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Commons Chamber

Volume 172: debated on Thursday 1 May 1924

House of Commons

Thursday, May 1, 1924

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

Private Business

PROVISIONAL ORDER BILLS (Standing Orders applicable thereto complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, referred on the First Reading thereof, the Standing Orders which are applicable thereto have been complied with, namely:

Ministry of Health Provisional Orders (No. 5) Bill.

Bill to be read a Second time Tomorrow.

Oral Answers to Questions

Naval and Military Pensions and Grants

Special Grants

asked the Minister of Pensions whether he is aware that last August the Ministry withdrew from the Special Grants Committee the power which they had under their Regulations to make grants not exceeding 7s. 6d. a week to widows of ex-service men who were suffering from serious and prolonged illness; if he is aware of the great suffering caused to many poor widows who have fallen ill by the withdrawal of these grants; and whether he has restored them or is about to restore them?

This matter is at present under consideration. I may, however, explain that grants actually in payment were not withdrawn, and provision was made for their renewal in suitable cases.

Will the right hon. Gentleman consider the case of poor widows where the pensions have been withdrawn?

Will the right hon. Gentleman consider the advisability of going into the whole question of the administration of these special grants committees, and satisfy himself that they are operating in the best interests of the pensioners?

asked the Minister of Pensions whether his attention has been called to the case of Mrs. Lily Knighton, of Nottingham, whose pension has been withdrawn by the Ministry; and whether he will reconsider that decision?

My attention has been drawn to the case in question, and the Special Grants Committee, who have dealt with it under Section 3 (1, f )of the Naval and Military War Pensions, Etc., Act, 1915, as amended by Section 2 (3) of the Naval and Military War Pensions, Etc. (Transfer of Powers) Act, 1917, inform me that they propose to make further inquiries in the case, in view of certain representations made by the hon. and gallant Member on behalf of Mrs. Knighton.

If I put this question down again in a fortnight's time, will the right hon. Gentleman be able to give me a definite answer?

Is there not an understanding with regard to putting down questions, that individual questions like this should not be put on the Order Paper? I would also like to know if other hon. Members are not entitled to put such questions down on the Paper?

I have only put this question down because I have had considerable correspondence with the Minister of Pensions upon it for over a year, and I have not been able to get a satisfactory answer.

I am not in a position to lay down and definite rule, and only request that, as far as possible, such questions should be put down as unstarred questions.

Administrative Action

asked the Minister of Pensions whether he is now able to state what proposals he intends to bring before the House in order to give effect to the policy of fit for service fit for pension?

The question whether it is advisable or necessary to submit proposals for legislation to this House is under consideration, but I have taken and am taking steps to secure by administrative action, the fullest measure of consideration and justice for all claims.

Does the sympathetic consideration of further proposals involve overriding the decisions of the final courts of appeal which are the real stumbling block in this matter?

As I have previously mid in answer to questions of a similar nature, that issue is involved in the consideration which is now being given to the question.

Is the right hon. Gentleman aware that each day most of the Members of this House receive very painful letters from persons who are continually turned down by the appeal tribunals; and how much longer have we got to wait?

I am quite aware of the facts as stated by the hon. Member. They are not really within my jurisdiction, but I am giving this question all the consideration which I know the circumstances warrant.

East African Local Forces

asked the Minister of Pensions why the right of appeal cannot be extended to widows of deceased members of East African local forces when their first application for a pension has been refused?

Members of these forces, and their dependants, are given the full benefits of the Royal Warrants, but a technical difficulty, with regard to the terms of their engagement, has hitherto prevented their access to the Pension Appeal Tribunal. I am, how- ever, in communication with the Treasury and other Departments concerned, and I hope that the difficulty will shortly be removed.

Do I understand that a widow who has received a reply will have her case considered?

Pensions Handbook

asked the Minister of Pensions when he will be in a position to publish a comprehensive pensions handbook, giving all relevant Acts of Parliament, Royal Warrants, Regulations, and other particulars, together with an adequate index?

A publication entitled "Notes on War Pensions" has been issued to members of War Pensions Committees, and is on sale to the public, containing the text of the Royal Warrants and Regulations most commonly in use, together with information of a general nature. The question of issuing a more comprehensive publication will be borne in mind when a suitable opportunity may occur.

State Pensions

asked the Minister of Pensions the number of pensioners participating in police, teachers, military, and naval service pensions, exclusive of Great War injury pensions, and the cost thereof for 1923, each item separately?

As the answer contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:—

The number of pensioners of the different classes and the total cost are approximately as follow:

Number.

Cost.

Army

108,000

£8,125,000.

Navy

68,000

£6,680,000.

Police

28,000

£3,000,000 (including gratuities and allowances).

Teachers

21,000

£3,500,000 (including additional allowances).

asked the Chancellor of the Exchequer the number of perpetual pensions now being paid by the British Government, with particulars thereof; the number of commutations of perpetual pensions in 1923; and the number of Members of Parliament in receipt of State pensions in respect of past services in the Forces or in the Civil Service, and the total cost?

The answer to the first part of the question is three. Particulars will be found on page 44 of the Finance Accounts for 1922–23, House of Commons Paper 89 of 1923. The answer to the second part of the question is none. It will take some little time to obtain from the various Departments concerned the information asked for in the last part of the question, but, if the hon. Member so desires, I will procure it and circulate it in the OFFICIAL REPORT when it is available.

Can the hon. Gentleman say if the amounts paid with respect to perpetual pensions are in every respect chargeable to Income Tax and Super-tax?

I could not reply to that off-hand, and it would be wrong to do so, because one must look up the precise conditions under which the pensions are given, as they vary.

Danish Lottery Circulars

asked the Secretary of State for the Home Department whether his attention has been called to the transmission of Danish lottery circulars through the post; and, seeing that it has been found that the most effective method of dealing with such breaches of the law is for the Secretary of State to issue a warrant authorising the Postmaster-General to intercept and return to the senders the letters containing the remittances which are addressed to the promoters of the lotteries in response to their circulars, and that the Secretary of State has adopted this method in the case of many racing sweepstakes and other lottery schemes organised in this country, in Ireland, and in some other countries on the continent, why it is not adopted in the case of the Danish Colonial Lottery?

Yes, Sir, and such steps as are considered desirable will be taken to prevent the use of the post for the transaction of business connected with this and other lotteries.

May we take it that there will be no differentiation between Danish and Irish lotteries?

Prison Service

asked the Home Secretary how many part-time officers are now in the prison service; and how many there were before the number of prisons was reduced.

The existing numbers (including vacancies) are: —

Chaplains

20

Medical officers

27

Roman Catholic priests

30

Before the closing of the eight prisons, i.e ., on the 31st March, 1922, there were: —

Chaplains

23

Medical officers

32

Roman Catholic priests

37

11 and 12.

asked the Home Secretary (1) which are the prisons staffed by part-time medical officers; what are the present salaries of these officers; and on what basis were they arrived at;

(2) in what respect has the closing of prisons increased the work and responsibility of the part-time medical officers at the remaining prisons; and whether it is proposed to increase their remuneration accordingly?

As the answer to these questions is rather long, I propose, with the hon. and gallant Member's permission, to circulate it in the OFFICIAL REPORT.

Is it not a general fact that a large amount of economy has been effected by closing prisons, and that more work has been thrown upon the part-time medical officers without any increase of salary?

Why are there so many more Roman Catholic priests than Church of England ministers?

I think my hon. and gallant Friend had better wait to see the written reply.

We have passed that point.

Following is the answer promised:

The prisons and salaries are as follows:

Manchester, £300; Hull, £250; Winchester, Newcastle, Bristol, Cardiff, Lincoln, Preston, Durham, Borstal, Aylesbury and Portland, £200 each; Leicester, Swansea, Shrewsbury, Portsmouth, Gloucester, Nottingham, Norwich, Exeter, Bedford, Wakefield, Oxford and Dorchester, £150 each; Ipswich, Shepton Mallet and Plymouth, £100 each.

In fixing the salary the population of the prison is the basis, unless there are some special features justifying special consideration. The closing of eight prisons in March, 1922, has caused some increase in the population of some of the remaining prisons, and in one instance the salary of the part-time medical officer was increased. In the remainder the additional population has not so far been sufficient to justify an increase, but except where there has been an increase on this or other special grounds a temporary bonus is drawn.

British-Born Wives (United States)

asked the Home Secretary whether he is aware that a British-born wife of an American citizen, wishing to visit her native land, cannot obtain a passport either from the State Department of the United States, because she is not an American subject, or from the British Consul, because she is not a British subject; and whether it is possible to remove this anomaly and disability attaching to British-born wives who have not relinquished their birthright?

Yes, Sir; but the incapacity to obtain a national passport does not prevent the British-born women in question from visiting their native land. It has been arranged that on making the appropriate affidavit they may be granted the necessary facilities by British Consuls. This is all that the British Government, as at present advised, can do to meet the difficulties arising from the recent American legislation under which a foreign woman does not, on marriage to an American, acquire American nationality.

Will the right hon. Gentleman make overtures to the United States Government in that direction, to see if this anomaly cannot be removed?

Will the Home Secretary give consideration to legislation that will allow a British woman to retain her nationality on marriage, and so bring English law into line with American legislation?

Unstamped Postal Packets (Members of Parliament)

asked the Home Secretary whether his attention has been called to a large number of unstamped postal packets recently forwarded to Members of this House containing imputations against the honour of Members; and whether he will take steps to identify the sender, with a view to prosecution and the prevention of any recurrence of this abuse?

Is the right hon. Gentleman aware that the best thing to do is in all these cases to send back the letters unopened?

Criminal Investigation Department

asked the Home Secretary how man men and women are employed on the political side of the Criminal Investigation Department; and how many of these are employed in service abroad?

I presume that the hon. Member refers to the Special Branch of the Criminal Investigation Department at New Scotland Yard. The strength of police officers and clerical staff in that branch is 170, including 22 women clerks and typists; and of these, five police officers are employed abroad.

Is it not a fact that this branch of the service does extremely useful work?

Aliens

asked the Home Secretary how many aliens have been admitted to domicile in this country since 1st January, 1924, giving the numbers, if any, of males and females, respectively?

The number of aliens who were given leave to land during the months of January, February and March was 51,948, of whom 9,589 were residents returning from abroad, and of the remainder all but 2,019 came here in transit elsewhere or were here for special and temporary purposes. Of the 2,019, 709 held Ministry of Labour permits issued under Article 1 (3) ( b ) of the Aliens Order, of whom 390 were males and 294 females, with 25 children; and the remainder may have intended to stay here; but the stream of alien passengers flows constantly out as well as in, and during the same three months 49,326 aliens left the United Kingdom.

Can the right hon. Gentleman say how many of these freshly arrived aliens are drawing the dole? [HON. MEMBERS: "None."]

Education

Teachers' Pensions

asked the President of the Board of Education the number of teachers now serving in schools for the blind and deaf who were engaged in the teaching of such children before 1894; and whether in the cases of these teachers he is prepared to make immediate provision to give effect to the recommendation of Lord Emmott's Committee that such service should be pensionable?

I understand that the number of teachers concerned is approximately 65. With regard to the second part of the question, I fear it is not practicable for me to undertake special legislation for this purpose in advance of a general measure.

asked the President of the Board of Education what action is being taken to consider applications from non-grant-aided schools for inclusion in the benefits of the Teachers' Superannuation Act, 1918, in accordance with the recommendations contained in the last three sentences of paragraph 82 of the Report of Lord Emmott's Committee?

The cases referred to by the Noble Lord are now receiving my consideration, but I can give no undertaking that it will be possible to deal with them in advance of the general question.

Teachers (Rhondda)

asked the President of the Board of Education whether, seeing that the Rhondda local education authority still maintains its resolution not to employ any teacher who is not a member, or does not become a member, of a recognised trade union, he will take steps in the interests of education to put a stop to action which has the effect of restricting the supply of teachers?

The appointment of teachers in schools provided by local education authorities rests with those authorities, and I am not prepared to intervene in the matter, as I have no reason to suppose that the operation of the rule is prejudicing the efficiency of the schools.

Then, we may take it, that the President of the Board reverses the policy of his predecessor four years ago on the same matter?

Training Colleges (University Courses),

asked the President of the Board of Education whether, in order to secure the fullest educational opportunities for teachers, he will take steps to encourage the attachment of training colleges to universities and to secure that the teachers' training should form part of a university course and be carried out in association with other students?

I am anxious that as many teachers as possible should have the advantages of university education, but before deciding what steps to take for this purpose, I propose to await the Report of the Departmental Committee, which is at present reviewing the system.

Elementary Schools (Organised Recreation)

asked the President of the Board of Education whether he is able to take any fresh steps to encourage local education authorities in urban areas to make fuller provision for organised recreation for the children in elementary schools by acquiring new playing fields and by the better use of existing opportunities, and, in particular, for the utilisation of municipal tramways to convey scholars to parks, playing fields, and swimming baths at hours when the tramcars are not fully used by the travelling public?

Local education authorities are, I think, aware that the Board are quite prepared to encourage the activities mentioned by my hon. Friend. I am always prepared to consider suggestions for their more extensive development.

Bethnal Green Museum

asked the President of the Board of Education whether he is yet in a position to say whether arrangements can be made to open Bethnal Green Museum in the evening; and whether, in coming to his decision, he will bear in mind that the hours of opening at present are such that it makes it impossible for the population in the neighbourhood to visit it?

I am now in a position to make arrangements for opening this museum on Monday and Thursday evenings in each week.

Royal Air Force (Accidents)

asked the Under-Secretary of State for Air how many fatal accidents have taken place in the Royal Air Force since 1st January, 1924; whether most of the accidents have been the result of engine failure; whether he is aware that there have been a very large number of cases of engine failure, and that recent figures work out at one failure for every 58 hours' flying; whether he can give the precise figures for the past 12 months; whether he is aware that inquiry has shown that a large number of failures are due to faulty maintenance and ground organisation; whether he is satisfied with the standard of technical knowledge and skill of the ground staffs and organisation generally; whether, in every case of engine failure, an exhaustive technical inquiry is held at the earliest possible moment; and, if not, will he take the necessary steps to see that such an inquiry is held and the results of such an inquiry recorded?

As the reply is somewhat long, I will, with the Noble Lord's permission, circulate it in the OFFICIAL REPORT.

Following is the reply:

The answer to the first part of the question is 17; to the second part is in the negative; as regards the third part, recent statistics do not support the statement that there has been a very large number of engine failures, and the figure quoted (58 hours' flying per engine failure) cannot be verified from information in my Department, but is presumably taken from the 192–23 Report of the Aeronautical Research Committee and refers to a period in 1922; as regards the fourth part, the latest return available shows that approximately 150 hours were flown per engine failure in units at home; as regards the fifth part, the proportion of engine failures due to faults of maintenance is at present under investigation, but there is no reason to suppose that the proportion is at all high; the answer to the sixth part is in the affirmative; to the seventh and eighth parts, that all serious accidents and accidents whose cause is not clear are investigated by a Service Court of Inquiry and also, when practicable and necessary, by the Accidents Investigation Branch of my Department, and that these arrangements are, in my opinion, fully sufficient.

Aircraft Exhibition, Prague

asked the Undersecretary of State for Air what arrangements, if any, have been made with regard to this country taking part in the forthcoming aircraft exhibition to be held in Prague?

Arrangements are being made by the Society of British Aircraft Constructors, Limited, to secure appropriate accommodation for a representative exhibit by the British aircraft industry at the exhibition referred to, and a financial contribution from Air Votes will be made towards the expenses actually incurred for the purposes of this exhibit.

England-Prague Air Service

asked the Under-Secretary of State for Air whether any further progress has been made with the arrangements for establishing the proposed air service between England and Prague, with an agreed subsidy from the Czechoslovakia Government; and what is now delaying the negotiations?

I am sorry to say that the difficulties referred to in my reply to the hon. and gallant Member on 28th February last still prevent the establishment of an air service between England and Prague, and pending their removal the conclusion of the permanent agreement which has been proposed would serve no purpose. The temporary agreement to which I then referred was duly ratified, but lapsed on 31st March.

Can the hon. Gentleman hold out any hopes of getting rid of the German opposition to this route passing over their territory, which is holding the matter up?

The Germans are making reciprocal claims in that respect, and it is possible that they may open up the route.

Pre-War Pensioners

asked the Home Secretary whether he proposes to introduce legislation to give effect to the Resolution passed on the 16th May last as to the inadequacy of the provisions of the Pensions (Increase) Act, 1920, to meet the needs of pre-War pensioners?

The Government's proposals will be tabled in the form of a Financial Resolution next week, and it is hoped to take the Resolution in Committee during the following week.

asked the Prime Minister whether he can inform the House as to the date when the Pre-War Pensions Bill will be introduced?

The Government hops that it will be possible to take the Money Resolution required before the introduction of this Bill the week after next.

Is it proposed to include the case of the pensioners of the Royal Irish Constabulary?

War Loan (Conversion)

asked the Chancellor of the Exchequer what is the total amount of 5 per cent. War Loan that has been converted into the new 4½ per cent. Conversion Loan?

I have not yet the final figures, but, as my right hon. Friend the Chancellor of the Exchequer said on Tuesday, the amount converted is not less than £150,000,000.

Could the hon. Gentleman say if the amounts converted are for large holders or small holders?

It is a little difficult at this stage to make a statement, but I think it is true that broadly it is in the larger holdings of stock.

Import Duties

asked the Chancellor of the Exchequer the total cost of collecting, during the last year, the duties imposed by the McKenna Act; the cost of collecting duties under the Safeguarding of Industries Act; and how many extra officials have to be employed in the administration of these Acts?

The work of collecting these duties is mainly performed by the Customs and Excise staff in conjunction with other functions, and separate figures as to the cost or the number of extra officials employed are not available.

Will not exactly the same number of officials be employed if these duties are done away with?

It is quite impossible to say at this stage, but I should think it would not make very much difference.

Ex-Cabinet Ministers (Pensions)

asked the Chancellor of the Exchequer the number of ex-Cabinet Ministers who are in receipt of pensions under the Lord Chancellor's Pension Act, 1832, with the amount thereof in each case; the number of ex-Cabinet Ministers who are in receipt of pensions under the Political Officers Act, 1869; and the number of ex-Cabinet Ministers who have been pensioned during 1923?

Three ex-Cabinet Ministers draw a pension of £5,000 a year under the Lord Chancellor's Pension Act. All three do regular judicial work. No pensions are being paid under the Political Offices Pensions Act, nor were any pensions to ex-Cabinet Ministers granted in 1923.

Irish Free State (Financial Settlement)

asked the Chancellor of the Exchequer if he will now furnish and lay a complete statement of account to 31st March, 1924, as between the British Treasury and the Irish Free State Government, showing the sums paid and the sums of money due on either side on current account, whether as revenue or other payments, and an estimate, if a final statement cannot be given, of the value of real property, stores, and any other property transferred by the British Government to the Irish Free State?

A statement is being prepared, and will, I hope, be ready shortly, giving the payments made during, and the amounts outstanding at the end of, the last financial year on current account as between the British Government and the Irish Free State Government. An estimate of the value of the property transferred by certain British Departments to the Irish Free State was given in Part II of the Financial Statement presented to Parliament by the late Government in 1923 (Command Paper 1930).

Will the statement presented give details of the amounts under the different headings under which they are chargeable or payable?

I could not tell the hon. and gallant Gentleman at this stage, but I can assure him that the statement will be complete in its character.

Will the hon. Gentleman take into consideration the necessity for giving full particulars of all the items chargeable to this account?

Members of Parliament (Leave of Absence)

asked the Financial Secretary to the Treasury whether, in view of the fact that the Statute 6 Henry VIII, c. 16, which enacts that a Member of Parliament absenting himself therefrom without the leave of the Speaker is to lose all those sums of money which he should or ought to have had for his wages has not been repealed, it is his intention to enforce these provisions in the case of present Members of this House?

I have taken legal opinion on this point, and am advised as follows:

The Statute quoted by the hon. Member refers to the payment of a fixed sum for each day during which a Knight of the shire, or a citizen, or burgess attended Parliament. Under the Common Law it was payable by each constituency to its Member on production by him of a writ de expensis levandis Those payments appear to have fallen into desuetude by the end of the seventeenth century. The Statute of Henry VIII has no application to the annual salary which is payable out of the Exchequer, in consequence of the Resolution of the House of Commons of the 10th August, 1911, and which is provided annually on Votes.

Is the hon. Gentleman aware that long after Henry VIII' s time it was customary to make a call of the House, usually at 8 a.m., and Members who did not attend were liable to severe penalties; and will he consider the advisability of reviving that?

Are the Government prepared to revive the custom which obtained in earlier days that every Member of the House was to be present at Prayers—Prayers at that time being held at eight o'clock in the morning—and that if any Member were absent, there was to be a fine of a shilling, which had to be paid to the poor; and could that fine be made applicable to Ministers themselves?

As to the matter of your giving leave of absence, Mr. Speaker, is it not a fact that when any Member leaves this House, he is bound to give a nod to you for your consent?

Workmen's Compensation (Medical Referees)

asked the Home Secretary if he is aware that the registrar of a County Court in Yorkshire is appointing as medical referees under Section 11 of the Workmen's Compensation Act, 1923, doctors who are permanently employed as compensation doctors for certain coal owners and the Yorkshire Coal Owners Mutual Indemnity Company, Limited, to adjudicate in cases of dispute between other Yorkshire coal owners whose workmen are insured by the Yorkshire Coal Owners Mutual Indemnity Company, Limited, and workmen; and, as this has been brought to the notice of the Registrar without result, will he inquire into the same and give instructions that medical referees appointed under Section 11 shall in no case be doctors who are employed permanently by either coalowners, coalowners' mutual indemnity companies, or trade unions affected?

I am not aware of any such case. In the only instance brought to my notice it appeared on inquiry that the allegation was not borne out. It is a condition of the appointment of a medical referee that he shall hold no permanent employment of the kind referred to in the question.

Is not the right hon. Gentleman aware that doctors who are practically permanently employed by the Yorkshire coal owners are very often elected to act as medical referees in cases of dispute between workmen and colliery companies, and does he think it possible for an impartial decision to be given in these circumstances?

I am afraid I am not aware of the actual case my hon. Friend has stated, but if he will submit to me a case I will look into it.

Seals (River Wash)

asked the Minister of Agriculture whether his attention has been called to a Report from the inspector for the Eastern Sea Fisheries for the year 1923, and the Report of a meeting of the Eastern Sea Fisheries Joint Committee, held at Spalding on Thursday, 17th April, when the question of the increased number of seals in the Wash was discussed; and will he, in view of the damage caused by these pests, take steps for their destruction, and so save the fishing industry in this area?

The answer to the first part is in the affirmative. Unfortunately, neither this Department nor, so far as I am aware, any other public body has any funds which could be used for the purpose, and apart from this no satisfactory method of destroying the seals, which are very difficult to approach, has been devised.

Will my right hon. Friend make an application so that funds can be allocated for the purpose?

I have asked the Admiralty if they could do anything, and they are considering my suggestion.

Is my right hon. Friend aware that it is rumoured that seals are visiting the Wash seeking the lost jewels of King John?

Butter (Prices)

asked the Minister of Agriculture whether he is aware that butter prices last week rose from 16s. a cwt. to £1 and whether, seeing that this increase of price took place in spite of large reserves in cold storage and big shipments crossing the seas from the Colonies and Ireland, he will take steps to stop profiteering on an article of food which is essential to health and well-being?

I have been asked to reply. I understand that there was a sharp rise last week in the wholesale prices of butter. The Board of Trade have no power to regulate the prices of butter, but I would point out that the recent rise has brought prices to about the level at which they stood in March before the fall that then occurred.

Unemployment

Dock and Harbour Workees

asked the Minister of Labour the respective contributions made during the past three years to the Unemployment Insurance Fund by the workers in the port of Liverpool?

The amounts contributed to the Unemployment Fund in respect of holders of dock tallies in the port of Liverpool during the years 1921, 1922 and 1923 may be roughly estimated at £35,000, £56,900 and £57,100 respectively, of which rather less than one-half was contributed by the workers. In addition there was an Exchequer contribution of about one- third of the amounts mentioned. The benefit paid during the same years respectively was £302,000, £246,300 and £256,000.

also asked the. Minister of Labour the number of dock workers signing on at the Employment Exchanges each week at Bristol, Avonmouth, Portishead and Hull for the past five months?

As the answer is in tabular form, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

The numbers of dock labourers on the registers of the Employment Exchanges at Bristol, Avonmouth, Portishead and Hull at 3rd December, 1923, 7th January, 4th February, 3rd March and 7th April, 1924, were as follows:

Date.

Bristol.

Avon-mouth.

Portishead.

Hull.

3–12–23

972

139

94

2,583

7–1–24

1,017

315

15

2,427

4–2–24

1,139

430

88

3,318

3–3–24

635

52

4

2,445

7–4–24

1,115

398

87

2,375

asked the Minister of Labour the respective contributions made during the past three years to the Unemployment Insurance Fund by the workers grouped in the "Labour Gazette" as canal, river, docks and harbour services, also the amount of benefit paid in each of the years in question?

As the answer includes figures in tabular form, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

Separate accounts of contributions and benefit are not kept for the various industries. At a rough estimate, however, the amounts contributed to the Unemployment Fund, in respect of adult male workers in the canal, river, docks and harbour services industry in Great Britain, and the amounts received by them in unemployment benefit, were as follows for the years 1921, 1922 and 1923:

Contributions Paid.

Benefits received.

Employers and Employed.

Exchequer.

£

£

£

1921

381,000

104,000

1,480,000

1922

536,000

195,000

1,565,000

1923

550,000

204,000

1,396,000

Lace Workers, Nottingham

asked the Minister of Labour the number of adult male lace operatives and the number of adult female lace workers, respectively, in Nottingham who were signing the unemployment registers during the weeks ending 11th April, 1923, and 9th April, 1924, respectively?

The numbers of adult males and adult females registered as unemployed in the lace industry at Nottingham on 24th March, 1924, were 662 and 435 respectively, the corresponding figures for 26th March, 1923, being 614 and 398. In addition, there were 105 men and 339 women recorded as working systematic short time on 24th March, 1924, as compared with 108 men and 374 women on 26th March, 1923. Figures for a later date are not yet available.

Building Trade Dispute

asked the Minister of Labour whether he can state the nature of the present dispute in the building trade; and whether he is taking any steps to safeguard the Government housing operations?

Following negotiations between the employers' and workers' organisations the latter are taking a ballot of their members. In the circumstances I do not think that it is desirable for me to make any statement on the matter at this moment.

What is the nature of the facts in dispute; what is the matter that has arisen to make the present trouble; and has the right hon. Gentleman taken any steps to safeguard the Government housing operations?

The matter in dispute is the demand for 2d. an hour advance in wages, which has been published in the, Press, and I am keeping in constant touch with developments as they arise.

Is the right hon. Gentleman aware that there is a famine of plasterers and bricklayers in the London area?

What will be the extra cost to the whole of the subsidy on Government houses if this 2d. an hour be paid?

King Feisal (Theaty)

asked the Prime Minister if he will state the position with regard to the proposed treaty between His Majesty and His Majesty the King of Iraq; and whether the proposed treaty, together with any annexes and additions, has been or will be published?

I have been asked to take this question. The treaty with King Feisal is now under consideration by the Constituent Assembly in Iraq. This treaty was published as a Parliamentary Paper in October, 1922. A further Paper is now being laid before the House containing the text of the Protocol and agreements subsidiary to the treaty.

The hon. and gallant Gentleman knows, the matter is now under consideration. I prefer to say nothing now.

National Health Insurance (Royal Commission)

asked the Prime Minister whether he can now state the terms of reference of the Royal Commis- sion to inquire into national insurance, and the names of the members of the Commission?

The following terms of reference have been agreed with representatives of the medical profession and the Committee appointed for the purpose by the Approved Societies' Consultative Council:

"To inquire into the scheme of National Health Insurance established by the National Health Insurance Acts, 1911–1922, and to report what, if any, alterations, extensions or developments should be made in regard to the scope of that scheme and the administrative, financial and medical arrangements, set up under it."

I am not yet in a position to announce the names of the members of the Commission.

Has the right hon. Gentleman yet decided the form of the Commission he proposes to set up?

Post Office

Mail Drivers (Wages and Hours)

asked the Postmaster-General what are the wages paid and hours worked by mail drivers employed by private contractors on behalf of the General Post Office; whether these men are entitled to sickness benefit when sick; whether they are in receipt of holiday pay; and what pensions, it any, are they entitled to on retirement from work?

The contractors are required by the Fair Wages Clause incorporated in the mail contracts to pay rates of wages and observe hours of labour not less favourable than those recognised in the trade in the district where the work is carried out. I have no detailed knowledge of the wages paid and hours worked, nor of the general conditions of employment under the numerous contracts.

Does not my right hon. Friend think his Department ought to be acquainted with the conditions and wages, etc., of the people employed?

Does that mean that if a man is in an agricultural district, he gets agricultural wages, and if in a town a wage commensurate with town wages?

The contract states that the Fair Wages Clause most be observed. If any hon. Member will bring to my notice cases in which that is not being done, I will have inquiries made, with a view to it being rectified.

Wages Receipt Stamp

asked the Postmaster-General the reason why postmen and other Post Office servants are subjected to a deduction of 2d. per week from their wages for a receipt stamp; whether this practice is confined to his Department; and whether he will consider the advisability of abolishing this imposition?

I beg to refer the hon. Member to the reply given on this subject by my hon. Friend the Financial Secretary to the Treasury on the 27th of March, of which I am sending him a copy.

Questions to Ministers

The following question stood on the Order Paper in the name of Mr. A. T. DAVIES:

"51. To ask the Parliamentary Secretary to the Overseas Trade Department, if he can state on what date it is anticipated the British Empire Exhibition sections at Wembley will be completed; on what date will the roads and approaches be in a fit state for pedestrian and other traffic; and when is it hoped to open the whole of the amusements section?"

On a point of Order, Mr. Speaker. Has your attention been drawn to the fact that the hon. Member who puts down this question has been putting down questions for oral answer for five years, and never by any chance is in his place to ask them?

My attention has been drawn to that fact, and I expressed the opinion then that an hon. Member should not put down questions for oral answer unless he has some intention of being present to ask them.

The following question stood on the Order Paper in the name of Lieut.-Colonel Sir F. HALL:

The name of the hon. and gallant Member having been called, on the second round of questions—

On behalf of the hon. and gallant Member, I beg to ask this question.

Does it not appear, in consequence of the hon. Member not knowing the number of the question, that he has not got permission to ask it?

That did arouse my curiosity. Has the hon. Member been requested by the hon. and gallant Member for Dulwich to ask questions for him to-day?

I have not, but he is a constituent of mine, or I would not have asked the question for him.

I desire to ask you, Mr. Speaker, a question in reference to a point which arises out of questions which stood in my name yesterday. I had then put down four questions on the Paper through inadvertence. The first three were answered, but the fourth question stood over. I looked to-day in the OFFICIAL REPORT, in the hope of seeing the answer to the question which had stood over, as I understood your ruling to be that the answers to any questions beyond the fourth will appear among the Written Answers. But I cannot find in the OFFICIAL REPORT to-day any reference to my fourth question.

The answer to the Noble Lords fourth question should have been circulated in the OFFICIAL REPORT, and I imagine that there must have been some inadvertence on the part of the Minister. I will cause the matter to be looked into.

Emigration (Charity School Boys)

asked the Parliamentary Secretary to the Overseas Trade Department if he intends to take any action to prevent the emigration of boys from charity schools to the Colonies, unless the conditions of life are fully and satisfactorily guaranteed beforehand and provision made for their periodical supervision?

I would invite the hon. Member's attention to the reply which I gave on the 13th March to the hon. Member for Wycombe. As I then stated, a delegation is visiting Canada, with a view to obtain first-hand information in regard to the system of child migration, especially as to reception, placing and supervision. This delegation will, probably sail about the middle of July. I should also like to mention that I have already instituted an inquiry into the methods of selection by boards of guardians and voluntary societies.

I cannot say that, because the delegation has not been appointed, but I think it is hardly likely.

Is there any reason to suppose that any of these schemes are: improperly carried out?

It is impossible for me to say definitely whether such is the case, but inquiries are being made, and delegations both in this country and in Canada are being appointed to make inquiries.

May I assume that, so far, the Department has received no complaint whatever as to the operation, of these schemes?

As I have received complaints in regard to children belonging to my Division who have been sent out there, may I ask the hon. Gentleman, if he cannot go himself, whether he will send out his private secretary or someone connected with the Department?

Criminal Justice Bill

asked the Attorney-General whether he is aware that the impression has been created that Sub-section (9) of Clause 1 in the First Part of the Criminal Justice Bill will discourage probation committees from engaging the agents of voluntary societies as probation officers; whether it is the policy of the Government that in the administration of this Bill the Secretary of State will encourage probation committees to invite the aid of voluntary societies in providing agents for engagement as probation officers; and whether the Government will arrange for the inclusion in the Bill of an Amendment giving permanent effect to the assurance given by the Lord Chancellor in another place?

I have been asked to reply to this question. I am aware that some misapprehension has arisen, and I am glad to have the opportunity of correcting it. There is nothing in the Clause referred to or in any other Clause of the Bill to prevent the employment of the agents of voluntary societies as probation officers. The responsibility for appointment will rest with the Justices or probation committees (except in the Metropolitan Police Court district where the Secretary of State will continue to be responsible), and it will be open to them to make such arrangements as they think best for carrying on the probation work of their area. As my right hon. Friend is aware, a great deal of excellent pioneer work has been done in, the past by voluntary societies in this sphere of social service. I should be very sorry to make any proposals to this House which would have the effect of hindering the further development of their work. In reply to the last part of the question I do not think any Amendment of the Bill is required, but this is a matter which can be considered, if necessary, in Committee.

As the right hon. Gentleman realises that there is grave anxiety on this question, will he discuss the matter with me?

Housing

Bricks (Prices)

asked the Minister of Health what has been the increase in the price of bricks for house building since the present Government took office?

I would refer the hon. Member to the monthly Reports of the Committee appointed to survey the prices of building materials.

Is it not a fact, as mentioned in the question, that the price of bricks has risen during the period stated?

Is the right hon. Gentleman aware that there has been a fresh advance in the price of bricks this week?

Is the right hon. Gentleman aware that the Powell Duffryn Company, one of the richest and one of the greatest producers of bricks, sent up their price of bricks by 5s. per 1,000 six weeks ago?

I can only say that all the information that is available on the matter has been published in the Reports.

May I point out, Mr. Speaker, that there is a direct question on the Paper? Surely we are entitled to a reply from the Minister.

What was the last Report of the Committee that was published? Has the April Report been published?

When a specific question is put by an hon. Member to a Minister, asking where he can obtain information in a form in which it is not available otherwise, is it not the duty of the Minister to give that information in the form desired?

It is only by going through a series of returns, and making a number of calculations that the information can be obtained.

Am I not right in saying that the last Report of the Building Materials Committee was for the month of February, and that there is no other way in which we can get the information than by asking for it now?

There has been no Report issued by the Minister of Health which exactly covers the period mentioned in the question.

Is it not open to the hon. Member to put a further question if he cannot obtain the information now?

Is the Minister of Health aware that in Glasgow, during last week, there have been serious increases in the price of bricks, and is he going to take steps to prevent an increase in the price because of the increased demands for bricks?

Three reports on this subject have been published since the present Government came into office—in the months of January, February and March. I assumed, those reports having been published and the information being available, that it would be sufficient for me to direct the attention of hon. Members to where the information can be procured. If anything further is wanted I shall be pleased to supply it.

Is the right hon. Gentleman aware that, as far as Scotland is concerned, it is the large collieries which control the brick works.

Concrete-Block Houses (Glasgow)

asked the Minister of Health whether he can make any statement upon the investigations made regarding concrete-block houses in Clarkston, Glasgow?

I have been asked to reply. The concrete-block houses in question have now been examined on behalf of the Scottish Board of Health, and a favourable report has been received of their construction.

Can the right hon. Gentleman say whether the Department is going to take steps to see that houses are built, and that they do two things, using the refuse from the refuse destructor and getting an increase of unskilled labour to manufacture these blocks, and a greater demand from the men who build these houses?

Gibraltar Naval Establishments (Employes)

asked the Parliamentary Secretary to the Admiralty why 800 foreigners or aliens are employed in naval establishments at Gibraltar instead of British subjects?

The employés referred to are Spanish subjects who have their homes in the vicinity of Gibraltar. British subjects are not available locally to take the places of the Spanish workmen. To send men out from this country would involve considerable expense, and there would be no adequate accommodation available for them in Gibraltar.

Is it in the best of taste, in view of our situation in Gibraltar, to ask questions about aliens there? Are we not aliens ourselves?

May I ask whether the "Rock scorps" at Gibraltar are an institution in the Navy?

Is the hon. Member aware that the so-called "Rock scorps" are British subjects, who were perfectly loyal during the War, and that this is a term of abuse which should not be used?

It seems to me rather undesirable to apply adjectives to our fellow citizens.

It was not my intention to apply adjectives. What I intended to say, although the hon. and gallant Member did not give me time to say it, or did not hear me, was that they are not looked upon as aliens in any way.

"Rock scorps" is a term that is objected to by the natives of Gibraltar, who are perfectly loyal British subjects.

British Empire Exhibition (Naval Dockyard Workers)

asked the Parliamentary Secretary to the Admiralty whether he is aware that during the Great Exhibition in London in 1862 special facilities were given to workmen in the Royal dockyards to visit the Exhibition; that the men in the Devonport yard were conveyed at special rates by the then South Devon and Exeter Railway, and were allowed three days' leave without loss of pay; and whether he will consider the granting of similar facilities for workmen in the Royal dockyards during the present British Empire Exhibition?

No assurance can be given that the workmen employed in the Royal dockyards will be granted leave of absence without loss of wages to enable them to visit the Exhibition. Any concession of this character could not be confined to one section of Government employés.

Is it not just as important to-day that the men who are working in our dockyards should know something about our great Exhibition as it was in 1862?

Bankruptcy Act (Amendment)

( by Private Notice ) asked the President of the Board of Trade whether, as a result of conference with representatives of the Association of British Chambers of Commerce, he has agreed to set up at once a Departmental Committee to consider proposals for amendment of the Bankruptcy Act, with a view to the introduction of a Government Bill, on the understanding that the Bill recently introduced by the Member for Farnham will be withdrawn?

Yes, Sir. I propose to set up such a Committee without delay.

I am much obliged to the right hon. Gentleman. Will he cause invitations to be issued to the commercial bodies, especially in the North of England, to attend to give evidence?

I cannot prejudge what the Committee may decide to do, but I am quite sure that they will wish to have all the relevant evidence from such bodies.

I thank the right hon. Gentleman, and ask that I may be allowed to withdraw the Bill which I introduced a few weeks ago, in view of the assurance which has been given.

Cleator Moor Inquest (Iron Ore Miner)

( by Private Notice ) asked the Home Secretary if his attention has been called to the unlawful dissection of the dead body of an iron ore miner named Ashton by three doctors on Cleator Moor; if he is aware that the coroner at the preliminary inquest upon Ashton issued an order for the burial of the body following a post-mortem examination, and that the body was not so buried, the deceased man's brains having been secretly removed without the knowledge or authority of Ashton's wife or relatives; that the coroner at the adjourned inquest stated that he gave no order, and had no power to order any such dissection of the body; and will the Home Office advise the institution of proceedings against those concerned?

My attention has been called to this case. The deputy-coroner ordered a doctor to make a postmortem examination; formally opened the inquest; and adjourned it, ordering the burial of the remains. The doctor who had conducted the post-mortem examination suggested further examination of the brain, but the coroner told him he had no power to order or pay for such an examination. The doctor, however, retained the brain and produced it at the adjourned inquest; solely, as the coroner thinks, in case further examination might be ordered. I could not advise that this action should be made the subject of any proceedings.

May I point out to my right hon. Friend that there were three doctors, and that the wife of the man who died thought that the entire body had been buried, and at the adjourned inquest the brain was produced in Court without her knowledge or consent, and, consequently, there must have been a conspiracy among the three insurance doctors to defraud the woman out of her compensation.

Business of the House

May I ask the Deputy-Leader of the House what will be the Business for next week?

The Business for next week will be as follows:

Monday: Prevention of Eviction Bill; Report stage. West Indian Islands (Telegraph) Bill; Committee. Pacific Cable Board Bill; Second Reading. War Charges (Validity) Bill; Second Reading.

Tuesday: Report stage of Budget Resolutions.

On Wednesday, we propose to take the Second Reading of a Bill to be introduced to amend the Education (Scotland) (Superannuation) Act, 1922; County Courts Bill, Second Reading; West Indian Islands (Telegraph Bill), Report stage.

Thursday: Supply; Navy Votes.

When can the Government take the Bill relating to the friendly societies power of insurance? It has now been outstanding for three months. Great hardship is arising as a result of this, and I understand that there is no controversy in respect of it at all.

The order has not been arranged. It is subject to settlement through the usual channels, but I will inquire into the matter.

Is the right hon. Gentleman aware that the Bill brought forward by the Secretary for Scotland dealing with small debt claims in Scotland is of very great urgency at the moment in Scotland and should not the Government bring it forward before even the Teachers Superannuation Bill?

Does the right hon. Gentleman think that one day is sufficient for the report of the Budget Resolutions? It is true that last year the Report stage was passed in one day, but there are two subjects dealt with in these Resolutions that will require very thorough discussion, the Import Duties and various problems arising out of the reduction of the Sugar Duty. Will the right hon. Gentleman consider whether it is not advisable to give a second day, subject to arrangement through the usual channels?

Some aspects of these matters can be the subject of later discussion under other head. We are following the precedent of last year, and in view of the fact that a large part of the Budget has not excited anything but agreement and admiration we are not without hope that one day will be sufficient.

Ordered,

"That the Committee of Ways and Means have precedence this day of the Business of Supply."—[ Mr. Clynes. ]

Bills Reported

Bombay, Baroda, and Central India Railway Bill [ Lords ].

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

Wandsworth Borough Council (Superannuation) Bill.

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

Orders of the Day

Ways and Means

Considered in Committee. [ Progress, 30th April. ]

[Mr. ROBERT YOUNG in the Chair.]

Amendment of Law

Question again proposed,

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

My right hon. Friend the Lord Privy Seal a minute ago said, in reply to a question, that the main features of the Budget had excited nothing but agreement and admiration. I venture, by way of introduction this afternoon, to take refuge in that statement. Apart from one or two minor questions of controversy, the really large controversy in this Budget will come upon the proposed abolition of the McKenna Duties, and a little later I shall try to say something on that point. My immediate duty is to try to meet some of the criticisms offered by the right hon. Member for Hillhead (Sir R. Horne) in the course of yesterday's Debate, and to leave to a later stage to-day the reply dealing with the larger issues of the Budget, which the Chancellor of the Exchequer himself will offer. In order to cover some of the ground, may I take, first of all, certain questions of taxation which were raised by the right hon. Member for Hillhead, namely, those falling within the sphere of direct taxation on the one side and indirect taxation on the other?

The right hon. Gentleman made a reference to the comparatively small surplus of approximately £4,000,000 which we will have in hand after effect has been given to the proposals of the Chancellor of the Exchequer. Later in the day my right hon. Friend, the Chancellor of the Exchequer, will deal with that point. There are, however, one or two considerations arising from questions which have been asked about special receipts, in respect of which a sum of £30,000,000 is estimated. That sum appeared to the right hon. Member for Hillhead and to others to be a large sum. For the purpose of information, I would say that the sum includes £10,000,000 on the Reparation Recovery Account, and there is still, of course, the £8,000,000 or £9,000,000 worth of commercially disposable stores, which we hold under the Disposal and Liquidation Commission, and which still remain to be sold; and it also includes payments under existing running contracts for materials disposed of in the past. Within the £30,000,000 there are, of course, other items. I am advised that there is no reason in the world why we should take a pessimistic view now regarding that item in the Budget statement. If that be true it meets so far some of the criticism which has been offered.

But there is a more important issue. It was raised by my hon. Friend the Member for Greenock (Sir G. Collins) and by other hon. Members, and relates to the arrears of Income Tax and Super-tax, Excess Profits Duty and Corporation Profits Tax. It depends, of course, upon the extent to which we can gather in the arrears under the four heads mentioned during the present financial year. Opinions must differ, and do differ in all parts of the House, as to how far a period of reviving or partially reviving trade in this country during the present year will enable us to wear down some part of what are undoubtedly heavy arrears of debt. The right hon. Member for Greenock asked me for precise figures. I can give them in round sums now. There are approximately about £20,000,000 of arrears of Income Tax, and about £42,000,000 of arrears of Super-tax. May I make it clear that we have about £60,000,000 under that head in respect of which notices have been served and which may be regarded as collectable money? I make that statement now, because it would be well to keep it in mind when we pass to the next stage, that is, the arrears of Excess Profits Duty which, of course, we can give now only upon a gross foundation.

It is difficult to say, because the arrears extend into previous years. The total amount under the two heads mentioned is about £62,000,000. Passing to Excess Profits Duty, the arrears amount approximately to £160,000,000. That is upon a gross estimate. No one would say how far we are going to realise the £160,000,000 of these arrears, but, in view of questions which have been asked regarding the steps which have been taken to recover the arrears of Excess Profits Duty, may I make it perfectly plain that I do not think this Government or any Government would agree to any general rule which would wipe out, by a kind of automatic process, these arrears, or simply above a certain point write them off as irrecoverable? The practice now is to look at each on its merits. The Treasury desires, as far as possible, to get payment of the arrears. We do not care to take any steps which will force a company or anyone concerned into bankruptcy or liquidation, under which we might recover little or nothing at all. In many cases it will be for the advantage of the country to nurse the company or the undertaking for the time being, in the hope that, with recovering trade, and notwithstanding the provision in respect of Excess Profits Duty repayment made under the Finance Bills of recent years, we shall be able to recover a very fair proportion of that large sum of £160,000,000.

After all, any step of a general character which was taken to give easier conditions to the people who still owe this money in respect of Excess Profits Duty would only confer an advantage on them as against others who have done their best to meet their liabilities, often, I admit, with very considerable difficulty during recent years. That is the practice which we are following. If I remember the figure accurately, we believe that while, during the past year, there was a kind of deficit of £2,000,000, we are hopeful that in the present year £8,000,000, or approximately that sum, will be forthcoming under this head. It is to be remembered, however, that there are many considerations to be taken into account. The only other item of the four which I have summarised, regarding arrears of taxation, concerns the Corporation Profits Tax, and is a sum of about £10,000,000, so that the total sum at which we arrive is anything between £200,000,000 and £220,000,000 of arrears of taxation outstanding.

Are there any outstanding claims for the repayment of Excess Profits Duty?

That, of course, is a process which I may say at once is continually at work and will be, I am afraid, far a good long time yet. As I was saying, we arrive at a total of about £200,000,000 to £220,000,000. I ask the permission of the Committee to discuss a matter which was raised indirectly in the Debate yesterday as to the recovery of arrears and the prevention of tax evasion. It will be remembered that in 1919 the Royal Commission on Income Tax made a series of recommendations dealing with tax evasion which under their five heads form a kind of scheme and in the Finance Bill of last year and in previous Finance Bills effect was given to three heads of that scheme. So far, that is the situation, but there still remains the large question which I think was mentioned yesterday, as to whether any steps should be taken, towards putting Income Tax on the basis of the previous year's earnings and getting rid of the three years average, and that suggestion appeared to be applauded in some quarters on the Opposition side. I have a personal interest in this matter inasmuch as that was one of our unanimous recommendations in the Royal Commission. The right hon. Gentleman the Leader of the Opposition, when we were discussing this question in previous Finance Bill Debates expressed, if I remember aright, his general agreement but thought the time was probably inopportune for making a change of that character, especially when we were in the midst of industrial depression.

It may be worth while to recall, in that connection, that it has been suggested by many people that if the change is to be completed—and it is very largely a question of completing a change already undertaken—if the change is to be completed in the sense of putting everything, or nearly everything, on the basis of the previous year, then notice should be given and such notice might be given in one year and the scheme put into operation a year later. It is suggested that there should be some notice of that kind, but in any event, if I may express a personal opinion, and it is one which I think is shared by large numbers of hon. Members, there is a very strong feeling that the nearer we can go to the actual year in which profits are earned, the easier we make it for the taxpayer to pay his proper duty, the easier it is for the administration and, I should also think, the better it is as a means of preventing the accumulation of arrears which in many cases can only be recovered afterwards with great difficulty, sometimes with a form of hardship, if, indeed, recovered at all.

I do not propose to say more under that head than to refer to one of the suggestions which the right hon. Gentleman the Member for Hillhead made yesterday. He twitted us with sacrificing what would be in a full year about £4,000,000 in the abolition of the Entertainments Duty on prices up to 6d. and its reduction on prices up to 1s. 3d. He hinted it would have been much more in the interests of industry in this country, under existing conditions, if we had made a concession which, as I understood his suggestion, meant the exemption from Income Tax of the reserves of public companies. May I say at once that apart altogether from the wider issues of the encouragement of industry as against relief from the Entertainments Duty, there is no comparison whatever, on the figures, between the two propositions. I am advised that if we gave the kind of exemption which the right hon. Gentleman suggested it would involve a sacrifice of revenue of anything between £25,000,000 and £50,000,000 in a full year. Whatever view we take, that is incomparably greater than the £3,000,000 or £4,000,000 in a full year which we are sacrificing by such relief of the Entertainments Duty as we propose to give. Apart from that, I hesitate to believe that hon. Members opposite who are interested in the application of Income Tax and in its perfectly fair incidence—in so far as we can achieve it—would strongly recommend that proposal because in fact it does mean a certain discrimination in taxation as between the kind of object to which these accumulated profits or reserves are put and other objects: it is very clear indeed that Income Tax must always have regard mainly if not exclusively to margins of profit or the existence of income and not very much, or at all events only within narrow limits to the permanent or temporary objects to which money is to be devoted. That raises a far-reaching question in taxation, but I believe the situation has been met by telling the Committee what the cost would be at the present day if the right hon. Gentleman's scheme were adopted.

4.0 P.M.

I pass to one other consideration which was raised by the right hon. Gentleman's speech. He asked us what would be the new relationship between direct and indirect taxation if the proposals of the present Budget were carried out, and I am glad to be able to give him more or less precise figures on that point. My hon. Friend the Member for Ilford (Sir F. Wise) went back to the Roman Empire the other day in a study of direct and indirect taxation. Fortunately for the Committee, the limits of time this afternoon prevent me from following him into a very interesting discussion. All I will say is that looking at a recent pamphlet which I think was turned out in one of the colleges in Oxford, entitled, "Fresh Light on the Roman Bureaucracy," I am perfectly satisfied the tax-gatherers were just as unpopular then as they appear to be now, but there are manifest differences between direct taxation in that day and the direct taxation which we have now in mind in Great Britain. The larger issue and the main issue for the whole country is the balance or the comparison between direct and indirect taxation. I have never been able to make up my mind that there was any particular virtue in 50 per cent. on the one side and 50 per cent. on the other. That appears to be nothing more than a rule of thumb. In any case, it is perfectly plain to all of us, whatever view we take of economic conditions, that there was bound to be a serious interference with that allocation in time of War and in post-War conditions, and more particularly when, during the War, we had raised the duty on sugar—one of the items of the indirect scheme—to an enormous extent, to say nothing whatever of the increase in other forms of indirect taxation. In any event, we are raising to-day more from direct taxation than we are raising from indirect taxation, that is, if we take the percentages one against the other. In 1923–24 we raised, I think, 36·5 per cent. from indirect taxation, and the balance, 63·5 per cent., from direct taxation. While, of course, it is difficult to say what exactly is the figure which will emerge after the proposals are carried into effect, the best figure which I can produce at the moment is 33·9 from indirect taxation and 66·1 from direct taxation. That will be the change brought about by the proposals of the Chancellor of the Exchequer. There is one very interesting fact to which I am bound to refer in connection with that figure of 33·9 per cent. raised from indirect taxation. All students of this problem have always divided indirect taxation into at least two parts: that part which is derived from what we may call the strict necessaries of life, and that part which comes from sumptuary articles, or what I will call articles of a luxury or semi-luxury character. The remarkable fact emerges that, if we so divide them, we are, within that 33·9 per cent. of indirect taxation, raising 5·1 per cent. from taxes on articles of an unmistakably food character, and 28·8 per cent. comes from what we should call taxes on luxury or sumptuary articles.

Yes. And we have to go back about 24 years before we can find a year in which we raised so low a percentage as 5·1 in indirect taxation from articles of an unmistakably food character. I think that is very interesting. I do not know that I need detain the Committee longer on this point save to try and meet what I think was the criticism of the right hon. Gentleman that there should be a balance between the two. It is very difficult to believe that we should get back to the 50–50 balance, even if that were our object, in the near future, because industrial and social conditions are such that we must always look to a fundamental test in this matter, namely, the fundamental test of ability to pay. There cannot be the least doubt, when we get into the sphere of articles which are strictly necessary, and in respect of which there is an inelastic demand, we must try, as far as we humanly can, to reduce taxation.

This is a convenient stage at which to say something about the Sugar Duty, and the opinion which my right hon. Friend expressed that conditions had changed as compared with last year, when the predecessor of the present Chancellor of the Exchequer found it impossible because of the conditions of the world's supply to propose a reduction. The real difficulty at that time was the prospect of the comparatively small carry over from one year to the other, estimated at likely to be rather less than 500,000 tons. It was thought that if the duty was then reduced—we pressed very strongly for it from the other side of the House—the state of the world's market and of the supply was such that the benefit would go to the producers, the middlemen, and others, or, at all events, would not reach the great masses of the consumers. I do not think that hon. Members opposite will be inclined to quarrel with us on the present facts of the situation. We have made, I agree, a very drastic reduction in this duty from 25s. 8d. per cwt., an incredibly high figure, to 11s. 8d. But, of course, it must be remembered that, taking the figure of 1s. 10d. pre-War, it has been a duty which has been increased beyond all recognition, and it was precisely a sphere in which, when real reductions came to be made, those reductions in order to be expressed in pounds avoirdupois had to be of a sweeping character.

Hon. Members may well ask us what is to be the effect on consumption, and whether we are sure that a very large reduction of duty of that kind will not so stimulate demand as to defeat the object we have in view and make it easy for rings or corners in sugar supply to manipulate the price against the consumer? In a problem of this character we can, of course, only proceed upon all the information at our disposal. We had the preliminary promise of the trade that if there were a clear cut reduction announced by my right hon. Friend from this Box it would be put in force at once, and effect appears to have been given to that promise. But beyond that, we must have the figures of the world's supply. The best estimate which I can offer to the Committee at the present time is a figure of about 19,250,000 tons for the present year. I think that is sufficient to enable us to say that, even if there be an increase in the consumption, we are probably safeguarded in the matter of balance or carry-over and can plead with fair force that the situation will not be manipulated against the consumer.

Can the hon. Gentleman tell us the figure for last year? I have not got it in my mind.

I cannot recall the exact figure, but it was a little less than 18,500,000, so that the world's supply, as I think my right hon. Friend will agree, is appreciably better, and to that extent the problem which confronted the Leader of the Opposition last year has disappeared.

Yes, it is always bound to be estimated at this time of the year. That is the reduction which we have proposed, and that is the world's supply as near as I can give an estimate to-day. We hope that our experience will prove that the consumers have been protected. I take this opportunity of anticipating a criticism which may be offered under another head; it is with reference to the manufacture of beet sugar in Great Britain. I propose at this stage to make nothing more than a passing reference to it. When representatives of the industry interviewed us in deputation some time ago, they pointed to the importance of this cultivation from the point of view of British agricultural conditions. One speaker said that if the duty on the imported article did not fall below 21s. they could probably carry on—no doubt not altogether without some kind of help—but, if it fell below that figure, then, as I understand their scheme, they thought it would be necessary, or at all events they would make the request, that the State should come in with some kind of subsidy. They did not want artificially to keep up the duty on imported sugar in order to help the industry at home, but they did put forward that proposition in the deputation which we received. That matter is still under consideration, but it would be idle to disguise the difficulties of a proposal of that kind, because clearly we should then be in the region of concealed or unconcealed subsidies, and there is not the least doubt, apart from any other consideration, that hon. Members in all parts of the House would hesitate before they embarked upon schemes of subsidy if any other form of healthy stimulus could be afforded. I will not say more on that matter, because there will be an opportunity during the Committee or Report stage of the Finance Bill to deal with amendments which no doubt will be promoted.

I want now, as briefly as I possibly can, because it is my duty to try and clear the ground up to a point, to say something about the larger issue, and what will be the bulk of the controversy under this Budget, namely, the proposed abolition of the McKenna Duties. The House is familiar with, and was reminded by my right hon. Friend in his Budget statement of, the history of those duties. But when the right hon. Gentleman the Member for Hillhead attacked us on this proposal yesterday afternoon, I gathered that his case amounted to this: "You are provided to-day with a revenue of between £2,250,000 and £2,500,000 annually from the four broad heads of the McKenna Duties. No protest, so he argued, is being made. Why, then, interfere with this situation?" The right hon. Gentleman did not say a single word about the four or five reasons—substantial reasons—for the imposition of the McKenna Duties in 1915.

I propose, as far as I possibly can, to cover the two sides of that controversy this afternoon. Two main questions which arise are: First of all, are those duties to-day, in effect, protective duties, and are we committed to some form of Protection? If that be excluded, then the other question is: Have the war conditions under which those duties were imposed disappeared, and are we now entitled to remove them? I need not detain the Committee now with any Tariff Reform or Protectionist issue, because the right hon. Gentleman the Member for West Birmingham (Mr. A. Chamberlain) himself and, I think, others have said over and over again that they do not put these duties strictly in that category, and the late Mr. Bonar Law, in what was a memorable speech in this and other connections, said that duties of this kind on such a scale would never have been contemplated by him in any tariff proposal that he had in mind. So that, while it is contended in many quarters that we have passed from the atmosphere of 1915 and war conditions, and that those duties do emerge as a kind of protective tariff, still I will not detain the Committee with the Protectionist side of the argument now, because, as I understand it, that is not stressed by right hon. Gentlemen opposite, and does not appear to be stressed if we take what my right hon. Friend said yesterday afternoon in admitting that the result of the last General Election was, of course, definitely a decision against Protection, at all events for the time being, in this country.

Then there is the other point. These duties were imposed in 1915 for the purpose of economy in tonnage. The House generally will agree that that consideration no longer arises. There are in this country unfortunately one million tons gross of shipping lying idle. There are five or six million tons in foreign countries. There is1 no shipping problem of the 1915 kind, therefore, to-day. It was argued that the taxes were sumptuary in character and that they were only imposed on articles which we could quite well do without during the War. Although that argument may apply to some watches and clocks and cinematograph films to-day, I think it would hardly be held to apply to touring and pleasure cars. I think it would be incorrect to describe those cars as feeing of a strictly luxury or sumptuary character. The other argument, the only other one of importance, was the effect upon our exchange. No doubt that was important during the prevalence of war time exchange conditions. But we have very definitely passed away from those conditions, and broadly and generally speaking it is, moreover, one of the conditions necessary to the rehabilitation of our exchanges that we should, as far as possible, secure the freest interchange of commodities and make every effort in this country to reduce tariff barriers insofar as they exist.

Then there remains the question of revenue. In the aggregate, while no Chancellor of the Exchequer can afford to ignore a sum of from two-and-a-quarter to two-and-a-half millions, still one must not exaggerate the importance of it, bearing in mind that the revenue which we have to call upon the taxpayers of this country to find is very nearly £800,000,000 to meet an expenditure of approximately a like sum. I believe the bulk of that two-and-a-quarter or two-and-a-half millions comes from the motor car trade—it may be put as from one-and-a-quarter to one-and-a-half millions at any rate. But there is one important point to which I think attention has not been directed in any previous debate on this subject, and that is that, notwithstanding the existence of the 33⅓ per cent. duty on all cars imported other than commercial cars, the total value of the cars imported from foreign countries, with a small proportion from Canada and other parts of the British Empire, in the years 1916 to 1923 has very largely increased. I exclude 1915, which was only a partial year, and 1920, when the total value bounded up to about £15,000,000 or more owing to conditions which I think were artificial and exaggerated. The fact remains that the total value has increased from nearly £1,700,000 in 1916 to £5,000,000 or more in 1923, and on the basis of the first three months of the present year, if the duties had been continued, it would have represented more than £6,000,000 of aggregate value. The point is, therefore, the cars have come in. I want to be perfectly impartial in this matter. The cars still come in and therefore as a tariff the duty is not quite the kind of protection which some hon. Members seem to imagine. If the element of protection is to be used as an argument, I think the House will agree on reflection that, so far from weakening, it adds strength to, our argument.

The only other point I am going to touch upon before I conclude deals with the consideration that, alike in the sphere of protection and in the sphere of the change from war-time conditions, the difference would not be sufficient to justify our taking the present step unless we were satisfied also that the fears that had been expressed to us regarding the effect on British industry were exaggerated or unfounded. On behalf of my right hon. Friend, I received a deputation from both motor car manufacturers and operatives, and it is only fair to say that they presented their case with very great ability and fairness. It is equally clear from their arguments that they had a protective tariff in mind. As to the effect of the removal of these duties from this part of British trade, I think we ought to keep clearly in mind that commercial cars are not affected. Hon. Members may point to the depression in that part of the motor car trade, but there are, I think, substantial arguments which go far to meet considerations of that kind. We have within recent times had a great deal of industrial depression, and, quite apart from that, at least 60,000 commercial cars have been disposed of by the Disposal and Liquidation Commission. In a country like our own, with a comparatively limited area, I submit you cannot introduce 60,000 com- mercial cars without affecting to some extent that branch of the industry. But bye and bye those cars will have been absorbed.

The question may arise as to whether the motor industry will be penalised so far as luxury and touring cars are concerned. On this question there has been some divergence of opinion within the trade itself. There is a fear of a very large dumping in this country of what is called surplus American production, and it is suggested that this is to be let loose on the British consumer immediately these duties are repealed. I find it difficult to believe that our American friends are going to be philanthropic to the extent that some of our critics suggest. I should think that the real reply on that head turns on the difference between the standardised American article and the unmistakable individuality which attaches to the British small car. I am not an expert in motor matters, but I read with great interest the report of an interview given by the Lord Provost of my own city of Edinburgh who, I believe, is a Unionist and a Tariff Reformer as well, and who has spent all his life in the motor-car industry. He is the head of one of the largest firms North of the Tweed. He bears out this contention; that if the duties are removed the British car will still retain its individuality and its appeal, and he thinks that the effect of the removal of the duty will be comparatively slight.

Can the hon. Gentleman say what is the reason for postponing the date of abandoning the duty if it will have no effect on the trade?

As a matter of fact, it is only fair to the motor-car industry of this country that it should be given some short notice in order that it may adjust itself to the changed conditions. [An HON. MEMBER: "What about the Sugar Duties?"] There is a distinction between the Sugar Duty and the coming into operation of the abolition of the Motor Car Duty without any kind of notice or warning. It is, however, largely a matter of convenience. I am not satisfied we are going to have the widespread disaster which critics have forecasted in this connection. In any event, I believe the balance of advantage will be derived from the pursuit of a Free Trade policy in this matter, and, what is more, that policy is the one in favour of which the country has pronounced so recently. We have always made it perfectly plain that we should abolish these duties if ever we came into office. Later to-night my right hon. Friend the Chancellor of the Exchequer will deal with other criticisms, but, in reply to other points put by hon. Members, I will conclude by emphasising the consideration that, broadly and generally, in all Budget changes dealing with remission of taxation, debt, and other points, we have had clearly in mind the duty of maintaining the credit of this country, for many reasons, but for one reason in particular. We are likely to suffer, as compared with many other countries in the world, in the process of trade recovery, because of the many obligations which the British people have freely shouldered. To the extent to which we can improve our credit we make the general task of world recovery easier, and we make it also easier for ourselves to recover and to discharge those obligations.

I agree thoroughly with the concluding words of the speech of the Financial Secretary to the Treasury. One of the good things, at any rate—I think the best thing—we can find in this Budget is the use that the Government have made of the fine surplus presented to them by their predecessors. They have used it in a way which does enhance the credit of the country, and I, therefore, agree with the sentiment which the hon. Gentleman expressed at the end of his speech. I am going presently to deal with some other observations that he made, and to call attention to the fact that he has omitted to answer quite a number of questions that were put to him yesterday, but before doing that I want to make some general observations. Just now we were called upon to express our admiration of the Budget. I myself am not prepared to express admiration of the Budget. I am not prepared to welcome it. I quite agree that it is temporarily popular, popular with hon. Members who would normally support the Government, and popular, further, with—I am not quite sure whether they are their allies at the moment or not—hon. Members below the Gangway.

I am quite prepared to wait as long as the hon. Member opposite likes in order to see what change of attitude his party will take. There are a number of people who are extremely thankful for this Budget. They are thankful to have escaped the worse fate which they were fearing, and if that consoles hon. Members opposite, I make them a present of it. There are quite a number of people who did anticipate considerably worse treatment than they are getting under this Budget, and, of course, there are others who are thankful for the remissions of taxation. Very few people will refuse a remission of taxation, on whatever head it is given, and those who are looking forward to the receipt of, say, something like 1s. per family per week are naturally, so long as they get it, going to be thankful for it. Whether prices will take some of it away from them in future I will not attempt to prophesy. I think it is extremely probable that the whole of the sugar reductions will not be permanent reductions. I think it is not at all improbable that some of the tea reductions will not be persisted in, but for the time being let them be thankful that there is 1s. a week, on the average, given to them. It might not work out quite as it is supposed at the moment. If it is permanent, it will have an effect on the cost of living figures, and those whose wages are dependent on the cost of living will find that there is a reduction in wages perhaps equivalent to the gift that is being made by the reduction in the Tea and Sugar Duties.

But it is not really on that account—because I, like everybody else, am glad that food prices should be reduced—that I want to criticise the Budget. I myself think the Chancellor of the Exchequer has failed in an opportunity which was presented to him. The dominating feature of to-day is unemployment. Hon. Members opposite were elected because they were supposed to have a remedy for unemployment, and this Budget does nothing whatever towards helping employment except the one thing of reducing the Corporation Profits Tax by £2,000,000 this year. That is the one thing which goes to increase enterprise, and which goes to make employment more probable, but not only are you not doing anything to help employment, you are definitely doing two things at least which interfere with employment. I will deal here with the hon. Gentleman's argument with regard to the McKenna Duties. He told us what was the origin of those duties. I am not concerned really with the origin of the McKenna Duties—[HON. MEMBERS: "Oh!"]—but let me, in two or three sentences, deal with the argument of the hon. Gentleman in regard to it. Shipping space was to be saved by these duties. Shipping space occupied by clocks, watches, and cinema films? A sum of £500,000 in duty is now received on clocks and watches. What sort of shipping space do clocks and watches occupy? A fifth of the duty comes from clocks and watches. I am sure that that was a part of the reason, but I do not care in the least what the reason was. What I want to do is to consider whether the Government is right or wrong in now repealing them. That is the practical question, and when the hon. Gentleman said that from 1916 to the present date the imports of motor cars have actually increased, I almost said to him, "Come over here," for that is the argument I have used on dozens of platforms. These sort of duties do not shut out imports, they do get some revenue, and they do create some employment in this country. That is precisely the effect of these duties to-day. Is it denied that there has been an increase of employment in the motor car trade? It cannot be denied. Is it denied that there has been an increase of imports? It cannot be denied. Then it is a fact that both imports of motor cars have increased and employment has increased in making cars in this country.

Is it not the case that during the Election the Chairman of the Arrol Johnston Company, in a letter to the "Times," stated that, owing to the increase of the imports of motor cars, the 33⅓ per cent. duty was not enough, and that he required 50 per cent.?

That is not germane to the argument. It may be that the hon. Gentleman thinks that, once a certain amount of duty is put on, somebody will ask for more, and if that be his argument, he is welcome to it. I want to deal with the duty as it is, and the results, because my right hon. Friend the Member for Hillhead (Sir E. Home), speaking from this bench yesterday, put some questions to the Government which the Government have not answered. They have given us a dissertation as to the origin of these duties, and they have told us the effect of the duties to-day, but when we ask them what harm these duties do they are silent. What harm do they do? That was the question that was put to the Government yesterday. We know that they give more employment, we know that more motor cars come in, we know that the price, generally speaking, for value has been reduced and not increased over these years. Then what harm do they do, and why should you interfere with them? Is this part of the bargain? As a matter of fact, Mr. McKenna, when these duties were introduced, anticipated that some imports would continue and that some employment would be given here, and the hon. Gentleman, if he looks back, will see that nothing new has happened with regard to these duties that was not anticipated. But the Chancellor is going to reply. Will he make another effort to deal with this question, and tell us what harm the Government think these duties do?

The Financial Secretary said he thought the motor-car manufacturers' fears might be exaggerated. They may be, but who is going to say? Can he guarantee that men will not be thrown out of work? They think they will be thrown out of work. Can he guarantee the man who is now in work that he will not lose work? The Government have postponed the operation of this repeal until the 1st August, and that is in order, as I understand it, to soften the blow in some way to the motor trade, but does the hon. Member realise what will happen? The Continental manufacturers, the overseas manufacturers generally, will know that our market is to be open to them on the 1st August, they will prepare their stocks for this country, and when the 1st August comes, they will rush them in here. What is the position of our manufacturers in the meantime? They have now a large number of cars in course of manufacture, and they have to get rid of them before the 1st August, or they have to meet the extra competition that will come from those cars that are imported from abroad, and what this means is a slowing down of manufacture straight away. Within the next few weeks manufacturers are bound to reconsider their position, and if they think these duties are coming off on the 1st August, they will have to slow down their manufacture, and it will not be in August next that men will be thrown out of work; it will be long prior to that date that we shall find that employment in that trade will suffer.

Then why not take the duties off now? Will the right hon. Gentleman support that?

I will not support taking them off at any time, and if I get the opportunity of voting against their repeal, I will vote against it, because I know that by repealing them you are callously, and for a mere theory, throwing men out of work. There is another question which my right hon. Friend yesterday raised and which is of importance, and it has not been dealt with by the Government spokesman to-day. It was dealt with, to some extent, by the hon. Member for Kettering (Mr. Perry) yesterday. Whether he was speaking on behalf of the Government, I am not quite sure—I am certainly not entitled to assume that he was—but as the hon. Gentleman the Financial Secretary has not replied, I am going to put it to the Chancellor, so that he may reply later in the day. My right hon. Friend called attention to the fact that the Deputy-Leader of the House has made a pronouncement in favour of the nationalisation of banks, and I am going to be a little more specific in regard to the statements that were made with regard to that question. The Deputy-Leader of the House was the President of the League of the British Commonwealth, which issued a leaflet with the right hon. Gentleman's name upon it as President. I know the right hon. Gentleman has a curious theory that if a member of the Government prints a pamphlet and issues it the Government are not responsible for it, but if he makes a speech then Cabinet responsibility holds good and the Government are responsible for it. But this is a document issued with the name of the Leader of the House upon it. There is another document to which I am going to call attention, with the name of the Prime Minister upon it and his photograph; and still a third document, the "Labour Year Book," which practically repeats the same proposal. I think we are entitled to know whether that is or is not the policy of the Government. The League of the British Commonwealth issued a document on "Unemployment, a Fundamental Cause Explained." This is a very interesting document. I wish the Minister of Labour had seen it before he made his famous speech about his hat! Had it not been concealed from him he would have found that his colleague had a remedy—or at least he said he had—for this document, as I say, is called, "Unemployment, a Fundamental Cause Explained." He goes on to review the home market, agriculture, the law of supply and demand, and his explanation is—[HON. MEMBERS: "Read it all!"]— I cannot read it all. I am going to read some of it. It is entitled, "The League's Demand"—

"The League of the British Commonwealth demands, therefore, the nationalisation of our principal banks as the only permanent remedy for unemployment."

It is very unfair that that was not passed over to the Minister of Labour. On that memorable occasion he need not have said, "Wait and see"; he could have shown us what the only remedy was. In justice to the right hon. Gentleman the Deputy-Leader of the House, I want to say that he has, since that was issued, resigned the presidency of the British Commonwealth League. I do not know whether he has altered his opinion, but he has resigned, and his resignation is explained in these words, which I am quoting from the notepaper issued by the League—

On a point of Order. I submit to you, Mr. Young, that the relations of the Deputy-Leader of the House to the British Commonwealth League is entirely irrelevant to this discussion.

I understand that this matter is raised for the purpose of getting an explanation of policy.

I only want to say this in justice to the right hon. Gentleman. He has now resigned, and on the leaflets and note-paper issued by the League there is this statement:

"The right hon. J. R. Clynee, M. P., as a Member of His Majesty's Government, has considered it advisable to resign his honorary Presidency of the League. We await his return in due course."

I just wish to know whether the relationship of the Leader of the House to the British Commonwealth League is the same as that of the right hon. Gentleman the Member for Colchester to his Coalitionist colleagues in the late Government?

The other document is entitled, "The Story of the Independent Labour Party, and what it stands for." [HON. MEMBERS: "Read it."] I am going to read a little—that which is material—

On a point of Order. Is there not a rule against repetition? Is it not the case that these documents were read yesterday?

On a point of Order. I do not know whether you, Mr. Young, were present yesterday, but they were not read out at all.

The documents were referred to, but they were not read, and therefore the right hon. Gentleman is perfectly in order.

The Committee is entitled to know what I am asking for. Hon. Gentlemen opposite, I dare say, do not like it. But it is just as well that the Committee and the country should know whether the Government's policy is the same as their followers'. This document does not profess to be written by the Prime Minister, but it is adorned with his photograph, and, notwithstanding any doctrine of non-responsibility for written or printed things, it seems to be almost impossible that the Prime Minister should not be responsible for this. But I want to know whether it now represents his policy or does not? It speaks of nationalisation, and says: Interruption. ] Never mind what hon. Members on the back benches opposite say about it, or, on the other hand, if that is still their policy the Government ought to come out into the open.

One other question I want to deal with. It was partly answered by the hon. Gentleman the Financial Secretary to the Treasury. It is in respect to the surplus. I am not in the least satisfied that there is a surplus of £4,000,000. I do not believe it exists, or rather, that it will exist. The hon. Gentleman is no doubt relying, as he said, on arrears. Whether that surplus exist or not depends largely—I think these were his words—upon the amount of arrears he can collect. He told us that there are some £20,000,000 arrears of Income Tax and £42,000,000 of Super-tax obtainable. These are to some extent no doubt collectable, but I should like to know whether or not it is a safe thing to rely upon, the test is how these arrears compare with last year's arrears; and, supposing they are only equal to last year's arrears, what expectation have you of getting anything additional on your Estimate beyond that which you have already taken credit for? If, on the other hand, these arrears are less than last year's arrears, then it is even more unsafe to rely upon getting any considerable assistance from them. As the hon. and gallant Gentleman the Member for East Lewisham (Lieut.-Colonel Pownall) pointed out yesterday, you are also relying upon Excess Profits Duty bringing you in £8,000,000. That brought in nothing last year, and it seems to be a very dangerous thing to count upon. Of course, the right hon. Gentleman has information which is not open to anybody else in the House, naturally, and he may feel that he is safe on relying on £8,000,000 on that account, although nothing was got last year. We know that there are back claims, but although you have gross arrears of £160,000,000, the Financial Secretary very carefully—and very properly—did not attempt to estimate what the real net value was of that £160,000,000. He cannot do it. Then, again, as to the Corporation Profits Tax. As to that, my hon. and gallant Friend the Member for East Lewisham pointed out yesterday—and I entirely agree—that there is a grave risk that you will not realise the £20,000,000 you put down as your probable revenue. I must, however, assume that all these calculations have been carefully made and that the Chancellor is entitled to put these figures in, but I would point out that even on that estimate the surplus does not arise from the real revenue of this year, because you are bringing an amount in of £30,000,000 special receipts, which are really war receipts, against which you have only this year got something over £3,000,000 of war expenditure—as is shown by your accounts. Therefore your £4,000,000 surplus, in fact, is represented by no surplus of strict revenue of this year, but is made up entirely of war revenue. Let us assume, however, that you are going to realise the whole of your surplus. Let us assume that the whole £4,000,000 is realised. Still your Budget will not balance, unless you can be sure that the expenditure which you have not yet budgetted for in detail will in fact be less.

5.0 P.M.

There is the thrift bar. You have promised to take that off Old Age Pensions, but the Chancellor of the Exchequer was careful not to tell us what his scheme was. Perhaps he will give us that information when he replies today. The Chancellor of the Exchequer is asking us to believe that there is a surplus of £4,000,000. If you take the Committee's Report on Old Age Pensions, you will find that if Old Age Pensions are made universal at 70, without any income bar, the cost will be an extra £18,000,000.

If you do not make them universal, but make them payable to everybody under the Income Tax level, which is one of the suggestions, the cost will be £15,000,000 yearly.

I am coming to that. If you take the third alternative, which is to double the present means scale, then that will cost £8,500,000 a year. That is the Report of the Committee on Old Age Pensions. This Committee of the House ought to know what expenditure the Government contemplates upon this. That is only one of the items of expenditure which the Government reserves to be made out of this £4,000,000. There is housing. Again we are in the dark. We do not know what expenditure is contemplated on that. At one moment we are told that 95,000 houses are to be built in the first year. If that be so, and bearing in mind that it is a 15 year programme, one has to contemplate an expenditure over the whole 15 years. The old £75 of subsidy was supposed to be not sufficient. Shall we estimate, very moderately, that the Government will give, out of State funds, the equivalent of £100 subsidy? That would amount on 95,000 houses to £9,500,000 in the first year. This is a different proposal from that of dealing with a thing year by year. Being spread over 15 years it will have to be made solvent year by year.

Does the right hon. Gentleman include what is already provided for in the Budget?

We are told there is to be a new housing programme which is to give us 95,000 new houses. The hon. Member can knock off as many houses as he likes, but he cannot, even then, make the Budget balance. Then there is unemployment. There, again, information is withheld from us as to the cost of unemployment. There has, however, been an actuary's report, which shows that after the deficiency period has expired—and that is expected in a year or two—an additional sum of £5,800,000 will have to be spent by the State. We have been given no information of the charge likely to fall in this or next year. I cannot, therefore, make an accurate estimate.

The right hon. Gentleman says it is in the Estimate, but there are new Bills coming along, Bills 1 and 2, which will cause additional expenditure. I understood that expenditure was not in the Estimate, because the Chancellor of the Exchequer in his own opening speech the day before yesterday, told us that this surplus of £4,000,000 had got to look after expenditure on three counts: old age pensions, housing, and unemployment. He would not have done that if all the expenditure contemplated on unemployment was already included in the figure before the Committee. There is thus a total of about £30,000,000 against the so-called surplus of £4,000,000. Therefore, I say that the Budget does not balance, and will not balance, even in the light of the information we have for this year. It is extremely easy to make a very popular Budget, and to make reductions in taxation, without taking the necessary pains, and without running the risk of unpopularity by raising the money to pay for them. Next year the position is to be still worse. With no other liabilities, no other expenditure except that now adumbrated, there will be a deficit, if the housing scheme is doubled, of about £40,000,000 on those three items alone.

The Government have promised widows' pensions. I do not know what expenditure is contemplated on that, but one of the estimates is £23,000,000 a year, so that there is a contemplated expenditure of an additional £63,000,000 a year. How does the revenue for next year stand? We know, as the right hon. Gentleman himself told us, that he does not expect to get any of the special War revenue, namely, £30,000,000, and he does not expect to get Corporation Profits Tax and Excess Profits Duty, to the same extent as this year. There is a reduction on that account of another £10,000,000. So that next year, as far as we can see to-day, the revenue will be down £40,000,000 and the pledged expenditure will be up by £63,000,000. I cannot imagine that, the right hon. Gentleman has overlooked figures so large as these. [ Interruption. ] One wonders why he is going forward to what appears to be a certain deficit, if not this year, then on the figures for next year. If he knows, he ought to tell the Committee. He has avoided telling the Committee what the cost of these three items will be, although he is boasting of a surplus of £4,000,000. We are entitled to know, and I ask him to tell the Committee, when he replies, how he proposes to meet the expenditure which he has adumbrated out of the small surplus which he has reserved for that purpose?

I am sure the Committee has heard with great interest the humorous and vivacious speech of the right hon. Member for Colchester (Sir L. Worthington-Evans). If I might say so, without offence, the greater part of the humour and vivaciousness was spent in dealing with a topic which seemed to me utterly irrelevant to the subject under discussion. I can understand one dealing with some questions, with which I am not familiar, of the connection of certain Members of the Government with the proposals for nationalisation of banks, or other irrelevant topics; and I can understand a vote of censure at a private Member's Debate or at a pleasant Sunday afternoon meeting, that might provide a welcome subject for discussion; but I cannot understand why twice we have had repetition at length of the same argu- ments, the demonstration of the same pamphlet, and the same offensive or admirable exhibition of the same photograph, and why we should have been troubled with a controversy which has no more to do with the Resolutions before the Committee than with the condition of the vegetation on the other side of the moon.

Might I intervene for a moment? Surely that affects the whole national credit of the country, and that is why it is dealt with.

I do not think either the pamphlet, the photograph or the attack have anything to do with the national credit. [ Interruption. ] What does affect the national credit—

On a point of Order Is the right hon. Gentleman the Member for Rusholme (Mr. Masterman) entitled to keep on saying that my right hon. Friend the Member for Colchester (Sir L. Worthington-Evans) was out of order when that point was put? It is a reflection on the Chair.

I am questioning no ruling of the Chairman as to a point of Order. I said it was irrelevant, and I say it again. As to the hon. Member for Ilford (Sir F. Wise), the question of the credit of the country is reflected in the taxation proposals before the country. No one has more welcomed the proposals of my right hon. Friend in the Budget for the maintenance of the credit of the country, by the full acceptance of the full £45,000,000 for sinking fund purposes, and the payment of National Debt, than the right hon. and hon. Members who have spoken from the other side of the Committee. I invite hon. Members to be content with the troubles they have to face at present, without going out of their way to find fresh ones. May it not he the case that they have not sufficient criticism to make against this Budget, and they therefore put their minds together in order to occupy the time in an entirely irrelevant discussion? I would begin my speech with exactly the contrary statement to that made by my right hon. Friend the Member for Colchester. He said he did not regard this as an admirable Budget. I am not speaking for my party, or for anyone else, but for myself. I regard it as an admirable Budget. I should regard it as an admirable Budget if it had been brought in by my right hon. Friends on these benches, or by right hon. Members opposite. There have been many words used in this House, and outside it, to describe the Budget. As we sometimes have the unpleasant work of criticism to do, let us also, when we have the opportunity, indulge in the more pleasant occupation of praise. I congratulate the Chancellor of the Exchequer on his Budget, and I congratulate him, if I may say so without impertinence, on his presentation of the Budget. I should like also to thank the Financial Secretary to the Treasury for clearing up many points about which I was going to put questions, but with which I need not now trouble the Committee. The Budget has been described by hon. Gentlemen opposite—I do not know whether in praise or blame—as a Liberal Budget, a Sugary Budget, a Free Trade Budget. It has also been called a "Poor Man's Budget," a "Housewives' Budget" and an "Electioneering Budget." I would rather use one other adjective.

I agree that, in view of the possibility of what might have been if the General Election had been postponed, it is a sour grapes Budget. But if the Election had been postponed, hon. Gentlemen opposite would have had the disposal of a considerable sum of money, which they might have used to make their policy more popular than it proved to be last December. The adjective I should like to use is a courageous Budget. I use that for three reasons. First—perhaps the least important, because it is more open to criticism—the right hon. Gentleman has budgeted with an optimistic view of the future. I am perfectly sure that he would not have done that if he had not had agreeing with him the advice of the greatest and most efficient expert at the disposal of any Department in Europe. That gives me some hope for believing that his optimism will be justified, and that by improvement in trade and the bringing in of past arrears not yet collected, the right hon. Gentleman's estimate of revenue may be realised. I regard it as courageous also because the right Hon. Gentleman has been prepared to face large vested interests in defence of great and essential principles, and he has been prepared also to carry out in such measure as the abolition of the McKenna Duties, not some wild Socialistic scheme of some Free Trade shibboleth or some particular fad for some particular purpose, but the definite and pledged resolve of every party in this House, speaking through their leaders, that these measures should be removed immediately the War was over.

The Financial Secretary to the Treasury appeared to me to have adopted an almost unnecessary apologetic tone when he said that we were entitled to remove these duties. If he had not suggested that course he would have been called upon to justify their non-removal, and by abolishing them he is only vindicating a policy and carrying out a pledge which was given by both the great parties who were in office when they were imposed. Mr. McKenna, who proposed them, was a Free Trader, and at that time Mr. Bonar Law made a pledge in definite and specific terms declaring that he regarded them as purely War duties, and he declared that it would be madness to propose them as a permanent tariff. He also indicated that it would be grotesque to imagine that a Tory tariff would be 33⅓ per cent. At the end of his speech, when it was suggested by those now sitting on these benches that a corresponding Excise Duty should be placed on these articles as well as a tariff, Mr. Bonar Law said that that was paltry, because although the duties were proposed in October they would undoubtedly be repealed in the following August. The people who have to justify these duties to-day are those who are now acting in violation of that pledge. When the right hon. Gentleman the Member for Hillhead (Sir R. Horne) declares that pledges made in Parliament do not count, then you are destroying the power of Parliament and Parliamentary action.

The third reason why I congratulate the Chancellor of the Exchequer is that he has definitely in this matter—the Government have not done it in all matters—carried out the mandate of the country as expressed at the last Election. It is nonsense to say that either the McKenna Duties, or the half-concealed Protection embodied in the Imperial Preferences, which were really taxes on food, were not in the uppermost part of the minds of the people at the last Election. If any hon. Member doubts that statement, let him come down to Lancashire. Let the right hon. Gentleman the Member for Colchester come down and exercise his ingenuity in a debate on this subject in the largest hall in Manchester.

That is in a constituency in which the only Conservative Member was elected out of twelve Divisions in Lancashire, and the hon. Member who has just interrupted me sits in this House as a Protectionist, although in a minority of over 8,000 votes.

The right hon. Gentleman is making the mistake which some of his friends have already made in assuming that the third candidate at the contest declared himself to be a Free Trader. which he did not do—

At any rate, if there had been a second ballot or an alternative vote in the Hulme Division, we should have been deprived of the presence of the hon. Member opposite in this House.

At any rate, there was only a difference of 400 votes, and the hon. Member was in a minority of 8,000. I congratulate the Chancellor of the Exchequer, whatever may be said on the other side of the Committee, in carrying out the general mandate of the country in connection with these duties. May I touch on one or two points which have been raised, and which I think ought to be dealt with. There has been some discussion on the question of the relation between direct and indirect taxation, and an assertion has been made from the other side of the Committee that the ideal system is that there should be 50 per cent. direct and 50 per cent. indirect taxation in raising the revenue of the country. During the five years in which I occupied a subordinate position, assisting in the preparation of Budgets in this country, every year that point was raised, and hon. Members referred to some vague aphorism made by Mr. Gladstone. On every occasion they were asked what it was and what reason there was behind it, and never has that question been answered up to the present time. What did Mr. Gladstone say? Perhaps before the end of the Debate the late Prime Minister will tell us what Mr. Gladstone actually did say.

I submit, however, to the Committee that the conditions have entirely changed from anything that existed in Mr. Gladstone's days, and for this reason: indirect taxation has now gone further towards taxing the weathy than Mr. Gladstone ever contemplated, and direct taxation has gone much further in the direction of taxing the poor than Mr. Gladstone ever contemplated. I might remind the hon. Members that when Mr. Gladstone in 1874 went to the country on the abolition of the Income Tax, it was a very different proposition in taxing the poor than at the present moment, and whatever Mr. Gladstone said then is not applicable to the present situation. I will not say sneers, but at any rate remarks have been made in regard to the smallness of the relief which may be given by the proposed reduction of the taxes on tea and sugar, and it has been said that they will only amount to about 1s. a week for every family in the country. I happen to live among people to whom a matter of 1s. per week is a very appreciable amount, and I can assure hon. Members that 1s. per year makes a great difference to some of the poor people who live in Camberwell and the East End of London.

Hon. Members opposite say that these reductions will be of no benefit to the unemployed, but I would remind them that by taking taxation off the poorest of the community you are increasing their purchasing power. There are two ways in which this money will be spent advantageously, and one is by giving more labour, because they will be able to demand more commodities; or it may be spent in what hon. Gentlemen opposite seem to think incredible, that is, in the savings of the working classes. The right hon. Gentleman the Member for Hillhead yesterday made much of the fact that if you reduce the Income Tax you provide a large amount of capital which can be invested. May I point out in this connection, that if you make the lot of the working people easier, it is not correct to assume that you do not provide any capital at all, and that it is pure waste.

The right hon. Gentleman represents the City of Glasgow, but I would like to know where he has been looking for such a theory as that. Has he never heard of co-operative societies and building societies? Has he never heard of the money invested by working people in savings banks? Does he know how many working people own their own houses? Is he aware how much money has been invested in War Saving Certificates by the working people of this country? Does he realise how in Lancashire the working people have been investing their money in capital expenditure in the very mills in which they work? On these points I am not addressing myself so much to the right hon. Gentleman for Hillhead as to the nonsense that has appeared in some of the newspapers on this question.

You can, with advantage to a great number of people, increase the money available for capital and for savings by making wages higher or sweeping off taxation from the working people, just in the same way as you can do it by an alleviation of the Income Tax and the Super-tax on the higher level of society. On that particular subject, I submit, that the Chancellor of the Exchequer is right when he claims that, by his proposals in the Budget, he is really relieving raw material from taxation, and one of the most important raw materials in the world, because he is relieving the food of the people from taxation, and he is giving the poor a greater purchasing power and, at the same, he is giving them an opportunity of saving money, which may be used for a further accumulation of the capital resources of the country.

There is only one other point upon which I would like the right hon. Gentleman to give us some light. More and more trade agreements in regard to wages are being established on the principle of the index of prices. That is the case in the railway settlement and the transport settlement, and it will probably be the case in the miners' settlement. Already it is largely the case in the Civil Service and Government employment. In these cases the relief of this taxation will undoubtedly mean the lowering of the index prices of commodities, and that will mean a diminution to a certain extent of the relief which the right hon. Gentleman intends to give to the poorest of the people. If that is the intention, I wonder whether the right hon. Gentleman has any conception of how they will obtain the full extent of this relief in view of the fact that the reducing of the index prices will cause wages to descend automatically.

I intended to submit some considerations to the Committee as to the possibility of the right hon. Gentleman over-budgetting in connection with revenue. I was especially anxious concerning the Excess Profits Duty, the Corporation Profits Tax, and the Income Tax. As a matter of fact my right hon. Friend has, as I think he will agree, estimated his revenue above all, or nearly all, the expert suggestions which had been made before his Budget was introduced. The most favourable to himself, and I think the greatest authority on this subject, the "Economist," did not give him £38,000,000 of surplus, and if, as1 a matter of fact, his estimate is largely, as the Financial Secretary says, from the point of view that he will be collecting arrears through a possible improvement in trade, much of my criticism disappears; but there is one point that I want to put to him very anxiously, and I want to put it, not for the purpose of making any kind of personal or party capital, nor even with the idea of reproach, such as I understood was made by certain hon. Gentlemen opposite. I do honestly hope that he will see his way not to delay the progress of the social reforms which are part of the alleged programme of all parties in this House. The right hon. Gentleman the Member for Colchester mentioned one or two items. I do not want to go through his speech, but I make what he would call the adverse balance substantially larger than he makes it.

We have, first of all, the unemployment insurance payments and the medical benefit payments, which the Minister of Health told me were not allowed for in the present Budget, and had to be included in a Supplementary Estimate. If we pass in substance the Unemployment Insurance (No. 2) Bill, which is not included in the Budget Estimate, and the Unemployment Insurance (No. 3) Bill, which deals with medical benefits, and in which I do not think the uncovenanted benefit is included, it seems to me that the State contributions must amount to at least between £3,000,000 and £4,000,000. If the right hon. Gentleman can disillusion me as to that, I shall be delighted. As I understood his speech, he promised that the thrift disqualification should be removed from the old age pensions. This is no Socialistic Measure; it was in the programme of every party, and it was included in the actual promise made by the late Prime Minister when he unfolded his programme to the House of Commons, before the life of his Government was cut short by a vote of the House. It is true that a beginning can be made in these matters with a very small amount, but that leads me to my final word to the Committee, and I thank them most warmly for listening so patiently. That is the question of the future. Supposing that all this were to come in in this year, and taking, if I may, my estimate of between £3,000,000 and £4,000,000 for Health and Unemployment Insurance, the removal of the thrift disqualification on the compromise will cost something like £15,000,000, and I cannot see aything less than that compromise. The full amount is £34,000,000, but no one, I think, is pressing for that, and £15,000,000 would probably satisfy all parties in the House.

Then there is the question of work for the unemployed. I am not now trying to make any party point, but the Minister of Labour, in response to repeated requests from us and from the other side, told us that, on the day when his salary was challenged on the Estimates, he would describe what the additional schemes for providing national work for the unemployed would be, beyond those which had been left as legacies to him by the late Government. Last October the late Government left as legacies some £50,000,000 of work and credit for the unemployed, and of that, I think, some £15,000,000 has been actually expended or estimated in connection with main roads and grants to municipal authorities. Let us put that down at £10,000,000 extra, as a moderate figure, because it is the fact, and disastrous as it is to have to realise it, every man in this House ought to do so, that the figures read out to us yesterday show that there are still over a million men, women and juveniles out of work. Then, with what intelligence God has given me, I very carefully followed the speech of my right hon. Friend to find out what his policy was with regard to widows' pensions. I think the bulk of the Members of this House are committed to that reform, and I am sure that, if it were proposed, there would be very little opposition to it, either in this House or elsewhere; but I have seen no scheme in connection with widows' pensions that is workable—I mean pensions for widows and for the support of their children while they are growing up, widows and orphans —which is estimated to cost much less than £12,000,000 to £15,000,000.

Then we come to the Housing Scheme. The Housing Scheme' has been pressed, and I hope with sincerity, by all parties in this House, and Members of all parties have stated that they are willing, if a workable scheme can be provided to give every help, entirely without controversy, and no one more than my hon. Friend the Member for West Woolwich (Sir K. Wood), to any scheme which will work. They require a programme extending over a certain number of years. I can conceive of no housing scheme, even with all the facilities for which I pleaded before the Recess—all the cheapnesses and speedings up and free purchases of materials—which will provide anything like the 200,000 subsidy houses a year which the Minister of Health desires without any less loss than something like £10,000,000 a year for the next 15 years. I do not say that that would arise this year, because it would be absurd to imagine that my right hon. Friend should have to budget for a full year of expenditure in connection with Bills which have not yet been introduced into the House of Commons. No Chancellor of the Exchequer has ever done so. But in a normal year that would mean an expenditure of something between £60,000,000 and £70,000,00, not for Socialistic legislation, but for legislation which would be approved by the whole House. What is the balance on the other side? The right hon. Gentleman realises that he will not get any of the £30,000,000 that he is getting from the sale of stores, nor anything like the £22,000,000 from the Corporation Profits Tax, and in two years' time the whole of that will disappear, because the tax will have gone, with no one to shed a tear on its going. It was a rotten tax from the beginning, and has been denounced by every sane economist. Even the right hon. Gentleman the Member for Colchester, who does not think this Budget an admirable Budget, might at least have praised that item in it.

Then there is increased expenditure threatened next year in armaments. The building of the new cruisers has only begun, and in the Naval Estimates only £1,800,000 is provided for them. The great bulk of that expenditure will come in next year and the year after. Then there is another item of increased expenditure in the programme for the year, which has been approved of by all parties in the House of Commons—a substantial increase in the expenditure next year on education, if what I may describe as the bold and welcome programme of educational reform which the President of the Board of Education outlined during the Recess is to come into full being. He told enthusiastic teachers at Scarborough— and I do not wonder that they were enthusiastic—that, although this year, owing to the automatic decrease in the number of children during the War, he was content with a smaller Education Estimate, he was going, to use his own words, "to ask Snowden for an increase next year, and he thought he was going to get it." If Snowden is there, I hope he will get it.

The problem is a serious one, and I would ask, not for purposes of controversy, but of enlightenment, whether my right hon. Friend can give us any indication as to how it will be possible to bridge the balance between at least £50,000,000, putting it moderately, of decrease in income, and something between £50,000,000 and £60,000,000 of increased expenditure, making a divergence of £100,000,000 between the one and the other.

If it can be done by improvement in trade, if it can be done by some great European settlement which will enable us substantially to reduce our armaments—and no one wishes the Prime Minister and those who are working with him success in that experiment more than my Friends on this side of the House—if it can be done by substantial retrenchments on the expenditure at present voted in this year's Estimates, or if it can be done by bringing in new and legitimate sources of revenue—and I notice that that is an allusion which my right hon. Friend the Chancellor of the Duchy of Lancaster recognises—or if it can be done by collec- tion of the £2,000,000,000 or £3,000,000,000 which is owing to us by foreign countries, or, if you like, by an agreement with Germany concerning reparations—if it can be done by any of these methods, there is not one of us who, if the Chancellor of the Exchequer is in the same position next year, will not congratulate him on his great achievement, and welcome the faith he has had in the possibilities of advance in the progress of humanity, the reduction of taxation, and the increase of social reform. I will reserve anything that I wanted to say on the McKenna Duties and on Imperial Preference for a subsequent occasion, as I have already occupied enough of the time of the Committee. Hon. Members have used pleasant sneers, but they do not really think much of them. They are merely the light give and take of Party play which we are more accustomed to see in the cheaper newspapers. What we do feel, and what everyone, I think, on this side below the Gangway feels, is that if hon. Gentlemen opposite, without anyone wishing to take any particular credit for it on one side or the other, will go forward on these lines, and especially on the lines of not sacrificing the social reforms which are common to all of us and are urgently desired by the people, as well as in the reduction of taxation, especially to those who at the present moment are unable to pay it, we do not mind those sneers, and we are prepared in every possible fashion to see that this Budget shall become law.

I will promise the Committee not to traverse the ground which has been so admirably covered by the previous speakers, but there are one or two points upon which I desire to address the Committee, and I am sure that my right hon. Friend the Chancellor of the Exchequer will not mind, amidst this chorus of praise, a few words of criticism about one or two matters in the Budget. There are two matters in the Budget about which I desire particularly to speak. One of them is the forecast that we have had as to the possible taxation of land values and the working up of the valuation during the current year. That is a matter about which I do not want to speak this afternoon, but there is one matter about which I do want to speak, now that I find that the Chancellor of the Exchequer is here, and that is the question of the Entertainments Duty. It may seem a very small thing, but in its way it is a very considerable matter, although the sum of money may be a trifling one—and I was very pleased to notice what the Financial Secretary said just now about the sum of £2,500,000, and what a very trifling thing he thought it was. In June last the whole of the Labour party, including 26 who are now Ministers, voted in this House for the total repeal of the Entertainments Duty. Practically every Minister in the Government was pledged by his action in the House and by pledges given outside. Those pledges were given to people in control of indoor entertainments.

Not only were pledges given by all the leading Members of the Government, but at the bye-election at Burnley, the Home Secretary, who was then a Member of the Government, pledged himself, unless he was misreported, to the total abolition of the Entertainments Duty; and at the bye-election in Westminster, although Mr. Winston Churchill refused to give any pledge that was not strictly limited to financial needs, Mr. Fenner Brockway, with, I suppose, the approval of his leaders, said he was in favour of its total abolition, and that in a constituency that makes a special appeal to the theatres and music halls. I do not think you can have it both ways, and those pledges are not redeemed by allowing people to go in cheaper to football and cricket matches. As a matter of fact, the Chancellor of the Exchequer has told us that he has got to sacrifice half the revenue obtained from this tax. But in sacrificing that part of the revenue he is not carrying out half the pledge of his party. He has told us he had got assurances that this relief would be passed on to the consumer. I should like to know by whom such assurances could be given. The bulk of the £4,000,000 must come from entrances to cricket and football matches. I most carefully went into the matter last year, and I believe the bulk of that relief goes outdoors. Have all cricket and football clubs which have to pay Entertainments Duty given that assurance? What have they done? Entrances which used to be 6d. were put up to 1s., and, as a matter of fact, most of these clubs not only have never complained about the Entertainments Duty but have actually made a profit out of it, and if you abolish it in this way for 6d. and under, and partly between 6d. and 1s. 3d., you are going in the main to give a bonus to people who have not asked for it, and you are going to leave the whole of the theatre and music under a grievous burden.

It is no good people thinking that because it is only a million or two it is not a grievous burden. The Chancellor told us he thinks he was the only Member of the House who opposed these duties when they were first brought in. If he will refresh his memory from the OFFICIAL REPORT, he will find that was not the case. Ever since they were brought in, in 1915, I have persistenly opposed these duties from the point of view of the theatre. To-day the position is this. I showed it to the House a year ago. I am not going through all the details now, though I may give further details during the debates on the Budget. West End theatres are actually paying to-day a tax of 15 per cent. upon the gross receipts. I should like to know what other business could stand such a tax. Of course, in the War, when you had people crowding to the theatre as they had never crowded before, it is true that to some extent the tax fell upon the people who went to the theatre. But the amount that one can spend in amusements is limited. All of us in all classes find it, and the result of these taxes in the end is to cast a burden not upon the people who go to the theatre so much as on the people who run the theatres. Because people cannot go often, the theatres take less in receipts. I have consulted in this matter manager after manager in London, and they all tell me the same story, that what the they find is that, owing to the high price of seats, which before the War was always grumbled at, the people who used to take half guinea stalls refuse now to take 12s. stalls and prefer to go to the dress circle, and people who used to go to the dress circle go to the upper circle. The owners of cinema theatres will tell you exactly the same thing. The net result of these taxes is a burden upon the industry and not upon the people you intended to tax at all.

If it is clear, and I submit that it cannot be disputed, that the effect of this tax is to put a burden upon the theatres, is it not about time this burden was taken off? This was a war tax. We were told it was to be taken1 off when the War was over. Now the Chancellor will tell us that certain taxes have been reduced below the level at which they were before the War. Was it really understood, when the Entertainments Duty was put on, that it was to be kept on so that the Tea Tax could be lowered below the pre-War level, and are we to understand now that the Entertainments Duty, which was put on for the War, is to be carried on as part of the financial resources of the country for meeting all these great schemes of social reform about which we are so anxious?

I read the other day an article by the Lord Privy Seal, also a supporter of the abolition of this tax, called "Opera for All." What is our contribution as a Government to the opera? Every other nation finds it necessary to subsidise grand opera, but we tax it. Every other country must always have found it necessary, to some extent, to subsidise good drama, but there is nothing so hit by the Entertainments Duty as good drama. [An HON. MEMBER: "In the West End!"] There is nothing so much hit in the West End by the Entertainments Duty as good drama. [ Interruption. ] I am not one of those who always think the theatre is going from bad to worse. I remember the London theatre for over 40 years, and I think it has grown steadily better, and it is one of those things we ought to be proud of and try to help. If anyone, who was a theatre goer 30 or 40 years ago, compares what there is to-day with what there was then, I do not think he would make an interruption of that sort. As a matter of fact, it is really a serious subject. The bulk of the good plays I remember during the last 20 or 30 years made their successes not on crowded business. It is rubbish that fills the house with crowded business more often than not. There was a large class of persons who would go to theatres which were not very successful when the prices were not so high. Now, when the prices are high, they find they cannot support the same artistic level as they did when the prices were low. It is very largely a London matter, but not altogether. Provincial theatres will tell you exactly the same story. After all, London, whether you like it or not, is the centre, not only of the theatrical and the musical, but of the artistic life of the country, and if you are going to hit the London theatres and the artistic side of things in London, you are going to hit it all through the provinces. Here is the Labour party desiring, not in the long run but in the short run, to establish municipal theatres and municipal opera, and really to bring the good things of life down to the poorest of the population. I beg my friends on this matter not to give way upon the attitude they have always taken up. The Financial Secretary says £2,500,000 after all, when you are dealing with £800,000,000, is a small matter. So it is, and you can abolish the rest of the Entertainments Duty quite easily, beginning, say, next September, without it costing more than £2,500,000. When we have, as a party, not only supported it in the House but in the country, and circularised the constituencies with statements that we alone as a party have carried out our pledges on that subject, how can we stand up and say at a time like this "our pledge is broken," and give, instead of our pledge, something that no one has asked fox at all?

It is no good telling the British Opera Company, whom you are taxing heavily in their enterprise and to such an extent that it makes all the difference between success and failure, that people will be able to go to cricket and football matches a little cheaper. We have to realise that we have either to come to the assistance of artistic enterprise or give up all idea of ever doing anything in the way of national or municipal enterprise upon this question. I protested against this tax from the moment it was introduced. It is a tax upon gross receipts that no other trade in the country has ever been asked to stand. I remember last year having gone through the figures given me by any number of London theatres. The next day I pointed out how the tax made practically a 15 per cent. tax on gross receipts all the time. The next day I met the chairman of one of our greatest industries. He said: "I have been reading your speech, and I agree with it. I can only tell you that if they treated other industries as they treat the theatre no Government could last a month." It is only because it is a small thing that the Government take up this attitude. It is only because it can be laughed at as a small thing. But here is an industry neglected all through the War. Instead of preventing the profiteer coming in and sweating the theatres by heavy rents in the War, the Government forbade the building of theatres without attempting to limit the rents. I know of one theatre of which the pre-War rent was £80 a week. The other day some friends of mine had to pay £400 a week and a share of the profits as well. That is what is happening to the theatre. Rents and wages are higher, scenery costs four times as much, and musicians cost more. Everything is more expensive, and when, during the War, there was a chance of the theatres raising their prices, like everyone else had to do, the Government came along and said, "No, we take that." They were not allowed to raise their prices. They had to pay more for everything they bought, and they could get no more for everything they sold. Then came along the Chancellor of the Exchequer with another of the worst taxes ever introduced into any country, the Excess Profits Duty, and they took from them any possible chance of making any profit. They first of all cut down their profits, and if they happened to have one big success, along came the Excess Profits Duty, and I can see hon. Members opposite me now who know perfectly well how that worked during the War.

6.0 P. M.

As a matter of fact, the theatre has, during the War, been burdened in a way that is totally unfair, and I appeal to hon. Members to give this matter their most earnest consideration. It is in the hands of the House. We have been told again and again that when you have got the three-party system there is going to be much more freedom. This is a very small matter involving perhaps £2,000,000 or £3,000,000. You have a Government absolutely pledged to the abolition of this duty and it comes forward with proposals which do not deal with that pledge in any substantial form. I challenge the Government to give us figures as to how much of this relief is going outdoors and how much indoors. With regard to outdoors they cannot have a pledge that it is going to be passed on to the consumer, and if they have, I should like to know who gave it. I suggested some time ago to the Chancellor that what he should do this year, if he could not get rid of the lot was to abolish the whole duty on indoors and leave outdoors for the moment to look after itself. There was no demand for it. I do not think anyone will suspect me of any particular hostility to sport, but it was not asked for. The other was asked for. The London theatre is going through a very difficult time. Then last year the provincial theatres have had perhaps one of the worst years on record. These higher prices are really doing a great deal of harm, and I appeal to the Government in this chorus of praise to listen to a few words of criticism upon this matter. It cannot be said that their pledge did not cover this matter. It cannot be said they have not the money to deal with it. There are other matters they could perfectly well have postponed for another year. It cannot really be said that this one industry is to be taken by itself and dealt with in this way utterly regardless of fair play and of pledges which have been given. The Government has been too inclined to consider only the point of view of the consumer. Of course, I want to see the cheap seats with this tax off. But I think you have to consider, not only the position of the consumer, but also the position of the producer. You are putting a. grievous burden upon this trade. The Government have not made any attempt to deal with the great industry of the London theatre, and I hope the House will take this matter into their most serious consideration. We shall have opportunity during the Budget Debates of voting as we voted last year upon this question. It cannot be that the majority who then voted for the abolition of this tax are now going to sit content with this half measure. I am sorry that there is this great flaw in the Budget, because it mars what is perhaps the most admirable Budget of recent years.

I wish now to deal briefly with a more important question, which goes to the root of all social reform and that is the question as to what we are going to do to raise more revenue for carrying out these great schemes of social reform, and how soon we are going to do it. I did hope to see in this Budget something in the way of land values taxation, because I regard the taxation of land values as the economic basis which will make all these social reforms possible. I cannot say that I am dissatisfied with what the Chancellor of the Exchequer said upon that subject, and therefore I do not pro- pose to say much more upon the question. I do not think it is reasonable to expect him, in the short time he has been in office, to bring forward a cut and dried scheme for the taxation of land values, but I did welcome the tone in which he spoke on this subject. I look forward to a great development during the next year upon that question, because the Labour Party are pledged on this matter, and in this case they will have the wholehearted support of the Liberal Party. Therefore, I look to great advance upon these lines.

These are the two points in the Budget, one which seems small and one which to those on this side of the House is big, where the Budget is open to some criticism. I would ask the Financial Secretary on the first point to see whether even now he cannot meet the case of the London theatres. They are very badly hit. I have many friends among the actors and actresses who have asked me to ventilate this question in the House and to do everything I possibly can to get this tax removed this year. I do appeal to the House to come to the support of this struggling industry and to do everything they possibly can to see that pledges, given with a view to winning elections, and pledges given since our party have been returned, with a view to winning other elections, are honourably fulfilled. We are absolutely pledged as a party, and practically every member of the Government is pledged, to help the theatre in this matter, and I call upon the Government to redeem that pledge and not to attempt to say that that pledge is redeemed by offering concessions to people who have no concern with theatrical and musical enterprises but who deal with other matters and have not asked for any relief in regard to this tax.

A great deal of what I had intended to say has already been dealt with by other hon. Members, but I desire to offer a few criticisms of a general character on the Budget. Everyone in the House and everyone outside will agree that, with the surplus available, it was right and just that very substantial reductions should be made on the taxes upon sugar and tea. These reductions were due and the opportunity for making them is welcomed by everyone. It should not be overlooked that this surplus was provided by the Budget of a Conservative Government, although it is a Socialist Government that has had the opportunity to make these reductions in taxation. There is, however, some flaw in the general paean of praise. The right hon. Member for Rusholme (Mr. Masterman), who had long experience at the Treasury, joined with my right hon. Friend the Member for Colchester (Sir L. Worthington-Evans) in his expression of doubt as to whether there was a surplus at all. At any rate, it is perfectly clear that this Budget is only a passing thing and cannot possibly be the foundation for meeting the expenditure which has already been incurred or is in prospect for next year. These doubts are being felt very largely outside the House. There is even some doubt at the back of the minds of the Government, because the Chancellor of the Exchequer is going to set up the Land Values Department; he wants more money.

The Chancellor of the Exchequer made one statement which was received by the Committee in a wrong sense. He said that the Income Tax could not stand permanently at 4s. 6d. The Committee took that to mean that on some future occasion and on an early future occasion, if he had the opportunity, he would reduce the Income Tax below 4s. 6d. On probing into the matter, and having regard to the very large commitments of the Government, one realises that there is a prospect of a deficit, on the foundation of the taxes for next year, of between £40,000,000 and £50,000,000, at the lowest calculation. Are we, therefore, to understand that the Chancellor of the Exchequer meant that he will increase the Income Tax to cover this deficiency which will undoubtedly occur in the next Budget? Although it is a popular Budget outside the House, the criticism which I have to offer on the Budget is it is not sound finance. The Government are taking great credit to themselves that they are sound financiers, but they agree that to finance for one year only is utterly unsound and unsafe. They have done that, and they will have to make provision for new taxation if they are in office when the next Budget is introduced. I do not think any Member on the Government Bench will deny that.

Practically the whole of the taxation will be raised under three heads, Income Tax in its various forms, the tax upon excisable liquor and the tax upon tobacco. There are no other very large items yielding revenue. That is not very sound finance. I will deal with the tax upon beer and spirits. These taxes are enormously high. The tax upon beer is 100s. per standard barrel, but a rebate of 20s. was made in the Budget of a year ago, and substantially the tax stands at 80s. per standard barrel. This means that of beer sold at 8d., 4d. of the 8d. represents taxation, while on 6d. beer, of 1040° or 1041° gravity the tax is over 2¾d., or nearly 3d. per pint. This is an enormous load of taxation. It is certain that the beer drinkers will not be satisfied that this taxation should go on for ever, and strong pressure will be brought to bear upon future Governments to reduce this taxation, and also the taxation upon spirits.

The hon. and gallant Member is too curious. He wants too much knowledge. He wants knowledge on every subject. Of course, sugar is used in beer, and he knows that without asking the question, but I can assure him that the proportion of sugar that is used in beer of late years is so small that the reduction in the taxation on sugar will represent a very small amount on the quantity of sugar used in beer and cannot possibly be conveyed to the consumer by a reduction in the price of beer. The only result of the reduction of the tax on sugar in its bearing upon the amount of sugar used in beer will be that the beer drinker will get some slight increase in the quality of the beer, and the beer may be stronger.

By far the most striking statement made by the Chancellor of the Exchequer in his Budget speech was made in a parenthetic passage which dealt with a subject which is not strictly within the purview of the present Finance Bill. The Chancellor of the Exchequer indicated clearly that he, and the Government which he was then representing, are entirely opposed to any of the Resolutions of the Imperial Conference which deal with Imperial preference. Indeed, the Secretary for the Colonies admitted that in the speech which he made subsequently in answer to the right hon. Mem- ber for Hillhead (Sir R. Horne). That is a most important statement. If we make mistakes in finance in one year we can make then good in another year. But this question of Imperial preference is one that affects the whole Empire. It is one with which we alone cannot deal in this House. It takes a long time and involves co-operation, and if this policy is rejected it cannot again easily be revived.

Hon. Members opposite appear not to realise how strongly the Dominions feel upon these questions of Imperial Preference. The statement of the Chancellor of the Exchequer amounted to the announcement that the Government is prepared, in order to support an economic theory, to abandon the British Empire. May I point out that the treatment which we propose to give to the Resolutions of the Imperial Conference is very different from that which is claimed for, and accorded to, Treaties made with foreign Powers. Surely, the unanimous Resolutions of an Imperial Conference impose some obligation on the Government of this country. Even though the present Government may not have been in office when those Resolutions were arrived at, it cannot claim to set those Resolutions aside, just as it cannot claim to set aside, in the summary manner adopted by the Chancellor of the Exchequer in his Budget speech, any Treaty or arrangement with foreign Powers which had been agreed to, and required only the ratification of this House. I do not propose to try to argue the matter on this occasion. I only beg the Committee, in passing, not to lose sight of this most serious and, it may be, fatal statement of the Chancellor of the Exchequer.

I would now ask a question which has been already asked as to the intentions of the Government in reference to the import duties which are at present in force. We are entitled to know what practical reason there is, for the benefit of the nation or any section of the nation, which has led the Government to abandon these duties. We are told that they were imposed during the War, that it was not possible owing to the long continuance of the War to deal with them, and that they have gone on till now. What harm have they done? It is admitted that they have helped many people to find employment, and that that employment will now be lost if those duties are done away with. As people with experience of business know, importers of foreign cars are already placing orders, which are contingent upon the Government recommendations to abandon these duties being adopted by this House. Only yesterday I heard of one case in which an order for 2,000 care has been sent to the United States conditionally on the duties being abandoned.

Then, look at the other side of the case. A motor firm in this country, requiring some credit for the development of machinery and plant, was refused, temporarily, at any rate, that credit by the bankers to whom it applied pending the decision of this question, which will affect seriously industry and employment in this country. Before the War the motor industry in this country was of a small character. It had been pushed aside by the excellent cars imported from abroad at cheap prices, which competed only too successfully with those which were made in this country. That industry has been re-established. The hon. and learned Member for Crewe (Mr. Hemmerde), speaking of the remission of Entertainments Duty, said that it was only a small matter. Unfortunately, the piano makers are only a small matter. Theirs is not a widespread industry. It is confined to a comparatively small number of people; it gives employment, not to large masses, but only to a few hundreds or a few thousands. But it is a valuable industry. Why should these people have their employment taken from them by the party opposite merely to support some theory?

We have now had experience of those duties for nine years, and surely we must look at the position in which the industries affected by them stand at the present time and consider what is to be the result, good or bad, of continuing them. They are not doing any harm. They are doing some good. Why not let them continue? It would be a different story if it could be shown that, although the abandonment of these duties would throw many hundreds of piano makers and many thousands employed in the motor car industry out of employment, yet that it would at the same time eradicate some great evil. But that is not the case. The Government is abandoning these duties in order to support some theory held by right hon. Gentlemen opposite, in the hope of securing the support of those whose votes they desire to obtain. I will not enter into this matter now at greater length, but when we come to some of these subjects later on they can be discussed in greater detail.

I would ask for that kindly consideration which is usually accorded to a Member on rising for the first time to address this House. As a Liberal Free Trader, I welcome most heartily the Budget which the Chancellor of the Exchequer has presented. It is a sound Free Trade Budget, and one which any Liberal Chancellor of the Exchequer would have been proud to bring before this House. I am particularly grateful to him for the concessions which he has been able to make to relieve the burdens on the working classes of this country. Incidentally, I may say that I do not think that it will all be all loss to him. I think that a very considerable return will come to him, owing to the added purchasing power which will be given to the workers of this country through the concessions in duties which he has been able to allow. There are, however, one or two points on which I would like to say a word or two. The first of these is debt redemption.

The Chancellor of the Exchequer stated that during the last five years we have redeemed some £650,000,000 of debt, and he spoke of it as a wonderful national achievement. We all heartily agree that it is a wonderful achievement, in view of the tremendous dislocation of industry and of credit owing to the War, and in view of the very difficult and trying years which have succeeded that disastrous time. But some hon. Members on the other side below the Gangway have misgivings as to whether we are not writing off our debt rather too quickly. They say that there is such a thing as going too speedily in the matter of debt redemption in view of the fact that it will not allow that expansion of capital which is so vitally necessary just now for the development of industry, and that in consequence more harm than good may be done by redeeming debt too speedily. There is a point in this connection to which I would like to call attention. Recently we had issued to us a White Paper in which were set forth the transactions of the Disposal and Liquidation Board. On perusing this I find that during the last five years that Board has realised some £665,000,000 through the sale of surplus stocks which were left over at the conclusion of the War. Actually the position is this, that five years ago our debt was £8,000,000,000, but, as against this, we had certain assets which have since been realised, bringing in £665,000,000, so that we are really in much the same position as we were five years ago. I am not suggesting that we have not done very well indeed, because in all the circumstances I think that we have done remarkably well. I am offering this criticism on account of remarks which were made by hon. Members opposite, because I wish to show that our efforts towards debt redemption have been by no means too great, and that every effort should be made to continue along this line.

Another matter to which I wish to refer is one which was dealt with yesterday by the hon. Member for Hemel Hempstead (Mr. J. F. Dunn). The hon. Member referred to the desirability of the reduction of the Stamp Duty on cheques. I support, warmly, the appeal which he made to the Chancellor of the Exchequer. The late Mr. Bonar Law, speaking on this subject in this House in 1918, when an increase of the Stamp Duty was proposed, referred to the advantage which would accrue from the diminution in the use of cheques because of the increased Stamp Duty, pointing out that the work entailed upon depleted bank staffs would be reduced. That is evidence that those who proposed the increase of the Stamp Duty at that time were fully aware that the increase would lead to a reduction in the requirements for cheques. It has been difficult to obtain any accurate figures on the subject. It will be recalled that, owing to the boom years and the expansion of trade after the War, there was an increased demand for cheques, but there is not the slightest doubt that the increased Stamp Duty on cheques has retarded the increase in the use of cheques in this country, and those who are familiar with banking affairs and with commercial matters know that anything which retards the expansion of the use of cheques is contrary to the public interest. As the use of cheques increases, pro tanto there is a decrease in the use of inconvertible paper currency.

I believe that the Chancellor of the Exchequer has estimated that there would be a loss in revenue of about £1,500,000 if the Stamp Duty were reduced from 2d. to 1d. In making that estimate I presume that he has not taken account of the fact that he would derive Income Tax from the £1,500,000 so sacrificed, inasmuch as Income Tax would be payable on the extra profit realised through the saving on cheque stamps. I would like to press this point upon the Chancellor of the Exchequer. Everything possible should be done to encourage small deposit accounts in this country. Such development is desirable, firstly, because it widens the basis of stability; secondly, because it increases the credit available for the development of industry, and at no time was it more vital that all possible credit should be made available for the development of industry; and, thirdly, because it reduces the requirements for the circulation of paper currency. The advantages far outweigh any small loss that the Chancellor of the Exchequer would have to face, and I believe that in the long run it would not result in a loss, but in a financial gain, to him to make this concession. I would urge the right hon. Gentleman to add this useful concession to the very many excellent features of his Budget.

I am sure that the Committee has listened with considerable interest to the maiden speech which has just been delivered, and that all hon. Members will welcome the hon. Member's more frequent participation in our Debates. I will not attempt to follow him or most of the previous speakers in the points they have raised this afternoon. Like others on these benches, I have been amazed at the weird and wonderful rhetoric with which hon. Members who ought to know better have contrived to prove, to their own satisfaction, at any rate, that there will be a considerable deficit next year. The right hon. Member for Rusholme (Mr. Master-man), in the course of an exceedingly interesting speech, took the present figures for unemployment, the present expenditure on unemployment, estimated the amount that would be spent upon housing, and, adding the figures together, said, "There you are!" It must be perfectly obvious that if you employ hundreds of thousands of men on house work and in the production of materials for the building of houses, you will, to that extent at any rate, decrease the number of men in receipt of unemployment benefit or Poor Law relief.

Will the hon. Gentleman help us to employ hundreds of thousands of men in house building?

Certainly. The point is that the right hon. Member cannot have it both ways. He cannot say that we are expending £3,000,000 or £4,000,000 on unemployment to-day, and that we will expend £10,000,000 on house building, without affecting the amount of money that is spent on unemployment relief. All these weird results which have been arrived at this afternoon as to possible deficits, based on figures of that kind, are worth nothing at all.

Does the hon. Member mean to suggest that there is now considerable unemployment in the building trade?

It is perfectly obvious that if you employ 100,000 or even 10,000 men in the lead trade, the glass trade, and the slate trade—

That is not the point. There is no purpose served in trying to draw that red herring across the track.

The interruption was relevant. The suggestion is that you are going to put out of employment a large number of men in the motor-car industry.

I do not accept that hypothesis for a moment. What I am attempting to prove is that these estimates of deficits next year, based upon the supposition that while we spend £10,000,000 on housing, we do not decrease the amount of money that we spend on unemployment benefit, are fallacious estimates. I put it no stronger than that. These figures are no more substantial than the figures, and the alleged fact with which the right hon. Member for Hillhead (Sir E. Home)—I am not certain about the right hon. Member for Colchester (Sir L. Worthington-Evans)—has been attempting to scare the country. Yesterday the right hon. Member for Hillhead repeated, though not with the same ful- ness, the statement that he has made in the country. It is a statement on which I would like to offer one or two observations. The right hon. Gentleman said yesterday afternoon:

On 1st November, the date referred to by the right hon. Member for Hillhead, there were by-election results announced in Rutland and Yeovil, with Conservative majorities. As the right hon. Member has said truly, the pound sterling then stood at $4.50. The Conservative party imagined that the flowing tide was with them. They thought they would have a General Election. The Tory machine, according to the "Times," was being tuned up for a General Election. The wicked Labour Government was not then in power. The pound sterling stood at $4.50. Then we had the late Prime Minister beginning his whirlwind campaign on Protection at Manchester. Promptly the pound sterling fell in New York to $4.46. On the 8th of that month a former star of the Coalition Government, Lord Birkenhead, went to Glasgow and delivered what he called an "Address on Idealism," in which he described idealism as a deadly source of national peril, and promptly the pound sterling fell to $4.40—a fall of 6 cents after that address. The Socialist Government was not in the picture then.

That is what I am saying. If the Noble Lady will bend her intelligence to what I am saying, she will be able to understand the grave issues before the country. Next we come to 9th November when the leading Conservative paper in the West of Scotland, the "Glasgow Herald," got scared at the fall in the £ sterling and threw overboard the right hon. Gentleman the Member for Hillhead and his Protectionist policy in order to save the £ sterling from utter collapse. On the 16th November Parliament was prorogued and a definite Protectionist issue placed before the country, and the £ sterling fell further to $4.32. I should like the right hon. Gentleman the Member for Colchester, who at the moment seems to be in dreamland, to take note of this point and convey it to his Friend the ex-Chancellor of the Exchequer the right hon. Member for Hillhead. The £ sterling fell from $4.50 to $4.32 before Parliament was prorogued at all and under a Conservative regime. As regards 18 cents out of the 20 cents' decline in the value of the £ sterling, the fall took place before the Prorogation and the millions of money to which the ex-Chancellor of the Exchequer referred yesterday were adversely affected to the extent of 18 out of 20 cents under a Conservative regime.

I think it is obvious that the Americans had a better appreciation of the electoral position in this country.

That is perfectly true. The Americans saw that when there was a Conservative Government in this country tinkering with a protective tariff system it was time that they were giving fewer dollars for the £ sterling, and I am glad to have confirmation of the theory I have been advancing from an eminent financial journalist in the City of London. If an ex-Chancellor of the Exchequer, like the right hon. Gentleman the Member for Hillhead, can go about the country repeating fallacious statements like those to which I have referred, even after his attention has been called to them; if he ascribes to the advent of a Labour Government financial disasters that quite clearly and demonstrably have occurred under a Conservative regimé, what are we to expect out of all the rhodomontade he offered us yesterday about the parlous plight in which this country would find itself if we dispensed with the McKenna Duties? I want to hear, and I have not yet heard, a reasoned answer to the case put up from the Opposition side on the McKenna Duties. Specific questions have been put from the Opposition benches, and statements have been made that nobody complains about the McKenna Duties and no consumer "grouses" at them. [HON. MEMBERS: "The farmers!"] If the farmers are "grousing" then that is an instance to the contrary, but at any rate I am one of those sitting on this side of the House who desire to hear these questions discussed. We do not desire to hear any of the old rag-tag and bob-tail about what Gladstone said in 1870 and the rest of it.

I can understand that that question would excite the hon. and gallant Gentleman's intelligence and stir it very deeply, but what Cobden said in 1862 is of no moment now. We are living in 1924, though I can quite understand that the hon. and gallant Gentleman is living in a world of his own, which dates back to half a century ago. We think we should have a reasoned answer on these matters, but, apart from that, I submit that the Opposition have made no case whatever, no financial case whatever, against the present Government, and if we could have a little more direct and honest discussion and less political manœuvring in this House it would be very much better for the country.

I am glad to have made a convert of the Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor). I have never in regard to her past conduct been able to compliment her on that political honesty of which I have just spoken. [HON. MEMBERS: "Withdraw!"] I have said it publicly before, and I say it again.

This is simply because I am not a Socialist. If I were a Socialist, I would support the Socialist Government. I wish to say to the hon. Gentleman: you are always getting at me because I will not join the Socialist party. I think you are dishonest to be in office.

As I say, I am not getting at her because she will not join the Socialist party. I think she is quite right to stay outside the ranks of the Socialist party until she understands what Socialism is, which she obviously does not understand at present. The point I wish to make is that all the stage thunder to which we listened for hours at a time this afternoon and yesterday against the Labour Government, does not matter anything at all to the country. If there be a case for the McKenna Duties, state it and let us have it debated, but there is no case whatever—not the slightest.

There is no case to justify the charge that the Labour Government has cost the country millions of money because of a fall in our national credit. The very reverse is the case. Our national credit everywhere stands higher than it did under a Conservative Government and must inevitably do so because there is no hope whatever for the working classes of this country or the people of the world under a competitive regime which must end in another war and the only hope—however timorous it is sometimes —for the people of the world is that a Labour Government directly representing the working classes and the common people shall set out to build—

The only hope for the working classes of this country and the world—and they are beginning to see it, and that is what is worrying hon. Members opposite—is to get rid of the parasitic exploiters.

The hon. Member is travelling very wide. The subject is a wide one, and he need not have any trouble in keeping within its limits. We are discussing the Budget.

I am very sorry. I quite accept your ruling, Mr. Chairman, and I will not pursue that line further than to say that any Budget which transfers a purchasing power of some where about £30,000,000 to the common folk of this country is a favourable Budget, and one which makes for more social peace, for greater contentment in the country, and for less unemployment. [HON. MEMBERS: "Oh!"] Yes, if the working classes get £30,000,000 which they had not in their pockets last year, their wives and mothers and daughters will be able to buy more goods in the shops, and that affects home industries and home trades.

I would like to ask the hon. Member a question. If you are going to close down an industry in this country, and put skilled workers out of employment and out of the country, what is going to happen to the boys and girls who are growing up, and what is the use in that case of having this country full of cheaply manufactured goods? What is the use of having cheap tea and cheap sugar and cheap everything? I voted for the reduction of the food duties, but what is the good of having the country full of cheap goods and cheap tobacco, and so forth, if the boys and girls are not at work—

The hon. Member is not in possession of the Committee at the moment, and must not address the Committee at such length.

May I finish my question? I wanted to ask the hon. Member what is the use of cheap manufactured goods, if we have not the men and boys at home?

I quite appreciate the hon. Member's point, and when we come to discuss means for the abolition of international sweating, I trust we shall have her support in the Division Lobby. The point I was endeavouring to make— perhaps rather provocatively—was that if you increase the purchasing power of the people you increase the demand for home manufactures; if you increase the purchasing power of the common people you increase the demand for British manufactured goods. [HON. MEMBERS: "Who are the common people?"] You do not know anything about the common people.

I decline to give way. I am willing to give way on a point of Order, but to persistent and deliberate interruption such as I have been experiencing I decline to give way, and I will state my point if I take an hour in doing it. I can understand the objections which hon. Members have to hearing this plain truth enunciated, but they have to hear it. If you increase the purchasing power of the people at home—there are 100 ways of doing it, and this Budget is one of them—you lessen unemployment at home by the best method. It is all fudge to say that if you leave the rich with their butlers and their barbers and the fellows who curl their hair for them, and so on, you give employment. You do not give employment in that way. That is the servile State. We are out to burst the servile State, and the only way that you can do it is by giving employment on useful work to the people of this country; not, as the hon. Member thinks, by keeping deer forests, but by having producers on the soil producing food for themselves, and maintaining themselves and their families in decency and comfort. This Budget, after three months of a Labour Government, is the first attempt, the beginning, to shift the social burdens in such a way as to bring nearer that cooperative Commonwealth and equality in this country for which we on these Labour benches stand.

I am quite sure that all Members of the Committee, in Whatever quarter they sit, have listened with great pleasure to the speech of the hon. Member who has just sat down. There was a note of sincerity in that speech which we on this side of the Committee at any rate can appreciate. I want, however, to address myself, not to the particular argument that was used by the hon. Member, but rather to the general scheme of the Budget as it has been propounded in two singularly able speeches by the Chancellor of the Exchequer on Tuesday and by the Financial Secretary to the Treasury this afternoon. If there be anything which the Financial Secretary to the Treasury cannot make clear, we may be certain that it is not clear in his own mind, and there is one point to which I shall advert before I sit down. I suppose that when the Chancellor of the Exchequer sat down two nights ago there was in the minds of most Members only one sentiment, and that was that they had never listened to a better exposition of a cleverer Budget. But I confess that after a couple of days' reflection I ask myself the question, whether what the country needs at the present moment is this amazingly clever Budget? I ask myself another question. Is it really necessary to have an amazingly clever Chancellor of the Exchequer, or, indeed, a Chancellor of the Exchequer at all? I am merely putting an obvious reflection before the Committee. After all, these Budgets are prepared to a very large extent, and admirably prepared, by the permanent members of the Civil Service. It occurs to me that possibly, as an innovation, we might have a Budget entirely prepared by a permanent Treasurer and presented—of course on the collective responsibility of the Cabinet—in this House by means of a loud speaker. I wonder whether any impersonal Finance Minister, sitting behind the double doors of the Treasury Department, preparing a Budget under the sanctified seal of anonymity, with no errant eye on his constituency, with no regard to elections immediate or remote, but with a single eye to the economic stability and industrial prosperity of the country, would have produced at this moment precisely this Budget? I submit that there would be something to be said for setting up such a permanent Treasurer, but this is obviously not the time to say it. I do think, however, that it is pertinent to the present discussion to consider how far the Budget before us does represent the best possible proposals conceived, as I have said, with a single eye to the prosperity of the country as a whole.

We shall all admit, I think, that this Budget has at any rate some outstanding virtues, though I do not think that the Government are to be credited too effusively with the quality of virtue in this respect. Like an unattractive woman they have had virtue thrust upon them. As Falstaff was a coward by instinct, so they are virtuous, not by instinct, but by necessity. Whatever the source, a virtue is admittedly there. In the first place, all of us in all parts of the House were delighted to hear the emphasis which the Financial Secretary in his concluding remarks this afternoon laid upon the supreme importance of maintaining the national credit, and, in particular, the rooted objection which he and the Chancellor of the Exchequer feel towards any raiding of the Sinking Fund. I believe that that announcement made by the Chancellor of the Exchequer and endorsed by his exceedingly able lieutenant will be received by the whole business community with a sigh of immense relief. In all parts of the House pleasure has been expressed, and I desire to re-echo it, at the fact that we are able to congratulate ourselves upon the reduction of the debt by a sum of no less than £650,000,000. That is an achievement of which this or any other country might well be proud.

There is another active virtue. I refer to the Corporation Profits Tax abolition. I believe that the whole industrial community will be profoundly grateful to the Chancellor of the Ex- chequer for this concession. When this tax was first introduced in this House, I was one of those who very strongly opposed it. I have attempted to get rid of it ever since. I opposed it on two grounds. In the first place, whatever the necessity for imposing it at the time, it was bound to be exceedingly deterrent to enterprise, and in the second place it was a tax peculiarly inequitable as between individual and individual. The relief, I think, will be appreciated, in particular, by those holders of ordinary shares in statutory companies and similar concerns where the tax could not be handed on to the consumers. On that ground, I, at any rate, am one of those who welcome very cordially this feature of the Budget.

I have done now with my enumeration of its virtues. I cannot help feeling that the scheme of this Budget has this radical defect, that it shows an immense excess of optimism in regard to the surplus which the Chancellor of the Exchequer anticipates at the end of his first financial year. I quite agree that under the circumstances of the year something is due to the consumers of sugar and of tea, but I think that both classes of consumers would have been satisfied and well pleased with some smaller concession. At any rate, I cannot help feeling very grave disquietude that the Chancellor of the Exchequer should have surrendered in a full year no less than £32,000,000. That is the estimated loss on Customs and Excise alone. I cannot for the life of me anticipate how he is going to meet the claims which he has adumbrated for a possible extension of old age pensions, for houses, and for unemployment out of a possible surplus of £4,000,000 on the current year.

The general scheme of this Budget calls for another observation. The enormous remission which the Chancellor of the Exchequer proposes to make under the head of Customs and Excise will still further increase the already glaring disparity between direct and indirect taxation. Some reference has been made this afternoon to the Roman Empire. I am not going back so far as that, but I do want to draw the attention of the Committee to the fact that, when our modem system of finance was inaugurated by Sir Robert Peel's great Budget of 1841, the ratio in which direct taxation stood to indirect taxation was as 27 is to 73. The Financial Secretary did not go back in his researches quite so far as that this afternoon. From that time down to the present, there has been a steady readjustment, and I frankly admit that at that time it was very much called for. The unrepresented people were not getting their fair share under the Budget of that time. Ten years later the direct figure had gone up to 33, bringing the indirect down to 67. Ten years later still, in 1861—the process is continuous—direct taxation stood at 38 and indirect taxation had fallen to 62. I am not going to give all the intermediate years, but when the present century opened the position was that there was an almost precise balance between, the two classes of taxation. Direct taxation was 52·5 per cent., and indirect taxation 47·5. I would remind members of the Committee who, perhaps, were not Members of the House during the War years, that during those years there was a further and tremendous exaggeration of these figures. The Financial Secretary to the Treasury might have recalled to the remembrance of the Committee the fact that in the year 1919 the burden borne by the direct taxpayers of this country, including the Excess Profits Duty, was not less than 82 per cent. of the total revenue of the country. To-day it has been somewhat slightly re-adjusted in the other direction, until, as the Financial Secretary told us, we have come to the point when the direct taxation is stabilised, probably, at 66 per cent., compared with 33 per cent. for indirect taxation.

The Financial Secretary said that, after all, this was not the essential point to be considered, and he went on, after discussing the question of ratio between direct and indirect taxation, to say that the crucial question was the question of ability to pay. Of course, that elicited a cheer from hon. Members behind him, but has the hon. Gentleman made up his mind as to what is the real incidence of direct taxation? Does he really suppose that direct taxation in its ultimate incidence—and I am quite sure he does not—falls on those on whom it is levied? I am sure he would never get up and make a proposition that direct taxation levied upon the presumably rich has no effect on the employment of the wage-earners of the country. He would be the last economist in this House—and I know that he is one of the best of them—to maintain that the immediate incidence of taxation is the measure of its ultimate incidence.

I want to say a passing word in regard to the Entertainments Duty. I have nothing whatever to urge against the remission under that head except this: I cannot for the life of me understand how any Chancellor of the Exchequer, or anyone with any sense of economic or industrial perspective, would select a remission of the Entertainments Duty as against, for example, the restoration of penny postage. I am very strongly opposed to subsidies of any kind, and I am merely suggesting on this point that if the Chancellor of the Exchequer had £4,000,000 in hand with which he could make a remission on a pure luxury like the Entertainments Duty he might have dealt boldly with a thing which the whole industrial community is crying out for, namely, the restoration of cheap facilities by the Post Office. I am considering the Budget from an economic point of view, and not in its relation to party values. I am sorry the Postmaster-General is not present. I have always regarded him as a tolerably forceful and persuasive personality. I cannot understand why he did not urge more strongly the question of substituting penny postage for a remission of the Entertainments Duty. I am very well aware of the organised influences that were brought to bear on the Chancellor of the Exchequer in the other direction. I can only express my own regret that he did not feel able to resist that pressure and effect a great social and economic reform.

We heard something this afternoon, I think it was from the hon. and learned Member for Crewe (Mr. Hemmerde) not only in regard to the Entertainments Duty but also of one other feature of the Budget which he hailed with unqualified delight, namely, the prospect of the restoration of land values taxation. To me it is a matter of amazement that a party which has already burnt its fingers on this question should want to burn them again. I remember very well the Budget of 1909—

I have a vague recollection that in the year 1909 we had a Budget which raised a considerable amount of comment—

As a matter of fact, that Budget did not provide for land values taxation, it only secured a valuation, and we are proposing to have that valuation brought up to date with a view to proper land values taxation.

I have a distinct recollection of the Budget of 1909, and I have a more recent recollection of the Budget of 1921, and I think one of the most amazing spectacles I ever witnessed was to hear the right hon. Member for West Birmingham (Mr. A. Chamberlain) sitting side by side with the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) pronouncing a funeral oration over the taxes that were imposed in connection with the land valuation scheme of 1909. What was the result of that scheme? In no one single year did these taxes ever produce the cost of collection. They were a dead loss to the State, and yet the Government opposite are now anxious to try the experiment over again. I do no injustice to hon. Members opposite when I say that they are profoundly and sincerely interested in the housing question. Yes, but what was the result of the taxes which I have referred to upon housing in this country? Was there ever a tax proposed which did more to interfere with the provision of housing than that did? It will not be denied by any one cognisant of the facts—

Land values taxation has been tried in Australia with precisely the opposite effect on housing.

I am referring to the taxation imposed by the Budget of 1909, and I again ask my hon. and learned Friend what was the effect of this taxation upon the provision of houses in this country? In the six years before the imposition of the tax in 1909 the total number of houses built in this country was 691,562, or an average for the six years of 115,260 houses per annum. Then came the Budget of 1909 and the taxes which that Budget imposed. The immediate result was a fall in the number of houses built in the next four years. I only go up to the outbreak of war, but during those four years the total number of houses built was 247,000. In other words, instead of having an average of 115,000 a year, we had an average of only 61,000. Housing was therefore diminished by the imposition of this taxation, and the production of houses was decreased by 50 per cent. That is a point which no one can possibly controvert.

I wanted to say a word or two on a question which has been fully debated already and one of which I believe will be a great deal more heard during the next few months: it is the way in which the Government have deliberately flung away, as far as they are concerned, the immense opportunities presented to the people of this country to make a gesture—and after all, what are they but a Government of gestures—for a real advance towards the people of our Dominions. That point was elaborated by the right hon. Member for Hillhead (Sir R. Horne) yesterday, and I will not add further to what he said. But let me assure hon. and right hon. Gentlemen opposite that if they are going to accept the principle which is involved in the present Budget they are assuming a responsibility with regard to the future of this Empire which I for one do not envy them.

I pass from that to say just one word on the point with which the Financial Secretary mainly dealt this afternoon. I have heard my hon. Friend speak dozens of times in this House. I have always listened to him with close attention and often with a considerable amount of agreement. If he wants to convince one, he is admittedly a master in the art of doing it. But I have never in my life heard anything more unconvincing than his defence of the abolition of the McKenna Duties. If he had been convinced himself, I think he would have gone much nearer to convincing the Committee at large.

What is the position? I challenge the Government, the Financial Secretary, or the Chancellor of the Exchequer to say that these duties have done one atom of harm to any man, woman, child, or animal in this Kingdom. On the contrary, they have effected no small amount of positive advantage. Are these facts disputed? First, they have produced a modest revenue. They were not imposed primarily with that object, but they have, as a fact, produced a modest revenue. Is that disputed? They have diffused wages and employment. Is that disputed? They have lowered the price, or, at any rate, since their imposition—I will not put it higher—the price has been lowered to the consumer. Is that disputed? In the fourth place, is it disputed that export has been stimulated? They have always told us, this "straitest sect" of the Free Traders, that we might improve the home market, but that we should do it at the expense of the export trade. Is it disputed that the export trade in light cars has improved very much since the imposition of these duties? The Financial Secretary told us this afternoon, and we were very much obliged to him for the information, that they have not impeded—did I understand him to say they have actually encouraged?—the import of these cars. The encouragement of imports, the raising of a modest revenue, the encouragement of export, the diffusion of employment and wages, the reduction of price to the consumer—where in the world is the disadvantage to be discovered? And, if there is no disadvantage to be discovered, are they proposing the abolition of these duties out of mere doctrinaire pedantry? I should like to know what other motive they can have.

Let me, in conclusion, say, in regard to this Budget, that to my mind it does represent, if I may be allowed quite respectfully and sincerely to say so, a sincere attempt to adhere to sound economic principles. I should be the very last person in the world to belittle or underrate any such attempt, but there is all the difference in the world between adherence to economic principles and persistence in financial pedantry. This Budget, as I believe, will go down to history as a most astonishing exhibition, and as an outstanding exaltation of financial pedantry. Whether you look at the gratuitous, meaningless abandonment of duties of proved benefit, whether you look at the disastrous refusal to meet the legitimate and reasonable wishes of our kinsmen overseas in regard to inter-Imperial trade, you cannot escape the conclusion that the main outlines of this Budget, so far as they have not been dictated by electoral and political considerations, are rooted in an obstinate refusal to look facts economic and political fairly in the face, and still more in an obstinate and pedantic persistence in outworn shibboleths and doctrinaire philosophies.

I wish I had the command of language and the eloquence of the hon. Member for York (Sir J. Marriott), in order that I might follow up his peroration with a complete denial of every argument that he has used. Most of his time was spent—in a very interesting speech, which we all enjoyed—in firing at a bird which was not in the air; in other words, in attacking land value taxes. I do not propose to follow him at length into that question, except to say that when he talks about the valuation having brought in nothing at all to the State, he has entirely omitted to point out that for Death Duties alone they have been of immense value, and when it is, as I hope in future it will be, found possible to increase the Death Duties still further, it will be even more valuable.

I am sure the hon. and gallant Member does not wish to misrepresent what I said. I said nothing about the land valuation or Death Duties. What I said was that the land taxes which were imposed under the Budget of 1909 brought in no return.

I do not want to misrepresent the hon. Member, but he certainly gave the impression of condemning the whole valuation root and branch. However, as I say, unfortunately, these taxes are not in the Budget, and that is one of the few criticisms that I have to make of this Budget. I am very sorry that the Chancellor of the Exchequer has been called out of the House, because I wished to say as pleasant things as I could about the Budget on its negative side. Before I come to my main argument, may I ask the Financial Secretary to the Treasury if he observed the very useful admission that I managed to extract from the hon. and gallant Member for Burton (Colonel Gretton), when I interrupted him? He twitted me with my thirst for information, but when I asked him whether the reduction in the Sugar Duty was not going to help the brewers in any way to produce the kind of beer enjoyed by the working men in this country, he most emphatically said it would not. Apparently the already swollen profits of the brewery companies—and they are swollen, as I shall show when the hon. and gallant Member for Burton raises the matter on later stages of the Budget—are going to be still further increased by the reduction of taxation on sugar, and that is a matter that I hope the Chancellor of the Exchequer and the Financial Secretary will watch very closely. I think this Budget is the greatest possible justification of the action which those who sit on this side of the House took in turning out the late Government, and it is a special justification of this party in doing what we have done to assist to keep the Labour Government in office until now.

I am glad the hon. and gallant Member for Bournemouth (Sir H. Croft) fully appreciates that. The fact that he, the hon. Member for York, the hon. and gallant Member for Burton, and the other leaders of the extreme right wing of the party opposite condemn this Budget is its greatest justification in my eyes, as, I suppose, the fact that I praise it is its greatest possible condemnation in their eyes. As a matter of fact, what do the people of this country think of the Budget? I have taken some steps to find out, and I find that, at any rate, there is one section of the community with which it is extremely popular, and that section is the housewives of the country. At the present moment the Chancellor of the Exchequer is the greatest lady killer in England, and he is the most popular man with all classes and all ages of the women of the country, and I congratulate him upon his conquest. [An HON. MEMBER: "What about the Navy?"] If the Government would only introduce the marriage allowance for naval officers, there would be more naval officers' wives to bless them still. It is perfectly true, as a previous speaker has pointed out, that this Budget will directly find employment by increasing the purchasing power of the working class.

I must just say one word in answer to the argument that has been used about the McKenna Duties. It is said they do no harm to anyone, that they are very good, and so forth. Apart from the question of justice and of keeping pledges given during the War to remove these duties, I think they do harm in this way, that for every car, or clock, or watch, or gramophone that they keep out of this country they produce direct unem- ployment in two directions, because these goods would be imported and paid for by other manufactured goods from this country; and, secondly, imported goods, when they can be bought here more cheaply, will provide work for our transport system and shipping and in that way will provide employment. Furthermore, I believe that, to take the case of motor cars, the price will come down now. When it comes down in the ordinary course of business by improvement in methods of manufacture, I am hoping to see the motor cars brought down in price to such an extent that the numbers in use will increase, and that will give work in garages for repairs of cars and all the multitudinous services connected with the use of great numbers of motor cars by masses of the people. With regard to the alleged increase in the export trade in motor cars, after all it is a new industry. The motor car has been introduced in the life of all of us in this House, and it was bound to increase in the ordinary course of events. Further, we had a very valuable trade in the highest class of cars for export long before these duties were put on.

I would make this suggestion, however, to the Chancellor of the Exchequer or the Financial Secretary. I admit that the motor-car trade, in particular, have a grievance, and I think they should really blame those who kept the McKenna Duties on for so long, namely, the Conservative party. They have been their worst enemies, and in order to meet that grievance I suggest—you could also reduce the tax on light cars at the same time—that, instead of charging £1 tax per horse-power in the case of British cars up to, say, 15 horse-power, you should charge a less tax, possibly 10s. That would be a direct incentive to people to buy British light cars. The Chancellor of the Duchy of Lancaster might possibly say that is Protection, but it might be tried for a certain time.

It would, I contend, remove this sense of grievance, and I throw out that suggestion, which I do not think has been made before in the Debate, nor, for that matter, have I seen it anywhere else. On the negative side of the Budget, as I say, I have nothing but praise—that is, the reduction of taxation, the throwing overboard of these useless and harmful McKenna Duties, and the other steps towards complete Free Trade which I hope are only the beginning of a complete march which will free trade entirely in this country. The minor criticisms which I would make are, first, that it has not been possible to return to penny postage, and, secondly, I want particularly to support the very able maiden speech of the hon. Member for Hemel Hempstead (Mr. Dunn) yesterday in favour of reducing the Stamp Duty on cheques, an appeal which was also made by another hon. Member this afternoon; and I agree with the hon. and learned Member for Crewe (Mr. Hemmerde) with regard to the Entertainments Duty. I think there ought to be further concessions to the entertainment world and to those who use those entertainments, and I hope that will yet be done. I regret very much that it has not been possible, apparently, in the time to have introduced a taxation of land values scheme. I do not know what the Chancellor of the Duchy of Lancaster was doing to allow this omission—it passes my comprehension!

On the question of major criticism I have two things to say. In the first place, I think that more money than this Budget provides will be wanted shortly. The reasons have been set forth very cogently by my right hon. Friend the Member for Rushholme. I must say that I do not see at present where the money is coming from to pay for the houses that ought to be built, and I hope will be built, in the next few years, and the beginning of which programme will be made this year. Furthermore, I do hope still that we will have a real constructional programme in this country for the relief of unemployment and the bringing of our transport and other systems up to date. In particular I would refer to the greater and more economical use of electricity, and the allied question of the better use of coal to produce electricity, and in this connection particularly the electrification of the main lines of the railway systems of the country. What is the Government's intention on these questions? We are at present deficient in transport and harbour accommodation for when the trade revival cames—and it must come if we as a nation are to exist. We must, of course, see to it, or we shall suffer, unless our transport and other matters of the sort have been improved and enlarged; and we are going to have serious congestion and great difficulty.

This is the time to make preparation for the coming revival, and so give employment to our workpeople in doing it. The Chancellor of the Duchy had his own idea as to one of the sources of revenue which might have been adopted, but there are other sources, and I particularly hope that the question of increasing the Death Duties has been thoroughly examined. I should be sorry to think that the Labour Government was going to perpetuate the system under which men are born millionaires. I think it is wrong, no one has a right to be born a millionaire, and if the Government move in this direction they shall get my support. It is not for me to suggest new methods of taxation which may exist, and they need not of necessity be harmful, although all taxation, I admit, is harmful. In theory an ideal State would not tax at all. In accordance with the old saying the King would then live on his own. I presume the Government propose, at least I hope so, to issue a constructional loan. That is about the only thing left. Unless some bold and statesmanlike policy is adopted and put into force I am afraid that the state of this country is simply going from bad to worse. What I suggest is that during this time—during the slump—we should embark on a great constructional scheme of coast reclamation, the improvement of our transport systems, and harbours and so on. Where is the money for these schemes to come from? The only thing left after this Budget is a constructional loan. After all, it is capital expenditure, and I do not think I am suggesting a bad plan or a bad policy at all.

There is another great lesson that this Budget should teach us, and that is that the finance of this country is closely bound up with our foreign policy. We come back to foreign policy after we have gone along every avenue of exploration. We endeavour to reduce the expenditure on our fighting services! We can only reduce that expenditure by being at peace with other countries, and that depends upon our foreign policy. In this matter of the reduction of expenditure, the party above the Gangway must have the support of the party below the Gangway. This Budget is obtaining a good deal of such support. I hope it is the beginning of much better relationships between the two parties. The speech of the Chancellor of the Exchequer has already improved those relationships. We have been fighting each other. I trust that will cease, and that the great schemes to which I have referred will be introduced with the support of both parties, and a better policy for the pacification of Europe will result. If not, hon. Members opposite will again come into power with loss and disaster to the country. I am glad to have been able to say a few words in reply to this most friendly gesture on the part of the Labour Government. I can assure hon. Members that the bulk of my party have been, and are still, in these matters, only too willing to meet and work with hon. Members above the Gangway for the benefit of the great mass of the people of this country.

It might be very alluring to follow up the last few words of the hon. and gallant Gentleman who has just concluded. I shall not do so. There are, however, one or two points to which I wish to refer before I turn my attention to and put a few questions to the Financial Secretary to the Treasury. It is interesting to note the relationship between the two parties who have been brought together by the Budget, and reunited! I remember, as many of my hon. Friends doubtless do, the speeches we read during the Recess which were full of polite amenities from leading members of the Liberal party to the Prime Minister, and back again. But now the happy sequel to these little quarrels reminds one of a little homely poem which runs this way:

"And blessings on the falling out,

That all the more endears

When we fall out with those we love

And kiss again with tears."

It is pathetic to see it, and I am only sorry that we on this side of the Committee cannot pretend to all the satisfaction in the matter that is evidenced by this new and conciliatory policy.

May I remind the hon. Gentleman that I only enunciated a policy that I have-been working on for some years.

I congratulate the hon. and gallant Gentleman on having converted his party. There are only a few points which I should like to put to the Financial Secretary to the Treasury. I will not deal with the question of the reduction of Debt. On that we agree. I will not deal with the necessity for keeping up our credit. Good. That, too, is a matter with which we are in agreement. I venture, however, to give one or two instances which may be interesting to the House, showing how our credit stands and the desirability and necessity of keeping it up. I have seen a French company dealing with Spanish material and selling it in Belgium, the price for which was arranged in pounds sterling. I have known of Norwegian material being sold to Germany, and again the price being arranged in pounds, shillings and pence. That is a testimony to the recovery of the pound sterling in the markets of the world. I pass also by the reduction of taxes on sugar and tea. I want to put one or two points to the Financial Secretary, one which is far from novel and yet one which has rot been mentioned in discussions on this Budget one on which I trust his view will concur with, mine.

Hon. Members on the benches opposite, and a few minutes ago the hon. Member for Stirling (Mr. Johnston), laid great stress on the need for increasing the purchasing power of the community at large. Hon. Members also laid stress on the need for improving the standard of living. There is only one way in which the standard of living can be really improved in this country to any great extent, and that is if the productivity of the country is largely increased. That is the only way by which any great and substantial improvement is possible. Anyone who realises the situation knows—perhaps I am not in agreement with the Chancellor of the Duchy of Lancaster in this matter—knows that the latent productive power of this country could be increased under our present system by probably another 30 per cent. I suggest one step by which the Chancellor of the Exhequer can help in this matter—and it is one which from a practical point of view cannot be emphasised too much—and that is in a reduction of the burden on industry in the matter of taxation on machinery. I quite agree there is an effort needed on the part of those who work in factories, a full honest effort. But, on the other hand, improvement also means that one must have plant and management made as efficient as possible. A great deal has been said at times to the effect that our manufacturers should follow the example of the Germans and bring ourselves up to date. Personally, as a manufacturer, I have studied methods in a particular case both in America and on the Continent. I have endeavoured to see what the latest plant was. But may I point out that so long as you have got the present taxation of machinery in this country it is absolutely impossible that the plant in this country can be brought up to date on anything like the scale of the United States. So I would suggest to the right hon. Gentleman that he might initiate an inquiry into the matter and really seriously consider whether the Government cannot give a measure of relief in this respect. The present effect of the burden of Income Tax, with inadequate allowances for replacements, acts as a deterrent to efficiency, reduces production in this country and keeps the standard of living below what it ought to be.

I pass on to emphasise the point which has already been made by the right hon. Gentleman the Member for Colchester (Sir L. Worthington-Evans). A cardinal feature in the sound finance of this country has always been considered to be to estimate, as far as possible, the liabilities for the year as a whole and to bring them into the Budget statement. Here in this Budget we have, so to speak, a disclosed Budget in the form of the figures presented by the Chancellor of the Exchequer, and we have got an undisclosed Budget of a very serious amount which may assume alarming proportions. What does it consist of? It consists of three main items which have already been mentioned. I do not want to elaborate the amounts involved. There is the question of the abolition of the thrift disqualification. The Government is pledged to it. The Chancellor of the Exchequer only awaits Parliamentary time to bring it in. Why do we not have a statement on the amount of money this is going to cost for a full year, and in this year? We have the question of unemployment. It is going to cost a large sum. We have had it laid down specifically by the Labour party that they were the one people who had an absolute remedy for unemployment, and that no other party has. That was laid down by them six months ago. They have got it! Why have we not got some estimate of it, and of the expense to which the country is going to be put during this year? Lastly, there is the matter of housing. No doubt it takes time to prepare housing schemes. But two-and-a-half months ago we were told by the Prime Minister that their scheme was going to be produced very shortly. The Government have already been in power for over three months.

8.0 P.M.

I put this to the Financial Secretary. We are entitled to know in this Committee the amount of expenditure to which the country will be committed by the schemes which have been accepted, and for which the Government have taken the responsibility during the present year, and the amount of money which is likely to be available to meet it. We are promised a balance of about £4,000,000 and certain hypothetical savings on the estimates of expenditure. That is not in accordance with good financial policy, as pursued in this country in past years. When the right hon. Gentleman the Member for Paisley (Mr. Asquith) introduced his Budget—I am speaking from memory, but I think I am correct—which contained the institution of old age pensions, the money for that purpose was brought into the Budget for the year. So it ought to be with all the expenditure of this kind. The country is not treated rightly, nor is this Committee treated fairly, if we do not have the amounts for these great items of expenditure clearly stated in the Budget. If the Chancellor of the Exchequer knows them, he ought to state them; and if he does not know them, he ought to have known them, for, by his own admission, and by the admissions of his party, they should have been in his hands by now. On a previous occasion when the actual amount was not ready, a large sum was taken to provide for the possible Supplementary Estimate which would be involved.

With regard to the preferential duties, and these much debated McKenna Duties, the Chancellor of the Exchequer told us in his speech that he greatly regretted any disappointment which may be caused to the Dominions and Colonies, but for that disappointment not this but the late Government must bear the responsibility. What earthly argument has the Chancellor of the Exchequer to urge in defence of that statement? I wonder if he remembers the Resolutions of the Balfour of Burleigh Committee, consisting of members of all parties, of all shades of opinion, financial, fiscal and others. They made a number of suggestions on financial policy and various reservations were made by individual members in regard to different parts of these financial suggestions. There was one in regard to which there was common acceptance by everybody, and no reservation was made. It was that

If he calls it the "settled opinion" of the country, let me bring home to him two instances of how that settled opinion was won. I give my own experience. I wish the hon. Member for Rusholme (Mr. Masterman) were here, after the way he talked about the country having given its opinion on this question at the last Election. I wonder whether he was responsible for some of the statements issued in print by the Liberal party. I picked up two leaflets. One of them was addressed to the people of the towns, and it said: cellor of the Exchequer has often, and perfectly sincerely, stated he was in favour of education. I am all with him, as the Financial Secretary to the Treasury knows. I wish he could extend his education to some of the people who speak on his own side, and for whom he takes responsibility in the electorate. I take the type of person who goes round—and, again, this is an actual instance—to canvass poor women. I am not giving sentimental instances. I hate them. This person hands out loaves to women and says: "Look here. This is going to cost you 3d. more if a Conservative Government come in." At any rate, we have got the Prime Minister's word that if we give a pledge you can trust us to keep it, and we gave a pledge as to the non-taxation of food. Therefore, if there were truth in the country being against preferential duties, that was the way the decision was reached. It is on the strength of this that the Chancellor of the Exchequer, while he says he is going to put the proposals before the House, throws all his weight against their being carried. What is more, when he says he is going to allow the preferences that already exist to remain, he does it in a way that minimises their value to the utmost extent. So far as he lets them remain at all, he makes a breach in his own fiscal rectitude, and he makes them as little useful as they can be to the Dominions who wish to be benefited by them. What do the Dominions wish from any preference? They are young countries and they want to develop themselves. They want to know that if they go in for some particular industry, and if they have the preference here, they may look for a market in this country for some particular kind of produce, and they develop themselves to that extent accordingly. Then the Chancellor of the Exchequer states: to any Dominion that they cannot expect to derive any permanent advantage from any of these existing duties whatever.

Will the hon. Gentleman say what is the camel which we are swallowing?

The whole of the laissez faire system to which Mr. John Bright and Mr. Gladstone, whom you are jettisoning this afternoon, were wedded in principle.

With regard to the McKenna Duties, the right hon. Member for Rusholme spoke of them as though there were a pledge to take them off. They were put on a temporary basis, and they were not meant as part of any permanent system. They could have been treated now on their merits, one way or another. That is all we have asked should be done. The right hon. Member for Paisley spoke of them in a characteristic way. He said he thought

I know, however, quite well that Members opposite below the Gangway will say that, after all, they have got to look to theory in these matters. Well, take the question of the actual theory of the McKenna Duties. The Financial Secretary and I are agreed in not wishing to dogmatize on the incidence of taxation, but both he and I recognise equally well that we have got to bring our theories of economics up to date. It is not that the old main principles of economics are necessarily untrue. It is that they have to be elaborated and the analysis put more closely, if they are to be applicable to the facts of the day. The original foundations of the theory of ballistics are the same to-day as they were 50 years ago, but if you apply the teachings of the ordinarily-received text books of 50 years ago to the gunnery of today, you would never hit a distant ship at which you were aiming. Precisely the same applies with regard to economic questions as regards the McKenna Duties. I know it will be said that this country depends on international trade. I have reason to know it as well as anyone in this House, and I know as well as anyone in this House that we do not want to raise the cost of living or the cost of production. The question is, at what point would these McKenna Duties raise the cost of living or the cost of production? To my mind the whole of the economic theory on which hon. Gentlemen opposite below the Gangway base their argument is out of date, because it has not taken account of modern development. I include the Chancellor of the Duchy of Lancaster.

When the right hon. Member for Paisley spoke some time ago in this House he said he would regard it as duction. The proportion of taxes in this country, the standing charges, is so much higher now, in proportion to the whole of the production of the country than it was before the War, that it affects the whole cost of production in a very appreciable way. If you have a further industry started in this country, where otherwise you might have unemployment or emigration, it means that you have taxes paid and contributions to the revenue by that industry by the men employed in it, and indirectly by the extra carriage on the railways, by the people who finance trade and by shopkeepers who sell the goods1, that you would not otherwise have. The result is a sum can be obtained for the reduction of taxation generally. If you have a tariff that is monstrously high, it is clear that the amount which you gain in taxation may be less than the amount which you lose if prices are put up. It can be proved to demonstration that you can so arrange a tariff that even if prices should go up you will get an advantage from the new contribution to taxation much greater than any variation in the cost of living or the cost of production owing to a possible increase of prices. On these grounds I do not think there is any justification whatever for taking off the McKenna Duties, and I think that is a most lamentable mistake.

But even on the Chancellor of the Exchequer's own theory, he has chosen the worst conceivable moment to abolish these duties. Even if there was any justification for abolishing them it should have been done in a way which would cause the least possible dislocation of trade and the least possible loss of employment.

It is said that this policy will produce greater employment as soon as these people can be absorbed in other industries, and that is the whole justification for the abolition of these duties from the point of view of the hon. Gentleman's own theory. Nevertheless, the Government have chosen the very worst conceivable moment to do it, at a time when unemployment is still very acute. The time chosen for this policy is one when the country is going to be committed to large expenditure on unemployment in other directions, and that is the precise moment when the Chancellor of the Exchequer takes a course which will cause dislocation in the motor industry, with the least possible chance of those who are displaced being absorbed in other industries.

I have heard hon. Members opposite declaring that hon. Members on this side of the House do not appreciate the remission of taxation to the amount of one shilling per family in this country. We do appreciate it, and we are quite aware what a relief it is to them. But what is 1s. against the whole weekly wage? I am genuinely convinced that many people are going to be thrown out of employment in the motor industry through the abolition of these taxes, and from that point of view this is a most retrograde and mischievous step to take at this particular moment. No doubt this policy appeals to the Liberal party below the Gangway, but I would like to ask Members of the Labour party if they all approve of this policy. The Chancellor of the Exchequer is an advanced Free Trader, but I would like to know if he represents the opinion of the whole of the Labour party in regard to this duty. Do they really agree with him in regard to this principle? [HON MEMBERS: Yes."] That is a strange contradiction to the appearance of the benches opposite when the right hon. Gentleman announced the abolition of these duties. I recollect there were many parts of the right hon. Gentleman's speech which Members of the Labour party cheered lustily. The Members of the Liberal party cheered the announcement of the abolition of the McKenna Duties, but when I looked at the Labour Benches I saw an expression in clear contradiction of the interruption I have just heard from hon. Members opposite. I ask Members of the Labour party whether they genuinely believe in the abolition of these duties, because if they do not we shall be disappointed in yet another of the things about which they have spoken so freely. There is also the question of proportional representation, and I would like to ask if on that question they are going to act in accordance with their principles. What we are really anxious to see is whether they are going to keep a clean sheet,—in always acting up to their principles or unlike the older parties—so that they can come to us with the same self-righteousness of the Pharisee when the days of the Budget are over and proportional representation is being dealt with.

I have listened with interest to the criticisms made by hon. Members of the proposals in this Budget. It would be impossible for any Government to present a perfect Budget, and we shall have to put up with what we have got. From what I have heard of business men in the City of London, and from what one reads today, it seems that the business men of this City and the country generally are approving of the Labour Budget. Not only this, but more particularly are the working men and the working women approving of it. Personally, I should have liked the Chancellor of the Exchequer to have been present in order that I might have congratulated him upon the presentation of his first Budget, which, to my mind, is a very good one indeed, although, as everyone will admit, it is far from being perfect. I remember as one of the old pioneers of the Labour movement in this country some 20 years ago, foolishly or otherwise, speaking of the present Chancellor being the first Labour Chancellor of the Exchequer. I would like to confess that on Tuesday last I felt a very proud man indeed to see the right hon. Gentleman in that position.

Something has been said this afternoon about the extent to which the working classes of this country will benefit by the reduction of the taxation on tea, sugar, jam, sweets and other articles, but mainly in regard to sugar. Someone has put it at 1s. per week, but personally I think that that is too low altogether. I think it may be put more nearly at 2s. per week, taking the average of households all over the country. That means more purchasing power for every householder in this country, it means more production of boots and clothes and food, or, in other words, it means finding more work for our own industries. That, in my opinion, will be a great boon to the country as a whole. We have heard about direct and indirect taxation. I think it was the hon. Member for York (Sir J. Marriott) who gave us the figures of direct and indirect taxation at certain periods. It is perfectly true that indirect taxation in the past has had to bear the heaviest burden, and the working classes are the people who have had to bear that burden. I remember a few years ago going on a deputation to the Treasury Office in Whitehall to see the right hon. Gentleman the Member for West Birmingham (Mr. A. Chamberlain), who was then Chancellor of the Exchequer. We went to ask him whether he could raise the limit before a working man or woman had to pay Income Tax, and he told us that it was an impossibility. We considered that the limit was too low at that time for the working man, and we asked that it should be raised to £250. The right hon. Gentleman said that it was impossible to do it. He said that money had to be found and the working classes would have to pay, and he pointed out to us what the rich classes had to pay. He pointed out that a man who had an income of £10,000 a year had to pay nearly £3,000 a year in Income Tax and Super-tax.

The Chancellor of the Exchequer of that time told us it was £3,000, and he went on to speak of the man with an income of £100,000, and pointed out what he had to pay. I and my colleagues who were on that deputation came to this conclusion, that it is not what a person has to pay in taxation that counts, but it is what he has left to live upon after he has paid his taxation that counts; and if a man with £10,000 a year, which is a very small sum to some people, had £3,000 a year to pay in Income Tax and Super-tax, he still had £7,000 a year to live upon, which was far different from the ordinary working man. We want to reduce indirect taxation much more in the future than it has been in the past. A great statesman in this House many years ago, who was wanting to raise taxation, said that he would raise it by direct taxes. Another great statesman said to him, "Oh, no; that is not the way to get money to run the country. You want to get it indirectly. You want to put it on every bit of food that the ordinary people eat, and they will not know that they are paying taxes." That has been going on for a long time, and therefore I say that the proposals of the Chancellor of the Exchequer will benefit millions of people in this country.

As the right hon. Gentleman the Member for Rusholme (Mr. Masterman) said, 1s. or 2s. a week is a great boon to ordinary people. May I, without any egotism, give a person experience? I remember that, when I was getting 25s. a week at the colliery where I worked, I was sent for and told that I was going to receive an advance of a few shillings a week. I went home that night—I think I had four or five children at that time and a wife to keep on 25s. a week—I went home practically thinking I was a millionaire because my wage was being advanced by a few shillings a week. Many of these poor people will think the same if they can save 2s. a week in duties that they have been paying, because they will have a greater purchasing power. Therefore, I say that the Government deserves all the thanks. The right hon. Gentleman the Member for West Birmingham, in a speech of his that I read the other day, was praising the Government for the Budget. Since, then I suppose they have got together and have begun to pick out some of the faults in it.

Much more could have been done had we had the surplus with which to do it. We are blamed because we have not done this, that, and the other, but give us a little time, and I feel sure we shall do much more even than is proposed in this Budget in benefiting the people of this country. It is not only the poor people that are going to benefit by reduced taxation on sugar, tea and other commodities. Rich people have to buy these commodities as well, and they are getting a benefit. People will benefit also from the abolition of the Corporation Profits Tax. Co-operative societies and middle-class and professional men will benefit very much by that, and also by the abolition of the Inhabited House Duty. There is one matter to which I should like to refer, and that is the Entertainments Duty. I came here at a by-election in 1922, and was here for a few months. I voted for the abolition of that tax when in Opposition, and I am still in favour of its abolition, because, having been a Member of the House of Commons during the whole of the War period I was one—the Chancellor of the Exchequer said the other day that he believed he was the only one, but I also was one—who opposed the imposition of that Entertainments Duty during the War period. I pointed out at that time that we ought not to impose a tax on these poor people which would prevent them from going to cinema theatres or music halls, because they were already suffering enough by losing sons and fathers, and we ought at least to give them a little relaxation. I am still in favour of the abolition of this tax, and, although I know it is impossible to find the money to abolish it altogether, I regret very much that it cannot be abolished. Up to 6d. it is going to be abolished, but anyone who is able to pay 1s. 6d. or 2s. is going to get no benefit. I only wish the Chancellor of the Exchequer could have carried out this abolition at least up to 2s. for a seat in a cinematograph show or music hall.

Another matter to which I want to refer is the question of the disqualification Clauses in connection with Old Age Pensions. We have been talking about that for a very long time. It ought never to have been imposed originally. Living, as I do, in my own constituency, which is a working class constituency, I get many complaints from people who are only receiving 3s. and 4s. a week in pension at 70 years of age, because they have been good enough to save a little money during, their lifetime. We ask the people of the country to save whenever they can, and after they have done so they are punished for saving when they attain the age of 70. A man came to me the other week and said, "Cannot they give a person more than 2s. a week old age pension?" I said, "Yes, if their income is not above a certain amount"; and he said, "My mother-in-law, who is now turned 70, is only getting 2s. a week pension. They have saved all their lives." I say that Clauses of that character ought to be abolished, and the sooner it is done the better. I had a case the other week, which I have sent on to the Manchester Pensions Committee only to-day. It is the case of a man 73 years of age, who, because his wife was earning £1 a week and he was not working at all, was asked to leave his home and go into lodgings if he wanted to retain his 10s. a week as an old age pensioner. Think of it! He had been living with his wife up to 70 years of age, and then, because she was more active than he, or could get work and earn £1 a week, he was told that, if he was to retain his 10s. a week, he must leave her and go into lodgings. This Clause wants abolishing as soon as possible, and I hope the Chancellor of the Exchequer will attend to this matter as soon as possible.

Another matter is pensions for widows. We have talked about that. We have talked about many things, but unfortunately there has been little opportunity to do much yet. I know everyone is crying out for some relief in taxation or for some alteration, but I hope if the Labour Government is in power another 12 months—I see no reason why they should not be; I believe they are the best Government that has been in existence for many years past—they will do something in the direction of widows' pensions. You have a woman whose husband has passed away left with three or four little children. Her only alternative is to go to the Poor Law guardians. Those of us who know and have had some experience of the guardians know how these poor people fare. Therefore I trust the Chancellor of the Exchequer will consider this matter very carefuly indeed. I heartily congratulate him upon the presentment of his Budget, because I have been predicting this for the past 20 odd years.

I am sure I shall have the consideration of the Committee, as a young Member, in dealing very plainly with a few outstanding facts connected with the Budget. It seems to me that in this one respect, at any rate, the Government have shown that they are not only in office but are qualified for office. There is quite a distinction between being appointed to and being qualified for any particular post. I say, without any question at all, they have in this respect, so far as I understand it, absolutely shown their qualification. I support the Budget, first of all, because it gives what I consider to be four very important things for us at present. It gives, first and foremost, some real help to the worker. It does not necessarily increase wages, but it increases the real wages of the worker, which is the thing that really matters. Secondly, it increases the advantages of the ordinary Income Tax payer, to some extent at any rate, by reducing the taxation he has to pay, at all events, in the immediate future. As the result of those two things it will inevitably mean that there will be some return of capital into industry, which is the most important thing to-day. Lastly—I shall not deal with this point because it has been adequately dealt with already—it does not in any way affect adversely the credit of the country, but, possibly, to some extent has acted in the opposite direction.

Most of us will agree that there is today, even more than in pre-War days, an inequitable distribution of wealth. You can only get an equitable distribution of wealth in one of three ways. You can get it by the method which some of our friends above the Gangway would adopt. We and hon. Members opposite would not, of course, agree with that. If we do agree that wealth should be more equitably distributed, we do not agree with that method. But there are only two other ways. Because this Budget does those two things, I am strongly in favour of it. It means an increase of wages, which is another way of more equitably distributing wealth, and also by means of taxation on those best able to bear it, it more equitably distributes the wealth of the country. Further than that—I know there will be some even on these benches who will criticise me for making this statement—I am very strongly in favour of the Budget because this is the first time a Chancellor of the Exchequer since the War has taken a risk. He has not left a wide margin. We have had too many Chancellors in the last year or two who have left too wide a margin, and we are getting back to the old practice of budgeting as carefully as possible. Some of us who are on the Public Accounts Committee know quite well that in practically all the accounts that come before us there is too wide a margin. We regularly get accounts in which there is not five, six, or 10 per cent., but as much as 40 per cent. over budgeting, and I am delighted to think the Chancellor has promised to look into this. Therefore, from that point of view I am not particularly perturbed that he has not left a wide margin, because I am satisfied that he will find considerable sums there.

I have listened carefully to the Debate, and I am surprised that so far no one has taken any steps to show the present position of capital. I say this because I believe this Budget in a very small way—I should have liked it more so—will tend to get some of the capital back into industry that we absolutely need. If you go back to the year 1913—I am giving Sir Robert Giffen's figures—we had an income of £2,400,000,000. We were told the nation spent, to live on, £1,800,000,000, and the National Exchequer took £200,000,000. We saved the remaining £400,000,000. We did that for years before the War with the result that when the War broke out we had a capital of something over £15,000,000,000. What is the position today? The very highest peak that our national income has ever reached was £4,000,000,000 in 1920. This year we are told by the Inland Revenue authorities that the national income will not reach more than £3,500,000,000. Am I safe in assuming, if it cost us £1,800,000,000 to live in 1913, that it cost us 50 per cent. more to live last year. It is probably a good deal more. If so, it cost us last year £2,700,000,000; the National Exchequer took £800,000,000, and you have absolutely no margin left for saving at all. Further, in spite of the fact that I do not believe I have given what it actually cost to live on, your rates alone took £100,000,000 last year more than 1913. Not only did you not save anything last year, but I make the very definite statement that we actually went to the bad on revenue account, and had to draw on capital.

Let me develop that a little more because it is a very important point. If you take the trouble to go back for the last 11 years in our national accounts you find—and no man appreciates it more than I do; it is an admirable record— that we actually raised £9,250,000,000. But we have actually spent £16,500,000,000, and of course the difference—£7,250,000,000 to £7,500,000,000—is the War debt. I say, with all respect, that the hon. Member who moved the Motion respecting the Capital Levy some weeks ago seemed to be making the same mistake that other people make of assuming that the whole of that increase is wealth. It is not wealth at all. The wealth of this country consists in the buildings, the plant and the machinery, etc., of the country. It is not represented by the amount of paper you may have in your safe. Today, we are actually about £3,000,000,000 or thereabouts poorer than we were 11 years ago. I think I am safe in assuming that our average national income for the past 11 years is about £3,000,000,000. Our average expenditure has been about £800,000,000.

How is that accounted for? Quite simply. There is no man who is con- nected with business today who will contradict me when I say that our ships, our buildings, our plant, our machinery and our railways are in nothing like as good a condition to-day as they were in pre-War years. We have not replenished. I know something of the cotton industry. Regularly in pre-War years we increased our spindleage by 3 per cent. per annum. Not only have we not put down new spindles but we have actually gone to the bad, and there are fewer spindles in Lancashire to-day than in pre-War years. I have no hesitation in saying that we are from £2,500,000,000 to £3,000,000,000 poorer than we were in pre-War years. We are suffering in Lancashire from lack of capital, along with other things. There are 1,200,000 men, women and young people out of work. How is that accounted for? The fact is that that is just approximately the total of the working population in excess of what it was 10 years ago. We have an increased population of 1,800,000, and 1,200,000 are of working age. If we had had the saving of capital that we had in pre-War years, the probability is that we should not have had anything like 1,000,000 people out of work today. Not only have we had a normal increase in the population, but we have had what has been a really serious matter for us, namely, restrictions on emigration into America. Whereas in pre-War years we used to send 300,000 to 400,000 people away every year, we are only sending 150,000 people from this country yearly. America used to take 130,000 of our people in one year, and last year she took only 10,000. We can only provide work for these people if we have the capital and the work necessary. Therefore, because this Budget by reducing taxation, though only in a small degree, will enable money to return to industry as capital, I support it very strongly.

The hon. Member for Farnham (Mr. A. M. Samuel) referred yesterday to the Inter-Allied debt question. He spoke about France owing us £623,000,000. There are two points I want to make in reference to that. Do not let us forget, in all fairness and justice, that all the money we have borrowed either by ourselves from America, or the money that France borrowed from us or that Russia borrowed from us, was borrowed at times of inflation, and it is going to cost us twice as much to pay back these debts. I am firmly convinced that it was not good business, but bad business, for us to settle our debt with America before we tried to settle the whole of the Inter-Allied debt question. I know that the reply to that is that immediately, or soon after, we had settled our debt with America, the exchange went in our favour. I am confident that it would have been infinitely better had we waited to deal with the whole of the Inter-Allied debt question as a whole. It may be said that we could do nothing else but settle with America. It does seem to me that America, with more than two and a half times as much wealth, and with five times as much gold in her coffers as we have, might have had the magnanimity to wait. I should like the Chancellor of the Exchequer to tell us whether in that debt settlement any cognisance was taken of the fact that certain American States owe us, or did owe us, £60,000,000 plus interest, which has never been dealt with.

The hon. Member for Farnham mentioned the fact that our external profits last year were £97,000,000, and he assumed, I think incorrectly, that was the profit, as he said, of John Bull & Son. If you have two departments in a business, and one makes a profit and the other a loss, you have to set the profit off against the loss, and I am confident that if we made a profit of £97,000,000 during the last year, we lost it at home, and that really we were no better off but slightly worse off at the end of the year than at the beginning. Much attention has been paid to the question of indirect taxation. I believe very strongly that all indirect taxation comes upon a man in inverse proportion to his income. That is absolutely wrong. May I give a few figures which are very interesting and very suggestive? I have separated into three lots of figures, first, the items spent on the Army, the Navy, the Air Force, the National Debt and the upkeep of the Revenue Department. The next section is what I call money spent upon social reform, education, old age pensions, labour, health and ordinary pensions, and the last section is money which I cannot very well allocate, such as local taxation and items of other expenditure. If we consider these facts, we are not doing anything very terrible to-day in reducing indirect taxation a little. In 1914 it cost us for our National Debt, the Army, Navy and the Revenue Departments, 68 per cent. of our total national income. Last year these items cost us 56 per cent. of our total national income. The direct social wants in 1914 cost us 18 per cent. and last year, in spite of what we are spending on education, old age pensions and the rest, only 20 per cent. That is to say, the proportion of our national income that we are spending today on real social reform is only 2 per cent. more than it was 10 years ago. If I bring in the item of other expenditure—I must protect myself from any possible criticism on this item—I find, quite honestly, that in 1914 the figure was 32 per cent.—the difference between 68 and 32, making the full 100 per cent.—and this year it is 44 per cent. So plainly, even if it be 44 per cent. this year spent on these things, I would very strongly support it.

A very strong appeal was made yesterday from these benches in reference to the three years' average, so far as income is concerned. As one who knows a little bit about it, I would appeal that we should have the single year as soon as we possibly can. An hon. Member on the benches opposite made a particular point about men going out of business in the last year of good trade, but you cannot deal with the last year of good trade if you do as you are doing today and assess on three years. I wish to make a special appeal to the Chancellor of the Exchequer to reconsider his decision in reference to postal rates. During the last 11 years the Post Office has made a profit of £57,000,000, while the telephones have lost £5,000,000, and the telegraphs have lost £17,000,000. On the Public Accounts Committee we have found that in spite of the fact that last year there was a considerably reduced turnover, there was an increase of capital required to run the various postal services. Some of us chink that there may be some possible way there of bringing back the penny postage. In 1923 the Post Office made a profit of £5,200,000, telephones a profit of £1,000,000, and there was a loss on telegraphs of £1,700,000. I have seen a circular in which the difference between those figures is shown as the profit on the postal services last year. The person who drew up that circular omitted an item which is estimated at about £1,250,000 paid last year in connection with a law case, in respect of the payment of bonus on wages that had been due over a period of years. If you add the profit on the Post Office to the debit, which was not an item in respect of last year alone, but in respect of several years, the Chancellor will find that this just gives the £5,700,000 which would cover the cost of the penny postage.

9.0 P.M.

I very strongly support this Budget because, as has been pointed out, in the first instance it does mean an increase, not in nominal wages but in the real wages of the working people of this country. I find that in 1913, according to Professor Bowley, the workers of this country received just above £1,000,000,000 out of the figure which I mentioned in the early part of my speech. That represented 45 per cent. I find, further, that those people whose incomes were less than £160 per year, in addition to those workers, who were not within the Income Tax limit of those days, received £300,000,000 or another 15 per cent. That is in pre-War years 8,000,000 of our families were living on something less than the Income Tax level in those days of £160 per annum. On the other hand, there were 1,100,000 families having an average income of under £800 per annum. That was wrong. We proved conclusively during the War that we had not in pre-War years reached the limit of taxation. Now take the position today. It is difficult to get accurate figures, and I have had to make some assumptions, but I do not think that I am far wrong, and I have questioned one or two friends to see if their figures correspond with mine. If I take the figure which I have mentioned, £3,500,000,000 as the aggregate income for 1923 and assume that wages were double what they were pre-War the workers today are getting something less than £2,000,000,000. These are all people who in these days are under Income Tax level, I find that some five-sixths of those are working people who are drawing £1,700,000,000 which is less than half the income of the whole country to-day. Less than half the income is going to something like 8,000,000 families, and, therefore, when I am asked whether I will support some of the indirect tax coming down, I say that of course I will and more so than ever at the present time.

There is no one on the Front Bench for whom I have more respect than the Financial Secretary to the Treasury (Mr. Graham), but he has given us some figures today with which I do not agree, and I would like him, if he will, to check the figures which I am going to put before the Committee. I find that in last year's accounts Customs receipts, £120,000,000, represent 14 per cent. of our total national income, while Excise, £150,000,000, represent 23 per cent., or in all a total of 37 per cent. If I have heard the speech of the Chancellor of the Exchequer correctly I find that Customs will be down by £18,000,000 to £102,000,000. We have got to take this year £794,000,000 as the total income and this gives the receipts from Customs as 13 per cent. Similarly if we take Excise at £136,000,000, we find that it makes 17 per cent. of the £794,000,000, making the total percentage of income represented by Customs and Excise 30 per cent. this year, as against 30 per cent. last year.

We have heard from an hon. and gallant Gentleman who spoke from below the Gangway this afternoon criticisms because taxation on some particular commodities had not been reduced. I find that of these taxes last year 70 per cent. represented taxes on intoxicating liquors and tobacco, and 30 per cent. taxes on foodstuffs and on some of the articles coming under the McKenna Duties. Out of £280,000,000 last year £207,000,000 came from intoxicating liquors and things associated with it, including tobacco, while something like £73,000,000 came from taxation on foodstuffs. The position today, according to the statement of the Chancellor of the Exchequer, is that there will be a saving on foodstuffs of about £25,000,000. If that is so I find that those taxes will fall this year by 35 per cent., but that then 20 per cent. or one-fifth of the whole of the indirect taxes will still be taxes upon the foodstuffs of the people. There has been a great deal of criticism on the point as to whether the Chancellor will have sufficient money to do what he wants to do during the coming year. I hope he will. I hope he will do it by finding money from the taxation of land values. There are some of us who believe that a tax of 4d. would bring in £50,000,000, and that a tax of 8d. would bring in £100,000,000, and that by that means we would be able to do all that some of us want to do in connection with old age pensions, widows' pensions and so forth.

I have listened with great appreciation to the last speech. There was so much in it, that I would prefer to read it in the OFFICIAL REPORT to-morrow before attempting to make any comment upon it. We have also had a speech in which an hon. Member pleaded for the old age pensioner and the widowed mother. I would like to join with him in that appeal. My real object in rising was to tender a compliment and some congratulations to the Chancellor of the Exchequer. The compliment is upon the extremely lucid manner in which he presented his Budget statement. My congratulation to him is upon his having been borne under a luckier star than most Chancellors of the Exchequer. I do not propose to refer to the series of happy accidents—happy for the Chancellor of the Exchequer—that put him somewhat unexpectedly in his present position, but I wish to congratulate him upon his extremely good fortune. I have heard a good many Budget speeches, but I cannot recall one in which a Chancellor of the Exchequer was so happily situated that he had to admit that he was deeply indebted to his predecessors in office for his ability to produce a popular Budget. The Chancellor of the Exchequer was perfectly frank about it. He said: predecessors in the last four years can best be measured by comparison. Although we—I do not mean any particular party—have, since 1919, reduced the Debt burden by £650,000,000, I would remind the Committee that after the Napoleonic Wars it took our forefathers 50 years to reduce the Debt by £50,000,000. I want to make this suggestion—that this great achievement, that the repayment of this enormous sum during the last four years, has been possible only by a considerable conscription of wealth. When some of the friends of the Chancellor of the Exchequer who sit behind him, and some who occasionally sit beside him, state in the country that wealth has not been conscripted, I hope that the Chancellor will firmly correct them by asking them to read his speech in introducing the Budget.

There is another point to which I would draw attention. The Chancellor of the Exchequer estimates, I have no doubt correctly, that Income Tax and Super-tax for the year will amount to £326,000,000. He estimates the interest on the National Debt at £305,000,000. It is, perhaps, worth noting that the whole of the interest on the National Debt can be paid out of the produce of Income Tax and Super-tax, and that £21,000,000 is left over for other purposes. I think the Chancellor of the Exchequer had another piece of luck in coming into office at a time when trade was improving and when employment was increasing. That, naturally, gave him confidence in estimating for a surplus, and, of course, when there is a surplus it is easy to find methods of disposing of it. As regards sugar, I think the Chancellor has been very fortunate. Last year many great financial and commercial authorities who understood the question thoroughly were of opinion that if at that time a reduction had been made in the Sugar Duty, the reduction would not have gone into the pockets of the consumers in this country, but would have gone into the pockets of the speculators in foreign countries. The latest forecast is that the world's production of sugar will so increase that the proposed reduction of the Sugar Duty can now be made with some reasonable anticipation that it will go into the pockets of our own people and not into the pockets of the speculators. Therefore, I congratulate the Chancellor of the Exchequer on having that piece of luck, and on being able to feel that he can reduce the Sugar Duty with great benefit to the people. I am afraid I have come to the end of my compliments and congratulations. Now I wish to express some regrets. I regret, particularly, that I can find nothing in the Budget—

I think it is a bad plan for my hon. Friend to be too previous. I was going to say that I can find nothing in the Budget calculated to reduce unemployment. That, to my mind, is its weak spot. There is only one proposal in the Budget which proposes to increase employment. [HON. MEMBERS: "Unemployment!"] If hon. Members will allow me, I know what I am saying. There is one class of person to whom it is suggested in the Chancellor's speech more employment might be given. I refer to the valuers in the Land Valuation Department. Personally, I do not want to see that sort of employment increased, because, if my memory is correct, the last time those gentlemen were actively employed, it cost us, I think, 3½ millions to produce three-quarters of a million of taxation. I cannot find in the Budget any other attempt to reduce unemployment, but I do find in it two black spots, both of which I think will increase unemployment in this country. The first of these is the proposal—the short-sighted proposal, as I think it—in connection with the Empire and our Dominions. I believe a short-sighted policy in that respect will increase unemployment in this country.

The second black spot is the repeal of the McKenna Duties. That, I am convinced, must increase, and largely increase, unemployment in one of the few industries in this country at present largely and fully employed, and one of the few industries in this country which hold out a hope to the juvenile unemployed. One of the crying evils of the situation to-day is that, not only are grown up men out of work, but that young men as they grow up cannot find employment in which to be trained as decent citizens. The McKenna Duties have had a very good effect in finding employment for these young men, and their repeal will mean unemployment for old as well as young. Liverpool, of course, is not interested in this matter to the same extent as some other places, but I have received numerous protests even from Liverpool to the effect that if the McKenna Duties are repealed it will increase unemployment and reduce prosperity in the city of which I have the honour of being a representative.

I regret that the Chancellor of the Exchequer, even with his somewhat optimistic views of the surplus which he will have at his disposal, has not made a more adequate provision for the expenditure which is necessary to carry out a proper housing scheme, and he has not, in my opinion, made adequate provision for removing the thrift disqualification connected with old age pensions. Nor have I seen anything in the Budget suggesting that he is going to make an adequate provision for pensions for widows and others. I hope in all these respects the Chancellor of the Exchequer will do what he can, so far as his surplus will permit, to deal with these various problems. I do not wish to say an unkind word about the Budget. I gladly and willingly accept all that is good in it; I admit it is a clever electioneering Budget, and I only regret that it is perhaps not so clever from the broad national point of view as it may be from the narrow party point of view.

There is only one aspect of the Budget with which I propose to deal, and in doing so I may express views not shared by those on this side of the Committee, while, on the other hand, some right hon. and hon. Gentlemen opposite may to a large extent agree with the views which I will put forward. I propose to deal with the subject referred to in the concluding remarks of the last speaker, namely, the McKenna Duties, and I wish to make it perfectly plain, in the first place, that I do not regard these duties as entering into either the case for Protection or the case for Free Trade to any extent. My own personal point of view is that these duties should never have been enforced, and in that connection I offer to the Chancellor of the Exchequer my humble sympathy, because it is much more difficult to remove duties once they are imposed than it is to prevent the imposition of duties. I view this matter having regard to the concern which it is causing to the workpeople in the motor-car industry. Like many other industries, after the outbreak of the War the motor-car industry gave over its workshops to the manufacture of munitions, and our competitors, especially America, who came late into the War, got a big advantage in that they were enabled to reorganise their workshops and carry out mass production to the decided disadvantage of the British producer.

It has been said several time during the last few days that the British motor-car industry is now in a very good state. The right horn. Gentleman the Member for Hillhead (Sir R. Home) yesterday gave figures showing the number of employés in 1914 compared with the number to-day. I do not dispute those figures. I believe they are correct, but I disagree with the right hon. Gentleman when he states that the imposition of the McKenna Duties was responsible for the increase of employment in the motor-car industry. The industry would have progressed in any ease. As a new industry with a future before it it would have advanced irrespective of the McKenna Duties. While dissociating myself from the Protectionist party, I wish to put forward a point of view which has net yet been put forward in this Debate—certainly if it has been put forward I have not heard it up to the moment. No one on this side has said a single word with regard to the Chancellor's proposal to continue these duties until 1st August. That is a three months' respite, which the right hon. Gentleman stated that he gave in order to deal fairly and equitably with the motor-car industry. The motor car industry of this country is dependent to a great extent upon its annual show for orders. The show is held in the autumn of each year, and there agents from all parts of the country, from the Colonies, and from other parts of the world congregate, and, after seeing for themselves and testing the new types of car, they are able to give some facts and figures to the manufacturers which assist them in arranging for their winter's production and enable them to estimate the number of cars that are likely to be sold in the following year.

The removal of this tax on the 1st August appears to me to be about the most awkward time possible. From May until November employers, while keeping their shops fully moving, do a large amount of experimental work necessary for the production of their new cars for the next season's market. If they have the added worry of having their shops upset by their employés having hanging over their heads the threat of being turned out of employment it is not going to give them an opportunity to develop and prepare for their next season's trade. I am not concerned with the removal of the McKenna Duties. I believe that they ought to removed. I take no side with the Protectionists. But I do want to beg t he Chancellor of the Exchequer to consider giving a further extension from the 1st August, say, to the date of the November show in order to enable the manufacturers to have a further opportunity—[HON. MEMBERS: "Why?"] Because they have begged for it themselves. The employers have begged for a further opportunity, and I am prepared to support them in the interests of the workpeople and of the industry itself. I represent an engineering constituency—[ Laughter ]—and therefore I am interested—hon. Members may laugh, but that does not concern me—in seeing that the thousands of skilled engineers we have unemployed get a chance. My only desire is to give the trade a chance, though not the chance which hon. Members who are so hilarious desire, because the British manufacturer ought to be able to compete with the manufacturer from any country.

The fact that these manufacturers did not make the necessary provision was mainly due to their own political shortsightedness last year, when they expected that a Government would be returned to power which would at least carry on these duties for another year. I agree that the employers made no effort to put their house in order, but, even in face of their own shortsightedness, I am prepared to beg for a little reprieve for them. I want to say that I have not been influenced by Press statements or anything of that kind. If the Chancellor of the Exchequer can see his way to give a further extension of time, and if he makes it perfectly clear that on a given date the duties are going to be removed, he need not have any fear of a further attempt towards a continuation of the duties. The only fear arises from the short notice, and the workpeople concerned are, I say frankly, alarmed at the proposition. They recognise that they are as skilled as any workmen abroad and are well able to compete with the foreign manufacturer of motor cares if they are given the proper opportunity by the employers and by the proper organisation of the workshops. Therefore I appeal to the Chancellor of the Exchequer to give a further extension of time in the hope that the industry, taken unaware as it has been by the danger which threatens them, shall have further time in which to work out their own salvation. I believe that the workpeople concerned will then see to it that that assistance will be given to the employers in the shape of the reorganisation Of the workshops which will enable them, even if they have been shortsighted in the past, to meet successfully their foreign competitors.

I should hardly have intervened in this Debate if I had not dared yesterday to interrupt the right hon. Member for Hillhead (Sir R. Horne) and if I had not failed to get my point in owing to the interruptions of hon. Gentlemen opposite. I was particularly struck with a quotation which the right hon. Gentleman made, and which I will beg permission to read, from Cobden. He said:

"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 he 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."—[OFFICIAL REPORT, 30th April, 1924; col. 169G, Vol. 172.]

I would remind my hon. Friends opposite that Disraeli said that the Colonies were a millstone around our neck, and at that time the Colonies were a millstone round our neck, because they were tied to us by tariff and navigation laws.

Is it not a fact that when Disraeli made that statement he was referring to the fact that they were a financial burden on this country from year to year, and that he was in no way suggesting any loosening of the bond?

I suppose that I have just as much right to quote Disraeli as the ex-Chancellor of the Exchequer has to quote Cobden. I want to take up this question of little Englanders. A little Englander, surely, is a man who belittles England, and we are constantly hearing speeches belittling England from the benches opposite. We get the hon. Member for Macclesfield (Mr. Remer) saying that they cannot make silk in Macclesfield as well as the foreigner and must have protection.

May I ask the hon. Member if he will name one occasion when I ever stated anything of the kind in the House?

I am sorry, but I have not the quotation. I have quite enough to quote from the speech made yesterday. [HON. MEMBERS: "Withdraw!"] If the hon. Member says that Macclesfield does not need protection against the foreigner, I accept his statement. One hon. Member, I forget which constituency he represents, has been telling us that the Empire will be destroyed if we do not have a 33⅓ per cent. duty on gas mantles. Several hon. Members have fallen from grace, which I deplore, and the Free Trade Socialist Member for Coventry (Mr. Purcell) has done so. I am just as much ashamed of him as of the other hon. Gentlemen who are fouling their own nests. I want to point out that this reference to the policy of little Englandism would be silly if it were true. I do not believe it is true. We had probably the greatest campaign for Protection fought in my own constituency during the last election. Indeed, it is credibly reported that one of the things that led to the General Election was a statement made in our own Chamber of Commerce by a leading Protectionist manufacturer, who told the world that Roubaix could make better goods than Bradford. It was not true, and certainly such a thing ought not to have been advertised to the whole world.

I want to quote another passage from the speech of the right hon. Member for Hillhead, in which he said that, because Colonial preference had been given to us we had been able to recover our Australian trade; that our trade had fallen from 50 per cent. before the War to 30 per cent., and that, owing to this preference, we have recovered our pre-War trade. There has never been a more nonsensical statement. We have recovered our trade because we are delivering the goods both in quality and in price. The English, the Scottish and the Irish workmen are the best in the world, and I believe that the standard and quality of our goods to-day is also the best in the world. We have recovered our pre-War trade because of that, and not because of any preference given by Australia. May I give a little instance in my own business to show what I believe is the fact with regard to quality. When the War came to an end, I had packed in my warehouses £200,000 worth of goods for a friendly neutral. They could not be shipped before the War was over because of the danger of capture or sinking. The friendly neutral was at that time buying German paper clothing because it could not get Bradford goods. Directly the War was over the friendly neutral wanted us to ship the goods forthwith, but our Government Departments with their usual foolishness put obstacles in the way, and in consequence the friendly neutral had to buy £50,000 or £60,000 worth of American goods. The Americans had no scruples about shipping them, and it was only by our sitting on the doorstops of Government Departments that we at last got permission to ship our goods. The American goods and the British goods arrived in Denmark at about the same time. My friend told me that the American goods were badly made and badly dyed, that they were faulty in width and in length, and that they were under quality. I think no member of the Front Government Bench will accuse me of being a Little Englander. I am proud of my own country and I say with some knowledge, at any rate of the textile export trade of this country, that we provide on an average 43 per cent. of the whole export trade.

What I want to point out is this, that America and Japan had the ball of international trade at their feet at the end of he War. A great proportion of British trade had been captured by them. The proportion of our Australian trade went down from 50 per cent. to 30 per cent. It has gone up again, and we know it has gone up because of the quality and cheapness of our goods. The right hon. Member for Hillhead argued that it had gone up because of the Australian preference. I say that statement is not only absurd, but it is an insult to the British manufacturer.

Does the hon. Gentleman deny that, in the case of Canada, New Zealand and Australia, until the preference was granted our exports to those countries were going down, and since the preference was granted they have increased?

That statement is perfectly absurd. I want to point out that while our exports to our Colonies and Dominions have been growing, if we had been dependent on this preference from Australia and Canada to Keep up our trade, then we should have lost our proportionate trade in the markets of the world where there is no preference. If that be a logical argument, let me put these figures before the Committee: In 1921 our exports to our Dominions amounted to £298,000,000, in 1922 to £295,000,000, and in 1923 to £300,000,000, showing practically a stationary amount of exports. Our exports to foreign countries in those three years amounted to £404,000,000, £433,000,000 and to £466,000,000, showing that we are gaining an increasing share of the world's export trade. That may be news to our friends opposite. I have no doubt it is news to our friends opposite that we never, before the War, did more than 13¼ to 14 per cent. of the export trade of the world. To-day we are doing 17½ per cent. of the export trade, because of Free Trade. It may be news to our friends opposite that if you deduct from the world's exports of manufactured goods the amount of smelted ores, which I think everyone will agree are, to us, raw materials, these little islands export, more manufactured goods than all the rest of the world put together, owing to Free Trade. So much for Colonial Preference and the McKenna Duties.

I have dealt faithfully with my hon. Friends opposite, and I now propose to deal faithfully with my hon. Friends on the left. On this question of the Budget, I want to congratulate the Chancellor of the Exchequer on the best Budget that has been proposed in my time, and I want to congratulate him on something further. I am speaking very seriously; I am speaking as a, man who, with a great many misgivings, went into the Lobby to help to throw out the Conservative Government—not that I had any misgivings about throwing them out, but I had a great many misgivings about putting these in. I have said to my friends in my own district over and over again: "Well now, wait until we see the Budget. That is the crucial test of what the Government are going to do." I congratulate the Chancellor of the Exchequer from the bottom of my heart on what he has done. I think he might have done more. I would like to have seen the Chancellor budget for no surplus at all. I would like to have seen him take the big risk and cut down expenditure to such, an extent as to be able to abolish, the Sugar Duty altogether. I have given a pledge long ago that I would under no circumstances ever vote for any tax on sugar. I consider it the worst possible tax in the whole country. But there is something more to be said. The fact of the Chancellor of the Exchequer having budgetted to remove the burdens on the people means that there is not going to be money enough for the Socialists to play with, and I would like to suggest that, barring, of course, my own revered leaders, the strongest influence for Liberalism in this country to-day is the Minister of Health, who has converted thousands and thousands of the steady working men who voted Labour last time, but who have taken fright at his extreme Socialist proposals. If they have not taken fright at them, at any rate the Chancellor of the Exchequer has. He is not going to provide the money for 3,000,000 houses. [ Interruption. ]

I must ask hon. Members not to interrupt, as there are many more who want to speak.

I am sorry to have trespassed longer on the time of the Committee than I meant, but I do not think it has been entirely my fault. I have great hopes. I believe that in administration, in office, men who have talked a good deal extremely in the past are prepared to serve their country as the Chan- cellor of the Exchequer, by his Budget, is serving it to-day. I shall vote with the utmost pleasure for his Budget, the more so as I believe, and have believed for many years, that at the root of all these social reforms is not the giving of doles, but the giving of opportunities. [An HON. MEMBER: "That is Socialism"]. I will not quarrel with my hon. Friend. If that be Socialism, then I am a Socialist. [ Interruption. ] So far as I can see, I think the difference between Liberalism and Socialism is that Socialism wants to uplift the people, but Liberalism wants to help the people to climb up.

In conclusion, I will, if I may, congratulate the Chancellor of the Exchequer on making a firm stand against the extremists of his own party.

I do not know whether I can congratulate the Chancellor of the Exchequer on the speech of one of his friends, to which we have just listened. If the hon. Member for South Bradford (Mr. H. H. Spencer) will forgive me, I do not propose to follow him in discussing Socialism tonight. I realise the difficulties that he had in making his speech, for while he was speaking I looked up his record in Bradford, and I am afraid it will be very difficult for him to beat the Socialists next time.

May I take a few moments before the Chancellor of the Exchequer replies, to take the Debate back to the real financial position—to the Budget in connection with which there is the financial point of view and the political point of view. There are one or two financial aspects I should like to deal with, and one is the surplus. A great many congratulations have been given to the Chancellor of the Exchequer and one was because of the fact that he continues to pay off the debt of this country. Whatever Government is in power that continues to pay off our debt means that our credit is bound to be improved. But I am one of those who is not easy about the surpluses of the last few years. It may possibly be difficult to Budget a little more closely, but an endeavour should be made to do it. Of course, we do not forget that the £450,000,000 of surpluses that we obtained have gone in the reduction of our debt, and every one of those millions have pro tanto improved the position of the finances of this country, as against the finances of the rest of the world. I do not know whether the Chancellor of the Exchequer—perhaps it is not quite fair to ask him—is budgeting for a surplus again this year, a concealed surplus over and above the £4,000,000 of which he told us? I want to ask whether he has made all the effort he can possibly make to reduce the taxation of this country? Very little has been said in the Debates of the last few days as to the real necessity of getting our taxation down much below its present level. After all, this year's Supply Estimates are £405,000,000—only half a million less than the expenditure of last year. It is five years after the War, and I cannot help feeling that the Chancellor might have made even a greater effort to cut these Supply Services down. There was mentioned in the very admirable maiden speech of an hon. Member this afternoon the slight rise in the cost of the Civil Services between pre-War days and to-day. I am not quite sure whether I agree with the figures given by the hon. Member. Apart from the debt and pensions charges there is very little real reason why the Civil Services should be so much higher to-day than ten years ago. The country is poorer than it was ten years ago. It has lost £7,000,000,000 of its capital, and in every way it must be poorer; yet we are spending something like £290,000,000 a year, as against £84,000,000 a year on social service. I trust the Committee will not think I am unduly hard—for I am not objecting to them—when I say that they are mostly paid for by the non-recipients. Before the War the figure for the Labour Ministry was under a million, now the figures stand at £14,000,000. Before the War old age pensions cost £15,000,000 now they stand at £24,000,000, and without any alteration in the conditions of old age pensions in another few years they will be costing us £44,000,000 a year. [HON. MEMBERS: "Oh, oh!"] I am not object- ing to them, but asking for information. This is one of the periods of the year when we are here entitled to review our expenditure. Fifty or 60 years ago there was a great deal of prosperity; a very large extra number of births took place, and in a few years time these people will reach pensionable age. Without any alteration in the conditions of old age pensions they are increasing by a £1,000,000 a year, and that will go on from year to year. These figures, I think, are correct, for I got them from the Government Actuary when I was at the Treasury.

Look at the question of education. Its cost has risen by 200 per cent. in the last ten years. We spent £14,000,000 in 1913; we now spend £42,000,000. I am not opposing it, far from that. I want to give every boy and girl worthy of it the fullest opportunity to rise, but I would suggest to the Chancellor of the Exchequer that, without in any way departing from the real education now being provided in the elementary schools of the country, he might see whether some economy could not take place in this direction. Really what the Government is or should be concerned about at the present time in this country is the improvement of our trade conditions; the getting back to tie conditions that we had before the War, when we were a great exporting country. After all, it is only by the improvement of our trade that the miserable and terrible scourge of unemployment can be got rid of. I put it to the Committee that the reduction of direct taxation is the only real means of improving trade, and that the reductions that may be made in indirect taxation do not inure nearly as much to the benefit of trade as if the reduction were direct.

The right hon. Gentleman the Member for Paisley (Mr. Asquith) told us some years ago that there should be relationship of 50–50 between the direct and indirect incidence of taxation. The Financial Secretary dealt with that matter in a speech which I envied him making without any notes, and dealing with figures in the way our old friend the late Mr. Bonar Law used to do. He told us that the indirect taxation had now got down to 34 per cent. and direct taxation had gone up to 66 per cent. He told us also the very remarkable fact that, of indirect taxation, only 5 per cent. was on real food; 29 per cent. of the indirect taxation was on what he was good enough to call luxury articles. Perhaps as a teetotaller and a non-smoker I might be prepared to agree with my hon. Friend the Financial Secretary in his description of luxury articles, but I am not at all sure that other hon. Members will agree. I put it, however, quite frankly to Socialist Members here, that what we want to do is rather to accumulate capital to replace the capital loss during the War. Any savings on direct taxation on sugar, tea, and so on, as everybody knows, will not go to the further accumulation of capital. [HON. MEMBERS: "Why not?"] I think not, because it is almost certain that the housewife who saves a shilling a week on sugar will in all probability spend that shilling in some other similar way.

That is exactly what I am coming to. The proof of the pudding will be in the eating. If we are both alive next year, the hon. Member for Stirling (Mr. Johnston) and myself will compare notes. I say quite definitely that the amount of money which has been given in relief of indirect taxation this year—some £25,000,000—will not appear as additions in the savings bank returns by this time next year. I wish it might. I want to ask the Chancellor of the Exchequer whether he does not think the taxable capacity of the men who are engaged in industry has been reached. I am not now discussing Socialistic theories. This is not a Socialistic Budget founded entirely on Socialistic theory. I accept it in that spirit. I am entitled to discuss it on the basis of the old Liberal and Conservative theory of taxation. According to those theories, the man who saves money, or even becomes a millionaire, is an asset and not a detriment to the country. I wonder whether the Committee remembers the statement of Mr. Ford, one of the richest men in the world, the other day. He said—I think perfectly truly—that if they taxed him up to 99 per cent. of his income it would make no difference whatever to his mode of living. He would neither eat, drink, nor spoke less, nor would it make any change in his clothes or in his house. The only result would be that the Ford car would cease to be the best car in the world. [ Interruption. ] I am not saying that the Ford car is the best car in the world. Mr. Ford went on to tell the American people that the gigantic works he had built up, had been produced out of the surplus savings from his original income. Year by year he has put enormous sums aside for the development of his business. That money was what was left to him after living and taxation expenses. We want in this country as large a surplus over taxation as possible in the pockets of the trading community, in order that they may replace their capital, extend their work and improve their machinery. The hon. Member for Bradford, South (Mr. H. H. Spencer) is a commercial man, and knows perfectly well that it is only out of savings that real improvements in businesses can take place, capital can be accumulated, and more and more workmen employed. Does not the Chancellor of the Exchequer think it is desirable to manage the finances of the country this year with such economy that he will be able to make further concessions next year, at all events, to the direct taxpayers?

The right hon. Member has said that indirect taxation is spent. Will he not agree that the resultant profits to sellers of the commodities which are bought will become capital eventually?

That is by no means so clear. I want the Chancellor of the Exchequer to give us a little more information as regards the statement of die Financial Secretary this afternoon about the three years' average. It was mentioned by the hon. Member for Sowerby (Mr. A. Williams) and by the hon. Member for Hemel Hempstead (Mr. Dunn). The Financial Secretary made a very remarkable statement. He said that the nearer we can go to the one-year plan the better. That is rather important. Has the Chancellor of the Exchequer in mind the abolition of the three years' average? The Financial Secretary gave me the impression that it was his desire, if not to abolish the three years' average, at least to get as near to the one year plan as he could. The Financial Secretary told us this afternoon that there are £62,000,000 of arrears of Income Tax and Super-tax. That looks as if my contention is correct, that the taxable limit of the Super-tax payer has been reached. It is by no means a satisfactory position for a country which is usually regarded as being very rich. I made some inquiries in regard to the position of Super-tax payers from one of the eminent bankers in the City of London. As far as I can gather, up to income of about £5,000 a year, the Super-tax is generally paid out of income; but in regard to incomes over £5,000 a year, there has been a very considerable number of cases where Super-tax has been paid out of capital. In a branch of one bank where inquiries were made on my behalf, there were 35 customers who had incomes of over £5,000 a year, of whom 15 last year had to apply to the Treasury for time in which to pay their Super-tax, and five definitely realised capital in order to pay that duty. In another branch there were five customers with incomes of over £10,000, and for several years past two out of those five have regularly paid Super-tax out of capital. They have been taxed above their taxable capacity. Whatever the reason may be, the effect is the same from a national point of view. Capital is being reduced, and the taxable capacity of that man in succeeding years is less. You may say that you do not like capital; but if you destroy the goose that lays the golden egg, your Super-tax will not increase in proportion to the natural wealth of the country. I ask the Chancellor of the Exchequer whether that really was not the case?

In his speech he did not tell us whether any efforts had been made in regard to dealing with taxation in other countries. I have been speaking of our high taxation. I think it will be agreed that we are taxed higher than any other European country. Figures were given a month ago showing that the taxation in this country amounted to £15 per head of the population, while in France, Belgium and Germany it was less than half that amount. There is, however, this difference, that we are paying our debts and they are not. I want to know if the Chancellor of the Exchequer has any information to give us on this point. He told us that over £2,000,000,000 was owing to us by our Allies and others. I want to know if any effort is being made to approah those countries to get even the interest on some of those debts. Having regard to the sacrifices we have made and are making in our taxation, having regard to the interest we are paying on our debt to America, I think at least an effort might be made by some of those countries to assist our hardly-ground-down taxpayers with some payments in this respect.

I had the honour to be Postmaster-General not long ago, and the Committee will remember that at the time the present Leader of the Opposition was Chancellor of the Exchequer, and he permitted me to make certain alterations in our postal charges. The basis upon which I did that was to clear away all small matters, such as improvements in the parcels post, telephone charges, and foreign postages, so as to leave only one great question to be dealt with. I remember telling the Treasury myself that I hoped, if I happened to be Postmaster-General next year, to be able to establish the penny post. I ask the Chancellor of the Exchequer now whether he cannot reconsider this matter, because I am sure it would be £5,000,000 better spent in this way than in any other which is proposed in his Budget. I am sure this reform would be highly satisfactory to the people of this country, and I think the time has come when we should get back to the penny post. Only yesterday I had a letter from the Bahamas, from where they can still send a letter to this country for one penny, and if these small countries can afford to have the penny post I think we might make some effort in the same direction.

I will now leave the financial side in order to say a word or two with regard to the political side, the McKenna Duties and the question of preferences. I shall have a great deal to say about them so far as they affect motor cars within the next few weeks, but I cannot help thinking that the revocation of the McKenna Duties is not so much a financial as a political question. We know there were discrepancies of thought between the Liberal and the Labour party. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) told us at large of his grievances with the Labour party, and we have heard that there were dissentions in the Labour Cabinet in regard to this question. I am sure many hon. Members would like to have been behind the doors of 10, Downing Street, when this matter was being considered. Cannot you imagine one Member after another saying, "After all we must do something for Lloyd George because he can be very troublesome, and we must be polite to him."

Then I can imagine some strong Free Trader, like my Noble Friend Lord Parmoor, for instance, suggesting to the Prime Minister, "Well, Prime Minister, if you cannot be polite to the Liberals below the Gangway, give them the McKenna Duties." It had the desired effect. I do not know how it was brought about, but the effect is there. I have never seen the Liberal party in such a happy frame of mind since the last Election.

That the Labour party has to find out. Whether it is worth it or not is not for me to say, but I do not think it was worth sacrificing employment in this country to please right hon. Gentlemen below the Gangway. I do want to protest at one sentence uttered by the right hon. Gentleman the Member for Paisley (Mr. Asquith). He said at this Box two days ago that, after all, if these manufacturers had established their factories in this country and had built up their businesses relying upon this, they had only themselves to blame. I spent this afternoon looking through the Debates on the McKenna Duties, and I find that a former Member of this House, who has now gone aloft and joined the Labour Government—Lord Arnold—when this question was being discussed, stated in this House that they were put forward as an emergency measure, but, said he, they are likely to be permanent. If this gentleman, so eminent and suitable for becoming a Minister in the Labour Government, thought they were likely to be permanent, can you blame the poor manufacturer for thinking the same thing, and for establishing his factories and employing men, or can you blame the men themselves? There have been two speeches to-day, one by the hon. Member for Stirling (Mr. Johnston), and one by the hon. Member for Gorton (Mr. Compton), both of whom were clearly not satisfied with the attitude of the Government in regard to the McKenna Duties. Both of them were, or, at all events, the hon. Member for Stirling was very interrogatory of the Government in his speech. He wanted to know why they have done it, what they expect the men to do, what damage the McKenna Duties are doing. I repeat humbly those questions which have been asked by the right hon. Gentleman's own followers. I do not know whether the suggestion made by the hon. Member for Gorton, that these duties should be extended, is a good one or not. It is not a logical one, at all events. If the duties are really doing harm, let them be abolished. If they are not, let us keep them. It is perfectly clear that in some respects they are doing good.

I have only one other political point to make, and that shall be very short, as we shall have further time for discussing it. It is in regard to the question of Imperial Preference and the late Economic Conference. I listened yesterday to the speech of my right hon. Friend the Member for Hillhead (Sir R, Home), and I listened to the Colonial Secretary making his reply. But he did not reply; he did not deal with the facts in the argument put forward by my right hon. Friend the Member for Hillhead. It is perfectly true that he suggested a non-party conference in order to deal with these questions. I do not know that I have any particular objection to a non-party conference, but the position as it now is means that clearly there is no continuity in our Colonial policy. We have always tried to have continuity in regard to our foreign policy. That has been the accepted principle between the Liberal and Conservative parties for many generations. It is far more important to have continuity of policy in regard to our great Dominions. Their representatives come over here periodically and these matters are talked over again and again, but it is idle for the Colonial Secretary to say he is an Imperialist as we are on this side of the House. He has flouted the opinion of the Dominions in this matter. I will read one or two sentences from a very remarkable speech in to-day's "Times," by Sir Joseph Cook, High Commissioner for Australia, who came here representing that great community. A High Commissioner very rarely makes political or even semi-political speeches, but it is right that we should know the views of the representatives of these great Dominions. Here is what he said—

No Chancellor of the Exchequer surely ever had more reason to be gratified with the reception which his financial statement and Budget proposals received, and I hope Members on every side of the Committee will accept my assurance that I am extremely grateful to them for the very kind things they have said about myself. In the time I have at my disposal to-night, it will be quite impossible to do other than make some desultory observations upon a few of the many points which have been raised in the course of this discussion It is quite true that not all the comments and observations which have been made on the Budget in the course of this Debate have been of an altogether nattering character. The Budget has been variously described. It has been described as an "Electioneering Budget" by hon. Members who sit on the other side of the House. I would not be disposed to attach a great deal of importance to the value of the opinions of hon. Members opposite upon electioneering tactics. I think that behind much that has been said from the benches opposite there has been the unexpressed regret and chagrin that it was their misreading of popular opinion which resulted in placing them in the position they are in to-day, and putting us in the position of dealing with what they now describe as the "lavish inheritance" we have received from them. The hon. Baronet who sits for the Kirkdale Division of Liverpool (Sir J. Pennefather) was kind enough to say, more than once, in the course of his speech, that I must have been born under a lucky star. Well, there are many people who are born under lucky stars who never reap the advantage of that gift. May I offer a paraphrase of a well-known quotation—

The criticism which has been made from the benches opposite has been not altogether consistent. In the first speech that was made after I sat down on Tuesday, the right hon. Member for Hillhead (Sir R. Horne) claimed that it was a "Tory Budget." He said, "This is just what we should have done." Just what they would have done! They had the opportunity of doing it last year, because my surplus this year is about the same as that which the Chancellor of the Exchequer last year had at his disposal. How did they use it? The right hon. Member for Hillhead, a previous Chancellor of the Exchequer, had the opportunity of doing these things too. "We might have done it," they say. They might have done it! Why did not they do it? Instead of doing it last year with the same surplus available as I had this year they reduced indirect taxation, but not on the necessaries of life. They reduced taxation upon beer.

The right hon. Gentleman who has just sat down (Sir W. Joynson-Hicks) has made a speech, as he usually does, to which I, or even the most captious, could take no exception. He was genial, he was courteous; but the right hon. Gentleman, in reply to an interruption from behind me, said that he was not always like that. The right hon. Gentleman in this House can coo like a sucking dove, but if you want to hear him in his best form, you want to hear him on the platform of a Primrose League meeting. The right hon. Gentleman was in his element last night. This is not the first speech which the right hon. Gentleman has made upon the Budget. In the latter part of his speech just now he dealt, as he said, with particular aspects of the Budget, and I was hoping, and indeed I expected, that we might have had a mild repetition of the sentiments which he expressed last night. He is reported to have said:

Are we, in making proposals for reduction of taxation, bribing the electorate, or are we making an honest attempt to redeem the pledges to which we have been committed ever since we have been constituted a party? Another criticism against this Budget is that it is not a Socialist Budget. Are hon. Members opposite disappointed because it is not a Socialist Budget? Certain remarks were make yesterday by the right hon. Member for Hillhead (Sir It. Horne), the only implication of which was that he personally would have liked us to have introduced what he called a Socialist Budget, because it would have had disastrous effects upon the credit of the country. I do not wish to be told by the right hon. Member for Hillhead the importance of maintaining national credit. But the right hon. Gentleman himself always gives me the impression of being a sort of modern Jim Crow. One year he poses as being in favour of payment of Debt, and the next year, as Chancellor of the Exchequer, he proposes the suspension of the Sinking Fund. You do not know where the right hon. Gentleman is. He is the modern Jim Crow—

A great many of the speeches during the past two days have dealt with the question of the relation between, and the incidence of, indirect and direct taxation. The right hon. Gentleman who has just spoken dealt in a very interesting way with that point. The best reply to speakers who had spoken previously was delivered this afternoon in a most admirable speech by my right hon. Friend the Member for Rusholme (Mr. Masterman), in which he pointed out that a reduction of indirect taxation, by keeping more spending power in the pockets of the people, was as effective as a reduction of a direct tax such as the Income Tax. I do not know how the people who are to get the relief under the tax reductions that I propose are going to apply it—whether they are going to apply it in increased spending. If they do, well and good. It means more trade. There is one very important factor operating in connection with this question which hon. Members opposite do not appear to appreciate. They look only to capital and to production, but what is the use of capital, and what is the use of production unless there is a demand to employ the capital, and a demand for the goods which are produced? Although I do not for a moment deny the importance of capital, I think it is still far more important that we should have an increase in the spending power of the people. The demand will stimulate the saving of capital. I have often been asked during these two days what my Budget does for unemployment. I will explain in a word what it does for unemployment. It puts this year nearly £30,000,000, and more, into the hands of the people of this county to stimulate and encourage trade. I will tell the right hon. Gentleman something else. He and others have been saying that a reduction of the Income Tax would result in saving to a much greater extent than a reduction upon indirect taxation. Has the right hon. Gentleman forgotten what I am doing in the way of relief of direct taxation? I am completing the work, which he began in a very small way last year, by abolishing the Inhabited House Duty altogether, and that, as I incidentally mentioned in the Budget speech, will give a greater relief to the married man with £500 a year than a reduction of 6d. in the £ Income Tax. There you have what the party opposite say is so essential—you have a reduction of direct taxation, and, unless the man who is relieved has an unsatisfied desire for further expenditure, then, of course, it will be saved, and will help to increase the capital of the country.

There are a hundred things I should like to say, but, under the Rules of the House, I must sit down in a very few moments. Therefore, I must skim very rapidly over a number of points which have been brought forward and questions which have been put to me. But in order that I shall not sit down before dealing with the matter, may I refer to two questions which have been repeatedly raised in the course of our discussion? I think they have been, I will not say raised, but emphasised under a misapprehension.

Hon. Members appear to think that I should have adumbrated in my Budget speech a scheme for improved old age pensions. It is not the business of a Budget to do so, nor even to foreshadow legislation. The business of a Budget is to provide money for the expenditure to which Parliament is committed, or which the Government have in prospect, and which will become operative during the coming year. I stated, and may I repeat it to-night—because I know from correspondence I have received that my statement does not appear to have received the prominence I hoped it would receive—that we are going to introduce a Bill for the removal of the thrift disqualification in connection with old age pensions. I have had a scheme prepared for weeks; it was one of the first things to which I turned my attention when I went to the Treasury. But everybody knows how the business of Parliament has been congested. I shall introduce that Bill at the earliest possible moment. [HON. MEMBERS: "What will it cost!"] You cannot expect me to say that. It would be as improper to anticipate the financial proposals of that Bill as to anticipate a Budget. But I want to assure the Committee of this—I have made adequate provision in my Budget to pay for that scheme if it receive legislative sanction.

Just another word about widows' pensions. We had a Debate on this question a few weeks ago, when the House was unanimous in support of that Motion. I spoke for the Government. I spoke not merely words of sympathy. It is quite true that I gave no definite pledge. It would have been very foolish, when we had been in office only two or three weeks, had I given a definite pledge on a matter which everybody realises is a very expensive thing. I do not mind saying what the cost of that would be, because it is almost a matter of public property. I do not think it would be possible to institute a scheme of widows' pensions the initial cost of which would be much less than £20,000,000. Obviously, that is a very serious proposition, and we would be quite unworthy to have charge of the finances of the country if we rushed recklessly, and without full consideration into a matter like that. But we have now for some time past had the matter under expert consideration. Let me say this: It is not merely a question of widows' pensions. The question of a scheme for widows' pensions cannot intelligently be considered without regard to other schemes, and we are considering the whole question. Our experts have made considerable progress, but I will not go further than this to-night. I make no pledge, but I express the confident hope that, before the end of this year, we may be able to submit to Parliament legislative proposal upon this question, and, if they be approved by Parliament, then the necessary financial provision will be made.

Yee, I will give that now. Some criticism has been brought against my financial statement, on the ground that I have been unduly optimistic in regards to receipts, and a little too pessimistic in regard to expenditure. I have tried to be neither optimistic nor pessimistic. I have faced facts. My right hon. Friend the Member for Rusholme mentioned this afternoon that my estimated surplus was nearly double the largest estimate which, before the Budget, had been made by outside experts

Yes, but let me remind my right hon. Friend and the Committee that even the most acute outside expert has not at his command the information that we have. I have not forgotten that another year follows this year. This is not an electioneering Budget in the sense that we expect to go to the electorate upon it. This is the first of a series of Budgets, and I have not forgotten next year. I expect to be here for a year or two, and I have sufficient regard and respect for my own reputation that I would not wilfully propose a Budget to the House of Commons this year the very basis of which will be falsified 12 months hence. Had I time now, I would deal further with that point, but there will be opportunities later on of dealing with that and many other questions which have been raised; and if the Committee will permit me I will reserve my observations upon them.

I want to deal with two points raised by two right hon. Gentlemen who, by the most curious coincidence, advanced figures which had I not known they were such political opponents would have led ms to think that their speeches had been made in collusion. I am referring to the right hon. Members for Colchester (Sir L. Worthington-Evans) and for Rusholme (Mr. Masterman). They submitted that I should be something like £100,000,000 to the bad on a full year. The right hon. Gentlemen are wrong, just as wrong as can be. In the first place the right hon. Gentleman the Member for Colchester put 9½ millions down as housing expenditure. I am not quite sure whether he was a Member of the Government 12 months ago, but I think that the Government last year promised a Housing Bill and gave us one, but they made no provision whatever in their Budget for financing it! The right hon. Gentleman estimated that our housing scheme would cost us 9½ million pounds this year, and he arrived at that amount by suggesting that we were going to build 95,000 houses and give a subsidy of £100 in respect of each house before it was begun. Even if the Bill of my right hon. Friend the Minister of Health (Mr. Wheatley) has a fairly easy passage through the House, it will be well at the back of the summer before it is passed into law, and then it will take some time before the Housing Committee can begin operations. Therefore the call upon the Exchequer this year for housing is not going to be very substantial.

Yes, plenty. There are hundreds of matters on which I should like to have spoken, but there will be many other opportunities in the course of the next few weeks, and before they are over, perhaps the House may be tired of hearing my voice. But for the moment, and until I have further opportunities of substantiating what I have said, I want the House to believe that I have produced not only a democratic Budget, but a sound Budget. Indeed, I did hear on authority that there is a movement in the City of London to erect a statue to me.

rose in his place, and claimed to move," That the Question be now put."

Question, "That the Question be now put," put, and agreed to.

Question put accordingly, and agreed to.

Resolution to be reported upon Tuesday next.

Committee to sit again upon Monday next.

Bankruptcy Bill

Order for Second Reading read.

In view of the assurance given by the President of the Board of Trade, I ask leave to withdraw this Bill.

Order read and discharged; Bill withdrawn.

The remaining Orders were read, and postponed.

Imports from Germany

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

I make no apology for raising a point which I think will prove the folly and the stupidity of the Government, not only in this direction, but in others as well, especially on the night when the McKenna Duties have loomed so large in our Debates. This matter has relation to the Reparation Duty, which was reduced by the present Government from 26 per cent. to 5 per cent. in the early part of their career. Two of the largest items which are imported from Germany into this country are leather and paper, and in a reply which the right hon. Gentleman gave me very recently it was shown that paper has been increased in price from £1 1s. 2d. to £1 2s. 2d., but when it comes to box and willow calf leather, that has been increased from £19 15s. 5d. in January, to £27 5s. 7d. in February, and £30 12s. 5d. in March. In other words, the Government have sacrificed all the reparation which has been given away to Germany, the difference between the 26 per cent. and the 5 per cent. has been made a free present to Germany, and the price to the consumer has been increased in this particular leather by more than £13 per cwt.

It shows conclusively that the Government, when they reduced the Reparation Duty, made a present to Germany—

Notice taken that 40 Members were not present; House counted, and 40 Members not being present,

The House was adjourned at Nine Minutes after Eleven of the Clock, until To-morrow.