I beg to move, to leave out the word "now," and, at the end of the Question, to add the words "upon this day three months."

I move this Amendment because I believe this Bill to be a bad Bill, following the bad tradition, of the Finance Bills of these post-War years, broken only in 1924, when my right hon. Friend the Member far Colne Valley (Mr. Snowden) was in charge of the finances of this country. We have heard a. good deal lately about French finances. There is one thing which we might with advantage learn from the French; they know how to get rid of unsuccessful Finance Ministers. We, on the other hand, are very tolerant, patient and long-suffering in this respect. The Chancellor of the Exchequer last year introduced a Finance Bill which was full of glamour and sensation. This year he has gone as near to a humdrum Budget as it is in his temperament to go. There is little glamour in this Finance Bill, in spite of the Betting Duty. Apart from that feature, it would be true to say that it is not only bad in principle but dull in detail. It is not unnatural that the Chancellor of the Exchequer this year should be singing in rather a minor key, because the great hopes of further reductions in taxation that were held out last year, which were to be secured from substantial economies in supply services, have not matured, and the hopes of further reductions of taxation have come to nought. In spite of concentrated economy campaigns against the social services, more particularly education and health, the Chancellor of the Exchequer has been unable to produce any considerable reduction in expenditure, and on the basis of existing taxation was landed with a prospective deficit of £8,000,000—a prospective revenue of £805,000,000 against an expenditure of £813,000,000. Therefore it is not unnatural that he should sing this year in a minor key.

When we turn to the balance sheet, we find that it is still dominated, as it has been since the War, by two factors—armaments and debt. These two forms of unproductive expenditure are responsible between them for more than 50 per cent. of the total expenditure. The total expenditure is £821,000,000, and subtracting £55,000,000 for Post Office expenditure (which is more than covered by a revenue of £59,000,000) we arrive at £766,000,000 as the net expenditure, of which £304,000,000 is for debt interest and £117,000,000 for armaments, a total of £421,000,000 out of 766,000,000 devoted to armaments and debt interest on loans, or more than 53 per cent. of the total and about 1os. 7d. in the £. If you add to that the Sinking Fund of £60,000,000, and war pensions £64,000,000—I do not grudge a single penny under these two heads—you arrive at a total of £545,000,000 out of £766,000,000, which may accurately be described as the combined cost of war in the past and preparation for war in the future. The balance left over for truly productive expenditure in the proper sense is very meagre. Further, it is apposite in this connection to note that the Income Tax and the Super-tax, at the low levels to which they have been reduced as a result of past Budgets, bring in only £320,000,000, which is not enough to cover debt charges, not enough to pay for the upkeep of our immense financial cenotaph represented by this £7,000,000,000 War Debt still outstanding.

Before the War the Income Tax and Super-tax yield covered the debt charges more than twice over, and the alteration in the ratio brought about since the War is the measure of the financial degradation at which we have arrived, the end of which we have not yet reached. It is against the burden of armaments and debt charges that an economy campaign has to be directed, rather than against the educational opportunities of the children and the development of the health, housing and other social services. But the prospect of relief given to us in the policy of His Majesty's Government under the heads of armaments and interest on the Debt are very small indeed. Although we are pledged to disarmament by the Treaty of Versailles, we are told that it may take several years, yet before we can hope to find a plan through the League of Nations. Meanwhile, we are pledged to a great expansion of the Air Force to 18 times its strength in 1922. We are also pledged to a great increase in expenditure in respect of Singapore and in other directions. That expenditure is more popular with hon. Members opposite—[HON. MEMBERS: "Hear, hear!"]—I hope they will cheer after I have finished my sentence—it is more popular with hon. Members opposite than expenditure on education or on health services. I think hon. Members opposite cheered me somewhat prematurely.

You cannot have the one without the other!

That is a matter of argument, but while this expenditure is viewed with great enthusiasm by hon. Members opposite we do not find them on our side when we are fighting the battle for expenditure on social services in order to build up the physical and mental qualities of the people. If I may turn to the French Debt negotiations in this connection, it appears to me that all the concessions of the Chancellor of the Exchequer to the French in respect of their debt, which means, of course, a future diminution in our receipts from that source, would have been well purchased and worth while making if they had formed the basis, or part of the basis for negotiations, including an Anglo-French agreement for disarmament, more particularly in the air. As far as I know, the Chancellor of the Exchequer made no attempt to link together debt and disarmament in these negotiations. The result is that we have made enormous concessions to the French, to be paid for by our own taxpayers in the future, and we have no quid pro quo in respect of any undertaking to check this suicidal competition in Air Forces that is proceeding between ourselves and out French Allies. We are drifting, with the approbation of many hon. Members opposite, to a more and more extensive preparation for war, which will be accelerated and rendered more likely by the policy now being pursued in common by the Allies in the late War. We are drifting, equally helplessly, with regard to the interest charges on the debt. We are still paying nearly £100,000,000 a day in interest alone upon the War Debt. The only means by which that can be reduced, short of repudiation, is by a repayment of the debt, or by conversion to lower rates of interest. These two policies are complementary one to the other. The faster you repay the more you strengthen national credit, and the more economical conversion operations become.

It is partly because we are repaying debt so slowly that the prospects of conversion are so bleak. That they are bleak cannot be denied. The Chancellor of the Exchequer has lived to see British credit standing so low that within the next few years we are likely to see conversion operations increasing rather than reducing the burden of the debt charge. The Chancellor of the Exchequer is aware, he has told us in several speeches, of the large maturities which are impending; indeed, he has made it one of the excuses for not carrying out the recommendation of the Royal Commission on the Coalmining Industry with regard to the nationalisation of mining royalties. One reason why the Government are not willing to carry out the Report of the Coal, Commission is because they say that it would damage national credit to issue an additional amount of gilt-edged securities, although they are backed by the coal resources of the country, a large and tangible asset such as we have not got to put against our War Debt. In the next year or two, in 1927–28, we have maturing £63,000,000 of 3½ per cent. War Loan. It is perfectly clear that at the present low level of national credit, conversion will have to be carried out at an increased cost rather than a reduced cost to the taxpayer. We shall not be able to borrow at the low rate of interest of 3½ per cent, in order to replace this maturing 3½ per cent. liability. Similarly, in the same year, we have £80,000,000 maturing of 4 Per Cent, National War Bonds. We cannot now-borrow at 4 per cent.; the rate is nearer 5 per cent. Under both these heads, and certain others which might be mentioned. conversion operations, instead of being a cause of relief, will be a cause of added burdens to the taxpayers of the country. The prospects of relief from conversion, are, therefore, very meagre.

When we turn from conversion to re-, payment, we find the enormous total which I have mentioned, of £6,500,000,000 Internal Debt, and £1,100,000,000 of External Debt, or a total of £7,600,000,000.Wehear a great deal about the reductions of taxation that have been made in the past year or two being necessary and beneficial in the interests of trade, industry, and investment; but I think it is still true that the safest investment of all is the repayment of one's own debts, whether that principle be applied to individual economy or the economy of a great nation. I have no doubt at all that a given sum of money applied to Debt reduction produces far more beneficial results than the same sum of money applied to the reduction of the taxation of wealthy people, who spend a large part, not in helping trade or industry, but in luxury and extravagance and in an unduly distended standard of life.

My own suggestion of policy is that we should fix a term within which we should aim at the redemption of the whole of this Internal Debt. That does not introduce a new principle. When the present Prime Minister funded the debt to the United States, the term of 62 years was agreed upon. The Chancellor of the Exchequer or some Member of the Government will be asking this House later to assent to a loan to Palestine and the East African Dependencies. I find from the explanatory Memorandum that that loan will have to be repaid in 40 years, even although it will have behind it the solid capital assets of railways, roads and other public works. Therefore, there is nothing new in principle in proposing that we should fix a term within which the whole of the debt should be repaid. There may be dispute as to how long the term should be. I would like to see it short enough to give a prospect to those who are now in middle age of seeing the whole of this debt cleared off before they die. Evidence was given before the Colwyn Committee on debt and taxation, not by a member of the Labour party but by a highly respectable professor of political economy, whose evidence, based on a simple arithmetical calculation, was to the effect that if we raised the Sinking Fund to £100,000,000 a year, and made it fully cumulative, the whole debt could be paid off in just over 30 years. That is a very hopeful calculation. Even if we do not take quite so short a period, that calculation alone proves that it is perfectly possible to secure the redemption of the whole of this debt within a comparatively short time, without placing any undue burden of additional taxation upon the people of this country.

The Chancellor of the Exchequer made an after-dinner speech last Wednesday at the Mansion House. It has already been referred to in terms of admiration more than once. I was greatly encouraged when I read the speech. It was full of admirable financial precepts, which could not, indeed, have been better had they been designed to provide me with a text for my remarks to-day. He said: There were some broad and simple truths which gave a sort of rough-and-ready, rule-of-thumb guide through all these mysteries and tangles (of finance). These simple rules did not require any lengthy explanation. Everyone knew what they were. One of them was 'Pay your debts, and pay them quickly.' I was greatly encouraged when I read those words. But then I remembered that at the present rate of repayment of our debts, under the Chancellor of the Exchequer's policy, we shall take rather over 150 years to pay off the National Debt. I think I am entitled, therefore, to say that the Chancellor of the Exchequer's practice is inferior to his precepts. Then he went on to say: When they adopted sound methods of finance they paid the price at the time and got the reward afterwards. That, again, seemed to me to be admirable, all leading up to a more vigorous policy of debt reduction. Then I remembered that the Chancellor of the Exchequer was himself responsible, or was very largely responsible, for adding rather over £100,000,000 to the War Debt of this country through his post-Armistice operations in Russia, in defence of the various White hopes whose very names we have almost forgotten—Yudenitch and the others.

The hon. Member is going rather wide in his remarks. He cannot, in a speech on the Finance Bill, touch Russia and the Chancellor of the Exchequer's views on that question. He must keep to what is in the Bill.

With great respect, it is not my intention to go further than to mention the fact that the War Debt and its magnitude were partly caused by this particular operation. I shall not pursue the matter further than that. I was then going to make a calculation regarding the Betting Duty. In a full year the Betting Duty will bring in about £6,000,000, which will be barely sufficient to pay the interest on this particular part of the War Debt which was due to the Chancellor of the Exchequer's adventures in Russia, or the adventures which other people had to undertake at the Chancellor's instigation. That is another example of what the Chancellor of the Exchequer calls paying the price at the time and getting the award afterwards. The "reward afterwards" in this case is the Betting Duty. With regard to the repayment of debt, I do not wish to go beyond the suggestion which I have already made, but it is high time that the Government had a policy. At present the Government have no policy of debt redemption, except to muddle along at a rate which will mean an expanse of more than 150 years before the whole burden is paid off. That is not good enough, and if we are to face this thing in earnest, we should at any rate envisage some point a little less remote than 150 years hence by which time the whole burden will have been lifted from the shoulders of the taxpayer.

I submit, further, that the taxation of the wealthier sections of the community is much too low, having regard to the necessities of the country. I would illustrate that by referring to certain changes which have taken place since 1919 in the distribution of wealth. The other day the Chancellor of the Exchequer, told us that the fall in wages in this country since 1919—which he admitted had been very great—had been balanced by the fall in the cost of living, his view being that although the wage-earners were getting less money that money was worth so much more that they were as well off in the aggregate as they had been before. I do not accept that view for a moment. But, in so far as there is any truth in it, it has a double application. If the money is worth more to the wage-earners it is worth more to the wealthy people whose money incomes have increased. The increase of wealth in the higher range of incomes has been much larger than would appear from mere statistics of money value I would set against one another two sets of facts which I think go to show that at the present time the taxation on large incomes and large fortunes is lower than it should be or a broad view of financial justice. Compare the Income Tax payers in 1919–20 with those who paid Income Tax in 1924–25. I find from the Sixty-eighth Report of the Inland Revenue Commissioners for the year ended March, 1925, that whereas in 1919–20 there were no fewer than 7,800,000 people with incomes of over £3 a week (or £160 a year), by 1924–25 the number had fallen to 4,700,000.In other words, it was nearly halved; 3,100,000 persons who had previously been obtaining £3 a week or more had fallen below the That is the measure of the way in which wages and small salaries diminished in that intervening period. On the other hand, if you take Super-tax payers, you will find that in 1920–21, the first year in which liability to Super-tax was brought down to £2,000, the number of incomes over £2,000 was 79,000, and in 1924–25 the number had gone up to 90,000. Eleven thousand more had climbed above the line of Super-tax liability. If, in addition, you allow for the fall in prices, it will be seen that the enrichment of that Section of society, represented by Super-tax payers and those just below the Super-tax limit, has been very considerable indeed. In view of that fact, I think we are entitled to assert, without any fear of contradiction, that, during this period, even apart from fiscal policy and apart from the effects of successive Finance Bills, the rich have been growing richer and the poor have been growing poorer. That tendency has been encouraged by the policy pursued by the Chancellor of the Exchequer. He has been only too willing to give the rich a helping hand on their road to greater riches and to give the poor a helping hand on their road to greater poverty, and that is the gravamen of our complaint against the policy of which he is, the author.

4.0.P.M.

It would not be proper for me to sit down without drawing attention on this occasion to one more feature of the right hon. Gentleman's finance, which has had an effect similar to those I have been describing. That is, the tendency to evade national burdens by shoving them on to the localities, or, in other words, by transferring burdens from taxes to local rates. The policy of the Economy Bill and of much else has enabled this Finance Bill and the Finance Bill of last year to be framed in such a way as to remit national burdens falling mainly on the well-to-do in order to throw corresponding charges on those localities which are less able to bear them. It may be said without exaggeration that the reduction in the Super-tax last year is being largely paid for by the ratepayers in necessitous districts such as West Ham, Bedwellty, and the rest. There is that local shift of burdens in addition to the shift of burdens as between classes of differing wealth in the community. This Bill, for the reasons I have been endeavouring to lay before the House, and for other reasons with which I have not time to deal, is the latest of a series of bad budgets, broken only by the good budget of 1924. This Bill is full of evil and anti-social tendencies, and for that reason we should not be doing our duty if we did not challenge it even in this last stage, and if we did not divide the House against it.

The time has come when we should announce as our policy that we intend to reverse the fiscal engines which the Chancellor of the Exchequer is operating and which are driving the poor ever deeper into poverty while carrying a small minority of the nation through successive tax remissions, upwards towards higher levels of ostentatious wealth and wasteful luxury than have ever before been known in the history of this country. It should be the business of finance to soften social injustices rather than to exacerbate them; it should be the business of finance to lighten unproductive burdens on the community rather than to allow them to remain and to grow heavier; it should be the business of finance to lay the foundations, not for future wars, but for a more hopeful relationship both between nations and between classes within the country. [ Interruption. ] One way would be to reduce the disparities of wealth which at present give rise to that feeling which the hon. and gallant Member deplores, but I am not going to allow him to draw me too far from the line on which I started, though I should be prepared to discuss the matter with him on another occasion.

My submission, in conclusion, is that whereas these are the objects which a financial policy in an enlightened country should follow the finance of the Chancellor of the Exchequer and of the Government is following exactly the opposite direction. It is moving along the wrong line. It is doing nothing to deal with those heaviest of all burdens which press upon the taxpayers at the present time. It does not adjust burdens fairly as between different classes of wealth and different sections of the community. The time has come to lay down the principle that these engines which are now operating to the detriment of the great majority of the community, and to the benefit of only a small section should be reversed whenever the electors of this country in their wisdom shall decide to reverse the positions occupied in this House by the party opposite and by ourselves.

I beg to second the Amendment.

This instrument, whose Third Reading we are discussing to-day, raises altogether approximately £825,000,000 of revenue, and it can be regarded from two points of view. It can be regarded from the point of view of the total amount which it is proposed to raise, or from the point of view of the incidence of that amount upon the taxpayers of the country. During the progress of this Bill through its various stages in this House it is the second of those considerations which we have had uppermost before us, namely, the incidence upon the taxpayers of the country of the burdens of taxation. This afternoon I propose, very briefly, to deal mainly with the other aspect of the question, namely, the total amount it is proposed to raise. I do this because I desire to put forward what I conceive to be the Socialist point of view upon this question as distinct from the point. of view which is held by the exponents of the other two principal parties in the State.

The essential Liberal point of view, as I understand it, is that all taxation is an evil; that the individual is a much better judge how to spend money than the State, that it would be very much better if the taxation and the expenditure of the State came down and down until it reached something like nil, and that the expenditure of the individual should be correspondingly increased. That view, if carried to its logical conclusion, would mean that the army of defence—or the whole of the defences of the country—instead of being provided communally by the State, would be provided as it used to be provided in old days, by individuals called upon to raise separate forces in order to join the King in providing for the protection of the country. It would mean that education would entirely cease or would be carried on exclusively by individual educational enterprises instead of in the aggregate by the community as a whole. It would mean that the care of health, instead of being in part entrusted to medical officers of health, would be confined, as a great Liberal thinker like Herbert Spencer very strongly represented that it ought to be confined, to the private medical services which individuals could provide.

Conservative and Socialist supporters agree that certain services are better provided communally than individually, but they differ to a large extent in the services that they favour. As far as I understand the Conservative position, it is that in the main the Fighting Services ought to be provided communally, and that the more money you can spend on those the better, but that, so far as the other services of the country are concerned, the smaller the Budget the better for the country.

The Socialist looks upon the State to some extent as an interested shareholder looks upon the company in which he has an interest. He looks upon the balance-sheet of the State very much as that shareholder looks upon the balance-sheet of his company. He looks upon the Budget statement much as that shareholder looks upon the profit and loss account of the company in which he is interested. When the chairman of a company is expounding the affairs of his company for the year, he does not apologise for the amount of the turnover. (My right hon. Friend the Member for Colne Valley (Mr. Snowden) says that he does apologise if the turnover is too low). But he does not apologise if the turnover is larger than it was in previous years and larger than the shareholders expected it. What he is interested in, and what the shareholders are interested in is to see, first of all and mainly, whether a good profit has been made. That is the main interest of the Socialist in the business of the State. Of course, where you are dealing with an ordinary company the profit takes the shape of actual money receipts over and above expenditure, and the money is available to be distributed in dividends.

When you are dealing with the balance sheet and the profit and loss account of the State, of course you do not get profits in that technical, monetary form. But the profit that the State derives from its expenditure is just as much real though it is not expressed definitely in terms of money. Hon. Members opposite realise the great profit to be derived from the fact that the defence forces of the country, instead of being provided by private individual expenditure of one body here and one body there, are provided by the country as a whole, and, in so far as it is necessary for us to have a defence force, whether for the external or internal preservation of order, it is perfectly clear that it can only be raised on national and on what I call communal lines. But the Socialist looks also at the other services render a very considerable profit to the community. Those are services that minister to the health and happiness of the people as a whole; and, from our point of view, the profit to be derived by the citizens of this country from communal expenditure on health, education, and other services of a similar character is of the utmost importance to the well-being of the State and the well-being of all the citizens within it.

Coming to the total amount which is raised by this instrument — about £825,000,000—I should like to say that, in the first place, roughly £25,000,000 of this sum comes from special receipts and is not, strictly speaking, raised by the people of this country at all. Therefore, we are concerned with about £800,000,000. It is quite a common thing among large numbers of people in this country to argue that we are proceeding on a very serious course, because we are taking what is roughly 20 per cent. of the national income for the communal services of the country. (The national income is probably nearly £4,000,000,000, and £800,000,000 is roughly 20 per cent. of that figure.) But I would point out that there is a certain fallacy in that method of argument. As a matter of fact, out of the total £825,000,000, only a small half is actually spent on what I should like to call the communal activities of this country. Before you come to the communal activities you have to consider that part of the revenue and expenditure of the country, which is, in fact, merely re-distribution. Taking first the National Debt charges and allowing for that part of the National Debt charges which goes to America, and it will be found that something like £326,000,000 spent on the National Debt charges goes to individuals in this country. If you add to that sum a sum of £122,000,000, which according to the White Paper dealing with the finances of the country is the total amount spent in pensions, you reach a sum of about £450,000,000. Therefore, out of this £825,000,000, a sum of £450,000,000 is really a redistribution of the wealth of the country, and the communal services of the country are what is left over after that has been taken into account. If you take £450,000,000 of redistribution from £825,000,000, you get £375,000,000, and if you allow that £25,000,000 comes from abroad, you find that that the taxation of the people of this country only amounts to a sum of £350,000,000 a year on behalf of what I call the communal activities of the State. Of that sum about one-third goes in providing the Army, Navy and Air Force, and the other two-thirds go in the general activities which we in the Socialist party, so far from disliking or disparaging, believe to be of the greatest value to the well-being of the community.

I said the main thing which the chairman of a company was expecting to point out was the profit, but, of course, that is not the only question to which he would have to refer and it is not the only question on which the shareholders would expect him to be able to justify the actions which his board had carried out. The second factor would be reasonable economy in expenditure. I wish particularly to emphasise the analogy there, because though we on these Socialist Benches firmly believe in a large communal expenditure on behalf of the social activities of the country, at the same time we are quite as zealous as hon. Members opposite or hon. Members below the Gangway to see that every penny of expenditure shall be economically and wisely spent and shall not be flung away in any method which would not get good value for money. Finally, the chairman of a company would have to justify the raising of the money and the expenditure on the ground that the enterprises carried out by the company were legitimate forms of enterprise. It is there perhaps that hon. Members opposite will come more particularly into conflict with us on this question when the analogue of the State is substituted for that of the private company. I contend that in this twentieth century we are realising, more and more, that certain things for the benefit of the country cannot be carried out by private means. Education is one of these and there are also the great health services. I do not propose to go into these subjects to-day, because I should then be going outside the province of what we are entitled to discuss on this Finance Bill. But I contend, and I desire to make it quite clear to this House, that where the Socialist point of view differs fundamentally from the point of view of Members of both the other parties is that we do not look upon national expenditure as evil in itself, even though it must be contributed by national taxation. What we demand is that national expenditure shall produce a real profit, in the widest sense of the term, to the country; that it shall be economically administered so that not a penny is wasted, and that the forms of expenditure shall be such as commend themselves to the great bulk of the people of this country.

I said I proposed to address myself mainly to this question of the total amount, and scarcely at all to the question of incidence, but before I sit down I should like to say this. With regard to the incidence of taxation as it is imposed by this Bill, I find myself in agreement with the hon. Member who moved this Amendment. I cannot find that this Bill really carries out the highest traditions of finance. Many of its provisions I regard either as niggling or as vicious, and in particular I single out the further impositions which are made in restraint of trade. The proposals for the repetition of Part I of the Safeguarding of Industries Act I regard, in the main, as injurious to trade. I know it is argued that they will benefit certain trades in this country. I think that argument is fallacious. I believe when the plus and the minus are added up together, it will he found that the minus has exceeded the plus, and I think that is also true, and perhaps even more true, of the small but obnoxious duty which is to be imposed on wrapping paper. Had the House been full, had all Members been in their places, when the discussion on that duty took place, I am not at all sure that the majority of the Conservative party would have held, because those who were present found themselves in increasing numbers forced to vote against these duties, and this was particularly so when it came to the duty on straw paper. It is a very small thing, but all the same I think those who were present will agree that it was proved conclusively from these benches that the inclusion of straw paper in wrapping paper was, in fact, a piece of sharp practice. I say so because those interested in the industry were told quite definitely that it was not to be so included, and therefore they made no attempt whatever to defend their case. Not only were they told it was not to be included, but up to that time straw paper had not been included in the Customs definition of wrapping paper, and it was not until after the Committee had reported that the whole position was changed and—I suppose for the purpose of giving colour to this piece of sharp practice —that straw paper was included in the term "wrapping paper" in the Customs description of imports. As I say, it is a small matter but it is typical of all this safeguarding business. With the avowed object of buttressing up one comparatively small trade, a certain amount of trouble, inconvenience, expense and injury is inflicted upon a large number of other trades throughout the country. That is why I say that, so far as the incidence of this Budget is concerned and also as regards the perpetuation of certain things in it, I regard it as both niggling and vexatious.

Finally, one word with regard to what I have called the redistribution. Perhaps what I said in the earlier part of my speech might convey the idea that I thought this redistribution of something like £450,000,000, just because it was redistribution could be regarded with comparative indifference. I do not take that view. In so far as this redistribution is used as a cloak for enabling the broadest backs to escape part of the communal expenditure, I think it is a very injurious thing. I may mention that the contribution which comes from the payers of Estate Duty, Income Tax and Super-tax in this current year only exceeds by £20,000,000 the total charges on the debt. Last year it exceeded those charges by £230,000,000, and in previous years by larger amounts. That, to my thinking, is a very serious thing. From the point of view of illustrating that the communal services of the country do not cost as much as some people suppose, it is quite true you can write off an amount which is simply in the nature of redistribution, but in so far as realising how taxes can operate, redistribution is exceedingly important. It is, I think, obnoxious that the receipts from persons of great wealth should only provide £20,000,000 over and above the amount which goes in the payment of debt. Therefore, although for reasons which I have given I am not one of those who grudge the total figure of this revenue Bill, yet I do feel that so far as the incidence of taxation is concerned, it has not been equitably arranged between the different portions of the community, and, so far as the smaller duties are concerned, I think this new attempt to bring back into British taxation a large number of small petty and vexatious duties is an injury to the well-being of the State.

The two speeches to which we have just listened attacked the Budget on general as well as on particular lines, and I agree, to some extent, with the views which have been presented to the House by both hon. Gentlemen. I must confess, however, when, I heard the hon. Member who seconded this Amendment say that the Liberal doctrine of taxation might be summed up in the single phrase that all taxes are evil, I wondered from where he had drawn his information. I gathered from a later passage in his speech that he thought Herbert Spencer was the most, typical Liberal in the whole range of British thought, and that was his justification for stating that the view that all taxes are evil, is good, sound Liberal doctrine. I am not altogether sure that the hon. Gentleman was not rather near the mark. He did not hit it. All taxes are disagree able, even if they are not evil. I can imagine circumstances under which taxes would be a positive good. One only has to look across the English Channel to see what would be the effect of a far wider and more pungent range of taxes than the French people suffer from at the present time. I do not accept the doctrine that all taxes are an evil, but I do say that the form in which taxes are imposed can in itself become an evil, and that is the reason why I object to some of the details of the Budget of this year, as I did to some of the evils of the Budget of last year,

No one can examine the new taxation and the provision which has been made for the collection of revenue in this Budget without realising that the right Ion. Gentleman has fallen back on to the obsolete machinery of Protection in a very small, insignificant, and almost contemptible form. There is nothing like the great wide range of Protective policy which characterised the propaganda of Mr. Joseph Chamberlain in days gone by. There is merely a desire to satisfy, in this direction or that, the Protectionist leanings of the supporters of the present Government. I do not know that these taxes in the total are going to do very much harm in themselves, in so far as they absorb the money of the taxpayer and swell the revenue, but they have an objectionable side, which was mentioned by the Seconder of this Amendment, which is of very great importance. They add to the friction of trade, they impede the transfer of goods, they make it more and more difficult to conduct exchange without interruption. In themselves, they are sometimes badly justified, as, for instance, in the case of wrapping paper, but the main objection that I have to them is that in their cumulative effect, so far from stimulating exchange, they interrupt it, and they also have the additional disadvantage of throwing on the consumer a much larger burden than can be measured by the benefit which comes to the revenue.

I satisfy myself, therefore, to-day with merely registering my objection to the Protective duties for which the right hon. Gentleman has made himself responsible, and with saying; for the last time on this Budget, that in so far as he has attempted to stabilise or render permanent the Protective tariff, such as it is at the present time, he has entered into an obligation which naturally will not be honoured by his successors and has done nothing whatever to give to the Dominion trader or to the trader in this country that settled and unvarying policy, which is one of the best assets that a business man can have in dealing with forward business. In the days previous to the War, every trader knew that we were not likely to depart from the Free Trade basis of raising revenue, and that, in itself, gave him the kind of stability that he wanted.

The objection, if I may say so, that I take to the views put forward by the Seconder of the Amendment is that, while paying lip service to the importance of turnover, he rather turned his mind away from the source from which turnover must spring, namely, that of production, to thoughts as to the distribution of the revenue so raised. It is far more important for us to-day, as it is more important for the Treasury, to realise the source from which they are to draw their revenue. We cannot have a large revenue in a country with a declining trade. It is absolutely impossible for us to keep up our present scale of expenditure and balance it with an annual Budget, unless the total turnover of the country is fully maintained, and that turnover cannot be maintained, unless the importance of production is constantly present in the minds of all those who are responsible for the conduct of industry. The hon. Gentleman, in the application of the general principle to which he adheres, appeared to ignore the fact that whatever money is taken out of the taxpayers' pocket is not money which is merely put into the hands of the State to spend in place of the private taxpayer spending it. It frequently is money which would have accumulated in the taxpayers' account and would have gone to swell the sum total of capital without which industry cannot be conducted, and the objection to passing it through the State is that there is no such process in any State machinery whereby you add to the capital sum in the national possession. [An HON. MEMBER: "That is Individualism!"] It is Individualism, but it is Individualism on which the State can be built up, and no State can be built up by ignoring Individualism.

What is important is that we should recognise how far these doctrines can be carried. There is one very simple distinction that I should draw between the old Individualism, such as my hon. Friend learned in his earlier days, and the more intelligent Individualism that is characteristic of to-day, and it is this, that we now recognise that there can be no such thing as the individual being cut off entirely from his environment. He makes his environment, but he is also the creature of his environment, and it is by recognition of that principle that we have plunged headlong into the provision of education, for a whole generation past, at State expense, and it is better that the money should be spent in that way rather than that it should be left purely to individual enterprise. We have learned that in practice. There is also the further fact that these social services, to which he made reference, arc based on the idea of the mutual responsibility of citizens of the State for each other. The doctrine of mutual insurance runs through the whole of our provision for the risks of ill health, of unemployment, and of death, and what is left of the expenditure which is of a communal nature, namely, that which is necessary for defence, should be kept within the strictest and narrowest possible limits; and if some of us, who are constantly preaching the doctrine of disarmament, are doing so, guided, as we are naturally, by a peaceful sentiment, we are also keeping in mind the fact that Europe in its present impoverished state cannot attempt profitably to go on, year after year, maintaining as large military forces as it had before the War.

On that, I only make one comment, because the expenditure of the year is not necessarily under review on the Third Reading of this Bill, and it is this rather remarkable fact, that if you assess the military expenditure of Europe in terms a francs, the military expenditure of this country is actually at the head of the list in Europe. I admit that that is not altogether a fair test, but it is a very remarkable fact that, assessed in terms of francs, it is actually higher in this country than it is in any other country in Europe. Let me take a moderate test, I do not want to take the franc at 250, but I will take it at 140, which is probably rather lower than the amount at which it will be stabilised. Even at that, our Army expenditure in this country exceeds that of France. That is a very startling fact, and it is one which must constantly be kept in mind by this House when it is pressing on the Government an extension of our military liabilities.

I return to the main source for which revenue alone can be raised, and that is the total turnover of the country. Turnover is, after all, the only means by which revenue can be provided. There has been a very grave interruption in the turnover of this country during the coal stoppage,and I should like to examine how far the revenue of the right hon. Gentleman is likely to be affected by the coal stoppage of the last nine or 10 weeks. We can assess it in detail, but, of course, no one can arrive at an accurate total of the loss which has conic to the country as a whole by the stoppage in the coalfields. What we can do is to take a rough estimate, such as was attempted at the close of the general strike—and I think the figures have not been challenged seriously in any quarter—namely, that the total loss to the country during that period came to at least £30,000,000. If we then take the period from the 16th May to the 16th July, I think it is fair to say that the loss owing to the stoppage in coal mining has come to at least £28,000,000. The loss on the railways has been less than, I think, most people anticipated. During the same period, compared with 1925, there has been a diminution of traffic in goods of about £1,400,000, and in passengers of about £600,000, or £2,000,000 in all. The two big categories in the metal list, pig-iron and steel, show, of course, far and away the greatest drop. They are directly dependent on the provision of coal, and it naturally follows that under the headings of both pig-iron and steel there has been a very big and almost sensational fall in the exports from this country and in the production for home use. If you take together the pig-iron produced for home use and that which is provided for export, there has been a loss during the same period of at least 1,000,000 tons. I assess that at only £5 a ton, but that means a loss under the heading of pig-iron alone of something like £5,000,000. In the case of steel, there has been a loss of at least 1,200,000 tons, and that, I think we may fairly say, represents something just under £10,000,000. If you total up what may be called these big, heavy losses which are the direct result of the coal stoppage, it is certain that at least, in our home and export- trade, the loss represents £45,000,000.

Now I turn to the textile trade. I am taking each one of these, because they are the basis upon which the right hon. Gentleman must naturally build up his revenue, and I want to assess the possible diminution in his revenue. Take the textile trade. In the export of cotton—I do not know what has been the output for home purposes; I can only make a guess at that, but in the export of cotton —there is a drop of £7,700,000 during the period from the 16th May to the 16th July in woollens, there is a fall of £1,660,000, and in other textiles a fall of about £176,000; and in the case of wholly or mainly manufactured goods, the drop in the export comes to no less than £17,500,000 during this period. if we add up these various categories, we come to the first total, but, of course, not the final total, of the dead loss which this country has suffered from the coal stoppage. If we add them up together there are £46,000,000 for home and export trade in what may be called "heavies," there is a loss on articles mainly or partly manufactured for export only of £17,500,000, and there has been a loss in one or two other smaller items, bringing the total in these categories up to no less than £63,500,000 during that period of some eight weeks. It is only fair to add to that the drop which there has been in the production of goods for home consumption, and as far as it is possible to draw up any estimate at all, the figures seem to lie somewhere within the very wide range of from £13,000,000 to £20,000,000, probably nearer £20,000,000 than £13,000,000. Then we have also to add to that large total the amount which has been lost in wages, and so far as the miners are concerned, it appears to be an accurate estimate that no less than £25,000,000 has been lost in wages to them during the stoppage of the general strike and since then. Of course, it does not mean that they have deprived the other industries and trades of this country of £25,000,000 spending power, because to some extent that has been made up by money subscribed in relief and distributed to the trade unions, and so on. It is, nevertheless, a loss to a very important section of the industrial population. If they have lost £25,000,000, I am sure that there can be no doubt about it that workers in other industries have lost at least £10,000,000 in wages during the last few weeks.

Let me sum up the totals. We find ourselves in this position: a loss of £30,000,000 during the general strike; £63,500,000 in the export trade, about £20,000,000 in the home trade, £25,000,000 loss of wages to miners, and £10,000,000 loss in wages of the workers in other industries, making a total of £148,000,000. This, in itself, is not the end of the tale, for there have been large numbers of industries which have suffered during that period. Let me take one of them. There is the direct. effect of the stoppage in the export of coal and in the provision of coal bunkers for the shipping trade. The amount of laid-up tonnage has nearly doubled since the 1st April of this year. There a-re now 1,376,000 gross tons of shipping idle in British ports, against 736,000 tons on the 1st April. That, in itself, means a loss of £700,000 during that period. But what is of even greater importance is the effect of this in the widening of the circle of industries —growing wider and wider as the weeks go on.

We have lost £160,000,000. That by no means covers the whole ground, for every one of these industries has in itself other industries dependent upon it Their purchasing power is reduced. The demand for their ordinary commodities disappears. The range of unemployment must in itself go over a far wider territory than anything we have been able to estimate during the last eight weeks if the stoppage continues. That is one of the effects of the coal stoppage which nobody can estimate. The only thing of which we can make sure is that, bad as may be the drop in the total national turn-over and in the present national revenue, it will grow increasingly greater as the weeks pass by.

I should like to say two or three words on another aspect of the same subject. We know that this stoppage is likely to have a detrimental effect upon the Revenue. It also has a very seriously detrimental effect upon the national credit. Nothing can be of more importance to the Chancellor of the Exchequer than the provision that must be made during the next three years for funding the rapidly maturing Debt. I am sure it must be constantly in the mind of the right hon. Gentleman that there is no less than £950,000,000 of short-dated Debt falling due for maturity between now and 1929. The success which he has in funding at a low rate of interest will decide in his future Budgets very distinctly the amount of taxes to be provided by the taxpayer in the years to come. For instance, if the right hon. Gentleman were able to take the whole of that matured Debt during the next three years and put it on a 4½ per cent. basis—which is by no means an unreasonable hope—he would save the taxpayer at once £20,000,000 or £30,000,000. If he could get it upon a 4 per cent. basis, he would increase that saving each year as the maturities were met, and also provide for a very large saving in interest charges. I see no prospect of his being able to do that under present conditions.

In the first place, there has not been left anything like a large enough margin of revenue over expenditure to leave him a very large surplus to make up for the stoppages during this year, especially the coal stoppage which we have been attempting to assess this afternoon. It will make it all the more difficult for him to have available in this country a very large amount of available capital for investment at the time when he wishes to change his long-dated into short-dated loans. There will always remain a demand in the City of London for short-dated paper. it is an essential part of our financial system. Every chance that we have is diminished by the effect of the stoppage in the coal mines and in the coal trade, and in the export trades which are frequently dependent upon them. We may truthfully say that the effect of the coal stoppage touches not only those directly concerned in the various industries; not only touches those who are the consumers of coal, but also is of direct importance to the taxpayers as a whole. Very few can hope to see any reduction in taxation in the years to come unless the right hon. Gentleman can fund a great deal of the debt at a lower rate of interest.

Notwithstanding the fact that the outlook at the present time is dark, and that we see very little chance of an immediate settlement and a resumption of work, we can, at all events, say that indications in other directions show how eagerly the commercial community—the great manufacturers, and those who represent the big concerns, as well as those engaged in the trades themselves— are anxious to supply the needs of the world. Given the opportunity to do so, they will show not only the enterprise which is necessary but that eagerness to do what is required for the countries which live very largely on the exports from Great Britain to satisfy their needs, as well as add, to our own national income. That we are capable of doing that I have no manner of doubt. There is very little doubt that anyone who makes a full survey of British industry can see that in almost every department it is more efficient than it was 12 or 15 years ago. The textile trades are equipped with more modern machinery. Their methods are more up-to-date. Their organisation for selling abroad, their representation in the great Asiatic markets, is better, more skilful and more energetic than it was 12 or 15 years ago. In the engineering trade you have more skill, adaptability and ingenuity, while designs and manufacture are rapidly on the increase. The finest textile machinery in the world is still produced in Lancashire. If we turn to the very large categories of manufacture—the making of peat ships and the engines which propel them—we have in one or two instances been outdistanced by our competitors abroad. We are rapidly making up the leeway at the present moment. Some of the finest internal combustion engines in the world are made in this country. They are of British design, and not dependent in any way upon foreign origin for their ingenuity or efficiency. All these various trades are ready to take full advantage of any opportunities, as they have done in the past, when a resumption of work comes in the greatest of our producing industries. Whatever effort is made by those in authority in the industry, these others are in a position to bring about a rapid resumption of activity, of coal production, of the manufacture of iron, and the extension of our engineering trade, which will confer benefit not only upon the right hon. Gentleman—who is by no means free from anxiety—not only upon the taxpayer as a whole, but upon the consuming community of the world, who are largely dependent upon what We sell and send to them.

I do not think that the right hon. Member for West Swansea (Mr. Runciman), who has just sat down, was justified in complaining of the hon. Member for West Leicester (Mr. Pethick-Lawrence) for having quoted Herbert Spencer as representing the true Liberal doctrine with regard to taxation. The right hon. Gentleman must realise that for those who are outside any of the Liberal camps and who can hardly follow the kaleidoscopic changes that go on within them it is very difficult to know where to turn in order to obtain the orthodox faith of Liberalism. Just as during the days of the Great Schism, when there were two or more Popes in Europe, seekers after the true faith were compelled to turn to an earlier source than any of them in order to obtain the truth, which led to the Reformation, so to-day we are driven to the works of some of the earlier apostles of Liberalism in order to obtain the true doctrine. Nor can I congratulate the right hon. Gentleman on his correction of Herbert Spencer. In the old days Liberals thought more clearly and used less equivocal language. Herbert Spencer said boldly that all taxation was evil. But the right hon. Gentleman the Member for West Swansea, dealing with this subject, said he would not go so far as to say that all taxation was an evil, but that all taxation was disagreeable. This differentiation was to my mind, a splitting of hairs that will not bear splitting, and I think that Herbert Spencer would have held that the words "evil" and "disagreeable" when applied to taxation meant very much the same thing. I think the Chancellor of the Exchequer is to be enormously congratulated upon the success of his Budget. If anything would convince me more than I am convinced of that view it would be the speeches to which we have listened this afternoon—it would be the interesting and illuminating way in which the three hon. Members who have spoken have not dealt with any single proposition contained in the Finance Bill.

The hon. Member for West Leicester in his speech made some sort of vague reference to paper. A vaguer reference to Preferential Duties was made in the speech of the right hon. Gentleman the Member for Swansea. When the betting tax was mentioned by the hon. Member for Peckham (Mr. Dalton) it was only to connect it in some way with the Russian Civil War of seven years ago. We have not really heard a word about the Finance Bill as such. We heard from the hon. Member for West Leicester a very interesting lecture on Socialism, but the Budget is not meant to be a Socialist Budget, and the hon. Member for West Leicester does not do the Budget any harm by saying that it does not conform to any of the principles of Socialism. The hon. Member began by saying that he was going to deal with the question of the amount raised, and he was going to criticise that. Many hon. Members, perhaps, would agree in the criticism of that amount by deploring the size of it. On the contrary, the hon. Member for Leicester considers that the amount is not enough. He wants to see a very much larger sum raised. All these items in the Finance Bill which we were told had provoked much violent opposition, and which we have had detailed in the Press and in speeches inside and outside this House, and which have been talked out over and over again, the Betting Tax, the raid on the Road Fund, Preferential Duties, and the Safeguarding of Industries, not one of these has found its way into the three speeches to which we have listened from the hon. Members opposite, from two Socialists and one Liberal.

Therefore I cannot see how the right hon. Gentleman the Member for West Swansea can justify himself in voting against the Bill, bearing in mind the survey of the financial position which he has given us. Hon. Members opposite, of course, will vote against it, but they cannot expect. to convince anybody else that their view is right, and that this is a bad Bill simply on the ground that it is not a Socialist Budget in any sense of the term. I expected the speeches to deal with the most novel feature in the Finance Bill, and that is the Betting Tax. I have listened to the Debates in the former stages of the Bill, and have always been surprised that the real charge against the Betting Tax has never been formulated.

It was said that the chief argument against it was the moral argument, and, if the real argument is the moral one, the Government would have to give it serious consideration. But, although everybody has mentioned the moral argument, nobody has ever in this House, as far as I am aware, said that betting is wicked and wrong, and, unless it is, there is no moral argument against betting. I say quite frankly that I do not think it is wrong, arid I shall be glad if, before the Budget finally passes, anybody who takes the opposite view will give us some reasons why he hold it. I can find no condemnation of gambling, for instance, in Scripture. That may sound an old-fashioned argument, but it should still carry considerable weight. I believe, on the other hand, that in the Koran betting is condemned, and perhaps it, is natural that some of those people who wish to introduce the Mohammedan rather than the Christian view of alcohol should also wish to introduce another precept of Mohammedan morality. I am strengthened in my view, because I have found that nobody is ashamed of betting, and people are ashamed of doing wrong. Even that pattern of stern morality the right hon. Gentleman the Member for Come Valley (Mr. Snowden), informed us that at an early stage of his life he indulged in a small wager to the extent of 6d. which was not successful. We all listened to that confession with amusement, and the right hon. Gentleman made it with a smile on his face. If he had had to confess that, even at the age of 13 and even for so small a sum as 6d., he had committed a theft, he would not have done i with a laugh, and the announcement would not have been received with amusement.

5.0.P.M.

The right hon. Gentleman the Member for Spen Valley (Sir J. Simon) also told us that he had occasionally betted to the extent of half-a-crown. He would not have confessed with the same airy unconcern that he had stolen half- a-crown. Yet he compared gambling with prostitution, as though the two things were analogous and could be compared. There is one great difference between them: the one thing is wrong and the other is not. If hon. Members would keep that distinction clearly in their minds, they would not be led away with humbug about the moral side of betting. We have all been deluged with tracts and literature with regard to this Betting Duty. I have studied some of that literature and tried to make out how some of the reverend gentleman who are the authors of the tracts justify their very strong moral objections to betting. The most in- genious of them, having searched the Decalogue in vain for any condemnation of it, say that they have found it in the Tenth Commandment. They say that the man who bets is committing the sin of covetousness. But I would ask them how can they seriously hold that view, and, if they can, can they pretend to have any knowledge of human nature? We all know the covetous man. We find him in all departments of life, but the covetous man is not a betting man; he is not such a fool. The avaricious man, who thinks solely of amassing wealth, does not waste his time or money in betting. The spirit that drives men to commit the folly of betting is exactly the opposite. It is the spirit of placing too little importance on money affairs, and regarding them in a reckless way and of not taking due thought for the future. For all these reasons, I submit that the moral argument against the tax will not hold water.

Once you have got away from that argument, how are you to look upon the practice of betting? It is a. foolish practice, and those who bet most will agree most heartily that it is. It is a foolish practice, which, practised as it is so universally in this country, becomes a serious social evil. Is it then the duty of the Government to attempt to ignore it, to look the other way, and allow it to go on; or is it their duty rather to attempt to restrain it, to restrict it, to control it, and, if possible, to derive some real benefit from it to the whole community? Surely that is the Government's duty, and that is exactly what the Government ale doing. My only regret is that it is still being found impossible to include all betting transactions in the present proposals of the Government. I hope that in next year's Budget some practical proposal may be brought forward to include street betting as well as credit betting and betting on the course. I always feel strengthened in the certitude of my own view being right when I find myself being opposed by extremists, whether they sit on my right hand or my left hand; but the most satisfactory situation of all is when one finds. oneself faced by two bodies of extremists, sitting at the two opposite ends of the pole. That is the position of those who are opposing this Betting Duty to-day. Of all the strange alliances in the history of politics, there is surely nothing stranger than the alliance between the Puritan and the bookmaker. Although we have heard less of the bookmakers' arguments in this House, they have had a considerable weight in influencing public opinion, and their voices, powerful if riot musical, with which those who have visited the race course are familiar, have been raised in indignant protest and have found their way into the Press to a greater extent than the voices of the Puritans. I have received a great number of letters and circulars from bookmakers giving me most moving and painful pictures of the harm that this tax is going to do I have heard of gentlemen who are in the habit of betting to the extent of £10,000 or even £100,00, and it has been made plain to me that they will be faced in future with the alternative of either reducing their stakes or else being put in the impossible and intolerable position of having to give up betting altogether. I think it would not be a great loss to the community if these gentlemen did retire from the arena. The argument that these big punters, who are to be hard hit by the Betting Duty, are the backbone of racing is absolutely untrue.

As in all financial transactions, in which huge sums are involved, it is not the few people of great wealth who count; it is the huge number of people who make small bets, and they will, I am afraid, continue to bet as cheerfully in the future as they have done in the past. They may realise that the real effect of the Government's proposal will be to make betting a little bit more of a "mug's game," that the odds will be a few pounds more against them, but that will not deter them from having their occasional, or even their regular speculations. Racing will go on exactly in the same way, and, if betting be diminished to some extent, as has been allowed for in the Government's proposals, so much the better for everybody concerned. The most satisfactory way of dealing with some of the literature which has been produced on this subject would be to forward occasionally to those people who say that the Betting Duty will increase and encourage betting enormously the circulars which one receives from the bookmakers, which prove conclusively that it is to have exactly the opposite, effect. And, in order that the bookmakers may not think they are being treated with incivility, it may be permissible to send them some of the tracts pointing out the enormity of the offence which they are committing and seeking to persuade them to give up this method of earning their living. That has largely been the policy with which the Chancellor of the Exchequer has so successfully met the various attacks that have been made upon him, and I think he is to be congratulated upon the way in which he has avoided the Puritan Scylla and the Charybdian bookmaker, and steered his barque successfully between the two, bringing it laden with revenue safely into the harbour of the Treasury.

I should like to say a few words of criticism or perhaps of warning or perhaps of exhortation to the Chancellor of the Exchequer. The hon. Member for Peckham criticised the Government on the ground that too much was being spent on armaments. That criticism I entirely support. We have been disappointed in the promises which the Chancellor of the Exchequer made last year to effect substantial reductions. He has been, I am sure, more disappointed than anyone else, and I only hope his disappointment will not discourage him or retard him from resuming the struggle. He will shortly be engaged again in the conflict with the great spending departments, which every Chancellor of the Exchequer has to take part in annually in this country. He came off badly in the battle last year; I hope be will prove more successful this year. I can assure him that he will have the whole-hearted support of many in his own party who believe that there is no danger threatening this country at the present day which is half so great and imminent as the danger of excessive expenditure. Some people think that the Liberal party is gradually passing away and that it will no longer fill any place in the councils of the nation. It has even been suggested that it has already passed away, and that hon. Gentlemen opposite are merely the ghosts of a party that once existed. I do not know how that may be; but, if it dies, it will probably die intestate, and its possessions will be divided between the survivors. The old theories, the old beliefs, the old battle-cries, the old watchwords, the old ideals, some of them will be pounced upon by the Labour party and some may fall to our share. I recommend the leaders of my own party to stake out an early claim to one of the old Liberal watchwords that has lately fallen on evil days; I mean the word "retrenchment." The claim should not be disputed, because it has been made abundantly clear by the speeches of hon. Gentlemen opposite that the Labour party will never lay any claim to retrenchment. Let us make it one of the principal planks in the Conservative platform. Let us, in the next few years that lie between us and another appeal to the electorate, give some practical proof that it is a real part of our practical policy and that we are determined to put it into force. "Peace, retrenchment and reform," are the three watchwords which used to go together. I think we would do well to concentrate on retrenchment, as all the others must follow it. Without peace we cannot have retrenchment, and without retrenchment we can no longer afford to reform.

I entirely agree with what has been said by the hon. Gentleman who has just sat down with regard to rerenchment. He referred to the Liberal party, and although the Liberal party may be in a bad position I should like to congratulate the right hon. Gentleman the Member for West Swansea (Mr. Runciman) on the figures which he has given to the House. I am sure they will be a very great asset to the Chancellor of the Exchequer. I have personally made out similar figures, but I am afraid they are even worse than his, in showing the great loss which the country has and is sustaining in the strike and the lock-out. The hon. Member for Peckham (Mr. Dalton) said the Chancellor was singing a song in a minor key. I often think he sings in too high a key, and that he does not realise the terrible gravity of the situation, and I sincerely hope the figures mentioned by the right hon. Gentleman the Member for West Swansea will be carefully considered by him. The hon. Member for Peckham also dealt with the question of the loans. I am sure he must realise that all our Government loans have a fixed redemption date except Consols. I understood him to say, or to insinuate, that the loans have not a fixed redemption date.

May I make my point clear? What I was saying was that we ought to fix a date within which the whole of the debt should be repaid and not merely re-borrowed on maturity.

It would alter the whole prospectus of the issue of the loans if there were any method of altering the redemption dates, say, to 30 years. To think that this vast sum could possibly be repaid in 30 years is beyond comprehension. It would mean a gigantic increase of taxation, not only of Income Tax and Super-tax, but also of indirect taxation, which I know the hon. Member is against. If the Chancellor realises that the revenue of this country depends on its trade and commerce, he must understand that the revenue, and especially the Income Tax is bound to depreciate in the next year or two. I do not know whether he has studied the balance-sheets which have been publishedrecentlybyfirmsin the unsheltered trades, such as Armstrong, Whitworth and Company, John Brown and Company and the Ebbw Vale Company. The first two are firms of the highest standing—Ebbw is, also—which have paid dividends regularly up to this year. I often think it is the excessive burden of local rates and local taxation which affect these firms as much as anything. The chairman of one important company stated in his speech that in Britain the cost of Poor Law, workmen's compensation, old age pensions, health insurance and unemployment insurance is £3 18s. 6d. per head of the total population in 1925, or more than twice what it is in Germany, six times greater than in France and 25 times greater than in Italy. This heavy charge must affect our trade and our power of competing for the world's trade. The cost of our National Debt services is very high. We are not in a position to compare ourselves with Germany, which has repudiated her debt. Our services, that is, the interest on the National Debt, cost about £304,000,000 a year, while the cost to Germany for interest, excluding the Dawes payments and any external loan, is only £5,500,000.

It is almost impossible to conceive what that weight of interest must mean to the traders of Britain in competing with the rest of the world; but in spite of it there must be no repudiation by us, no inflation, and no capital levy. We have got to stand by it. We have got to deal with it by way of the Sinking Fund. I think I may say the Sinking Fund is a friend of mine. I believe in it. It places our credit on a sounder and firmer basis, but it loses its value and its weight if our expenditure rises. The Sinking Fund will do five things. It will reduce the National Debt, it will reduce the interest on the National Debt, it will reduce taxation, it will release for trade Government money which is unproductive, and it will advance the credit of the country. As I said before, the Sinking Fund is a friend; but £60,000,000 a year for the Sinking Fund is almost more than the country can stand at the present time, especially in view of our troubles over the general strike and the lock-out in the coal mines. After the Civil War in the United States it was 12 years before the United States started a Sinking Fund. I do not say we should copy that, but £60,000,000 is a vast sum to take out of the taxpayers' pockets at the present time.

If there is one thing we must have in the country it is cheap credit—we live on cheap credit—but the financial liabilities of this country have been going up by leaps and bounds. I refer to the Financial Bills and Financial Resolutions which are passed in this House. I congratulate the Chancellor of the Exchequer in stopping at the £75,000,000 for the Trade Facilities Bill; but there is the Credit Insurance Scheme. I am told the Credit Insurance Scheme will not take any money out of the taxpayers' pockets, but there it is; and there are the Agricultural Credits Scheme, and the liabilities under the Small Holdings and Allotments Bill which went through the Second Reading on Friday; and there is the credit which, I understand, will be guaranteed under the Electricity Bill. I think it is wicked that the taxpayers should guarantee the money to. be raised under the Electricity Bill; it could be raised without the taxpayers' guarantee. To guarantee that sum of £44,500,000, principal and interest, is a loose way of playing with Britain's credit.

Coming to the expenditure of the country, I cannot help thinking that it is really alarming. Government expenditure has increased since the Conservative Government came into power. On the Third Reading of the Finance Bill last year my right hon. Friend the Member for Norwich (Mr. Hilton Young) spoke and made an excellent speech dealing with expenditure, and the Chancellor of the Exchequer interrupted him to ask where a reduction of expenditure could be brought about. Naturally it was not for my right hon. Friend to say how a reduction could be obtained, but I believe he could put his finger on some of the policies which would bring about a reduction. I was hopeful during the Budget speech when the Chancellor of the Exchequer said, "Expenditure governs the position"; but, if he will forgive me saying so, I do not think he yet realises the fever of this terrible expenditure. In 1923-24 our expenditure was £789,000,000; this year it is £824,000,000. What is the position as regards the quarter's revenue, from 1st April to 30th June? That must be a very black spot to the Chancellor of the Exchequer. In saying this, I hope that one's constructive criticism may be listened to in a small way. The revenue for the first quarter of this year amounted to £146,000,000, a decrease of £22,000,000; the expenditure was £224,000,000, an increase of £4,000,000. Those are very bad figures, and they must warn the Chancellor of what is coming. The returns of Income Tax, issued this morning, show a reduction of £13,000,000, and the Super-tax returns, which no doubt worries the hon. Member for Peckham, show a reduction of £5,000,000 since 1st April, compared to 1925 figures. The Floating Debt has increased during the quarter by £70,000,000. Those figures are very serious, they paint a sad and a bad picture, and I feel that the sooner something drastic is clone the better it will be for the country and for the taxpayers.

I know the Chancellor of the Exchequer has the assistance of a Cabinet Committee, but I do not think that is sufficient. I think he ought to set up another Committee to go into expenditure, and do so at once, in order to see where reductions can be made so that, possibly, there may not have to be too large an increase in taxation next year. I would humbly suggest to him that the Government should stop issuing all credits or subsidies. In his speech last Saturday the Prime Minister showed that he was against subsidies, and the Royal Commission on Coal stated that a subsidy for the coal trade would be absolutely wrong. I cannot help thinking that a certain policy might be carried out in regard to reorganising the Ministries. I know it would be difficult, but the Chancellor likes difficulties—I am sure he does, he always has; and I wish he would endeavour to face this difficulty, and that he would also look at the figures of the quarter's revenue and the quarter's expenditure, which are alarming. We are heading to national bankruptcy. What is to happen about our trade balance next year? Last year our trade balance was only £28,000,000 to the good, and, as far as one can see, it will be very much worse this year.

May I further submit that finance is the life of the nation. It is a jumble of technicalities, a forest of figures, but I hope the Chancellor of the Exchequer will not be afraid on that account. Our people have been taxed up to the hilt, and evidently, judging by the figures the right hon. Gentleman the Member for West Swansea has given us, we must look forward to further taxation. The camel cannot live on its hump, and the British nation cannot live except by cheap credit. I hope the Chancellor of the Exchequer will put his foot down with regard to expenditure and the giving of credits. Let him guide Britain; let him show that we in this country are ready to reduce expenditure; let him realise that every penny he takes from taxation comes out of the pockets of the people, and when he realises that I feel sure he will understand the gravity of the national financial situation.

The hon. Member for Oldham (Mr. Duff Cooper) complained that the Budget had not been attacked from this side of the House. I do not know how far that criticism is justified, but certainly an attack has been made from the opposite side by the hon. Member for Ilford (Sir F. Wise) who offered some very damaging criticisms in regard to the rate of expenditure. The hon. Member for Oldham said that there was no ground for attacking the Betting Duty on the moral issue, and he described the social evil which it represents, but surely that is an attack on the moral issue. If the hon. Gentleman will go to the housewives whose weekly budget is diminished by the amount wrongly wasted in betting, he will find that they regard the issue as one being very near a moral issue, as well as an important financial consideration in their domestic budget. Complaints have been made about the subsidies and their extension. Some of us on this side of the House voted against the biggest of all subsidies which was proposed last year. I know we took a great risk, because a great body of opinion was on the side that it was worth finding £23,000,000 or £24,000,000 to get a nine months' respite in regard to the coal strike. We spent that money, and we got nothing in return. The failure of hon. Members to object to that subsidy, I cannot understand. When we protest against further expenditure on armaments, and when we show a few instances in which further reductions are possible, we get no help in that way from the hon. Member for Ilford or the hon. Member for Oldham.

We suggested that those countries whose growth of armaments is greater than ours should be asked to consider a reduction of those armaments when they come to us asking for a. reduction in their terms for repayment of debt to us, but the right hon. Gentleman the Member for Norwich (Mr. Hilton Young) poured scorn and contempt on the whole suggestion. That is not the view that is held by responsible statesmen in America. If hon. Members would only read the speeches made in America, they would find that American statesmen attach great importance to disarmament and debt settlement. When other countries interfere with our domestic affairs and ask us to tax our people in order to carry their burdens, it is not enough for the Government to say that we should like to see them at a round table conference.

Since the Budget proposals have keen put forward, a large amount of new evidence has come to hand. Take the case of the duty on wrapping paper. I was told the other day that the London County Council had been presented by their contractors for paper with a demand for a 10 per cent. increase on their contracts because of the rise in the price of paper due to the new tariffs. Take the motor ear duties, which were supposed to be doing such a wonderful amount of good to the motor car trade, and the recision of which was supposed to damage the motor car trade. Mr. Morris told us that on account of this foreign competition the whole motor industry was threatened and might come to smash, but his firm were actually manufacturing nearly twice as many motor cars in the year when he had no duties as in the year when he had them. I want to take advantage of the presence of the Chancellor of the Exchequer to apologise to him for suggesting what I did in regard to the Imperial Conference in 1907. Speaking at Edinburgh, in May, 1907, the Chancellor of the Exchequer said: They were told the Government had banged the door. Well upon what had they banged the door? They had banged the door upon Imperial taxation of food. Yes, they banged it, barred it, and bolted it. Anyone who reads the Report of the Imperial Conference of 1907 will see that at times the flow of the right hon. Gentleman's eloquence was checked by those well-informed Imperial statesmen who were present. The Chancellor of the Exchequer made a speech on Imperial Preference, and before the House meets again it will be necessary for the Chancellor of the Exchequer and the President of the Board of Trade to sit at the Conference, and develop the system of Imperial Preference. Therefore, I should like to ask the right hon. Gentleman what is going to be done, and whether he can find any flaw in the following arguments, which I have summarised from his speech in 1907. He puts aside the question of remission of existing taxes: this admittedly would only be of consequence as 'conceding the larger principle.' I want to know if that argument holds good now with the right hon. Gentleman? I think what I am quoting from is the best statement against Imperial Preference that has ever been made, and wish to ask the Chancellor of the Exchequer whether, in the light of his later experience, he can find any flaw in any of these arguments. The Chancellor of the Exchequer also said: Imperial Preference would bring Colonial affairs into Parliamentary Debate, which is objectionable. Is that not exactly what has happened? We have discussed on this question of Imperial preference subjects like the incidence of Imperial defence and other matters touching Colonial affairs which would never have been raised if preference proposals had not been presented to Parliament. In the same speech the right hon. Gentleman says: No fair system of Preference can be laid down which does not include taxes on bread, meat, dairy produce, wool, loather, and other staples. This means seven or eight new taxes. If that be so, then the present system is an unfair one. What are you doing for New Zealand? I know you are doing a great deal for Canada, but what is being done for New Zealand? We have no more loyal Dominion than New Zealand and we all know what she has done for Imperial defence. What is the Government doing for New Zealand by these preferences? Simply nothing at all. At the Imperial Conference in 1907 the Chancellor of the Exchequer said: Such an introduction can be calculated to produce an anti-Colonial party in this country. The moment we come up against the fact that we cannot reduce our own taxation as hon. Gentlemen desire because we have entered into a bond with the Dominions and are no longer masters of our fiscal system, then the prophecy of the Chancellor of the Exchequer will be fulfilled.

Perhaps the hon. and gallant Member will permit me to remind him that at that time the proposals of Imperial Preference were based upon protective taxation of bread and meat To that I was opposed, and I am still opposed. While we were engaged in opposing this change which we considered likely to be detrimental, it was perfectly natural that every minor aspect of preference, such as the concessions suggested, should be scrutinised from the point of view of whether they did or did not vitiate the general resistance to the taxation of bread and meat. That has been definitely ruled out of the programme of any political party in this country, and it plays no part in the proposal for which this Government or the previous Conservative Government was responsible. In these circumstances, we are free to consider the remaining aspects of the question.

That does not seem to touch the points which I am raising. The right hon. Gentleman now says that bread and meat must not be touched. What about wool?

If a duty were imposed in this country, the Dominions would be given a preference, and, if a duty were imposed on wool, a preference would be given in that ease. But there is no proposal or suggestion of imposing a duty on wool.

These duties are constantly being introduced, and we want to know how far they may cause further duties to be presented. The Chancellor of the Exchequer went on to say that The value of the preference would lie in a better price and not in a greater volume of trade. The benefit hoped for is that of giving to the Colonial producer the price of the foreign supply, plus the tax.'' I ask the Chancellor of the Exchequer whether anything that has happened since 1907 has at all invalidated the strength of the argument that the value of the preference would lie in a better price. The right hon. Gentleman had considerable discussion with Dr. Jameson and Mr. Deakin, and they declared that the value of the preference was to enable the colonial exporter to extort a better price from the British consumer. After the lapse of 18 years, I would like to ask the Chancellor of the Exchequer if he has come to the conclusion that Mr. Deakin's view on the subject was better than his own. Clause 7 introduces the principle of locked preferences. It is quite true that Parliament is a sovereign assembly, and it cannot bind succeeding Parliaments. The proposal is that the preferences should be stabilised for 10 years, and they will regard that in exactly the same way as they would regard a treaty. It is not, however, a treaty, because this House cannot alter a, treaty. It is a unilateral treaty, if the Chancellor of the Exchequer prefers that expression. It is a declaration on our part, and they will believe it is a firm declaration, that, for a period of 10 years, a certain money preference will be given. Already trouble is beginning. There are two of these preferences which are of considerable value, one more particularly. There is the question of cameras from Canada, and already there is a great outcry from the camera manufacturers in this country against giving this preference to cameras from Canada, because they allege that they are really of American manufacture. Therefore, the locked preference argument is already answered. Then there is the question of motor cars, which, of course, are a considerable item.

The hon. and gallant Gentleman has introduced a phrase which has not been heard for many years. He speaks of the distinction between a free preference and a locked preference. I think I drew that distinction in those days, but the hon. and gallant Gentleman must attach to that distinction the meaning which was attached to it at that time. A free preference, in my opinion, is a preference such as we are giving now. It is given because, as far as we can see, it will do us no injury, and we hope it will help the Dominions. They give similar preferences to us. A locked preference would be a preference given by the Dominions to us or by us to the Dominions as a reciprocal matter, as a matter of fixed bargain on both sides, and that would to a very large extent tie the hands of Parliament. That is the distinction that I have tried to draw.

I dare say the term "locked preference" was a very useful term in those days, but, in fact, there is no issue of substance between us. If we say to the Dominions that we are going for 10 years—they believe it is of some value, though, in fact, it is not—to give them something, and they reply that for 10 years they will give us something else, we may call it reciprocal freedom, but, in fact, it is a locking. In fact, industries will be built up in the Dominions on the strength of Clause 7 of this Bill, and that, will bind Parliaments in the future either to maintain these duties or disappoint interests in the Dominions.

On the contrary, if the hon. and gallant Member will read the words of the Finance Bill he will see that the Clause is so drafted as in no way to prevent the, duties being reduced, because the preference only holds good so long as the duties are above the level of the preference.

If in any given industry the duties were reduced or abolished, the position of the Dominion exporter to this country would thereby he impaired, and if the duty were reduced past the stabilised amount of cash represented in Clause 7—because the ratio to-day is fixed into a cash sum—severe damage would be done to the importer. In fact, by Clause 7 of this Bill, we are tying the hands of future Parliaments, and, although these preferences do not, except in the case of motor cars, represent anything of any importance to the Dominions, they excite hopes in the first place, and, secondly, so far as they are not a sheer illusion and almost a mockery, they foster the growth of interests there which will fetter our freedom at home. Once the taxpayers of this country understand that all the appeals of the hon. Member for Oldham and of the hon. Member for Ilford cannot affect the Chancellor of the Exchequer, because he is master of his own Budget, there will come a day£long may it be postponed—when people in this country will say that the Imperial tie, instead of being a free Imperial tie, a bond between people of like ideals and like blood, is a fiscal fetter, which they would do well to throw off.

We have had one of those bright and illuminating speeches from the hon. and gallant Member for Leith (Captain W. Henn) to which the House has been accustomed in connection with these fiscal matters, but the hon. and gallant Member has not really directed attention today to the merits of the question. Although he has indicated, in passing, the formidable principles upon which he thinks that all duties on any kind of manufactures from other countries should be rejected, he has really confined himself to an attack on the consistency of the Chancellor of the Exchequer, and, since my right hon. Friend is very capable of taking care of himself in these matters, I do not propose to rake up the past speeches which he has delivered, although I think it would be very good for all Members of the House if they took the opportunity of reading the discussions that took place in the Imperial Conference of 1907. I think there is still a great deal for us to learn from those Debates, and that much of what was asked for at that time by the Dominions has really proved to be justified in the time that has followed since those discussions were held.

My hon. and gallant Friend has given us to-day a great variety of warnings, such as he has given on many past occasions. He reminds, me very much, on these occasions, of an old practice that used to take place in the Western Highlands of Scotland in days before people became more civilised, and when they were still in a state of rather primitive ignorance of the ways of the world. When there was anything that they disliked, or any person whom they wished to bring to an end, they made a wax figure of him and stuck pins in it, in the belief that in course of time, through this display of animosity and hostility on the part of the pin-pricker, the gentleman concerned would disappear from off the earth. Of course he did not, or, if he did, it was from causes totally different from the particular form of attack that was made by the person who disliked him.

We have had these prognostications from the hon. and gallant Gentleman very many times. We have been told all the terrible things that would occur if anyone dared to put a duty upon anything, and the hon. and gallant Gentleman is, no doubt, very much embarrassed to-day by the fact that these terrible menaces never come to pass. He referred to the question of the Motor Duties, and it is, no doubt, a most difficult point for him at the present time, and, perhaps, even grievous to his feelings, that, instead of the motor car industry of this country being ruined by the 33⅓ per cent, duty which has been put upon imported motor cars, it is going by leaps and bounds to greater prosperity. My hon. and gallant Friend referred to the fact that the Morris prospectus disclosed that in the year in which there was no duty there had been a considerable increase—I think it had been doubled—over the production of the year before; but he very carefully and cautiously told us nothing about what has happened since then. If he looks at the figures for the first four months of the present year, as compared with the first four months of the year in which there was no duty, he will find that there has been an enormous increase in the production of motor cars in this country, and that, instead of prices going up, as was threatened by all the arguments of the Opposition, motor cars are cheaper today than they have ever been before. We were also told, according to the ordinary rigid Free Trade doctrine, that the result of the imposition of this duty would be to destroy the export trade; and yet the result has been that the export trade in motor cars has been enormously increased.

The explanation is perfectly simple to anyone who understands it. It is this: If you are in a position to increase your production, if you have the certainty of a market which is going to buy your goods, undoubtedly you can produce at an immensely less cost that if you had only a small market; and the result is a complete exhibition of a theory which every man engaged in production understands, namely, that the larger production and cheaper cost enable you to sell at a lower price. That is why to-day we are selling motor cars, not only in this country but abroad, at much lower prices than previously. I am sometimes rather amazed at the kind of things we are told from the Opposition Benches in connection with this matter. We have been constantly treated to the view that any duty puts people who are producing articles within the defences of the duty so much to sleep that immediately terrible results follow in the shape of inefficiency. Has any inefficiency been caused in the motor car trade of this country by reason of the duty? If, on the other hand, one takes a wider view, and looks at what is happening in America, does anyone tell me to-day that America is reduced to inefficiency because of the enormously high tariff that it perpetually maintains as a defence for its own industries Everyone knows to-day that America is the most go-ahead country in the world, and the most efficient in its industries. No doubt there are some industries, like that in which my right hon. Friend the Member for West Swansea (Mr. Runciman) is concerned, in which we are at the present time still pre-eminent, but, taking the business of the country by and large, I do not think anyone can say that America is the least efficient country in the world, or that it does not compare very favourably in efficiency with that with which we conduct our business.

Accordingly, all these old arguments that are used here against duties are contrary to practical experience. Take the case of the Silk Duties. I have made careful inquiries with regard to what is happening in connection with the Silk Duties, and I find that, as regards raw silk, any change that has taken place in the price is inappreciable, and, with regard to manufactured silk goods, the increase in the price of the articles is really very small indeed compared with the amount of the duty. The result in the case of both these industries is that we are drawing a revenue for the Exchequer; that the amount of business in the country is increasing, and that the articles are really not being raised in price—not at all in the case of motor cars, and not appreciably in the case of silk—while in both these cases we have an enormously increased export trade.

I pass from that topic to the question of Imperial Preference. The hon. and gallant Member dwelt upon the difficulties that would be caused by the fact that we should have to debate in this House questions of our policy towards our Dominions and Colonies, and that we should be, embarrassed by the consideration arising out of Preferences which we hadgranted that the duty Was increasing the burden upon the British taxpayer. Ever since we have had an Empire, however, we have had perpetual arguments in this House with regard, for example, to the provision of defence for the Empire, Is that a circumstance that has ever diminished our respect for the Empire It certainly did not amongst the leaders of the party opposite when the suggestion was made that the only reason against England having colonies was that she would then be so strong that she would be a menace to the rest of the world. That was the doctrine we got from the Liberal benches many years ago. I do not suppose that anyone, even my hon. and gallant Friend, could be found so bold as to ask—

It was Disraeli who said that colonies were a menace.

But there never was a time when he suggested the idea of getting rid of them. On the contrary, in one of the most famous speeches he ever made, in 1872, he urged the development of an Imperial policy such as we are trying to carry out to-day. No one is really going to believe that, because we have to discuss this question of duties, our feelings and our affections for our Dominions and Colonies overseas are going to be diminished. I wish the hen and gallant Member would face something which he never does face. He indulges in many arguments against our giving preferences to our Dominions on their goods, but is he prepared to face the withdrawal of the preferences which the Colonies and Dominions give to us? That is really the question. Is he prepared to face that withdrawal It would be no use to answer me by quoting something that my right hon. Friend said at the Conference. What I ant presenting now is the argument of practical application at the present time. We have a very difficult position to maintain. Anyone who is engaged in business knows the appalling difficulty of finding markets for our goods. Why are so many people unemployed to-day? It is because we are not getting orders in this country, and that is because the markets which used to take our goods are unable or unwilling to take them. Where are our best markets? It is demonstrable on the figures that what has saved our trade in recent times has been the amount of our manufactures which have been taken by our Colonies and Dominions. I think our exports to-day to the Empire represent 44 per cent. Of all our trade, and if you take manufactured goods alone, which are most important to us, it goes to an even higher figure than that. Does anyone imagine that we could keep these markets without the preferences which are given to us? If anyone thinks so I would beg him to look at what has happened in actual administration. If you take the case of Australia you find that before tile War 51 per cent. of Australian imports were taken from us. During the War, owing to dislocation of trade, we lost that market to some extent, and America and Japan began to export to Australia goods which we had previously sent. In 1919–20 our proportion of the Australian market had decreased to something like 44 per cent., and by the year following to 38 per Cent. Australia then increased our preference to an average level of 12 per cent., and when they still found we were being undercut in the Australian market by the countries which had the benefit of a depreciated exchange they imposed anti- dumping legislation solely for the purpose of helping the British manufacturer, The result is that Australia is now taking 53 per cent.—she has got back to the old level and gone beyond it—of her imports from the manufacturers of Great Britain.

Is not that worth while What would our trade be to-day without the support of Imperial Preference? Our position could not have been maintained. Is the hon. and gallant Gentleman prepared to sacrifice all that? Could he go to any business community in the country to-day and suggest that a policy should be indulged in which would get rid of all the benefits we enjoy in our Colonial markets. If he is not prepared to go as far as that how does he anticipate keeping these preferences if we are going to give nothing in return? He has been sufficiently warned. If he studies the Colonial Press he will find that there is a very active propaganda in Canada in favour of reducing the preferences to Great Britain and in some cases taking them away altogether if Britain is not going to reciprocate more than it is doing The Prime Minister of Australia. who is well known to be one of the most devoted Imperialists there is in all our Dominions, wrote a very solemn and deliberate article in one of our most important magazines last year in which he disclosed the fact that there were being made to Australia persistently offers from other countries more favourable than anything we give them in the shape of trade, and he said it could not be expected that the Dominions were going to turn deaf ears to these offers for ever if the old country was not going to reciprocate to a greater extent than it has done.

What did he ask for from the old country?

He pointed out—the hon. and gallant Gentleman may pour scorn on it, but it is of considerable importance—that the fruit trade could be enormously helped if we could make a market for it which would enable it to develop.

Meat and wool.