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."

The Chancellor's description of the main purpose of the provisions of this Bill was that it was to secure a scheme of rating relief for productive industries, which was to constitute the main effort of the Government to deal with the present difficult situation. I quote his words from the Debate of last Tuesday evening. I should be well content to have the merits of this Bill judged by that criterion which the Chancellor has selected. He has told us that the central point of the Bill, the main process by which he hopes to effect the great changes called for by the present situation, is what he calls the "powerful, fruitful, fiscal engine of the Petrol Duty," and I want to face the strong points of the Chancellor's proposals in this Bill, leaving the minor points for consideration at some other time. The Chancellor's statement of the case on behalf of this powerful fiscal engine is a good statement of the opposition that could be put forward to the Chancellor's case.

During these debates it has been interesting to see at moments what is really in the Chancellor's mind regarding the principles upon which particular taxes ought to be based. He told us that experience had shown that it is now the central desire of radical democracy to turn in future to graduated taxation upon the profits of wealth rather than to show any discrimination in taxation upon the sources from which wealth is derived, as was suggested by my right hon. Friend when on the Second Reading he drew special attention to the need for taxation of site values. That is as good a statement of principle as I could find upon which to base the attack which I now wish to deliver upon his Bill. The Petrol Duty is a special example of discrimination against the sources from which wealth is derived. Instead of looking to the profits of wealth as the source from which to collect that which is needed for these rating reforms, instead of having regard to those inexorable economic laws to which he has so frequently referred in these discussions, he disregards all his professions and openly imposes a duty which, as has been shown from these benches, as well as from the benches opposite, will place grave obstacles in the way of industry and in the long run will lessen the profits of industry.

The statement which I have read out proves that he realises exactly what ought to be the principle adopted either by himself or any other Chancellor. If there were anything in his claim that there ought to be graduated taxation upon the profits of wealth, his first duty when meeting the new difficulties with which we are confronted was not to put a duty upon petrol but to revert to the Super-tax and the Income Tax which he was willing to forgo in the 1925 Budget. I submit that, judging by his own claims, the Chancellor of the Exchequer was bound, rather than bring in this central claim of his Budget, again to go back to the proceses that he has discarded. Had there been anything in this central claim which the right hon. Gentleman has made, then he ought to have relieved the rates upon the dwellings of the mass of the people. One of the most unfair things about the present process of local rating is that a man's house is no index whatever of his capacity to pay, and yet by the proposals of the Finance Bill, by which the Chancellor of the Exchequer will relieve the rates upon productive industry, he will leave a class of people still bearing unfair burdens, and he will be doing this in diametrical opposition to the canon which the right hon. Gentleman said ought to be adopted in the development of any Finance Bill.

Furthermore, had there been any point in the professions which the right hon. Gentleman made when answering our charges with regard to his neglect of taxation of land values, he ought to have given particular attention to the relief of the heavy burdens which the distributive organisations in industry are bearing to-day. I do not think that I exaggerate when I say that it is the distributive parts of industry rather than the productive parts which are mainly responsible for the high prices which people must ultimately pay for their commodities. It is the cost of running distributive trades that largely undermines the forces of demand, and, if the Chancellor of the Exchequer really desires to make it easier for demand to improve, he ought to have made a special point in his Finance Bill of taking the burdens as much off our distributive trades as off those sections of productive trade to which he has referred. Instead of doing any of these things, and in spite of his profession, in spite of the statement that there should be no discrimination of the sources from which wealth is derived, he has proceeded in the opposite direction in this Finance Bill and in the proposals which have grown out of it.

I would remind the House of the exemptions that the right hon. Gentleman has already made in the matter of Supertax and Income Tax; and he has refused to relieve the heavy burdens which are placed upon the ordinary working-class dwellings throughout the country. At the same time, the right hon. Gentleman has insisted upon maintaining the distributive burdens to which I have referred. More than that, the right hon. Gentleman has actually proposed in this Finance Bill further heavy burdens by means of that part of the Petrol Duty which will fall upon the transport system, upon which so many of the workers of this country depend, and he has also added a very heavy burden of indirect taxation to that £25,000,000 of additional taxation which he has placed upon the workers in an indirect form during the last three years. Worst of all, the right hon. Gentleman continues to disregard what he himself has so well understood in the past, and that is that the best and surest method of raising taxation is by placing a tax upon the land values of this country.

I will leave that point for a moment in order to examine a little more closely the difficulties in which the Chancellor of the Exchequer has involved himself through the main proposals of this Bill. He was in retreat upon the Petrol Duty even before he saw the enemy. Then we had the dropping of the Kerosene Duty, causing heavy losses. I submit that, after all the consideration which we have given to the details of those proposals, the first retreat of the right hon. Gentleman should logically have compelled him to drop the whole of the Petrol Duty proposals. Let the House observe the straits to which the right hon. Gentleman was driven, not merely by the Members of the Opposition sitting on these benches, but by his own supporters, after this tax had been examined in detail. The right hon. Gentleman was asked to examine that part of his tax which would fall upon the raw material of the paints, varnishes, and colours industry, which is an important industry in this country, and one which enters largely into the general prosperity of the building trade. The right hon. Gentleman disregarded those claims. Claims were made that spirit, which is largely used in the preparation of feeding stuffs, should be exempted. Then came a demand from the supporters of the Government for the exemption from taxation of the petrol used in the dyeing and cleaning industry, in which a large amount of petrol is used. The case of the glove manufacturers was also raised by hon. Members sitting on the Government benches. Not only this, but the hardships inflicted upon agriculture and the fishing industry by the Petrol Duty were brought before the attention of the Chancellor of the Exchequer, but to all these demands the right hon. Gentleman returned a steady negative. I was particularly interested to notice the sentence in which he gave the grounds of his refusal to accede to the many requests which were made to him. I will read the statement which was made by the Chancellor of the Exchequer in reply to these criticisms. He said:

I want to say just a word or two, although I must be very brief, that I have not been able to say before owing to my not having been called upon in the previous discussions. I admit that there was very good ground for that, as many others wanted to speak, and I make no complaint. I will be as brief as I can in putting the case before the House. I would say, in general conclusion, that the Chancellor is faced with the central complaint that my right hon. Friend brought against him when we first began to consider the matter. The Chancellor has himself, on many occasions in the past, proved to his own satisfaction and the satisfaction of the general community that a far safer place on which taxation can rest, a far juster process of taxation—in spite of all these developments which he said had taken place since Henry George's time, and even before Henry George wrote his book—the safest place upon which to rest burdens of the type that he now desires to put on the community is on the land of the country.

In the days when the great land campaign of the Liberal party was at its height, when the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) pushed his wonderful campaign of popular exposition throughout the country, it was left to the Chancellor of the Exchequer to make the scientific explanation of those taxes and of the need for imposing them. He now comes pretending that there is an excuse, that there were four land taxes that were tried and that failed; but he knows as well as we know that those were not land taxes—[ Interruption ]—that at any rate they were not land taxes of the sort that he himself had proposed in the many speeches that he made in the country. If they were, surely the central complaint that we now 'night bring to bear against the Chancellor is that he himself was as much responsible as the right hon. Gentleman the Member for Carnarvon Boroughs for those four taxes, and if he in those days proved so unable to give body to his principles in the taxation proposals brought before the House, how can he expect us to believe him when he tells us that industry is once more to be set on its feet by this new sort of taxation and by the new de-rating proposals that he has brought before us?

I suggest that what the Chancellor today is faced with, and, indeed, what the whole of the party opposite is faced with, is a growing understanding by the country as a whole that the difficulties which confront us are so great that pettifogging processes, either in this Finance Bill or in the de-rating Bill that has grown out of it, cannot meet the situation that faces us. That was known, not only to us last Tuesday night, but to hon. Members opposite, who left the Chancellor's best effort in almost stony silence. Indeed, I would submit to the Chancellor that his efforts, and, indeed, the efforts of the Prime Minister and the whole Government, have been characterised by the admirable cartoon with which Low provided us the other day, when we saw the Government beset by the burdens of unemployment and bad trade, and, instead of fighting, running for dear life out of the way of the difficulties that they ought to confront. We know that, when the knock-out blow will be given, it will be given against a Government that has dodged and squirmed in front of all the difficulties that faced it. Instead of fighting with the burdens of landlordism and the grip of high finance, instead of fighting the heavier and heavier burdens that have been placed upon the people who are least able to bear them, the Chancellor has engaged time and again in pettifogging proposals which Members who in the past have given him support now realise go no way at all towards facing the difficulties that confront us. For these reasons I have pleasure in moving this Amendment.

I beg to second the Amendment.

The proposals contained in this Bill must be considered in relation to its three predecessors, and, the more one looks back over the past four years, and over the discussions on this particular Finance Bill, the more one is impressed by the sheer futility of Churchillian finance. It is true, and it can be said of the Chancellor of the Exchequer, that it is better to try without succeeding than to succeed without trying. The Chancellor has tried, but he has failed to achieve any success. This is the culminating point of four years of Churchillian finance, and I think that, from whichever angle one cares to examine the situation—financially, industrially, socially or otherwise—we are in a much worse position in 1928 than we were when the right hon. Gentleman took office in 1924. Practically the whole of his proposals, consisting of a series of makeshifts and patchwork devices of every description, always for the purpose of shouldering the burden upon that section of the community who are least able to bear it, have failed to bring either industrial prosperity or any sort of equanimity in our industrial and social life.

While delving in makeshifts and employing all kinds of devices, the Chancellor has, cheerfully omitted or ignored the one vital thing that ought to receive his earnest consideration. The National Debt brings its annual burden. From £300,000,000 to £350,000,000 or £360,000,000 must be found every year for the purpose of meeting National Debt services, and I am one of those who feel that this nation will not consent in perpetuity to bear such a colossal burden as that for no services rendered, and I think that, unless either this or some future Chancellar will take advantage of the Minority Report of the Colwyn Committee, and apply some drastic remedy to a drastic disease, there will be little or no chance of ever easing the burdens upon the multitude or helping our industrial situation out of the condition in which we find it at the moment. The Chancellor, like most other Tory Chancellors, seems to imagine that the stable national revenue of £800,000,000 to £830,000,000 is quite an easy proposition, and one that we must face for many years to come. I want to suggest that here again we find, as though it were a law of God, the idea in the mind of the Chancellor of the Exchequer and the Government that the cost for the Army, Navy and Air Force, for national defence, reaching about £120,000,000, must be accepted cheerfully and without any complaint.

indicated dissent.

I know, of course, that this is not the moment to enter into an argument on those particular lines, but I do want to suggest to the Financial Secretary, when he suggests that that statement is wrong, that all that we need do is to note year after year the Army, Navy and Air Force Estimates. It is perfectly true that we are told that, unless other nations are willing to agree upon certain proposals, there will be little or no chance of decreasing our expenditure in that direction. If we have to wait until the various nationals, like unlimited auctioneers, agree upon reductions in their armaments, it seems to me that we shall wait for a very long time before we reduce this wasteful expenditure of £120,000,000 per annum. Therefore, from that point of view it seems to me the Chancellor of the Exchequer is accepting as a hardy annual, first this colossal burden of interest, and secondly an expenditure of anywhere up to £120,000,000 for national defence, and he intends to take no material steps in the direction of relieving the nation from that burden.

I was interested to hear my hon. Friend refer to the campaigns in which the Chancellor used to indulge in days gone by. I should like to refer to a speech he made at Manchester dealing with this very vital subject which one might have expected he would practise when he had the opportunity to do so. Referring to unearned wealth, the right hon. Gentleman said:

While imposing these burdens upon the poorer section of the community, the right hon. Gentleman continues with the remissions previously given to the wealthier section. The Chancellor, the Financial Secretary, and apparently the whole party opposite believe the only thing worth while is to strive for a reduction in either Income Tax or Super-tax. In 1923 the present Prime Minister told us that decreasing the Income Tax by 6d. in the £ was going to be the forerunner of an era of industrial prosperity which no other single thing could do. The present Chancellor of the Exchequer in 1925 continued the process. The Income Tax was reduced by 1s. in 1922 and by a further 6d. in 1923, and added to in 1925 and continued for the three succeeding years. In reductions in Income Tax and Super-tax over £600,000,000 have been given to the wealthier section of the community, but instead of providing an era of industrial prosperity we are in a much more parlous state than we were in 1924. Therefore all these devices and makeshifts have only had one effect. They are bound to make the rich richer and the poor poorer. Whether we take Super-tax payers as compared with the wages of workpeople, or the dividends on ordinary capital, we find, starting with 1922, that wages have persistently gone down whilst Supertax payers and their income have persistently increased. We also find that for the past five years there has been a persistent increase in the dividends paid on ordinary invested capital. Therefore, if we want to apply a real test to the success or failure of the Chancellor's proposals this year and in the three preceding years, we have to look, first, perhaps to our unemployment problem, the number of recipients of poor law relief or the general prosperity or depression, and after a certain examination we are bound to conclude that after four years of Churchillian finance the right hon. Gentleman is more of a liability than an asset to the State. The proposals in this Bill continue the exasperating series of giving to those who already have more than enough and taking from those who have less than they require.

The Petrol Tax, with the rating scheme which emerges subsequently, is one more effort on the part of the Chancellor and the Government to solve the mining problem. In 1925 the Government gave £23,000,000 to save the mining industry. They failed lamentably in their purpose. In 1926 they provided another solution, and again they saved the industry by increasing the hours and decreasing the pay of the workpeople. In 1928 the Chancellor came forward again in a further attempt to keep the mining industry alive. Under the rating scheme some £3,000,000 is expected to extend its period of life. I see no reason to expect that a greater measure of success will follow these proposals than followed the proposals of 1925 and 1926. Certain we are, however, that, whoever may receive the results of the collection of the Petrol Tax, the consumer is bound to pay, and we are also convinced that a large number of the recipients will be that section of the community who could well afford to manage without further bribe or further subsidy from the State.

If one looks for a moment at agricultural land, one might imagine the Chancellor sitting on these benches and addressing a Labour Chancellor of the Exchequer who was providing £5,000,000 to relieve agriculture on the lines indicated by the right hon. Gentleman. One could imagine him saying "Here you are providing £5,000,000, apparently to help the industry, but instead of providing according to the needs of the various sections of the industry, the more prosperous and the more prolific the land, the bigger is going to be the subsidy the Socialist Chancellor is giving." One could imagine the right hon. Gentleman waxing eloquent over these proposals. As with agriculture, so it is here with ordinary industrial concerns. The more prosperous the concern the bigger the subsidy, the more depressed the industry and the smaller amount they pay in rates, the less will be the sum they receive under these new proposals.

There is another phase to this rating scheme. I cannot help thinking that in a Finance Bill of this description it is an extraordinary thing to find the Chancellor of the Exchequer continuing to move down the slippery slope. Having started the process, to use the words of the right hon. Gentleman himself, no-one can tell where it is going to end. In 1889, 25 per cent. of the rates on agricultural land was taken away. In 1923, 50 per cent. more from the rates on agricultural land was taken away. In 1928, the agriculturists are demanding the total de-rating of all their land and agricultural buildings. Then, with industrial concerns, you made a start with machinery, and now you come forward with a 75 per cent. relief for all productive concerns. Therefore, one can fully expect that in the days that are to come the productive concerns will never rest happy until they have been relieved of the total burden of rates. There can only be one result from that, namely, that other ratepayers, the ordinary occupiers of cottage property and so forth, business people, will be called upon to carry a heavier burden than they are carrying at this moment. When one leaves this Rouse and goes back to a mining area, one finds miners, with wages varying from £1 to £2 per week and working short time, called upon to pay no less than 5s. per week in rates. There is no relief for that section of the community, no relief to the poorest section of the community, but relief in very large sums to that section of the community who can well afford to manage without it.

If this really is Tory finance one is bound to conclude, taking the national point of view, that they are practically bankrupt and have no policy at all. We feel that, if the Government had any sense of proportion at all, if they realised their duty to the State, then, instead of relieving the rich at the expense of the poor, they would allocate a far greater proportion of the national income for the purpose of social expenditure and local expenditure, and for helping to increase the incomes of the poor and so to increase their spending power and thus give the greatest urge to the industries of the country. No thought of such things as real old age pensions, children's allowances, improved wages, or schemes of that description, enter the Chancellor of the Exchequer's mind. We think that such questions, for instance, as increasing the school age, and making provision for maintenance allowances for children might very well have been part of the proposals in this Finance Bill. These would have been a real help to the poorest section of the community and a real contribution towards the solution of our unemployment problem. They would have been a real help in regenerating activity in many of our important industries.

We are bound to conclude that this Bill, like its three predecessors, is based entirely upon wrong principles, fails to meet the elementary needs of the moment, and in no way visualises a period when the wealthy section of the community ought to bear a fair proportion of the sacrifices that the nation has been called upon to make. Lower wages for the workpeople and more taxation, bigger incomes for the wealthy section and less taxation—that, I submit, is a wrong policy and one which no Government ought to pursue. I would suggest to the right hon. Gentleman that when he replies he ought to indicate to the House what is the policy of the Government with regard to dealing with this colossal annual burden for interest, whether they have any policy with regard to national defence, or, if they intend in perpetuity to impose this terrific burden upon the people, constantly increasing it in Finance Bill after Finance Bill by means of the agency of the safeguarding of industries, leaving the people worse off than before, only introducing a series of patchwork proposals, devices of every description, raiding the Unemployment Fund, the Road Fund, National Health Insurance Fund and so forth. If they are going to continue that policy, then, as my hon. Friend indicated, we on this side of the House shall look forward full of optimism and hope to the time when we shall occupy the benches opposite.

It is not my purpose this morning to take the part of defender of the Government on the Finance Bill. That will, no doubt, adequately be performed by the Financial Secretary to the Treasury at a later stage. All I wish to say to-day are one or two remarks on the oil tax relating to this Budget. I cannot help thinking that just as the first Budget that introduced the Income Tax was a historic Budget, so this Budget will rank as historic, because it is the first Budget in which an oil tax has been introduced. The object of my getting up to-day is to try and persuade the Government that the change from the oil tax to the petrol tax was wrong. When the original proposals were put before this House it will be remembered that from the point of view of the convenience of the Customs the tax extended to what is called white oils. In other words, it included paraffin. Now we have had an agitation both from this side and from the other side of the House to try and defend the cottager in the country from having to pay more for his lighting, and the Chancellor of the Exchequer, from a practical point of view, forestalled the Opposition by removing the tax in that particular. That may be a very good thing from a party point of view and from a political point of view, but I think that from the country's point of view it is a very retrograde step indeed.

I am not interested in how the Government get their money, nor am I going to say whether it is right that the money should be spent on rating proposals or not. That is not what I got up to speak about. What I am interested in is, what is going to be the effect. of the oil tax upon the coal industry of the country? We have shifted from an an oil tax to a petrol tax. I think the Chancellor of the Exchequer is going to have some diffi- culty in collecting money from motor vehicles, because already the employment of kerosene instead of petrol, in spite of what the Under-Secretary of State for Scotland (Major Elliot) says, is already coming in, and on the heavy side of motor locomotion in this country, the advent of the Diesel oil engine, with its heavy oil untaxed, is sweeping upon us. I do not say that this year, but certainly in two or three years' time very few of the heavy industrial vehicles will be run on petrol; they will be run on heavy oils. Consequently, in the near future I can see the Chancellor of the Exchequer automatically having to shift his tax on to the heavy side simply in order to collect money from the motorists.

I want to deal with the effect of a tax of this kind upon the coal industry. I know perfectly well that I am in a difficult position. Everybody knows that I am enormously keen and interested in a process for producing oil from coal, but I cannot help reminding the House that I have always opposed a Petrol Duty qua a Petrol Duty from the motoring point of view. I have always considered that it was bad from the point of view of the motor industry. I have differed from the right hon. Member for Hillhead (Sir Robert Horne) on this particular point. I want the House to bear me out that I have argued in the past against what might be called my own interest on this particular point. On the question of oil, the Chancellor of the Exchequer had, I think, very nearly sized up the situation, but when he was on the point of helping the industry, he ran away simply to please the agricultural people. I am not saying that we were wholly to blame on this side of the House in that respect, because hon. Members opposite were doing exactly the same thing.

What I plead for is not a shifting of the oil tax to the light side, but to have a tax on all oil, both light and heavy. That would have an influence upon the coal trade. I do not ask for a reply from the Financial Secretary on this difficult point to-day. I know that we on this side of the House and hon. Members, on the other side of the House have been guilty this year in shifting the oil tax from oil to petrol, but I would like the Chancellor of the Exchequer and the Opposition to consider whether next year it would not be possible to put a tax upon oil in its en- tirety. I look upon oil as something which has done more harm to this country than any other import. It has had a shrivelling effect upon our industries. Just as paraffin shrivels up a wasp, so oil has shrivelled up our industries. I cannot say how enormous is the substitution of oil for coal that is going on from day to day. It is not for me to try to explain how oil can be got from coal. It can be got and it will be got, and I am not asking for help from the Government now, but I want to show, if I can, the enormous change that is going on because of the convenience of oil in comparison with coal.

First of all, let us consider the question of central heating. Up and down the country you will have builders trying to instal into your houses, as they try to instal into my house, a system of central heating by means of oil instead of coal. Every one of this type of central heating apparatus that is installed puts miners out of work. There has been a revival in the shipping trade, but what ships have we built? We are building ships which are oil-burning instead of coal-burning ships. Every 10,000 ton ship that we launch puts permanently out of employment over 100 miners. That is the sort of thing that is making perpetual our coal troubles, but there are other causes. I know of a firm in the West of England who run their works by a steam engine which is fired by oil. That oil is imported from America and it produces steam at an English factory, although within four miles of that factory there is a coal mine with men out of work. How can we ever get back to the proper use of coal as a prime motive power in this country unless we handicap in some way the importation of oil?

The hon. and gallant Member has referred to the use of oil for firing a steam engine. Can he say the price of the oil and what would he the comparative price of coal to produce the same heat?

The hon. Member knows that, weight for weight, oil gives more heat than coal. They would pay more for their oil than for their coal. They use oil because they say: "No longer are we going to be worried by the coal troubles in this country." The result is that they have got into the practice of using large quantities of American oil for their boilers, although there is an English coal mine within four miles of their factory. I would like the Government, by a system of taxation, to deal with this problem of oil importation. I admit that such a system would be hard on certain sections of English society. The cottager might have to pay a little more for his light, and other people would have to pay a little more for their oil commodity, but it would help our basic industry of coal. So long us we could put a penalisation upon the use of heavy oil when its use is unnecessary, we should encourage every use of coal that is legitimate, to the exclusion of oil.

12 m.

I am sorry to have to interrupt the hon. and gallant Member, but I must remind him thatit is never in Order on the Third Reading of the Finance Bill to go outside what is in the Bill itself. If I were to allow a general discussion on the taxation of heavy oils, we should get a long way from the Finance Bill.

I beg your pardon, but I was driven to this line of argument because the Bill originally contained a certain line of demarcation in regard to oil, but for expediency it has been shifted from that line to another. It is the shifting of that line that I deplore, and that is one reason for what I have said. Had you waited one moment I should have finished. I would finish by saying that a dose of oil is a very good thing sometimes for the human being, but a dose of oil for a coal country is one of the most fatal draughts which it could possibly take. I hope the Chancellor of the Exchequer and the Opposition will try to go into this question by next year and see if, by general consent, we cannot start an oil tax for the good of the coal industry next year.

The Government have come to the House today to celebrate the passage of this Bill, but it seems to me, particularly after listening to the speech which we have just heard, that we are much more assisting at a funeral than celebrating a victory. When the right hon. Gentleman rises from the Treasury Bench, I think he would accurately reflect the feeling of the House if he were to say, with Antony, "We come to bury the Budget, not to praise it". Although the birth of the Budget was heralded by the Chancellor of the Exchequer with all the fanfare of trumpets which he knows so well how to blow in his own support, its features have been very seriously battered about in the course of its passage through this House, and what is left of the Chancellor's financial proposals is something very different from the light-hearted and charming propositions which he put before us in the early days while he was still confident of success.

Let me run through one or two of the matters which show their mark in the Bill at the present time and which illustrate how the Chancellor of the Exchequer has had to yield to criticism. Take first the Betting Duty. I am not going into the details of the merits of a Duty on betting and the erection a totalisators, but in the processes which took place at the very last stage of the Finance Bill we had an admission by the Chancellor of the Exchequer that his whole scheme has failed. He found it necessary, after flaunting the success of his Betting Duty, to make substantial reductions because he realised that in their existing form they did not achieve their purpose. He now tells us that he is going to reorganise the whole of the betting taxation. I wonder whether it is going to be any greater success in its new and reorganised form than in the old form, which is already discredited. Then I come to the duty on mechanical lighters. I have no wish to harp upon old subjects, but I cannot help reminding the House that they nearly produced a Government catastrophe.

Then there is the Surtax. The Chancellor's proposals for a Surtax which commenced last year and are carried out in this year's Budget, very nearly brought about a rebellion in the Tory party. Even as it was, it produced the largest number of defections on the benches opposite than any proposal of the Government since this Parliament sat. We on this side of the House always notice that the one question in which hon. Members opposite are interested is the taxation of the wealthy classes; the benches opposite are never so well filled as when any proposal to deal with the very rich is brought before the House. On this occasion a very considerable number of hon. Members opposite voted against the Government in opposition to the Chancellor's proposals. Personally, so far as the merits of the Chancellor's Surtax proposals are concerned they had my complete support, but as to their method of introduction I think the opponents of the scheme had a very legitimate grievance because while the Chancellor was, in fact, adding one year to the payment which Super-tax payers had to make, with his usual adroitness, I will not use a harsher word, he succeeded in covering it up so effectively that hardly anyone was aware of it when the proposals were first made. That is all in keeping with the method of finance he always adopts. The supreme merit in any financial exposition is clarity. Whether we agree with any proposal or not we are entitled to know exactly what it involves, and it is because the proposals of the Surtax were hidden from hon. Members of this House that I think the opponents of the scheme, although wrong on the merits, were right in considering that they had a serious grievance against the Chancellor of the Exchequer.

Now I come to the question of safeguarding. This year we have had two illustrations; the Duty on buttons and the Duty on enamelled hollow-ware. They are the latest fruits of the safeguarding procedure of the Government. I have no hesitation in describing them as mean, futile and unsound. They are mean because, in common with most other duties of a safeguarding character, they really fall on the backs of the poorest of the people, but by being spread very thin over the whole population it is hoped that they will pass almost unnoticed. They are futile because they do nothing to alleviate unemployment. In the last few weeks we have seen the numbers of unemployed going up by leaps and bounds, and the fact that the whole system of safeguarding does not succeed in reducing that appalling figure and that the Government themselves have had to introduce their new rating proposals shows that the safeguarding efforts of the Government are known by hon. Members opposite to have failed in their object. Further, they are unsound because in this island country we are dependent upon international trade. As the City of London knows, and as the great shipping interests know, we cannot build the prosperity of this country upon exclusiveness.

Whatever may be the merits of a protective system in other parts of the world they are not suited to this country, and the proof of that is present even to the Tory party, which recognises that they cannot put out the whole protective theory in the delectable way they would like. Every now and again that part is torn by convulsions. One half wants protection in its largest degree, and the other half knows that protection is a futile and unsound remedy for the distress in the country. So they compromise on this miserable safeguarding procedure. While willing to wound they are afraid to strike. The Chancellor of the Exchequer, who has intermittently favoured us with his presence during these debates, knows quite well how unsound is the policy of protection. He must be very distressed sometimes at the muddle-headedness of some of his colleagues, and there must be times when he cannot but regret that "just for a handful of silver, just for a ribbon to stick in his coat," he left his colleagues in the Liberal party. He knows quite well that these safeguarding proposals are of no value in themselves and do not achieve their purpose, and that if they blossomed into the full measure of protection, they would not only land the country in disaster, but before they got as far as that would land his party in the ignominy which they have suffered before.

But the pièce de resistance of the Chancellor's Budget proposals is his rating scheme. The hon. Member who has moved the rejection of the Bill has dealt so admirably with the Petrol Duty, and the hon. and gallant Member who has just spoken has driven such a complete hole through it, that it is unnecessary for me to say anything on that particular matter. Nor would it be in order for me to deal at any length with the Rating Relief Bill, part of which we have had and part of which we are to have in the autumn. I will content myself with saying that the scheme as we already have it is complicated and unfair in its method of discrimination and the scheme as we are to have it before us in the future is still more complicated. I doubt very much whether it can be carried out in the way the Government propose. I feel confident that when the country really understands these proposals they will express their opinion upon them in no uncertain manner.

I want to refer to two other questions, one of which I have dealt with in a previous Debate. That is the twisted way in which the Chancellor of the Exchequer presents the accounts. On the financial statement we had a nominal Sinking Fund of £65,000,000. That, of course, is merely an estimate, and even in the form in which it is presented I doubt very much whether that estimate will be realised. We have had already the Petrol Duty considerably reduced. I do not know whether that is to be taken out of the Sinking Fund, or how it is to be dealt with. We have had the promise of an alteration in the basis of relief. I do not know whether that is coming out of the Sinking Fund or whether it is to be dealt with in some other way. In any case this Sinking Fund of nominally £65,000,000 is really a sham. As I showed in an earlier Debate, the right figure is £38,000,000, and this £65,000,000 is really built up by a number of unsound financial devices that a decent firm of auditors would expose and destroy if they were dealing with a private firm or a company. I have no intention of going into the details on that question; we have discussed it too many times before.

The other matter to which I wish to draw attention is a new point which I think has not been brought before the House so far. I wish to call attention to the unsound method of collecting and disposing of the revenue, by the unequal distribution of receipts and payments at different times of the year. The fact that in the earlier part of the year we always have a deficit is a very serious thing. Not only do we always have a deficit, but the deficit that we get in the earlier months of the year is increasing year by year. On 30th June last it was as much as £80,000,000. Of course, I am not suggesting that the fact that we have a deficit at the end of June means that we are to get a deficit at the end of the year. What I do suggest is that it is injurious to credit and to the money market for the Government to have to borrow on the Floating Debt in the earlier stages of the year large sums of money which have to be repaid in the second half of the year. The Chancellor of the Exchequer has aggravated this evil in recent years in many ways. I will mention only one which is well within the recollection of the House. I refer to the change that he made with regard to the collection of Schedule A Income Tax, whereby, instead of distributing the receipts from that part of taxation over two equal payments, he decided to take it all in one large lump, to the inconvenience of the taxpayer and also to the inconvenience of the monetary situation. I hope that those who are responsible for drawing up the financial arrangements of the country will take steps in future to prevent this state of things, or at any rate to alleviate it, so that we have a much more even incoming and outgoing of money.

But, after all, this is a matter of technical detail, and that is not the main ground on which I criticise the Bill. In my view the whole of the financial system on which the Chancellor of the Exchequer based his Budget is discredited. The scheme outlined by him and embodied in the Finance Bill marks a further descent from the heyday noon with which the Chancellor of the Exchequer, in the earlier stages of this Parliament, lived, to the winter night which is descending upon the Government, and of which they will be conscious when they next seek the suffrages of the people at a General Election.

I am sure that the hon. Gentleman who has just spoken will forgive me if I do not follow him in the course of his speech, the greater part of which we have heard at every stage of these discussions. I do not say that we can hear him too often on the same point, but as a matter of fact we have had most of the arguments which he has presented to the House this morning over and over again on different stages of the Bill. The point on which I specially desire to speak is the general aspect of the Finance Bill. My hon. and gallant Friend the Member for Chatham (Lieut.-Colonel Moore-Brabazon) spoke of this as a historic Budget. My own impression is that it will deserve that epithet, though not exactly on the ground which he claims. Over and over again in these discussions I have been a critic of certain specific points, as, for example, the one which was mentioned by the hon. Member who has just spoken, in regard to the method of introducing proposals for the new surtax.

But because I have been a critic on these particular points, I think that it is perhaps more incumbent on me at this stage of the Bill to say a very few words in cordial support of the Third Reading of the Bill. My support of the Third Reading does not imply any slackening of the criticism of details which I and certain of my friends have thought it our duty, at earlier stages, to make. I want to make it once more perfectly clear that the real gravamen of the criticism which I and others have thought it our duty to urge against the surtax proposals, is rather one of method and emphasis than one on the merits of the proposals themselves. I quite agree with the last speaker that the method of introduction might have been considerably clearer from the first. I do want to urge, even at this late stage, the absolute necessity, not only in regard to the surtax proposals but in regard to our whole revenue system, for greater clarification. I am well aware, and no man in the House perhaps is better aware than I am, of the extraordinary difficulty of drafting Amendments to laws so chaotic as our Income Tax laws are at the present time. But of this I am profoundly convinced; that unless you are going to accentuate and engender suspicion in the minds of the taxpayers, it is your first duty to make your revenue laws so clear that they may be "understanded of the common people" who have to pay the revenue. The unintelligibility has now reached a point when it may almost be described as a public scandal.

There is one other point in that connection which I would beg the House and the country to remember. There is no country in the world which depends to so large an extent as our own on direct taxation. That means, in effect, that in the last resort you depend for the payment of a considerable part of that taxation largely on the good-will of the taxpayer. I venture respectfully to urge, as I have surged before, that we are in rather serious danger of sacrificing that inestimable asset of good-will by reason of the complexity and unintelligibility of our taxation laws. However, that is a matter which will concern any future Government quite as much as it concerns the Government of to-day. It is not only a question for the actual administration of the hour but is a point of supreme importance to all who may have to administer the fiscal affairs of this country. I pass from these words of criticism to a very cordial expression of congratulation to the Chancellor cf the Exchequer. In particular, I wish to thank him for what I regard as the very important concession announced by him to the House when he last spoke—I think on Tuesday last. From the first moment when this Budget was introduced, I urged on the attention of the Government the fact that there was no reason why the relief which they are about to give to rates should not, in some directions, be anticipated and accelerated. It is obvious that the general relief of rates cannot operate fully until the Rating and Valuation (Apportionment) Measure has done its work.

The hon. Member cannot go into those matters on the Third Reading of the Finance Bill.

I will observe your ruling, Mr. Speaker, and I do not propose to resume that point. But I may, perhaps, be permitted to say that the Petrol Duty, in regard to which the hon. and gallant Member for Chatham (Lieut.-Colonel Moore-Brabazon) was speaking, is not a deferred charge. As a matter of fact, whatever revenue arises under that head, is coming in already. That being so, I suggest that the Government ought to take advantage of the fact and pay out some of the money on account. The railway companies, as we all know, have been and are in desperate plight, far less from lack of passengers, serious as that has been, than from lack of freights, particularly on coal and the products of the heavy industries. It is on that ground that I cordially welcome the concession which the Chancellor of the Exchequer announced on Tuesday. It would give a false impression of my general attitude towards this Finance Bill if I were not permitted to express the cordial welcome which I and I think most of my friends who have dissented from particular aspects of the Bill, desire to give to the central conception of the scheme of finance for this year. It seems to be a rather unfortunate result of our method of procedure that after only a day or two days have been devoted to the Second Reading of this Finance Bill, we should have been compelled to plunge into the detailed criticism which is appropriate to the Committee and Report stages. On these stages I, unfortunately, found myself more than once in conflict with the Chancellor of the Exchequer. But that conflict only detracts in small degree from my admiration for his scheme as a whole. When he was introducing this Bill the Chancellor of the Exchequer very properly and justly claimed that his scheme should be regarded and judged as a whole, and I submit that it is only in its integrity and entirety that the scheme can be fully judged.

The argument for the general scheme of the Bill rests upon a series of propositions very closely inter-related and, indeed, interdependent. The first, which will be generally agreed, is that the wellbeing of this country, the very existence of this country, depends absolutely on the prosperity of a relatively small number of very important basic industries. That is a point which has been emphasised over and over again in all parts of the House, and there will not be any dispute upon it. Nor can it be disputed that, for at least a decade, these basic industries have, except for very brief intervals, been increasingly depressed. These industries, as we are constantly hearing from all parts of the House, and particularly from the benches opposite, employ about three-fourths of the wage-earners of this country and, they account, the Chancellor of the Exchequer has said, for not much short of nine-tenths of the 1,000,000 or so of unemployed. The right hon. Gentleman most justly contended that this terrible, difficult and menacing problem can only be solved by giving a powerful and concentrated stimulus to those great productive industries. The House is aware that nothing has done more, or perhaps as much, to depress these industries, in particular and limited districts, as the burden imposed upon production by a system of rating which was designed 300 or 400 years ago for a country of 4,000,000 people living entirely by agriculture, and which is wholly unsuitable to the highly industrialised society of to-day.

The question which the hon. Member is now raising can only have an indirect connection with the Finance Bill.

I shall certainly observe your ruling Sir, and I do not propose to go into details. I merely desired to explain why, notwithstanding the criticisms of details which I felt myself compelled to make in reference to certain portions of the Budget, I desire to give to the Budget in its integrity and as a whole my cordial support. The hon. and gallant Member for Chatham as I have already mentioned, spoke of it as a historic Budget and he ascribed to it. that epithet because it was a Budget which for the first time dealt with the important commodity of oil. I think it will be entitled to the term "historic" on much broader grounds. My own impression is that, not for a whole century, has any Chancellor of the Exchequer unfolded to the House of Commons and proposed to the country a larger scheme of constructive reform the effect of which, I hope, will be felt beneficially throughout many generations to come.

The hon. Member for York (Sir J. Marriott), who has just spoken, announced his intention at the beginning of his speech to deliver a panegyric on the Budget. Most of the speech was taken up with a resumé of his criticisms, thoroughly well-informed, very much to the point, and the only part of his speech that was at all laudatory seemed to be out of order. Therefore, all that will remain on the Journals of this House and that will be part of history is a very well-informed and well-directed criticism against the Budget, and history will be left completely in the dark as to why the hon. Gentleman should ever think this was a great and beneficent Budget. He said, as my hon. and gallant Friend the Member for Chatham (Lieut.-Colonel Moore-Brabazon) said, that the Budget was a historic Budget. As a matter of fact, I think he is the author of that phrase, in an article that appeared in, a very well-known review. He is a great constitutionalist, and I ask him now to contradict the statement which I am making, that this is the first time we have ever had a peace Budget that has negotiated, arranged, and established an assured deficit. The expenditure was announced, the commitments of the Government were also announced, and the Chancellor of the Exchequer made a certain arrangement by which he was prepared to meet that expenditure for two, three, or four years. The last year that he prepared for, there was a deficiency of £4,000,000, which he hoped to meet to a large extent by the effect upon the Income Tax of the reduction in rates. That was the hope, but even then there was a deficit.

What has happened since has completely dislocated the finance of the Budget. As a statement of revenue and expenditure, the situation has completely changed from what it was at the time when the Chancellor of the Exchequer stood at that Box and told us what he proposed; and I venture to say that it is not quite fair to the House that we should not have had a revised statement, either from the Chancellor of the Exchequer or from the Financial Secretary to the Treasury, showing what the revenue and expenditure position is now, after what has occurred since that date. The new revenue which he anticipates is down to about £15,000,000, but it will increase up to £18,000,000 by 1932. The expenditure will be up to £35,000,000, from the figures given recently by the Chancellor of the Exchequer, and it is easily worked out. If it is not correct, we really ought to have the accurate figures. It was £29,000,000 when the Chancellor of the Exchequer made his statement there. I am going to point out that millions have been added on, and I cannot find that the figure is one penny less than £35,000,000. If it is, I should like to see where it is wrong. So this Budget is a Budget which sanctions an expenditure of £35,000,000 a year with a revenue provision of £15,000,000. That is entirely without precedent in the whole history of the finance of this House in days of peace. The House of Commons, I venture to suggest, are quite prepared to make an allowance for the fact that the Chancellor of the Exchequer has not quite recovered, and, therefore, I am not making any complaint personally, but I think there ought to be somebody on behalf of the Treasury to give the House of Commons a revised estimate.

I will say exactly what I mean. The Chancellor of the Exchequer anticipated a yield from his Petrol Duty of £14,000,000 odd; ultimately the Petrol Duty was estimated to yield £17,800,000 next year. There was to be an annual increase estimated at £1,250,000. There was no other provision, except a slight raid on the Road Fund, for the expenditure of £29,000,000. What has happened since then? The Chancellor of the Exchequer had an ingenious device to meet this deficiency. He proposed something which was quite new in the whole history of finance in this country, and for the moment I am not criticising it, but it was a very eccentric proposal and quite a novelty. He proposed that he should tax this year and tax next year, and that practically you should roll up those taxes before you started spending them, and that then you should, spend that accumulation in meeting the deficits for the next two or three years. You are not to meet the deficit out of current revenue, which is quite a new principle, with the result that by the time you have expended the whole of that surplus you are left with a deficiency of £4,000,000. The Chancellor of the Exchequer no doubt said, "Trade will improve, the Income Tax revenue may be increased, and I shall be able to effect economies, or my successor will be able to do it"; but, to use a phrase which is a fair phrase in this connection, he was gambling on two or three contingencies, and they are by no means assured. That is quite a new thing. What has happened since then? His Petrol Duty is no longer £17,800,000, and his Kerosene Duty has gone. He estimated that the loss to the revenue through the removal of the duty on kerosene was about £3,000,000 a year. I think he knows by now that that is an under-estimate.

No, I do not.

He was told so at the time. A question was put by an, hon. Friend behind me yesterday to the Treasury as to what the effect was up to the present. Well, I do not think it was an answer which gave all the information that the Treasury have.

It is all the Treasury have got.

The Treasury could have told us far more than that if they thought it was necessary to do so. They know perfectly well at this hour whether the Kerosene Duty which has been delimited is coming up to their estimate. They made an estimate before they knew. Two or three months have elapsed since then. Does the hon. Gentleman mean to tell me—I have been at the Treasury for seven or eight years—that those very well-informed gentlemen there in charge of this collection cannot give a fair estimate as to whether the £3,000,000 was an assessment which has been justified by the facts? Of course, they know perfectly well. As a matter of fact, the reason why we dropped the tax on petrol was that we found, exactly what the right hon. Gentleman and his experts found afterwards, that it was almost impossible to get any delimitation there to which you could adhere strictly and sternly; and when you took away the Kerosene Duty there was a leak in the oil can which is getting wider and wider. That was one of the difficulties we had. We ought to know whether the Treasury are still of opinion—and I think we are entitled to ask whether the revenue officials are prepared to say now—that the estimate which they gave of £3,000,000 loss is justified by what has happened since then, and whether they adhere to that estimate. But take it at £3,000,000. There is another £1,250,000 gone on the Betting Duty. So that you are down more than £4,000,000 of your revenue at least. We ought to know how that deficiency is to be made up, because it is a cumulative deficiency. It is a deficiency this year; it is a deficiency next year, and it decreases the fund out of which you cover the deficit, which is the result of your spending more than the revenue you are raising. It is £4,250,000 a year at least.

Now I come to the expenditure. What has happened there? The Chancellor of the Exchequer said, "I am going to provide £3,000,000 in order to ease the reconstruction of local government in this country"—a very wise thing to do. Some districts will have to pay more, and, therefore, you must find a good deal of money in order to make it easier for you to get the assent of Members who repre- sent districts of that kind to the very revolutionary changes that are to be proposed in the Winter Session. I ventured to say then, from such knowledge as I had of local government, that £3,000,000 was quite inadequate. What did the Minister of Health say? He was almost insulting in the way he answered. I hope that is not too strong a term, but, if it is, I withdraw it; but he was very indignant and contemptuous. He said, "What does the right hon. Gentleman know? I have the information from my officials, and my officials tell me that £3,000,000 is quite enough." I am not sure he did not hint that there might be a surplus. What has already happened? You have increased the special fund, which I was told was quite adequate, from £3,000,000 to £5,500,000, and by means of a special arrangement about the 1s., you have added another £3,000,000. That is £8,500,000.

That is not all. I remember very well some of us—hon. Members above and below the Gangway on this side—said, "You cannot possibly go until October, 1929, without doing something for these distressed areas. Public opinion will not tolerate it. I doubt even if this House of Commons will tolerate it." The pressure came, and the Chancellor of the Exchequer had to announce that he was going to anticipate the relief that was to be given to coal and to iron, and he hoped to begin on 1st December. That is going to make another addition to the expenditure, with the result that your revenue per annum is down £4,250,000, and your expenditure is up £5,000,000 or £6,000,000, and that in regard to a fund which has to be accumulated for a year and a half in order to meet the deficiency. What have you got now? You have got £15,000,000 revenue to meet a fresh expenditure of £35,000,000, and we are passing this Budget without a single statement from the Treasury to explain how that is to be met. I do not believe that even that party which has had such an experience of stern discipline as has already been applied to a Member who dared to give an independent vote—I do not believe that even that party can let this go through without some explanation.

The "Times," a very faithful supporter of His Majesty's Government—I am not sure it is the only one that is left—had on Saturday a very remarkable article, in which they complained that the Government had not given any explanation of the position as a whole, and that they have so arranged their Bills and their Parliamentary business, that it is not in order to criticise the scheme on any one Bill. That is so. I am not criticising the fact that it is ruled out, because I do not see what Mr. Speaker or the Chairman of Committees could do, having regard to the way the Bills have been divided, but I say there ought to have been some proposition before the House of Commons in a form which would have enabled us, within the rules of order, to discuss a proposition which is going to commit this country to a deficiency of anything from £15,000,000 to £20,000,000 a year without any financial provision but the hope that one of the right hon. Gentleman's successors will be able somehow or other to find the cash for the purpose.

I do hope that we shall get from the Chancellor of the Exchequer or from his colleague sitting by his side the revised figures. They must not complain if in any respect the figures which I have given are inaccurate, because we cannot get official figures. We have never been able to get a discussion in this House that has enabled us to elicit from any Minister an official statement. Questions have been put about kerosene and also about the White Paper as to expenditure, but they cannot explain except in algebraic terms. There has been no exposition, and even now, on the Third Reading of the Finance Bill, which is the basis of the whole of this scheme, there is no revised estimate, although a complete change has occurred between the time when the Chancellor of the Exchequer stood at that Box and the present moment. All we know is that there is going to be another raid on the Road Fund of £3,000,000. £26,000,000 has already been taken away. There is about £4,000,000, I think, annexed permanently as a revenue, and now you are going to get another £3,000,000 at a time when the Treasury cannot find money to deal with the problem of unemployment.

They appoint Committees to examine that problem. They practically say to them, "You are not to be allowed to spend any money," and they take away from a Fund that would have been available for the purpose of doing something there, £3,000,000 as part of their annual Budget. When you say you are not going to spend money, it is simply trying to settle the unemployed problem on Woolworth principles—"You must not spend anything over 6d." And this is part of a scheme for dealing with the problem of unemployment and depressed industries! As a Member of this House, I do ask the Chancellor of the Exchequer, or somebody on behalf of the Treasury, to let us know—because the primary duty of this House is finance—what the estimate is at the present moment when his revenue has gone down by millions, and expenditure has gone up by many more millions, and he is faced with a deficiency of at least £30,000,000.

The right hon. Gentleman has, I am sure the House will recognise, contributed another of his helpful speeches to the difficult problems connected with unemployment and the reform of local government which have occupied such a large portion of the Budget scheme and of the time of this Session. He has asked a question, of which I had no previous notice, of which, however, I do not complain. He has asked me to re-balance the Budget of the present year. I did not know that he was going to do so, but I am bound to say that, forecasting as far as I could the position that would arise on this occasion, and thinking that not improbably such a question would be asked, I have no difficulty in setting out what is the total effect of the various changes which have taken place during our discussions. We are dealing with the finances of the present year in the first place, because, as the right hon. Gentleman has not forgotten, our finances are conducted on an annual basis. Every year the Chancellor of the Exchequer makes provision for meeting the expenditure that will fall due in that year.

Let us look at the current year first of all. The Kerosene Duty has been dropped. The right hon. Gentleman said that we lost £3,000,000 on that. That is not so, for the tax was not expected to produce its full yield during the present year, and the loss on the Budget this year from that tax is therefore only some £2,000,000. Then there is the cost of the concessions made in the Betting Duty; that is £1,250,000 this year. But £700,000 or £800,000 of that would have been lost any way. Of course, as regards the revenue generally, there is a wide range of fluctuation in the yield of the different taxes every year, but we nearly always find that what is lost on one tax is counter-balanced on another, and I have no reason to suppose on the experience so far that this will not be the case this year. Then we have accelerated the railway freight relief, part of our general rating relief scheme. That accelerated relief has been concentrated on particular traffics, and includes the relief to agriculture which passed almost unnoticed in the recent Debate; and this also will be brought into operation as from 1st December. But there are only four months of the present year left, and therefore the extra charge which will fall due during the currency of the present financial year is estimated at only £850,000.

I do not know what expenditure will be involved in the present year by the increased programme of Empire migration which was announced by the Prime Minister. Discussions have to take place with our Dominions, and as I must take this opportunity of reiterating, there must be complete and perfect co-operation on both sides. We do not know to what extent those to whom the offer is made of facilities for finding a new home beyond the seas in other lands under the British flag, will take advantage of these facilities; but if I put £500,000 as the figure which will be required, that would appear to me to be making ample provision for what is likely to come into charge before 31st March next. Adding these together, we get an adverse effect upon the Budget of this year of something like £4,600,000, say £4,750,000.

What is that £4,750,000?

The loss during the present year on the Budget figures, either by increased expenditure or by revenue concessions made during the passage of the Budget through the House. If we deduct that from the original Budget surplus, which was estimated at £18,750,000 we find ourselves left still with a prospective surplus of roughly £14,000,000. The right hon. Gentleman asked a question without notice, and I am giving the answer.

I apologise.

1 p.m.

1 p.m.

I am giving the answer as I had ascertained it before the right hon. Gentleman put his question, but of course not with that close precision of accountancy which I should have shown had I been aware that he intended to make this point. We are, as I say, looking forward to a prospective surplus of £14,000,000 at the end of this year, after all the concessions which have been made in this year have been paid for, and after taking into account all the additional expenditure which would fall due in this year. Of course, there are the ordinary fluctuations of our revenue and expenditure which no one can do more than guess at. I am certainly not going to undertake to give an interim estimate of the yield of the various taxes; that would be most precipitate. So far as I am aware, there is no reason why the Budget estimates as a whole should not be made good. That is the advice which I received at the close of the first quarter of the financial year. Of course it is already clear that we have gained in some directions and that this tends to balance a falling off in other directions. On the basis that the estimates are justified, I estimate a surplus at the end of the present financial year of some £14,000,000 after the £4,600,000 or so has been allowed for. In the balancing of new taxation and the new liabilities connected with the Rating Scheme, I had assumed to carry forward a sum of £14,000,000 and I reinforced myself with the £4,000,000 odd from the old Sinking Fund. Consequently, on the whole, I can say to-day that the provision and the prevision of the old Sinking Fund has broadly speaking balanced the concessions which have occurred during the course of the present Session, so far as the present year is concerned.

I have dealt with the present year. There is not the slightest reason for any feeling in regard to it except one of confidence and congratulation. But I come to the future, going much beyond what precedent enjoins or the House could have required. I have attempted to balance as a separate part of the Budget the cost of the new Rating Scheme and the new revenue, and until the end of the financial year 1930 there should be a surplus. But as you get into periods which are more remote, and if you assume that there is to be no normal increase in the yield of taxation and no improvement in the general trade of the country, and that expenditure continues as at present then, undoubtedly, there will again be a gap which may be considerable between the future revenue and the future new liabilities of the Central Exchequer, but not a gap which could not be bridged quite easily if there were a recovery, as we hope there will be in the next two or three years, in the general trade of the country. Anyhow, it is not as if in this Budget we had been incurring wasteful expenditure, which added to the national burden. What we have been doing is to adumbrate great remissions of taxation, remissions of local taxation, which presses in the most onerous form upon all classes in the community.

This expenditure of between £30,000,000 and £35,000,000 which we are distributing in relief to the rates on productive industry, and generally to facilitate rating reform, is not expenditure like that on Army or Navy or the Civil Services or on pension schemes. It is not comparable to that kind of expenditure; it is, in fact, a remission of taxation. What has been done is that we have undertaken a remission of taxation, a most important remission of taxation, which cannot come into full operation for two years. We have not by this scheme added in any way to the public burdens. The total public burden is to be reduced, and, as I say, reduced not from the point of view of the National Exchequer, but reduced where the burden is most painful, namely, in the local rates. Therefore, I say, that although I have tried as a work of supererogation to peer into the future of the finances of this scheme—The right hon. Gentleman shakes his head. I am trying to give him a full explanation, and whether I secure his assent or not is a matter of total indifference to me.

I am sorry that the right hon. Gentleman should feel it necessary to say that. I only shook my head about the statement that it has been a work of supererogation to look into the future. It was a part, and an essential part of his scheme, if he does not mind my pointing it out, to look into the finances of the next four years. Otherwise, there would have been a very great deficit, and he is rolling up the finances of this year and next year in order to meet the deficiencies of two and three and four years hence. It is not a work of supererogation. It was an essential and fundamental part of his scheme.

According to all precedent the actual responsibility of a Chancellor of the Exchequer has been to deal with the finance of the year. But it is agreed—and I have gone on that principle throughout the discussion—that we should look as far as we can into future years, having regard of course to the difficulty of all human prophecies at a considerable distance of time. I say that that is more than has generally been done in the course of an annual statement of the finances. But even with regard to those years ahead, my argument is that all we are committing ourselves to, even supposing that on account of bad trade there should be a hiatus between the revenue and the expenditure of this scheme, is a removal of burdens which at the worst might be judged to be premature. That is a course along which we are entitled to proceed hopefully, endeavouring to lighten the burden of taxation as much as we can and reducing the amount of money at the disposal of the Exchequer as much as we can, and using the shortage of money at the disposal of the Exchequer as a greater reason for enforcing economy on all Departments of the State.

I have endeavoured to deal in general terms with the questions which the right hon. Gentleman asked. There is no doubt, so far as the finance of this scheme is concerned, that this year we have a substantial surplus, and next year there is likely to be no difficulty in financing it, but in the year after that there may be a certain difference between the revenue and the expenditure, if no good fortune comes to us in any revival of trade. But there are many resources at the disposal a the State for meeting such a difficulty.

The actual total cost of the remission of the Kerosene Duty would be £2,900,000 in a full year. I have no reason to suppose that that estimate will be in any way exceeded. The greatest confidence is expressed by my technical advisers that the new chemical frontier in oils can be effectively defended. We have also undertaken in the future to supply some £2,000,000 a year more for the purposes of the rating scheme which the Minister of Health will introduce in the Autumn. Those two adverse factors, making together about £5,000,000, must be allowed for in the estimates of future revenue and expenditure connected with this scheme which I gave when I introduced the Budget. To that extent, undoubtedly, the position has deteriorated. The State will be, in fact, £5,000,000 worse off for those purposes, but, as I have pointed out, this scheme is not one involving the ordinary onerous expenditure, but constitutes an attempt to alleviate public burdens, and I have every hope that in two or three years time we shall have a relief and revival which will easily enable us to meet the difficulty; if not, we shall have, at the very worst, to consider other resources of taxation. I was hoping to follow this year's Budget with a Budget next year which would possibly contain some mitigation—

I am very Corry to interrupt—

Will you let me finish my sentence? What happens in the present case is that concessions which have been given this year reduce pro tanto my power of giving further relief next year.

I only wanted to point out this. The right hon. Gentleman says the £3,000,000 has been put up to £5,000,000; to the extent of £2,000,000 the Budget position has been worsened. I should like to ask him whether there is not, in addition to that, that separate grant of 1s. which in England and Wales and Scotland runs up to another £3,000,000? One of the difficulties we are experiencing is that the thing has not been explained as a whole, but it appears on the face of it as if there were another £3,000,000 added on.

In the Budget I undertook to place at the disposal of the Ministry of Health £3,000,000 a year in order to ease hard cases which might arise in bringing rating reform into operation. Since then that has been increased to £5,000,000 or so from the Ex- chequer, and arising out of certain road responsibilities which are transferred to the local authorites, £3,000,000 is also to be found in the future from the Road Fund. So far as the Exchequer is concerned, and the Budget balance is concerned, the addition is £2,000,000, and that does not apply this year.

The 1s. special grant is not an issue?

No, that is provided out of the total of £8,000,000—the £3,000,000 which I originally undertook to provide, the £2,000,000 which has been added from the Exchequer, and the £3,000,000 from the Road Fund. I see no reason to suppose that there will be any difficulty in balancing the Budget of future years, and certainly far less than those we have had to face in balancing the Budgets during the strike period in the present Parliament. There is in prospect a certain reasonable and normal expansion of revenue, and this, instead of being used for further concessions, will be first of all devoted to bridging the gap on the rating scheme.

I have answered the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) as fully as I could upon short notice, and I do not complain of being asked to balance my Budget again. I am bound, however, to draw the attention of the House to the manner in which the right hon. Gentleman the Member for Carnarvon Boroughs has throughout the long Debates in this House and out of doors endeavoured by every resource at his disposal and all the knowledge and wide experience which he has accumulated in his career, to darken counsel and put a spoke in the wheel of reform, and to baffle and confuse the public mind. The right hon. Gentleman has used on every occasion arguments, many of them flatly contradictory one of the other, and arguments so unsound and so degraded in their character that they will hardly bear repeating here. The right hon. Gentleman has even found fault with the Government's scheme because in answer to a request the Minister of Health expressed it in an algebraic formula, as if the application of science and mathematics and the scientific mind to social problems ought to be made a point of ridicule and condemnation of modern schemes.

Where does the right hon. Gentleman stand? Does he wish to go back to the age of pop-guns and rule-of-thumb? These modern times undoubtedly require extremely complicated processes in reforms, and that they should be jeered at and derided because they can be expressed in scientific terms shows the measure of the quality of the opposition which the right hon. Gentleman has applied in the criticisms which he has devoted to this Measure. To-day at the close of the Budget on the Third Reading, I am glad to say that the right hon. Gentleman has added to the various attacks he has made from one quarter and another. He is now urging concessions here and then running over there and saying "What a disaster you have got yourselves into." The whole of the series of these attacks and opposition are the result of the intense feeling of chagrin which has overwhelmed the right hon. Gentleman when he has seen what he thought was a trump card for his party utilised as a means of a great practical reform by his political opponents.

The Chancellor of the Exchequer, in replying to the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), instead of explaining the deficit of his Budget, has devoted himself to making a personal attack on the right hon. Gentleman. I wish to examine the Budget in regard to what it really does contain. The Budget represents the balance-sheet of the nation, and, as such, it ought to be closely examined. My object is to try and show to the House how the money could be found in a better way than that which has been described on this occasion by the Chancellor of the Exchequer. The rating proposals form the chief part of theBudget, and to obtain the money for that purpose the Chancellor of the Exchequer has put a tax upon petrol, and in that and other ways he hopes to get £14,500,000 which is required to carry out his rating proposals. I am not dealing for the moment with the incidence of the Petrol Duty. I think the House of Commons ought to pay more attention to the Death Duties. On occasions like this the Chancellor of the Exchequer would be far better employed in trying to get more money from that par- ticular source. It is quite true that in 1925 the right hon. Gentleman increased his revenue from that source by £10,000,000, but he has not exhausted it, and he can easily get more from it if he likes. I would like to draw the attention of the House to a statement made by the hon. Member for the City of London (Mr. E. C. Grenfell), who, in speaking upon the Second Reading of the Budget, pointed out that: Chancellor of the Exchequer had given a little more attention to that point.

There is another point to which I should like to draw the attention of the House. On the 3rd July we had a remarkable instance of what the defenders of wealth will do. On that occasion the hon. Member for Guildford (Sir H. Buckingham) moved an Amendment in regard to Super-tax, and he claimed that the Chancellor's method was increasing the cost to Super-tax payers by £1,000,000. On that evening, between six o'clock and 7.30, when on other occasions the benches are as empty as they are now, the benches opposite were crowded with Super-tax payers fighting for their own interests. The hon. Member for Guildford went on to say that he would not have minded had the Chancellor of the Exchequer asked for £2,000,000 from them in a straightforward way, but, because he was trying to take £1,000,000 from them in the way that he was, they were going to fight it. The result was that in the Division Lobby there were some 50 votes of what I may call Super-tax payers, against 109 votes for the Government. On that occasion, I voted with the Government, because, much as I dislike the Government, I dislike Super-tax payers more, and the efforts made by the Supertax payers showed me what that class of people will do when their interests are attacked. On the present occasion I am lodging my protest against this Finance Bill because of the way in which taxation is brought about. My idea is that all taxation should be direct taxation, and not that, as is the case now, at least 35 per cent. should be indirect taxation and the remainder direct. I claim that, for there to be anything like equity, direct taxation should be as near 100 per cent. as possible, and, on these grounds, I shall go into the Division Lobby against the Third Reading of the Finance Bill.

The Finance Bill, as to its general merits, remains quite unchanged. None of the arguments that have been put forward by the official Opposition have done anything except provide them with a certain amount of satisfaction; they have certainly done no harm whatever to the Finance Bill. I want to raise a point which has been raised many times before. I know that I was ruled out of order in raising it in Committee, but it has been ruled to be in order by Mr. Speaker in past Debates, and I trust, Mr. Deputy-Speaker, that, if I raise the question of tax appeals, you will not rule me out of order, observing that no appeals against taxation are likely to take place unless there is some ambiguity or unintelligibility in the way in which our taxation laws are drawn up. They are' the basis of such appeals, and, therefore, I hope I shall be in order in raising this question.

I am afraid that the hon. and gallant Member, as far as I can understand his point, would not be in order in dealing with it. There is nothing in the Finance Bill which deals with the subject of appeals against taxation, and it would be quite impossible to bring it within the scope of the Third Reading.

May I put it to you very respectfully that we have in the Finance Bill the Clause which deals with Income Tax and Super-tax, and, as appeals must emanate from the reading of that Clause, I very respectfully put it to you that it would be in order to raise the question on the Third Reading.

No, I am afraid not. If the hon. and gallant Member has any definite point on the Clauses of the Bill, he can raise it, but, according to his argument, it would be possible to raise almost anything upon a Clause in the Finance Bill if only it were carried far enough. This Bill has to do with the imposition of taxation, but it has nothing whatever to do with questions of appeals to the courts and the interpretation of the law. If the hon. and gallant Member wants to raise a point on one of the Clauses where he thinks there is a doubt, it might be a matter which he could connect with that particular Clause, but, if he is going to discuss the whole question of legal appeals generally, I am quite sure that that would be out of order.

I am certainly not going to raise the whole question of appeals. I only wanted to raise a point from the standpoint of an individual taxpayer who, having been asked by the Revenue authorities to pay his Income Tax, thinks, on his reading of the present Finance Bill, that he has a case, but the Revenue authorities say, "No; you have to pay the money that we are asking of you." It seems to me that it would be in order to raise such a point.

I am afraid not. I am afraid that that is a general question regarding the resort which the subject has to the courts on matters of dispute in connection with Acts of Parliament. It is not a matter that can be raised on the Third Reading of the Finance Bill.

I bow to your decision, but I should like just to say that this point was raised last year on the question of the Clause standing part, and for that reason I felt that it would be proper to raise it now on the Third Reading. There is another point that I want to raise, and that is in regard to Clause 18 and its effect on limited liability companies, private and otherwise. I know that Clause 18 has been designed and very carefully amended by a skilful Committee in order to protect the interests of private firms trading both on a small and on a large scale, and I know that the object of that Clause is to get at tjie tax-dodger, that immoral citizen who puts an extra burden on other citizens of the State. I want, however, if I may, to put to the Financial Secretary one or two points in this connection. I have taken the trouble recently to get into touch with the affairs of various trading concerns and private companies, and I want to quote one in particular as showing what hardship may be inflicted on them if the legislation outlined in Clause 18 should be carried too far by the Revenue authorities. The company in question, of which I have the particulars from the governing director, has been in existence for somewhere about 30 years, and has had only something like £50,000 subscribed in capital. It has built up its resources bit by bit. The ordinary shareholders have refrained from taking or asking for any dividends, with the result that over the course of years a certain amount of money was put to reserve, and, after a long period of conservative government in that particular company, the present situation is that the capital, instead of being, as it was originally, £50,000, has now been built up to something in the neighbourhood of £500,000. This Company, starting from nothing, has built up a business which deals with every country in the world, and it employs, directly and indirectly, no fewer than 1,000 British workers. I think the House will agree that that is very creditable. The firm in question, and one or two others in regard to which I have information, are desirous of continuing that conservative policy and further expanding their energies all over the world.

If, however, Clause 18 should be carried out by the Revenue authorities to the extent which it would permit, it will very seriously handicap enterprising firms of the type I have described. The Chancellor of the Exchequer is, of course, at once not only the champion of enterprises of that kind but also, I hope, the implacable enemy of the immoral tax-dodger and both the immoral tax-dodger and the enterprising industrial concern are affected by Clause 18. I should like very much to have from the Financial Secretary or the Chancellor of the Exchequer a further pledge that companies that are run on really enterprising conservative lines, and cannot in reason be said to be storing up their reserves in order to evade taxation, shall have absolutely full protection.

I have not taken much part since I have been a Member of the House in Debates on finance, but that is not an indication that I have not taken an interest in all the Budgets that have been brought forward since 1919. At one period I used to pride myself in being able, in my own way, to satisfy my mind that I had grasped the various points and technicalities raised in the different Finance Bills, but I have to confess that during the last two or three years it has been very difficult to grasp what was meant by the right hon. Gentleman's Bills. That may be my fault and not his, because I understand from what he has said that he has lately been putting his Budgets on a scientific basis. But I find to-day that I am not the only one who does not understand the right hon. Gentleman's Bill. Everyone who has been called to order to-day has been on the opposite side of the House, so it seems that a large number of the right hon. Gentleman's followers do not understand the Bill. He has been asked to give explanations, but in his usual way he explains by giving approximations. His past approximations have always proved very far from being realities when the facts have been revealed, and consequently we shall go away at the end of the Session in very grave doubt as to what is going to be the real outcome of this Bill. The Chancellor has told us about his remissions of taxation, but he very adroitly told us nothing about the taxation that was being imposed.

One of the things that has been very prominent in our Budget Debates is the relief he is going to give to the basic, or heavy industries, amongst which is the mining industry, but he is going to take away the value of any remission he gives to the mining industry by impositions of another kind. I received a letter yesterday from one of the largest colliery companies in the county I represent. It says:

This is the first occasion on which I have taken an active part in a Budget Debate, and I should not have intervened if it had not been for the treatment the Opposition have received. There has been a good deal of talk about lack of opposition in the House. It is said we are not performing our functions as an Opposition. I have never accepted that view. I have generally taken it that the Labour party is as good, and better than most Oppositions, and certainly equal to any. But to-day I almost doubt if some kind of colour cannot be given to that view. There may be only a small group of us, but we expect to get some consideration. The duty of the Opposition is to criticise and to keep the Government straight on financial issues. The Chancellor has not given a single word of reply to Labour Members. The whole of his reply was to the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). He did not deign to reply to the well-thought-out criticisms of Members of this party. I suppose he says, "Who are they? What function have they in the House? Who am I that I should pay any attention to them? I will concentrate on keeping the ex-Prime Minister and myself in the forefront, and the issues raised by the Labour Members, great, deep, national issues, will be forgotten, the picturesque spectacle of the two gladiators will take its place and the poverty of the masses of the people will be forgotten." It was a most contemptible display.

But I have a word to say even to our Front Bench, and I should be lacking in public duty if I did not say it. Here is this Budget, the most important thing of the year. After all, what is the Budget? On it hinges what this Government are to do for the whole of the year. It is a balance-sheet. It is more. It represents what we in this House of Commons do for the nation. It represents what we are going to do in the year for housing, for the social problems which confront us. What is the use of asking for more pensions for the old, and for allowances in respect of children when the Chancellor of the Exchequer simply stands up at that Box and says: "Yes, I would like to do these things, but my Finance Act of last year only allows me a certain sum of money, and I cannot go outside that sum." All our great problems of social reform and other great problems which face this nation come within the scope of the Finance Bill. If the Finance Bill was liberally endowed with provisions for raising huge sums of money the great mass of the people, the old age pensioners, the widows, the children at school, would be mare likely to be generously treated than if it only made provision for the raising of a meagre amount.

We have the spectacle on the Third Reading of not a Front Bench Member on this side rising to speak on what is the most important Bill that comes before us. This is the position; not one of them rises to say a single word of criticism on this most important issue. First of all, we have the Chancellor of the Exchequer ignoring the speeches of Members on these Benches. One of the best speeches that I have ever heard was that which was delivered by an hon. Member on these Benches. It was a thoughtful speech, and it was evident that he had spent hours thinking it out, but the Chancellor of the Exchequer devoted the whole of his speech to the observations of one right hon. Gentleman. While I think that our opposition has at times done extreme good, this morning's display—and I say it quite frankly; we may hold a special meeting about this—has lent some colour to the assertion that the Opposition are not carrying out their function. The Finance Bill is the battleground for all parties for the year. I remember that when I first came to this House I used to speak to an ex-Member of the Liberal party, who, I am happy to say, has now joined the Labour party, and I learned a good deal from him. I refer to the ex-Member for Leith (Captain Wedgwood Benn). I remember him telling my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood) and several of us that the Finance Bill ought to be taken more notice of than any other Measure in the year. The Finance Bill provides the finances for the year's work of this House, and he said that it ought to be closely criticised and closely watched. Since then I have tried to follow that advice.

What is the feature of this Finance Bill? The feature of it is not so much what it does but what it leaves undone. What is the greatest problem that this nation has to face at this moment? The greatest problem is that of unemployment, and I admit that there is at least this to be said for the Chancellor of the Exchequer, that whatever criticisms we may make of him, he has, at least, produced a rating scheme with the object of doing something for the unemployed. He has produced, in this Finance Bill, certain provisions for the raising of money for the purpose of helping that rating scheme. There is at least this to be said, that it is something done. It is, however, in my view grossly inadequate and a hopeless expedient, and it will not reach the desired end. At last, the opposition of the Labour party has driven the Government to make an attempt at doing something.

What do the Government propose to do? They propose to provide this money for rating relief. They have done this, because they realise that the greatest problem in this country is the problem of poverty and of unemployment. They think that by providing so many millions for the purpose of rating relief they can help the unemployed. I think that they are bound to fail by that method. I want to turn to what I think they ought to have tackled in this Finance Bill, namely, the great financial burden of this country. The great financial burden of this country is not what some people probably suppose, the burden of the armies. Far be it from me to defend either the creation of armies of men or the building of battleships. In this House, I have constantly allied myself with a small group, which, I am glad to say, is growing larger, and I have voted against every single penny of expenditure upon armaments. But this does not account for the great sum embodied in the Finance Bill, neither does the expenditure on social services. The greatest burden in respect of which the Finance Bill makes provision is that which has arisen out of the past War, and which is now commonly called the National Debt. The sum required for the Sinking Fund, roughly speaking, amounts to £350,000,000. I do not think that the Financial Secretary to the Treasury, who is now left in charge of the Bill, would say that that is an exaggerated sum. In some quarters I have seen the amount quoted as high as £380,000,000; £350,000,000 is the burden for which this Finance Bill has to make provision. This money is required to make payment of interest, payment to the bankers, payment to the persons who can extract from the nation interest on money loaned. When this money was borrowed by the nation, the nation was in a position of extreme need. It needed men, munitions, food and clothing, and it was driven to need money. Those who had the money to lend forced the rate of interest up as high as they possibly could. The interest paid was over 6 per cent., but it has fallen, I understand, to an average of 5½ per cent.

What has happened to the wage-earner? What has happened to the mining population. In our opinion one capable miner is equal to any 10,000 interest holders in this country; he produces more for the commonwealth and the common good and adds more to the sum total of happiness than all the interest holders. In those days, the miner was as scarce as money. To-day, the money of the lender is sacred. We must not touch it. It stands on a pedestal, almost like the political leaders, not to be criticised, not to be altered or modified. It stands there as part of the money-lending business. Hands off! If you touch it, you may spoil the credit of the nation. You may lower our credit in countries abroad. The treatment of the poor does not matter. What does it matter if we lower the wages of the unemployed, so long as our good name is maintained in Royal circles!

The hon Member must confine himself to the taxation which is contained in the Finance Bill.

My point is, that instead of continuing certain taxes on the necessities of life, the Government ought to have raised a much larger sum in other ways, and I suggest that we ought to have reduced the interest on the War debt, and I am giving my reasons for that.

The hon. Member must realise that arguments of that kind ought to have been made at an earlier stage of the Finance Bill. He has been a Member of this House long enough to know that on the Third Reading of any Bill, including the Finance Bill, discussion must be confined to the subject matters contained in the Bill. If he wishes to suggest other means of raising revenue, he should have done it at an earlier stage of the Finance Bill.

I understand that one proposal in the Finance Bill is to raise £350,000,000 for the purpose of paying interest and principle on the War loan. Surely, I am entitled, if that be the case, to criticise that proposal in the Finance Bill, and to say that the amount to be raised for this purpose ought to be reduced.

The proposal in the Finance Bill is to raise money to meet certain charges. Those are the only things which the hon. Member can criticise. Certain taxes are proposed to meet certain charges, and it is only those taxes that can be criticised on the Third Reading of the Finance Bill. The hon. Member cannot at this stage argue that other taxes should be imposed, or that money should be raised in other ways.

2.0 p.m.

On a point of Order. While I agree that that is generally understood on the Third Reading of a Bill, I would put it to you, Mr. Speaker, that very frequently in this House on the Third Reading of the Finance Bill, a certain amount of latitude is allowed in order to cover the whole financial and economic condition of the country. During your temporary absence from the Chair, latitude was allowed and was indulged in by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) and by the Chancellor of the Exchequer. Under these circumstances I submit that it is only right and proper that the hon. Member for Gorbals (Mr. Buchanan) should have some degree of latitude in taking a general survey of the financial position of the country.

I do not know what has been done in my absence, but while I was in the Chair, the right hon. Membef for Carnarvon Boroughs (Mr. Lloyd George) was speaking, and I understood his argument to be that sufficient money was not provided in the Finance Bill to meet the expenses that had been incurred, but he did not suggest other forms of taxation.

The Chancellor of the Exchequer not only dealt with matters which were not in the Finance Bill, but he gave a forecast of what was going to be in the next Budget.

That was while you were in the Chair, Mr. Speaker.

Not only did the Chancellor of the Exchequer do that, but he went on to criticise speeches outside this House, and to make forecasts of matters not in the Finance Bill. I thought that I, as a back bench Member, was entitled to proceed in the line of argument which I had adopted, and I still think that I am entitled to raise the issue that this Finance Bill contains far too generous an allowance in respect of the National Debt.

The hon. Member is entitled to say that the Finance Bill contains too generous an allowance in respect of the National Debt payment, and he can criticise the taxes proposed, but he cannot proceed to argue that other kinds of taxation should be imposed.

I can only trust to Providence, and I suppose I must always feel that I am a back bencher, and that I belong to a very unpopular group.

And you should protect us, Mr. Speaker.

The hon. Member is not entitled to make that remark. I must look after the interests of the whole House, and not of a few Members.

I was dealing with the Finance Bill in respect of its provision for the National Debt, and I was pointing out that, although it made provision for the building of battleships and for the Navy, Army and Air Force, by far the greatest cost is due to the National Debt charges. My view is that the Chancellor of the Exchequer, had he been a Chancellor of the Exchequer in the best sense of the word, ought to have looked to the welfare of the common people, and, instead of putting a tax of is. on petrol and instead of maintaining the duties on tea, he should have said: "Where can I find money in order to meet the needs of the masses of the people without inflicting any great hardship?" My submission is that the least he could have done was to take £175,000.000 from the interest on the National Debt. There is nothing revolutionary in halving the interest on the National Debt, and he could have used that money in order to meet the needs of the masses of the country.

Let me turn to the proposals of the Chancellor of the Exchequer in the Budget—I must admit that my line of reasoning has been somewhat altered, indeed somewhat shaken by the interruption just now. The Chancellor of the Exchequer proposes to give a certain sum of money for the purposes of rating relief, which he assumes will give a fillip to industry by which the masses of the country will also gain. One cannot help contrasting the methods of the Chancellor of the Exchequer in his treatment of the Labour party and his treatment of hon. Members on his own side. When we were discussing the Super-tax this House was packed, the benches opposite were full, because their friends were being attacked. When we deal with the question of unemployment or the conditions of the people the House is empty. The Chancellor of the Exchequer to-day did not deign to say a word in reply to the Labour party. He ignored us; he treated us with contempt; and it may be that we should have put up a Front Bench Member to open the discussion. But in the case of Super-tax payers he treats them not to one but to two and three speeches. When the wealthy classes ask for anything in this House the Chancellor cringes; when the poor ask for anything he pays no attention, he ignores them. They do not count in financial issues.

Take the proposals for rating relief. Does he really consider that they are going to do half the good which he claims for them? The coal industry is in a bad way, and it is hoped to put it on its feet again by the relief which is to be provided. When this Bill is passed and this money is granted, what will happen? Germany is our chief competitor. This money is being granted to the coal industry in order to smash the German competition. Within three weeks or three months the German Government will come along and give £4,000,000 perhaps to their coal industry, and you are back in the same position as before. The money which is to be granted for the purpose of aiding this industry will do nothing at all. Take shipbuilding. The total sum given to the shipbuilding industry will not amount to much over £1,000,000. That does not mean any real reduction in the price of ships, especially when you are dealing with ships which cost over £100,000 each to build. Therefore, the position will really remain the same as before.

The issues raised in this Finance Bill are of the gravest importance. The raising of money by indirect taxation is bad for the taxpayer and bad for the nation. Taxation should be levied direct, so that each person knows what he is paying for in regard to local and national services. This Bill will do nothing to relieve the conditions of the masses of the people, will do nothing to relieve the miners, will do nothing to relieve the slum dwellers. It will do what every Tory Finance Bill has done in the past, it will help the rich and wealthy to become more powerful and unscrupulous than in the past, and it will make the poor poorer than they were before. I intend to vote against the Bill. It is but another item in the long indictment against this Government. It is another charge of helping their friends and neglecting the poor.

I do not wish to delay the House at this late stage in the discussions of the financial provisions for the year. Four months have elapsed .since the Budget was first introduced and during that period, in one form or another, at regular intervals we have discussed the various proposals in it and the general principles which underlie it. We have discussed all sorts of items, from buttons to mechanical lighters and from kerosene to hollow-ware. I congratulate the Chancellor of the Exchequer and his Financial Secretary on having produced a Budget which has enabled this House of 615 presumably responsible citizens to discuss trivialities and distinctions with no difference for a period of four months. As I listened to the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) in his cross talk with the Chancellor of the Exchequer to-day I said to myself that I was certain, with his political philosophy, that if he had been sitting in the Chancellor's place and the Chancellor of the Exchequer had been sitting below the Gangway things would have been exactly the same as they were to-day. The criticisms of the Chancellor of the Exchequer sitting. below the Gangway would have been the same as the criticisms of the right hon. Member for Carnarvon Boroughs, and I do not believe the Budget would have been essentially different in any detail if the right hon. Member for Carnarvon Boroughs had been Chancellor of the Exchequer.

We are sitting here discussing these matters while steadily the condition of the country has gone from worse to worse, the position of the basic industries has been getting worse, unemployment has become more extended, the reduction of wages has gone on and more industries have had to be reconstructed. The only item in the whole Bill that is supposed to do something to stimulate and re-develop the trade of the country is the proposal with reference to rating relief, and the amount of faith that the Government themselves have in that proposal was shown by the speeches of the Prime Minister and the Chancellor of the Exchequer in the unemployment Debate a few days ago. They showed their great confidence in the financial proposals for the restoration of the nation's trade by telling us that the only way to deal with the problem of unemployment was to deport our unemployed men to all parts of the world. I never saw a more pitiable exhibition in my life than was made by the Prime Minister and the Chancellor of the Exchequer when they told us that as responsible statesmen they had absolutely no hope of giving the people of Britain an opportunity to live decently in their own country. It was a most pathetic, humiliating and saddening spectacle of men who ought to be guiding the nation's destiny and stimulating the nation's hope and laying down financial principles that would set our industries going, coming to this House and pathetically, pitifully, weakly telling us that they cannot run this nation's affairs so as to employ the people, and that the people have to be deported from the country.

This Bill has been based on absolutely wrong principles. It goes on the assumption that relief is to be made to the capital owners of the country, that they are the people who must be relieved from the burden of taxation; and the Chancellor of the Exchequer to-day intimated—not too definitely, because he has suf- ficient foresight to know that by the time another Budget comes along he will have a whole lot of other difficulties to face—that next year he hopes to be able to make some mitigation in the taxation of the wealthier sections of the community. That, besides being bad humanity, is bad economics. There is absolutely no reason why the Chancellor of the Exchequer should frame his Finance Bill on the basis of giving relief to the rich. The only Finance Bill that will produce reasonable prosperity and reasonable comfort for the people of this country, is a Finance Bill that is approached in the definite frame of mind of a Chancellor of the Exchequer who will say, "How much can I take off the possessions of the rich, and how can I best transfer it into the pockets of the poor?" If a Government is not prepared to face up to its financial arrangements in that mood, it can look forward to a declining industry, a decaying nation, a bankrupt nationality, and the complete loss of any prestige that it may have had among the nations of the world.

Your wealth, your taxable capacity is absolutely built up on the toil of the working people. I heard a right hon. Gentleman on the other side of the House say the other day, "Ah, you can tax the rich once, but if you tax them 20s. in the £ you will kill the goose that lays the golden egg." If that right hon. Member regards the capitalist class of this country as the goose that lays the golden egg, then I for one am quite prepared to kill it. I do not regard it as the goose that lays the golden egg. I believe that it is the cuckoo that takes possession of the golden egg after it has been produced by the toil of others.

The cuckoo lays an egg and does not take one.

The metaphor was started by a right hon. and very learned Gentleman on the other side. I could see all the difficulties that he was in when he used it, and so could he, and I realised the difficulties that I would be in in repeating it. But in plain, blunt language he believes that the wealth of this country is the result of the efforts of capitalists. I believe that it is the result of the efforts of workers. [HON. MEMBERS: "Of both."] I do not believe that the capitalist, as capitalist, does one solitary thing to make a loaf of bread or a pair of boots or a suit of clothes. That is wealth and nothing else is wealth. The cheques in the bank premises are not wealth; even Treasury notes are not wealth. Wealth is the loaves, the boots, the clothes, the houses, and these are not produced by bankers or financiers or even by Members of the Tory party opposite; they are produced by people who go out into the fields with hob-nailed boots and horny hands to plough the fields, or who go into the mines or on to the railways. That is the way your wealth is produced; and whether your capitalist system reduces the wage-earner's position to one of direst distress or not, it is the duty of the national Government to see that the persons who produce the wealth have a decent opportunity of living in comfort.

The hon. Member is now disobeying the ruling that I gave in the case of the hon. Member for Gorbals (Mr. Buchanan), and he cannot proceed further on those lines.

I am making the point that the Bill is framed on entirely wrong principles. It aims at relieving the burden of taxation upon the rich members of the community, and I am making the point that that definitely throws an additional burden on to the working people of the country, the big majority who are already overburdened. I want to quote some figures from the Inland Revenue returns to show that from 1920 to 1927, the years of slump and distress, the Inland Revenue Commissioners found that incomes from rent increased from £293,000,000 to £385,000,000. While the nation's trade was going down and while 1,000,000 people were unemployed, the rent-drawers added to their incomes by practically 50 per cent. There is an "on cost" charge on the nation's trade that has to find its way into price somewhere—an extra £100,000,000 taken by the rent-drawers during years of slump. Then we find that interest increased during those years from £102.000,000 to £156,000,000—an increase of 50 per cent. for the interest drawers during the years of depression. What happened to wages in the same period? The total amount of wages subject to Income Tax in 1920 was —944,00,000. To-day the amount is £185,000,000. That is from the Inland Revenue returns. Rent-drawing has gone up, interest-drawing has gone up, but wage-earning has come down from £944,000,000 to £185,000,000, and the huge mass of the wage-earners, nearly 16,000,000 out of 19,000,000, are living on incomes of less than £2 12s. per week while there are 97,000 Super-tax payers drawing £590,000,000 between them. And the right hon. Gentleman is afraid to tackle the 96,000 in the interests of the 19,000,000.

If you had a Chancellor of the Exchequer who was prepared to take from every wealthy person every scrap of income above £1,000 a year, it would leave enough for any intelligent human being who has health and strength and common sense. Anybody who has that amount of income has an opportunity to get all the best that life can give and none of the worst. If you had a Chancellor of the Exchequer who was prepared to say to the wealthy, "Every penny above £1,000 a year I am taking from you and I am going to use that money and re-distribute it among the homes of the people so that there will not be one solitary home with a ragged or starving child or an overwrought mother," then hon. Members opposite would be able to walk through their constituencies and look the working men and women square in the face, knowing that they were giving those men and women a fair show. To-day no man, if he has the ordinary instincts of a gentleman, can face the workers who, he knows, have done more to build up the nation than he has ever done, if he is drawing an income of thousands a year, or thousands a month, or, in some instances, thousands a week, while that worker—his equal, his fellow-man, a decent human citizen, with all human qualities is being asked to live on 17s. per week. I regret that the Chancellor of the Exchequer is not in his place, and I ask the Financial Secretary to convey to him the view that he should regard his next Finance Bill, not from the point of view of how he can give protection to the rich, but to direct this tremendous engine for political and social change towards abolishing the super-wealthy and the poor altogether, and putting the whole of the people of this nation on a decent level of security and comfort.

I undertake to convey to my right hon. Friend the Chancellor of the Exchequer the views expressed by the hon. Member for Bridgeton (Mr. Maxton). Now perhaps it will be convenient to the House if I refer to the Finance Bill. We have reached the final stage of the Bill, which embodies the financial proposals of the Budget introduced by my right hon. Friend in April last. I think it will be agreed by hon. Members upon this side of the House, and will even be conceded by hon. Members opposite, that in their experience of this House they have never known a Budget of such far-reaching importance as this Budget to go through the various stages of discussion with such smoothness and success. Of course, there has been opposition. It is the duty of the Opposition to oppose. Indeed, the hon. Member for Gorbals (Mr. Buchanan) seemed to think that the Opposition had not opposed this Bill as they might have done. I should be the very last to agree with that, because I think they have given opposition which in many cases has been wholesome and helpful.

We do not agree with hon. Members opposite always. In fact, we seldom agree with them, but when they do bring forward points which are worthy of consideration, even though we may not at the time agree with their speeches, we read the speeches in the OFFICIAL REPORT and we consider what has been said by the Opposition, and, if their criticisms are of a helpful character, we are pleased and proud to make use of their criticisms. The type of criticism which has been offered by the hon. Member for Bridgeton we take in good part. We welcome that type of criticism. But we do not accept as wholesome the kind of criticism delivered by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). We regard criticism in the form of discouragement with—I do not like to use the word "contempt."

Say what you think.

I was about to say that the criticism of the right hon. Gentleman the Member for Carnarvon Boroughs is of the type which is called "defeatist." Apparently, he would rather see us fail in helping forward industry than that we should succeed in that object. As the hon. Member for Gorbals has said, we are putting our backs into the effort at least to do something to help the great basic industries. We do not seek for reasons as the right hon. Member for Carnarvon Boroughs did, why we should not act. We are searching, honestly and conscientiously, in every direction, to find reasons why we should act, and where and how we should act, to help productive industry. There has also been, during these Debates, the usual amount of opposition of the kind which would result in losing the Tea Duties and perhaps, in our receiving less money from the Income Tax. These speeches have been delivered in good part and we take no exception to them. In fact, my right hon. Friend the Chancellor of the Exchequer and all of us who sit on these benches, would like to see a free Empire breakfast table. No one would be better pleased than we if we could attain that end. It is largely a question of cost and where the money is to come from.

It has been remarkable with what unanimity the proposals with regard to the de-rating and helping of the great industries have been received, out-the House. One cannot generalise about anything, but on the whole, in the great industries, both employers and employed have welcomed the effort of the Government to take the rate burden off the shoulders of our industrial enterprises. I regard this as a great Budget. This Finance Bill gives effect to the Budget. The hon. and gallant Member for Chatham (Lieut.-Colonel Moore-Brabazon) described it as a historic Budget, and I think when we are dead, men will look back to it as one of the great Budgets of our era. [ Interruption. ] I am entitled to have my opinion. It is a Budget of pluck and imagination, a Budget of prudence, and a Budget of initiative, and—

The hon. Gentleman says it will help the people of the country, but how will it help this situation? The present rate of relief to the unemployed person in a certain union in Northumberland is 8s. per week for a man, 8s. for his wife, and 4s. per child, but it is given as a document and not in hard cash, and they have to go to a certain grocer's shop to get provisions. Where is the help coming from there?

I wonder that the hon. Member puts such a question to me. The very thing which he puts up as an example of misery—and I agree that it is—is the very thing we are out to stop by increasing work in the great industries, so that people should not receive relief and live on charity, but should get work and wages. My right hon. Friend shares whatever blame there may be with the right hon. Gentleman opposite and other Chancellors who had to do with Budgets in past years in being party to what I may call non-attention to what was a weak spot in our finance, namely, the interest on War Savings Certificates. The Chancellor of the Exchequer, when he settled his Budget once and for all made provision for that weak spot in the financial position. We have faced up to it, and we have made provision for interest on those Savings Certificates in the past as well as what will accrue in the future.

Before I pass from the purely financial Clauses of the Bill, I should like to refer to one part of the Budget which gave pleasure to the hon. Members, for Keighley (Mr. Lees-Smith), Finsbury (Mr. Gillett), and West Leicester (Mr. Pethick-Lawrence). I refer to the Currency and Banknotes Bill, which I had the honour of introducing, and I must say this, that I believe those hon. Members thoroughly enjoyed that Debate. I enjoyed it myself, and although I did not agree with much that they said, it was an intellectual treat to us all, on both sides, to listen to that Debate. My right hon. Friend empowered me to introduce that Bill as the coping stone on his policy of the return to gold. By that Bill, which is now an Act, we have returned to the principles of that important Act, the Bank Act of 1844, which I think—

On a point of Order. Is it in order for the hon. Gentleman to discuss the Bank Act of 1844 on the Third Reading of what will be the Finance Act of 1928?

The hon. Gentleman the Financial Secretary to the Treasury made such a point, in opening his speech, that he was going to confine himself to the Finance Bill that perhaps I trusted him too implicity.

I apologise, Mr. Speaker, and admit that your rebuke is very just. I will pass to two useful provisions in the Finance Bill which my right hon. Friend the Chancellor of the Exchequer has been able to put into operation, notwithstanding the fact that this year's revenue is still suffering from the disaster of 1926. He was able to give a very welcome allowance or Income Tax remission for children, whidh has been greatly appreciated throughout the country.

Are we not suffering more from the coal subsidy of 1925 and the return to the gold standard in that year? That is the foundation of it all.

The disaster of 1926 cost this country in capital not less than £400,000,000 and in a loss of revenue in this last year of probably £80,000,000. Then my right hon. Friend has taken steps to reduce the staffs in Government Departments over a period of five years, amounting to 11,000 people. By his policy of reducing the duty upon unrefined sugar, he has been able to give a remission which is worth to the consumer £4,000,000 a rear, but it will cost the Exchequer only £2,900,000. It has had a further beneficial effect. I see the hon. Member for Greenock (Sir G. Collins) sitting in his place, and I am sure he will bear me out when I say that the effect of the readjustment of duty has been very beneficial to those engaged in the refining industry. It has brought employment back to them and to their ancillary trades. Not only the refiners themselves, but the transport trade, the chemical trade, and the jute trade have all benefited by what my right hon. Friend has done as the result of the remission of 2s. 4d. per cwt. off unrefined sugar.

But the outstanding feature of the Budget has, of course, been the courageous, useful, and, I am perfectly certain, eventually successful policy of de-rating. We have, to use my right hon. Friend's expression, so far as agriculture is concerned, wiped out the remaining amount of rating on agricultural land and buildings. Once and for all taxes on that industry have gone and three-quarters of the local taxation upon productive in- dustry also has gone. There are hon. Members who have, like myself, taken some considerable part in local government, and I am sure they will agree when I say that we have been for years looking for a rearrangement of our system of local taxation on production, which was set up in the time of Queen Elizabeth and has now become entirely unsuited to modern conditions. Here we have an opportunity of doing something under this Bill which will enable us to reform local rating.

Where?

It is implicit in the proposal. I have the quotation from my right hon. Friend's speech.

It may be in the speech, but it is not in the Bill.

My right hon. Friend said:

"Advantage will be taken of this unique opportunity to carry out those reforms in the local government system which are long overdue."—[OFFICIAL REPORT, 24th April, 1928; col. 849, Vol. 216.]

Therefore, we are, by reason of the duty on imported petrol, able to carry out

these reforms which my right hon. Friend has foreshadowed. The motorist has backed us up. The distributor supports us. He realises that he will share in any renewal of prosperity to coal, steel, cotton, and other basic trades. We help the factory, the fields of agriculture, we help the mine, we develop the use of our domestic product, coal, and we have the virtuous circle instead of the vicious circle.

It was a penny tax upon a sixpenny omnibus ride.

I think those who do that, unless they have a very adequate reason for it, could be charged with gross profiteering. I have run briefly through the Finance Bill. I feel that it is a great privilege to have been allowed to take part in the Budget upon which this Bill is based. As I said, it is a Budget of courage and initiative, and I believe that this Finance Bill will operate to confer benefits upon our people.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 249; Noes, 84.

Bill read the Third time, and passed.

PETROLEUM (CONSOLIDATION) BILL [Lords]

Considered in Committee, and reported, without Amendment; read the Third time, and passed, without Amendment.

FOOD AND DRUGS (ADULTERATION) BILL [Lords]

Considered in Committee and reported, without Amendment; read the Third time, and passed, without Amendment.

I beg to move, "That this House doth agree with the Lords in the said Amendment."

I think that I should explain, very briefly, the object of this Amendment and the subsequent Amendment: In page 4, line 20, at the end, insert the words:

The House will remember that on the Report stage, in connection with the Clause allowing shops to remain open for a longer hour in holiday resorts, words were inserted on the Motion of hon. Members opposite to allow an equivalent extra holiday for the extra hours' work. The House will also remember that that Amendment was accepted without a Division, but I pointed out that the wording was open to administrative objection. Since the Amendment has been inserted, I have been at some pains to find a more suitable form of words, and that, I think, we have been able to do by leaving out the words which were in the Bill as it left this House, and by inserting the new Sub-sections, and also by inserting an additional Schedule at the end of the Bill. I should explain that, as the Amendment left this House, it did not really give the shop assistants any right to make a claim and no holiday was given. That is to say, there was no legal right in the wording of the Amendment, and it was merely a pious resolution. It also did not define what the wages were on which the extra holidays were to be based, or attempt to define how the hours on which the holiday was to be based were to be calculated. We have endeavoured to do that in this Amendment. I have had informal consultations with certain hon. Members opposite who moved this Amendment, and they have expressed their general agreement with these words, so that I hope the House will agree to accept these Amendments.

I am glad that this Amendment has been made in another place, but I am still not satisfied that it gives any statutory right to the holidays.

Oh, yes!

If that be the case, I am very glad. This House, which is always so anxious about its own holidays, is to be congratulated on ensuring a holiday for one small section of the public, namely, the shop assistants.

Question put, and agreed to.

FIRST SCHEDULE.—(Transactions not prevented by this Act or by Closing Orders made under the Principal Act.)

Lords Amendment:

In page 6, line 29, after the word "tobacco," insert "table water."

I beg to move, "That this House doth agree with the Lords in the said Amendment."

A similar Amendment was on the Order Paper on the Report stage, but was not selected. The proposal is to allow table waters to be sold for consumption off licensed premises, and as liquor can be sold in licensed premises for off consumption, it would be in the interests of temperance that people should be able to take away soda water with them as well. The Grocers' Federa- tion, representing the only interests who are legitimately affected by this Amendment, have expressed themselves as perfectly satisfied, and they do not raise any objection, and I hope the House will agree to the Amendment.

Question put, and agreed to.

Remaining Lords Amendments agreed to.

Merchant Shipping (Linethrowing Appliance) Bill

As amended ( in the Standing Committee ), considered; read the Third time, and passed.

Rag Flock Act (1911) Amendment Bill

Not amended ( in the Standing Committee ), considered; read the Third time, and passed.

The remaining Orders were read, and postponed.