Orders of the Day — Finance Bill.

Part of the debate – in the House of Commons at on 23 July 1924.

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Photo of Sir John Marriott Sir John Marriott , City of York

I do not want to follow the hon. Member in his very ingenious and flattering anticipations of the financial and social millennium. I, like him, look forward to that millennium, but I do not propose to reach it by the same route. I want to say one word with regard to a point raised by my hon. Friend with regard to the speech of the right hon. Gentleman the Member for Hillhead (Sir R. Horne). The hon. Member opposite put a question to the House, how we are to retrieve the position which was revealed by my right hon. Friend the Member for Hillhead in regard to shipbuilding in this country. I want to say just one word with regard to that point One of the main points I wish to deal with was raised by the hon. Member for Wavertrce (Mr. Rathbone). The whole burden of the speech of the right hon. Member for Hillhead was that the trade of this country was being absolutely strangled by the weight and burden of taxation which is laid upon it. When my hon. Friend opposite, the Member for Harborough (Mr. Black), asks how we are going to retrieve the position, I say there is one way of doing it, and that in by relieving-the burden of taxation which rests on British industry. My hon. Friend the Member for Waver-tree said taxation had to be raised. That surely depends on the expenditure which we are proposing. I am very well aware that I should be out of order if I were to discuss the question of estimates or of expenditure but it has been my duty as Chairman of the Estimates Committee to scrutinise carefully the pre-suppositions of expenditure which underlie this Finance Bill. I know I should not be permitted to discuss that here and now, but may I say to the President of the Board of Trade, if he will be good enough to communicate with the Leader of the House on this matter, that, although I should not be permitted to raise that question now, it will be my duty at a later stage of the Session to ask His Majesty's Government, and particularly the Leader of the House, to give us time according to the unbroken practice of recent years for the discussion of reports which as an Estimates Committee we have to make to the House of Commons.

For the moment, I desire to make only one or two observations on the Finance Bill. It seems to me that the first outstanding feature of the Bill is that it does possess certain virtues, but those virtues, I venture to suggest, are inherited virtues. I am very glad indeed that the Labour Government in the first Budget they introduce should have the advantage of inherited virtues. The main lines of the Budget, so far as the revenue side is concerned, are due, I respectfully submit, to the financial wisdom and the fiscal virtues of the immediate predecessors of the present Government. Virtues it possesses, but in the main—I do not want to be offensive, and I shall not be deemed offensive when I say—this is a cowardly Budget. I am not imputing any blame at all on this point to the immediate authors of the Budget. They are cowards, like Falstaff, under compulsion, and the compulsion to cowardice has come from those who, with some apparent inconsistency, are alternately described as tyrannical masters and patient beasts of burden. But whatever the source, the result is as I suggested. The Budget is conceived on cowardly lines. What I mean is this. It is cowardly, in the first place, in its refusal to face the facts of the industrial situation. Those facts haw; been admirably brought out in the Debate this afternoon by my right hon. Friend the Member for Hillhead. The facts of the industrial situation are far more disquieting than most people in this House are prepared to admit.

Then I suggest that this Budget is cowardly in another sense—in its failure to provide for the financial responsibilities which are implicit in the legislative programme of the Government themselves. For example, we have already had published yesterday a very substantial volume of Supplementary Estimates. I know that that is a point which I am not entitled to pursue in this Debate, but I may remind the House that those Supplementary Estimates already reach a total of over £3,000,000, including, as they do, two token Votes as against an estimated surplus in the Budget of £4,000,000. That reveals a very serious financial state of affairs. That brings me to the main point on which I want to say a word or two. I cannot help feeling that this Budget, whatever its virtues, and whatever its vices, is in the main a doctrinaire Budget. I am not going to embark on those larger issues of the fiscal problem, some discussion of which has nevertheless been permitted this afternoon. I want to put this question to the Chancellor of the Exchequer or to the Financial Secretary as a Scot. Does the Financial Secretary really desire to be a better Free Trader than the father of Free Trade himself? Does the Financial Secretary want to be a better Free Trader than the greatest of his compatriots in economic science? Does he want to be a better Free Trader than Adam Smith? I suggest to the Financial Secretary, whose knowledge of these matters is far greater than my own, that with that great master of economic science the question of Free Trade and Protection was in no sense at all a matter of principle; it was wholly a matter of expediency. I respectfully suggest to the Financial Secretary that he will find in that great master of economic science, his own compatriot, ample justification for those two sets of fiscal imposts which have been deliberately omitted from the present Measure. I refer, of course, to the preferential rates on Imperial produce and to the new duties which are associated with the name of Mr. McKenna.

In regard to Imperial Preference, does the Financial Secretary suggest that on that matter he can shelter himself or the Government or their proposals behind the great authority of Adam Smith. I suggest that he will find it exceedingly difficult to do so. As a matter of fact, Adam Smith was always prepared to admit that in the last resort an economic consideration must give way to a political consideration. If these preferential duties are to be condemned—and I am not prepared to condemn them—from the economic point of view, is there behind them any large political issue which, as my right hon. Friend the Member for Hillhead said this afternoon, is of supereminent importance to the future prosperity in the large sense of This country and the Empire? In regard to the justification for dropping the McKenna Duties, again I appeal to the great authority of the hon. Gentleman's compatriot and master—I am sure I may so describe him—and he will find there a maxim which completely cover the case of those duties. Great emphasis has been laid in the Debate this afternoon on the terrible burden of taxation in this country. My right hon. Friend the Member for Hillhead gave to the House some exceedingly interesting figures in regard to the extent to which rates and taxes enter into the cost of our manufactured products to-day, more particularly in the steel industry, and make it exceedingly difficult for those products to compete in neutral or, indeed, any markets of the world. It has always been an aphorism that where you are laying a heavy burden on the products of native industry you are entitled to lay by every rule of fiscal science a corresponding duty on similar products in competition with them which come to this country from abroad.

I referred just now to the terrible burden which we are laying upon production in this country. The hon. Member for Wavertree laid great stress on the necessity for encouraging accumulations of capital. My right hon. Friend the Member for the Central Division of Sheffield (Mr. Hope) laid great stress also upon the restriction of personal expenditure necessitated by taxation. Well, I am concerned with the burden of taxation far less from the point of view of the individual taxpayer than from the point of view of national production. This burden, to-day, arises not only from the aggregate amount of taxation, which is very heavy, but from the disproportion between the direct and indirect taxpayers. My right hon. Friend the Member for Sheffield made some allusion to that point—to the percolation, as he called it, of the incidence of direct taxation, which is not to be- measured only by the assessment of the individual taxpayer. I entirely agree with those remarks. I associate myself, if I may respectfully say so, with them, but I think I look at the matter from a slightly different angle. He was, as I understood him, laying special stress upon the restriction of personal expenditure in consequence of the burden of direct taxation.

I am not so greatly concerned about that. I do not very much mind about the reduction of personal expenditure. I am far more concerned with the effect of direct taxation on the depletion of our national capital. The whole future trade of this country very largely depends on the ability of individuals in this country to accumulate capital for the replenish ment of industry, and so long as this heavy burden rests on industry, such, replenishment of capital is rendered impossible. I am obliged to the House for listening to these few remarks. I take leave of the Budget of this year with this remark. I think it might be worse. I think it would have been worse but for the very rich legacy which the Government inherited from their prudent predecessor. I think if might have been worse but for the peculiar disposition of political forces in this House. I ventured to say once before that the virtue of this Budget approximates to the virtue of the plain woman, who is not exposed to overwhelming temptation. I think it would be ungracious if, as I have taken some part in Budget Debates for many years in this House, I did not say one word of great appreciation of the courtesy with which all parties in the Trouse have been treated by the Financial Secretary to the Treasury and by the Chancellor of the Exchequer. The passage of this Budget has, I am certain, been greatly facilitated by the courtesy of my hon. Friend opposite, and I desire, on behalf of those who sit on these benches, to thank him for it.