except in conjunction with some effective method of finding work and
of testing willingness to work, and that can only be afforded by a
national system of labour exchanges. That Bill has already passed
through Parliament, and in the early months of next year we shall hope
to bring it into operation by opening, all over the country, a network
of labour exchanges connected with each other and with the centre by
telephone. We believe this organisation may secure for labour--and,
after all, labour is the only thing the great majority of people have
to sell--it will secure for labour, for the first time, that free and
fair market which almost all other commodities of infinitely less
consequence already enjoy, and will replace the present wasteful,
heartbreaking wanderings aimlessly to and fro in search of work by a
scientific system; and we believe that the influence of this system in
the end must tend to standardising the conditions of wages and
employment throughout the country.
Lastly, in connection with unemployment I must direct your attention
to the Development Bill, which is now before Parliament, the object of
which is to provide a fund for the economic development of our
country, for the encouragement of agriculture, for afforestation, for
the colonisation of England, and for the making of roads, harbours,
and other public works. And I should like to draw your attention to a
very important clause in that Bill, which says that the prosecution of
these works shall be regulated, as far as possible, by the conditions
of the labour market, so that in a very bad year of unemployment they
can be expanded, so as to increase the demand for labour at times of
exceptional slackness, and thus correct and counterbalance the cruel
fluctuations of the labour market. The large sums of money which will
be needed for these purposes are being provided by the Budget of Mr.
Lloyd-George, and will be provided in an expanding volume in the
years to come through the natural growth of the taxes we are imposing.
I have hitherto been speaking of the industrial organisation of
insurance schemes, labour exchanges, and economic development. Now I
come to that great group of questions which are concerned with the
prevention and relief of distress. We have before us the reports of
the majority and minority of the Royal Commission on the Poor Law, and
we see there a great and urgent body of reforms which require the
attention of Parliament. The first and most costly step in the relief
of distress has already been taken by the Old-Age Pensions Act,
supplemented, as it will be if the Budget passes, by the removal of
the pauper disqualification. By that Act we have rescued the aged from
the Poor Law. We have yet to rescue the children; we have yet to
distinguish effectively between the _bona fide_ unemployed workman and
the mere loafer and vagrant; we have yet to transfer the sick, the
inebriate, the feeble-minded and the totally demoralised to
authorities specially concerned in their management and care.
But what I want to show you, if I have made my argument clear, is that
all these schemes--which I can do little more than mention this
afternoon, each one of which is important--are connected one with the
other, fit into one another at many points, that they are part of a
concerted and interdependent system for giving a better, fairer social
organisation to the masses of our fellow-countrymen. Unemployment
insurance, which will help to tide a workman over a bad period, is
intimately and necessarily associated with the labour exchanges which
will help to find him work and which will test his willingness to
work. This, again, will be affected by the workings of the Development
Bill, which, as I told you, we trust may act as a counterpoise to the
rocking of the industrial boat and give a greater measure of stability
to the labour market.
The fact that everybody in the country, man and woman alike, will be
entitled, with scarcely any exception, to an old-age pension from the
State at the age of seventy--that fact makes it ever so much cheaper
to insure against invalidity or infirmity up to the age of seventy.
And, with the various insurance schemes which are in preparation, we
ought to be able to set up a complete ladder, an unbroken bridge or
causeway, as it were, along which the whole body of the people may
move with a certain assured measure of security and safety against
hazards and misfortunes. Then, if provision can be arranged for widows
and orphans who are left behind, that will be a powerful remedy
against the sweating evil; for, as you know, these helpless people,
who in every country find employment in particular trades, are unable
to make any fair bargain for themselves, and their labour, and this
consequently leads to the great evils which have very often been
brought to the notice of Parliament. That, again, will fit in with the
Anti-Sweating Bill we are passing through Parliament this year.
Now, I want you to see what a large, coherent plan we are trying to
work out, and I want you to believe that the object of the plan and
the results of it will be to make us a stronger as well as a happier
nation. I was reading the other day some of the speeches made by
Bismarck--a man who, perhaps more than any other, built up in his own
lifetime the strength of a great nation--speeches which he made during
the time when he was introducing into Germany those vast insurance
schemes, now deemed by all classes and parties in Germany to be of
the utmost consequence and value. "I should like to see the State"
(said Prince Bismarck in 1881), "which for the most part consists of
Christians, penetrated to some extent by the principles of the
religion which it professes, especially as concerns the help one gives
to his neighbour, and sympathy with the lot of old and suffering
people." Then, again, in the year 1884 he said: "The whole matter
centres in the question, 'Is it the duty of the State or is it not to
provide for its helpless citizens?' I maintain that it is its duty,
that it is the duty, not only of the 'Christian' State, as I ventured
once to call it when speaking of 'Practical Christianity,' but of
every State."
There are a great many people who will tell you that such a policy, as
I have been endeavouring to outline to you this afternoon, will not
make our country stronger, because it will sap the self-reliance of
the working classes. It is very easy for rich people to preach the
virtues of self-reliance to the poor. It is also very foolish,
because, as a matter of fact, the wealthy, so far from being
self-reliant, are dependent on the constant attention of scores, and
sometimes even hundreds, of persons who are employed in waiting upon
them and ministering to their wants. I think you will agree with me,
on the other hand--knowing what you do of the life of this city and of
the working classes generally--that there are often trials and
misfortunes which come upon working-class families quite beyond any
provision which their utmost unaided industry and courage could secure
for them. Left to themselves, left absolutely to themselves, they must
be smashed to pieces, if any exceptional disaster or accident, like
recurring sickness, like the death or incapacity of the breadwinner,
or prolonged or protracted unemployment, fall upon them.
There is no chance of making people self-reliant by confronting them
with problems and with trials beyond their capacity to surmount. You
do not make a man self-reliant by crushing him under a steam roller.
Nothing in our plans will relieve people from the need of making every
exertion to help themselves, but, on the contrary, we consider that we
shall greatly stimulate their efforts by giving them for the first
time a practical assurance that those efforts will be crowned with
success.
I have now tried to show you that the Budget, and the policy of the
Budget, is the first conscious attempt on the part of the State to
build up a better and a more scientific organisation of society for
the workers of this country, and it will be for you to say--at no very
distant date--whether all this effort for a coherent scheme of social
reconstruction is to be swept away into the region of lost endeavour.
That is the main aspect of the Budget to which I wish to draw your
attention. But there is another significance of the highest importance
which attaches to the Budget. I mean the new attitude of the State
towards wealth. Formerly the only question of the tax-gatherer was,
"How much have you got?" We ask that question still, and there is a
general feeling, recognised as just by all parties, that the rate of
taxation should be greater for large incomes than for small. As to how
much greater, parties are no doubt in dispute. But now a new question
has arisen. We do not only ask to-day, "How much have you got?" we
also ask, "How did you get it? Did you earn it by yourself, or has it
just been left you by others? Was it gained by processes which are in
themselves beneficial to the community in general, or was it gained by
processes which have done no good to any one, but only harm? Was it
gained by the enterprise and capacity necessary to found a business,
or merely by squeezing and bleeding the owner and founder of the
business? Was it gained by supplying the capital which industry needs,
or by denying, except at an extortionate price, the land which
industry requires? Was it derived from active reproductive processes,
or merely by squatting on some piece of necessary land till enterprise
and labour, and national interests and municipal interests, had to buy
you out at fifty times the agricultural value? Was it gained from
opening new minerals to the service of man, or by drawing a mining
royalty from the toil and adventure of others? Was it gained by the
curious process of using political influence to convert an annual
licence into a practical freehold and thereby pocketing a monopoly
value which properly belongs to the State--how did you get it?" That
is the new question which has been postulated and which is vibrating
in penetrating repetition through the land.[20]
It is a tremendous question, never previously in this country asked so
plainly, a new idea, pregnant, formidable, full of life, that taxation
should not only have regard to the volume of wealth, but, so far as
possible, to the character of the processes of its origin. I do not
wonder it has raised a great stir. I do not wonder that there are
heart-searchings and angry words because that simple question, that
modest proposal, which we see embodied in the new income-tax
provisions, in the land taxes, in the licence duties, and in the tax
on mining royalties--that modest proposal means, and can only mean,
the refusal of the modern State to bow down unquestioningly before the
authority of wealth. This refusal to treat all forms of wealth with
equal deference, no matter what may have been the process by which it
was acquired, is a strenuous assertion in a practical form, that there
ought to be a constant relation between acquired wealth and useful
service previously rendered, and that where no service, but rather
disservice, is proved, then, whenever possible, the State should make
a sensible difference in the taxes it is bound to impose.
It is well that you should keep these issues clearly before you
during the weeks in which we seem to be marching towards a grave
constitutional crisis. But I should like to tell you that a general
election, consequent upon the rejection of the Budget by the Lords,
would not, ought not to be, and could not be fought upon the Budget
alone. "Budgets come," as the late Lord Salisbury said in
1894--"Budgets come and Budgets go." Every Government frames its own
expenditure for each year; every Government has to make its own
provision to meet that expenditure. There is a Budget every year, and
memorable as the Budget of my right hon. friend may be, far-reaching
as is the policy depending upon it, the Finance Bill, after all, is in
its character only an annual affair. But the rejection of the Budget
by the House of Lords would not be an annual affair. It would be a
violent rupture of constitutional custom and usage extending over
three hundred years and recognised during all that time by the leaders
of every Party in the State. It would involve a sharp and sensible
breach with the traditions of the past; and what does the House of
Lords depend upon if not upon the traditions of the past? It would
amount to an attempt at revolution not by the poor, but by the rich;
not by the masses, but by the privileged few; not in the name of
progress, but in that of reaction; not for the purpose of broadening
the framework of the State, but of greatly narrowing it. Such an
attempt, whatever you may think of it, would be historic in its
character, and the result of the battle fought upon it, whoever wins,
must inevitably be not of an annual, but of a permanent and final
character. The result of such an election must mean an alteration of
the veto of the House of Lords; if they win they will have asserted
their right, not merely to reject legislation of the House of Commons,
but to control the finances of the country, and if they lose, we will
deal with their veto once and for all.
We do not seek the struggle, we have our work to do; but if it is to
come, it could never come better than now. Never again perhaps,
certainly not for many years, will such an opportunity be presented to
the British democracy. Never will the ground be more favourable; never
will the issues be more clearly or more vividly defined. Those issues
will be whether the new taxation, which is admitted on all sides to be
necessary, shall be imposed upon luxuries, superfluities, and
monopolies, or upon the prime necessaries of life; whether you shall
put your tax upon the unearned increment on land or upon the daily
bread of labour; whether the policy of constructive social reform on
which we are embarked, and which expands and deepens as we advance,
shall be carried through and given a fair chance, or whether it shall
be brought to a dead stop and all the energies and attention of the
State devoted to Jingo armaments and senseless foreign adventure. And,
lastly, the issue will be whether the British people in the year of
grace 1909 are going to be ruled through a representative Assembly,
elected by six or seven millions of voters, about which almost every
one in the country, man or woman, has a chance of being consulted, or
whether they are going to allow themselves to be dictated to and
domineered over by a minute minority of titled persons, who represent
nobody, who are answerable to nobody, and who only scurry up to London
to vote in their party interests, in their class interests, and in
their own interests.
These will be the issues, and I am content that the responsibility for
such a struggle, if it should come, should rest with the House of
Lords themselves. But if it is to come, we shall not complain, we
shall not draw back from it. We will engage in it with all our hearts
and with all our might, it being always clearly understood that the
fight will be a fight to the finish, and that the fullest forfeits,
which are in accordance with the national welfare, shall be exacted
from the defeated foe.
FOOTNOTES:
[20] We do not, of course, ask it of the individual taxpayer. That
would be an impossible inquisition. But the House of Commons asks
itself when it has to choose between taxes on various forms of wealth,
"By what process was it got?"
THE BUDGET AND PROPERTY.
ABERNETHY, _October 7, 1909_
(From _The Daily Telegraph_, by permission of the Editor.)
This is a very fine gathering for a lonely glen, and it augurs well
for the spirit of Liberalism. Much will be expected of Scotland in the
near future. She will be invited to pronounce upon some of the largest
and most complicated questions of politics and finance that can
possibly engage the attention of thoughtful citizens, and her decision
will perhaps govern events.
There is one contrast between Parties which springs to the eye at
once. One Party has a policy, detailed, definite, declared, actually
in being. The other Party has no policy. The Conservative Party has no
policy which it can put before the country at the present time on any
of the great controverted questions of the day. On most of the
previous occasions when we have approached a great trial of strength,
the Conservative Party have had a policy of their own which they
could state in clear terms. You would naturally expect some reticence
or reserve from the head of a Government responsible for the
day-to-day administration of affairs. But what do you see at the
present time? Mr. Asquith speaks out boldly and plainly on all the
great questions which are being debated, and it is the Leader of the
Opposition who has to take refuge in a tactical and evasive attitude.
Why, Mr. Balfour is unable to answer the simplest questions. At
Birmingham, the Prime Minister asked him in so many words: What
alternative did he propose to the Budget? What did he mean by Tariff
Reform? and what was his counsel to the House of Lords?
It would not be difficult to frame an answer to all these questions.
Mr. Chamberlain, for instance, was quite ready with his answers to all
of them. At Glasgow in 1903 he stated what his Budget would have been,
and he explained precisely what he meant by Tariff Reform. At
Birmingham last month he was equally clear in urging the Lords to
reject the Budget. There is no doubt whatever where Mr. Chamberlain
and those who agree with him stand to-day. They would raise the extra
taxation which is required, by protective import duties on bread, on
meat, on butter, cheese, and eggs, and upon foreign imported
manufactured articles; and in order to substitute their plan for ours
they are prepared to urge the House of Lords to smash up the Budget
and to smash up as much of the British Constitution and the British
financial system as may be necessary for the purpose.
That is their policy; but, after all, it is Mr. Balfour who is the
leader of the Conservative Party. He is the statesman who would have
to form and carry on any administration which might be formed from
that Party, and he will not state his policy upon any of the dominant
questions of the day. Why will he not answer these simple questions?
He is the leader, and it is because he wishes to remain the leader
that he observes this discreet silence. He tells us he is in favour of
Tariff Reform, he loves Tariff Reform, he worships Tariff Reform. He
feels that it is by Tariff Reform alone that the civilisation of Great
Britain can be secured, and the unity of the Empire achieved; but
nothing will induce him to say what he means by Tariff Reform. That is
a secret which remains locked in his own breast. He condemns our
Budget, he clamours for greater expenditure, and yet he puts forward
no alternative proposals by which the void in the public finances may
be made good. And as for his opinion about the House of Lords, he dare
not state his true opinion to-day upon that subject. I do not say that
there are not good reasons for Mr. Balfour's caution. It sometimes
happens that the politics of a Party become involved in such a queer
and awkward tangle that only a choice of evils is at the disposal of
its leader; and when the leader has to choose between sliding into a
bog on the one hand and jumping over a precipice on the other, some
measure of indulgence may be extended to him if he prefers to go on
marking time, and indicating the direction in which his followers are
to advance by a vague general gesture towards the distant horizon.
Whatever you may think about politics, you must at least, in justice
to his Majesty's Government, recognise that their position is
perfectly plain and clear. Some of you may say to me, "Your course,
your policy may be clear enough, but you are burdening wealth too
heavily by your taxes and by your speeches." Those shocking speeches!
"You are driving capital out of the country." Let us look at these
points one at a time. The capital wealth of Britain is increasing
rapidly. Sir Robert Giffen estimated some years ago that the addition
to the capital wealth of the nation was at least between two hundred
and three hundred millions a year. I notice that the paid-up capital
of registered companies alone, which was 1,013 millions sterling in
1893, has grown naturally and healthily to 2,123 millions sterling in
1908. And, most remarkable of all, the figures I shall submit to you,
the gross amount of income which comes under the view of the Treasury
Commissioners who are charged with the collection of income-tax, was
in the year 1898-9 762 millions, and it had risen from that figure to
980 millions sterling in the year 1908-9: that is to say, that it had
risen by 218 millions in the course of ten years.
From this, of course, a deduction has to be made for more efficient
methods of collection. This cannot be estimated exactly; but it
certainly accounts for much less than half the increase. Let us assume
that it is a half. The increase is therefore 109 millions. I only wish
that wages had increased in the same proportion. When I was studying
those figures I have mentioned to you I looked at the Board of Trade
returns of wages. Those returns deal with the affairs of upwards of
ten millions of persons, and in the last ten years the increase in the
annual wages of that great body of persons has only been about ten
million pounds: that is to say, that the increase of income assessable
to income-tax is at the very least more than ten times greater than
the increase which has taken place in the same period in the wages of
those trades which come within the Board of Trade returns.
When we come to the question of how burdens are to be distributed, you
must bear these facts and figures in mind, because the choice is
severely limited. You can tax wealth or you can tax wages--that is the
whole choice which is at the disposal of the Chancellor of the
Exchequer. Of course I know there are some people who say you can tax
the foreigner--but I am quite sure that you will not expect me to
waste your time in dealing with that gospel of quacks and creed of
gulls. The choice is between wealth and wages, and we think that, in
view of that great increase in accumulated wealth which has marked
the last ten years, and is the feature of our modern life, it is not
excessive or unreasonable at the present stage in our national
finances to ask for a further contribution from the direct taxpayers
of something under eight millions a year. That is the total of all the
new taxes on wealth which our Budget imposes, and it is about equal to
the cost of four of those _Dreadnoughts_ for which these same classes
were clamouring a few months ago. And it is less than one-thirteenth
of the increased income assessable to income-tax in the last ten
years.
It is because we have done this that we are the object of all this
abuse and indignation which is so loudly expressed in certain quarters
throughout the country at the present time. While the working-classes
have borne the extra taxation upon their tobacco and whisky in
silence, all this rage and fury is outpoured upon the Government by
the owners of this ever-increasing fund of wealth, and we are
denounced as Socialists, as Jacobins, as Anarchists, as Communists,
and all the rest of the half-understood vocabulary of irritated
ignorance, for having dared to go to the wealthy classes for a fair
share of the necessary burdens of the country. How easy it would be
for us to escape from all this abuse if we were to put the extra
taxation entirely upon the wages of the working classes by means of
taxes on bread and on meat. In a moment the scene would change, and we
should be hailed as patriotic, far-sighted Empire-builders, loyal and
noble-hearted citizens worthy of the Motherland, and sagacious
statesmen versed in the science of government. See, now, upon what
insecure and doubtful foundations human praise and human censure
stand.