be voted unless its objects were determined and the machinery for raising it was in existence.

Mr. Gibson Bowles had attacked the Finance Bill on somewhat the same lines in The Times; and Mr. Asquith had promised the dissentients that the Commons would not part with the Finance Bill (imposing taxes) until the Revenue Bill (securing the allocation of the proceeds) should have passed the Lords; but the completion of both Bills within the four months' limit laid down by the Provisional Collection of Taxes Act (A.R., 1913, p. 86) was seen to be impracticable. And, when the Finance Bill came before the House on June 22, Mr. Cassel (U., St. Pancras, W.) asked whether it was in order, inasmuch as it went beyond the money resolution on which it was based, which did not cover either the proposed allocation of grants in relief of rates to local authorities or the reduction of the charge on the National Debt; and Sir F. Banbury (U., City of London) raised other points, one being that the Bill increased the "transferred sum" under the Home Rule Bill, and was thereby out of order as going beyond its title. The Speaker dismissed this latter point; in regard to the others, matters could be set right by introducing a new resolution in Committee of Ways and Means, citing a precedent of May, 1894; but he deprecated the recent practice of including in the Finance Bill matters not purely financial. In moving the second reading, the President of the Local Government Board said that two principles of the Bill were that new sources of income should be provided for local authorities, and that personalty should contribute to local taxation; but, as a local income tax was, for reasons which he specified, impracticable, the Bill adopted an alternative method. About 38,000,000l. annually, or one-third of the total expenditure of local authorities in the United Kingdom, would eventually be provided under the Bill from the Exchequer. Education, public health, poor-law services, and main roads, were of national concern as well as local, and the central authority should see that they were well administered, and that the relief given should be given to the part of the rating which fell on local improvements, not to that on bare land values. The existing system of rating adopted "the methods of the Eastern taxgatherer." The rates would be levied in two parts-on land value, and on building and improvement value, and in the current year the Revenue Bill would provide for the collection of the information necessary to enable the division to take place in 1915. The case of the Liberal dissentients could be met by procedure. An instruction would be moved to divide the Bill into two parts, one containing the provisions relative to the new taxation and the National Debt, the other those relating to the new grants to local authorities. Both Bills and the Revenue Bill would be proceeded with. This would unfortunately mean the abandonment for the current year of the temporary grants on the new basis to local

I

authorities. The increased taxation to meet these would be unnecessary, and the income tax would only be 1s. 3d. in the pound. This was a postponement, not a release.

Mr. Holt (L.) abandoned an amendment in the sense of the dissentients' protest, but objected both to the huge expenditure on armaments and to the excess of the actual over the estimated cost of recent social reforms. Members themselves, he thought, were in fault for pressing for more expenditure. It was increasing more rapidly than income, and a decline in trade was at hand. He and his friends did not object to the character of the new taxation; direct taxation was preferable to indirect; but it would be impossible to pass the Finance Bill as it stood and the Revenue Bill by August 6, as required by the Provisional Collection of Taxes Act. It invited obstruction, which would be met by the guillotine closure. He and his friends, therefore, would cordially support the revised programme of the Government.

Mr. Long (U., Strand) congratulated the dissentient Liberals on their success. The great Budget was crumbling already. But was there any law left in the House? Income tax was being collected at a rate for which there was no Parliamentary authority; what would be done where it had been already collected "at the source"? Would the Irish proposal (to increase the "transferred sum ") be abandoned as well as the English? The Unionists had thought of moving to adjourn the debate, but had preferred to state their case for further information at once. Every one wanted social reform, but were they not really burdening the weak? The Treasury had become a spending instead of a supervising department, and the Chancellor of the Exchequer one of the most powerful causes of public expenditure. In every department of public expenditure there was an enormous increase, due either to hasty legislation or to want of control by the Minister whose duty it was to exercise control. Employment on estates was diminishing, and the increase in the death duties imposed unequal burdens. He was unable to understand what the rating proposals were. By thus changing their plan the Government had insulted the House. Later the Chancellor of the Exchequer explained that only some 50,000l. had been collected in regard to the 1d. of income tax now dropped, and the banks would adjust the matter on the next dividend payment. Some Budgets had been altered while before the Commons, e.g. the wheel and van tax in 1890.

The House adjourned early in view of the King's Birthday dinners, and next day (June 23) Mr. Hayes Fisher (U., Fulham) moved an amendment expressing regret that the promised grants to local authorities were not to be made in the current year, and condemning the new system of valuation by which these grants were to be conditioned. He agreed with the views of the dissentient Ministerialists about the Bill (p. 128) and suggested that money might be found by taxing imports; the Port of London

Authority already charged dues on 2,200 articles. Would the Chancellor repeat his Ipswich speech now? He strongly protested against central control of valuation. Mr. Cassel (U.) seconded the resolution. Among later speakers, the Secretary for Scotland said that the only difference to the local authorities would be that they would not receive the four months' grants during the current year. Mr. Healy (I.N.) attacked the Chancellor of the Exchequer and the bases on which the grants were allotted to Ireland. Mr. G. Roberts (Lab., Norwich) said his party profoundly regretted the capitulation of the Chancellor of the Exchequer. The President of the Board of Education said that there was no danger of the abolition of free education. Next day (June 24) Mr. J. F. Hope (U., Sheffield, Central), in a speech characterised by the Chancellor of the Exchequer as fresh and interesting, suggested that 200,000l. a year might be saved on payment of members, and the Development Commission and the Road Board might be abolished. The Estimates should be sent to a special Committee for scrutiny. He favoured higher import duties on foreign luxuries and a graduated tax on amusements. He feared for local freedom and knowledge in administration. After other speeches, the Chancellor of the Exchequer replied. He said that nothing had been said about the taxes; reduction of expenditure had been suggested on armaments, but it had no support, at any rate from the Opposition, and on the Development Commission and Road Board, but nearly all the expenditure on the former had gone to agriculture, and the primacy of Great Britain in roads. was due to the tax on motor petrol. The Opposition had constantly pressed the Government to spend millions to relieve the ratepayers; when this was attempted, they tried to wreck the Bill. The industrial districts were strangled with rates due to absolute necessities, such as education; the projected readjustment of the grants would save some of those hardest pressed between 1s. and 2s. in the pound. Housing, which had been so often pressed, could not be undertaken unless the rates were relieved, and yet members rummaged in the dustbins of ancient precedents for obstacles to the Budget proposals. The truth was, the Opposition wanted to obstruct, for they had rather do the job themselves. Interference with local authorities had a precedent in the case of education and the existing valuation by overseers was a farce. The separation of improvement values from site values was regarded as insane, but it worked well in British Columbia. When the Colonies proposed to tax corn they were our kith and kin; when they taxed land they were lunatics. The abolition of the sugar tax had been suggested, but the penny was wanted, and abolition would mean an increase next year on the income tax. Those who voted against the Bill would be voting against means to increase the efficiency of the people and make a stronger and more enduring State.

Mr. Austen Chamberlain (U.) said that the Chancellor's speech gave no idea of the Bill, and he seemed not to have read the amendment. The relief of rates being of the utmost urgency, it was dropped, with trifling exceptions, for the current year, and made contingent for the next year on the passage of other Bills and a system of valuation of which the main features were still obscure. The proposals as to settled estate duty broke a bargain. Social reform could not be conducted regardless of its cost, and it was only on domestic expenditure that economies were possible. After protesting against the attack on Mr. Cassel for defending the rules and practice of the House, he said it was the conditions imposed by the Chancellor which made it impossible to give the strangled municipalities relief. Were the grants intended to relieve rates or to extend municipal activity? He recalled the Chancellor's speech at Ipswich, and described his electioneering as a crude form of bribery of a kind, for a less serious instance of which a Liberal Whip had been obliged to apologise.1 He protested against centralised control as tending to extravagance, and attacked the valuation scheme. It was the Chancellor who by his attacks on property, adopted "the methods of the Eastern taxgatherer." He was using his conditions of relief to cover up the mess he had made.

After other speeches on that day and the next, the Prime Minister rose (June 25). He began by remarking that the predictions of financial disaster owing to increased expenditure and socalled confiscatory taxation had been made when the Corn Laws were repealed, when succession duties were begun in 1853, on Sir William Harcourt's Budget in 1894, and on the Budget of 1909. But since 1894 there had been the largest investment of capital recorded in British history; the capital which had gone abroad had found itself subjected to far larger exactions than in Great Britain; and the experts had been refuted by experience. Between 1905-6 and 1914-15 national expenditure had risen by 57,000,000l. Of this, the Navy had taken 18,000,000l., the Civil Service, including social reform, 30,500,000l., of which 20,000,000l. were due to old-age pensions and insurance, and 2,500,000l. to Imperial expenditure on education. The revenue derived from taxation had increased in the same time by 41,000,000l.; the non-tax revenue, mainly from the Post Office, by 11,000,000l., or nearly 50 per cent. In 1905-6 direct taxation produced 50.3 per cent. of the tax revenue, indirect 49.7 per cent.; the proportion now was 59.5 per cent. to 40.5 per cent., and of the latter only a little more than 7 per cent. was derived from the non-sumptuary taxes. This Mr. Asquith treated as an argument against using the 1d. taken off the income tax to reduce the sugar duty.

1 Mr. Gulland (L., Dumfries) had made a speech in the Wick bye-election contest (A.R., 1913, p. 257) which was interpreted as a promise of a new harbour if the Liberal were returned. He had disclaimed this interpretation in February.

Meantime Great Britain, almost alone among nations, had been reducing her national debt. In principle he had always been a rigid economist, but expenditure on the Navy certainly could not be reduced, and that on social reform was likely to increase. Treasury control was in fact being vigorously exercised; the mainspring of additional expenditure was in the Commons, which had largely expanded the scheme of old-age pensions and other social reforms. The increase in indirect taxation had been wholly in sumptuary taxes. As to direct taxation, income-tax law had become to the ordinary man a Chinese puzzle, and he repeated that there ought to be a thorough revision of the system of collection. As to the present problem, the injustice of the existing system of local rating was unquestionable, and a local income-tax, which he would. have preferred, being impracticable, the fairest way to reach personalty was through the income tax and super-tax payers. That was the first principle of the Chancellor's proposals, the second was that the grants must be accompanied by security for efficiency, which would involve no interference with local autonomy; the third was that the increased subvention to local authorities should be accompanied by a new system of valuation. Every one admitted that the existing system was unfair and ineffective. They desired to assist the local authorities with expert advice. The need for expenditure on these objects was much more urgent than the relief of the sugar duty. The Government meant to obtain in the current year three distinct things: (1) the maintenance intact of the provisions for necessitous school areas, feeding of school children, nursing, measures against tuberculosis, and national insurance; (2) statutory authority for a more generous system of payment of grants during the next financial year; (3) statutory authority for a new system of valuation separating site from improvement value. Anyone who voted for the amendment was tending to put off social reform.

The subsequent speeches exhibited in various ways the dissent among a section of Liberals from the proposals of the Government. Eventually Mr. Bonar Law rose. After saying that the change in the Budget was really due, not to the Speaker's ruling, but to the Liberal dissentients, he remarked that the plan for relieving local rating conflicted with the Report of the Committee, and asked why, if the separate valuation of site value was so simple, it was not put into the Bills? Because Ministers generally would only agree to an inquiry. He then elaborately attacked Mr. Lloyd George's financial methods. The Chancellor ignored regularity in procedure; he utterly failed to control expenditure; he ignored the maxim that taxes should not be imposed which involved an excessive cost of collection; and he and other new Liberals promised, not retrenchment, but extravagance. With the Chancellor of the Exchequer extravagance was a principle. He was trying to use Budgets to correct the inequalities of