12 MARCH 1910, Page 8

THE LORDS AND FINANCE.

THE debate in the House of Lords which Lord Lans- downe initiated on Monday is highly instructive. Looking at it superficially, we admit that there is here a suggestion of the pot calling the kettle black. Lord Lans- downe says that the financial chaos is due to the neglect of the Government to provide for the collection of the taxes. Lord Crewe and Lord Loreburn retort that the whole trouble arises because the House of Lords rejected the Finance Bill last November. When he reads such statements as these the average man is tempted to say :—" You are both only playing a. party game, and I have as little confidence in one as in the other." In this case, however, the merits of the question can easily be brought to a test. We have merely to ask—Which of the two parties is at the present moment sacrificing the interests of the country for its party advantage ? There can be no possible doubt as to the answer to this question. The Liberal Government, for various reasons which we will examine presently, refuse to legalise the collection of taxes which the taxpayers are willing to pay, and which nobody opposes. This refusal involves the necessity of raising loans to meet the deficit, and on these loans interest has to be paid by the nation. That is a real national loss, and it is imposed upon the nation solely for the supposed advantage of the present Liberal Government. In other words, admitting both parties to be actuated by purely party motives, it so happens that at the present moment the Unionist Party are acting in the national interest, and the Liberal Party are not.

Let us now turn to the Liberal defence. It dates back to the events of last November. The House of Lords when it rejected Mr. Lloyd George's Budget offered through its leader, Lord Lansdowne, to give facilities ' for legalising the non-contentious taxes so as to prevent the financial confusion which has now occurred. This offer was scornfully rejected by the Government. Their expressed argument was that they were not going to permit the House of Lords to pick and choose the taxes which it would pass, and that on that House must rest the sole responsibility for any financial confusion which arose. Suppose, however, that the rejection of the Budget had taken place in the House of Commons instead of in the House of Lords ; and in spite of the growing autocracy of Liberal Governments, even Mr. Asquith and Mr. Lloyd George would still admit that the House of Commons retains the right to reject a Finance Bill on the third reading. Suppose that it had exercised this right. The country would then have been faced with exactly the same financial situation as that facing it when the House of Lords rejected the Bill. In these circum- stances, it is as certain as anything in politics can be that by general consent the House of Commons would have taken steps before the Dissolution to legalise the non- contentious taxes. What reason was there for not doing this when the rejection was due to the House of Lords rather than to the House of Commons ? The needs of the country in each case were the same. The sole differ- ence was that the Liberal Party wanted to challenge the right of the House of Lords to reject a Budget. The Liberals were perfectly within their competence in making this challenge, and it was an excellent issue on which to appeal to the country. What they had no right to do was to complicate this issue by allowing the finances of the country to be thrown into confusion in order to discredit their opponents. In so doing the Liberal Party forgot what ought to be an axiom with all parties,—that the party game must not be played at the expense of the nation.

It would have been perfectly easy for the Liberals to have gone to the country on a clear anti-Lords and pro-Budget issue. They could have argued with absolute truth :—" The particular features of the Budget to which the Liberal Party attaches importance—namely, the Land-taxes and the License-duties, which in our judgment the country desires to see passed into law—have had to be abandoned because of the action of the House of Lords in rejecting the Finance Bill. We believe that action is unconstitu- tional. We also believe that the House of Lords habitu- ally exercises its powers to injure one of the parties in the State, and if it is to have the power to reject a Finance Bill it will always be able to turn that party out of office. We therefore demand that the House of Lords shall be deprived of the power to reject Finance Bills, and that its veto in other matters shall be limited." That would have been an intelligent appeal to address to an intelligent electorate. Apparently, however, the Liberal Ministers were doubtful either of the intelligence of the electorate, or else of the validity of their own case. They there- fore tried to weight the scales by introducing the altogether irrelevant question of financial confusion. That this question was irrelevant we have already shown by pointing out that it would have arisen to exactly the same extent, and no more, if the Bill had been rejected on the third reading by the House of Commons instead of by the House of Lords on the second reading.

So much for what happened last November, and, to be fair to the Government, it must be admitted that, though wishing to load the scales, they had then no intention of throwing into them such a heavy weight as they are now trying to add. Their intention last year clearly was to reintroduce the Finance Bill at the earliest possible moment, so that there would be only a few weeks' interruption in the legal collection of the taxes. This intention is made manifest both by Mr. Asquith's speech in the House of Commons, and by the circular issued by the Inland Revenue Department, which Lord Revelstoke quoted in his admirable speech on Monday. Mr. Asquith said on December 2nd, and it is worth while to quote his words again :—" The result [of the General Election] I trust will be that a new House of Commons will assemble at such a time as to make it possible for it to provide both retrospectively and prospectively for the needs of the current financial year. If we are fortunate enough to enjoy its confidence, then our first act will be to reimpose from this week all the taxes and duties which were embodied in the Finance Bill, and to validate all past collections and deductions." These words can have only one possible meaning. The Prime Minister then assumed as a matter of course that some Finance Bill must be passed before the end of the financial year, and he undertook, if he secured a majority, that this Finance Bill should be the same as the one which the House of Lords had just rejected. If further proof is needed, it is found in the circular just referred to, which was issued to bankers, coupon dealers, and others in the City of London, signed by the Secretary to the Board of Inland Revenue. The concluding sentence, quoted by Lord Revelstoke, is as follows :—" The Board are authorised by the Lords Commissioners of his Majesty's Treasury to suggest that a similar course should be adopted on the present occasion, and that the Income-tax should continue to be deducted at the rate of 16. 2d. in the pound pending the introduction of another Finance Bill for the current year."

In view of this circular and of Mr. Asquith's speech, there can be no manner of doubt that it was the intention of the Government to introduce a Finance Bill as soon as the new Parliament met. Further, there is evidence, though of a less explicit character, that this remained the intention of the Government up to the actual assembling of Parliament. The Westminster Gazette, which serves the useful purpose of interpreting to the nation the views of Cabinet Ministers, insisted for several days after the result of the elections was known that the first business of Parliament must be the passing of the Budget. The extreme Radicals meanwhile were shouting that the veto must be taken first, and it was only on the very eve of the assembling of Parliament that the Westminster Gazette began to alter its note, and to announce that the two would be taken together. Even this concession failed to meet the situation, and the Cabinet and its faithful mouthpiece in the Press were driven to advocate the postponement of the Budget until after the end of the financial year in order to placate the Nationalists.

That, in brief, is the kernel of the situation, and every- body knows it. Everybody knows that the real author of the present policy of his Majesty's Ministers is Mr. John Redmond. It is he who has dictated the abandon- ment of the Budget ; it is he who has compelled Mr. Asquith to go back upon his clear-spoken words, and to sacrifice the needs of the nation for a supposed party advantage. The question which most Englishmen will be inclined to ask themselves is whether under such conditions as these it is consistent with English dignity for Ministers to retain office. They cannot pass their own Budget, and they cannot or will not legalise the collection of even those taxes which everybody admits to b3 necessary. In other words, they have ceased to carry on the King's government. They are still holding their offices, but they are failing to discharge the primary duties which they undertook.