agricultural landowner and the country gentleman. Now, there is no
grosser misrepresentation of the Budget than that it hits the
agricultural landowner, and I think few greater disservices can be
done to the agricultural landowner, whose property has in the last
thirty years in many cases declined in value, than to confuse him with
the ground landlord in a great city, who has netted enormous sums
through the growth and the needs of the population of the city. None
of the new land taxes touch agricultural land, while it remains
agricultural land. No cost of the system of valuation which we are
going to carry into effect will fall at all upon the individual owner
of landed property. He will not be burdened in any way by these
proposals. On the contrary, now that an amendment has been accepted
permitting death duties to be paid in land in certain circumstances,
the owner of a landed estate, instead of encumbering his estate by
raising the money to pay off the death duties, can cut a portion from
his estate; and this in many cases will be a sensible relief.
Secondly, we have given to agricultural landowners a substantial
concession in regard to the deductions which they are permitted to
make from income-tax assessment on account of the money which they
spend as good landlords upon the upkeep of their properties, and we
have raised the limit of deduction from 121/2 per cent. to 25 per cent.
Thirdly, there is the Development Bill--that flagrant Socialistic
measure which passed a second reading in the House of Lords
unanimously--which will help all the countryside and all classes of
agriculturists, and which will help the landlord in the country among
the rest. So much for that charge.
Then it is said, "At any rate you cannot deny that the Budget is
driving capital out of the country." I should like to point out to you
that before the Budget was introduced, we were told that it was Free
Trade that was driving capital out of the country. Let that pass. It
is said we cannot deny that the Budget is driving capital out of the
country. I deny it absolutely. To begin with, it is impossible to
drive the greater part of our capital out of this country, for what is
the capital of the country? The greatest part of that capital is the
land, the state of cultivation which exists, the roads, the railways,
the mines, the mills--this is the greatest part of the capital. The
owners of that capital might conceivably, if they thought fit, depart
from the country, but their possessions would remain behind.
I shall be asked, What about all this foreign investment that is going
on? Is not British credit now being diverted abroad to foreign
countries, to the detriment of our own country? Is not British capital
fleeing from The Socialistic speeches of the Chancellor of the
Exchequer, and the President of the Board of Trade, and taking refuge
in Germany, where of course there are no Socialists, or in other
countries, where there is never any disturbance, like France, or
Spain, or Russia, or Turkey? Now let us look into that. There are only
two ways in which capital can leave this country for foreign
investments. It is no good sending bits of paper to the foreigner and
expecting him to pay a dividend in return. There are only two
ways--one is by exports made by British labour, and the other by
bullion. Now, if the exports were to increase, surely that should be a
cause of rejoicing, especially to our Tariff Reformers, who regard the
increase in exports as the index of national prosperity. As for the
second--the export of bullion--would you believe it, it is only a
coincidence, but it is an amusing coincidence, there are actually six
million pounds' worth more gold in the country now, than there were at
the beginning of the year before the Budget was introduced. The active
and profitable investment abroad which has marked the last two or
three years, which is bound to swell the exports of the next few
years, has not been attended by any starvation of home industry. On
the contrary, the amount of money forthcoming for the development of
new industries and now enterprises in this country during the last
two or three years has compared very favourably with the years which
immediately preceded them, when the Conservative Government was in
power.
Property in Great Britain is secure. It would be a great mistake to
suppose that that security depends upon the House of Lords. If the
security of property in a powerful nation like our own were dependent
upon the action or inaction of 500 or 600 persons, that security would
long ago have been swept away. The security of property depends upon
its wide diffusion among great numbers and all classes of the
population, and it becomes more secure year by year because it is
gradually being more widely distributed. The vital processes of
civilisation require, and the combined interests of millions
guarantee, the security of property. A society in which property was
insecure would speedily degenerate into barbarism; a society in which
property was absolutely secure, irrespective of all conceptions of
justice in regard to the manner of its acquisition, would degenerate,
not to barbarism, but death. No one claims that a Government should
from time to time, according to its conceptions of justice, attempt
fundamentally to recast the bases on which property is erected. The
process must be a gradual one; must be a social and a moral process,
working steadily in the mind and in the body of the community; but we
contend, when new burdens have to be apportioned, when new revenues
have to be procured, when the necessary upkeep of the State requires
further taxes to be imposed--we contend that, in distributing the new
burdens, a Government should have regard first of all to ability to
pay and, secondly, that they should have regard to some extent, and so
far as is practicable, to the means and the process by which different
forms of wealth have been acquired; and that they should make a
sensible difference between wealth which is the fruit of productive
enterprise and industry or of individual skill, and wealth which
represents the capture by individuals of socially created values. We
say that ought to be taken into consideration. We are taking it into
consideration now by the difference we have made in the income-tax
between earned and unearned incomes, by the difference we make between
the taxation which is imposed upon a fortune which a man makes himself
and the fortune which he obtains from a relative or a stranger. We
are taking it into consideration in our tax on mining royalties, in
our licence duties and in our taxes on the unearned increment in land.
The State, we contend, has a special claim upon the monopoly value of
the liquor licence, which the State itself has created, and which the
State itself maintains from year to year by its sole authority. If
that claim has not previously been made good, that is only because the
liquor interest have had the power, by using one branch of the
Legislature, to keep the nation out of its rights. All the more reason
to make our claim good now.
Again we say that the unearned increment in land is reaped in
proportion to the disservice done to the community, is a mere toll
levied upon the community, is an actual burden and imposition upon
them, and an appropriation by an individual, under existing law, no
doubt, of socially created wealth. For the principle of a special
charge being levied on this class of wealth we can cite economic
authority as high us Adam Smith, and political authority as
respectable as Lord Rosebery; and for its application we need not
merely cite authority, but we can point to the successful practice of
great civilised neighbouring States.
Is it really the contention of the Conservative Party that the State
is bound to view all processes of wealth-getting with an equal eye,
provided they do not come under the criminal codes? Is that their
contention? Are we really to be bound to impose the same burden upon
the hardly won income of the professional man and the extraordinary
profits of the land monopolist? Are we really to recognise the liquor
licence which the State created, which the law says is for one year
only--as if it were as much the brewers' or the publicans' property
_for ever_ as the coat on his back? No; it is absurd. Of the waste and
sorrow and ruin which are caused by the liquor traffic, of the injury
to national health and national wealth which follows from it, which
attends its ill-omened footsteps, I say nothing more in my argument
this afternoon. The State is entitled to reclaim its own, and they
shall at least render unto Caesar the things which are Caesar's.
The money must be found, and we hold that Parliament, in imposing the
inevitable taxes, is entitled not only to lay a heavier proportionate
burden upon the rich than on the poor, but also to lay a special
burden upon certain forms of wealth which are clearly social in their
origin, and have not at any point been derived from a useful or
productive process on the part of their possessors. But it may be
said, "Your plans include other expenditure besides the Navy and
Old-age Pensions. What about Insurance, Labour Exchanges, and economic
development?" Those objects, at least, it may be urged are not
inevitable or indispensable. It is quite true that the taxation which
we seek to impose this year, and which is sufficient, and only
sufficient for the needs of this year, will yield more abundant
revenues in future years, and if at the same time a reduction in the
expenditure on armaments becomes possible, we shall have substantial
revenues at our disposal. That is perfectly true, but is that a reason
for condemning the Budget? When we see on every hand great nations
which cannot pay their way, which have to borrow merely to carry on
from year to year, when we see how sterile and unproductive all the
dodges and devices of their protective tariffs have become, when we
remember how often we have ourselves been told that under Free Trade
no more revenue could be got, is it not a welcome change for our
country, and for our Free Trade policy, to find our opponents
complaining of the expansive nature of a Free Trade revenue? I don't
wonder that Tory Protectionists have passed a resolution at Birmingham
declaring that the Budget will indefinitely postpone--that was the
phrase--the scheme of Tariff Reform.
And upon what objects and policies do we propose to spend the extra
revenue which this Budget will unquestionably yield in future years?
People talk vaguely of the stability of society, of the strength of
the Empire, of the permanence of a Christian civilisation. On what
foundation do they seek to build? There is only one foundation--a
healthy family life for all. If large classes of the population live
under conditions which make it difficult if not impossible for them to
keep a home together in decent comfort, if the children are habitually
underfed, if the housewife is habitually over-strained, if the
bread-winner is under-employed or under-paid, if all are unprotected
and uninsured against the common hazards of modern industrial life, if
sickness, accident, infirmity, or old age, or unchecked intemperance,
or any other curse or affliction, break up the home, as they break up
thousands of homes, and scatter the family, as they scatter thousands
of families in our land, it is not merely the waste of earning-power
or the dispersal of a few poor sticks of furniture, it is the stamina,
the virtue, safety, and honour of the British race that are being
squandered.
Now the object of every single constructive proposal to which the
revenues raised by this Budget will be devoted, not less than the
object of the distribution of the taxes which make up the Budget, is
to buttress and fortify the homes of the people. That is our aim; to
that task we have bent our backs; and in that labour we shall not be
daunted by the machine-made abuse of partisans or by the nervous
clamour of selfish riches. Whatever power may be given to us shall be
used for this object. It is for you to say whether power will be given
us to prevail.
But they say, "This uncertainty about the Budget is causing
unemployment; you are aggravating the evils you seek to remedy." The
Budget has not increased unemployment. Unemployment is severe in the
country this year, but it is less severe this year than it was last,
and it is less severe since the Budget was introduced than before it
was introduced. The proportion of trade unionists reported to be
unemployed in the Board of Trade returns at the end of September was
7.4 per cent., and that is lower than any month since May 1908, and it
compares very favourably with September of last year, when the
proportion was not 7.4, but 9.3 per cent.
I can well believe that the uncertainty as to whether the House of
Lords will, in a desperate attempt to escape their fair share of
public burdens, plunge the country into revolution and its finances
into chaos--I can well believe that that uncertainty is bad for trade
and employment, and is hampering the revival which is beginning all
over the country. I do not doubt that all this talk of the rejection
of the Budget is injurious to business, to credit, and to enterprise;
but who is to blame for that? When did we ever hear of a Budget being
rejected by the Lords before? When did we ever hear of a leader of the
House of Lords proposing, like Lord Lansdowne, to decide whether he
would tear up the British Constitution after consultation with the
leaders of the drink trade? The uncertainty is not due to our action,
but to their threats. Our action has been regular, constitutional,
and necessary. Their threats are violent, unprecedented, and
outrageous. Let them cease their threats. Let one of their
leaders--let Mr. Balfour, for instance, say this year what he said
last year, in the month of October, at Dumfries. Let him say, "It is
the House of Commons and not the House of Lords which settles
uncontrolled our financial system." Let him repeat these words, and
all uncertainty about the Budget will be over.
I am amazed and I am amused when I read in the newspapers the silly
and fantastic rumours which obtain credence, or at any rate currency,
from day to day. One day we are told that it is the intention of the
Government to seek a dissolution of Parliament before the Budget
reaches the House of Lords--in other words, to kill the child to save
its life. The next day we are told the Government have decided to have
a referendum--that is to say, they will ask everybody in the country
to send them a postcard to say whether they would like the Budget to
become law or not. Another day we are told that the Government are
contemplating a bargain with the House of Lords to alter the Budget to
please them, or that we should make a bargain with them that if they
pass the Budget we should seek a dissolution in January. Why should we
make a bargain with the House of Lords? Every one of those rumours is
more silly, more idiotic, than the other. I wish our Conservative
friends would face the facts of the situation. "Things are what they
are, and their consequences will be what they will be." The House of
Lords has no scrap of right to interfere in finance. If they do, they
violate the Constitution, they shatter the finances, and they create
an administrative breakdown the outcome of which no man can foresee.
If such a situation should occur a Liberal Government can look only to
the people. We count on you, and we shall come to you. If you sustain
us we shall take effectual steps to prevent such a deadlock ever
occurring again. That is the whole policy of his Majesty's
Government--blunt, sober, obvious, and unflinching.
THE CONSTITUTIONAL MENACE
NATIONAL LIBERAL CLUB, _October 9, 1909_
(From _The Times_, by permission.)
I have never been able to rank myself among those who believe that the
Budget will be rejected by the House of Lords. It is not that I take
an exaggerated view of the respect which that body would bear to the
constitutional tradition upon which alone they depend. It is not that
I underrate at all the feelings of personal resentment and of
class-prejudice with which they regard, naturally, many of the
provisions of the Budget. But I have a difficulty in believing that
the responsible statesmen by whom they are led, and by whom we think
they are controlled, would not hesitate as patriotic men before they
plunged the finances of the country into what would be a largely
irremediable confusion. And still more I find it difficult to believe
that Party leaders, anxious no doubt for office on the most secure
terms and at the shortest notice, would voluntarily run unusual risks
in order to be able to fight a decisive battle upon exceptionally
unfavourable ground. In common with most of us who are here to-night,
I hold that the rejection of the Budget by the House of Lords would be
a constitutional outrage. I do not think we are entitled at this stage
to assume that such an outrage will be committed. We cannot credit
such intentions, even though we read them every day brutally and
blatantly affirmed by a powerful Party Press. We do not credit such
intentions. We are, however, bound to be fully prepared against all
contingencies. The necessary precautions must be taken. The fighting
machine must undergo all those preliminary processes necessary for a
rapid and efficient mobilisation. And the ground on which a great
battle might take place, the theatre of war, must be scanned
beforehand with military foresight. And that is being done.
But those who lightly estimate the crisis which will follow the
rejection of the Budget by the House of Lords must be either strangely
unimaginative or else they must be strangely ignorant of British
history and of the British Constitution. The control of finance by
the representative Assembly is the keystone of all that constitutional
fabric upon which and within which all of us here have dwelt safely
and peacefully throughout our lives. It is by the application of the
power of the purse, and by the application of the power of the purse
almost alone, that we have moved forward, slowly and prosaically, no
doubt, during the last two hundred years, but without any violent
overturn such as has rent the life and history of almost every other
considerable country, from a kind of mediaeval oligarchy to a vast
modern democratic State based on the suffrages of six million or seven
million electors, loyal to the Crown, and clothed with all the stately
forms of the venerable English monarchy. Finance has been the
keystone. Take finance away from the House of Commons, take the
complete control of financial business away from the representative
Assembly, and our whole system of government, be it good, bad, or
indifferent, will crumble to pieces like a house of cards.
The rejection of the Budget by the House of Lords would not merely be
a question of stopping a money Bill or of knocking out a few taxes
obnoxious to particular classes; the rejection of the Budget by the
House of Lords would mean the claim of the House of Lords--that is,
the claim of a non-elective and unrepresentative Chamber--to make and
to unmake Governments; and a recognition of that claim by the country
would unquestionably mean that the House of Lords would become the
main source and origin of all political power under the Crown. Now
that is a great quarrel; that is a quarrel on which we had hoped, on
which we had been taught, that the sword had been sheathed
victoriously for ever. And that is the issue that is before us now. We
do not intend to soften it in any way. The responsibility for the
consequences must rest with the aggressor who first violates the
constitutional tradition of our land.
The Budget is through Committee. We have had not merely an exhaustive
but an exhausting discussion. I am told by ingenious calculators in
the newspapers that over six hundred hours, from some of which I
confess I have been absent, of debate have been accorded to the
Committee stage. No guillotine closure has been applied. Full, free,
unfettered debate has been accorded--has been accorded with a
patience and with a generosity unprecedented in Parliamentary annals,
and which in effect has left a minority not merely satisfied in all
the conditions of reasonable debate, but unable even on grounds of the
most meticulous partisanship to complain that the fullest opportunity
has not been accorded to them. In all this long process of six hundred
hours and upwards we have shown ourselves willing to make concessions.
They are boasting to-day that they, forsooth, are in part the authors
of the Budget. Every effort has been made to meet honest and outspoken
difference; every effort has been made to gather for this Budget--the
people's Budget, as they know full well it is--the greatest measure of
support not only among the labouring classes, but among all classes in
our vast and complicated community.
It has been a terrible strain. Lord Rosebery the other day at Glasgow
paid his tribute to the gallant band who had fought in opposition to
the Budget. Had he no word for his old friends? Had he no word for
those who were once proud to follow him, and who now use in regard to
him only the language of regret? Had he no word for that other
gallant band, twice as numerous, often three times as numerous, as the
Tory Opposition, who have sat through all these months--fine speakers
silent through self-suppression for the cause, wealthy men sitting up
to unreasonable hours to pass taxes by which they are mulcted as much
as any Tory? Men who have gone on even at the cost of their lives--had
he no word for them? We to-night gathered together here in the
National Liberal Club have a word and a cheer for the private members
of the Liberal Party in the House of Commons who have fought this
battle through with unequalled loyalty and firmness, and who have
shown a development of Parliamentary power to carry a great measure
which I venture to say has no counterpart in the Parliamentary history
of this country.
Well, that long process of debate, of argument, of concession, of
compromise, of conciliation will very soon come to an end. When the
Budget leaves the House of Commons the time of discussion, so far as
we are concerned, will have come to an end. It will leave the House of
Commons in a final form, and no amendment by the House of Lords will
be entertained by us. I have heard it often said, and I have read it
more often still, that there are some members of the Cabinet who want
to see the Budget rejected, and I have even been shocked to find
myself mentioned as one of these Machiavellian intriguers. To those
who say we want to see the Budget rejected I reply, That is not true.
As Party men we cannot be blind to the great tactical advantages which
such an event would confer upon us. We cannot pretend that our
feelings in such an event would be feelings of melancholy; but we have
our work to do. Politics is not a game. It is an earnest business. We
have our work to do. We have large, complex schemes of social
organisation and financial reform on which we have consumed our
efforts, and which we desire to see, at the shortest possible date,
brought to conception and maturity. We do not want to see the finances
of the country plunged into inextricable confusion, and hideous loss
inflicted on the mass of the people and the taxpayers. For my part, I
say without hesitation I do not at all wish to see British politics
enter upon a violent, storm-shaken, and revolutionary phase. I am
glad, at any rate, if they are to enter upon that phase, it shall be
on the responsibility of others.
Our intentions are straightforward. We seek no conflict; we fear no
conflict. We shall make no overtures to the House of Lords; we shall
accept no compromise. We are not called upon to offer them any
dignified means of escape from a situation into which they have been
betrayed by the recklessness of some of their supporters. They have no
right whatever to interfere in financial business directly or
indirectly at any time. That is all we have to say, and for the rest
we have a powerful organisation, we have a united Party, we have a
resolute Prime Minister, we have a splendid cause.