"The people who can check evasion are the large firms. Their travellers form a magnificent body of inspectors, who ought to see that the Act is enforced. The checking of evasion will have to be carried out, not so much by visiting workshops and home-workers as by hearing where cheap, low-class goods are coming into the market, and tracing the goods back to the contractors who made them."
"The people who can check evasion are the large firms. Their travellers form a magnificent body of inspectors, who ought to see that the Act is enforced. The checking of evasion will have to be carried out, not so much by visiting workshops and home-workers as by hearing where cheap, low-class goods are coming into the market, and tracing the goods back to the contractors who made them."
There are solid reasons on which we on this side of the House who are Free Traders rely with confidence, when we associate ourselves with this class of legislation. First of all, we must not imagine that this is the only European country which has taken steps to deal with sweating. The first exhibition of sweated products was held in Berlin, and it was from that exhibition that the idea was obtained of holding that most valuable series of exhibitionsthroughout this country which created the driving power which renders this Bill possible. I am advised that German legislation on some of these questions has even anticipated us. In other countries legislation is pending on principles not dissimilar from those which we advocate. In Bavaria and Baden the latest reports are to the effect that the official Government Reports of Inquiries recommend almost the same and in some cases stronger provisions than those to which we now ask the assent of the House of Commons. This may be said in a different form of Austria. All this movement which is going on throughout Europe, and which is so pregnant with good, will be powerfully stimulated by our action in this country, and that stimulus will not only facilitate our work by removing the argument which causes hon. gentlemen opposite anxiety, but it will also, I think, redound to the credit of this country that it took a leading and prominent position in what is a noble and benignant work.
I was delighted to hear the Leader of the Opposition say, in a concise and cogent sentence, that he could easily conceive many sweated trades in which the wages of the workers could be substantially raisedwithout any other change except a diminution of price. Sir, the wages of a sweated worker bear no accurate relation to the ultimate price. Sometimes they vary in the same places for the same work done at the same time. And sometimes the worst sweating forms a part of the production of articles of luxury sold at the very highest price. We believe further, however, that decent conditions make for industrial efficiency and increase rather than diminish competitive power. "General low wages," said Mill, "never caused any country to undersell its rivals; nor did general high wages ever hinder it." The employers who now pay the best wages in these sweated trades maintain themselves not only against the comparatively small element of foreign competition in these trades, but against what is a far more formidable competition for this purpose—the competition of those employers who habitually undercut them by the worst processes of sweating. I cannot believe that the process of raising the degenerate and parasitical portion of these trades up to the level of the most efficient branches of the trade, if it is conducted by those conversant with the conditions of the trade and interested in it, will necessarily resultin an increase of the price of the ultimate product. It may, even as the right hon. gentleman has said, sensibly diminish it through better methods.
Sir, it is on these grounds, and within these limits, that I ask for a Second Reading for this Bill.
The principles and objects are scarcely disputed here. Let us go into Committee and set to work upon the details, actuated by a single-minded desire to produce a practical result. It is by the evidences of successful experiment that, more than any other way, we shall forward and extend the area of our operations; and in passing this Bill the House will not only deal manfully with a grave and piteous social evil, but it will also take another step along that path of social organisation into which we have boldly entered, and upon which the Parliaments of this generation, whatever their complexion, will have to march.
[14]Otherwise called "The Trade Boards Bill."
[14]Otherwise called "The Trade Boards Bill."
The functions of Government in relation to industrial life may be divided into three categories—discipline, organisation, and relief. The control and regulation of industrial conditions by penal and disciplinary powers belong to the Home Office, the relieving and curative processes are entrusted to the Local Government Board, and the organisation of industry falls to the province of the Board of Trade. The proposals which I now submit to the House are concerned only with organisation; they can be judged only in relation to that section of the subject; they do not pretend to stretch beyond it, or to include other not less important aspects; and I ask that they shall not be impugned, because, in dealing with the evils which properly fall within that sphere, they do not extend to other evils that lie without it.
I ask permission to introduce a Bill for the establishment of a national system of Labour Exchanges. There is high authority for this proposal. The Majority and Minority representatives of the Poor Law Commission, differing in so much else, are agreed unanimously in its support. "In the forefront of our proposals," says the Majority Report, "we place Labour Exchanges." "This National Labour Exchange," says the Minority Report, "though in itself no adequate remedy, is the foundation of all our proposals. It is, in our view, an indispensable condition of any real reform." The National Conference of Trade Union Delegates, convened by the Parliamentary Committee of the Trade Union Congress, of March 19, 1909, resolved unanimously: "That this Conference of Trade Union delegates, representing 1,400,000 members, approves of the establishment of Labour Exchanges on a national basis, under the control of the Board of Trade, provided that the managing board contains at least an equal proportion of employers and representatives of Trade Unions." The Central Unemployed Body for London, by a Resolution in June 1908, declared in favour of a national system of LabourExchanges. Economists as divergent in opinion as Professor Ashley, of Birmingham, and Professor Chapman, of Manchester, have all approved and urged the project publicly in the strongest terms. Several of the principal members of the late Government have, either in evidence before the Poor Law Commission or in public speeches, expressed themselves in favour of Labour Exchanges, and the Report of the delegates of the Labour Party to Germany strongly approves of the system which they found there, namely: "the co-ordination and systematic management of Public Labour Exchanges."
The British authorities which I have mentioned are reinforced by the example of many foreign countries; and as early as 1904 the Board of Trade, in its reports on agencies and methods of dealing with unemployed in foreign countries, drew attention to the very considerable extension of Labour Exchanges in the last three years in Germany, Austria, Switzerland, France, and Belgium. Since then Norway has been added to the list. Mr. W. Bliss, in the Bulletin of theWashington Bureau of Labourfor May, 1908, in the course of a survey of the whole field of unemployment and of possible remedies, says, "The mostimportant agencies for providing work for the unemployed who are employable, but have no prospect of returning to their former positions, are the public employment bureaux. These are largely developed in a number of European countries, and especially in Germany, where they have grown rapidly in the last twenty years, both in numbers and in efficiency." So that the House will see that we have behind us this afternoon not only a practical consensus of opinion among authorities at home in favour of the policy, but the spectacle of its successful practice on an extensive scale, and over a period of years, in the greatest industrial community of the Continent, and its extension in various degrees to many other countries.
I do not, therefore, propose to occupy the time of the House with any elaborate justification of the merits of the Bill. Those we may discuss at our leisure later. I confine myself only to a few general observations. Two main defects in modern industrial conditions which were emphasised by the Royal Commission were the lack of mobility of labour and lack of information. With both of these defects the National System of LabourExchanges is calculated to deal. Modern industry has become national. Fresh means of transport knit the country into one, as it was never knit before. Labour alone in its search for markets has not profited; the antiquated, wasteful, and demoralising method of personal application—that is to say, the hawking of labour—persists. Labour Exchanges will give labour for the first time a modernised market. Labour Exchanges, in the second place, will increase and will organise the mobility of labour. But let me point out that to increase themobilityof labour is not necessarily to increase themovementof labour. Labour Exchanges will not increase the movement of labour; they will only render that movement, when it has become necessary, more easy, more smooth, more painless, and less wasteful.
Labour Exchanges do not pretend to any large extent to create new employment. Their main function will be to organise the existing employment, and by organising the existing employment to reduce the friction and wastage, resulting from changes in employment and the movement of workers, to a minimum. By so doing they will necessarily raise the general economic standard of our industrial life.
So far as the second defect, "lack of information," is concerned, a system of Labour Exchanges promises to be of the highest value. In proportion as they are used, they will give absolutely contemporary information upon the tendencies of the demand for labour, both in quality and in quantity, as between one trade and another, as between one season and another, as between one cycle and another, and as between one part of the country and another. They will tell the worker where to go for employment. They will tell him, what is scarcely less important, where it is useless to go in search of employment. Properly co-ordinated and connected with the employment bureaux of the various education authorities, which are now coming into existence in Scotland and in England, they will afford an increasing means of guiding the new generation into suitable, promising, and permanent employment, and will divert them from overstocked or declining industries. They will put an end to that portion of unemployment that is merely local or accidental in character. They are the only means of grappling with the evils of casual employment, with all its demoralising consequences. They are capableof aiding the process of dovetailing one seasonal trade into another. A system of Labour Exchanges, dispensing with the need for wandering in search of work, will make it possible, for the first time, to deal stringently with vagrancy. And, lastly, Labour Exchanges are indispensable to any system of Unemployment Insurance, as indeed to any other type of honourable assistance to the unemployed, since they alone can provide an adequate test of the desire for work and of the reality of unemployment. The authority of both Reports of the Poor Law Commission may be cited upon these points; and I shall present this Bill to the House as an important piece of social and industrial machinery, the need for which has long been apparent, and the want of which has been widely and painfully felt.
I said that in the creation of such a system we may profit by the example of Germany; we may do more, we may improve upon the example of Germany. The German Exchanges, though co-ordinated and encouraged to some extent by State and Imperial Governments, are mainly municipal in their scope. Starting here with practically a clear field and with theadvantage of the experiment and the experience of other lands to guide us, we may begin upon a higher level and upon a larger scale. There is reason to believe that the utility of a system like Labour Exchanges, like utility of any other market, increases in proportion to its range and scope. We therefore propose, as a first principle, that our system shall be uniform and national in its character; and here, again, we are supported both by the Minority and by the Majority Reports of the Royal Commission.
A Departmental Committee at the Board of Trade has, during the last six months, been working out the scheme in close detail. The whole country will be divided into ten or twelve principal divisions, each with a Divisional Clearing House, and each under a Divisional Chief, all co-ordinated with the National Clearing House in London. Distributed among these 10 Divisions in towns of, let us say, 100,000 or upwards will be between 30 and 40 First-class Labour Exchanges; in towns of 50,000 to 100,000 between 40 and 50 Second-class Exchanges; and about 150 minor offices, consisting of Third-class Exchanges, Sub-Offices, and Waiting-rooms, which last will be specially used in connection with Dock decasualisation.
The control and direction of the whole system will be under the Board of Trade. But in order to secure absolute impartiality as between the interests of capital and labour, Joint Advisory Committees, to contain in equal numbers representatives of employers and work-people, will be established in the principal centres. Thus we shall apply to the local management of Labour Exchanges the same principle of parity of representation between workmen and employers under impartial guidance and chairmanship, that we have adopted in the administration of the Trade Boards Bill, and that,mutatis mutandis, is the governing feature of the Courts of Arbitration which have recently been set up. If this Bill should obtain the assent of Parliament without undue delay, I should hope to bring the system into simultaneous operation over the whole country, so far as practicable, in the early months of next year. Temporary premises will be procured in all cases in the first instance; but a programme of building has been prepared, which in ten years will by a gradual process enable in all the principal centres these temporary premises to be replaced by permanent buildings.
The expense of this system will no doubt be considerable. Its ordinary working will not need a sum less than about £170,000 per year, and during the period when the building is going on the expenditure will rise to about £200,000 per year.
We hope that the Labour Exchanges will become industrial centres in each town. We hope they will become the labour market. They may, where necessary, provide an office where the Trade Board, if there is one, will hold its meetings. We desire to co-operate with trade unions on cordial terms, while preserving strict impartiality between capital and labour in disputed matters. It may, for instance, be possible for trade unions to keep their vacant-book in some cases at the exchanges. The structure of those Exchanges may in some cases be such as to enable us to have rooms which can be let to trade unions at a rent, for benefit and other meetings, so as to avoid the necessity under which all but the strongest unions lie at the present time of conducting their meetings in licensed premises. The Exchanges may, as they develop, afford facilities for washing, clothes-mending, and for non-alcoholic refreshments to persons who are attending them. Separate provision will be made formen and for women, and for skilled and for unskilled labour. Boy labour will be dealt with in conjunction with the local Education Authorities; and travelling expenses may be advanced on loan, if the management of the Exchange think fit, to persons for whom situations have been found.
So much for the policy of Labour Exchanges. That is a policy complete in itself. It would be considerable if it stood alone; but it does not stand alone. As my right hon. friend the Chancellor of the Exchequer has announced in his Budget speech, the Government propose to associate with the policy of Labour Exchanges a system of Unemployment Insurance.
The House knows that the Minority Report advocates a system of compulsory labour exchanges, that no person shall engage any man for less than a month except through a Labour Exchange. That is not the proposal we are making. We are making a proposal of voluntary Labour Exchanges. I am quite ready to admit that no system of voluntary Labour Exchanges can deal adequately with the evils and difficulties of casual labour; but there is one conclusive reason against compulsoryLabour Exchanges at the present time. To establish a system of compulsory Labour Exchanges in order to eliminate casual labour, and so to divide among a certain proportion of workers all available employment, would be absolutely and totally to cast out at the other end a surplus of unemployed: and to do this before preparations have been made for dealing with that surplus, would be to court an administrative breakdown which could not fail to be attended with the gravest possible disaster. Until poor law reform has made further progress, to establish a compulsory system of Labour Exchanges would only increase and not diminish the miseries with which we are seeking to cope.
We have, therefore, decided that our system of labour exchanges shall be voluntary in its character. For that very reason there is a great danger, to which I have never shut my eyes, that the highest ranks of labour, skilled workers, members of strong trade unions, would not think it necessary to use the Exchanges, but would use the very excellent apparatus which they have established themselves; that therefore this expensive system of Exchanges which we are calling into being would come to beused only by the poorest of the workers in the labour market, and, consequently, would gradually relapse and fall back into the purely distress machinery and non-economic machinery from which we are labouring to extricate and separate it. It is for that reason, quite apart from the merits of the scheme of unemployment insurance, that the Government are very anxious to associate with their system of Labour Exchanges a system of unemployed insurance. If Labour Exchanges depend for their effective initiation and establishment upon unemployment insurance being associated with them, it is equally true to say that no scheme of unemployment insurance can be worked except in conjunction with some apparatus for finding work and testing willingness to work, like Labour Exchanges. The two systems are complementary; they are man and wife; they mutually support and sustain each other.
So I come to Unemployment Insurance. It is not practicable at the present time to establish a universal system of unemployment insurance. We, therefore, have to choose at the very outset of this subject between insuring some workmen in all trades or all workmen in some. In thefirst case we should have a voluntary, and in the second a compulsory system. The risk of unemployment varies so much between one man and another owing to relative skill, character, demeanour, and other qualities, that any system of State-aided voluntary insurance is utilised mainly by those most liable to be unemployed, and, consequently, a preponderance of bad risks is established against the Insurance Office fatal to its financial stability. On the other hand, a compulsory system of insurance, which did not add to the contribution of the worker a substantial contribution from outside, would almost certainly break down, because of the refusal of the higher class of worker to assume, unsupported, a share of the burden of the weaker members of the community.
We have decided to adopt the second alternative, and our insurance system will, in consequence, be based upon four main principles. It will involve contributions from workmen and employers; it will receive a substantial subvention from the State; it will be organised by trades; it will be compulsory upon all—employers and employed, skilled and unskilled, unionists and non-unionists alike—within thosetrades. The hon. Member for Leicester[15]with great force showed that to confine a scheme of unemployment insurance merely to trade unionists would be trifling with the subject. It would only be aiding those who have, thank God, been most able to aid themselves, without at the same time assisting those who hitherto, under existing conditions, have not been able to make any effective provision.
To what trades ought we, as a beginning, to apply this system of compulsory contributory unemployment insurance? There is a group of trades specially marked out for the operation of such a policy. They are trades in which unemployment is not only high, but chronic, for even in the best of times it persists; in which it is not only high and chronic, but marked by seasonal and cyclical fluctuations, and in which, wherever and howsoever it occurs, it takes the form not of short time or of any of those devices for spreading wages and equalising or averaging risks, but of a total, absolute, periodical discharge of a certain proportion of the workers. The group of trades which we contemplate to be the subject of our scheme are these: house-building, andworks of construction, engineering, machine-and tool-making, ship-building and boat-building, making of vehicles, and mill-sawing.
That is a very considerable group of industries. They comprise, probably at the present time, 2¼ millions of adult males. Two and a quarter millions of adult males are, roughly speaking, one-third of the population of these three kingdoms engaged in purely industrial work; that is to say, excluding commercial, professional, agricultural, and domestic occupations. Of the remaining two-thirds of the industrial population, nearly one-half are employed in the textile trades, in mining, on the railways, in the merchant marine, and in other trades, which either do not present the same features of unemployment which we see in these precarious trades, or which, by the adoption of short time or other arrangements, avoid the total discharge of a proportion of workmen from time to time. So that this group of trades to which we propose to apply the system of unemployment insurance, roughly speaking, covers very nearly half of the whole field of unemployment; and that half is, on the whole, perhaps the worse half.
The financial and actuarial basis of thescheme has been very carefully studied by the light of all available information. The report of the actuarial authorities whom I have consulted leaves me in no doubt that, even after all allowance has been made for the fact that unemployment may be more rife in the less organised and less highly skilled trades than in the trade unions who pay unemployment benefits—which is by no means certain—there is no doubt whatever that a financially sound scheme can be evolved which, in return for moderate contributions, will yield adequate benefits. I do not at this stage propose to offer any figures of contributions or benefits to the House. I confine myself to stating that we propose to aim at a scale of benefits which would be somewhat lower both in amount and in duration of payments, than that which the best-organised trade unions provide for their own members, but which, at the same time, should afford a substantial weekly payment extending over by far the greater part of the average period of unemployment of all unemployed persons in these trades.
In order to enable such a scale of benefits to be paid, we should have to raise a total sum of something between5d.and 6d.per week per head, and this sum will be met by contributions, not necessarily equal, from the State, the workman, and the employer. For such sacrifices, which are certainly not extortionate, and which, fairly adjusted, will not hamper industry nor burden labour, nor cause an undue strain on public finance, we believe it possible to relieve a vast portion of our industrial population from a haunting and constant peril which gnaws the very heart of their prosperity and contentment.
The House will see the connection of this to the Labour Exchanges. The machinery of the insurance scheme has been closely studied, and, as at present advised, we should propose to follow the example of Germany in respect of Insurance Cards or Books, to which stamps will be affixed week by week. When a worker in an insured trade loses his employment, all he will have to do is to take his card to the Labour Exchange, which, working in conjunction with the Insurance Office, will find him a job or pay him his benefit.
The relation of the whole scheme of insurance to the present voluntary efforts of trade unions requires, and will receive, the most anxious consideration, and I am inhopes that we shall be able to make proposals which would absolutely safeguard trade unions from the unfair competition of a national insurance fund, and will indeed act as a powerful encouragement to voluntary organisations which are providing unemployed benefit.
I have thought it right to submit these not inconsiderable proposals in general outline to the House of Commons at this early stage, in order that the proposals for Labour Exchanges which we are now putting forward may be properly understood, and may not be underrated or misjudged. We cannot bring the system of unemployment insurance before Parliament in a legislative form this year for five reasons: We have not now got the time; we have not yet got the money; the finance of such a system has to be adjusted and co-ordinated with the finance of the other insurance schemes upon which the Chancellor of the Exchequer is engaged; the establishment of a system of Labour Exchanges is the necessary forerunner and foundation of a system of insurance; and, lastly, no such novel departure as unemployment insurance could possibly be taken without much further consultation and negotiation with the tradeunions and employers specially concerned than the conditions of secrecy under which we have been working have yet allowed. This business of conference and consultation of the fullest character will occupy the winter, when the Board of Trade will confer with all parties affected, so that the greatest measure of agreement may be secured for our proposals when they are next year presented in their final form.
It is only necessary for me to add that the pressure and prospect of these heavy duties have required me to make a re-arrangement of the Labour Department of the Board of Trade. I propose to divide it into three sections. The first will be concerned with Wages questions and Trade disputes, with Arbitration, Conciliation, and with the working of the Trade Boards Bill, should it become law; the second, with Statistics, the Census of Production, Special Inquiries, andThe Labour Gazette; and the third, with Labour Exchanges and Unemployment Insurance.
One of the functions of the last section will be to act as a kind of intelligence bureau, watching the continual changes of the labour market here and abroad, and suggesting any measure which maybe practicable, such as co-ordination and distribution of Government contracts and municipal work, so as to act as a counterpoise to the movement of the ordinary labour market, and it will also, we trust, be able to conduct examinations of schemes of public utility, so that such schemes can, if decided upon by the Government and the Treasury, be set on foot at any time with knowledge and forethought, instead of the haphazard, hand-to-mouth manner with which we try to deal with these emergencies at the present time.
Such are the proposals which we submit in regard to the organisation section of this problem. I have carefully confined myself to that section. I have not trespassed at all upon the other no less important or scarcely less important branches, and I am quite certain this Parliament will gladly devote whatever strength it possesses to attempting to grapple with these hideous problems of social chaos, which are marring the contentment and honour of our country, and which, neglected, may fatally affect its life and its strength.
[15]Mr. Ramsay MacDonald.
[15]Mr. Ramsay MacDonald.
PAGETHE BUDGET RESOLUTIONS(May 4, 1909)277THE BUDGET AND NATIONAL INSURANCE(May 23, 1909)297THE LAND AND INCOME TAXES(July 17, 1909)318THE BUDGET AND THE LORDS(July 26, 1909)344THE SPIRIT OF THE BUDGET(Sept. 5, 1909)357THE BUDGET AND PROPERTY(Oct. 7, 1909)384THE CONSTITUTIONAL MENACE(Oct. 9, 1909)405
The Leader of the Opposition this afternoon told us that we were at the beginning of what would be a very complex and a very protracted discussion. If that discussion continues as it has begun, the Government will have no reason to complain of it. We have made extensive and even daring proposals. Those proposals have been accepted and, on the whole, even acclaimed by the public at large, and they have not been substantially challenged in this House. The Leader of the Opposition, it is true, devoted his reasoned and temperate speech to making a careful inquiry into the foundations and the character of certain of the taxes by which my right hon. friend proposes to raise the revenue for the year; and I gathered he accepted, with such reservations as are proper to all engaged in a large discussion, and as are particularly appropriate to aParty leader, the general principle of differentiation of taxation in regard to the amount of property, but that he demurred to and condemned differentiation in regard to the character of property. The right hon. gentleman singled out for special censure and animadversion the two sets of taxes in relation to land and to the licensed trade. He used an expression about some of the forms of taxation proposed by the Chancellor of the Exchequer which was a striking one. He said that they diverged from the principles which have hitherto dominated civilised society.
Even at the risk of that accusation we on this side of the House have always taken and will always assert an entirely different position in regard to the taxation of land and of liquor licences from that of the taxation of other classes of property. The immemorial custom of nearly every modern State, the mature conclusions of many of the greatest thinkers, have placed the tenure, transfer, and obligations of land in a wholly different category from other classes of property. The mere obvious physical distinction between land, which is a vital necessity of every human being and which at the same time is strictly limited inextent, and other property is in itself sufficient to justify a clear differentiation in its treatment, and in the view taken by the State of the conditions which should govern the tenure of land from that which should regulate traffic in other forms of property. When the right hon. gentleman seeks by comparisons to show that the same reasoning which has been applied to land ought also in logic and by every argument of symmetry to be applied to the unearned increment derived from other processes which are at work in our modern civilisation, he only shows by each example he takes how different are the conditions which attach to the possession of land and speculation in the value of land from those which attach to other forms of business speculation.
"If," he inquires, "you tax the unearned increment on land, why don't you tax the unearned increment from a large block of stocks? I buy a piece of land; the value rises; I buy stocks; their value rises." But the operations are entirely dissimilar. In the first speculation the unearned increment derived from land arises from a wholly sterile process, from the mere withholding of a commodity which isneeded by the community. In the second case, the investor in a block of shares does not withhold from the community what the community needs. The one operation is in restraint of trade and in conflict with the general interest, and the other is part of a natural and healthy process, by which the economic plant of the world is nourished and from year to year successfully and notably increased.
Then the right hon. gentleman instanced the case of a new railway and a country district enriched by that railway. The railway, he explained, is built to open up a new district; and the farmers and landowners in that district are endowed with unearned increment in consequence of the building of the railway. But if after a while their business aptitude and industry creates a large carrying trade, then the railway, he contends, gets its unearned increment in its turn. But the right hon. gentleman cannot call the increment unearned which the railway acquires through the regular service of carrying goods, rendering a service on each occasion in proportion to the tonnage of goods it carries, making a profit by an active extension of the scale of its useful business—he cannot surely compare that process withthe process of getting rich merely by sitting still. It is clear that the analogy is not true.
We are further told that the Budget proposals proceed on the assumption that there is a corner in land, and that communities are denied the opportunity of getting the land required, whereas, it is asserted, there is in fact nothing approaching a corner in land. I do not think the Leader of the Opposition could have chosen a more unfortunate example than Glasgow. He said that the demand of that great community for land was for not more than forty acres a year. Is that the only demand of the people of Glasgow for land? Does that really represent the complete economic and natural demand for the amount of land a population of that size requires to live on? I will admit that at present prices it may be all that they can afford to purchase in the course of a year. But there are one hundred and twenty thousand persons in Glasgow who are living in one-room tenements; and we are told that the utmost land those people can absorb economically and naturally is forty acres a year. What is the explanation? Because the population is congested in the city the price of land is high upon the suburbs, and becausethe price of land is high upon the suburbs the population must remain congested within the city. That is the position which we are complacently assured is in accordance with the principles which have hitherto dominated civilised society.
But when we seek to rectify this system, to break down this unnatural and vicious circle, to interrupt this sequence of unsatisfactory reactions, what happens? We are not confronted with any great argument on behalf of the owner. Something else is put forward, and it is always put forward in these cases to shield the actual landowner or the actual capitalist from the logic of the argument or from the force of a Parliamentary movement. Sometimes it is the widow. But that personality has been used to exhaustion. It would be sweating in the cruellest sense of the word, overtime of the grossest description, to bring the widow out again so soon. She must have a rest for a bit; so instead of the widow we have the market-gardener—the market-gardener liable to be disturbed on the outskirts of great cities, if the population of those cities expands, if the area which they require for their health and daily life should become larger than it is at present.
I should like to point out to the Committee that the right hon. gentleman, in using this argument about the market-gardener, recognises very clearly—and I think beyond the possibility of a withdrawal—the possibility of these cities expanding and taking up a larger area of ground in consequence of the kind of taxation which my right hon. friend in his land taxes seeks to impose. But let that pass. What is the position disclosed by the argument? On the one hand we have one hundred and twenty thousand persons in Glasgow occupying one-room tenements; on the other, the land of Scotland. Between the two stands the market-gardener, and we are solemnly invited, for the sake of the market-gardener, to keep that great population congested within limits that are unnatural and restricted to an annual supply of land which can bear no relation whatever to their physical, social, and economic needs—and all for the sake of the market-gardener, who can perfectly well move farther out as the city spreads, and who would not really be in the least injured.
We take the view that land cannot be regarded as an ordinary commodity, nor are we prepared to place publicans' licencesin the same position as ordinary property. A licence is a gift from the State, and the licensed trade is subject to special restrictions and special taxation; this has been recognised by all parties and by all Governments. The position in regard to licences, as we know perfectly well, has been sensibly and, indeed, entirely altered in the course of the last few years. We have seen the assertion on the part of the licensed trade of their right to convert their annual tenancy of a licence from what it has been understood to be, to a freehold, and in that position they must face the logical consequences of the arguments they have used and of their action. If there are any hardships to them in the taxation proposed, let the hardships be exposed to Parliament and they will be considered in no spirit of prejudice or malice. Do not, however, let us have attempts to represent that the tax which involves an increase in the cost of production extinguishes the profits of the industry. It does not necessarily affect the profits of the industry; it is not a deduction from resultant profits; it is an incident in the turnover. If there are hard cases and special instances, we are prepared to meet them with the closest attention and witha desire to avoid severity or anything like the appearance of harsh treatment of individuals. But we decline to regard licences or land on the same footing as ordinary property. Licences are not to be regarded as ordinary private property, but as public property which ought never to have been alienated from the State.
No one will deny that we are making very considerable proposals to Parliament for the finance of the year; but the Conservative Party have gravely compromised their power of resistance. Those who desire to see armaments restricted to the minimum consistent with national security, those who labour to combat the scares of war, and to show how many alarms have no foundation,—those are not ill-situated, if they choose to make criticisms on the scale and scope of the finance required for the year's expenditure. But an Opposition that day after day exposes the First Lord of the Admiralty and the Prime Minister to a rain of questions and cross-questions, the only object of which, or an important object of which, is to promote a feeling of insecurity, involving demands for new expenditure of an almost indefinite character, those who, like the right hon. Memberfor Dover,[16]hurry to and fro in the land saying—or was it singing?—"We want eight, and we won't wait"—they, at least, are not in the best position to tell the taxpayer to call on some one else. Surely a reputation for patriotism would be cheaply gained by clamouring for ships that are not needed, to be paid for with money that is to come from other people.
There is another set of arguments to which I should like to refer. We have been long told that this Budget would reveal the bankruptcy of free-trade finance, and the Leader of the Opposition, seeking from time to time for a sound economic foothold in the fiscal quicksands in which he is being engulfed, has endeavoured to rest the sole of his foot on tariff for revenue. The adoption of a policy of tariff reform, we have been told, had become absolutely necessary if the revenue of the country was to be obtained and if a natural expansion were to be imparted to it. But now, if we may judge from the newspapers, one of the complaints made against the free-trade system and the free-trade Budget of my right hon. friend is not that the revenue will expand too little, but thatthere is the possibility that it will expand too much. It is not that we have reached the limits of practicable free-trade taxation, but that the taxation we now ask Parliament to assent to, will yield in the second year a much more abundant return than in the first year, and that in subsequent years the yield will increase still further. In the words ofThe Timesnewspaper: "The Chancellor of the Exchequer has laid broad and deep the basis of further revenue for future years."
Those who lately taunted us with being arrested by a dead wall of Cobdenite principles are now bewailing that we have opened up broad avenues of financial advance. They came to bewail the deficit of this year: they remained to censure the surplus of next. We may, no doubt, in the future hear arguments of how protection will revive industry and increase employment, as we have heard them in the past; but there is one argument which I should think it unlikely would be effectively used against us in the future, and that is that a free-trade system cannot produce revenue, because one of the criticisms which is emphatically directed against this Budget is on account of that very expansivenessof revenue which it was lately declared a free-trade system never could produce.
But that is not the only vindication of free-trade finance which is at hand. How have foreign countries stood the late depression in trade? The shortfall of the revenue from the estimates in this country was last year less than two millions, in Germany it was eight millions, and in the United States over nineteen millions. Let the House see what fair-weather friends these protectionist duties are. In times of depression they shrink. In times of war they may fail utterly. When they are wanted, they dwindle, when they are wanted most urgently, they fade and die away altogether.
And what is true of the taxation of manufactured articles as a foundation for any fiscal policy is true still more of the taxation of food, and of no country is it so true as of this island. For if you were ever engaged in a war which rendered the highways of the ocean insecure the rise in prices would be such that all food taxes would have to be swept away at once by any Government which desired to use the whole vigour of its people in prosecuting the war. This year, with itstrade depression and its excellent maintenance of the revenue, has seen the vindication of free trade as a revenue-producing instrument; next year will see its triumph.
I have no apprehensions about the Budget which is now before the Committee. As Mr. Gladstone said, in introducing the Reform Bill of 1884, what is wanted to carry this measure is concentration and concentration only, and what will lose this measure is division and division only. And I venture to think that it will not only be a demonstration of the soundness of the economic fiscal policy we have long followed, but it will also be a demonstration of the fiscal and financial strength of Great Britain which will not be without its use and value upon the diplomatic and perhaps even upon the naval situation in Europe.
The right honourable Member for East Worcestershire[17]said this Budget was the work of several sessions, if not indeed of several Parliaments. The statement is exaggerated. The proposals outlined do not in any degree transcend the limits of the practical. A social policy may be very large, but at the same time it may be very simple. All these projects ofeconomic development, of labour exchanges, of insurance for invalidity, and unemployment, which depend on money grants, may require very careful and elaborate administrative adjustment; but so far as Parliament is concerned they do not impose difficulties or make demands upon the time of the House in any way comparable to those which are excited by the passage of an Education or a Licensing Bill, and I see no reason whatever why we should not anticipate that in the course of this session and next session we should be able to establish a wide and general system of national insurance, which, more than any other device within the reach of this generation of the workers of our country, will help to hold off from them some of the most fatal and most cruel perils which smash their households and ruin the lives of families and of workmen.
On many grounds we may commend this Budget to the House. It makes provision for the present. It makes greater provision for the future. Indirect taxation reaches the minimum. Food taxation reaches the minimum since the South African war. Certainly the working classes have no reason to complain. Nothing in the Budget touches thephysical efficiency and energy of labour. Nothing in it touches the economy of the cottage home. Middle-class people with between £300 and £2,000 a year are not affected in any considerable degree, except by the estate duties, and in that not to a large extent, while in some cases they are distinctly benefited in the general way of taxation. The very rich are not singled out for peculiar, special, or invidious forms of imposition.
The chief burden of the increase of taxation is placed upon the main body of the wealthy classes in this country, a class which in number and in wealth is much greater than in any other equal community, if not, indeed, in any other modern State in the whole world; and that is a class which, in opportunities of pleasure, in all the amenities of life, and in freedom from penalties, obligations, and dangers, is more fortunate than any other equally numerous class of citizens in any age or in any country. That class has more to gain than any other class of his Majesty's subjects from dwelling amid a healthy and contented people, and in a safely guarded land.
I do not agree with the Leader of the Opposition, that they will meet thecharges which are placed upon them for the needs of this year by evasion and fraud, and by cutting down the charities which their good feelings have prompted them to dispense. The man who proposes to meet taxation by cutting down his charities, is not the sort of man who is likely to find any very extensive source of economy in the charities which he has hitherto given. As for evasion, I hope the right hon. gentleman and his supporters underrate the public spirit which animates a proportion at any rate of the class which would be most notably affected by the present taxation. And there is for their consolation one great assurance which is worth much more to them than a few millions, more or less, of taxation. It is this—that we are this year taking all that we are likely to need for the policy which is now placed before the country, and which will absorb the energies of this Parliament. And, so far as this Parliament is concerned, it is extremely unlikely, in the absence of a national calamity, that any further demand will be made upon them, or that the shifting and vague shadows of another impending Budget will darken the prospects of improving trade.
When all that may be said on these grounds has been said, we do not attempt to deny that the Budget raises some of the fundamental issues which divide the historic Parties in British politics. We do not want to embitter those issues, but neither do we wish to conceal them. We know that hon. gentlemen opposite believe that the revenue of the country could be better raised by a protective tariff. We are confident that a free-trade system alone would stand the strain of modern needs and yield the expansive power which is necessary at the present time in the revenue. And our proof shall be the swift accomplishment of the fact. The right hon. gentleman opposite and his friends seek to arrest the tendency to decrease the proportion of indirect to direct taxation which has marked, in unbroken continuity, the course of the last sixty years. We, on the other hand, regard that tendency as of deep-seated social significance, and we are resolved that it shall not be arrested. So far as we are concerned, we are resolved that it shall continue until in the end the entire charge shall be defrayed from the profits of accumulated wealth and by the taxation of those popular indulgences which cannot be saidin any way to affect the physical efficiency of labour. The policy of the Conservative Party is to multiply and extend the volume and variety of taxes upon food and necessaries. They will repose themselves, not only, as we are still forced to do, on tea and sugar, but upon bread and meat—not merely upon luxuries and comforts, but also on articles of prime necessity. Our policy is not to increase, but whenever possible to decrease, and ultimately to abolish altogether, taxes on articles of food and the necessaries of life.
If there is divergence between us in regard to the methods by which we are to raise our revenue, there is also divergence in regard to the objects on which we are to spend them. We are, on both sides, inclined to agree that we are approaching, if we have not actually entered on, one of the climacterics of our national life. We see new forces at work in the world, and they are not all friendly forces. We see new conditions abroad and around us, and they are not all favourable conditions; and I think there is a great deal to be said for those who on both sides of politics are urging that we should strive for a more earnest, more strenuous, more consciouslynational life. But there we part, because the Conservative Party are inclined too much to repose their faith for the future security and pre-eminence of this country upon naval and military preparations, and would sometimes have us believe that you can make this country secure and respected by the mere multiplication of ironclad ships. We shall not exclude that provision, and now indeed ask the Committee to enable us to take the steps to secure us that expansion of revenue which will place our financial resources beyond the capacity of any Power that we need to take into consideration. But we take a broader view. We are not going to measure the strength of great countries only by their material resources. We think that the supremacy and predominance of our country depend upon the maintenance of the vigour and health of its population, just as its true glory must always be found in the happiness of its cottage homes. We believe that if Great Britain is to remain great and famous in the world, we cannot allow the present social and industrial disorders, with their profound physical and moral reactions, to continue unchecked. We propose to you a financial scheme, but we also advance a policyof social organisation. It will demand sacrifices from all classes; it will give security to all classes. By its means we shall be able definitely to control some of the most wasteful processes in our social life, and without it our country will remain exposed to vital dangers, against which fleets and armies are of no avail.