The gist of Mr. Lloyd George's speech was that the
industrial situation governed everything and that the Budget had been prepared without any proper regard for industry. He suggested that Income Tax relief ought to have been confined to allowances for capital repairs. Any surplus still available ought to have been used for the relief of industrial rates. Mr. Churchill replied that, after all, the Government's belief was that the best way to aid production was to reduce direct taxation. In one way and another he had taken off nearly ls. in the E. He might have followed Mr. Snowden in " cutting off dollops of indirect taxation," but the Government had preferred to finance a vast scheme of social reform. As regards the silk duties he was unre- pentant. He had made several concessions and he regarded the modified duties as excellent. The Prime Minister defended himself against the accusation that the Government had introduced Protection contrary to pledges. The McKenna duties were revenue-raising duties and were in no sense Protective. The silk duties were copied from Gladstone's tobacco duties. Mr. Baldwin ended with an appeal for general co-operation in the work of national recovery and the second reading was agreed to. * * * *
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