[16]Mr. Wyndham.
[16]Mr. Wyndham.
[17]Mr. Austen Chamberlain.
[17]Mr. Austen Chamberlain.
(FromThe Manchester Guardian, by permission.)
Considering that you have all been ruined by the Budget, I think it very kind of you to receive me so well. When I remember all the injuries you have suffered—how South Africa has been lost; how the gold mines have been thrown away; how all the splendid army which Mr. Brodrick got together has been reduced to a sham; and how, of course, we have got no navy of any kind whatever, not even a fishing smack, for the thirty-five millions a year we give the Admiralty; and when I remember that in spite of all these evils the taxes are so oppressive and so cruel that any self-respecting Conservative will tell you he cannot afford either to live or die, I think it remarkable that you should be willing to give me such a hearty welcome back to Manchester. Yes, sir, when I think of the colonies we have lost, of the Empirewe have alienated, of the food we have left untaxed, and the foreigners we have left unmolested, and the ladies we have left outside, I confess I am astonished to find you so glad to see me here again.
It is commonly said that our people are becoming hysterical, and that Britain is losing her old deep-seated sagacity for judging men and events. That is not my view. I have been taught that the dock always grows near the nettle. I am inclined to think that in a free community every evil carries with it its own corrective, and so I believe that sensationalism of all kinds is playing itself out, and, overdoing, is itself undone. And the more our scaremongers cry havoc, and panic, and airships, and sea-serpents, and all the other things they see floating around, the greater is the composure and the greater is the contempt with which the mass of the nation receives these revelations, and the more ready they are to devote their mind to the large and serious problems of national and social organisation which press for solution and for action at the present time, and upon which his Majesty's Government have notable proposals to make.
I come to you this afternoon to speakabout the political situation and the Budget, or rather I come to speak to you about the Budget, because the Budget is the political situation; and I ask you, as if it were at an election, whether you will support the policy of the Budget or not. Let us look into it.
What is the position in which we find ourselves? After reducing the taxes on coal, on tea, on sugar, and on the smaller class of incomes by nearly £7,000,000 a year, and after paying back £40,000,000 of debt in three years, we find that new circumstances and new needs make it necessary that we should obtain fresh revenue for the service of the State.
What are the reasons for this demand? There are three reasons—and only three. Old-age pensions, the navy, and the decrease in the revenue derived from alcoholic liquor. From those three causes we require sixteen millions more money this year than we did last year. Now who has a right—this is my first question—to reproach us for that? Certainly the Conservative Party have no right.
Take first the case of old-age pensions. I do not think their record is a very good one on that. They promised old-age pensions to win the general election of 1895.They were in power for ten years and they made no effort to redeem their pledge. Again, Mr. Chamberlain, in 1903, promised old-age pensions as a part of his Tariff Reform proposal, but the Conservative Party refused to agree to the inclusion of old-age pensions in that programme and forced that great man in the height of his power and his career to throw out old-age pensions from the Tariff Reform programme and to write a letter to the newspapers to say that he had done so.
We, the Liberal Party, did not promise old-age pensions at the election of 1906. The subject was scarcely mentioned by any of the candidates who are now your Members. Certainly it did not occupy at all a prominent position. We did not promise old-age pensions; we gave old-age pensions. When the Old-Age Pensions Bill was before the House of Commons, what was the attitude of the Conservative Party? Did they do anything to try to reduce or control the expenditure of that great departure? On the contrary. As my right honourable friend the Chancellor of the Exchequer has told the House of Commons, amendments to the Old-Age Pensions Bill were moved or received the official support of the Whipsof the Conservative Party which would have raised the cost of that scheme to fourteen millions a year. And the Liberal Government, which was making this great effort, which was doing the work, which was keeping the Tory promise, was reproached and was derided for not accepting the proposals which these irresponsible philanthropists, these social reformers on the cheap, these limited-liability politicians, were so ready to move. And Lord Halsbury, the late Lord Chancellor, one of the leaders of the Conservative Party, a man with a powerful influence in their councils, said in a public speech that the old-age pensions as proposed by the Government were so paltry as to be almost a mockery.
I do not think any fair-minded or impartial man, or any average British jury, surveying the record of the Conservative Party upon old-age pensions, could come to any other conclusion than that they had used this question for popularity alone; that they never meant to give old-age pensions; that they only meant to get votes by promising to give them; that they would have stopped them being given if they could; that while the Bill was on its way they tried to embarrass the Government,and to push things to unpractical extremes; and now, even when the pensions have been given, they would not pay for them if they could help it. Let me say that I think the conclusion, which I believe any jury would come to, would perhaps be rather harsh upon the Conservative Party. I believe they meant better than their record; I am willing to admit that. But their record is before us, and it is a bad one, and upon the facts I have no hesitation in saying that it is not open to them to protest—they have not even an inch of foothold to protest—against any expenditure which we may now have to incur in order to defray the consequences of the policy of old-age pensions. So much for the first cause of the increased expenditure.
I pass to the navy. The Naval Estimates have risen by three millions this year. I regret it; but I am prepared to justify it. There will be a further increase next year. I regret it; but within proper limits necessary to secure national safety I shall be prepared to justify it; but I hope you will not expect me to advocate a braggart and sensational policy of expenditure upon armaments. I have always been against that, as my father was before me.
In my judgment, a Liberal is a man who ought to stand as a restraining force against an extravagant policy. He is a man who ought to keep cool in the presence of Jingo clamour. He is a man who believes that confidence between nations begets confidence, and that the spirit of peace and goodwill makes the safety it seeks. And, above all, I think a Liberal is a man who should keep a sour look for scaremongers of every kind and of every size, however distinguished, however ridiculous—and sometimes the most distinguished are the most ridiculous—a cold, chilling, sour look for all of them, whether their panic comes from the sea or from the air or from the earth or from the waters under the earth.
His Majesty's Government are resolved that the defensive measures of this country shall be prescribed by the policy of Ministers responsible to Parliament, and by the calculations, subject to that policy, of the experts on whom those Ministers rely, and not by the folly and the clamour of Party politicians or sensational journalists. In that determination we as a Government are united, and we shall remain united. Yet it is clear that the increase in the NavalEstimates of this year must be followed by another increase in those of next year. That is deplorable. It will impose upon our finances a strain which some other nations would not find it very easy to bear, but which, if the necessity be proved, this country will not be unwilling, and will certainly not be unable to support.
Well, but what have the Conservative Party got to say about it? Have they any right to complain of the taxes which are necessary for the maintenance of our naval power? Do we not see that they are ever exerting themselves to urge still greater expenditure upon the nation? He is a poor sort of fellow, a penny-plain-twopence-coloured kind of patriot who goes about shouting for ships, and then grudges the money necessary to build them. And when Mr. Balfour tells us that "gigantic sacrifices" are required, and that those gigantic sacrifices "must begin now," and then at the same time objects to the taxes by which the Government proposes to raise the money, he puts himself in a very queer position.
I have dealt with two of the causes which have led to our demand for further revenue—old-age pensions and the navy. Upon neither of them have the ConservativeParty any ground for attacking us. What is the third? Ah, gentlemen, I agree that there is one cause of the prospective deficit for which we are budgeting for which the Conservative Party is in no way responsible. I mean the decline in the consumption of alcoholic liquors. Nothing that they have said and nothing that they have done has, in intention or in fact, contributed to the drying up of that source of revenue. On the contrary, by their legislation, by the views they have taken of the rights of the licensed trade, by their resistance to every measure of temperance reform, by their refusal even to discuss in the House of Lords the great Licensing Bill of last year, by their association with the brewers and with the liquor traffic generally, they have done all they could—I do them the justice to admit it—to maintain the Customs and Excise from alcoholic liquors at the highest level. If the habits of the people, under the influences of a wider culture, of variety, of comfort, of brighter lives, and of new conceptions, have steadily undergone a beneficent elevation and amelioration, it has been in spite of every obstacle that wealth and rank and vested interest could interpose.
The money has to be found. There isno Party in the State who can censure us because of that. Our proposals for enlarging the public revenue are just and fair to all classes. They will not, in spite of all these outcries you hear nowadays, sensibly alter the comfort or status, or even the elegance of any class in our great and varied community. No man, rich or poor, will eat a worse dinner for our taxes.
Of course, from a narrow, electioneering point of view, there are a great many people—I believe they are wrong—who think we should have done much better if we had put another penny on the income tax instead of increasing the tax upon tobacco. Well, I have come here this afternoon to tell you that we think it right that the working classes should be asked to pay a share towards the conduct of a democratic State. And we think that taxes on luxuries, however widely consumed, are a proper channel for such payment to be made. We believe that the working classes are able to pay by that channel, and we believe, further, that they are ready to pay. We do not think that in this old, wise country they would have respected any Government which at a time like this had feared to go to them for their share.
I have a good confidence that this Budget is going to go through. If there are hardships and anomalies in particular cases or particular quarters, we are ready to consider them. They will emerge in the discussions of the House of Commons, and we have every desire to consider them and to mitigate them. But we believe in the situation in which we find ourselves in this country, and in the general situation of the world at the present time—that the taxes on incomes over £3,000 a year, upon estates at death, on motor-cars before they cause death, upon tobacco, upon spirits, upon liquor licences, which really belong to the State, and ought never to have been filched away; and, above all, taxes upon the unearned increment in land are necessary, legitimate, and fair; and that without any evil consequences to the refinement or the richness of our national life, still less any injury to the sources of its economic productivity, they will yield revenue sufficient in this year and in the years to come to meet the growing needs of Imperial defence and of social reform.
This Budget will go through. It will vindicate the power of the House of Commons. It will show, what some people wereinclined to forget, that in our Constitution a Government, supported by a House of Commons and the elected representatives of the people, has in fact a full control of national affairs, and has the means of giving effect to its intentions, to its policy, and to its pledges in every sphere of public affairs.
That is one thing which the passage of this Budget will show. Let not that be overlooked. But that is not the only thing; the Budget will do more than that. It will reveal the financial strength of Britain. At a time when every European country is borrowing merely for the needs of ordinary annual expenditure, when all these disturbing naval programmes, which are injuring the peace of the world and the security and progress of civilisation, are being supported by borrowed money; and when the credit of Germany has fallen below that of Italy, this country, which has necessarily to make the biggest expenditure for naval defence of any country, will be found, under a Free Trade system and by our proposals, able not only to pay its way, but to pay off the debts of the past—to pay off the debts of our predecessors—even in the worst of times at the rate of something like £7,000,000 a year.
I have spoken to you of the causes which in the past have led up to this Budget. I have spoken to you of its present justification. What of the future? If I had to sum up the immediate future of democratic politics in a single word I should say "Insurance." That is the future—Insurance against dangers from abroad. Insurance against dangers scarcely less grave and much more near and constant which threaten us here at home in our own island. I had the honour and opportunity a few days ago of explaining to the House of Commons our proposals for unemployment insurance. That is a considerable matter. It stands by itself. It is a much simpler question than invalidity insurance; but it is a great matter by itself. Indeed, I thought while I was explaining it to the House of Commons that I had not made such an important speech since I had the honour of explaining the details of the Transvaal Constitution.
Well, what is the proposal? The proposal is that you should make a beginning. We have stood still too long. We should begin forthwith, taking some of the greatest trades of the country in which unemployment is most serious, in which fluctuations are most severe, in which there are no short-timearrangements to mitigate the severity to the individual; and that a system of compulsory contributory insurance, with a large subvention from the State, should be introduced into those great industries.
But our proposals go farther than that. The State assistance to unemployment insurance will not be limited to those trades in which it is compulsory. Side by side with the compulsory system we shall offer facilities to voluntary insurance schemes in other trades, managed by trade unions or by societies or groups of workmen. Moreover, we contemplate that the State insurance office should undertake, if desired, the insurance against unemployment of any individual workman in any trade outside of those for which compulsory powers are required, and should afford to these individuals an equivalent support to that which is given in the trades which are subject to the compulsory system.
Of course you will understand that the terms, that can be offered under a voluntary or partial system, are not so good as those which can be obtained in the compulsory system of a great trade. Where all stand together, it is much better for each. But still it is certain that individuals who takeadvantage of the insurance policy which will be introduced, and I trust carried through Parliament next year, will be able to secure terms which will be much more favourable than any which are open to them by their unaided contributions at the present time, because their contributions will be reinforced by the contributions of the State. Further, if our beginning proves a success the attempt and the system will not stop there. It will be extended, and in proportion as experience and experiment justify its extension, in proportion as the people of this country desire its extension, it must eventually cover, in course of years, the whole of our great industrial community.
Well now, it is said that in adopting the policy of contributory insurance the Government have admitted that they were wrong in establishing old-age pensions upon the non-contributory basis. Now I do not think that is true. There is no inconsistency or contradiction between a non-contributory system of old-age pensions and a contributory system of insurance against unemployment, sickness, invalidity, and widowhood. The circumstances and conditions are entirely different. The prospect of attaining extreme old age, of living beyondthreescore years and ten, which is the allotted span of human life, seems so doubtful and remote to the ordinary man, when in the full strength of manhood, that it has been found in practice almost impossible to secure from any very great number of people the regular sacrifices which are necessary to guard against old age.
But unemployment, accident, sickness, and the death of the bread-winner are catastrophes which may reach any household at any moment. Those vultures are always hovering around us, and I do not believe there is any sensible, honest man who would not wish to guard himself against them, if it were in his power to make the necessary contribution, and if he were sure—this is a very important point—that he would not by any accident or fraud or muddle be done out of the security he had paid for. And if we choose to adopt one system of State-aid for dealing with one class of need, and quite a different system for dealing with quite a different class of need, it does not lie with any one, least of all does it lie with those who have impartially neglected every problem and every solution, to reproach us with inconsistency.
But I go farther. The Old-Age Pensions Act, so far from being in conflict with a scheme of contributory insurance, is really its most helpful and potent ally. The fact that at seventy the State pension is assured to all those who need it, makes a tremendous difference to every form of insurance confined to the years before seventy, whether for old age or for invalidity. I asked an eminent actuary the other day to make me some calculations. They are rough, general calculations, and no doubt they might be more exact. But roughly, I believe it to be no exaggeration to say that the rates to cover a man till seventy are in many cases scarcely half what they would be, if they had to cover him till death. Do you see what that means? It is a prodigious fact. It is the sort of fact by the discovery of which people make gigantic fortunes; and I suggest to you that we should make this gigantic fortune for John Bull. It means that the whole field of insurance has become much more fruitful than it ever was before, that there is a new class of insurance business possible which never was possible before. It means that the whole field of insurance is far more open to the poorest class of people than it was before, and thatwith a proper system the benefits of the Old-Age Pensions Act would not be confined to the actual pensioners who are drawing their money, but would extend forwards in anticipation to all other classes and to all other people, and that so far as five shillings a week is concerned—that is not much unless you have not got it—the actuarial position of every man and woman in this country has been enormously improved by the Old-Age Pensions Act.
It is of that improvement that we mean to take advantage next year. Next year, when Free Trade will have yielded the necessary funds to the revenue, we mean to move forward into this great new field. But let me say one thing which is of the utmost importance. We must remember that the field of insurance is already largely covered by a great mass of benevolent and friendly societies, just as the field of unemployment insurance is already occupied to some extent by trade unions, and the Government would not approve of any development or extension of the policy of insurance which did not do full justice to existing institutions, or which did not safeguard those institutions, to whom we owe so inestimable and incommensurable adebt, or caused any sudden disturbance or any curtailment of their general methods of business. On the contrary, we believe that when our proposals are put in their full detail before the country, they will be found to benefit and encourage and not to injure those agencies which have so long been voluntarily and prosperously at work.
The decisive question is this—will the British working classes embrace the opportunities which will shortly be offered to them? They are a new departure; they involve an element of compulsion and of regulation which is unusual in our happy-go-lucky English life. The opportunity may never return. For my own part, I confess to you, my friends in Manchester, that I would work for such a policy and would try to carry it through even if it were a little unpopular at first, and would be willing to pay the forfeit of a period of exclusion from power, in order to have carried such a policy through; because I know that there is no other way within the reach of this generation of men and women by which the stream of preventable misery can be cut off.
If I had my way I would write the word "Insure" over the door of every cottage,and upon the blotting-book of every public man, because I am convinced that by sacrifices which are inconceivably small, which are all within the power of the very poorest man in regular work, families can be secured against catastrophes which otherwise would smash them up for ever. I think it is our duty to use the strength and the resources of the State to arrest the ghastly waste not merely of human happiness but of national health and strength which follows when a working man's home which has taken him years to get together is broken up and scattered through a long spell of unemployment, or when, through the death, the sickness, or the invalidity of the bread-winner, the frail boat in which the fortunes of the family are embarked founders, and the women and children are left to struggle helplessly on the dark waters of a friendless world. I believe it is well within our power now, before this Parliament is over, to establish vast and broad throughout the land a mighty system of national insurance which will nourish in its bosom all worthy existing agencies and will embrace in its scope all sorts and conditions of men.
I think it is not untrue to say that inthese years we are passing through a decisive period in the history of our country. The wonderful century which followed the Battle of Waterloo and the downfall of the Napoleonic domination, which secured to this small island so long and so resplendent a reign, has come to an end. We have arrived at a new time. Let us realise it. And with that new time strange methods, huge forces, larger combinations—a Titanic world—have sprung up around us. The foundations of our power are changing. To stand still would be to fall; to fall would be to perish. We must go forward. We will go forward. We will go forward into a way of life more earnestly viewed, more scientifically organised, more consciously national than any we have known. Thus alone shall we be able to sustain and to renew through the generations which are to come, the fame and the power of the British race.
(FromThe Times, by permission.)
We are often assured by sagacious persons that the civilisation of modern States is largely based upon respect for the rights of private property. If that be true, it is also true that such respect cannot be secured, and ought not, indeed, to be expected, unless property is associated in the minds of the great mass of the people with ideas of justice and of reason.
It is, therefore, of the first importance to the country—to any country—that there should be vigilant and persistent efforts to prevent abuses, to distribute the public burdens fairly among all classes, and to establish good laws governing the methods by which wealth may be acquired. The best way to make private property secure and respected is to bring the processes by which it is gained into harmony with thegeneral interests of the public. When and where property is associated with the idea of reward for services rendered, with the idea of recompense for high gifts and special aptitudes displayed or for faithful labour done, then property will be honoured. When it is associated with processes which are beneficial, or which at the worst are not actually injurious to the commonwealth, then property will be unmolested; but when it is associated with ideas of wrong and of unfairness, with processes of restriction and monopoly, and other forms of injury to the community, then I think that you will find that property will be assailed and will be endangered.
A year ago I was fighting an election in Dundee. In the course of that election I attempted to draw a fundamental distinction between the principles of Liberalism and of Socialism, and I said "Socialism attacks capital; Liberalism attacks monopoly." And it is from that fundamental distinction that I come directly to the land proposals of the present Budget.
It is quite true that the land monopoly is not the only monopoly which exists, but it is by far the greatest of monopolies; it is a perpetual monopoly, and it is themother of all other forms of monopoly. It is quite true that unearned increments in land are not the only form of unearned or undeserved profit which individuals are able to secure; but it is the principal form of unearned increment, derived from processes, which are not merely not beneficial, but which are positively detrimental to the general public. Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position—land, I say, differs from all other forms of property in these primary and fundamental conditions.
Nothing is more amusing than to watch the efforts of our monopolist opponents to prove that other forms of property and increment are exactly the same and are similar in all respects to the unearned increment in land. They talk to us of the increased profits of a doctor or a lawyer from the growth of population in the towns in which they live. They talk to us of the profits of a railway through a greater degree of wealth and activity in the districts through which it runs. They tell us of the profits which are derived from a rise in stocks and shares, and even of those whichare sometimes derived from the sale of pictures and works of art, and they ask us—as if it were their only complaint—"Ought not all these other forms to be taxed too?"
But see how misleading and false all these analogies are. The windfalls which people with artistic gifts are able from time to time to derive from the sale of a picture—from a Vandyke or a Holbein—may here and there be very considerable. But pictures do not get in anybody's way. They do not lay a toll on anybody's labour; they do not touch enterprise and production at any point; they do not affect any of those creative processes upon which the material well-being of millions depends. And if a rise in stocks and shares confers profits on the fortunate holders far beyond what they expected, or, indeed, deserved, nevertheless, that profit has not been reaped by withholding from the community the land which it needs, but, on the contrary, apart from mere gambling, it has been reaped by supplying industry with the capital without which it could not be carried on.
If the railway makes greater profits, it is usually because it carries more goods and more passengers. If a doctor or a lawyer enjoys a better practice, it is because thedoctor attends more patients and more exacting patients, and because the lawyer pleads more suits in the courts and more important suits. At every stage the doctor or the lawyer is giving service in return for his fees; and if the service is too poor or the fees are too high, other doctors and other lawyers can come freely into competition. There is constant service, there is constant competition; there is no monopoly, there is no injury to the public interest, there is no impediment to the general progress.
Fancy comparing these healthy processes with the enrichment which comes to the landlord who happens to own a plot of land on the outskirts or at the centre of one of our great cities, who watches the busy population around him making the city larger, richer, more convenient, more famous every day, and all the while sits still and does nothing! Roads are made, streets are made, railway services are improved, electric light turns night into day, electric trams glide swiftly to and fro, water is brought from reservoirs a hundred miles off in the mountains—and all the while the landlord sits still. Every one of those improvements is effected by the labour and at the cost of other people. Many of the most importantare effected at the cost of the municipality and of the ratepayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is sensibly enhanced.
He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing even to the process from which his own enrichment is derived. If the land were occupied by shops or by dwellings, the municipality at least would secure the rates upon them in aid of the general fund; but the land may be unoccupied, undeveloped, it may be what is called "ripening"—ripening at the expense of the whole city, of the whole country—for the unearned increment of its owner. Roads perhaps have to be diverted to avoid this forbidden area. The merchant going to his office, the artisan going to his work, have to make a detour or pay a tram fare to avoid it. The citizens are losing their chance of developing the land, the city is losing its rates, the State is losing its taxes which would have accrued, if the natural development had taken place—and that share has to be replaced at the expense of the other ratepayers andtaxpayers; and the nation as a whole is losing in the competition of the world—the hard and growing competition in the world—both in time and money. And all the while the land monopolist has only to sit still and watch complacently his property multiplying in value, sometimes manifold, without either effort or contribution on his part. And that is justice!
But let us follow the process a little farther. The population of the city grows and grows still larger year by year, the congestion in the poorer quarters becomes acute, rents and rates rise hand in hand, and thousands of families are crowded into one-roomed tenements. There are 120,000 persons living in one-roomed tenements in Glasgow alone at the present time. At last the land becomes ripe for sale—that means that the price is too tempting to be resisted any longer—and then, and not till then, it is sold by the yard or by the inch at ten times, or twenty times, or even fifty times, its agricultural value, on which alone hitherto it has been rated for the public service.
The greater the population around the land, the greater the injury which they have sustained by its protracted denial,the more inconvenience which has been caused to everybody, the more serious the loss in economic strength and activity, the larger will be the profit of the landlord when the sale is finally accomplished. In fact you may say that the unearned increment on the land is on all-fours with the profit gathered by one of those American speculators who engineer a corner in corn, or meat, or cotton, or some other vital commodity, and that the unearned increment in land is reaped by the land monopolist in exact proportion, not to the service, but to the disservice done.
It is monopoly which is the keynote; and where monopoly prevails, the greater the injury to society, the greater the reward of the monopolist will be. See how this evil process strikes at every form of industrial activity. The municipality, wishing for broader streets, better houses, more healthy, decent, scientifically planned towns, is made to pay, and is made to pay in exact proportion, or to a very great extent in proportion, as it has exerted itself in the past to make improvements. The more it has improved the town, the more it has increased the land value, and the more it will have to pay for any land it may wish toacquire. The manufacturer purposing to start a new industry, proposing to erect a great factory offering employment to thousands of hands, is made to pay such a price for his land that the purchase-price hangs round the neck of his whole business, hampering his competitive power in every market, clogging him far more than any foreign tariff in his export competition; and the land values strike down through the profits of the manufacturer on to the wages of the workman. The railway company wishing to build a new line finds that the price of land which yesterday was only rated at its agricultural value has risen to a prohibitive figure the moment it was known that the new line was projected; and either the railway is not built, or, if it is, is built, only on terms which largely transfer to the landowner the profits which are due to the shareholders and the advantages which should have accrued to the travelling public.
It does not matter where you look or what examples you select, you will see that every form of enterprise, every step in material progress, is only undertaken after the land monopolist has skimmed the cream off for himself, and everywhere to-day the man, or the public body, who wishes to putland to its highest use is forced to pay a preliminary fine in land values to the man who is putting it to an inferior use, and in some cases to no use at all. All comes back to the land value, and its owner for the time being is able to levy his toll upon all other forms of wealth and upon every form of industry. A portion, in some cases the whole, of every benefit which is laboriously acquired by the community is represented in the land value, and finds its way automatically into the landlord's pocket. If there is a rise in wages, rents are able to move forward, because the workers can afford to pay a little more. If the opening of a new railway or a new tramway, or the institution of an improved service of workmen's trains, or a lowering of fares, or a new invention, or any other public convenience affords a benefit to the workers in any particular district, it becomes easier for them to live, and therefore the landlord and the ground landlord, one on top of the other, are able to charge them more for the privilege of living there.
Some years ago in London there was a toll-bar on a bridge across the Thames, and all the working people who lived on the south side of the river, had to paya daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings appealed to the public conscience: an agitation was set on foot, municipal authorities were roused, and at the cost of the ratepayers the bridge was freed and the toll removed. All those people who used the bridge were saved 6d.a week. Within a very short period from that time the rents on the south side of the river were found to have advanced by about 6d.a week, or the amount of the toll which had been remitted. And a friend of mine was telling me the other day that in the parish of Southwark about £350 a year, roughly speaking, was given away in doles of bread by charitable people in connection with one of the churches, and as a consequence of this the competition for small houses, but more particularly for single-roomed tenements is, we are told, so great that rents are considerably higher than in the neighbouring district.
All goes back to the land, and the landowner, who in many cases, in most cases, is a worthy person utterly unconscious of the character of the methods by which he is enriched, is enabled with resistless strengthto absorb to himself a share of almost every public and every private benefit, however important or however pitiful those benefits may be.
I hope you will understand that when I speak of the land monopolist, I am dealing more with the process than with the individual landowner. I have no wish to hold any class up to public disapprobation. I do not think that the man who makes money by unearned increment in land, is morally a worse man than any one else, who gathers his profit where he finds it, in this hard world under the law and according to common usage. It is not the individual I attack; it is the system. It is not the man who is bad; it is the law which is bad. It is not the man who is blameworthy for doing what the law allows and what other men do; it is the State which would be blameworthy, were it not to endeavour to reform the law and correct the practice. We do not want to punish the landlord. We want to alter the law. Look at our actual proposal.
We do not go back on the past. We accept as our basis the value as it stands to-day. The tax on the increment of land begins by recognising and franking all past increment. We look only to the future; and forthe future we say only this: that the community shall be the partner in any further increment above the present value after all the owner's improvements have been deducted. We say that the State and the municipality should jointly levy a toll upon the future unearned increment of the land. A toll of what? Of the whole? No. Of a half? No. Of a quarter? No. Of a fifth—that is the proposal of the Budget. And that is robbery, that is plunder, that is communism and spoliation, that is the social revolution at last, that is the overturn of civilised society, that is the end of the world foretold in the Apocalypse! Such is the increment tax about which so much chatter and outcry are raised at the present time, and upon which I will say that no more fair, considerate, or salutary proposal for taxation has ever been made in the House of Commons.
But there is another proposal concerning land values which is not less important. I mean the tax on the capital value of undeveloped urban or suburban land. The income derived from land and its rateable value under the present law depend upon the use to which the land is put. In consequence, income and rateable value are notalways true or complete measures of the value of the land. Take the case to which I have already referred, of the man who keeps a large plot in or near a growing town idle for years, while it is "ripening"—that is to say, while it is rising in price through the exertions of the surrounding community and the need of that community for more room to live. Take that case. I daresay you have formed your own opinion upon it. Mr. Balfour, Lord Lansdowne, and the Conservative Party generally, think that that is an admirable arrangement. They speak of the profits of the land monopolist, as if they were the fruits of thrift and industry and a pleasing example for the poorer classes to imitate. We do not take that view of the process. We think it is a dog-in-the-manger game. We see the evil, we see the imposture upon the public, and we see the consequences in crowded slums, in hampered commerce, in distorted or restricted development, and in congested centres of population, and we say here and now to the land monopolist who is holding up his land—and the pity is, it was not said before—you shall judge for yourselves whether it is a fair offer or not—we say to the land monopolist: "This property ofyours might be put to immediate use with general advantage. It is at this minute saleable in the market at ten times the value at which it is rated. If you choose to keep it idle in the expectation of still further unearned increment, then at least you shall be taxed at the true selling value in the meanwhile." And the Budget proposes a tax of a halfpenny in the pound on the capital value of all such land; that is to say, a tax which is a little less in equivalent, than the income-tax would be upon the property, if the property were fully developed.
That is the second main proposal of the Budget with regard to the land; and its effects will be, first, to raise an expanding revenue for the needs of the State; secondly that, half the proceeds of this tax, as well as of the other land taxes, will go to the municipalities and local authorities generally to relieve rates; thirdly, the effect will be, as we believe, to bring land into the market, and thus somewhat cheapen the price at which land is obtainable for every object, public and private. By so doing we shall liberate new springs of enterprise and industry, we shall stimulate building, relieve overcrowding, and promote employment.
These two taxes, both in themselvesfinancially, economically, and socially sound, carry with them a further notable advantage. We shall obtain a complete valuation of the whole of the land in the United Kingdom. We shall procure an up-to-date Doomsday-book showing the capital value, apart from buildings and improvements, of every piece of land. Now, there is nothing new in the principle of valuation for taxation purposes. It was established fifteen years ago in Lord Rosebery's Government by the Finance Act of 1894, and it has been applied ever since without friction or inconvenience by Conservative administrations.
And if there is nothing new in the principle of valuation, still less is there anything new or unexpected in the general principles underlying the land proposals of the Budget. Why, Lord Rosebery declared himself in favour of taxation of land values fifteen years ago. Lord Balfour has said a great many shrewd and sensible things on this subject which he is, no doubt, very anxious to have overlooked at the present time. The House of Commons has repeatedly affirmed the principle, not only under Liberal Governments, but—which is much more remarkable—under aConservative Government. Four times during the last Parliament Mr. Trevelyan's Bill for the taxation of land values was brought before the House of Commons and fully discussed, and twice it was read a second time during the last Parliament, with its great Conservative majority, the second time by a majority of no less than ninety votes. The House of Lords, in adopting Lord Camperdown's amendment to the Scottish Valuation Bill, has absolutely conceded the principle of rating undeveloped land upon its selling value, although it took very good care not to apply the principle; and all the greatest municipal corporations in England and Scotland—many of them overwhelmingly Conservative in complexion—have declared themselves in favour of the taxation of land values; and now, after at least a generation of study, examination, and debate, the time has come when we should take the first step to put these principles into practical effect. You have heard the saying "The hour and the man." The hour has come, and with it the Chancellor of the Exchequer.
I have come to Scotland to exhort you to engage in this battle and devote your whole energy and influence to securing a memorable victory. Every nation in the worldhas its own way of doing things, its own successes and its own failures. All over Europe we see systems of land tenure which economically, socially, and politically are far superior to ours; but the benefits that those countries derive from their improved land systems are largely swept away, or at any rate neutralised, by grinding tariffs on the necessaries of life and the materials of manufacture. In this country we have long enjoyed the blessings of Free Trade and of untaxed bread and meat, but against these inestimable benefits we have the evils of an unreformed and vicious land system. In no great country in the new world or the old have the working people yet secured the double advantage of free trade and free land together, by which I mean a commercial system and a land system from which, so far as possible, all forms of monopoly have been rigorously excluded. Sixty years ago our system of national taxation was effectively reformed, and immense and undisputed advantages accrued therefrom to all classes, the richest as well as the poorest. The system of local taxation to-day is just as vicious and wasteful, just as great an impediment to enterprise and progress, just as harsh a burden upon the poor, as thethousand taxes and Corn Law sliding scales of the "hungry 'forties." We are met in an hour of tremendous opportunity. "You who shall liberate the land," said Mr. Cobden, "will do more for your country than we have done in the liberation of its commerce."
You can follow the same general principle of distinguishing between earned and unearned increment through the Government's treatment of the income-tax. There is all the difference in the world between the income which a man makes from month to month or from year to year by his continued exertion, which may stop at any moment, and will certainly stop, if he is incapacitated, and the income which is derived from the profits of accumulated capital, which is a continuing income irrespective of the exertion of its owner. Nobody wants to penalise or to stigmatise income derived from dividends, rent, or interest; for accumulated capital, apart from monopoly, represents the exercise of thrift and prudence, qualities which are only less valuable to the community than actual service and labour. But the great difference between the two classes of income remains. We are all sensible of it, and we think thatthat great difference should be recognised when the necessary burdens of the State have to be divided and shared between all classes.
The application of this principle of differentiation of income-tax has enabled the present Government sensibly to lighten the burden of the great majority of income-tax payers. Under the late Conservative Government about 1,100,000 income-tax payers paid income-tax at the statutory rate of a shilling in the pound. Mr. Asquith, the Prime Minister, when Chancellor of the Exchequer, reduced the income-tax in respect of earned incomes under £2,000 a year from a shilling to ninepence, and it is calculated that 750,000 income-tax payers—that is to say, nearly three-quarters of the whole number of income-tax payers—who formerly paid at the shilling rate have obtained an actual relief from taxation to the extent of nearly £1,200,000 a year in the aggregate. The present Chancellor of the Exchequer in the present Budget has added to this abatement a further relief—a very sensible relief, I venture to think you will consider it—on account of each child of parents who possess under £500 a year, and that concession involved a further abatement and relief equalto £600,000 a year. That statement is founded on high authority, for it figured in one of the Budget proposals of Mr. Pitt, and it is to-day recognised by the law of Prussia.
Taking together the income-tax reforms of Mr. Asquith and Mr. Lloyd-George, taking the two together—because they are all part of the same policy, and they are all part of our treatment as a Government of this great subject—it is true to say that very nearly three out of every four persons who pay income-tax will be taxed after this Budget, this penal Budget, this wicked, monstrous, despoliatory Budget—three out of every four persons will be taxed for income-tax at a lower rate than they were by the late Conservative Government.
You will perhaps say to me that may be all very well, but are you sure that the rich and the very rich are not being burdened too heavily? Are you sure that you are not laying on the backs of people who are struggling to support existence with incomes of upwards of £3,000 a year, burdens which are too heavy to be borne? Will they not sink, crushed by the load of material cares, into early graves, followed there even by the unrelenting hand of the death duties collector? Will theynot take refuge in wholesale fraud and evasion, as some of their leaders ingenuously suggest, or will there be a general flight of all rich people from their native shores to the protection of the hospitable foreigner? Let me reassure you on these points.
The taxes which we now seek to impose to meet the need of the State will not appreciably affect, have not appreciably affected, the comfort, the status, or even the style of living of any class in the United Kingdom. There has been no invidious singling out of a few rich men for special taxation. The increased burden which is placed upon wealth is evenly and broadly distributed over the whole of that wealthy class who are more numerous in Great Britain than in any other country in the world, and who, when this Budget is passed, will still find Great Britain the best country to live in. When I reflect upon the power and influence that class possesses, upon the general goodwill with which they are still regarded by their poorer neighbours, upon the infinite opportunities for pleasure and for culture which are open to them in this free, prosperous, and orderly commonwealth, I cannot doubt that they ought to contribute, and I believe that great numbers of them are willing tocontribute, in a greater degree than heretofore, towards the needs of the navy, for which they are always clamouring, and for those social reforms upon which the health and contentment of the whole population depend.
And after all, gentlemen, when we are upon the sorrows of the rich and the heavy blows that have been struck by this wicked Budget, let us not forget that this Budget, which is denounced by all the vested interests in the country and in all the abodes of wealth and power, after all, draws nearly as much from the taxation of tobacco and spirits, which are the luxuries of the working classes, who pay their share with silence and dignity, as it does from those wealthy classes upon whose behalf such heartrending outcry is made.
I do not think the issue before the country was ever more simple than it is now. The money must be found; there is no dispute about that. Both parties are responsible for the expenditure and the obligations which render new revenue necessary; and, as we know, we have difficulty in resisting demands which are made upon us by the Conservative Party for expenditure upon armaments far beyond the limits which arenecessary to maintain adequately the defences of the country, and which would only be the accompaniment of a sensational and aggressive policy in foreign and in Colonial affairs. We declare that the proposals we have put forward are conceived with a desire to be fair to all and harsh to none. We assert they are conceived with a desire to secure good laws regulating the conditions by which wealth may be obtained and a just distribution of the burdens of the State. We know that the proposals which we have made will yield all the money that we need for national defence, and that they will yield an expanding revenue in future years for those great schemes of social organisation, of national insurance, of agricultural development, and of the treatment of the problems of poverty and unemployment, which are absolutely necessary if Great Britain is to hold her own in the front rank of the nations. The issue which you have to decide is whether these funds shall be raised by the taxation of a protective tariff upon articles of common use and upon the necessaries of life, including bread and meat, or whether it shall be raised, as we propose, by the taxation of luxuries, of superfluities, and monopolies.
I have only one word more to say, and it is rendered necessary by the observations which fell from Lord Lansdowne last night, when, according to the Scottish papers, he informed a gathering at which he was the principal speaker that the House of Lords was not obliged to swallow the Budget whole or without mincing.[18]I ask you to mark that word. It is a characteristic expression. The House of Lords means to assert its right to mince. Now let us for our part be quite frank and plain. We want this Budget Bill to be fairly and fully discussed; we do not grudge the weeks that have been spent already; we are prepared to make every sacrifice—I speak for my honourable friends who are sitting on this platform—of personal convenience in order to secure a thorough, patient, searching examination of proposals the importance of which we do not seek to conceal. The Government has shown itself ready and willing to meet reasonable argument, not merely by reasonable answer, but when a case is shown, by concessions, and generally in a spirit of goodwill. We have dealt withthis subject throughout with a desire to mitigate hardships in special cases, and to gain as large a measure of agreement as possible for the proposals we are placing before the country. We want the Budget not merely to be the work of the Cabinet and of the Chancellor of the Exchequer; we want it to be the shaped and moulded plan deliberately considered by the House of Commons. That will be a long and painful process to those who are forced from day to day to take part in it. We shall not shrink from it. But when that process is over, when the Finance Bill leaves the House of Commons, I think you will agree with me that it ought to leave the House of Commons in its final form. No amendments, no excision, no modifying or mutilating will be agreed to by us. We will stand no mincing, and unless Lord Lansdowne and his landlordly friends choose to eat their own mince, Parliament will be dissolved, and we shall come to you in a moment of high consequence for every cause for which Liberalism has ever fought. See that you do not fail us in that hour.