Part 18

If there is divergence between us in regard to the methods by which we are to raise our revenue, there is also divergence in regard to the objects on which we are to spend them. We are, on both sides, inclined to agree that we are approaching, if we have not actually entered on, one of the climacterics of our national life. We see new forces at work in the world, and they are not all friendly forces. We see new conditions abroad and around us, and they are not all favourable conditions; and I think there is a great deal to be said for those who on both sides of politics are urging that we should strive for a more earnest, more strenuous, more consciously national life. But there we part, because the Conservative Party are inclined too much to repose their faith for the future security and pre-eminence of this country upon naval and military preparations, and would sometimes have us believe that you can make this country secure and respected by the mere multiplication of ironclad ships. We shall not exclude that provision, and now indeed ask the Committee to enable us to take the steps to secure us that expansion of revenue which will place our financial resources beyond the capacity of any Power that we need to take into consideration. But we take a broader view. We are not going to measure the strength of great countries only by their material resources. We think that the supremacy and predominance of our country depend upon the maintenance of the vigour and health of its population, just as its true glory must always be found in the happiness of its cottage homes. We believe that if Great Britain is to remain great and famous in the world, we cannot allow the present social and industrial disorders, with their profound physical and moral reactions, to continue unchecked. We propose to you a financial scheme, but we also advance a policy of social organisation. It will demand sacrifices from all classes; it will give security to all classes. By its means we shall be able definitely to control some of the most wasteful processes in our social life, and without it our country will remain exposed to vital dangers, against which fleets and armies are of no avail.

FOOTNOTES:

Mr. Wyndham.

Mr. Austen Chamberlain.

THE BUDGET AND NATIONAL INSURANCE

THE FREE TRADE HALL, MANCHESTER, May 23, 1909

(From The 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 Empire we 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 speak about 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 L7,000,000 a year, and after paying back L40,000,000 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 Whips of 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 Naval Estimates 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 Conservative Party 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 is no 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 L3,000 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 were inclined 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 L7,000,000 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-time arrangements 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.