate demand, the more in proportion is labour power expended on the production of those commodities. Therefore, I say, without doubt, that indirect taxation should have more concessions at the present time.
Reverting to sugar. As a result of War finance, sugar has suffered the most, and yet is becoming more and more a necessity of life. Cheap sugar is vital, especially when the purchasing power of the masses of the people is being reduced. Take some of those commodities which (represent some little form of luxury, but are nevertheless a necessity in working-class homes. In the preparation of jam, from 40 to 50 per cent, in weight is represented by the sugar ingredients, and, therefore, any increase in the price of jam, through the cost of sugar, reduces the consumption and directly interferes with the prosperity of the fruit-growing industry of this country. Hon. Members opposite have shown a considerable amount of interest in the agricultural industry in this country, and yet here is a very important industry, the fruit-growing industry, kept in a state of stagnation, because jam-makers cannot buy sugar at a price to get a saleable commodity on the market. Consequently the manufacture of jam does not only directly, affect the fruit-growing industry of this country and the employment of labour, but when finally sold to working-class consumers, constitutes a valuable and variable food commodity.
Sweets, a necessity for children, are mainly composed of sugar. Chocolate, for instance, contains from 40 to 50 per cent, of sugar. Condensed milk, practically the only milk millions of working-people of this country can purchase at the present moment, because of the high price of raw milk, contains 40 per cent, of sugar, and therefore that directly affects its price. Biscuits contain from 5 to 35 per cent., according to the particular kind and quality. The argument of the Chancellor of the Exchequer, that the reduction of the Sugar Duty at the present moment would not find its way to the consumer, is quite fallacious. If the Chancellor clearly wished to benefit the consumer in this country, then the argument he has used is not valid and will not stand analysis. This country only consumes about one-twelfth of the sugar production of the world, and if high prices, or rather reduced consumption, affected prices, how is it at the present time when sugar is very high to what it was in 1914—brought about primarily by the high tax on sugar—whilst a tax is on the sugar the price is mounting? That in itself proves that the world price of sugar—there is an increased demand from America, it may be said—and that is quite right—but the whole world supply of sugar is not entirely dependent upon the American market!
Hon. Gentlemen opposite have been pleading recently for the introduction of preference and preferential duties on Imperial-grown commodities. If there be anything in their arguments, why is it that Imperial-grown sugar at the present time is not affecting prices? There is a concession of 4s. 3d. per cwt. on Imperial-grown sugar, and yet when that sugar reaches the table of the consumers in this country it does not differ in price with any other sugar. It is not affecting prices. I feel that the argument of the Chancellor is particularly thin. In avoiding a concession in indirect taxation at the present moment, he is doing so because, he says, he is afraid of the reduction not finding its way to the consumer, whereas, if there be any desire— even if that argument was sound, which I strongly contest—to help the indirect taxpayer, it could be done in the reduction of the Tea Duty, the abolition of the Duty upon dried fruits, and in many other ways in indirect taxation where there would be some distinct benefit. Sugar is a most vital food commodity, and the Sugar Duty should have had consideration. But the right hon. Gentleman has chosen to follow the policy of his predecessor in giving the major part of taxation relief to the direct taxpayer instead of the indirect taxpayer. Therefore, I shall vote for the rejection of this Bill, because I think it is unfair, and it proves what we have always said, that while we on this side of the House are accused of fomenting and preaching class-prejudice, hon. Members on the other side do not talk about it, but they practice it. That is shown in this year's Budget and, in that of last year.
I will not follow the right hon. Gentleman the Member for Swansea (Sir A. Mond) into the elaborate calculations he put forward with regard to the reduction of Debt or the reduction of taxation, nor into the figures put forward by the hon. Member for Colne Valley (Mr. Snowden) as to the relative value of direct and indirect taxation. All I propose to do is to deal with one specific point. In the last Debate on this Budget, hon. Members opposite raised the question of the import duties on motor cars. From their point of view, they look at these duties as being an attack on Free Trade. I myself am not a Free Trader. I am not a Protectionist. I believe in keeping to the mean. The extreme Free Trader and the extreme Protectionist are equally impossible, the same as is an absolute Prohibitionist on the one hand and the drunkard on the other! There is always a mean between. the two, and I believe we should not conduct the taxation of this country by means of shibboleths, but judge each article on its merits.
I look upon the import duty on motor cars as illogical, as constituted at the present time. You tax the motor car. You tax the accessories of the motor car —that is to say, certain of them: the speedometer, the clock and the wheels, but there is no tax on tyres. Why have tyres been specifically exempted from this import duty? In 1915, I believe, rubber tyres were included among the accessories. We were at that time at war with Germany. All the rubber came to this country in order to be distributed to Europe to make quite certain that none of it reached enemy countries. For that reason, therefore, I understand at that time rubber tyres were exempted from import duties. I do not believe that reason stands good any longer. The rubber industry is an important industry with a capital of between £25,000,000 and £30,000,000, and in normal times it employs 65,000 men. Yet these large works have at the present time but little work owing to the large number of imported foreign tyres.
Last year something like 1,100,000 of foreign tyres were imported; that was partly due to the depreciated exchanges of France and Italy. Michelin and Pirelli tyres are coming into this country at the present moment owing to the depreciated exchange; other countries send us tyres, especially America. This is not due to depreciated exchange, but when you study the motor industry in this country you find there are about 450,000 cars here, while in America there are 12½ million cars. Therefore, the manufacturers in America of cars manufacture on an enormous scale, and there is a certain surplus beyond what they themselves want, and that surplus is thrown into this country. People who distribute it have not the high taxes we have to bear, and our industries are being severely affected and a large number of men thrown out of employment. I suggest to the Chancellor that we are not asking him for money, but this that we are asking for would bring money into his pocket. We know the Government are as anxious as they can be to do all they can to relieve unemployment. By putting this tax on rubber tyres, and making them the same as all the other accessories of the motor car, the Chancellor would not only benefit his own revenue, but help to promote employment in this country.
There is one other point I should like to raise, and that is the exemption of commercial motor vehicles, in this country from the same taxation as is put on what are called pleasure cars. How does the right hon. Gentleman differentiate at the present time between what is called a pleasure car and a commercial car? It becomes very hard to justify that particular term of "pleasure." The doctor has to have his car; he has to go his rounds. If he were to go back to the old-fashioned horse and trap, as in the old days, he would not be able to do the amount of work he does. I look upon so-called pleasure cars as cars of utility and necessity, and I feel it is not. right to differentiate between the two classes of cars.
In this country there are 16 big manufacturers of commercial motor-cars. During the last year 12 of these concerns lost £2,355,000, and the remaining four firms have gone into liquidation. Why? The reason for this is the vast number of cars surplus from the War thrown into the market at absurd prices, and also the fact that other cars are being brought into this country surplus at the present time. This is an industry which previously employed 20,000 men. It does not now employ 5,000. Here is a way whereby 15,000 more men could be put to work without costing the Government a penny. During the last year the number of commercial motors in this country increased by 22,000, and of that 22,000 only 4,000 were manufactured in this country. That is not due to inflated prices, as might be thought, because at the present time the price of a commercial motor-car is only from 10 to 15 per cent, above pre-War prices, and all of us know that the cost of living at the present time is 75 per cent, above pre-War prices. This commercial motor industry is a very vital one to us, and certainly would be if at any time we went to war again—which I trust will never be the case. If, however, we did, all our transport would be mechanical transport, and if at the beginning of the War the industry has been completely ruined, and we have to start new factories to make motor transport for our Army, it would take not only a very long time, but be a serious risk to our then position.
In all sincerity, therefore, I ask the Chancellor of the Exchequer if he could not see his way to give some preference to commercial motor cars and rubber tyres. At the present time most of these come from America. I should have thought that when we have to pay this very heavy debt of £30,000,000 or £40,000,000 to America it would have been an advantage to preach that it was unpatriotic on the part of people here to buy what are luxuries or unnecessary articles from America. Every penny spent on buying unnecessary articles from America makes it more difficult for us to pay our debt to America. I feel that to buy these articles is a mistake, and I should certainly suggest that if they are to be bought that, at least, they should contribute the 33⅓ per cent. I, therefore, hope the Chancellor will not mind me making these suggestions in all friendliness in respect to a Measure which, in every other respect, the country looks upon as a safe and sound Budget.
7.0 P.M.
We have just had an example of the dangers of the slippery slope of Protection. We have the example of the McKenna duties, which started the precedent. They encourage Members from various sides of the House to ask that their special industry, or some special industry in their particular constituency, should have the advantage of the duties, or that the duties should be extended to them. I would just say this in respect to the hon. and gallant Member's arguments in favour of tyres being taxed, that a tax on -rubber tyres would be a tax on transport, because on cheap tyres depends the development of road transport, and the making of it an effective competitor with railway transport. I feel a little afraid of the Chancellor in this matter. I rather regarded him in some ways as a sound Free Trader. In the Sugar Duties, however, I am afraid he showed a lapse from Free Trade standards.
The Chancellor of the Exchequer was indulging in the old Tariff Reform argument of the foreigner paying the tax, because he was arguing that it was unsound to lower the Sugar Duty, and that the only result of lowering that Duty would be that the price would be raised by the people who control the sugar abroad. That, of course, suggests that at present the controllers of sugar pay part of the present Duty of sugar and that if we lower the Duty because of the existence of the combine, the price would not go down. That is a thoroughly fallacious argument, and very reminiscent of the old Tariff Reform days. I am satisfied that if the right hon. Gentleman had thought fit to lower the Duty on sugar, before very long the price would have dropped. At any rate that is the belief of the large consumers of sugar—the manufacturers of jam and confectionery. They believe that if the Duty on sugar were lowered, the benefit would accrue to them, and they would be able to have the advantage of cheap sugar. Apparently, with regard to sugar, there is general agreement among the Opposition. An hon. Member opposite said that on many matters we were divided, but one thing united us and that was the belief that the time was coming when the tremendous tax on sugar—a necessary article of diet— should be lowered.
I hope the Chancellor of the Exchequer will not listen to the most persuasive arguments of the right hon. Member for West Swansea (Sir A. Mond). I can assure him that the right hon. Gentleman does not represent hon. Members on this side of the House, who are quite sound on finance. I think I can speak for hon. Members on this side above the Gangway when I say that they are in favour of liquidating the Debt as rapidly as possible. There is a difference of form; they favour a capital tax, while we go on the more traditional method of working through the Sinking Funds, and through the ordinary methods of taxation. The Debt of the country is so staggering that it would be a very serious thing if we were to postpone its reduction indefinitely. The right hon. Member for West Swansea talked glibly of postponing it for a year or two. Once you start that game, it is a terrible temptation to a Chancellor of the Exchequer to postpone it. When the desire for pressing social reform is constantly coming upon us from all parts of the country, it is a temptation to dip into the Sinking Fund. Still, there it is, a big Debt. Even at the rate which the Chancellor of the Exchequer has set for repayment of £50,000,000 a year, as was pointed out in the opening speech, that would take something like 150 years to liquidate, and it is a tremendous task to face. The right hon. Member for West Swansea pointed out, as a precedent, the rapid liquidation of the Debt, as a result of the Napoleonic wars. He quite rightly said that liquidation became possible because of the tremendous industrial development due to machinery. I am not sure that that is a very sound precedent to follow. I am rather inclined to think we have reached something near the peak load of economic development in this country for years to come. It is true, there is a possibility that electricity may revolutionise industry very much in the same way as did steam. That is something in which it would be unsound to place too much faith. We have to face the fact that we have this enormous dead weight of Debt on the industry of the country, and that in some way or other it has to be liquidated. That is the strength of the position of the Labour party; that is the force of their argument in favour of a capital tax. It is only by sticking to sound traditional finance, and by making ample provision out of the ordinary Budget of the year, that we can face the argument in favour of a capital tax.
What I want to get from the Chancellor of the Exchequer—I raised the matter on the Budget—is the position of some of our assets, due to us from our Allies and from the Dominions. In the Paper issued at the time of the Budget, figures were given showing that the Debt due to us from the Dominions was £148,000,000. How much can we regard that as an asset that is to come before long in liquidation of our liabilities? The Dominions are in a very strong financial position. They have large undeveloped assets in territory not yet opened up, most of which belongs to the State. We have a right to ask the Dominions to come to our aid as soon as possible, and to pay up the Debt they have incurred—it is true, in the common cause, but only as their share of fighting the common enemy. The wealth per head of the population in Australia and New Zealand is probably larger than in any other part of the world. It is certainly very much larger than in this country, and we have a right to demand, especially at a time when they are asking us to assist them with emigrants, that they should share the liability for our immense Debt.
I again press the Chancellor of the Exchequer to enlighten the House and the country as to how much he regards as assets the Debts from our Allies. The Allied Debt to us works out at something like £1,913,000,000. If you add to that the amount of money advanced to Austria, and other States, for reconstruction, the total works out at the immense sum of £2,000,000,000. Would it not be a fair thing to regard part of that sum, at least, as an asset? Certainly we have a, right to look to the amount due from France as an asset against our Debt. The net Debt of France is £5,613,000,000, of which £584,000,000 is due to Great Britain. Are we to wipe that figure right out 1 It is never referred to in these Debates, and I think there is a growing feeling in France that they can ignore their liability to us. The Rapporteur-General pointed out in the Senate that the gross Debt of France was £7,900,000,000. They are making, so far as I can gather, no attempt in their Budget to reduce that amount. France is not an example which we ought to follow. The French seem to be going down the slippery slope to bankruptcy. They are spending £800,000,000 a year, while their revenue is only £400,000,000. We are encouraging them in that unsound finance, because we are not, apparently making any allowance for their liability to us.
I submit to the Chancellor of the Exchequer that the French financial position must be reconsidered. The French are suffering, at present, economically far less than this country. They have no unemployed, and all their industries are working full time. Their rich men do not pay in any way on the same scale as do our Income Tax payers. They are providing, so far as I can find out, in Income Tax, only £44,000,000 a year. Somebody has pointed out that France is a regular paradise to the rich man, while the United Kingdom is levying a bill on the well-to-do class of no less than £319,000,000. The taxation per head in France is only £9 12s., while the taxation in this country works out at very nearly double—£17 9s. Have we not got a duty to the people of this country to stand up for our rights? Are we justified, in our natural affection and sentiment for France, as our Ally, in ignoring our just rights and claims for the financial assistance we gave in the War 1 We contributed our quota of men, we made the common sacrifice. Are we not justified in asking France to share the financial burden with us?
The same applies, of course, to Reparations. Reparations are now disappearing in this country, as being a negligible quantity. No longer do they appear in our debates. I do not think they have been mentioned once, in our discussions either on the Budget, or the Finance Bill. There is the danger that not only will France refuse to pay her liability to us, but that, if at any time Germany is able to foot the bill for Reparations, France will claim the greater part of the money. It would be a great encouragement to the country, to the taxpayers, and to the nation as a whole, to know what is the position in reference to the debts due to us both from the Dominions and from our Allies. France has shown very little desire for economy. We have made a small contribution to the reduction of armaments; but we see France steadily going on maintaining an army on an immense scale and on a war footing, costing as much as before the War. They have, I think, just over 600,000 men in the army at the present time, and they even refused to agree to the Washington Agreement with reference to submarines. I think the Chancellor of the Exchequer will agree that the only real way to give relief to the taxpayer is to bring down expenditure. The only chance of bringing down expenditure is by reduction of armaments—reduction of the Army and of the Navy. The task of the Government in bringing about a real reduction in armaments is difficult unless France agrees to do the same.
France now is the only country in Europe with a large army at the present time. We have a right, while our people are bearing this tremendous burden of taxation, while over 1,000,000 people are unemployed, to say to France that while we stood by her in her time of trial during the War, and helped her financially, she should come to our assistance now, in our economic distress; that she should help us to bring down our taxation, first, by recognising her liability to us financially, and, secondly, by joining us in our desire to reduce armaments. I agree with my hon. Friends of the Labour party that there is no practical chance of giving any relief to the taxpayer in any of the great Civil Services. The demand is not for less but for more expenditure. As the Minister of Health has pointed out, the housing scheme, which involves a considerable charge on the Exchequer in the way of subsidy, is only the beginning, and it will be necessary further to expand after two years. Some attempts have been made to reduce the cost of education. The only result has been to decrease its efficiency, and to create an outcry amongst all the people who are keen on education throughout the country. That being so, if the Chancellor is going really to bring some relief to the taxpayer, it must be in the direction of co-operation with France; in France recognising her liability to this country; in France recognising the error of her ways in the expansion of her armaments; and by her joining us in our desire to bring about a substantial reduction in armaments. Finally, I would say that I am not a great believer in conferences. We had, I think, some 12 or 13 conferences during the last Parliament, and they involved considerable expenditure in travelling. I do suggest, however, that in regard to this subject I think we ought to take steps to bring the financial position of this country and the whole of Europe prominently before either the League of Nations or a conference representing not only all the, European States, but also America, so that our financial position may be considered in connection with the whole financial position of Europe. I think on the whole the Budget is a sound one, but there is one mistake, and that is with regard to sugar, which I hope will be removed next year; but apart from that, I am glad that the Chancellor of the Exchequer will have the courage to provide for a substantial reduction of the National Debt.
A good many topics have been raised in this discussion which one might deal with if there was sufficient time. I should like to have said some-thing about the agricultural situation. We are often taunted on this side of the House with inability and incapacity on this subject, but hon. Gentlemen opposite belong to a party who have traditionally been concerned and whose chief occupation has been the conduct of agricultural affairs; and yet after centuries of application to that subject nearly every hon. Member opposite bemoans the fact that they have run agriculture to ruin.
With regard to the subject of motor cars, one hon. Member has told us the number of motor cars in use in this country and in America. If it is true that there are 12,500,000 motor vehicles in use in America it is obvious they must be used to a large extent by people of moderate means. The difficulty in this country is that the man of moderate means cannot afford a motor car, for the reason that he is being taxed to death chiefly because he has to meet great international debts. There is only one party in this House which has put forward proposals for adequately dealing with this situation. What is our position? It is fair to assume that the National Debt is of such proportions that it runs to about £l,000 per family in this country, and at 5 per cent, that means that each family must find for interest alone about £50 a year, which is a tremendous amount of taxation for such a purpose. I venture to say that that is a burden which the industry of this country and the people cannot permanently carry.
If one takes the figure with regard to the proportion of debt to wealth production, it is fair to assume that if we take our production of wealth in 1913 experts agree that the annual wealth production of that year was somewhere round about £1,500,000,000. The Budget was round about £200,000,000, roughly, in 1913, and the proportion of the annual wealth production demanded by the Government for State purposes was just over one-seventh of the total production. The annual production to-day is not greater but less than it was in 1913. I do not think that the most extreme optimist would declare that we were producing more wealth in 1922 than we were in 1913.
Assuming that and bringing these figures down to those of 1913, and taking our interest on Debt alone at £350,000,000, and calling it at to-day's prices equal to £200,000,000 in 1913, we come to this that we have actually now taken for interest purposes alone from a lessened annual production as much for interest as we did for all our total charges eight or nine years ago. I am not a business man, but I am speaking in a House where business men predominate, and I would like to get from business experts some reply to the question as to how they think the industries of this country can carry a burden of that description.
The right hon. Gentleman the Member for West Swansea (Sir A. Mond) spoke about deferring the payment of this Debt for years and years to come. We on these benches lacking business experiences suggest that it would be a great relief to this country to reduce our Debt, and cut our losses at the earliest possible moment. We are in favour of dealing drastically with our Debt, because we believe it was contracted by exceedingly wicked financial means. It was mostly piled up by profiteers. In 1916 Sir George Paish was the Financial Adviser to the Treasury, and he addressed the Cardiff Chamber of Commerce, a remarkably successful body of men, some of whom are still in this House, and who appear to be just as successful. But at that time they were remarkably successful. At that time Cardiff was having a good deal to do with shipping, and shipping was an extremely profitable business, and Sir George Paish told the Cardiff Chamber of Commerce that they had the economic control of something which the nation required and which to the nation was a question of life and death. At that time their profits increased by hundreds of millions, and they had been able to exact that increased profit, and they were able to demand it from a harassed nation because the prices charged must be paid if the services were to be forthcoming. Sir George Paish went on to tell us that this was not altogether to be deplored that these gentleman had made these huge additional profits, because they could lend the profits back to the Government to enable them to carry on the War. In effect that means, first of all, they can rob the nation, because successive Chancellors of Exchequer have recognised that this was robbery, because they taxed those profits 60 per cent, or 80 per cent., and then they are told, after they have exacted the uttermost farthing from the nation, that these exactions can be lent back to the nation to secure a successful conduct of the War. It is owing to the lending back of those exactions that we have to provide now some £350,000,000 a year in interest alone. It is because of that that we are faced with this Budget which is a bad Budget, and an iniquitous one, and it constitutes an excessive demand upon the poorest of our population.
I say that this Budget is a mean one. I look in the Estimates, and what do I find? That we are spending this year on public education about £4,000,000 less than we spent last year. We have been told that we have effected other economies this year. I notice that we have effected an economy of £4,000,000 upon education and that is something which I think we shall all deplore a little later on. We have saved this year, we are told, about £17,000,000 on ex-soldiers pensions, and I venture to say that there is no Member of this House who is not badgered out of his life every day with piteous stories coming from these people who are being deprived of their pensions in a particularly hard world. You have saved £17,000,000 there.
We have been told that £7,000,000 or £8,000,000 has been saved in connection with the Civil Services, the social services which are necessary for carrying on the health and sanitation of our towns and cities. What does the hon. Member for Colne Valley (Mr. Snowden) twit the Government with? That this year they have made a present to the Income Tax payers of £26,000,000 and of 2,500,000 Income Tax payers, three-fourths of them received out of that sum only £3,000,000, and that half a million of those fortunate persons receive no less than £23,000,000 as their share of the remission of taxation. That is half a million of people who are most Income Tax and Supertax payers, and I say that every penny remission that the Chancellor of the Exchequer has given to them in this Budget is given at the cost of the education of the children of this country, and at the expense of the pensioners and worn out soldiers. You say there has been £17,000,000 saved in pensions, but that is not due to the attrition of death, but because the pensions of these men have been callously cut down when they ought to have been maintained in order to keep these men from the pangs of poverty which they are now suffering.
This Budget is an unfair one. The question of indirect taxation has been discussed. Is it not a fact, so far as indirect taxation is concerned, we all pay it? I am going to say again that the poorer a man is the more he pays in indirect taxation in proportion to his income, and therefore the greater the burden becomes. A man may pay very easily a tax on sugar if he is receiving an income of £5 a week, but if a man is only receiving 30s. a week and he has to pay the same tax on sugar, that hits the poor man with much greater severity than the man who is receiving three times the amount of his income. All this facile sliding over the difficult cases that occur in taxation, all this assumption of optimism, is not borne out by any actual fact, so far as one can discover. We on these benches are opposed to the Government's methods of taxation, and that is why we shall ultimately put forward our own proposals for dealing with this question.
Might one, in passing, also refer to the question of the bearing of this huge National Debt upon the question of unemployment? The problem of unemployment still remains. It may be that, because of the provision for finding relief work, a large number of men, running, perhaps, to 120,000, 130,000 or 140,000, are taken from the unemployment registers, but what one has to remember is that, in the strict commercial sense of the term, those men are still unemployed. The ordinary enterprise, the ordinary channels of production and commercialism, are not providing them with work. They are being maintained by unprofitable relief works; the ordinary processes of commerce are not finding them employment. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), on the 3rd August last year, when he was Prime Minister, spoke in this House upon the question of National Debt. He was arguing in favour of its very early reduction, and he said something to this effect— I am not quoting the exact words, and am trusting to my memory, but I will give, as far as I possibly can, the sense of what the right hon. Gentleman said. He said, "I bid hon. Members beware of a Ger- many with 60,000,000 virile people, with no National Debt, with her National Debt wiped out, while England has a debt of £7,000,000,000. In competition with Germany "—and he mentioned another State; I think he was referring to America—" in competition with those two great, virile States, think of the burden you have got to carry. I bid you beware of the problem that confronts you in the future." He went on to say that there was nothing to be gained by pushing our late enemy too far.
That is a problem which ultimately the business men of this country will have to face. You cannot permanently keep the German nation down. You cannot permanently curtail their productive powers. You may defer or check it, but, sooner or later, they will find access to the world's markets, and then all your 33 per cent, of duty cannot touch the fact that to a large extent their National Debt has been wiped out, and that they face you on terms which you cannot touch so long as you have this millstone round your neck of something approaching £8,000,000,000 of debt. It is surprising to me that, confronted with facts of that description. Members of a business House do not show more courage in facing this question than appears to be the case at the present moment. We are accused of not particularly loving our friends to whom we refer as capitalists, but I am convinced that, over this question of taxation and dealing with the National Debt, we shall have to save our economic enemies in order to save the working classes. They hang together. We have to save you against yourselves and in spite of yourselves.
I do not want to detain the House at too great length, because I know how one suffers at times from the somewhat too lengthy speeches of Members, but I do want to say that, in my opinion, the Chancellor would have been far better advised to have made a larger remission of indirect taxation than he has. I cannot allow the opportunity to pass without protesting against the maintenance of the tax on sugar. I know how the tax hits so many of the poorest of the poor. I know how indirect taxation hits the extreme poor. We have unemployment, we have poorly paid and poorly pensioned soldiers, and it is dis- gusting at times to think that, by means of indirect taxation, we actually put a tax on the poor pensions and allowances that we pay to these men who are receiving some return from the Ministry of Pensions. On the little they can spare, indirect taxation takes from them in the extremest proportion of all, and that is one of the iniquities of this method of indirect taxation. I protest, therefore, against the absence of any remission of tax so far as the poorest of our people are concerned, and I shall go into the Lobby and vote against the whole of this Budget with a calm conscience, quite clear in the fact that I am meeting the wishes of my constituents, who suffer tremendously because of the iniquities of our present financial methods.
I have not the least doubt that the hon. Gentleman opposite will go into the Lobby this evening with a perfectly calm conscience. It is the quality of hon. Gentlemen opposite, on every question on which an attack can be made upon the Government, to go into the Lobby with calm consciences, so that they will not be exhibiting any new manifestation of higher humanity by performing that pleasant duty this evening. In the few observations that I propose to address to the House, I should like, in the first place, to enter my protest against the monstrous accusation of the hon. Gentleman opposite that this Budget has been conceived in any spirit antagonistic to the discharged and demobilised sailors and soldiers. I submit that no more atrocious charge has been made in this House for a long time. Indeed, if any single action of the Government in recent times deserves the commendation of this House and the apreciation of the country, it is the constant care that they have exercised in doing everything they possibly can to protect the interests of the discharged and demobilised men of the Navy and Army. I do not think that any Minister in the Government, or any Department of the Government, deserves more credit for the work that has been done in the in-trests of our splendid discharged fighting men than my right hon. Friend the Minister of Pensions and the Department which he controls.
Of course, in the speech delivered by the hon. Member from the Liberal Benches below the Gangway opposite, it was quite inevitable that he would have said something on the subject of Free Trade. I am sorry that the hon. Member is not in his place, but I am sure that in this House we ought to approach ail questions in the spirit which he indicated, that is to say, on their merits, and particularly questions which are purely economic in character. I am afraid, however, that the hon. Gentleman himself and the party to which he belongs do not always pursue that precise line of argument in this House. I am one of those who whole-heartedly support the Second Reading of this Bill, and I venture to submit to the House that it indicates a course of financial policy which is already reacting to advantage upon the industrial revival in this country. Indeed, the atmosphere created in manufacturing and business circles since the Chancellor delivered his Budget speech is already manifest in a substantial improvement of the trade conditions of the nation. When hon. Gentlemen opposite say that this Budget is designed to help the rich and more and more to oppress the poor, they are talking entirely without fair and square consideration of the facts. The first set of people in this country, the first section of the community, who will derive immediate benefit from the operation of the concession which has been made in the Government's proposals with regard to taxation is the very class whom hon. Members opposite profess to represent. Already the figures show a reduction in unemployment, which is in no small measure due to the encouragement and hope which has been inspired in the productive enterprise of this country by the concessions made in the Budget.
We had a long disquisition from the right hon. Gentleman the Member for West Swansea (Sir A. Mond) on the respective merits of reduction of Debt and reduction of taxation. I think, personally, that a great deal must be said for the contention of the right hon. Gentleman, but it also is the fact that a great deal must be said on the other side, and, when one contrasts the position in which the credit of this country has been placed by the proposals of the Chancellor of the Exchequer in making such a large provision for the reduction of Debt, and the effect of that high credit upon our position in world commerce and industry, I think the balance will be on the side of the proposals of the Chancellor of the Exchequer. Many of us have thought, who have had to consider these questions in commercial circles, that the provision of £40,000,000 this year, £45,000,000 next year, and £50,000,000 the year after is rather a large burden to impose upon the revenue of this country for the discharge of Debt, and, indeed, we felt very strongly that it might have been unwise for the Chancellor to commit himself to these provisions by Statute, as is done in Clause 18 of this Bill. On the whole however, looking at the comment that has been excited throughout the world since the Budget was introduced, one cannot help feeling that the Chancellor was wise, and that this policy of a substantial reduction of Debt is a sound one to pursue.
The right hon. Gentleman the Member for West Swansea spoke at length on the question of the funding of pensions. To that subject a number of Members of this House gave continuous thought for a considerable time. Here was a burden representing a capital value, according to the Chancellor of the Exchequer himself, of £874,000,000, and we were strongly impressed by the view that the distribution of that large capital sum over a terminable period, and not carrying the peak load at any one time, would decidedly be an advantage to the country; but it must be remembered that, for a considerable portion of the terminable period that might be fixed, pensions would have to be paid out of borrowings, and, of course, borrowing immediately implies the risk of diminishing national credit. On the whole, while one would suggest that the Chancellor of the Exchequer might very well, with his experts at the Treasury, take this important subject into consideration before he introduces his Budget next year, for the present I do not think he ought to be pressed to do anything further than he has done in the financial provisions he has made. It is true, as the right hon. Gentleman said, that in the Liverpool administration an attempt was made, and made with some success, to fund the burden of pensions at that time. It was really made successful, not by funding for a terminable period, but by means of a bargain entered into by the Bank of England at the time that a certain annual contribution should be made for a period of 45 years, and that the bank would take the responsibility of discharging pensions. We all know that that system of finance was described at the time in somewhat strong terms by men like Ricardo and Hume, and even Brougham, and it was spoken of for many years afterwards as wild finance. Nevertheless, with all its defects, it was described by Disraeli, when he had to deal with the funding of certain Debts in 1867, as having been a distinct financial success. However, in these days of more complex financial transactions it requires long and careful consideration, and it may be that the Chancellor of the Exchequer will give some consideration to it during the course of the current financial year.
Every time a Budget is introduced each section of the community, indeed, very often individual people who have grievances will take steps to bring them before the Chancellor, and if they have representation in the House you will hear of them in the House itself. It is quite impossible, in the financial exigencies of this time, when efforts are being made to put the country on its feet, for any Chancellor of the Exchequer to meet every sort of suggestion of the kind which has been made. He is asked, for example, to make an allowance to widowers. Why should a widower get special consideration in the finance of the year? He is to make an allowance to dependants and relatives. There may be a case for certain sets of dependants and relatives, but are you going to take the relatives and dependants of the whole community and make concessions? How could you do it? Again, an hon. Member says there must be something done to differentiate the taxation on earned and unearned incomes. That is a very old subject which has been frequently discussed, and is as difficult of treatment as when it first cropped up. Finally, the hon. Member asked that an allowance should be made for the travelling expenses of people going to and from their daily employment. I ask hon. Members how any scheme could be devised which would fairly and squarely make allowance for people in their daily travel in the infinite variety of circumstances that prevail.
Something has been said of the new assessments. A little too much is being made in the Press about this new cry of increased assessments affecting substantially the revenue of the year. I think too often in public life, when some little possibility of striking the Government or striking a political leader crops up, certain sections of the Press are too apt to make use of it for party purposes. A great deal too much is being made of the recent alarmist statements with reference to the effect upon property owners of the assessment as against the valuation of the property before the War. I represent probably as large a number of property owners as any Member in the House, and in Birmingham, where we have a most patient, genial and patriotic population, I have only had two complaints from a constituency which is almost entirely residential and in which there are 43,000 registered voters. [An HON. MEMBER: "You will have more after this speech."] The hon. Member may be right when the vigorous thought of my constituency has had full time to develop itself, but up to the present moment I have only had two, and that is some indication that this cry is not the substantial one that some newspapers would have us believe. As a matter of fact the increase in the valuation of property in Birmingham with its million inhabitants upon which an increase of taxation could take place is only 7 per cent, in the 10-year period, and taking that together with the decrease of taxation, the result will be comparatively small. There is one point to which I should like to direct the right hon. Gentleman's attention. Last year we put down an Amendment asking the late Chancellor of the Exchequer whether he would take into consideration the case of large holding companies, who frequently have associated with them smaller companies which make losses, and whether he would consider allowing the holding companies to put the losses of the subordinate companies against the profits of others, as was done in the case of E.P.D., so that they would be taxed upon the real profit they actually made.
The hon. Member opposite, in his forcible and eloquent way—we all like to hear him speak, and if physical effort could carry conviction no one could do it better than he—pointed out that a, terrible grievance is inflicted on the poorer section of the community. As he knows perfectly well, 64 per cent, of the taxation of the country is direct taxation and, roughly, 36 per cent, is paid in indirect taxation. The direct taxpayer is carrying on two-thirds of the whole burden of national administration. When it is argued that the direct taxpayer gets the benefit of the reduction, he has the enjoyment of paying both direct and indirect taxes, so it is not a fair comparison to suggest that the whole advantage goes to the direct taxpayer in contrast with the indirect. The 2,500,000 taxpayers to whom attention was directed by the hon. Member are the people who are paying two-thirds of the entire cost of carrying on the public administration, and, moreover, they are mainly the people who direct the enterprise of this nation and they are the people who take the risk and make sacrifices in order that the effective productive effort of the nation should be maintained, and upon these people the hon. Member wishes to make the charge that the whole Budget has been mainly concerned in their interest and concessions are being made to them at the expense of the poorest and most wretched section of the community.
The hon. Member for South-West Bethnal Green (Mr. Harris) spoke very strongly and appealed to the Chancellor of the Exchequer as to what he was going to do about the debt France owes to us. Is this a time to raise the question of France being asked to discharge her obligation to us? We all know that hon. Members opposite have no consideration for anyone who appears at all out of touch with their own political tendency. At this moment hon. Members opposite are immensely concerned about the safety and future welfare of Germany.
We are concerned with Europe.
They are making friends of economic enemies. While France is in its present position of endeavouring to arrive at an understanding with Germany with regard to the discharge of German's obligations to France, and we are parties to an effort to produce some kind of basis of European peace and economic security, is that a time to begin to ask whether we should demand of France the payment of her obligations to us and of Italy's obligations to us? That is not the kind of appeal that ought to be addressed to the Chancellor. I think the House, in supporting the Finance Bill, will have given its assent to a financial scheme which, although not going as far as many of us hoped it would go, at the same time brings into the service of the year financial proposals which will be of great advantage to industry and commerce, and will give life and encouragement to industrial activity and strengthen our competitive power against those who are operating in competition with us. I would ask the Parliamentary Secretary to impress upon the Chancellor again the importance of the consideration of wiping out the Corporation Profits Tax for all time after this year. It is still an unwieldy, embarrassing burden upon industry, and he will be doing a great national service, in addition to what has been accomplished already, if he will at some definite point of time within the present financial year see his way to declare that the Corporation Profits Tax comes to a close. The concession which has been made is comparatively small. It does not operate at all till June of next year, and only in 1925 will it amount to £12,500,000. It would be to the advantage of industry, and, indeed, in the long run to the advantage of the Exchequer itself, if the tax were completely abolished. I cordially support the Second Reading.
8.0 P.M.
I must apologise to my hon. Friend if I rose, hoping to catch your eye, before he had concluded his speech. He is so eloquent that I had mistaken his peroration, and at the conclusion of the particular peroration when I rose, I did not realise that it was the penultimate and not the final peroration. If he speaks with such fluency and ease he must forgive us if from' time to time our minds are rather deflected from certain simple facts which relate to the Finance Bill and we are carried away in a cloud in which we see visions of an England which, so far as I know the social conditions of England, do not exist at this moment. My hon. Friend is well known for his incurable optimism and invincible cheerfulness, but really to-night he has been rather too optimistic and, I think, has rather overdone the cheerfulness as he reviewed the financial situation. One would not imagine, to have heard that speech, that at present every section of the community is strained almost to breaking point in the endeavour to carry on industry, and that the great mass of our workers are not merely, as to over 1,000,000 of them, unable to find employment, but as to every one of them, and those in employment, bearing a burden due to the high cost of living which imposes upon their patience a restraint which I am glad they are able to bear. When my hon. Friend spoke of this new taxation of property and said he felt entitled to speak on behalf of a residential area, which I know and the importance of which I recognise, I was very interested when he was interrupted by an hon. Member who said, "If you have had no complaints up to now you may expect them." I cannot for the life of me understand how any hon. Member imagines that the people of this country are going to submit in silence or how they will be able to endure the extra burden of this new taxation. You will take the case of the struggling man, either the highly paid artisan or the clerk or the middle-class man, who has been compelled to buy his house on account of the housing shortage. Having bought it and not being able to pay for it in full, he has borrowed upon it, so that at the present time there is a fixed annual charge upon such income as he has. You can imagine this man suddenly being asked to submit to a valuation which in fact is not a real valuation; it is an official and arbitrarily arrived at valuation which says to him, "You have X pounds more than you had before, and you shall pay 4s. 6d. in the £, less deduction on the top of this money which you never received." For people in these circumstances this is imposing a burden which, knowing something of their lives as I do, I say they will be unable to bear.
I can give you a case where a medical practitioner has been gravely affected by the new valuation. We all have our little jests at doctors, but I do not think they are nearly so many nor so good as the jests the doctors have at the expense of patients. In spite of that fact, we do know that doctors are a hard-working and not too well remunerated section of the community. This doctor had a house which was handed over to him by his father. He has some considerable family, and his domestic expenses are as heavy as they can be in his circumstances of life. This house was rated at £60 a year until the new assessment. It has now been rated at £100, while everybody in the locality knows that its rateable value was not £100. What is that man's redress?
His redress lies only in the hope that there will be every sort of public pressure brought to bear upon us who are private Members of the House of Commons; that we, who, after all, stand between the mass of the people, who individually cannot act, and their freedom and rights, shall be determined that the Government will reconsider this matter finally before it passes on to the Statute Book this year.
As I followed this Debate, I was very anxious to hear what arguments would be adduced in support of the reduction of the Sugar Duty. It is a tax, I must say, which I very much hoped would be reduced, but I must in fairness say that I thought the arguments of the Chancellor of the Exchequer at the time when he regretted that he was unable to reduce it were unanswerable, and I was really surprised to hear my hon. Friends on the benches below say that although the tax had not been reduced, yet the price of sugar had gone up. Surely that entirely confirms the decision of the Chancellor of the Exchequer. The price of sugar has gone up for reasons well known to all of us who have acquainted ourselves with them, and it will continue to go up until these reasons cease to operate. But it is also true that the sooner the cost of sugar is lessened to the housewife and that there is less taxation upon it, the better for the well-being of the country.
What I wanted to refer to was an expression of opinion by the Chancellor of the Exchequer, which I believe to be well founded, that there is a great deal of evasion and fraud with reference to Income Tax. The real way to deal with evasion and fraud in matters of taxation is to reduce taxation. If Governments are encouraged to think that it is in their power to tax people beyond an endurabl'3 and supportable degree, evasions and fraud are inevitable, human nature being what it is. Our complaint at this moment is that taxation is much too high, that in one or two cases it is detrimental to trade and far beyond the value of the revenue and return to the Exchequer. Our complaint is not merely on account of the amount of taxation and in some cases the way in which the money is spent, but our complaint is very strong and bitter as to the methods of the collection of taxes. One of the taxes I refer to as being too high is what I might call at this stage a flippant tax, it is the Corporation Tax. That tax is an abominable nuisance to business people, and rather tends to override what, I believe, is the one sound fiscal maxim for any Government, which is: "Get out of the way, as a Government, of business men; encourage them to make and earn all they can, and since we must bear one another's burdens by direct taxation, take from each man in accordance with his proved earnings." But the Corporation Tax is a tax which irritates, embarrasses, hampers and discourages business men. It yields very little, and if it were removed, there would be much larger sums available, by the help it would be to business men to increase profits, than you get from the Corporation Tax itself. In the same way I say that where 6d. off the Income Tax is welcome, Is. off would not merely have been twice as welcome but substantially as useful to the Treasury.
The Chancellor of the Exchequer to-day is finding himself compelled to organise a new system of tax collection. A Department has been set up—I do not think it generally known to the public—because of the belief of the Chancellor of the Exchequer that there is evasion and fraud in Income Tax. They are now to take businesses in groups. They will take the boot and shoe trade, and they will take the returns of everybody in that trade; they will find out what allowances are asked and what rebates are claimed by different firms. They are then going to average them and test them. They will go to the man who has put his costs and his overhead charges much lower than others; they will find out how he was able to do so, and then they will go to the man who has put his charge much higher, and you will find there will be a line drawn and the pressure will be very great. I am not saying that if one man is more adept and has more skilful advice as how to prepare his statement to the Treasury that one man in a like business should pay less than another; but I do say that, if this inquisitorial method is to be proceeded with, it does behove the Treasury to watch with the most jealous eye every 1d. of public expenditure which is drawn from the people, I was going to say with so little consideration, but I will say with such inevitable disregard to the consequences of individuals as long as the sources yield the full supply.
On this question of the method of taxation I want to draw the attention of the Financial Secretary to this fact. I think it is not generally known that at this moment very great injustices are being done in connection with the Excess Profits Duty. I am going to ask my hon. Friends to allow me to quote Section 39 of the Finance Act, 1921. It says: agreed to accept in settlement a sum of £80,000. Now they claim that there is a balance due to them although there was a settlement arrived at.
The fact is, and this is why I say it is so important for the House to determine this year how long this condition of affairs is to exist, that where the Government think they can attack firms and obtain more, they want to re-open the cases. Where they have obtained more than they should, they want to delay or dispute, and this is the arbitrary system under which individuals can be prosecuted for fraud, individuals can be forced to give to the State more than they should give; but who can lay a prosecution against officials who have forced individuals and businesses to pay more than was due and hold them to ransom and refuse to return it 1 I want to call the attention of the Financial Secretary to this, that the whole community is doing its best to bear with patience the great strain and burden of taxation. It is desirable that from the Chancellor of the Exchequer, who I am sure would gladly respond to the suggestion, and from the higher officials, there should go forward an arrangement so as to make this burden as bearable and as obviously fair in its incidence as passible. People will put with the burden of having to do a thing if they feel that they have been fairly treated, but throughout the country there is a feeling that this is a harsh and arbitrary action on the side of the Treasury, and that it is hopeless and unfair on the side either of a corporation or an individual.
In conclusion, I wish to speak on the increased burden which is being placed upon those holders of houses who are receiving what is called the new blue form. That arises partly out of a notion which was in the mind of a certain Government some years ago, that in some way the Government should interfere with the building trade in its normal operations. A Budget was introduced in which taxes were imposed which deprived those connected with the building trade of legitimate profit, instead of allowing them to make profit and to pay tax upon the profit when they had made it. That was largely responsible for the great shortage of houses which exists to-day. The Government are proposing again to interfere with the people who are the unfortunate owners of this class of property. If again the impression gets abroad that from time to time the Government will interfere with the normal economic operations of the building trade, it will discourage all the people in that trade, so that instead of releasing the tide of energy and capital that would flow into the industry it will prevent any man of prescience and sense from having anything to do with the building trade. You are compelled to give subsidies because you cannot get off the backs of the builders. You cannot say to any builder that if he has capital, business and energy, it is wise for him to put it into building. Here is a further attack, following upon other foolish and unnecessary legislation, to make, upon the industry at a time when you are giving subsidies which have to be provided by taxation, and at a time when you are giving doles to people who are out of work and only have a pittance upon which to live, and when even their more fortunate fellows in work cannot find homes in which to live.
The chief thing that we need to-day is to impress upon the Government the vital necessity for the delimitation of Governmental functions. We do not want the Government spending large sums of money in any Department in connection with industries. The salvation of this country will come through the ability and energy of individuals, but if the Government are going to strain us, and to bear down upon all classes of the community, the result will be disastrous. The better-off people, the capitalists as they are called, have now to meet practically a capital levy, and in the case of their death their estates are subject to a cruel capital levy. On the other hand, you take from the middleman, by almost usurious pressure, a large part of his income in direct and indirect taxation, and you tax the poorer classes in their necessaries of life and their few luxuries. If you are going to do that, do not fritter away money by having Departments doing work which is no proper part of the business of government. Do nothing more than give even-handed justice to all classes, in proportion to their capacity to bear the burden, from highest to the lowest, and if that be done all classes will endure it with goodwill.
The hon. Member who has just spoken has given us a very interesting view on the question of the Sugar Tax. Speaking with knowledge of that subject, he said that after hearing the Chancellor of the Exchequer's statement, he could take no course on the present Finance Bill other than the course he has taken. I compare that statement with that made by the hon. Member for South-West Bethnal Green (Mr. Percy Harris). From what we hear on this somewhat sticky subject of sugar, the two wings of the Liberal party have at last found something which may cause them to adhere together. On the question of sugar the two wings are consolidated. We have since heard from the hon. Member for Merthyr (Mr. Wallhead) that in that decision the Labour party is equally fixed in its determination. Although the hon. Member for Moseley (Mr. Hannon) dealt with one aspect of the speech of the hon. Member for Merthyr, there is another aspect of that speech which should not go without an answer. The hon. Member for Merthyr said, and he stated that the view was widely held on the Labour benches, that the whole mass of the National Debt incurred during the War was in the main handed over to the Government from the profiteering profits, and was now part of our National Debt. What happened? Not only were 80 per cent, of the excess war profits taken in Excess Profits Duty, not for the National Debt, but to meet the current war expenditure, but, in addition, Income Tax and Super-tax amounting to 12s. in the £ were imposed upon rich people, on the money that was left after the 80 per cent. Excess Profits Duty had been paid over to the Government. The contributions to the vast sum which now constitutes the National Debt were advances to meet the expenses of the War, and were made by all classs from the savings of the people, from the sale of vast sums of our investments abroad, particularly in America, which we were asked to sell and to lend again to the Government, and in other ways. Therefore, to suggest that it was subscribed from profits that were made during the War, which were illegitimate profiteering profits, which should be confiscated by a capital levy, is one of the worst arguments that I have ever heard in this House, because it has no basis or foundation in fact.
Earlier in the afternoon we had a speech from the right hon. Member for South Molton (Mr. G. Lambert), who said that when I had resided longer in Devonshire I should develop more financial acumen. He said that there were some people on this side of the House who look to Protection to increase the revenue of the country, but that Protection and Socialism were identical, and that when he. wanted any Socialism he was going to look to hon. Members behind him. That is a very wide and sweeping statement. Surely he would not accuse the whole of the United States of America and parts of Europe—not the parts that have gone mad in the East, but the perfectly sane parts in the West—France and other countries, because they are Protectionist, living under a Socialist system. I suggest that there is a way in which you could profitably and usefully reduce the Sugar and Tea Duty and at the same time do a great deal to improve the position of agriculture in this country. On 19th April I was told in reply to a question that the total revenue collected in 1922–23 on sugar and tea was £50,931,000, or roughly £51,000,000, and on 16th April I asked what was the amount and the value of our imports of bacon, cheese and butter into this country, and I found that of these three commodities we imported 14,800 cwts., the value of which was within a few thousand pounds of £100,000,000. I therefore suggest to the Financial Secretary that a duty on the import of these manufactured products of agriculture of £l per cwt., equivalent to 15 per cent. ad valorem, would bring in £15,000,000 a year, and would enable him at once to remit one-third of the duty now collected on sugar and tea without costing the revenue a farthing, while doing an enormous amount to encourage agriculture in this country, particularly the agriculture of small holdings.
There is only one other subject to which I wish to direct attention for a moment. When I was in the House before 1918, the vast turnover of the cooperative societies of this country, who were at that time practically escaping all taxation, was the subject of frequent debate. In 1917 there was a proposal to take off practically the whole of that duty which was borne in some measure by the co-operative trade, namely the Excess Profits Duty. That was put on in 1915, and I believe that practically the whole of it was taken off by the Finance Act, 1917. In all the debates it became apparent that the main difference between this particular bulk of trade and the rest of the retail and a great deal of the wholesale trade of the country is what you call it and not what it is. It is a question of whether you call, what we should call a profit in trade, surplus or a profit, whether what would be a dividend—what is known as the "divi" if paid in cash, or a discount if returned on a purchase—should be called a dividend, so that the trade should be done without any substantial profit being shown at the end of the year. The present Prime Minister, when Chancellor of the Exchequer, in his speech dealing with this subject on the 17th July, 1917, said:
Therefore, I am entitled, on that one question of Corporation Profits Tax, to ask whether that snap Division in 1921, when a previous Government was put in a minority, is to be the governing rule for the present Government. Has any advance been made in finding an alternative to Income Tax, which is generally admitted not to be applicable or in any sense directly leviable upon the surplus trading turnover of these Co-operative Societies? I am bound to raise this question, because the subject has not been mentioned by the Chancellor of the Exchequer. The subject was left in the position that after the defeat in 1921, although the Government did not intend to accept that defeat, nothing more was done about it. The right hon. Member for West Birmingham, in the speech which be made in 1920, mentioned certain definite proposals which had been suggested to him as to methods for fairly and equitably taxing this vast turnover. Are the present Government in communication with representatives of the Co-operative movement in order to arrive at a fair solution of this difficulty, which was felt to be a great injustice in the retail trade when the Income Tax was no more than Is. in the £, and has been a growing difficulty ever since, until, in the j words of the right hon. Member for West j Birmingham, it has become "intolerable"? Some solution must be found. It is rather remarkable that we have had no reference to the question in any of the statements on financial questions from the Treasury Bench. I felt that the matter could not possibly be left where it was, and that we must ask for some answer from the Chancellor.
9.0 P.M.
The House will agree that it is not altogether inappropriate that one who was a member of the Royal Commission and a signatory of the minority statement, should state the facts of the situation, which throw a rather different light upon the problem compared with that which the hon. Member has just presented. It is true that this subject of co-operative societies was considered at some length by the Royal Commission on the Income Tax in 1919 A reservation was incorporated at the end of the Report, signed by representatives of the co-operative societies and others, which made not more than a passing reference to what might be done in the event of a Corporation Profits Tax being instituted in this country. But, as we tried to point out over and over again in the course of the Debate in the last Parliament, until we finally defeated the Government of the day on the subject, that reservation, together with the whole of the work of the Royal Commission, expressly preserved the principle of mutuality in the taxation of these societies. I dare not argue to-night the whole question of mutuality in taxation. The Royal Commission made certain admissions on the point which, I think, the last speaker will accept as going far to undermine the argument which he has advanced. The net effect of taxing the ordinary dividend would be to compel the societies, in all probability, to reduce their prices to such a level that the surplus or dividend would disappear, and there would be nothing to tax. Speaking as a warm friend of the co-operative movement, I am not sure that that would not be a very desirable result.
That is not the question before the House, however. What the late Government did was the most extraordinary thing that almost anyone could imagine. They applied the Corporation Profits Tax to the undistributed portion of the surplus arising from the mutual trading of the Members from year to year; they left the whole of the distributed portion on one side and they fastened upon a relatively small proportion, the undistributed portion, held partly for charitable and educational and other purposes, and they imposed the Corporation Profits Tax on that. The whole thing was very illogical and absurd, and we compelled even the Coalition Government to be beaten on it. It was not a snap Division. It is true that the majority was small. The facts of the situation are, that the Government could not get their supporters upstairs. I do not object in the least to further investigation of this co-operative question. I can say on behalf of the co-operative societies, although not entrusted to speak for them, that they are quite willing and ready to make definite proposals, which were made on the Floor of this House while that discussion was taking place—to repeat most of those proposals at the present day. I think it will be found that not only are the societies carrying a very heavy burden of taxation now, but that there is very little revenue in this proposition for the State.
My object in rising was to refer to two questions. Hon. Members have spoken of the enormous weight of our Debt, to the distribution of taxation, and, indirectly, have referred to questions like the capital levy and so forth, and I do not propose to cover that ground again. There are, however, two questions of importance with which, I must deal. The first is the question of the re-assessment of house property. I do not intend to trouble the House by referring to the details of individual cases of hardship, because, strictly speaking, that is not what is at stake. What we are considering in all this controversy is a proper basis of the valuation of property, on which taxation can proceed. The hon. Member for the Eye Division (Mr. Lyle-Samuel) quoted a certain case, and I regret to say that he gave way to several inaccuracies in the process. He did not make clear that if people bought property at a high price during the War and found it necessary to get a mortgage, the mortgage ranks for the purpose of Income Tax relief. In the second place, while he was referring to their increased burdens, he might have said that local rates are falling in a fair number of localities, and in any case, under the new system of valuation, if the valuation is increased the aggregate amount to be raised will not vary substantially, and there will be a lower local rate on a higher valuation.
I am not sure that, taking everything into account, other than a comparatively restricted class in going to be put in a position of hardship, but it is our duty to face the position of that small class, find out if there is a hardship, and put the whole thing in proper proportion. I hesitate to refer to the Scottish principle in this matter, because we are charged with making too much of our native country on the Floor of this House. But it is an undeniable proposition that the whole system of valuation in Scotland is infinitely better than that in England. That superiority turns very largely on the fact that we in Scotland have what is, in practice, an annual valuation. In England an enormous number of people have bene-fitted by the quinquennial valuation and more particularly by the delay in making even that valuation in the case of valuations which should have been raised some time ago to a proper amount, and which should have been taxed accordingly. Let us examine what happens in that financially unhappy country North of the Tweed. We have an annual valuation, and within recent times in Scotland that annual valuation has come to be, for all practical purposes, the basis of Income Tax charges. In nine cases out of 10 the Income Tax official is the local assessor, and the annual valuation is entered and kept up to date, and the Scottish proprietary classes, if I may so call them— the people who own small properties— have been taxed on that footing during recent years. In reply to a question a few days ago on this subject the Chancellor of the Exchequer admitted indirectly that this would be an important element to be taken into account in comparing the financial positions of the two countries. In other words, it comes to this: that we have really paid more in proportion in taxes than we should have paid because of our better system of valuation. Hence the justice of our claim for better financial treatment.
Let me come to the English problem. I think the only possible basis is to try to arrive at the rent which the property would bring if let in ordinary reasonable circumstances year by year, and by ordinary and reasonable circumstances I mean the exclusion of any artificial wartime or scarcity value. If the valuation in a certain number of cases has proceeded upon an acute scarcity basis then, I think, probably the proprietors have suffered some minor disadvantage, but if, taking things reasonably together, and keeping in mind the fall in annual values within recent times and the character of the district concerned, we could say that the property if exposed for letting purposes would bring in a certain sum annually, I think that is a perfectly fair proposition to insert in the return. If there is anything artificially higher than that, then quite clearly the owner or the applicant has a right to appeal—possibly with a good chance of success—but to launch upon a wholesale campaign of objection to revaluation, accompanying it with all kinds of newspaper misrepresentation, is not only thoroughly inaccurate but thoroughly unjust to other classes of taxpayers in the country. It is not in the interests of the house proprietors themselves, because after all they want a proper valuation of their property and the State wants a proper valuation of what exists within its borders. There are sudden falls in value as well as other changes, and in so far as the artificial element exists, I think in order to deal with it we have only to put England on the footing on which Scotland has stood for a very long time now. I have tried to make that plain because a great deal of the argument in this Debate has turned on that point.
Another subject to which I wish very briefly to refer is rather indirectly touched upon by one of the Clauses in the Finance Bill, and it raises an issue of importance not only as regards the savings of the working classes and the poorer people in the country, but also from the point of view of the terms on which the State raises money for one department of its activities. I refer to that Clause which deals with the use of the proceeds of War Savings Certificates. It has been the subject of an inquiry by a very representative Committee of the Treasury which has just issued its Report. Some years ago it was decided to allocate one half of the proceeds of the sale of War Savings Certificates in the localities to the Local Loans Fund from which the local authorities of this country would be able to borrow money on the usual terms for housing and other purposes, the idea being to stimulate local thrift by pointing to definite works in the district which had been undertaken as a result of this scheme. No doubt from many points of view that was a desirable thing, but an entirely new situation has arisen. We have raised now nominally about £600,000,000 in War Savings Certificates —it will be less actually—and we have paid as the Report of the Committee indicates, something more than 5 per cent. on certificates, although the exact amount is a little difficult to determine because of variation in the life of the certificate. We have raised that vast sum within recent years, and the annual income from that very large holding has been entirely exempted from Income Tax. The original theory was that these certificates were to be confined to people whose annual incomes were £300 or less, but after a short effort it was found quite impossible to impose any income limit at all, and the Certificates were sold at large.
No doubt in the early stages and during the War they were bought to a considerable extent by working people and by people of small means. But it is perfectly plain now that for various reasons a very large proportion of the certificates are held by people who are quite well to do and the report of the committee which investigated the matter makes that abundantly clear. The tendency has been to concentrate a very large block of the nominal £600,000,000 of War Savings Certificates in the hands of people in this country who are liable either to Super-tax or at least to Income Tax and these by distributing up to £500 worth of Certificates over individual members of their families have been able to place substantial sums beyond the reach of Income Tax year by year. It cannot be argued for a moment that it is the kind of saving for which the Certificates were originally intended, although I am saying nothing at all against them as an investment. The position is that while it is very difficult to obtain any estimate of the loss in Income Tax thus incurred year by year, it probably amounts to anything from £12,000,000 to £15,000,000 or more. I think that is a very modest estimate at the present time and we are entitled to ask the Chancellor of the Exchequer when he includes a reference to Savings Certificates in his Finance Bill what view he takes of many of the statements in the Report of the Committee to which I have referred and what the future policy regarding National Savings Certificates is to be?
The precise subject of the Report of the Committee turned on the allocation of one half of the proceeds of the sales of Certificates to the Local Loans Fund. Thanks to the stoppage of the building programme and other reasons, a very large sum was accumulated by the allocation of one half in that Fund, of which the Treasury could not get free and easy use. We entirely agree that, as a matter of financial policy, the Treasury should have free use of that money provided we do not penalise the local authorities of this country by so denuding the Fund that they could not get resources from it, in the event of their making a call. I see no risk of any immediate exhaustion of the Fund, but it is worth while to point out this fact at the same time, that in practice it is really only the smaller local authorities of this country that have recourse to the Local Loans Fund at all. Quite clearly, if we are going to borrow money on War Savings Certificates and exempt it from Income Tax at 5 per cent., or whatever the rate may be—and it is about that, roughly, at the present time— we cannot allocate that money to the Local Loans Fund and lend it at less than what we are borrowing it at from time to time, so that there is not much chance, in so far as the local authorities in this country depend upon that allocation under the Fund, of their getting money at much less than five or a little more per cent.—probably 5 per cent.
Now they do not raise it locally as the larger local authorities do. I mentioned in Debate a few days ago in this House that the Lanarkshire County Council was raising money recently—and, I believe, is doing so even at the present day—and even refusing it week by week, at about 3j per cent, or 3J per cent. That is a very substantial advantage to a large local authority, but the smaller local authorities are undoubtedly in difficulty on this point, and I would suggest to the Government, in passing, that it probably has a not unimportant bearing on the success of their housing scheme, in so far as that depends upon the effort of the local authorities in Great Britain. I have raised these two points very briefly, because other Members desire to speak, but I think they are both issues of importance, and I cannot leave the second without asking the Chancellor of the Exchequer a question regarding the position of trustee savings banks in this country.
They responded very loyally to the appeal to sell the War Saving Certificates, but these trustee savings banks are restricted to a rate of interest at 2½ per cent. They hold in all, according to the latest return, about £126,000,000, mainly belonging either to working-class people, or to people of comparatively humble means at the present time. I do not think that any Member of the House would suggest that even indirectly in our financial policy they should be penalised, but I am very much afraid that the continuance of the existing policy as regards War Savings Certificates is making their position difficult, and is indirectly doing some injustice to very large numbers of poor people who have placed their money in these institutions. It is, of course, true that the savings in the trustee savings banks of this country have very largely increased, but it is doubtful how much higher they would have increased but for the existence of this competing element. The Chancellor of the Exchequer has quite recently re-imposed the limit, at least in the annual deposits which people can make in trustee savings banks in this country, and he has fixed it at the comparatively generous figure of £500 per annum, but it is clear that people were taking advantage of the 2½ per cent. rate of interest in the trustee savings banks, for what is really money at call, who strictly had no real right, according to their earlier basis, to resort to them at all—that is, business concerns and others. I make no suggestion at the moment save this, as regards the War Savings Certificates, that if we believe that the State should recruit money on the lowest possible terms, we cannot go on defending the existing system, however desirable the investment may be. By all means let us encourage thrift at fair rates, but let us expose the annual income of that thrift to the ordinary taxation of the time, remembering always that enormous numbers of people in the working classes of this country would not be called upon for direct taxation in the form of Income Tax, although indirectly they shoulder a good portion of it, because of the now rates of exemption which were brought into force following the Report of the Royal Commission of 1919. It is because I believe that that latest Report raises important issues that I hope the Chancellor of the Exchequer, when he comes to reply, will have something to say on this point.
The hon. Member for Central Edinburgh (Mr. W. Graham), in his closing sentences, referred to the trustee savings banks, and when the Government come to answer on that subject I hope that they will deal with the rate of interest, and I would point out that banks to-day are only giving 1½ per cent, on deposit accounts. It may be because of that, that the Government are taking steps to check the savings of people being de posited in the Post Office Savings Bank. I have risen to draw attention to one or two points in the Finance Bill. Several speakers this afternoon have referred to the Debt redemption policy of the Chancellor of the Exchequer. It used to be said before the War that an individual should save 10 per cent, of his income, and that was a very sound rule, but when I come to analyse the percentage which the Government propose to take, I find that the £40,000,000 which they set aside for Debt redemption amounts to only 5 per cent, of the national income. Some £700,000,000 is being raised this year by taxation, and £40,000,000 is practically 5 per cent, of that sum. I do not think, bringing that figure down to a percentage of the national revenue raised by taxation, that the Government are asking too much this year from the taxpayer. I know it is said that any policy of Debt redemption cannot be a popular policy, because a policy which tends to reduce debt does not bring at once certain other factors into play, but a policy of Debt redemption tends in the long run, I think, to i enable the Government of the day to borrow money at a lower rate of interest. Traders to-day are suffering because the British Government are offering a high rate of interest for a long-dated loan, and if the Government in future years, perhaps next year, are able to launch a long-dated loan at 3¼to 4 per cent., every trader in the country will at once be able to borrow money at a much lower rate of interest than he is paying to-day. With a lower rate of interest, prices will be lower, and when prices are lower employment will be created.
Therefore, I am glad this evening to be able heartily to congratulate the Chancellor of the Exchequer on the courageous step he has taken in asking the taxpayers, at a time of grave industrial depression, to face the necessity of raising certain sums for Debt redemption, because I think by that means the credit of our country will steadily improve, and with our credit steadily improving, the main items of taxation year by year will be lowered. Until the high rate of interest on long-dated loans is courageously faced by the Government, a high rate of taxation will be levied on the citizens of the State. I have only got to mention that a fall of 1 per cent, in the rate of interest on all our loans would enable the Income Tax to be lowered by at least Is. in the £. Therefore, I hope, during the Committee stage of the Bill, the Chancellor of the Exchequer will hold tenaciously to the principle he has enunciated to this House of asking £40,000,000 this year for Debt redemption.
The Chancellor of the Exchequer in this Bill has given considerable relief to the large Income Tax payer, and practically no relief whatsoever to those least able to bear taxation. There is no reduction on tea, no reduction on sugar, and only a trifling reduction on the Income Tax where the rate is smaller. Take, for instance, a single person with an income of £500 a year. The amount of direct taxation is £45. An income of £500 a year is practically equal to a pre-War income of £300. Deducting the £45 paid by way of Income Tax, he is left with an income of £255 in comparison with his pre-War income. I suggest that on incomes, say, below £600 to £700, the Chancellor of the Exchequer would be well advised not to halve the standard rate, not to fix a rate of 2s. 3d., but to fix the rate at one-third of the standard rate. This would have the result of giving benefit to those who need it most, which should be the first characteristic and dominant note of the Chancellor of the Exchequer.
Under the Finance Bill a sum of £700,000,000 is raised. The Chancellor of the Exchequer, in his Financial Statement, showed that £176,000,000 is being raised by way of local taxation. In the present year, therefore, the citizens of Great Britain are finding, for the purposes of government, £876,000,000. What does that really mean? It means that, on the average, every citizen is working from two or three months every year for the purpose of paying the cost of government both for Imperial and local purposes. I do not think I have exaggerated in that statement. The total income of the nation is some £3,600,000,000, and the total sum raised by way of taxation is £876,000,000. Therefore, of the produce of every individual's labour, skill and enterprise, the State Departments and local authorities are taking one-fifth, that is, practically one week in every five he is working for the upkeep of government. I think hon. Members in all quarters will agree that that is excessive. It may be asked, how can that sum be reduced. We note with satisfaction that, during the last 18 months, the cost of government has been decreased. But I notice a growing tendency in the policy of His Majesty's Government to increase the sum to be spent on armaments. As has been pointed out by an hon. Member on this side earlier in the evening, a sum of £127,000,000 is to be spent this year on armaments. That means that 3s. 6d. in every £ paid by way of taxation this year is going towards the upkeep of our Army, Navy and Air Force. Surely that sum is excessive. The external danger has been removed. The internal danger is present to us, when we know there are over 1,000,000 people out of work to-day. I know the Chancellor of the Exchequer has only been a short time in his office, but I do appeal to him, in the coming months, to direct his attention to this large, and, what I consider to be, unnecessary expenditure in our fighting forces—unproductive expenditure. If he could get to grips with the Admiralty, he could save at least £20,000,000 a year.
indicated dissent.
The right hon. Gentleman opposite shakes his head. Every taxpayer in this country to-day is being taxed at a lower rate because the driving pressure of public opinion some two years ago forced the Government of the day to curtail the expenditure of every Department of the State. I remember speaking in this House last year, I think. it was, and pointing out that over 100 years ago the House of Commons refused to grant the necessary Supplies. The House of Commons, during the Napoleonic Wars, accepted for the first time an Income Tax. Two years after Waterloo the House of Commons refused to grant the passage into law of the Income Tax. What was the result? Supplies were not forthcoming, and the Government of the day were forced to curtail their expenditure and bring it into keeping with their revenue. Let me remind the right hon. Gentleman opposite—and I am sure he will agree with me in this—it was not until the Treasury was getting empty, it was not until there was a chance of a real deficit in the national finance, that the Government of the day took steps to curtail their expenditure. The most effective step that this House could take would be to cut off Supplies from His Majesty's Government. The proposed taxation is unfair in its incidence and not going to relieve those who need it most. I, myself, quite appreciate, with other hon. Members, and congratulate the Chancellor on the step he has taken to reduce our National Debt. Yet the amount to be levied under this Bill is excessive and unnecessary, and if the Amendment is pressed to a Division, I shall have pleasure in voting for it.
There is one general observation on the Debate that I should like to make before dealing for a brief period with one or two other matters. I suppose every one of us realises that the Chancellor of Exchequer is to-day faced with a problem hardly ever faced by any Chancellor previously. You have clamant demands for necessary expenditure on the one hand, and equally clamant demands for reduction of excessive taxation on the other. The right hon. Gentleman has fairly tried to strike a balance between the two. I think he has had a most difficult task, but I think the general opinion of the country is that he has steered as fairly between Scylla and Charybdis as it was possible for a Chancellor to do. There is only one general observation I wish to make. I do think it is very important for us to realise that we cannot debate this question between direct and indirect taxation on the basis that all the consequences of direct taxation fall upon one class, and all the consequences of indirect taxation fall upon another. That is a hopeless basis upon which to approach this great problem. Surely hon. Members must realise that that idea really finds its root in the tradition which has come down on the old days, when both direct and indirect taxation were on a comparatively low basis! In those days it was mainly true that direct taxation was paid out of the pockets of the capitalist and employer class and indirect taxation fell—although all paid it proportionately—on the incomes of the employing and capitalistic classes in small proportion to that in comparison paid out of the incomes of the working classes. That being so, it should really be looked upon as being mainly paid by them and as their contribution to taxation.
But when you have direct taxation on the level of the present day, you have altogether a totally different state of things. The direct taxation which now falls upon the employer and capitalist class cannot conceivably, or possibly, be met out of the ordinary savings or ordinary expenditure which would come under the head of their expenditure on personal amusements and so on. I was really astonished to hear the hon. Gentleman who has just sat down suggest that we only worked two or three months of the year to pay our taxes, and that the State only took from one-fifth to one-sixth of what the individual could earn. From figures that have been given by hon. Friends, a man owning land at present is lucky—at least, I should so consider myself—to get one-fifth for himself, let alone the State only taking one-fifth! When you have taxation on that basis— I am not making that a point between one class and another—but merely pointing out that when direct taxation is at its present level, it cannot fall only on the person who nominally pays it but upon the industry for whose maintenance and direction the particular person is responsible. When it, therefore, falls upon industry the people who suffer most are those working for weekly wages in that industry. Therefore, I suggest when the right hon. Gentleman opposite comes to speak he will deal with that point. I put it to him sincerely— I believe it from the bottom of my heart— that the class he comes here specially to represent do suffer much more severely and more seriously in employment and in wages from super-taxation levied in the form of direct taxation upon the industries at which they work, than they do from indirect taxation which apparently falls more severely upon them. It is better that a man should get wages because his industry is flourishing, and to have to spend rather a higher proportion of those wages in buying tea and sugar than that he should get his tea and sugar a little cheaper and get no wages to buy them! I did not, however, rise to take part in the general Debate, but I could not refrain from making that general observation.
The matter I wish to deal with is the matter of the revaluation. I want to put this on rather a different footing from what it has hitherto been put in this Debate. The hon. Member for Central Edinburgh (Mr. W. Graham) in his speech rather dealt with it as if the question at issue were the basis upon which this revaluation ought to be made. I do not think there is any dispute about the basis. The basis is perfectly simple, as the hon. Member stated. It is the annual value, as rent, at which any property may be reasonably expected to let at from year to year. But the whole question really is: Is this valuation being carried out in accordance with that principle, and is each annual valuation being dealt with on its merits? To my mind, the whole of this trouble has arisen, not because the valuation is being made fundamentally on a wrong basis, but because the valuation departments do not seem to have remem- bered the evidence they gave before the Royal Commission on Income Tax. I should like to read some of this to the House. I remember it very well, because I had the honour of sitting as a member of that Commission. Here is paragraph 439:
There is another thing which appears to me to have been departed from in this matter. That is, that two years ago a Clause was inserted in the Finance Bill of the year, to alter the whole system of valuation, by taking it out of the hands of the local commissioners and placing it in the hands of the Inspectors of Taxes. The House rejected that proposal, yet it appears, so far as I am able to get any evidence, that an attempt is being made, certainly in a great many districts, to carry out this revaluation, not at the hands of the local Commissioners, but through the Inspectors of Taxes. Straws show which way the wind blows. Here is a letter which rather illustrates that, from an Inspector of Taxes to a property owner, a taxpayer, who objected to his valuation. The Inspector of Taxes says: the legal profession, and he knows what he is writing about. He says:
Exchequer another question. The time for appealing under the present Statute is 21 days. In answer to a question here, I believe he indicated that that might be extended to something about three months. There has been no definite statement on that point, as to whether or not three months is actually going to be allowed. I hope, when the right hon. Gentleman replies, he will give us a definite statement on that matter. I wish to make a definite suggestion as to how this matter can be dealt with. It has been suggested that it may be dealt with by postponing the valuation for a year. I should not support that at all, because it is quite obvious that there are a large number of valuations of property where the rent has been considerably increased and where people have been paying taxes far below the amount of their rents, and it is quite unsatisfactory that that state of things should be prolonged any longer than is possible. I do not stand up here for a moment to say that anybody whose property has actually increased, either in rent or in rental value, should not be assessed at a higher figure. Of course, he should be so assessed. I object to the flat rate assessment on people under which, even if they be correctly assessed, it is not done on knowledge or figures, but purely on chance. People object to that. The Chancellor of the Exchequer did not happen to be present in the House just now, when I read the evidence given to the Royal Commission, and I should like to read the paragraph again. [HON. MEMBERS: "Oh!"] I will read the last part of the paragraph again: it must be completed in one year. This flat-rate increase has caused already much resentment and confusion. I hope the Chancellor of the Exchequer will consider my suggestion, because it would enable him to utilise all the existing reassessments which had been made with actual knowledge and on a basis of actual increases of rent. Where the assessments have been made without any actual increase of rent or upon the basis of a knowledge of the condition of the property, my suggestion would enable the reassessment to be deferred until the case had been examined, and until the revaluation could be carried out on its merits. The Income Tax Commissioners suggested that this would take five years, but I do not think so, and I think something of this kind is absolutely necessary, if a great deal of dissatisfaction is to be avoided, because time should be allowed to make a proper examination in any case, and no one should be allowed to go away with the impression that his assessment has been unfairly increased without his case being properly considered. I do not think it is right that people should be assessed without proper facts and without a proper basis, and then be forced to appeal. In the first instance those who are making the valuation ought to have a basis to go upon, and my suggestion would enable that to be carried out.
I shall compress what I have to say within the limits, which will leave the Chancellor of the Exchequer ample time to deal adequately with the many arguments and cases which have been brought to his notice during the course of the Debate. I rise to add a little to what has been said from this side of the House, to the effect that the lines and methods of finance covered in the Bill now before the House are rich men's lines and methods, and, as we said when the Budget was introduced, it is a rich man's Budget. The right hon. Gentleman the Member for Chelmsford (Mr. Pretyman) will perhaps dispute what I have to say on the argument which I understood him to address to the House just now. Really, I cannot agree with him in the conclusion which he has drawn, that taxes levied upon rich people are worse for the poor than the taxes levied directly on the poor themselves.
I did not say that.
That, at any rate, was the conclusion to which I was driven. The right hon. Gentleman put to the House the argument that poor people suffered more from taxation upon the richer classes than they suffered because of the indirect taxation to which they were subjected. I do not accept that conclusion, which, broadly, is, that the poor are hurt by taxes on the rich more than they are hurt by any indirect taxes upon themselves. I have listened to a very large part of this Debate. I will not say that I have heard nothing against the Amendment which stands upon the Order Paper, but I have heard very little against it. It is a reasoned Amendment, offering a succession of arguments to justify the course which we shall shortly take in the Division Lobby against the Second Reading of this Bill.
Few hon. Members have directed their arguments against the statements which we set forth in the Amendment. Naturally we have a great deal of sympathy with embarassed Chancellors of the Exchequer in these days, but I think we are justified in reminding the House of the forecast and the advice submitted to this House many years ago. To go no further back than the year 1919, we then repeated our appeal to the Government to use a very large part of those ill-gotten war fortunes which were automatically acquired under artificial conditions of trade that had long prevailed. In these days Governments must not miss great opportunities. I will not say that their conduct was cowardly, but it was not defensible to have missed such an enormous chance of lessening the burdens which we have now to bear on account of the heavy taxation which must be imposed. Those were days when there was a good deal of talk about equality of service to the State and about the necessity of equality of sacrifice on the part of us all in order to help the State. We well know that setting aside all that might lie between the two extremes, there was in the one case a soldier's grave for the service of hundreds of thousands as their only reward, and for others riches and power together with the pleasure of a life of comparative ease and safety during the whole period of the War.
We are entitled now to remind the Government that those great opportunities which were missed of either imposing exceptional taxation, or, indeed. of appropriating those fortunes automatically made during periods of unnatural trade—I am referring to the fortunes made above the ordinary margin to which the traders and men in business and commerce were fairly entitled. I think the Chancellor of the Exchequer has treated our problems of internal debt too light-heartedly, and there is some danger of that attitude being extended to the Press of the country, and amongst business men, and even amongst manufacturers and traders, the notion being that as we owe this money to ourselves, it is no great burden to pay interest upon it, because that interest is spent again in some other way. If there be any consolation in that doctrine at all, why not go on borrowing much more in order to meet many of the urgent claims for social reform, especially, for instance, great questions of house construction, and even many features of unemployment solution? The Debt will never be appreciably lessened in the lifetime of this and a few succeeding generations by any such ordinary plan as trying to lessen it out of savings; but other opportunities will, I understand, be offered, and, I can assure the House, eagerly availed of, in order to discuss far-reaching and, I do not refrain from saying, novel proposals, but still necessary proposals, extraordinary proposals to meet extraordinary conditions; and we certainly will eagerly use any opportunity when it is so offered.
This Finance Bill virtually asks our sanction for a continuance of an increase in indirect taxation, notwithstanding the fact that the extent of that taxation now is 40 per cent, of the whole, as compared with a pre-War figure of 17 per cent. There is a class, of course, in this country, not very large, but very fortunate, running, it may be, into two or three million people, who really do not feel this side of taxation, whose purse is so ample that they have no terrors because tea or sugar is dearer, or because beer can still only be purchased at a very high price, and certain other things present difficulties to the poorer portions of the community. My hon. Friend the Member for Moseley (Mr. Hannon) alleged that the classes to which I refer took the risks and made the sacrifices, and bore, as he said, these double burdens. He is not now in his place, but in his absence I emphasise the fact, without offence, that he personally, and a few millions too, are more fortunate than our poorer brethren, and do not feel this burden of indirect taxation which we attack, and which we are anxious to have reduced in the interest of others.
The Chancellor of the Exchequer, in his Estimates for the coming year, has raised the figure for revenue to be yielded from the incomes of the year. He anticipates, in the case of that class, not reduced salaries or reduced incomes corresponding to the reduced wages of the poorer classes, but he anticipates an increase, and is budgeting for a substantial increase in the revenue as the result of the greater incomes that will be enjoyed by the class to which I refer. However gloomy or depressed trade may be, however black the outlook for the masses of the people, there appears to be no risk whatever of one considerable favoured section of the country sharing those privations that have to be endured by others. As a single illustration, let me take the case of the poor woman who goes into a corner shop, poor like herself, to buy half a pound of poor tea. She cannot afford to leave in that shop 4d. which the tea is not worth, but she must; and yet the rich titled lady, buying her costly tea, pays a tax only similar to the tax imposed upon the poor woman. To-day an answer was given in reply to a question as to the number of unemployed women, and it showed that there are registered on the unemployment books about a quarter of a million women who are totally out of work, and nearly half of them are getting no unemployment benefit at all, being disqualified for one reason or another. I do not know what feelings of compassion the right hon. Gentleman may have for women who are so situated, but I think he will agree that there are large numbers of women who cannot afford even these coppers which are exacted from them by our present conditions of taxation.
We oppose this Bill because, so far as it apportions the relief due to the surplus, it gives three-fourths of that relief to the class which is least in need of it, and only the lesser portion to those whose need is the more urgent; and here I would press upon my right hon. Friend the case, which we think is very strong, for a remission of indirect taxation because especially of the very severe reductions in wages which have been suffered in the last year or two. The figures were given, up-to-date and confirmed figures, by my hon. Friend the Member for Colne Valley (Mr. Snowden), who began this Debate. Roundly, the reduction in the workers' wages amounts to £700,000,000 a year, or, roughly, something more than £12,000,000 a week. It does not mean that the workers are earning less than that £12,000,000; it means that they are getting less. They are still working at the same jobs, doing similar work, making, not the same profits, but more profits—for my hon. Friend again referred to a group of firms, big business undertakings, where, I think, in each case the dividend return for the last year, as compared with the previous year, showed a double dividend. You have, therefore, this spectacle of enormous affluence, automatically increasing, side by side with this state of unemployment and a state of severely reduced wages for those who still remain in their work. I say that this severe wage reduction has placed many millions of workers on a wage level, viewed from the standpoint of purchasing power, far below the pre-War level—the level to which, of course, they were assured they never would be forced back.
I do not, perhaps, agree with everything that would be said by my hon. Friend the Member for Colne Valley on, say, the subject of beer, but I quite agree that any remission in the case of the Beer Duty was far less urgent than in the case of articles of food like tea and sugar. I think that, probably, beer consumers on the whole would have welcomed a remission of taxation on those articles of the table rather than, say, the joy of the tap-room. The Beer Duty, however, is worth a little notice, even as it has now been left by the Chancellor of the Exchequer. I doubt whether in all history there is an instance comparable to this, where, in such a subtle and effective way, a Government has been able to use. during a time of exceptional national stress, one particular article to do so much of its work and to rid it of so many of its burdens. The annual yield from the Beer Duty last year was. roundly, £124,000,000. Taking it now, ' with the reduction of £16,000,000, it still approaches £110,000,000. What does that do? It goes far to pay nearly altogether the Old Age Pensions, the pensions of wounded soldiers, and the moneys to widows and dependants and children. In short, it is a plan which, in the main, enables Chancellors of the Exchequer to dip deeply into the pockets of the working class, who are largely the beer consumers, and to make them pay almost entirely for all these other great obligations arising from social necessities and from the conditions of the War. A double relief has been given to that class which, as compared with the poor, was not urgently in need of relief at all. If there is anything in the law of first things first, it should have been given to the class that is most in need of that aid. Yet we find that in the apportionment of that surplus most of it has gone to the Income Tax paying community. Skilled men are now working for wages that labourers were able to get only two years ago, and agricultural workers after a bitter struggle had to return to their labour in Norfolk only a few weeks ago on a weekly wage less than the average amount being received by hundreds of thousands of men for doing no more than registering themselves as unemployed. How long can we expect such a state of evil conditions to continue? How long can we expect men to go on following laborious, dirty, dangerous labour for a weekly wage less than they must receive if they go to the Poor Law and get their benefits in one way or another as registered unemployed? That is a condition which cannot long endure. Finally, I press my point that the Chancellor has therefore callously disregarded these real privations which are being suffered by so many millions of people whose income is not high enough to justify any country in asking them to pay any taxation at all. There used to be a doctrine at one time humanely accepted I that these burdens should be adjusted; according to the principle of the ability of the shoulders to bear them. That no longer is the case, and now there are millions of people who cannot afford a copper out of their slender weekly earnings, but yet they are compelled to pay very many shillings a week as their contribution towards existing national or revenue needs. I urge that in view of the continued wage reductions there might even yet be time for the Chancellor to review this case and give relief to that class who clearly are more urgently in need of it than the richer men who so far have received the favours.
10.0 P.M
The right hon. Gentleman the Member for Chelmsford (Mr. Pretyman) told us that if the opinion of the country could be gauged it would be found to be very greatly in favour of the Budget. I suggest that if the opinion of the country could be taken on this Budget it would be rejected by an overwhelming majority. At any rate, the chorus of approval in favour of it is not going to evoke any echo from this side of the House this evening. It seems to me that the Chancellor of the Exchequer has sold his soul to those interests which are represented on the other side of the House—big business, beer and barley, if I may put it that way, the three great vested interests in this country which find expression for their opinion through the mouthpiece of the Tory party. It is a Tory Budget, and the only bright spot in it, to our mind, is the reduction of the Debt. I am sorry that opinion below these benches is not in line with ours, and that is an unfortunate thing for the consultations which are going to take place between the National Liberals and ourselves. The only thing I can congratulate the right hon. Gentleman on is the fact that he has grappled with this question of Debt reduction. I do not think it goes far enough. I do not think the £40,000,000 or £45,000,000 or £50,000,000 that he is allowing in the next three years is adequate to the needs of the case. It is equivalent to a half per cent, on the total of the National Debt, whereas the reduction should be per annum at the rate of 1 per cent. The right hon. Baronet the Member for Swansea (Sir A. Mond) advocated a policy which I do not think will commend itself to the majority of opinion in this House—the policy of not paying off Debt at all—and he seemed to advocate that from the point of view of the interest of the trade of the country. I think he omitted to recognise the effect which the redemption of Debt has upon the credit of the country, and the credit of the country has a great influence upon the trade of the country. By reducing the Debt the Chancellor of the Exchequer is doing the right thing, because it enables money to become cheaper and enables business and trade generally to finance itself at a cheaper rate of interest. As regards the suggestion of a fund to pay for pensions, it seems to me merely a device which will not in the long run inure to the benefit of the country as a whole. As far as we know, we may be in for another war before very long, if hon. Members opposite have their way. The whole point of these suggestions of the right hon. Baronet seemed to me to be to perpetuate the bad finance which prevailed during the War, when instead of taxing people to a much greater extent than they were taxed, we borrowed a great deal more money than we should have borrowed.
It has also been suggested that the surplus of £100,000,000, which seems to have caused such great surprise to the late Chancellor of the Exchequer, should not have been applied to the reduction of debt. I am very suspicious of that, surplus of £100,000,000. The late Chancellor of the Exchequer professed not to know that it was going to mature, but a good many people in the City and in other commercial centres in the Kingdom had reason to suppose that the surplus was a premeditated one, that it was expected and planned for, because it is, I believe, an undisputed fact that a great many men who were subject to Super-tax in March and February of last year were told it did not matter if they did not pay it until June or July. That occurred in many centres of commerce in this Kingdom. The reason for it was that the money was not required. It was not thought necessary in the financial year ending March last. I believe that this huge surplus of Income Tax and Super-tax which was then accumulated was largely due to the policy based on not putting sufficient pressure on the taxpayer to1 make him pay. The result has been, as the Chancellor pointed out in his speech in presenting his Budget, that in March last year there was £120,000,000 or £130,000,000 of Income Tax and Super-tax in arrear. There was no necessity for such huge arrears. It must have been well known, if not to the late Chancellor of the Exchequer, then to the Treasury, that a good deal of that money would be collected in the year just closed, and it has largely accounted for the surplus. In the same way, I believe a great deal of the reduction in expenditure of the last financial year must have been foreseen, and I cannot get it out of my head that that huge surplus of £100,000,000 was a deep laid plan to produce a large surplus which would come in useful when the late Coalition Government thought they would go to the country to persuade the country to renew their confidence in them.
As regards the question of beer and the reasons given for not reducing the tax on sugar, I have no hesitation in agreeing with my friends on this side of the House that if there was to be a reduction on either beer or sugar it should have been made on sugar. But there is evidence throughout the country that this question of beer had been decided before the last General Election, because, in the address presented to the constituents in my Division, the late Member of this House who represented my Division had a paragraph in his election address, the only paragraph which referred to taxation, and which referred to beer. He said there ought to be a reduction in the price of beer, and he thought that if the State and the brewers put their heads together, something might be done in that direction. It is a curious coincidence that that is exactly what has been done by the Chancellor of the Exchequer. The State and the brewers did put their heads together, and, as usual when the State put their heads together with brewers, with big business men, or with agriculturists, the State gets the worst of it. I am perfectly certain that that suggestion in my opponent's address never originated in his brain. That suggestion came, I am perfectly certain, from headquarters, and it is one of the pledges the Government had to carry out.
As regards sugar, I must confess I never heard more feeble excuses or reasons given by anyone occupying the proud position of Chancellor of the Exchequer for not reducing the tax on sugar. The point has been dealt with by my right hon. Friend the Member for West Swansea (Sir A. Mond), and I do not propose to go over his arguments again. I will add one reason, however. [ Interruption. ] I will add one reason, notwithstanding the gibbering of certain Members. [HON. MEMBERS: "Withdraw !"] I have had some experience in merchant business, and I say that the Chancellor of the Exchequer's point, that if he reduced the tax on sugar it would cause a greater demand for sugar and send the price up, is a most extraordinary statement. That is all very well for a meeting of Primrose Dames in the Queen's Hall, but it does not cut any ice at all in the sugar market. [ Interruption. ] This is not an easy subject. I always notice that when one discusses any question of trade or high finance or anything of that sort one cannot get a hearing, because hon. Members opposite know nothing about the subject. My point is, that you have speculation in the sugar market, and the very fact that the tax on sugar was lowered would mean a greater demand. If the price did go up, it would mean that a larger area would soon come under production, and the price would fall. The speculators would foresee that, and the effect of their operations would be that the price of sugar would fall sooner than it would if the tax were not reduced. It is a most extraordinary argument, to my mind, to say that you can reduce the taxation on any article and at the same time increase the price of that article for any length of time.
The Chancellor of the Exchequer the other day told us that he did not propose to withdraw the McKenna Duties, because we were not out of the region of War finance, but I submit that the real reason was that this Government is a Protectionist Government, and that they mean to keep their Protectionist duties on as long as they possibly can. One hon. Member opposite this afternoon referred to the importation of motor tyres. I noticed in the Press the other day a letter from the hon. Member, I think for Coventry, who said in effect, "Look at the £10,000,000 of motor tyres coming into the country and the huge sums of money going out of the country to pay for these tyres." There never was a greater fallacy. It is manufactured goods that go out of the country to pay for these imported goods. Last year our imports of goods were £200,000,000, and the only money that went out of the country was gold to the value of £10,000,000. Payment for those tyres was made in manufactured goods made in this country. If you are to stop the importation of manufactured goods into the country, then you will reduce the exportation of manufactured goods from this country. [HON. MEMBERS: "No!"] Is the proposal of hon. Members that our exports are to go on just the same whether our imports are going on or not? [HON. MEMBERS: "Import food stuffs."] The theory of hon. Members opposite is that we are going to stop the importation of manufactures into this country and only to receive food stuffs and raw materials, and that we are going to export our manufactured goods to the rest of the world. We are going to be the manufacturing centre of the world. [HON. MEMBERS: "Hear, hear.'] If hon. Members will only listen I will explain to them. If we are going to reduce the rest of the world to the position of hewers of wood and drawers of water; if we are going to reduce the purchasing power of the world, and to assume that the rest of the world is in such a primitive and backward state that they would not be able to take our highly specialised manufactures; if we are going to drive the rest of the world into the position of the natives of India or of China, we shall so reduce the purchasing power of the world that it will not be able to pay for the manufactured goods of this country.
There is no greater fallacy than to say that money is going out of this country to pay for imports. Money cannot go out of this country. [HON. MEMBERS: "Oh."] You cannot have manufactured goods coming into this country unless there are goods going out to pay for them. [ Interruption. ] Any one who has had any experience of foreign trade or foreign exchange—and I have had 30 years of it—must know that fact. Every import of goods into this country provides a credit in order to purchase goods in this country. [ Interruption. ] Mr. Speaker, I have always thought that the question of foreign exchanges was one of the most difficult questions, and I have had 30 years of it, and it does not make it any the easier to discuss it while listening to the ribald remarks of hon. Gentlemen opposite. What I maintain, as a merchant and manufacturer, is that, if goods come into this country from a foreign country, they must provide a credit for the purchase of goods in this country. Hon. Members opposite talk about money going out of this country. What use is our money in France? Suppose, for the sake of argument, that our money goes to France. What use is it there? They would have to sell our money there for francs, and they could only sell that money to people who wanted to buy goods in this country. Every import of manufactured goods into this country must stimulate the export of goods from this country. Every import which is not balanced by a corresponding export erects, inevitably and automatically, it may be invisibly, a tariff on goods coming into this country. [HON. MEMBERS: "Oh!"] If hon. Members will only take the trouble to study the question, they will see that I am right. The trouble is that hon. Members opposite—and I include the President of the Board of Trade and other Members of the Front Bench-have not the most elementary or rudimentary knowledge of the fundamental principles which govern foreign trade. These post-prandial professors of political economy—[ Interruption. ] It will stand the test of political economy. It may not strike hon. Members opposite, but unless you abide by the principles of political economy you will get into a state of financial chaos which will bring the trade of this country to destruction. You cannot by Acts of Parliament or by speeches of hon. gentlemen at Chamber of Commerce dinners avoid the results of economic laws which operate regardless of the President of the Board of Trade, of the Chancellor of the Exchequer, or any of the curious theories which pervade the minds of hon. Members opposite.
There is a point which has not been mentioned by any other speaker. That is the subject of beer. I hope that my hon. Friends will not believe that I am full of my subject. I am glad that a large number of my friends are teetotallers, because that means more to myself and my friends. I do not want to interfere with their pleasures, any more than I desire that they should interfere with mine, but the question I want to raise is this: As I understood the Chancellor of the Exchequer's speech when introducing the Budget, he laid down that the Government were prepared to make a bargain with the brewers. To begin with, as far as I understand it—I may be wrong, because I have not got a big head for figures; the only figures I know are the figures in the streets—on condition that the brewers were prepared to meet the public to the extent of a reduction of 1d. a pint in the price of beer, the Government were prepared to meet the brewers on reducing the tax by 24s. a standard barrel by giving an abatement of £l on the 24s., the brewers being responsible for the remaining 4s. But in London during the last few days numbers of licensed holders have received notice from the brewers that the brewers are not going to accept the responsibility of that 4s. and that the licensees, who are tied tenants and have no power to refuse, are going to be called on to pay the whole or part of the 4s. difference. So far as beer is concerned, if it is a question between tea and sugar and beer, I would vote for tea and sugar being reduced in taxation, but I want to see a square deal. If this Government has thought fit to give a concession to the brewers on certain conditions, I will ask the Chancellor of the Exchequer to say in his reply, if he will protect the tenants of the tied houses, and not allow them to be made the victim, so as to have to pay anything from 33 per cent, to 50 per: cent, of the tax remitted, because, whatever name it may go by, it is a tax. They have no power to alter it. They are tied up. If the Chancellor of the Exchequer wishes, I can produce the evidence of the tenants and the brewers if necessary.
It is always a pleasure to hear the hon. Member for Silvertown (Mr. J. Jones) put his case clearly and without prejudice. The last time he did me the honour to ask me a question it was on the subject of mineral waters. So catholic are his tastes that to-day he has returned to the charge on beer. I shall have great pleasure in looking into the point which he raises. I have nothing to do with the relations between the brewers and the retail trade. The undertaking was that the retail price should be reduced by a penny per pint.
Did the right hon. Gentleman intend, when he gave the rebate, that the retailer, who was a tied tenant, should be compelled to pay any portion of the rebate or tax left?
Is it not a fact that I sent the Chancellor of the Exchequer word that Messrs. Whitbread had charged the people part of the remitted tax, and made the retailer bear two-pence of the shilling per dozen pints. Was it not the bargain that there should be a penny per pint knocked off, and that the penny would be borne by the brewers?
I can give figures as to the experience of clubs, and I shall be glad to let the Chancellor of the Exchequer have them.
11.0 P.M
I shall be glad to look into the matter. I had no idea that this point was to be raised to-night. If the fact be as is suggested, I think that, perhaps, it requires investigation.
It would be for the convenience of the House, before we come to the definite terms of the Amendment for rejection of the Bill, if I were to say a few words on a subject which has been very much in the minds of Members of all parties, and that is the question of the reassessment of premises for Schedule A. I do not propose to delay the House unduly, but I should not like hon. Members to think for a moment that this matter has not been, for some little time past, very present to my mind. I never like to take steps in any matter until I am quite sure of the ground, until I am thoroughly conversant with the facts, and until I can see the direction in which I can be of best service to the community, if I conceive it to be my duty to act. It seems to me that in all the questions that have been asked of me, and in all the discussions that have taken place, there are two or three outstanding points. One has relation to the time limit for giving notices of appeal. As hon. Members are well aware, the statutory term at present is 21 days, although, in practice, that term has been extended in the past. Hon. Members will see the necessity for preserving a term of some kind, because it is very undesirable, for the efficient administration of a tax, that appeals should run on into the time when the collection of the tax is at its height.
Perhaps it would meet the case if I were to extend the term of appeal from 21 days until 31st August of the current year, which would give a period of practically four months, and then, to meet the case of the owners who have not had the notice—hon. Members appreciate as well as I the practical difficulties of giving all owners that notice, and they are familiar with the conditions under which the owner can obtain his information—if I proposed, with regard to owners who have not been noticed, that they should be allowed to appeal at any time within a year after the end of the current year of assessment, and to claim a refund if such refund should be due to them. I think as far as right of appeal goes, that j will meet both these cases, and I propose to make these provisions statutory.
Another point which has caused some apprehension and I think justifiable apprehension is this: We are living to-day in a time of fluctuating values, and, it is asked, supposing values of properties should suffer a fall, after this current year in which the assessment has been made, how are we to meet that situation? I propose to give a statutory right of appeal against an assessment for any future year, during the term for which the present assessment shall continue in force, and I think, that will meet a case which may very possibly arise. A point perhaps not of such importance has arisen, and that is as to the right of the owner to be represented on an appeal before the Commissioners by an agent. There is at present a statutory right for legal advice, but I propose in the Finance Bill to give a statutory right to enable any agent to be heard on behalf of the owner of property.
A great deal of confusion has arisen as to this assessment. I am led to this opinion by various arguments which I have read in the Press, and I was surprised to see, in papers that should be well informed, the statement as recently as last Sunday that the amount of tax to be received under this assessment, would be £25,000,000 a year, the fact of course being that the increase in income would be in the neighbourhood of that figure, from which the amount of the tax itself is fairly easy of calculation. I think that a great deal of misconception and of talk about the very large increases in many cases as between the present assessment and the past, arises from this: that people have often taken the gross assessment which has been made on this occasion, and compared it with the net assessment which they had under the last assessment. I propose that the Treasury should issue an announcement, making it clear to the taxpayer that the larger figure on the notices of assessment of annual value now being issued is the gross assessment, and is subject to the statutory deductions for repairs, bringing it down to the lower net figure given on that notice, whereas on the demand notes issued each year for the Property Tax the only figure which appeared was the net assess- ment after the deduction for repairs had been made. I cannot help thinking that, with these three statutory alterations, and with the announcement that I propose to make, a great deal of the apprehension which has been not unnaturally caused, will be, at any rate, alleviated by this process. I may add, for the information of hon. Members, that the number of appeals so far received—and I lay no great stress upon this—are no more than, if in proportion as much, as those that were received after the last quinquennial valuation in London, although I have no doubt, after the attention which has been called to the matter in so public a fashion and in this House, we may possibly have some considerable increase in the next few days.
Now there is an Amendment down for the rejection of the Finance Bill, and it was moved in an extremely able speech, as we should expect, from the hon. Member for Colne Valley (Mr. Snowden), on behalf of the Labour party. It was supported, on diametrically opposite grounds, on behalf of the National Liberal party. The hon. Member, who moved a reasoned rejection of the Bill, from his point of view perfectly fairly and with reason, proposed the rejection on three grounds: first, the inadequate provision for redemption of Debt; secondly, that the reduction of taxation does not relieve those on whom the burden is heaviest: and thirdly, because such reductions as have been given do not stimulate trade and industry. I should like first to comment in passing on two or three statements which he made in the course of his speech. He spoke as though I had made a new departure in saying that the ultimate amount which I proposed to set aside for redemption of Debt was an almost exact equivalent of the current receipts from Death Duties; and he wanted to know if there was to be a specific allocation of Death Duties for the purpose of Debt redemption. The answer to that is "no." There can be no specific allocation of any specific tax for any specific purpose, and I was merely pointing out to the House what I conceived to be an interesting coincidence. Then he took the line—and this deals with the first part of his tripartite objection—that we ought to make a greater provision to meet the larger Debt under which the country to-day labours, and he suggested, in accordance with a circular issued some time ago, I think, by the Treasury, that a sum not less than £100,000,000 ought to be provided. My answer is that I wish it could, but, after all, we have to deal here with practical politics, and it would be quite impossible to carry such a proposal. Hon. Members opposite smile, and I think they arc quite justified in doing so, but when they have been in office they will know better than they know at present what is meant by practical politics. Practical politics is a very different thing from the impractical suggestions that are sometimes made before you get here.
There are one or two figures which the hon. Member for Colne Valley brought forward, and I want to say a word or two about them, not that I think they are in themselves of great importance, but that figures want using with very great discretion. I took a prominent part, in a very small way— I lay emphasis on that—between 1903 and 1906 in the Tariff Reform campaign. I remember coming to the conclusion, long before I had finished, that figures and statistics can be made to prove anything, and I had a great distrust of them. I want to throw out a caution, not to influence hon. Members opposite, but it may, perhaps, help some of my own friends. People often think that figures are like things that appear in print—they must be true. But they are apt to be misleading. The hon. Member said —I think he gave his authority, and I do not complain of it—that the Income Tax payers at the end of the War were £4,000,000,000 better off than they had been at the beginning of the War. That, of course, was a statement of fact. I do not add, as Lord Melbourne did, that though a statement of fact, it was not accurately stated. Facts seldom are, he said. This was correctly stated, but the inference that was drawn, or might be drawn, from it is erroneous. The £4,000,000,000 increase at the end of the War was actually a calculated increase of capital values, and represented an increase on pre-War figures, calculated similarly, of 33J per cent., which probably hardly represented the actual decrease that had occurred in the value of money. That really vitiated the decrease in the value of money, and, consequently, vitiated all statistics, unless one bears in mind a very important fact—the fact, of course, which applied at that time equally to accretions of capital or increases in wages, which were merely recorded on their face value, and not on the value of money and of what they represented.
One of the greatest difficulties of the present day is that the ordinary charts that show rises and falls, whether it be of wages or profits, or of anything else, are at present, and have been for the last few years, more in the nature of fever charts than in the nature of charts which tell you anything. And it will be extraordinarily difficult, until you really get a stabilisation of prices and of wages and profits, to draw any conclusion of any practical value on isolated collections of figures that may be presented in Debate. I would only like to add this—and I am sure I speak for everyone on this side of the House— that in the few remarks the hon. Member made about certain trades in the country to-day where wages are especially low, the fact of those low wages is felt by us on this side as much as it is by any hon. Member opposite. We regret it, and we would do anything in our power to mend it.
I want to say a few words about the reduction of taxation not relieving those on whom the burden is heaviest. That brings us at once up against a question on which a good deal has been said to-day, and that is direct and indirect taxation. The hon. Gentleman the Member for Colne Valley quoted from some hon. Member on this side of the House who, according to him, has said that 50 per cent, was the proportion which ought to be observed in the relations of these two kinds of taxation. I do not know whether any hon. Member said that or not, but it is obvious that there is no peculiar sanctity in 50 per cent, or any other per cent. As a matter of fact, and in the common knowledge of the House, the proportion of direct and indirect taxation has varied considerably over a long period of years, and the tendency of the years has been to bring direct taxation—which a long time ago was a small proportion of the taxation of the country—more and more to an equality with indirect taxation. Then the two forms of taxation passed, and the tendency increased in the direction of making the proportion of direct taxation steadily higher, and that of indirect taxation steadily less. Just before the War, the average of the last three preceding years, the proportion of direct taxation was 57½ per cent, and of indirect 42½ per cent.
After various fluctuations during the War, the proportions, supposing the Budget I have introduced go through more or less in its present form, will be 63½ per cent, direct taxation, and 36½ per cent, indirect taxation. That is a considerably easier position for indirect taxation 'in proportion than in the three years immediately preceding the War. I think this shows that I have not been unfair to the payers of indirect taxation, although the hon. Member for the Colne Valley—I appreciate his position—takes a line which I cannot accept, that because a number of the payers of indirect taxation are among those less able to bear the taxation of the country, therefore the payers of indirect taxation should be relieved of the whole of their burden before further remissions are given to direct taxation. We cannot accept that position, because we bear in mind what the hon. Gentleman the Member for Colne Valley said, that not only must we have regard to the ability of the taxpayer to pay, but what I confess I myself have paid less regard to, the benefit that each class gets. If -we are to look at that, there can be no doubt that the indirect taxpayer does get considerable benefits from taxation—far more than he pays in indirect—in the sums which are paid in aid of education, insurance, un-. employment, and the various services of which the taxpayer bears the cost. I have tried so far as possible, and as far as I thought fair, to lighten the burden both of the direct and of the indirect taxpayer. But I must repeat what I said on the introduction of the Budget that just as a proportionately greater amount was placed upon the direct taxpayer during the War, so it must be at the moment—it is only natural—the case that, while endeavouring to assist both classes of taxpayers, the greater weight should be taken from the direct taxpayer.
The hon. Member for Colne Valley said that such remissions of taxation as had been made would not stimulate trade or industry. I find myself, as I am afraid is too often the case, not in entire agree-men with the extreme views on either side. I am temperamentally a mugwump. It is equally extreme and away from the mark to say that too enormous benefit will accrue from the reduction of taxation as to say that the reduction will not help business at all. I repeat that there is a certain amount of exaggeration in the claims made by some men who speak on this topic.
I should now like to turn my attention to the right hon. Gentleman the Member for Swansea. Hon. Members who did me the honour of listening to me a month ago when I spoke on the Budget Resolutions, may remember, that I took some pleasure, and it is little enough pleasure I have, in saying that, to a certain extent, the arguments of my opponents cancelled each other, and they were like the triangular duellists in "Mr. Midshipman Easy." We have, to some extent, had a repetition of that scene to-day, and it reminded me very much of an occasion when I was very young, and I had the pleasure in listening to the worst string quartette I ever heard in my life. They were all playing different tunes, and as was said by a very acute amateur, "None of them were playing in time and none of them were playing the same tune; yet they ended in a maddening scrunch in which they all came in at the end." In the same way we have had various tunes to-day. We have had from the right hon. Gentleman the Member for West Swansea the enchanting but insidious melodies of the VenuSberg—that fruit which changes to dead sea fruit in the mouth. We have only been prevented by time from my hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), moving his Amendment in which we should have heard the pregnant drum tappings of the Fifth Symphony asking questions which no man can answer. With all this instrumentation and all this melody there will be at least one note in unison, and it will be that all the performers will follow each other into the Lobby. I think my right hon. Friend (Sir A. Mond) will do me the justice of agreeing with me when I say that I have not changed my point of view on elementary national finance since I sat with him in the last Government. The right hon. Gentleman said something about my views on finance, but I have not changed my views, and I will do him the justice of saying that he has not changed his views. I would lake to add this. There were many more occasions on which he and I saw eye to eye than occasions on which we did not. The occasion this evening is one of those melancholy ones on which we fail to agree. My right hon. Friend said he thought—I do not think he put it higher than that—that, as a business man, I should rather approve of his suggestion. It is just as a business man that I do not.
The redemption of Debt, on which I propose to say something before I sit down, is one to which I have paid a great deal of attention as a business man. I would put this to my right hon. Friend, whose experience is wide and varied. In any well-managed business—any large company that is prosperous, enjoys great trade, and has a large issue of debentures—surely one of the most important objects is to see that you have your proper fund, whether you do it yourselves or through an insurance company, for the redemption of those debentures when their term is up. Every company with which I have been connected has had such a fund, and the half per cent., or whatever it may be, that is put by year by year for that purpose is a prior charge, a charge that no company would think of intermitting, even if it paid no dividend, and a charge which, if intermitted, or if not charged, would, in most cases, lower the credit of that company when the time came for it to raise second debentures. My right hon. Friend gave me a quotation, which I found some difficulty in following, from Sir Stafford North-cote. Whatever it was, it dealt with a very different set of circumstances from those we have to-day. I would only throw up against Sir Stafford Northcote our mutual friend the right hon. Member for Paisley (Mr. Asquith), who is entirely on my side in this matter.
My right hon. Friend spoke, I think quite naturally and justly, of the large balances of unpaid Income Tax and Super-tax which have appeared in recent accounts. I am sure he realises that it is quite impossible, as I think he intimated, to juggle with these amounts, because you can only juggle with them by suspending collection. That is perfectly impossible in practice, for the excellent reason that it would be detected at once, and brought to the notice of the House of Commons. That is the last subject on which any Chancellor would like to be interrogated. It is, of course, due in the main to the circumstances of the last two or three years. The tremendous fall in prices, the tremendous fall in profits, coupled with the three years' average, has rendered it a matter of the gravest difficulty for many taxpayers to pay their taxes—taxes having to be paid in cash, and not by Bills. That accounts for the arrears which have existed during the past two years—arrears, as the House will have seen in my statement, which are now rather less than they were last year, and which will rapidly come back to the normal.
I might say a word now about sugar. My right hon. Friend was interested in sugar, as have been also a number of hon. Members. Indeed, the hon. Member for South-west Bethnal Green (Mr. Harris), to my great distress, was kind enough to express approval of all my Budget except in regard to sugar; and, just as in the case of an unfortunate girl who may have made one slip in life, every man passes by on the other side of the road, he is going into the Lobby against me on that alone. The sugar question is a very simple one, and I think it has not been quite fairly presented this afternoon. Some hon. Members said I stated that the sole reason why I felt I could not reduce the duty was that, if I did, the speculators in New York would put up the price. My hon. Friend the Member for Southwest Bethnal Green, if I understood him aright, said that in saying that I was apparently guilty of economic heresy. That is not the whole truth. It is not economic heresy; it is a much more interesting thing than that—it is demand and supply. It is because the supply is barely equal to the demand, or only just about equal to it to-day, and because the slightest increase in demand would send the demand up above the supply, that the dealers in sugar have the market in their hands. I am quite aware that, as has been said by more than one hon. Member, manufacturers who use sugar in making chocolates and other commodities are anxious for a reduction in the Duty. I do not know what is their reason. I suggest one to the House. I do not think I ever disguised ray view for a moment that whatever Duty were taken off sugar would be reflected in the price for a week or two. But I have always maintained that, after about a fortnight, in the present state of world production, prices would soar, and any manufacturer using sugar in his trade who is able to buy at the price, less the Duty, for a week or two would sell in a market where the prices were soaring. That is the only comment I would make on that point.
Now I should like to examine, if I may, the suggestions made by my right hon. Friend the Member for West Swansea; and I can assure him, as he would expect, that I have given careful consideration to the points which he suggested— not to-day, but any time during the last two months—and it is partly owing to the fact that I have been considering them that I am able to assure my right hon. Friend that I am not disposed to adopt them. I will give him my reasons, because I feel that, in spite of his great ability and his business acumen, while he has had what we here are supposed to be deficient in, namely, imagination— while he has had imagination enough to devise these schemes, he has not had sufficient imagination to follow them out to their natural and logical consequences. The pension charge this year is £73,000,000, and my right hon. Friend suggested that £40,000,000 might be saved by funding pensions, and by having a fixed amount of £33,000,000 charged against the Budget. I should like to ask him, first of all, if he has really calculated at what rate of interest, and for what term, he thinks he could come to those figures, because I can hardly conceive any rate of interest or any term which would reduce the amount that would have to be provided in equating the charge to so small an amount as £33,000,000.
I have had calculations taken on that, both at 4 per cent, and at 5 per cent, for periods varying from 30 to 50 years, and if I take the lowest rate, 4 per cent., and the longest term, 50 years, I find the equated annual charge would be £42,000,000. That would immediately reduce the amount he would have to play with from £40,000,000 to about £30,000,000. If you take that amount, and spread it over 30 years, which is a more reasonable period, and if you take the lower rate of 4 per cent., your equated figure would be £52,000,000, and your saving about £20,000,000. I would much rather take a modest figure like that than the larger figure which my right hon. Friend suggested. I am going to get a Budget saving apparently of £20,000,000, and I get it by borrowing, and according as the saving is going to be the smaller amount I name, or the larger amount my right hon. Gentleman is going to name, the peak of additional borrowing will be either £200,000,000 or £400,000,000, at about the half-way term, of course. But we will not bother about that. We will confine our attention to remembering that we have to borrow the £20,000,000, which we are supposed to have saved. The Sinking Fund provision this year is £40,000,000, and this year, at least, practically all that £40,000,000 is statutory. If not statutory, it has some reference to certain payments in connection with the American Debt which have to be paid. Therefore, if you are going to remit that £40,000,000, you will have to borrow it. I do not know if my right hon. Friend was going to reduce taxation. If so, whatever he reduced it by this year would be largely increased next year, because the second year always costs a good deal more than the first, and if by any chance he is going to devote the Sinking Fund to taking Is. or Is. 3d. off the Income Tax, that is a sum which will swell up to £65,000,000 next year, when the £20,000,000 which we have already borrowed for the funds of the pensions would throw us out next year by about £85,000,000.
Next year, of course, starting with that amount of deficit, we should have to borrow again our £20,000,000 or £40,000,000, as the case might be, for funding pensions. By that time, we should have borrowed over £100,000,000 in a little over a year, and would have to begin to consider what the effect of that would be on the finances of the country. I have not the sligheet doubt that the effect of that additional amount of borrowing would be that you would find the rate of interest raised against you. You would depress the price of securities, and if you brought down War Loan (which has been gradually lifted up to 101) to 95, you would at once let yourself in for £32,000,000 a year more of statutory Depreciation Fund, which you would either have to find out of taxes, or by borrowing. At the same time, with the fall which would naturally occur sympathetically in Victory Bonds and War Bonds, such as are tendered for Death Duties, you very quickly come back to having to find another £40,000,000 a year, and you would be in exactly the same position as that of two or three years ago.
Of course, all this would happen without any reduction of Debt. If you were to begin to apply, as was suggested quite seriously in the Debates on the Budget, borrowing to the amount of your old Sinking Fund—that is the surplus of last year—for the remission of taxation, you' might very easily find yourselves within a year or two borrowing a couple of hundred millions. That, of course, leads straight to disaster, and it would also give a weapon to hon. Members opposite which, if I were in their place, I should be only too delighted to have, because, if they were to see the National Debt going up by leaps and bounds it would be an argumentum ad hominem for the Capital Levy which would be extremely difficult to refute. I cannot see myself, and I have never seen, how, by any of these methods of borrowing, you can relieve taxation, because fundamentally all these schemes come down to this—how are they going, after the first 12 months, to help either the taxpayer or the credit of the country?
I should like, before I sit down, to say just a word or two on the question of Debt reduction. I make no apology for doing it, because it is a subject that comes up in the speeches on both sides of the House, and it is a subject on which there is a genuine difference of opinion. There are two or three things which at the present day we might very well bear in mind. People sometimes talk as though the Government, in making provision for Sinking Funds, were following some kind of abstract theory, or following the economist purists. I propose to justify once more the position of the Government, and I should like to say here that the kind of suggestions which are thrown out in desperation for easing taxation, as I think, illegitimately, are not the j suggestions of sound business men. They are more like the suggestions of super-financial men. I know that this Government are often accused of not being supermen. I do not myself exactly know what is a "super-man." I am not fond of analogies, but perhaps I might use an analogy by which I could explain a superman. I take a word that I have often read lately—" super cinema"—and I think a super-man must be something like a super-cinema. The super-cinema I take to be something that bulks much more largely in the public eye than an ordinary cinema, and is much more profusely covered with decorations. I think we may safely leave that kind of finance to the super-men.
The right hon. Member for West Swansea spoke of a scheme for funding pensions. Such a scheme was started in 1822, and given up in 1828, not by the Minister, but on the Report of a Select Committee of the House of Commons. I believe that if we had a scheme for funding pensions to-morrow, it would be given up in five years, on the recommendation of a Select Committee of the House of Commons. Between 1830 and 1840, there were several deficits in the Budget. It was the administration of Sir Robert Peel that restored the financial stability of the country, and restored it in the, only way in which it could be done—by balancing the Budget, and renewing the Income Tax, in order to get the additional taxation necessary to avoid a deficit. By that prudent and sound finance, Peel was enabled to put into effect conversions made possible by the fall in the rate of interest which followed on his policy. The United States of America, in 30 years after the Southern War, had paid off £340,000,000 of debt, and relieved their annual Budget by £22,000,000. The high credit which they were enabled to get by this very process enabled them, by the end of that period, to replace their 6 per cent, and their 5 per cent, bonds by bonds at 4½ per cent., and sometimes even at 3½ per cent. We must always remember that State credit is exactly the same in essence as the credit of anyone of us, and that the solvency of the State is gauged in exactly the same way, namely, by the price at which they can secure accommodation. The State cannot add to its liabilities any more than can an individual without coming ultimately to the end of its resources. We should remember when suggestions of borrowing are put before us, that every Government loan pro tanto raises the rate, or prevents the fall of the rate of interest.
I am quite aware that a. large number of hon. Members will vote against the Second Reading of the Finance Bill. As I have shown, they will go into the Lobby animated by very different feelings; but the only feeling common to them is a desire to displace this Government. That is not a feeling that we on this side of the House share. I am speaking for hon. Members behind me, and not for myself. We believe that we have presented this year a Budget in which, as
far as is humanly possible, we have held a fair balance between the various classes of taxpayers—between the demand of the country for sound finance and the maintenance of the credit of the country, and the demand of the taxpayers for relief from burdens in respect of which they are entitled to relief. I shall go into the Lobby with full confidence that the Measures which we have submitted to the House will receive a substantial majority of the votes.
Question put, "That the words proposed to be left out stand part of the Question."
The House divided: Ayes, 271; Noes, 157.
Division No. 148.] AYES. [11.20 p.m. Agg-Gardner, Sir James Tynte Clarry, Reginald George Harmsworth, Hon. E. C. (Kant) Ainsworth, Captain Charles Clayton, G. C. Harrison, F. C. Alexander, E. E. (Leyton, East) Cobb, Sir Cyril Harvey, Major S. E. Alexander, Col. M. (Southwark) Cockerill, Brigadier-General G. K. Hawke, John Anthony Allen, Lieut.-Col. Sir William James Colfox, Major Wm. Phillips Henn, Sir Sydney H. Amery, Rt. Hon. Leopold C. M. S. Colvin, Brig.-General Richard Beale Hennessy, Major J. R. G. Apsley, Lord Conway, Sir W. Martin Herbert, Dennis (Hertford, Watford) Archer-Shee, Lieut.-Colonel Martin Cope, Major William Herbert, S. (Scarborough) Astbury, Lieut.-Com. Frederick W. Cotts, Sir William Dingwall Mitchell Hewett, Sir J. P. Astor, J. J. (Kent, Dover) Courthope, Lieut.-Col. George L. Hilder, Lieut.-Colonel Frank Baird, Rt. Hon. Sir John Lawrence Craig, Captain C. C. (Antrim, South) Hiley, Sir Ernest Baldwin, Rt. Hon. Stanley Craik, Rt. Hon. Sir Henry Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Balfour, George (Hampstead) Croft, Lieut.-Colonel Henry Page Hogg, Rt. Hon. Sir D. (St. Marylebone) Banbury, Rt. Hon. Sir Frederick G. Crooke, J. Smedley (Deritend) Hohler, Gerald Fitzroy Banks, Mitchell Curzon, Captain Viscount Holbrook, Sir Arthur Richard Barlow, Rt. Hon. Sir Montague Davidson, Major-General Sir J. H. Hood, Sir Joseph Barnett, Major Richard W. Davies, Alfred Thomas (Lincoln) Hopkins, John W. W. Barnston, Major Harry Davies. Thomas (Clrencester) Hopkinson, A. (Lancaster, Mossley) Barrie, Sir Charles Coupar (Banff) Dawson, Sir Philip Houfton, John Plowright Bell, Lieut.-Col. W. C. H. (Devizes) Dixon, C. H. (Rutland) Howard, Capt. D. (Cumberland, N.) Bellairs, Commander Carlyon W. Doyle, N. Grattan Howard-Bury, Lieut.-Col. C. K. Benn, Sir A. S. (Plymouth, Drake) Du Pre, Colonel William Baring Hudson, Capt. A. Bennett, Sir T. J. (Sevenoaks) Edmondson, Major A. J. Hume, G. H. Betterton, Henry B. Ednam, Viscount Hurd, Percy A. Birchall, Major J. Dearman Elliot, Capt. Walter E. (Lanark) Hurst, Lt.-Col. Gerald Berkeley Bird, Sir W. B. M. (Chichester) England, Lieut.-Colonel A. Hutchison, G. A. C. (Midlothian, N.) Blundell, F. N. Erskine, James Malcolm Monteith Inskip, Sir Thomas Walker H. Bowyer, Capt. G. E. W. Eyres-Monsell, Com. Bolton M. Jackson, Lieut.-Colonel Hon. F. S. Boyd-Carpenter, Major A. Falcon, Captain Michael Jodrell, Sir Neville Paul Brass, Captain W. Falle, Major Sir Bertram Godfray Jones, G. W. H. (Stoke Newington) Brassey, Sir Leonard Fawkes, Major F. H. Joynson-Hicks, Sir William Bridgeman, Rt. Hon. William Clive Fermor-Hesketh, Major T. Kelley, Major Fred (Rotherham) Brittain, Sir Harry Ford, Patrick Johnston Kennedy, Captain M. S. Nigel Brown, Major D. C. (Hexham) Foreman, Sir Henry Kinloch-Cooke, Sir Clement Brown, Brig.-Gen. Clifton (Newbury) Forestler-Walker, L. Lamb, J. Q. Brown, J. W. (Middlesbrough, E.) Foxcroft, Captain Charles Talbot Lane-Fox, Lieut.-Colonel G. R. Bruford, R. Fraser, Major Sir Keith Leigh, Sir John (Clapham) Bruton, Sir James Fremantle, Lieut.-Colonel Francis E. Lloyd-Greame, Rt. Hon. Sir Philip Buckingham, Sir H. Furness, G. J. Lorden, John William Buckley, Lieut.-Colonel A. Galbraith, J. F. W. Lorimer, H. D. Burn, Colonel Sir Charles Rosdew Ganzoni, Sir John Lougher, L. Burney, Com. (Middx., Uxbridge) Garland, C. S. Lowe, Sir Francis William Butcher, Sir John George Gates, Percy Loyd, Arthur T. (Abingdon) Butler, H. M. (Leeds, North) Gaunt, Rear-Admiral Sir Guy R. Macdonald, Sir Murdoch (Inverness) Butler, J. R. M. (Cambridge Univ.) Goff, Sir R. Park Macnaghten, Hon. Sir Malcolm Butt, Sir Alfred Gould, James C. McNeill, Ronald (Kent, Canterbury) Button, H. S. Gray, Harold (Cambridge) Maddocks, Henry Cadogan, Major Edward Greene, Lt.-Col. Sir W. (Hack'y, N.) Malone, Major P. B. (Tottenham, S.) Campion, Lieut.-Colonel W. R. Grenfell, Edward C. (City of London) Manville, Edward Cassels, J. D. Gretton, Colonel John Margesson, H. D. R. Cautley, Henry Strother Guinness, Lieut.-Col. Hon. W. E. Mason, Lieut.-Col. C. K. Cayzer, Sir C. (Chester, City) Hacking, Captain Douglas H. Mercer, Colonel H. Cecil, Rt. Hon. Sir Evelyn (Aston) Hall, Lieut.-Col. Sir F. (Dulwich) Milne, J. S. Wardlaw Cecil, Rt. Hon. Lord R. (Hitchin) Hall, Rr-Adml Sir W. (Liv'p'I.W.D'by) Mitchell, W. F. (Saffron Walden) Chadwick, Sir Robert Burton Halstead, Major D. Mitchell, Sir W. Lane (Streatham) Chamberlain, Rt. Hon. N. (Ladywood) Hamilton, Sir George C. (Altrincham) Molloy, Major L. G. S. Churchman. Sir Arthur Hannon, Patrick Joseph Henry Molson, Major John Elsdale Moore, Major-General Sir Newton J. Rentoul, G. S. Stuart, Lord C. Crichton- Moore-Brabazon, Lieut.-Col. J. T. C. Reynolds, W. G. W. Sueter, Rear-Admiral Murray Fraser Morden, Col. W. Grant Rhodes, Lieut. Col. J. P. Sugden, Sir Wilfred H. Morrison, Hugh (Wilts, Salisbury) Richardson, Sir Alex. (Gravesend) Terrell, Captain R. (Oxford, Henley) Morrison-Bell, Major A. C. (Honlton) Richardson, Lt.-Col. Sir P. (Chertsey) Thompson, Luke (Sunderland) Murchison, C. K. Roberts, Rt. Hon. G. H. (Norwich) Thomson, F. C. (Aberdeen, South) Nail, Major Joseph Roberts, Rt. Hon. Sir S. (Ecclesall) Thorpe, Captain John Henry Newman, Colonel J. R. P. (Finchley) Robertson-Despencer, Major(Isl'gt'nW) Tryon, Rt. Hon. George Clement Newman, Sir R. H. S. D. L. (Exeter) Robinson, Sir T. (Lanes., Stretford) Tubbs, S. W. Newson, Sir Percy Wilson Rogerson, Capt. J. E. Turton, Edmund Russborough Nicholson, Brig.-Gen. J. (Westminster) Rothschild, Lionel de Vaughan-Morgan, Col. K. P. Nicholson, William G. (Petersfield) Roundell, Colonel R. F. Wallace, Captain E. Nield, Sir Herbert Ruggles-Brise, Major E. Ward, Col. L. (Kingston-upon-Hull) Ormsby-Gore, Hon. William Russell, Alexander West- (Tynemouth) Watson, Capt. J. (Stockton-on-Tees) Paget, T. G. Russell, William (Bolton) Watts, Dr. T. (Man., Withington) Parker, Owen (Kettering) Russell-Wells, Sir Sydney Wells, S. R. Pennefather, De Fonblanque Samuel, A. M. (Surrey, Farnham) Weston, Colonel John Wakefield Penny, Frederick George Samuel, Samuel (W'dsworth, Putney) Wheler, Col. Granville C. H. Percy, Lord Eustace (Hastings) Sanderson, Sir Frank B. White, Lt.-Col. G. D. (Southport) Perkins, Colonel E. K. Sandon, Lord Whitla, Sir William Perring. William George Sheffield, Sir Berkeley Willey, Arthur Peto, Basil E. Shepperson, E. W. Wilson, Col. M. J. (Richmond) Pielou, D. P. Simms, Dr. John M. (Co. Down) Windsor-Clive, Lieut.-Colonel George Pilditch, Sir Philip Singleton, J. E. Winterton, Earl Pollock, Rt. Hon. Sir Ernest Murray Skelton, A. N. Wise. Frederick Pretyman, Rt. Hon. Ernest G. Smith, Sir Allan M. (Croydon, South) Wolmer, Viscount Privett, F. J. Smith, Sir Harold (Wavertree) Wood, Rt. Hon. Edward F. L. (Ripon) Raeburn, Sir William H. Somerville, A. A. (Windsor) Wood, Sir H. K. (Woolwich, West) Ralne, W. Somerville, Daniel (Barrow-in-Furness) Wood, Maj. Sir S. Hill- (High Peak) Rankin, Captain James Stuart Sparkes, H. W. Yerburgh, R. D. T. Rawlinson, Rt. Hon. John Fredk. Peel Spender-Clay, Lieut.-Colonel H. H. Rees, Sir Beddoe Stanley, Lord TELLERS FOR THE AYES.— Reid, Capt. A. S. C. (Warrington) Steel, Major S. Strang Colonel Leslie Wilson and Colonel Gibbs. Reid, D. D. (County Down) Stewart, Gershom (Wirral) Remer, J. R. Stott, Lt.-Col. W. H.
NOES. Adams, D. Graham, W. (Edinburgh, Central) Mond, Rt. Hon. Sir Alfred Moritz Adamson, Rt. Hon. William Gray, Frank (Oxford) Morel, E. D. Adamson, W. M. (Staff., Cannock) Greenall, T. Morris, Harold Alexander, A. V. (Sheffield, Hillsbro') Greenwood, A. (Nelson and Colne) Morrison, R. C. (Tottenham, N.) Ammon, Charles George Grenfell, D. R. (Glamorgan) Mosley, Oswald Attlee, C. R. Groves, T. Murnin, H. Barker, G. (Monmouth, Abertillery) Grundy, T. W. Murray, John (Leeds, West) Barnes, A. Guest, Hon. C. H. (Bristol, N.) Murray, R. (Renfrew, Western) Batey, Joseph Guthrie, Thomas Maule Nichol, Robert Bennett, A. J. (Mansfield) Hall, F. (York, W.R., Normanton) O'Grady, Captain James Berkeley, Captain Reginald Hamilton, Sir R. (Orkney & Shetland) Oliver, George Harold Bonwick, A. Hardie, George D. Paling, W. Bowerman, Rt. Hon. Charles W. Harney, E. A. Parkinson, John Allen (Wigan) Briant, Frank Harris, Percy A. Parry, Lieut.-Colonel Thomas Henry Broad, F. A. Hastings, Patrick Phillipps, Vivian Brotherton, J. Hay, Captain J. P. (Cathcart) Ponsonby, Arthur Brown, James (Ayr and Bute) Hayday, Arthur Potts, John S. Buchanan, G. Hayes, John Henry (Edge Hill) Richards, R. Buckle, J. Henderson, Rt. Hon. A. (N'castle, E.) Richardson, R. (Houghton-le-Spring) Burgess, S. Henderson, T. (Glasgow) Riley, Ben Burnie, Major J. (Bootle) Herriotts, J. Ritson, J. Buxton, Noel (Norfolk, North) Hinds, John Roberts, C. H. (Derby) Cairns, John Hirst, G. H. Roberts, Frederick O. (W. Bromwlch) Cape, Thomas Hutchison, Sir R. (Kirkcaldy) Robinson, W. C. (York, Elland) Chapple, W. A. Jenkins, W. (Glamorgan, Neath) Rose, Frank H. Charleton, H. C. John, William (Rhondda, West) Royce, William Stapleton Clarke, Sir E. C. Johnston, Thomas (Stirling) Saklatvala, S. Clynes, Rt. Hon. John R. Jones, J. J. (West Ham, Silvertown) Salter, Dr. A. Collins, Sir Godfrey (Greenock) Jones, R. T. (Carnarvon) Scrymgeour, E. Collison, Levi Jones, T. I. Mardy (Pontypridd) Sexton, James Cowan, D. M. (Scottish Universities) Jowett, F. W. (Bradford, East) Shaw, Thomas (Preston) Darbishire, C. W. Kirkwood, D. Shinwell, Emanuel Davies, Evan (Ebbw Vale) Lansbury. George Short, Alfred (Wednesbury) Davies, Rhys John (Westhoughton) Lawson, John James Simpson, J. Hope Dudgeon, Major C. R. Leach, W. Smith, T. (Pontefract) Duffy, T. Gavan Lee, F. Snell, Harry Duncan, C. Linfield, F. C. Snowden, Philip Dunnico, H. Lowth, T. Spencer, George A. (Broxtowe) Ede, James Chuter Lunn, William Spencer, H. H. (Bradford, S.) Edwards, C (Monmouth, Bedwellty) McCurdy, Rt. Hon. Charles A. Stephenson, Lieut.-Colonel H. K. Entwistle, Major C. F. MacDonald, J. R. (Aberavon) Stephen, Campbell Fairbairn, R. R. M'Entee, V. L. Sullivan, J. Falconer, J. March, S. Thomson, T. (Middlesbrough, West) Fisher, Rt. Hon. Herbert A. L. Marshall, Sir Arthur H. Thorne, G. R. (Wolverhampton, E.) Foot, Isaac Maxton, James Thornton, M. George, Major G. L. (Pembroke) Middleton, G. Trevelyan, C. P. Gosling, Harry Millar, J. D. Turner. Ben Walsh, Stephen (Lancaster, Ince) Whiteley, W. Wright, W. Warne, G. H. Williams, Dr. J. H. (Llanelly) Young, Robert (Lancaster, Newton) Watson, W. M. (Dunfermline) Williams, T. (York, Don Valley) Watts-Morgan, Lt.-Col. D. (Rhondda) Wilson, C. H (Sheffield, Attercliffe) TELLERS FOR THE NOES.— Webb, Sidney Wilson, R. J. (Jarrow) Mr. Morgan Jones and Mr. T. Griffiths. Weir, L. M. Wintringham, Margaret Westwood. J. Wood, Major M. M. (Aberdeen, C.)
Bill read a Second time, and committed to a Committee of the Whole House for To morrow.
Dentists Act (1921) Amendment Bill
Read a Second time.
Motion made, and Question, "That the Bill be committed to a Committee of the whole House," put, and negatived.— [ Lieut.-Colonel Dalrymple White. ]
Bill committed to a Standing Committee.
The remaining Orders were read, and postponed.
It being after Half-past Eleven of the Clock upon Monday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
Adjourned at Twenty-Five Minutes before Twelve o'Clock.