Liberalism and the Social Problem

by Winston Churchill

THE BUDGET AND PROPERTY.[ToC]

Abernethy, October 7, 1909

(From The Daily Telegraph, by permission of the Editor.)

This is a very fine gathering for a lonely glen, and it augurs well for the spirit of Liberalism. Much will be expected of Scotland in the near future. She will be invited to pronounce upon some of the largest and most complicated questions of politics and finance that can possibly engage the attention of thoughtful citizens, and her decision will perhaps govern events.

There is one contrast between Parties which springs to the eye at once. One Party has a policy, detailed, definite, declared, actually in being. The other Party has no policy. The Conservative Party has no policy which it can put before the country at the present time on any of the great controverted questions of the day. On most of the previous occasions when we have approached a great trial of strength, the Conservative Party have had a policy of their own which they could state in clear terms. You would naturally expect some reticence or reserve from the head of a Government responsible for the day-to-day administration of affairs. But what do you see at the present time? Mr. Asquith speaks out boldly and plainly on all the great questions which are being debated, and it is the Leader of the Opposition who has to take refuge in a tactical and evasive attitude. Why, Mr. Balfour is unable to answer the simplest questions. At Birmingham, the Prime Minister asked him in so many words: What alternative did he propose to the Budget? What did he mean by Tariff Reform? and what was his counsel to the House of Lords?

It would not be difficult to frame an answer to all these questions. Mr. Chamberlain, for instance, was quite ready with his answers to all of them. At Glasgow in 1903 he stated what his Budget would have been, and he explained precisely what he meant by Tariff Reform. At Birmingham last month he was equally clear in urging the Lords to reject the Budget. There is no doubt whatever where Mr. Chamberlain and those who agree with him stand to-day. They would raise the extra taxation which is required, by protective import duties on bread, on meat, on butter, cheese, and eggs, and upon foreign imported manufactured articles; and in order to substitute their plan for ours they are prepared to urge the House of Lords to smash up the Budget and to smash up as much of the British Constitution and the British financial system as may be necessary for the purpose.

That is their policy; but, after all, it is Mr. Balfour who is the leader of the Conservative Party. He is the statesman who would have to form and carry on any administration which might be formed from that Party, and he will not state his policy upon any of the dominant questions of the day. Why will he not answer these simple questions? He is the leader, and it is because he wishes to remain the leader that he observes this discreet silence. He tells us he is in favour of Tariff Reform, he loves Tariff Reform, he worships Tariff Reform. He feels that it is by Tariff Reform alone that the civilisation of Great Britain can be secured, and the unity of the Empire achieved; but nothing will induce him to say what he means by Tariff Reform. That is a secret which remains locked in his own breast. He condemns our Budget, he clamours for greater expenditure, and yet he puts forward no alternative proposals by which the void in the public finances may be made good. And as for his opinion about the House of Lords, he dare not state his true opinion to-day upon that subject. I do not say that there are not good reasons for Mr. Balfour's caution. It sometimes happens that the politics of a Party become involved in such a queer and awkward tangle that only a choice of evils is at the disposal of its leader; and when the leader has to choose between sliding into a bog on the one hand and jumping over a precipice on the other, some measure of indulgence may be extended to him if he prefers to go on marking time, and indicating the direction in which his followers are to advance by a vague general gesture towards the distant horizon.

Whatever you may think about politics, you must at least, in justice to his Majesty's Government, recognise that their position is perfectly plain and clear. Some of you may say to me, "Your course, your policy may be clear enough, but you are burdening wealth too heavily by your taxes and by your speeches." Those shocking speeches! "You are driving capital out of the country." Let us look at these points one at a time. The capital wealth of Britain is increasing rapidly. Sir Robert Giffen estimated some years ago that the addition to the capital wealth of the nation was at least between two hundred and three hundred millions a year. I notice that the paid-up capital of registered companies alone, which was 1,013 millions sterling in 1893, has grown naturally and healthily to 2,123 millions sterling in 1908. And, most remarkable of all, the figures I shall submit to you, the gross amount of income which comes under the view of the Treasury Commissioners who are charged with the collection of income-tax, was in the year 1898-9 762 millions, and it had risen from that figure to 980 millions sterling in the year 1908-9: that is to say, that it had risen by 218 millions in the course of ten years.

From this, of course, a deduction has to be made for more efficient methods of collection. This cannot be estimated exactly; but it certainly accounts for much less than half the increase. Let us assume that it is a half. The increase is therefore 109 millions. I only wish that wages had increased in the same proportion. When I was studying those figures I have mentioned to you I looked at the Board of Trade returns of wages. Those returns deal with the affairs of upwards of ten millions of persons, and in the last ten years the increase in the annual wages of that great body of persons has only been about ten million pounds: that is to say, that the increase of income assessable to income-tax is at the very least more than ten times greater than the increase which has taken place in the same period in the wages of those trades which come within the Board of Trade returns.