I beg to move:

"That so much of Standing Order 91 as fixes Five as the quorum of the Select Committee on Standing Orders be read and discharged."

I object. This change of Standing Orders ought not to be agreed to until an explanation has been made as to why it has been put on the Paper.

It has been the custom in the past for us to make this Motion after the Easter-time Recess, in order that we may obtain a better attendance of the Members of the Standing Orders Committee. It has never been refused before.

Question put, and agreed to.

Ordered,

"That, for the remainder of the Session, Three be the quorum of the Committee."—[ Sir C. Marks. ]

London, Midland, and Scottish Railway (Superannuation Fund) Bill,

To be read a Second time upon Monday next.

Ministry of Health Provisional Orders (No. 4) Bill,

Read a Second time, and committed.

MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 6) BILL,

"to confirm certain Provisional Orders of the Minister of Health relating to Kingston-upon-Hull, Kingston-upon-Thames, Liverpool, Loughborough, Rochdale, and Uxbridge," presented by Mr. WHEATLEY; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 122.]

Ministry of Health Provisional Orders (Water) Bill,

"to confirm certain Provisional Orders of the Minister of Health relating to Bradford Water, Burnham and District Water and Portishead District Water," presented by Mr. WHEATLEY; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 123.]

London County Council (Money) Bill,

"to regulate the expenditure on capital account and lending of money by the London County Council during the financial period from the first day of April, one thousand nine hundred and twenty-four, to the thirtieth day of September, one thousand nine hundred and twenty-five; and for other purposes," presented, and read the First time; and referred to the Examiners of Petitions for Private Bills.

Yesterday I was fortunate enough to be drawn in the ballot, and my hon. Friend the Member for South Salford (Mr. Toole) gave Notice in my name. I want to say it was entirely unauthorised, and I wish to withdraw it.

I am much obliged to the hon. Member. This gives me an opportunity of reminding the House generally that no one must either ask a question or give a Notice of Motion on behalf of another Member unless he has been specifically authorised on that day by the Member concerned. It would lead to much trouble and unpleasantness if hon. Members jumped up without any authorisation to ask questions, or to give Notice for which they have no authority whatever.

We yesterday had the advantage of listening to the exposition of a Budget which I think now, by common consent, has been recognised as a very good electioneering Budget. The hon. Member for Dumbarton Burghs (Mr. Kirkwood) yesterday showed the perspicacity of his race by interpolating a demand for an immediate General Election. I am ready for it at a moment's notice. We shall take up that challenge greedily whenever it is presented. I beg the Government Benches to be under no error of that kind. But while this is the first Budget of a Socialist Government, I do not think anyone would describe it as a Socialist Budget. In the striking little speech of the right hon. Gentleman the Member for Paisley (Mr. Asquith), there was no passage more remarkable than that in which he reminded the Committee that, in fact, what was now being proposed was in some measure the dream of so old a Liberal as John Bright. He had always espoused, it appears, the cause of the free breakfast table. John Bright was an old Liberal. He died, I think, a Liberal Unionist, and if he had been alive to-day the probability is that he would have been sitting on these benches. He has been dead for 35 years. There was no more ardent opponent of every Socialist idea than was John Bright. At the time when he died there was no duty on sugar and there was a 6d. duty on tea. To-day, as a result of the first efforts of this Socialist Government, which was going to introduce us to a new régime of ideas and to new methods of finance, we have got, as the supreme achievement of their activity, or we are to have a 4d. duty on tea and a 1½d. duty on sugar. I do not think that, in these circumstances, whatever may be the merits of this particular Budget, anything can -be attributed in that respect to the peculiar tenets of the doctrine of Socialism.

Agreed.

I am very happy at the cordial acquiescence of my countrymen in what I have said. It at least endorses the fact, which I am endeavouring to point out by more oblique methods, that to-day we have this position while we have a Socialist Government in office, or, as the Prime Minister reminded us the other day with some pride, in power. That was contradicted by the Liberal Whip, in one of the solemn utterances which English orators think it necessary to address to lugubrious Scotch audiences. He informed the astonished capital of Edinburgh that the Liberal party were in power. [An HON. MEMBER: "They turned you out."] I agree, but the test is, did they succeed in putting themselves in? What was said by the Liberal Whip did not agree very well with the somewhat plaintive speech which one of his leaders was making in Wales at the very time that he was speaking in Scotland.

To come back to my original point, a Socialist Government, declared by its leader to be in power, produces a Budget which is acknowledged by some of its ardent supporters to have no trace of Socialism contained within it. We are all grateful for the reduction of the duties on sugar, tea, cocoa and coffee. It is, as I said yesterday, an action which all parties would have liked to take at the earliest possible moment. Indeed, it was made plain last year by the present Leader of the Opposition that he would have desired at that time to take off a portion of the duty on sugar had it not been for the very peculiar circumstances of the market at that time. There was a great shortage of sugar, and the chances were, indeed, so far as our advice went, the certainties were that the whole of the remission of the duties would have gone into the pockets of the speculators in sugar rather than into the pockets of the consumers.

Mostly Tories.

The comment of the hon. Gentleman opposite seems to be entirely irrelevant to my argument. I should be surprised to be told that the distributors and grocers in this country, for the greater part, belong to the Conservative party, although I should be very glad to think that that were true. The situation then was that there was a condition of apprehension in regard to the effect of the remission of the duties. There are still apprehensions of the same kind, though they are not so operative as they were a year ago. No doubt, hon. Members would see in the Press the other morning a statement by one of the experts in this particular market that he did not think the consumer would get the full benefit of the remission even now. But I am content, for my part, to take the assurance of the Chancellor of the Exchequer, as we took the assurance of the Chancellor of the Exchequer last year, that now he is confident that the benefit of this remission will really go into the pockets of the consumers in this country. I am content to take that statement, and I hope that that condition will continue, although I think it would be optimistic to imagine that that the consumer will get all the benefit of all the remissions during the whole of the period. I accept the assurance, however, that we can indulge in that confident belief.

I have tried to estimate what particular advantage in pounds, shillings and pence this particular remission on the food duties is going to bring to the householder in this country. As far as I can judge, making the best estimate I can, the remission will represent something like Is. a week to each household, not to each person. That, I agree, is a useful remission, but we must not look at it out of perspective. As I listened yesterday to the plaudits of the hon. Members who sat behind the Chancellor of the Exchequer when they heard him announce these particular remissions of duties, it occurred to me to wonder how grateful workmen would have been in some of the recent agitations for increase of wages if they had been offered an increase of Is. a week. Therefore, in estimating the actual value of these remissions, we must take into account circumstances of that kind. Everybody applauds the opportunity which has been given to the present Government, through the happy fortune by which they have succeeded through the assiduous efforts of their predecessors in the way of economy, for which they can take no credit whatsoever, and while we are glad that they have been able in these circumstances to remit some of our taxation, there are circumstances to which I should like to ask the attention of the Committee.

These remissions have been made entirely, except in the case of the Corporation Profits Tax and the Inhabited House Duty, in connection with indirect taxation. The Chancellor of the Exchequer said that he thought it was time that such remission should be given. I would remind him that when in the Budget of 1922 a decrease was made in the Income Tax, the Government of that day thought it necessary to make a reduction in indirect taxation in connection with the Tea Duty. At that time I took off 4d. of the duty, just as the Chancellor of the Exchequer proposes to do now. Some regard must be paid by this House, if we are to manage the finances of this country properly, to the relation between direct and indirect taxation. The right hon. Gentleman the Member for Paisley has said in this House—I confess that I have learned more from him about finance than from anybody else in this Chamber; I may not have learned very well, but still that does not prevent me from paying my tribute to the right hon. Gentleman—that the old ideal of Chancellors of the Exchequer was to have something like a balance between direct and indirect taxation. Before the War the relation was, roughly, as far as I recollect, 52 per cent, direct taxation as against 48 per cent, indirect taxation. To-day, if I am not wrong in making the best estimate I can, the proportion has been greatly altered and is now something like 63 per cent, direct taxation as against 37 per cent. indirect taxation, and, of course, the proposals of the Chancellor of the Exchequer will make that balance still more striking. [HON. MEMBERS: "Hear, hear!"] Some hon. Members cheer that, and I wish, if I may, to direct their attention to some of the consequences. But I would like to know from the Chancellor of the Exchequer, or from the Financial Secretary to the Treasury, some time in the course of these Debates, what he believes is going to be the exact relation between these two factors in our taxation as a result of the Budget which he proposes.

It is a very striking thing to-day to see exactly how we stand on this matter. I find that about 4,500,000 people in this country are liable to Income Tax, but out of these 2,000,000 are exempt on the ground of the various allowances which are given under our finance legislation. 2,500,000 people, or one-tenth of the electorate of this country, are bearing at present, in Income Tax and Super-tax alone, apart altogether from the other form of direct taxation, a burden of £330,000,000 per year. [HON. MEMBERS: "Hear, hear!"] As hon. Gentlemen on the back benches on the Government side cheer that statement, they should remember that it is out of the savings of these very people that the industry of this country is financed, that equipment is maintained and kept up to date, and new enterprises furnished with the necessary capital. You may at the moment believe that you are taxing those people who are most able to bear it—and I agree that that is the proper view to take of taxation—but you must always keep in view that you must so regulate the burden of taxation that you are riot going to cripple the very springs of energy and enterprise of this country and destroy the chances by which industry is going to give employment to our people. You have a very striking contrast in the United States of America at the present time. I do not know whether hon. Members of this House have been watching the argument which has been going on in America with regard to the burden of taxation. The present burden of taxation, even in that wealthy country, is too great for industry to bear. In spite of the fact that everybody is employed in the United States, they say that high taxation is inimical to industry, and all parties are agreed on reducing it at the present time.

Compare the position of the two countries. With us the taxation per head amounts to 65 dollars in the year. In the United States of America it amounts to 29 dollars, and yet they think it too high in connection with the interests of industry in that country. I beg hon. Gentlemen who look with equanimity on increasing the burdens of taxation upon those who pay it directly to remember the reactive effects which may very well produce a very serious burden on employment in this country, and put into a con- dition of unemployment many people who to-day have the opportunity of using the skill of their hands. In this connection I should have liked the Chancellor of the Exchequer to find himself able to do at least one thing in connection with our Income Tax. It is one of the unfortunate results of our present system that all the money that is put to reserve by public companies has to bear the burden of Income Tax just as much as that which is distributed among the shareholders. It is these reserves which really form the fund by which industry is replenished in this country. If the Chancellor of the Exchequer had seen his way to make some exception in the case of these reserves. it would have produced, a very great boon for industry in the community. I do not think that it would have cost him very much. I do not think that it would have cost him as much as it will cost him to relieve the Entertainments Duty, but in my belief it would have been a far greater benefit to give to the country. It is a very inadequate reply to make to a man who is out of work that you offer him a cheapened form of entertainment in which he may see one of the star cinema performers exhibit his particular skill at a salary of £120,000 a year.

I should like to leave that point, on which I hope I have not dwelt at too great length, to go to another. I find some difficulty in following entirely the proposition of the Chancellor of the Exchequer with regard to the surplus which he anticipates. He used a somewhat peculiar expression with regard to the £4,000,000 which he is not going to distribute for the present. I forget the precise phrase which he used, but he indicated that in some way it was to be kept in reserve, and that it was to meet various commitments which he expected in the course of the current year. He suggested that there might be larger demands made upon him in the ordinary departmental way, but he specifically mentioned three other items for which he had to provide. These were, as I remember them, first, the removal of the restriction upon the thrift limit with regard to old age pensions; second, housing expenses; and, third, the cost of unemployment.

The sum is £4,000,000. I ask the Chancellor of the Exchequer, what does he estimate will be the cost of the removal of the restrictions of the thrift limit on Old Age Pensions? I would like accurate information on that head. I have taken the opportunity of looking at the Report of the Old Age Pensions Commission. I find that the entire removal of that restriction will cost the country another £18,000,000 a year, in addition to the £23,000,000 which the Old Age Pensions scheme at present costs. I find also that, even if you remove the restriction only so far as it affects the people who would come within the Income Tax limit, it would cost in the region of £14,000,000 or £15,000,000 in a year. What is the Chancellor's proposal, and what does he estimate it will cost him? My second question relates to housing. What does the right hon. Gentleman anticipate that he will have to find for housing? I do not mean merely for this year, but also for next year, because I believe implicitly in the doctrine which the right hon. Member for Paisley laid down yesterday, that it is bad budgeting to look only at the current year. What is to be the expense with regard to housing? We know what the ill-fated Dr. Addison scheme cost us. It cost us £10,000,000 a year.

Were you not then a member of the Government?

Yes, I was. I do not want in any way to cast off my own personal responsibility. I am referring to the subject only because it was Dr. Addison's scheme, his own conception. I take full responsibility for my share. My only point now is to get at a figure. The present Minister of Health has told us that he is going to do something so big and wonderful in the course of a week or two that he will deserve the plaudits of the nation. It must be something better than we did. He is going to produce more houses. Am I right? [HON. MEMBERS: "Yes!"] He is going to give us cheaper rents. Am I right? [HON. MEMBERS: "Yes!"] The result inevitably will be that it will cost something far more than we have yet had to meet. I want the Chancellor of the Exchequer's attention directed to this matter, because it is a problem which he has to face. Here is a test. Will he have sufficient money to meet this, in which case, is the housing scheme to be a mere bagatelle, or is he to produce sufficient money for a very large housing scheme, in which case no provision has been made for the years intervening? My next question is on the subject of unemployment. What provision is the Chancellor going to make for unemployment? We know that already the Insurance Fund is indebted to the State for a very large sum, and always the answer is made to us that, of course, then money will ultimately be repaid. As one who was at the Exchequer, I have always had considerable doubt as to the ultimate fate—

It has paid off millions.

What is the amount to which I am referring? Actually about £14,000,000. The State, of course, has to bear its share in paying off; it is one of the partners in the Fund. A quarter of all that is paid off is paid off by the State to the State. How much has the Chancellor of the Exchequer to find for that? Quite obviously the Chancellor will have to find money to meet that burden; it is obvious that he has to find some sum in order to repay what the State has to pay for unemployment. The Chancellor must recognise that himself. It is plain to the Committee by this time that there is to be a considerable deficit in this year unless the Chancellor of the Exchequer makes considerable savings. Is he bud-getting upon the supposition that he is going to save a deficit only by making savings in expenditure? If that be his position, he is outraging all the canons of finance which he laid down with so much eloquence yesterday. What is his position in the matter?

I would like to deal further with what the right hon. Member for Paisley said yesterday. What is the assumed position of the Chancellor of the Exchequer with regard to the following year? So far as the current year is concerned, as I judge it, the Chancellor is going to have a deficit. What about the following year? Does he see any increased income in that year? If not, his deficit will be still further increased. The right hon. Gentleman told us yesterday that in the next year he is going to lose £30,000,000 from Special Receipts, and that he will have additional burdens amounting to something like £10,000,000 more, in the course of the accruing of that part of the new burden which will not affect the present year. Therefore, so far as next year is concerned, he has to find £40,000,000 more than he has to find this year. What provision does the Chancellor consider that it will be possible to make for that? These questions I put to him in all seriousness. I welcomed yesterday his strong and eloquent pronouncement upon the benefits of keeping up the credit of this country. He described that as vital to this country's existence, and, indeed, it is, in a sense which most people do not quite realise. It is of the first importance that your financial credit should be high and that nothing should be allowed to weaken it. You can see the truth of that in a very obvious way in the effect on currency. As soon as there is any shock to confidence, the value of currency decreases, and money, which ordinarily would be lying in this country, pours out of it at a rate which you can scarcely measure. I am sure that hon. Members will remember what was the effect, not many months ago, of an inadvertent statement by a junior Minister with regard to inflation. [HON. MEMBERS: "A Member of the last Government!"] I am not disputing by whom the statement was made; I am pointing to the fact which I wish people to realise.

4.0 P.M.

The effect was that, within 24 hours, millions of money had left the City of London purchasing foreign securities. I myself had brought to me telegrams from different parts of Europe telling agents in London to convert their sterling into dollars. Nobody is blaming the present Government for that. I have my own argument about them, but that was done long before they came into power, as they will remember. The next shock to confidence came as the result of the Election, and, reasonably or unreasonably—I will not say which—exactly the same thing took place, only in greater amount. When I was in New York and in Montreal in the month of January, I found that millions of British money were being transferred for the purpose of buying American securities and also for deposit in Canadian banks in fear of what would happen. I am not saying this as a criticism of the present Government, but I am pointing it out, as a moral with regard to the necessity of keeping up the confidence of the world in British credit.

Many people think that this is a matter of high finance, with regard to which the ordinary people of this country have nothing to do. It is a complete fallacy. It is not merely what the City of London reaps in a year, in commissions and discounts from the confidence which the world has in its; money market—a sum of over £30,000,000, upon which Income Tax is paid—it is not merely the higher purchasing power of our sterling in all the markets of the world, although that represents an almost inestimable sum, but it is in addition something which goes right down to the homes of this country. London, after the War, fought a great battle with New York as to whether it was to recover the position of being the money market of the world. It did recover it, and to-day it is again the money market of the world. Why? Because of the very things which the Chancellor of Exchequer mentioned with such pride yesterday, and which were done by his predecessors. By paying off debt, by increasing our credit, and by re-establishing our position in the world—that was how we did it, and to-day we have retrieved the old income upon discounts and commissions which we used to have. It was worth doing from that point of view alone. It makes London still the lending market of the world.

What does a loan mean? It only means the granting of a credit to the borrowing country to buy goods in the lending country. [HON. MEMBERS: "Hear, hear!"] I am not concerned with any other argument. I shall have no difficulty in meeting that when it arises. I am expressing to the Committee my supreme conviction upon this matter of finance and the confidence of the world in our money system that the stability of our finance means not merely wealth to those who manipulate it, or Income Tax to the State within which it takes place, but it also means industry to thousands of homes in this country which otherwise would be deprived of employment. Accordingly, I venture to put to the right hon. Gentleman the Prime Minister the suggestion that he should do nothing in any way to weaken that confidence. I have already described what mere political confusion—I shall put it quite indefinitely like that—arising out of the Election did, but there are circumstances with regard to this Government which do still create a lack of confidence. We have not yet recovered the position in which we were before the Election started, and we have paid millions for the felicity of enjoying a Labour Government to-day. That is our position.

Will the right hon. Gentleman say whether it is not the case that 18 out of the 20 cents that the £l fell had fallen by 16th November before the question of a Labour Government arose?

Will the hon. Gentleman listen to what I am saying? I described it as the confusion into which we had fallen politically at that time, and undoubtedly it arose from the apprehension in the minds of large numbers of people that we were going to have a condition of indeterminate government, or a Government such as we have at the present time. I wish to follow this matter a little further. At the same time as we have these eloquent speeches from the Chancellor of the Exchequer upon the question of the nation's credit and the preliminary announcement that the Prime Minister, when he outlined his policy, made with regard to the sanctity of industrial capital, we nevertheless have poured out in a stream from the Labour offices day after day literature which announces an entirely different policy. Only the other day I received by post a pamphlet, which was very seductive to me from the fact that it had the Prime Minister's photograph on the front and that it was said to have been written by him. What does that pamphlet urge? It urges the immediate nationalisation of the banking system of this country. [HON. MEMBERS: "Hear, hear!"] There are the cheers of his followers to confirm it. Is that his policy? We want to know, because so long as the Socialist Government speak with two voices they can never enjoy the confidence of this country or bring confidence to the business men who have to carry on the business of the country.

It is not only the Prime Minister. I have received also a pamphlet with the name of the Lord Privy Seal (Mr. Clynes) upon it, urging exactly the same thing, and saying that it is the only remedy for unemployment. The rabbit remedy for unemployment has been kept very long up the sleeve of the Minister of Labour, but it appears that the Lord Privy Seal himself had it all the time. The real remedy for unemployment is the nationalisation of the banking system of this country! I venture to say that as soon as you announce that policy to the world, the effect upon the whole of the financial fabric, of which to-day we are proud, will be disastrous. I speak with some timidity upon this matter. I recognise that the Prime Minister announced to an audience the other day that business men, for some reason or another, are unfitted to occupy high places in the Government. Much that was obscure was explained to me by that statement. I do not protest on my own behalf. All I venture to say is that, although it may fall to people with more exalted ideas to occupy these high places, they will have to depend upon business men to carry on the ordinary sordid business of the State, without which there will be nothing for them to govern. I would ask him to bring back some confidence to these business people upon whom this Government so much depends. He has up till now kept in the dark some of the Socialist theories of finance—I mean, so far as the House of Commons is concerned—which he has announced so loudly to the public. For years he has been pointing a revolver at the heart of British credit with some of those extreme theories of his. I would ask him, if he wants to bring about confidence, to throw away that revolver and disown those theories.

I now turn to another topic, that is the question of what are known as the McKenna Duties. I would venture to ask the Committee to try to look at this problem free from all pre-conceived prejudices. I am not going to argue the question whether Free Trade or Protection is right, or whether tariffs are in general bad. I would like to direct the attention of the Committee to this specific problem and to it alone. We are to-day, as everybody knows, in a condition of great depression so far as employment is concerned It is a little better on the unemployment figures than it was a few months ago. [HON. MEMBERS: "Due to a Labour Government."] Well, whatever the reasons are, it is only a little better. We still have in this country an amount of unemployment which makes one's heart sore. I take the motor trade as the one chiefly concerned, although there are three others also vitally concerned. It belongs to the engineering circle of trades, and as we heard from the Minister of Labour to-day, the engineering trades are suffering almost worse than any other trades from unemployment at the present time. What is the position of the motorcar industry? It has during the last two or three years enjoyed a prosperity altogether unexampled among the engineering trades. Instead of putting men on the street out of employment, it has been steadily increasing the number of hands to which it has given industry. These are the facts, whatever the reasons may be. I hope I shall not weary the Committee if I say that I have taken five firms in this trade to see what the increase of employment given by these particular firms has been. They have gone up from 3,200 hands in 1914 to 15,000 hands to-day. These are only five firms, and their numbers are not very large. I believe that the motor-car trade with its allied and associated industries employs something like 200,000 people altogether.

More than that.

At any rate, I ask hon. Members opposite, who are well aware of this problem, and who probably get down to it in its actual gross hardship more than most of the rest of us, just to remember what an enormous difference it means to the heart and encouragement of a man to be earning his money every week instead of going in a queue to the Employment Exchange to take his weekly payment. You cannot exaggerate what that means in contentment and happiness to that body of men who are obtaining that employment. Here is the Austin Car Company. The number of its employés has gone up from 1,470 in 1914 to 6,200 in the present year; the Crossley Car Company from 300 to 2,100; the Morris Company from 300 to 4,000 men, and the Singer Company from 800 to 1,870. Take, again, the question of wages. The Singer Company, on Good Friday last year, paid in wages £3,750. This year they paid £8,630 in wages.

Here is an industry which, by contrast with others in this country, has been successful in doing what this House, and the people representative of various Governments, have failed to achieve up till now. It has been providing employment for men in the trade in which they want to work. What harm is this doing to anybody? Is there a single person who has complained that he is being damnified by this industry? Is there a single person who has complained that he is not getting his motor car cheap enough? Is there one? You cannot find a single creature in this country who has made complaint that any harm is being done. What are you going to do?

The employers in the trade say they will have to discharge their workmen if these duties are abolished. Can you compensate them? The fact is you may be wrong, and the people who are accustomed to work in the trade and know its difficulties may, perchance, be right. What I want to put to the Committee on general grounds is this. Here is an industry that is giving employment and will continue to do so if you leave it alone. If you do that nobody will suggest that any harm can be done. But if you interfere with it you run the risk of doing harm. Have you any right to run that risk. Have you any right to rob the wife and family of a single man of their means of subsistence? It may be all very well to defend this proposal on grounds of theory, but to-day we must take the situation as we find it, and if you insist on doing something on grounds of theory, grounds which are of no practical value so far as you can indicate, you will be open to the gibe that you are afraid to put your theory to a fair test. I do not want to press the question of theory too far. I would rather obtain the assent of this House on other grounds to allow this industry, which is offering employment to these people, to continue. I do not want to treat this matter from a political or partisan point of view. From that point of view nothing would please me better than that you should do away with the McKenna Duties, but I am aghast at the hardship and misery which, in the process, you will bring about. I wonder whether this is the price that is to be paid for Liberal support. The Prime Minister said in the House the other day that he would not agree to its being said that any man was his master. I can quite understand that feeling. Possibly here we may have some arrangement on the hire-purchase system which makes the price less revolting.

There is one remark I would like to make before I leave that question. It was suggested by the Chancellor of the Exchequer yesterday that he was taking this course because the electorate had pronounced in favour of the action he was taking. I venture to say that the electorate did nothing of the kind. I agree that the electorate rejected a general tariff, and I am not one of those who suggest anything otherwise, but the electorate did not reject individual tariffs. It is a fact that Coventry at the General Election returned a Labour man and a Free Trader. There is not the slightest doubt that the country pronounced against a general tariff because it might possibly mean an increase in the cost of living, but Coventry is in favour of maintaining the McKenna Duties. That has been made plain by the hon. Member who was elected, and it has been made plain, too, by the express authority of, I should think, 99 per cent, of the workmen of Coventry who have indicated their opinion in this matter. The Free Trade Member for Coventry was present at a protest meeting last Saturday. He was supported by one of the distinguished Labour Members who sits on one of the back benches, and he was supported also by the Liberal candidate. The protest was specifically against the abolition of the McKenna Duties. I beg the Committee to consider this matter free from all prejudice and to look at the situation of this trade at the present time in relation to the scourge of unemployment which, unfortunately, still besets our land, and not to do anything harshly which would undoubtedly have the effect of creating very great misery in the community. I was staggered by a phrase which the right hon. Member for Paisley used yesterday standing at this Box. He said, with regard to the manufacturers of motor cars—obviously recognising that they are going to be hurt and injured by the change of policy—that they had only themselves to blame. Only themselves to blame! Let us suppose that they ought to have foreseen that some combination of political parties might be formed which would do such a thing as this.

Not to have foreseen, but to have remembered that Mr. McKenna said that these duties were imposed for temporary purposes, and would cease at the expiration of the War, and also what Mr. Bonar Law said.

I agree. I know that perfectly well, but they have been continued regularly ever since, and people are very wise to act on the facts rather than on what politicians say. I wonder what the right hon. Gentleman was thinking of when he mentioned that with regard to these enterprising motor car makers. I do not expect he was worrying about their losing their capital, but I do suggest he was forgetting the large number of men in employment to-day who are likely to be told by their employers that they have no work to give them, and who will be driven to the degradation of applying for the dole—a degradation of which we have so often heard from the benches opposite.

I turn now to one final topic, that is the question of Imperial Preference. Here, again, do we see the folly of people over-ridden by theory. One did hope that one of the results of the War was going to be that a new and enlarged view with regard to Empire was going to be taken in this country, and that we were going to get rid of the old Little England party. But it would appear that the dead hand of Cobden still holds a grip on a considerable number of Members Of this House. It will be recalled that one of the things he said was that his belief was that Free Trade would gradually and imperceptibly loosen the bonds which bind the Colonies to England. Is that the sole theory which is animating the Government and their Friends below the Gangway?

I do not propose to argue this question upon the grounds on which I should like to argue it. That will be more suitably done in the Debate which I understand the Prime Minister is going to provide at some early date upon the whole question of Imperial Preference, but I should like to make one or two general observations from a more sordid point of view. The Government have made great professions about relieving unemployment. As I said yesterday, they have not only done nothing in that direction, but what they are doing is in the direction of decreasing the employment we have, and they are in danger of intensifying that result by the action which they are proposing to take with regard to our Dominions. I wonder whether even the Colonial Secretary, who I see is going to reply upon this matter, realises what we owe to the Empire in the way of trade and whether he has made up his mind as to what is his policy upon this subject. If the Committee will forgive me, I should like to afford them a few figures as to the trade we do with the Dominions at the present time. If we take the year 1922, we find that out of £568,000,000 worth of manufactured exports, Britain sent £251,000,000 worth to the Empire or over 44·2 per cent. That is a very big market and affords us in this country, who require it, a vast mass of employment. I suppose that will be conceded by everybody.

Does that include India?

Yes, undoubtedly. Why not?

You said "Dominions."

I have not come to that point yet. I will give my right hon. Friend sufficient pabulum upon that matter to require an answer from him. He has been a little premature in his question. Let me take a sparsely populated country like Australia. The 5,500,000 people of Australia buy more British goods in the bulk than the 110,000,000 people in the United States of America or than the 65,000,000 people in Germany or the 40,000,000 people in France. Is not that a market worth considering? The Government are now busy negotiating with Russia. I have no prejudices on this matter, although the Prime Minister always ignores the small part which I have played in the past in connection with this Russian arrangement. He announced to this House, as I listened to him, on the occasion of his advent to office that he had made the first move towards any kind of trading arrangement with Russia. In fact, in 1921, I, as President of the Board of Trade in the Coalition Government, had made a trading agreement with Russia, and whatever he achieves by way of amity—and I do not think it will come to much—by the de jure recognition of Russia, he will not improve at all in trade upon what I did in 1921. I only mention the question of the Russian trading agreement in order to make it plain that I am not a person who is prejudiced against trade with Russia. Indeed, I desired to get into trade relations with Russia at the earliest possible moment. It seemed to me even as early as 1921 that we should be picking up trade in every possible part of the world where we could, but look at the situation. People imagine we did an enormous trade with Russia before the War. In fact, the little country of New Zealand, with 2,000,000 people or less, took as much from us in the way of manufactured goods before the War as the whole teeming population of Russia. I do not know what the Government will offer to Russia to-day in order to make a trade agreement. I do not know what concession they will make to them or what they will do. Evidently they are content to spend time negotiating with a country like that whose chief representatives at the present time persist in libelling our Prime Minister. [HON. MEMBERS: "He does not mind!"] He does not mind, but believe me the rest of the country minds that its chief officer should be subjected to that particuarly insulting language.

What is it?

If the hon. Gentleman wants information I am always willing to give it. Zinovieff very often quoted Lenin—of whose acquaintance the Prime Minister at one time may have had some knowledge.

indicated dissent.

However that may be, he quoted Lenin as stating that they would give the support to the Prime Minister which a rope gives to the man who is hanging from it. That is only one sample, but there are many others. What I want to point out is that it is madness to disregard every proposal made to you by your Dominions and, at the same time, to seek trading relations with other countries who do not afford you anything like the same friendly atmosphere as you enjoy in the case of your own people, or anything like the lucrative markets you have constantly enjoyed at their hands. Do you think you enjoy it upon your own merits? [HON. MEMBERS: "Upon yours."] No, I am speaking of the country at large. Do you think Britain enjoys that trade with her Dominions because of the merits of our manufactures over those of everybody else? [HON. MEMBERS: "Certainly."] Perhaps I can enlighten hon. Members. I have already mentioned the example of Australia. Here is the experience of recent years there. In 1912 they had already given you a preference, and at that period you were enjoying 50 per cent, of their market, that is to say, 50 per cent, of Australia's imports came from Great Britain. During the War, of course, owing to conditions of shipping, that percentage dropped considerably, and in the year 1919–20, owing to the active advances of Japan in the Australian market, your proportion had dropped to 38·9. In 1920, the preference was increased by the Australian Government in order to give additional advantages to our trade. It was increased from an average of 5 per cent, to 12 per cent., and they followed that up by special antidumping legislation, which was specifically designed to help British manufactures, with the result that by 1922 we had got back to rather better than our pre-War position with 51·8 per cent, of the imports into Australia.

Will the right hon. Gentleman tell the Committee how much the Australian Government increased the tariff against British goods at the same time? It is perfectly true they increased our preference but—[HON. MEMBERS: "Order!"]

I understand the point which the hon. Member is about to make and I will answer it at once. What he neglects to understand and what completely wipes away the point he is making is that I am talking of our position in competition with others. It may be that the general tariff has been increased, but our preference has been increased and that is the point. The whole question with regard to imports into Australia is, what is the amount of preference which we have over our competitors? The hon. Gentleman will kindly understand that I am an exporter to Australia and I very well understand the market.

So am I.

There is no tariff at all on cotton goods going from this country to Australia and there is a tariff of 15 per cent, preferential to this country. There is no increase against this country in any tariff on cotton because there is no tariff.

On my goods there is.

The hon. Member is looking at the matter merely from the point of view of competition with the Australian producers. My point is that we maintain our position by reason of the preference which is given to us over other outside competitors and, but for that preference, we should be very much behind in those markets. Take any body of British traders exporting to Australia to-day and ask them what would be their view of the preference being reduced? They would look upon it as a threat to their industries. Everyone knows it. It is as obvious to the man who has practical business views as anything could be. If you reduce the preference on British goods, down goes our market and down goes the chance of employment. What is the policy of the Government with regard to these matters? Mr. Bruce, who speaks with a great sense of responsibility, says that at the moment the Australians are very much pressed by proposals from other countries with regard to reciprocal trading arrangements, and he says that such arrangements will undoubtedly adversely affect British trade. Are you prepared, in the present condition of unemployment, to run the risk of losing these markets? If so, what is your point of view? Is it because of some peculiar fetish which nobody else in the world at the present time follows—no other country that can be named. I am not arguing that you should adopt any system of Protection, but I argue that in relation to the Empire you should show somewhat more consideration for your own people. I go back to a very solid Resolution which was passed by the Imperial Conference in 1921. I wish the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) were here. He presided at that Conference. Here is the Resolution which was passed, and I would beg to direct the attention of the Colonial Secretary to its terms. This was a Conference of Dominion Prime Ministers along with British Ministers, including the Prime Minister of that day, and their Resolution states:

If that be the attitude that we take, I see no prospect at all of holding this Empire together. Believe me, you will not gain in the end by any policy of that kind. The people of this country will never forgive those who fail them in this great matter. Deep down in their hearts the citizens of our country have an intense pride in the great achievements of our race in building up this great Empire, which has been in all the world the most potent instrument for the advancement of freedom, and which stands to-day as an embodiment of humanity and justice unsurpassed by any other nation. I would implore the Committee in this matter not to do anything by which they would run the risk of weakening the loyalty of our brethren overseas or jeopardising the connections with our Dominions, the loss of which would destroy a great part of the authority and the influence which to-day we wield in the world.

We have listened to a very eloquent and a very interesting speech, but, having listened patiently to that speech, I am still unable to ascertain what is the real complaint of my right hon. Friend against the Government. He started off by saying that the Budget that was opened yesterday was not a Socialist Budget, that it imposed no new taxation, and that it inflicted no additional hardship upon the rich people. From the tone in which he delivered his remarks one would assume that the right hon. Gentleman was deeply disappointed at that fact. I want to know exactly whether it is a speech for inside or outside consumption, because my right hon. Friend returned from America less than two months ago, and within an hour of stepping on land in this country, he said:

No, Sir, it may be that it is a good debating speech, but my right hon. Friend touched the key of the situation when he said that he was not afraid of an Election. I want to know what is the real meaning of that? Would he have been more afraid of an Election if we had fulfilled all his prophecies, or is it because he is disappointed that we have not given him the chance? It is not for him to twit us about Elections. It is no good for him to say this afternoon: "We will accept the challenge for an Election at one moment's notice." We received that challenge without any notice at all. We were not told there was going to be an Election. All that we have heard about the McKenna Duties, all that we have heard about the surplus, all that we have heard about the Tea and the Sugar Duties and the Empire as a whole rested in the pockets of my right hon. Friend and his friends, and they chose the moment to gamble with it, and it is not for them to talk to us about an Election. I put it to him that his speech this afternoon is the measure of his disappointment. I put it to him that when he received all those telegrams from his poor friends, and his patriotic friends, and real Englishmen, saying: "So disgusted are we with the intelligence of the democracy of this country that we propose transferring sterling into dollars," he must have replied: "Yes, from all the information at my disposal, I think you are justified," and then, when the Labour Government come in, and having found, not a depreciation but a gradual appreciation in the sterling as against the dollar, he dare not write to those same friends and say: "I made a profound mistake." That may be all right, as I say, as a mere debating point, but I am still going to ask my right hon. Friend this simple question, and I am going to ask the Committee to note the difference between our attitude and that of the party opposite.

Twelve months ago, when they were sitting on these benches, they had almost the identical surplus that we have to-day; in other words, the same surplus that my right hon. Friend the Chancellor of the Exchequer had yesterday, they had 12 months ago. But I ask the right hon. Gentleman opposite to observe that, so far as the country is concerned, they will note the difference in the way in which this surplus was applied as compared with the way in which it was applied 12 months ago. I do not propose to deal with the McKenna Duties—[HON. MEMBERS: "Oh!"]—not because we are not going to deal with them—we do not propose to run away from anything—but I rose primarily to deal with the question of Imperial Preference, contained in the latter part of my right hon. Friend's speech, and I want to protest against a further illustration that we have had this afternoon of the claim that hon. Members opposite and members of a particular political party are alone the guardians of the Empire.

We do not want to be, but you make us.

It is quite true that you pretended to be—

We always have been.

It is quite true that you have used the Union Jack as a cloak for many things; it is quite true that when you have failed to have other arguments, you have dragged that in as an excuse, but we do not intend to allow you, or the members of any particular party, to let it go forth that you or they alone are the party jealous of the great Empire of which we are all proud.

Actions speak louder than words.

Yes, and we are going to act. It is a very convenient thing to ignore facts, and my right hon. Friend forgets that, within the last 10 weeks, within the Empire, there have been four dissolutions and already two changes of Government.

What has that to do with it?

5.0 P.M.

This, that if we are the enemies of the Empire, if we are the people who cannot be entrusted with its safety, it is rather peculiar that already there are two additional Labour Governments within the Empire. Let us see exactly what is this remarkable claim that the party opposite make. My right hon. Friend spoke of the very serious Resolution of the Imperial Conference. I am sorry he dragged in the dead, because it is not up to anyone in this House to say one word about the sacrifice of any people in any part of the Empire. The life that was given from the East End of London, the life that was given from the North of Scotland, or from the South of Ireland, was equally as precious, and given as readily, as it was from 5,000 miles away. The last thing that the Dominions claimed, and the last thing that any Prime Minister from the Dominions has ever claimed, was that those lives were given or sacrificed in return for a demand which the people of this country did not appreciate. The right hon. Gentleman quoted the 1917 Conference, but he did not quote that at that same Imperial Conference there was another Resolution, equally and as unanimously carried, which, dealing with the constitutional relations of the Empire, referred to the preservation of all existing powers of self-government and complete control of domestic affairs. But that was followed by every Dominion Premier making it clear that any resolution he supported was subject—and subject alone—to the confirmation of his Government and Parliament when he returned.

That was made clear, and the significant thing is this—and here I want to touch on an aspect of this question that I hope the Committee and the country will endorse. Since I took any interest in Dominion affairs, I have always deplored the fact that you bring representatives of the Dominions to this country; they debate resolutions; they come to decisions; and then those decisions are reversed. I know the danger, but the weakness of it is that, as long as you limit your Imperial Conference to the representatives of one party, how can you expect that one party to bind the country at home? To be quite frank, I know the strong feeling that exists, because I have had evidence of it, that where resolutions are agreed to, and immediately the Conference adjourns, or disbands, they find that no effect can be given to those resolutions. That was made most manifest in the last Imperial Conference. What did we find? Not only had the Conference adjourned, but a large number of the representatives had not left this country when a General Election reversed the whole policy. I had the privilege and honour of meeting a number of these representatives and discussed the matter with them. I should like to see, not one party, but all parties in this House apply themselves to this problem, to try to see whether an Imperial Conference, instead of being representative of a. party, could in the main be representative of the whole and not a section. That is the view of our Government, and I put it to right hon. and hon. Members in all parts of the Committee that, if they are going to talk about the Empire, they should stop assuming that it is the preserve of a class, stop saying that it is the property of one section, and realise that on these benches, and, indeed, in all quarters of the House, you will find men ready to co-operate with you in doing the very best for the Empire, equal to anything you do. But my right hon. Friend opposite assumes it is only in one way that it can be done.

What are you going to do?

I will come to that. I have been talking 10 minutes, and my right hon. Friend spoke for considerably more than an hour. I might equally have said that to him after he had been speaking 10 minutes. He asks me what I am going to do. Let me first draw his attention to what this Government have done. Is he aware how many resolutions were passed at the Economic Conference? My right hon. Friend the Leader of the Opposition will agree with me that at the last Imperial Economic Conference 32 resolutions were passed unanimously. I put it to this Committee that there would be no resolutions submitted to that Conference unless, first, they were important resolutions, unless they were resolutions upon which some part of the Empire or another felt keenly, unless they were resolutions that were of benefit to the Empire as a whole, and warranted consideration. I put that as a general proposition. Thirty-two resolutions were the outcome of the last Economic Conference of 1923. We are accused of having no Imperial interest, of having no interest in the Empire, of disregarding Imperial opinion. Let us see what the facts are? Out of those 32 resolutions, there are two at present under consideration. There are two definitely opposed by the Government, and there are 28 that we have already endorsed, and taken the necessary steps to put into operation. This is the party that disregards the interests of the Empire! It may be uncomfortable, but it is the fact.

I am perfectly happy.

My right hon. Friend says he is perfectly happy. That means he is more comfortable now that he knows the facts.

I only mean that I always enjoy listening to my right hon. Friend's speeches.

Yes, more especially when the right hon. Gentleman finds his views in accordance with them. Therefore, I put it to him that our position is perfectly consistent. Twenty-eight resolutions out of 32 were adopted by the Government. That, at least, indicates a desire to help—I put it no higher than that. Two were rejected, and please observe that they are both resolutions with which the right hon. Gentleman could have dealt without appealing to the country. They are two resolutions with which he had already the power to deal, but within a month of the Imperial Conference breaking up, he said, "In my judgment, it is necessary to take the opinion of the country." They took the opinion of the country, and the right hon. Gentleman now complains that the country ignored the views of the politicians, and rather dealt with the facts. We are here dealing with the facts. I hope, therefore, that as a result, not of the Budget Debate, but of our unfortunate experience, of which hon. Members in all parts of the House must be aware, namely, the difficulty of dealing with Imperial Conference Resolutions in a party sense, this will receive the attention of Members in all parts of the House.

So far as the Government are concerned, I say, on their behalf, that we deplore as much as right hon. and hon. Members on the opposite side, the difficulty that has arisen. But we are not responsible for it. The Premiers unquestionably were misled—there is no doubt about that. Let us see to it that we all apply ourselves to avoiding that mistake. I would say only one other thing. My right hon. Friend opposite twitted the Prime Minister about saying something disparaging of business men. I have read the speech, and I think the right hon. Gentleman misquoted it, but, in any case, it is not for him to complain, for this reason. I rather gathered that he interpreted the Prime Minister's speech as reflecting somewhat on business men as politicians. I would rather congratulate the business community by saying that they discovered in my right hon. Friend how valuable a politician is as a business man.

Therefore, I would summarise it in this way. It is not for us to discourage any class. It is not for us to differentiate between sections, but to realise that each can make its contribution. The Chancellor of the Exchequer presented yesterday a Budget that demonstrated two things. It gave the lie to all those scaremongers who predicted all manner of evils three months ago, and thereby disappointed many of my friends. It made it impossible for my right hon. Friend who has just spoken to give further interviews on the lines he has already given. While the English sterling has appreciated, his stock has depreciated. We are not presenting this Budget as an Election Budget. [An HON. MEMBER: "Oh!"] Oh, no; we have many more Budgets to present. This is only a first instalment of the Election cry. This is only the first Budget which has indicated to the world that Labour's Chancellor of the Exchequer is at least fit to govern, that Labour in office is not vindictive, that Labour in office is prepared to be fair, that Labour in office is prepared to distribute a surplus equitably and justly.

And vote yourselves free passes.

Yes, free passes in order to equalise the benefit with those who have always had free passes, and that is a system of equality which is appreciated on all hands. There will be, at least, general agreement in this, that while we may have disappointed those who assumed in us the ills from which they suffer; while we may have disappointed those who assumed that we would use our position and power in the interests of a section, we are content to believe that the great mass of the people of this country will interpret the Budget, and my right hon. Friend's Statement, as a genuine indication, not of a class policy, but of justice to all.