Orders of the Day — Finance Bill.

Part of the debate – in the House of Commons on 26th May 1938.

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Photo of Mr Albert Alexander Mr Albert Alexander , Sheffield, Hillsborough

If the hon. Member had been listening carefully he will know that I have already referred to the increase in the Income Tax, and he need not be anxious, because I propose to refer to the wealth which can yet be taken from the wealthy before I sit down. But the burden to-day upon the poor is altogether out of proportion to that which they are able to bear. Take, for example, the kind of weekly wage to which I have already referred. Let hon. Members consider the family of a miner in that position. At the present time, there is not an article of their food, except bacon, which is not taxed directly, and even bacon is kept at an artificial price by other extra-fiscal methods. The right hon. Gentleman the Chancellor of the Exchequer was once a member of a party which always resisted to the last taxation on food, and now he is Chancellor in an administration which raises taxation on food. In the last financial year, the Government obtained roughly £40,000,000 from taxes on food, and with the addition of the Tea Duty —and we consider tea as a food, for it is a food to the working classes—an amount of £42,750,000 will be obtained from taxes on food alone. In the case of the Petrol Duty, do not for one moment think that that will be felt only be certain captains of industry and wealthy people who use motor cars. When one considers the extent to which the road transport industry enters into the national life nowadays in transporting essential goods, including food commodities, the additional burden that is placed upon that industry by the Petrol Duty is bound ultimately to have its influence on the poorer consumers. We say that these inequalities are not justifiable as long as there remain avenues of wealth in this country which can be taxed for the purpose of meeting the burdens which the country has to face.

Moreover, there are certain proposals in the Bill which effect slight amendments to the tax which caused so much controversy last year, the National Defence Contribution; but I fail to notice in any of those proposals any relief from the burden in the case of societies which do not make profits, but are engaged in mutual trading, nearly all of which are owned and controlled by the heavily-taxed workers themselves. I do not find any indication in the Chancellor's Budget speech or in this Bill that he has done what he told me last year he would do, namely, look into the question of the profits of certain companies which provide public services, which may or may not be public utility companies, but the profits of which, as I quoted last year, are exceedingly heavy, and many of which are exempted altogether from the burden of the National Defence Contribution. As long as companies providing for public services, having public utility conditions and making large profits, are relieved, then it is completely unreasonable to ask the working classes to pay taxation upon their own mutual efforts or to pay increased taxation upon their food. Therefore, I draw attention particularly to the iniquity of these proposals.

I could say a great deal about the Tea Duty, but as we had a Debate on it in Committee on the Budget Resolutions, and as no doubt we shall have other opportunities, I do not propose to enter into the details to-day, apart from saying that evidence has already accumulated in my own organisation, which is the largest distributor of tea in the world, that the whole tendency since the return to the tax on tea and its gradual increase during the last three or four years has been to concentrate demand in a larger degree upon the cheaper qualities, with a consequent rise in the price in those common qualities, and a stabilisation—and not an upward trend—in the case of the more expensive qualities of tea which are not used by the working classes. If at any time the Chancellor has any doubt about that, and wants to see the figures, I shall be pleased to show them to him. That is all I propose to say on the Tea Duty now.

I suggest to the House that, with this nation in face of a growing financial crisis in the National Exchequer, the position is still as the party to which I belong has so often said, namely, that wealth is allowed to increase in limited sections of the community while poverty increases among other sections, and that when one comes to the national burden, it is inequitably distributed among those sections. We say that the Chancellor, in dealing with the very complex financial situation which he had to face, had the opportunity of going to other sources to meet the needs of the moment. Much was said in the course of the Debates on the Budget Resolutions about the fact that, for some reason or other, no recourse has been had to new revenue either from Surtax or from Estate Duties. I know it may be argued that any drastic revision of the rate of imposition on the Surtax payer might lead to the operation of the law of diminishing returns, but after reading carefully the various annual reports of the Board of Inland Revenue, I am satisfied that we have by no means exhausted the extent to which the national burden could be met from the Surtax.

When I look at the record in regard to Estate Duties, I consider that the case of hon. Members on this side is absolutely proved, and that wealth continually increases in face of the continued deepening of the poverty of large sections of the community. I will quote to the House the figures of the yield from Estate Duties. In 1930–31, it was £82,000,000; in 1931–32, £65,000,000 (the fall was largely accounted for by the low market price of shares); in 5932–33, £77,000,000; in 1933–34, £85,000,000; in 1934–35, £81,000,000; in 1935–36, £87,000,000; in 1936–37, £87,000,000; and in 1937–38, a pound or two short of £89.000,000. During the last few years, there has been practically no change in the rates. In other words, the fortunes of a limited section of the community are increasing year by year. As far as I can see, there is no reason why, in dealing with the national financial burden, the Chancellor should not have refrained from overtaxing that section of the community which is so near, and in some cases below, the poverty line, and turned to those sources of wealth, and distributed the burden in a manner which was more equitable and just than has actually been the case.

Moreover, that is not the only resource to which the Government can turn. As has been mentioned before by some of my hon. Friends, there is perhaps no more able and well-informed student than the Chancellor of the general principles and law relating to the tax on the unearned increment of land values. When one considers what has happened during the last few months in regard to land values, when one considers the extent to which in incident after incident there has been abuse of land values at a time of national necessity, when land is wanted for national emergency purposes, I should have thought that, considering all the years during which the Chancellor ardently advocated the obtaining of wealth from that source, no one would have been as bold as him in making proposals to the House in that respect. I feel that, however inadequately I have painted the picture this afternoon, we are at any rate justified in moving our Amendment. I repeat that the financial crisis which has arisen so largely from the failure of the Government's policy is far greater than the financial crisis in 1931. [Interruption.] I hear something more like a snort than anything else from the other side of the House. I will give a quotation from someone who is not a Labour Member of Parliament and not a Socialist. A book has just been issued entitled "Can 1931 come again?" This is how the situation is summed up in that book by Collin BrooksBehind the false facade of prosperity made by rearmament activity, Britain's true economic position is desperate. The remedies must be drastic. What is the disease we have to cure? These are its symptoms: (1) A lack of economic and commercial confidence in Britain itself …. (2) A lack of political confidence … (3) A general lack of confidence, felt abroad, in Britain's stability. [Interruption.] I am glad that causes amusement to hon. Members opposite. I shall not be upset if their amusement continues, because it will mean that they will continue to lose by-elections. If they remain in that position of complacency when we put such facts before them, they will go on losing by-elections; but, in the interests of the nation, we would rather that the House as a whole would give its attention to the problem that we have to face. We ask the Government to tackle these problems on the basis which we have outlined, or to make way for those who are willing to tackle them on a sound and rational basis. We ask them in the first place to apply to themselves, and in a more marked degree, the same medicine which they applied in a far lesser financial crisis to the Labour Government in 1931. As a matter of fact, with the grave problem of high Budgets which will come during the next few years, I do not believe that the Government will ever be able, with its political beliefs, to tackle the situation. Until there is a Government that will tackle the international situation on the basis of Labour's foreign policy and get rid of the drift from collective security, and relieve the problem of rearmament by getting a solution of the problem of collective security, it will not be possible to get any remedy. I do not believe we shall be able fully to meet the burden of these national Budgets until we get in office a Government which is prepared, not from the objective of private profit, but in the public interest, to plan and organise the whole of the resources of the nation in the public interest.