Valuation of Real Property

These proposals necessarily involve a complete reconstruction of the method of valuing property. The existing taxes upon real property are levied upon the annual value of such property as a whole without distinguishing between the value which resides in the land itself and that which has been added to it by the enterprise of the owner in erecting buildings or effecting other improvements.

Indirect Taxation

I am not going at this late hour to enter into any discussion of the principles which ought to guide a Finance Minister in the imposition of indirect taxation. But one thing I am sure will be accepted by every Member of this House, and that is that we ought at any rate to avoid taxes on the necessaries of life. I referred some time ago, in the course of a discussion in this House, to the old age pension officers' reports. There was one thing in those reports which struck me very forcibly, and that was that they all reported that the poorer the people they had to deal with, the more was their food confined to bread and tea, and of the price of that tea, which of course was of the poorest quality, half goes to the tax gatherer. That is always the worst of indirect taxation on the people. The poorer they are the more heavily the tax falls upon them. Tea and sugar are necessaries of life, and I think that the rich man who would wish to spare his own pocket at the expense of the bare pockets of the poor is a very shabby rich man indeed, and therefore I am sure that I carry with me the assent of even the classes upon whom I am putting very heavy burdens, that when we come to indirect taxes, at any rate those two essentials of life ought to be exempt.

There are three other possible sources beer, spirits, and tobacco. . [No increase on beer, but an estimated amount of £1,600,000 to be raised by increased taxes on spirits.] .

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Increase of Tobacco Duty

I have still nearly two millions more to find, and for this I must turn to tobacco from a fiscal point of view, a much healthier source of revenue. The present rate of duty on unmanufactured tobacco containing 10 per cent or more of moisture is 3s. a pound, with equivalent additions to the rates for cigars, cigarettes, and manufactured tobacco.

Conclusion

I have to thank the House for the very great indulgence which they have extended to me and for the patience with which they have listened to me. My task has been an extraordinarily difficult one. It has been as disagreeable a task as could well have been allotted to any Minister of the Crown. But there is one element of supreme satisfaction in it. That is to be found in contemplating the objects for which these new imposts have been created. The money thus raised is to be expended first of all in insuring the inviolability of our shores. It has also been raised in order not merely to relieve but to prevent unmerited distress within those shores. It is essential that we should make every necessary provision for the defence of our country. But surely it is equally imperative that we should make it a country even better worth defending for all and by all. And it is the fact that this expenditure is for both those purposes that alone could justify the Government. I am told that no Chancellor of the Exchequer has ever been called on to impose such heavy taxes in a time of peace. This, Mr. Emmott, is a War Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away we shall have advanced a great step towards that good time when poverty and wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests.

Extract 59

A SOCIALIST'S VIEW OF THE BUDGET

(Mr. Philip Snowden, Commons, November 2, 1909) MR. SNOWDEN 1: I have followed, as far as I have been able, the speeches and arguments advanced in the country in opposition to these proposals, and, so far as I can judge, there have been not many objections but only one objection to this Bill, and that one has been that the Bill is Socialism, or, in the words of Lord Rosebery, it "is the end of all things religion, property, and family life." . . . Now, I shall confine my remarks to dealing with the objection that this Budget Bill is Socialism. I may begin by attempting to define what we, who profess to be Socialists, mean by Socialism. The Attorney-General was right in saying that Socialism means State action, but that is not exactly the definition of Socialism which was given by the right hon. Gentleman the Leader of the Opposition at Birmingham about twelve months ago. If I may be permitted I will read the right hon. Gentleman's words, because they admirably serve my purpose. The Leader of the Opposition-speaking, I believe, at the opening of that curious anachronism, a Tory labour club, about twelve months ago, a club which I believe has since found its way into the Bankruptcy Court - gave this as his definition of Socialism:

It seems to me there is no difficulty or ambiguity about the subject at all. Socialism has one meaning, and one meaning only. Socialism means, and can mean nothing else, that the community or the State is to take all the means of production into its own hands, that private enterprise and private property are to come to an end, and all that private enterprise and private property carry with them. That is Socialism, and nothing else is Socialism. Social reform

and I ask here the attention of the House to the distinction which the right hon. Gentleman attempted to draw between Socialism

1 Parliamentary Debates, Commons, Fifth Series, vol. 12, col 1681 sqq.

and Social Reform I shall, later on, endeavour to show that there is really no distinction where the right hon. Gentleman attempts to establish it. The right hon. Gentleman goes on to draw a distinction between Socialism and Social Reform, and he says:

Social reform is when the State, based upon private enterprise, recognising that the best productive results can only be obtained by respect of private property and encouraging private enterprise, asks them to contribute towards great national, social, and public objects. That is social reform.

I accepted the statement made by the Attorney-General that Socialism is State action. But it is something more than that. It is State ownership of the means of producing and distributing wealth. There may be State action which is not connected with the ownership, control, and management of industry. We as Socialists recognise that. We recognise, too, the existence of conditions which everybody deplores, and we recognise further that the cause of those conditions is to be found in the monopoly of the means of production and distribution—at any rate in the monopoly of land and capital. Our purpose is to substitute for private ownership of land and capital public ownership and control of both. But that is not a thing which can be accomplished at once. We realise that. Meanwhile we are anxious to do something towards bringing it about. The right hon. Gentleman defines Socialism as the State ownership of the means of producing and distributing wealth. May say I do not accept that? The definition by Socialists of Socialism is not the State ownership of land and capital. That is only a condition of Socialism or a means of Socialism. Socialism means that all socially created wealth shall be owned by the community, and that its distribution shall be directed by the community for the good of the community. The national ownership of land and capital is a necessary condition to attaining a state of things like that. We recognise that we cannot reach our goal under the present system and at once, and we are anxious, therefore, in the meantime, to divert as much as we can, and as rapidly as we can, socially created

I

wealth for the purpose of dealing with industrial and social evils which are the result of the private ownership of land and capital. Therefore, although the taxation of socially created wealth may not be Socialism in itself, it is a step towards Socialism, and therefore, in so far as this Budget taxes socially created wealth for social purposes, it is Socialistic. But it is not Socialism.

Now I come to the point whether there is anything new or novel in the proposals of this Budget. The Attorney-General, no doubt, described certain proposals as being novel, but I have not been able to discover any novelty whatever in any one of the proposals of the Finance Bill. To my mind there is nothing new in it. It is too late in the day to begin to talk about the beginning of Socialism; as a matter of fact we are well on the road to Socialism, and all the legislation of the nineteenth century has been nothing more or less than an effort on the part of this House to deal with the evils resulting from the private ownership of land and capital. Throughout the whole of the nineteenth century we have been moving in our legislation towards Socialism first of all by constantly increasing legal restrictions in the free and individual use of land and capital. Our public health legislation is an illustration of that. If you require further illustration there is the Factory legislation. There is no difference whatever in the economic effect upon private monopoly of the Workmen's Compensation Act and the factory legislation and public health legislation, and the direct taxation upon the profits on monopoly which has been acted upon by all parties in the State.

The second way in which we are moving towards Socialism has been the gradual supplementing of private voluntary charities by public organisations for dealing with the poorest parts of our population. That is accepted by the party opposite and, indeed, by every party in the House, and the Old Age Pensions Act is an illustration of that. Then we have been trying to raise the condition of the poorest part of the population by such measures as the Education Act. What makes a measure of that kind all the more Socialistic