THE POLICY OF THE NEW GOVERNMENT.— SAVING TAXES.
pEOPLE with faint hearts are already beginning to express fears and doubts because of what they call the New Government's lack of a positive policy. Was there ever a more unreasonable complaint ? If these critics would only think the matter out, the very reason why Mr. Bonar Law and his colleagues have been placed where they are, with the country's full approval, is because they are not talking programmes and policies and making promises. They have got far more serious work before them. They are, before everything else, a Breakdown Gang, doing the absolutely necessary work of clearing the line and getting the damaged places restored. Here is two or three years' hard work which cannot possibly be postponed in order to outbid Mr. Lloyd George or the Labour Party in the exciting work of making everyone prosperous by Act of Parliament.
The policy of the New Government is retrenchment. That sounds like negation. It is, in fact, one of the most positive of things. People who are honest in that work, and not content merely to talk economy, are the busiest of mortals. There is no harder or more exacting work than finding out where a shilling can be saved and then saving it. This is the work which hitherto we have so foolishly failed to tackle, but must now face lest we perish.
We would ask the Government in this matter to remember one or two very simple things. Still more, we would ask their friends and supporters to remember them when the unavoidable pain of cutting down comes. The first thing to keep in mind is this. In considering whether an act of retrenchment shall take place it is aselesg to dwell on the evils of not doing what was previously - done. What must be considered is the alternative to forgoing a reduction. The alternative to retrenchment is a persistence in over-taxation, which may prove to be the very sword of Attila and carry destruction through the land. If men can only be left free to exchange, they will by themselves surmount almost any conceivable obstacle. Once, however, forbid them freedom, as only over-taxation can, and recovery may prove impossible. Take the concrete case of the evacuation of Mesopotamia and of Palestine. Plenty of evils and losses are likely to result to the Peoples of those Provinces, and were the cost small no wise man would counsel their abandonment. But the cost is not small, but huge, and this cost, expressed as it must be in terms of taxation, will have consequences far more dangerous and oppressive than leaving undone the task we embarked on with such levity. The gatherers of light taxes may be ignored. The gatherers of heavy. though their work r is not immediately visible, is often disastrous. The Hindus in the early days of our rule in India fled before the collectors of the East India Company as .something worse than even the Mahratta or. Pindaree Raiders. " Save yourselves," was the cry.
" Is it the Robbers ? " " No, no—something worse, far worse—the Adawlat is coming." The Adawlat was the court which enforced the laws for the collection of the revenue.
By fixing one's attention too much on the good results of expenditure and forgetting the evils of collection, we may therefore bring men and women to ruin and unhappiness as surely as if we put them to the sword. To say this is not to lend the slightest weight to the crude suggestion that the evils of taxation can be got rid of by acts of confiscation such as the Labour Party propose. That is the most harmful and destructive form of taxation ever conceived by the mind of man, and must multiply a hundred times the evils it seeks to. cure. The same may be said with equal truth of the schemes for repudiating the National Debt.
There is only one sure way of dealing with taxation which has passed the limit of safety, and that is scrupulous care in all fiscal matters—avoiding waste by seeing that the minimum of harm is done in the matter of depriving men of their pecuniary freedom, and encouraging exchanges and the accumulation of capital. This involves cutting off all expenditure that cannot be shown to be absolutely necessary to the safety and welfare of the realm and the maintenance of the national faith and honour. By this we mean, of course, such a sacred obligation as the full payment of all pensions justly due to soldiers and all other servants of the State, and the payment of all our debts here and overseas. Beyond that for the present we cannot and must not go.
We must keep always before us three or four very simple maxims of taxation. The first is Peel's great apophthegm against State Socialism. The statesman, he said, must leave all the money he possibly can to " fructify in the Pockets of the People." The next is one far too often. forgotten. It is that men and women with pockets and cheque books pay taxes. Inanimate things cannot pay. When we say that tobacco is taxed we are, fiscally speaking, talking nonsense. What we mean is that we are choosing their consumption of tobacco as one of the ways of estimating the- contri- bution to the revenue which we should exact from individuals. A third maxim, of French origin, is cynical but sound : " I must endeavour to pluck the feathers out of the live national goose in such a way that the bird shall suffer as little pain as possible." Let us next remember to observe the old Treasury maxim : " No assent should ever be given to State expenditure till a careful and independent estimate of the cost has first been obtained." Not to observe that law but to assume —as of late has been the rule—that money can always be found if necessary is a capital offence. Finally, we should remember the golden questions which Lord Cromer applied to all schemes and proposals which required extra expenditure—" What will it cost ? " ; " Where is the money to come from ? It is only reforms in regard to which satisfactory answers can be given to these two questions that should be accepted and attempted.
Elsewhere we deal with the other side of the problems we have been discussing—how to raise the money that it is necessary to raise. We make no apology for such insistence on finance. As Napoleon said in 1815, " In the situation in which we find ourselves there is nothing that matters so mudh."
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