An appropriate time, in view of the recent English budget, to post Belloc's contribution to an earlier one...
Mr. HILAIRE BELLOC
I intend to occupy a short time as one of the few Members on these Benches who have criticised, and who still criticise, certain parts of the financial proposals of the Budget, to state that I support them as a whole. Before we go further I would like to ask how this matter would be looked at if, instead of being organised as it is, largely for the purposes of advocacy, it were competent for every man in this Debate to have free speech and give his free opinion on the subject. We have to find £16,000,000 of money, and nearly £14,000,000 of that sum, I believe, since the concessions were made, over £14,000,000 have to be found by some form of taxation. We are a community, one province of which, the Irish, are, on the whole, poorer in proportion to the rest than any other province. We are a community which, even if we include that misruled, impoverished, and ruined province, on the whole is wealthy, and which cannot be said to consume much more than £1,000,000,000. I know that there are staticians who put it as high as £1,800,000,000, but they allow for imaginaries and for types of wealth which could not be reckoned in the scale of economic values. We have under the heading of economic values a consuming power, perhaps, of £1,200,000,000 as a maximum, and perhaps a minimum of £1,000,000,000, and we have to find on that £160,000,000 by taxation; and we have as well this deficit of £14,000,000.How is that deficit to be met? There is the crux of the whole matter. The Prime Minister put it in one phrase, which might have been written in letters of gold up there during the whole of the Debates, "How is this very large sum to be met?" The right hon. Gentleman who opened the Debate, the ex-Chancellor of the Exchequer, put, though very briefly, with equal emphasis, the alternative. We must either meet that vast deficit, for it is a vast deficit, by some such proposals of direct taxation as are contained in this Budget, or we must have a heavy import duty on the type of goods which are manufactured in this country, as well as those very heavy import duties we have on types of goods which cannot be manufactured in this country, or we must borrow. Any one of our great rivals would borrow. Germany would not hesitate; Germany is building her fleet, that fleet which has so often been discussed, and which is the spur which has produced this high expenditure, and Germany is producing that fleet by loans. Why do we not borrow? We do not borrow because the state of our credit has fallen, in my opinion, through the past foreign and Colonial policy, but I do not discuss that now. The state of our credit has fallen to a certain level below which we dare not push it. We dare not have Consols below 80, and, therefore, we are not borrowing. If we are to have this very large sum raised by exceptional taxation, what sources are we to touch? The normal Budget, and I may say the Budget of past generations, had two great sources open to it if there was an exceptional strain. The first is the increase of the Income Tax, and the second is the increase of the indirect taxation upon the necessaries, or what are called the luxuries, for they are not luxuries, of the very poor. We either increased the tax on tea, or the tax on sugar, or the tax on tobacco, and at the same time the Income Tax, or we tried to save the indirect taxation on those necessaries, or small luxuries, and found the money in some other way. Had you attempted to find this very large sum by the old financial method of raising the Tea Tax and raising the Tobacco Tax, which has been done now, but might be to a larger extent—had you proceeded on those lines you could not have filled the cup.
In the matter of what you have done to the Income Tax you have a means more justly to be recommended, and you have graduated the Income Tax, with which I believe the whole community agrees. I think it ought to be said it is to the honour of English politics that a tax of this kind, falling mainly upon the wealthier members of the community, and heavily upon them, has not been seriously contested. I confess for myself, as I have listened to these Debates for many weeks in Committee, and on Second Reading, and again on Report, nothing has struck me more than the acquiescence of the wealthy men of the community in the Super-tax. I think it ought to be said that perhaps in no other community than ours would that acquiescence have been given As to the taxes on land, I would beg hon. Members to remember that merely to tax land as undeveloped land, or with Increment Duty, or royalties, is not always to tax the same persons. If a man holds up land, and does not sell it when he dies, I suggest that the State has a perfect right to say, "You could have sold it for, say, £20,000," and if the man for whatever reason—sometimes it is because he likes the amenities of his farm—or for whatever other reason he may have held up the property, then there is no conceivable reason why he should not be taxed on that amount. That is the principle of it, that is the reason of it, and that is the argument in favour of it.
When it comes to tax the future increment value of land, hon. Members opposite are perfectly right when they say that the principles there advocated are based upon the works, not of Henry George, who was a man who did not think very clearly, but on the works of almost every economist who has written throughout the nineteenth century. They are based on the conception, and after all it is common-sense, that in an industrial community, or at any rate in any community of any activity, the rise in the value of land in the neighbourhood of great towns, other than agricultural land, is almost entirely due to the action of the community. That principle has been accepted and is contained in the present Bill which determines that from all probable increment in the future, or all unexpected increment, you take 20 per cent., not the whole, or the half, or the third. I admit if the land of this country were well divided amongst a very large number of small interests, and widely diffused amongst the citizens, that this tax, even if it were arguable on abstract grounds, might be defeated, and justly defeated, on concrete grounds. The argument in favour of the Increment Duty is roughly this, that in this particular community in which we live a very small number of men, through historical process for which their families are responsible, have become possessed of the land upon which other men have to live. That very small class will, unless some such tax as this be levied, be overwhselmingly the masters of the community in the next generation.
Will anybody tell me that any one of the great owners of the London estates to-day would be a less happy man, a less prosperous man, I would add a man even counting less in the community, if this tax had been levied fifty years ago? Not at all. These families would still be great, wealthy families, great among the dominating families of the State, and meanwhile they would have contributed, and justly contributed, a proportion of the revenue. I would say, with regard to the Increment Tax, my own conviction is, and it is the conviction of many others, that the only danger is that we may be putting it on too late. If we had put it on generations ago many of the problems with which England has to deal now would have been solved. The tax on existing royalties, not on future royalties, is the only example in the Bill among all these proposals that can be called Socialism. It is a tax on one particular type of property, because that type of property is regarded as a means of production which properly belongs to the community and not to individuals. There is that feeling behind the tax on royalties. I will say two things in regard to it. First—it is a very old joke—it is a very little one. That, in a matter of principle, is of no account. Secondly, you must remember that almost every civilisation of the past regarded minerals as the property of the State. The getting hold of minerals by the landed families is a comparatively recent development of English history. I will not make that an argument for confiscation, though if the tax were very much larger it might be taken into account. But you must remember, when you are arguing against the injustice of the tax on royalties and minerals, that in almost every other community than ours it would seem a monstrous thing that a comparatively small number of men should be the owners of minerals, which everywhere else are regarded as the property of the State.
The Super-tax I have already dealt with. As I say, it is an honour to English politics that there has been accepted in such a way a policy involving a strain on the richest members of the community.
My hon. Friend says "No," and he ought to know. But his interjection is only a further proof of the truth of my statement that the manner in which this policy has been accepted is one which reflects much honour, and augurs well for the future advantage of the country and the future harmony of the State.Then I come to the part which I personally have criticised, namely, the Licence Duties. I am convinced that the motive—and motive is everything—lying behind these proposals is that the consumption of fermented liquor is immoral, or, at any rate, is bad for the community, and that therefore you may treat the trade as an immoral trade or as a trade of such a sort that if you suppress you do no great harm, while if you increase it, great harm is done. When the Chancellor of the Exchequer said the other day that the drop in the consumption of whisky was a thing on which he congratulated the House, and was heartily cheered for saying so, he was propounding that doctrine. No man can talk to masses of the English people without knowing that that doctrine is very widely held. I would suggest to the House of Commons this perfectly clear principle. If you have made up your minds by a determining majority that a particular trade or avocation or habit, once thought moral, is now in your opinion immoral—the slave trade is the great example in the past—and if you have allowed a vested interest to arise in that trade, or if by prescription you have permitted a sense of property to exist in that which you are about to condemn, it is your bounden duty to recoup the owners. You cannot get away from that. You have never attempted to get away from it in the past, and you ought not to attempt to get away from it now on a false issue. If you are trying to recover the monopoly value for the State—which is quite another matter, and one in which I heartily agree—you ought to do it by slower steps, in a more gradual manner, with less harshness than is involved in the Licensing Clauses of the Bill. Though I shall support the Bill as a whole, and though when I speak of the alternative I shall say that as com-compared with that alternative it is as a blessed thing compared with a curse, nevertheless I condemn that particular section of the proposals, and have voted against them in detail. That is the course I should take again if need be, and it is the position I shall maintain in my own Constituency in what I believe to be the approaching elections.
Now let me ask the House to consider what is the alternative. We are asked to meet a very difficult moment in the national fortunes by the imposition of import duties upon foreign manufactured goods. I will not insult the House of Commons by supposing that there is anyone present who wants to tax raw materials for the advantage of the Colonies, and also manufactured goods for the advantage of English manufacturers. It is ludicrous to suppose that anyone wants to tax bacon, leather, and corn, and at the same time to tax iron billets, steel rails, and other forms of manufactured goods. He cannot want both. I know that in the newspapers there are many men who say that they do want both; but at least for the honour and intelligence of the House of Commons let me believe that no one here wants both those policies at once. [An HON. MEMBER: "They do."] We have had from the ex-Chancellor of the Exchequer to-day a fairly definite statement of his proposal, which I take it is the proposal of the Opposition as a whole, with the exception perhaps of the Noble Lord the Member for Marylebone (Lord R. Cecil), the hon. Member for Norwood (Mr. Bowles), and one or two others. According to that statement, the general alternative of the Opposition is to tax manufactured goods coming into the country. But have they thought, first of all, what revenue can be got from that, and, in addition to its effect upon our own trade, whether they can conceivably get by any machinery whatsoever more than £5,000,000 from it? Have they thought, secondly, which is most important of all, whether our fiscal system would stand the strain? I am not going to argue here—it will be argued on a thousand platforms in the course of the next few weeks, and it has been argued threadbare, usually by men who know very little about it—whether the system is possible, or would ultimately be for the benefit of the country. Those are the two points which, speaking as one who is quite independent in the matter, would always make me vote against that alternative. Have the Opposition considered those two points? Are we importing manufactured goods on such a scale that an import duty of 10 per cent. could meet the great strain upon our fiscal system through which we are now passing? Secondly, could we, commercial community that we are, with our traditions and with the enormous expansion of our trade during the last few generations, undertake that experiment and live? Could we survive the complete upsetting of commercial conditions that would follow? It is my profound conviction that we could not. I would rather see this country undertake a dangerous war with a great rival than undertake an experiment of that kind. On that account, accepting this Budget as the alternative to that very dangerous suggestion, although I differed from every other thing in it, I would support it as a Free Trade Budget at the present time.