Liberalism and the Social Problem

by Winston Churchill

Indeed, if you look back, you will find that the fourth year in the history of a Government is always a very critical and has often been a very unfortunate year. It is quite true that Mr. Disraeli's Government, which assumed office in 1874, did enjoy in its fourth year a fleeting flush of success, which, however, proved illusory. With that single exception, every other modern Government that has lasted so long, has occupied an unsatisfactory position in its fourth year. The Government of 1880 in the year 1884 was brought very low, and was deeply involved in disastrous enterprises beyond the sea which ultimately resulted in sorrow and misfortune. The Conservative Government which took office in 1886 was by the year 1890, owing to its strange proceedings against Mr. Parnell, brought to the depths of humiliation. The Government of 1895 was in the year 1899 thoroughly unpopular, and if they had not plunged into the tumult of war in South Africa, they would very shortly have been dismissed from power. As for the Government of 1900, in the fourth year of Mr. Balfour's late Administration, I am sure I could not easily do justice to the melancholy position which they occupied.

Where do we stand to-day at the end of our fourth year of office? I put it plainly to you to consider, whether one is not justified in saying that we occupy a position of unexampled strength at the present time. The Government is strong in its administrative record, which reveals no single serious or striking mistake in all the complicated conduct of affairs. There have been no regrettable incidents by land or sea and none of those personal conflicts between the high officials that used to occur so frequently under a late dispensation. We have had no waste of public treasure and no bloodshed. We are strong in the consciousness of a persistent effort to sweep away anomalies and inequalities, to redress injustice, to open more widely to the masses of the people the good chances in life, and to safeguard them against its evil chances. We also claim that we are strong in the support and enthusiasm of a majority of our fellow-countrymen. We are strong in the triumph of our policy in South Africa; most of all we are strong in the hopes and plans which we have formed for the future.

It is about this future that I will speak to you this afternoon. And let me tell you that when I think about it, I do not feel at all inclined to plead exhaustion in consequence of the exertions we have made, or to dwell upon the successes which we have had in the past, or to survey with complacency the record of the Government or to ask you to praise us for the work which we have done. No; when I think of the work which lies before us, upon which we have already entered, of the long avenues of social reconstruction and reorganisation which open out in so many directions and ever more broadly before us, of the hideous squalor and misery which darken and poison the life of Britain, of the need of earnest action, of the prospects of effective and immediate action—when I dwell upon this, it is not of feelings of lassitude or exhaustion that I am conscious, but only of a vehement impulse to press onwards.

The social conditions of the British people in the early years of the twentieth century cannot be contemplated without deep anxiety. The anxiety is keen because it arises out of uncertainty. It is the gnawing anxiety of suspense. What is the destiny of our country to be? Nothing is settled either for or against us. We have no reason to despair; still less have we any reason to be self-satisfied. All is still in our hands for good or for ill. We have the power to-day to choose our fortune, and I believe there is no nation in the world, perhaps there never has been in history, any nation which at one and the same moment was confronted with such opposite possibilities, was threatened on the one hand by more melancholy disaster, and cheered on the other by more bright, yet not unreasonable hopes. The two roads are open. We are at the cross-ways. If we stand on in the old happy-go-lucky way, the richer classes ever growing in wealth and in number, and ever declining in responsibility, the very poor remaining plunged or plunging even deeper into helpless, hopeless misery, then I think there is nothing before us but savage strife between class and class, with an increasing disorganisation, with an increasing destruction of human strength and human virtue—nothing, in fact, but that dual degeneration which comes from the simultaneous waste of extreme wealth and of extreme want.

Now we have had over here lately colonial editors from all the Colonies of the British Empire, and what is the opinion which they expressed as to the worst thing they saw in the old country? The representatives of every Colony have expressed the opinion that the worst they saw here, was the extreme of poverty side by side with the extreme of luxury. Do not you think it is very impressive to find an opinion like that, expressed in all friendship and sincerity, by men of our own race who have come from lands which are so widely scattered over the surface of the earth, and are the product of such varied conditions? Is it not impressive to find that they are all agreed, coming as they do from Australia, or Canada, or South Africa, or New Zealand, that the greatest danger to the British Empire and to the British people is not to be found among the enormous fleets and armies of the European Continent, nor in the solemn problems of Hindustan; it is not the Yellow peril nor the Black peril nor any danger in the wide circuit of colonial and foreign affairs. No, it is here in our midst, close at home, close at hand in the vast growing cities of England and Scotland, and in the dwindling and cramped villages of our denuded countryside. It is there you will find the seeds of Imperial ruin and national decay—the unnatural gap between rich and poor, the divorce of the people from the land, the want of proper discipline and training in our youth, the exploitation of boy labour, the physical degeneration which seems to follow so swiftly on civilised poverty, the awful jumbles of an obsolete Poor Law, the horrid havoc of the liquor traffic, the constant insecurity in the means of subsistence and employment which breaks the heart of many a sober, hard-working man, the absence of any established minimum standard of life and comfort among the workers, and, at the other end, the swift increase of vulgar, joyless luxury—here are the enemies of Britain. Beware lest they shatter the foundations of her power.

Then look at the other side, look at the forces for good, the moral forces, the spiritual forces, the civic, the scientific, the patriotic forces which make for order and harmony and health and life. Are they not tremendous too? Do we not see them everywhere, in every town, in every class, in every creed, strong forces worthy of Old England, coming to her rescue, fighting for her soul? That is the situation in our country as I see it this afternoon—two great armies evenly matched, locked in fierce conflict with each other all along the line, swaying backwards and forwards in strife—and for my part I am confident that the right will win, that the generous influences will triumph over the selfish influences, that the organising forces will devour the forces of degeneration, and that the British people will emerge triumphant from their struggles to clear the road and lead the march amongst the foremost nations of the world.

Well, now, I want to ask you a question. I daresay there are some of you who do not like this or that particular point in the Budget, who do not like some particular argument or phrase which some of us may have used in advocating or defending it. But it is not of these details that I speak; the question I want each of you to ask himself is this: On which side of this great battle which I have described to you, does the Budget count? Can any of you, looking at it broadly and as a whole, looking on the policy which surrounds it, and which depends upon it, looking at the arguments by which it is defended, as well as the arguments by which it is opposed—can any one doubt that the Budget in its essential character and meaning, in its spirit and in its practical effect, would be a tremendous reinforcement, almost like a new army coming up at the end of the day, upon the side of all those forces and influences which are fighting for the life and health and progress of our race?

In the speeches which I have made about the country since the Budget was introduced I have explained and defended in detail the special financial proposals upon which we rely to provide the revenue for the year. You are, no doubt, generally acquainted with them. There is the increase in the income-tax of twopence, the further discrimination between earned and unearned income, and the super-tax of sixpence on incomes of over £5,000 a year. There are the increases in estate duties and in the legacy duties, and there are the new duties on stamps; there is the tax on motor-cars and petrol, the proceeds of which are to go to the improvement of the roads and the abatement of the dust nuisance; there are the taxes on working class indulgences—namely, the increase in the tax on tobacco and on whisky, which enable the working man to pay his share, as indeed he has shown himself very ready to do; there are the taxes on liquor licences, which are designed to secure for the State a certain special proportion of the monopoly value created wholly by the State and with which it should never have parted; and, lastly, there are the three taxes upon the unearned increment in land, upon undeveloped land, upon the unearned increment in the reversion of leases, and then there is the tax upon mining royalties.

Now these are the actual proposals of the Budget, and I do not think that, if I had the time, I should find any great difficulty in showing you that there are many good arguments, a great volume of sound reason, which can be adduced in support of every one of these proposals. Certainly there is no difficulty in showing that since the Budget has been introduced there has been no shock to credit, there has been no dislocation of business, there has been no setback in the beginning of that trade revival about the approach of which I spoke to you, when I was in Leicester at the beginning of the year and which there are now good reasons for believing is actually in progress. The taxes which have been proposed have not laid any burden upon the necessaries of life like bread or meat, nor have they laid any increased burden upon comforts like tea and sugar. There is nothing in these taxes which makes it harder for a labouring man to keep up his strength or for the small man of the middle class to maintain his style of living. There is nothing in these taxes which makes it more difficult for any hard-working person, whether he works with his hands or his head, to keep a home together in decent comfort. No impediment has been placed by these taxes upon enterprise; no hampering restrictions interrupt the flow of commerce. On the contrary, if the tax upon spirits should result in a diminution in the consumption of strong drink, depend upon it, the State will gain, and all classes will gain. The health of millions of people, the happiness of hundreds of thousands of homes, will be sensibly improved, and money that would have been spent upon whisky will flow into other channels, much less likely to produce evil and much more likely to produce employment. And if the tax on undeveloped land, on land, that is to say, which is kept out of the market, which is held up idly in order that its owner may reap unearned profit by the exertions and through the needs of the surrounding community, if that tax should have the effect of breaking this monopoly and of making land cheaper, a tremendous check on every form of productive activity will have been removed. All sorts of enterprises will become economically possible which are now impossible owing to the artificially high price of land, and new forces will be liberated to stimulate the wealth of the nation.

But it is not on these points that I wish to dwell this afternoon. I want to tell you about the meaning and the spirit of the Budget. Upon the Budget and upon the policy of the Budget depends a far-reaching plan of social organisation designed to give a greater measure of security to all classes, but particularly to the labouring classes. In the centre of that plan stands the policy of national insurance. The Chancellor of the Exchequer has been for more than a year at work upon this scheme, and it is proposed—I hope next year, if there is a next year—it is proposed, working through the great friendly societies, which have done so much invaluable work on these lines, to make sure that, by the aid of a substantial subvention from the State, even the poorest steady worker or the poorest family shall be enabled to make provision against sickness, against invalidity, and for the widows and orphans who may be left behind.