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Speech Archive

Leader's speech, Manchester 1909

Arthur Balfour (Conservative)

Location: Manchester

Commentary:

The issue of tariff reform was a central theme of this speech, and Balfour challenged the claim that this measure would hamper the cotton industry in Lancashire. He then attacked the government’s Budget proposals, one of which was the introduction of a tax on land values. Balfour claimed this move would destroy both private ownership in land and the security of property in general, and on this basis he supported Lord Lansdowne’s motion that called on the House of Lords to reject the Budget. Other key issues at the time of the conference were Home Rule and the Navy.

Lord Derby, my Lords, ladies and gentlemen. This, I think, is the first time that I have had the pleasure and the honour of addressing a Manchester audience since my official connection with this city was terminated three years ago (Shame.) I well remember that day. It was probably the lowest in the political fortunes of our party, and I do not blush to acknowledge, I am not ashamed to acknowledge, that I re­gretted the severance of a connection of 20 years with this great centre of political life and energy. Ladies and gentlemen, if I read the signs of the time aright, since then a mighty revolution has been effected in the opinions and sentiments of our countrymen. They have had this three years in which to consider and compare the promises and performances of our successors in office. They have measured these performances and weighed these promises, and I do not think that the result is likely to be in favour of those who have succeeded us in the responsibilities of Government. However that may be, I am a not going to detain you today with a survey of the past. The present and the future is what concerns the politician - (cheers) - and he leaves, and rightly leaves, the past to be discussed and dealt with by the historian. How, then, about the present and the immediate future? What are we to say of the great questions which now exercise the mind of every person who concerns himself with the fate of his country and of the Empire – ­every man who knows how much depends, and will depend for months and years, upon the decision which in a few weeks must be taken by our countrymen? (Cheers.) Now, I am not going to attempt anything so rash as to survey within the course of an hour’s speech the whole field of political controversy, nor am I even going to touch upon matters which I think may engage, and even absorb, our attention at no very distant date, and which I am well aware are cast into the background at the present moment by the insistent results, the overmastering excitement, naturally aroused by the crisis with which we find ourselves directly face to face.

Home Rule and the Navy

I am going, therefore, not to refer, except by mentioning them, to two such questions vital to the future of this country - Home Rule and the Navy. (Hear, hear.) No man who listens to me underrates the importance of these questions. They will be, I am convinced, in your minds when you are asked to give your vote at the poll. You will ask yourselves - I hope every elector will ask himself - whether the vote he means to give is a vote apart from all the pressing and immediate controversies on which I am going in the main to speak tonight. He will ask himself whether the vote he is going to give is a vote for preserving the unity of the United Kingdom from internal disruption, or whether it is a vote that is going to secure the unity of the Empire which depends on it from external aggression. (Cheers.) These points cannot be, and ought not to be, absent from your minds, but I am well aware that it is neither Home Rule nor the naval position of this country which at this moment is exercising your mind, but a group of very different problems closely related to each other indistinguishably - not indistinguishably, but yet inextricably - interconnected, and it is on these that I mean to speak to you tonight.

Tariff Reform

What are they? Tariff Reform - (prolonged cheers) - the Budget - (cheers) - Socialism - (‘Boo’) - and the House of Lords. (Cheers.) Now, ladies and gentlemen, I am told that the feeling in favour of Tariff Reform in Lancashire is more lukewarm, is less ardent, than is certainly to be found in other great centres of the country. (‘No.’) Well, I may be right, and I may be wrong, but what I am told is that there are a certain number of persons, otherwise by sym­pathy, by tradition, and by connection, members of the party to which we all belong, who look with considerable distrust and suspicion at the effect which a fiscal change is likely to have upon that great industry with which the fortunes of Lan­cashire are all so intimately bound up, and forms so great and honourable a part of the in­dustrial activity of our industrial country. What is the reason? If acts be true, what is the rea­son of this? I am told that the reason is that there are persons who fear in the first place that a fiscal change will increase the cost of living to the workingman of this country, and that by increasing the cost of living to the workingman of this country it will throw the burden on the industries in which they are engaged which will react unfavourably on the industry - the cotton industry as a whole. (Cheers.) I do not believe a word of that (Cheers.) Of course, anything that diminishes the prosperity of the workingman of this country would affect not merely them - they are the most important element in the country, but it would affect all other classes also. (Cheers.) But certainly I should never touch, I should never give my adhesion to any fiscal change of importance which increased the cost of living - the ordinary Budget expenditure of the working classes of this country. (Cheers)

The Cotton Industry

No man of common sense can deny that Fiscal Reform disposes of the fears that import duties are going to hamper Lancashire.

I cannot even imagine it is supposed that that result will follow, and I do not believe it will follow. But, mark you that is not the only reason, perhaps it is not the main reason, why is supposed by some unwise, unsympathetic thinkers in Lancashire that the fiscal system is going to injure the staple industry of Lancashire. There are other reasons. They say the cost of manufacture will be augmented. I was given yesterday a very interesting article which appeared in a Radical newspaper intended for consumption in Lancashire, in which the case against fiscal reform in relation to the cotton industry was set out as length, and I confess I read that article with great astonishment, not unmingled with some amusement. The article stated that the cotton industry, those engaged in the cotton industry in Lancashire, were now fighting for their lives to keep down prices in international competitive trade. They stated further that fiscal reform in the form of import duty would hamper the industry of Lancashire in international competition, in the competition of neutral markets. Lancashire is now struggling to keep its head above water; it is fighting a difficult fight against international competition in order to keep our position in the cotton trade in neutral markets. I suppose that this newspaper knew what if was talking about. (‘No.’) Well, at all events, it knew the opinions of those it quoted. It knew ­the opinions of the various people engaged in the Lancashire cotton industry which it quoted; and the phrase that I have given you is one of those that it quoted. But observe what follows from that. The whole theory is that wherever import duties are put on competitive industry is endangered in neutral markets, that the country which puts on these duties handicaps itself in the international struggle. Well, that is very interesting. But who are we struggling against? (Cheers.) Who are these competitors? Who are these nations against whom we can just, but only just, hold our own, and against whom we shall be no longer able to hold our own if any form of import duty, unbalanced import duty, is put on? Who are they? Protected countries - (cheers) - which have the tariffs, which I certainly do not recommend, personally, this or any other country to adopt. But they are labouring under this difficulty in an aggravated form, which even in its lightest and most innocuous form we are told will ruin Lancashire in the markets of the world. (Cheers.) But is not that nonsense on the face of it? How on earth can anybody seriously say that when they see that in protected neutral markets a protected country like Germany is increasing faster than we are, I do not think that proves one way or another that Fiscal Reform is right, but surely no man of common sense can deny that it disposes of these fears that the import duties are going to hamper the great industry of Lancashire. Here I am, for I am still glad to identify myself with a Lancashire audience, here are we with the traditions of more than a century, far more than a century behind in the cotton trade, and all that tradition gives us, and the knowledge and education of our people, with the best machinery and the best climate and other circumstances which should aid us, and then comes the least happily circum­stanced country on us, and gains on us we are to be told that the import duties required for these revenue purposes are going to destroy our trade.

On Dumping

Is that what they understand by Free Trade?

That is not all I learned from this interesting article. I gathered that they were afraid that these import duties might prevent the dumping of steel, for instance - that was the example given - by the Steel Trust of America. If that goes on, says the article, if you are going to put duties on steel, from the steel trust, and on machinery, from the machinery trust, the industry of ‘dumping’ is gone. Is that what they understand by Free Trade? (Cheers.) Remember that if steel is to be dumped, it is not because steel can be produced more cheaply elsewhere than it can here, but because the high protective duties in America enable a great cor­poration like the Steel Trust to ‘dump’ their steel here at prices at which it would not pay the English producer of steel to turn out that commodity. This is the whole theory of dumping in a word, and now we are told on the authority of their writers – (laughter) – we are told that Free Trade is necessary to Lancashire, to the cotton industry of Lancashire, because, without what they choose to call Free Trade, steel made in a protective country would not be dumped in this country to the injury of our own producers. In other words, the Free Trade of those advo­cates of the cotton industry means, and means only, that some other British industry shall be unfairly competed with (Cheers.) Do not tell me that that was the meaning of the word free trade, which those in whose honour this hall was built would not have repudiated with indignation. I am not here to defend the idea of Mr. Cobden. I dissent, and have always dissented, from, his Imperial views, from his economic views, and from his social views. I think he was too much of a little Englander. (Cheers.) I think he hated social reform with a sincere hatred; I mean he hated the measures we call social reform - and rightly so - and he opposed them in his lifetime, and his whole scheme of political thought was one which I have never been able to sympathise with. Do not tell me he would have given in to absurdities such as these. He never would have told one industry ‘you must submit to be unfairly competed with in order that some other industry may flourish.’

So-Called Free Trade

His idea was Free Trade all round. (Cheers.) He hoped and he believed, firstly, that he would live to see; and secondly, that if he did not live to see, that at all events it would come in a brief period. It has not come, and it is not coming, in the lifetime of any man, even the youngest whom I am now addressing. But at all events neither Mr. Cobden nor Mr. Bright I believe would have given their adhesion to that absurd and bastard form of Free Trade which does not say let each country produce and sell its produce to another country freely without the barrier of tariffs. That was his idea. He would never have said let the country, under the head of Protection and tariffs, produce commodities and then sell its surplus to its neighbours in such a way as to ruin the legitimate interests of its neighbours; but at least the modern Fiscal Reformer and the ancient old Radical Free Trader may shake hands and may join in repudiating the new school which has sprung up, which is as oblivious to the old doctrines of economic Free Trade as it is to the new conditions of modern competitive industry. (Cheers.) Now, if I do not, for these reasons, hold the view that the cotton industry is going to suffer, you may, well ask me - you will be right in asking me - is the cotton industry going to gain? I think it is going to gain. (Cheers.) And I think it is going to gain in two ways. I think, in the first place, it is going to gain by the commercial treaty-making power - (cheers) - which Fiscal Reform - and Fiscal Reform alone -(cheers) - can give you. Why is it that Germany, for instance, is gaining on us in the markets of Central Europe in the matter of the cotton industry? Partly, it is proximity, but not mainly. Largely, I have no doubt, it is due to effective treaties. And the more the current industry goes along its present channel, the longer the present system -inter­national system - prevails the more certain it is that whatever part the labour difficulty, the complication, and the friction arising from these international arrangements will continue. I do not say that under the new system the Foreign Minister will have an easier time; he will have a much harder task. I do not say that compli­cations will be avoided, or difficult questions in the House of Commons and in the country may not be raised. (Cheers.) Believe me, it is quite impossible for us under modern conditions to hold our own against countries not less well equipped than ourselves, for the great industrial fight - international fight - when we deliberately throw away the one weapon which they find effective. (Cheers.) We are too proud - or too stupid - (loud cheers) - to turn it to full account. (Cheers.) That is the first and positive gain which I think will accrue to the great staple industry of this part of England - (hear, hear) - and I do not mean to say that will occur in the first few months that Tariff Reform is passed, but it is a weapon you will have to use year by year with various successes towards immense advantage. 

Colonial Markets

I am confining myself to hard business, commercial facts.

What is the other? The other is Colonial Preference. (Cheers and renewed cheering.) My lords, ladies and gentlemen, the time was when it was the fashion to sneer at Colonial Preference when the idea that this country had much to gain by closer commercial relations with our Colonies, was hardly regarded as worthy of the consideration of any practical statesmen or economists, and was regarded as a dream of ideal Imperialists. That view is abandoned. There can be no doubt, and there is no doubt, that at this moment, while the Colonies chose to give us preference we gain immensely thereby - (cheers) - and I believe that the gain which is great now will augment year by year as time goes on, and, as these great sister States increase in population, increase in wealth, increase in their demand, preference will mean more and more to the great industries of this country. (Cheers.) I have not time today to dwell on a side of this question which appeals to me quite as much, I admit, appeals to me perhaps more than anything which can be expressed in pounds, shillings, and pence. I have not time to dwell on all that the Imperial aspect of Colonial Preference means to those who think with me; on this question, so intimately bound up with the future of our country. I am, for the moment, confining myself to the hard business, commercial facts, and I say that the cotton industry of Lancashire is not merely threatened by the growth of com­petition in the Central States of Europe; but that it is threatened also in the East by American competition - of which you have only seen, be­lieve me, the beginning - by Japanese competi­tion - of which you have only seen the beginning also. And it is threatened also - though I am no pessimist, and do not wish to speak in terms of pessimism - by difficulties of supply of the raw material on which our very existence, the exist­ence of the cotton industry, depends. Now, some of these dangers, no action of this Government - I mean of the Government of this country - can easily prevent. Other dangers there are which I think it would prevent, and in any case it can do all in its power to reserve what will in the future be some of the best markets on which we have got to depend. Are you going to do it or not? Is there a man in the cotton industry who seriously says, ‘I am indifferent to the colonial market; I am ready to take all my risks there, though I admit they are growing communities whose demand will increase year by year, though I admit they give us a preference, and though I admit this very immense benefit, and that it is a growing benefit, I am so wedded to the caricature and travesty of a doctrine based on a system of 50 years ago that I won’t move a finger either to extend or to preserve that preference from which economically, as well as materially, so much is to be gained?’

Appeal to Free Traders

To those so-called Free Traders I would venture to make this appeal. They must have been embarrassed in comparing their economic doctrines with historic fact to see how enorm­ously German prosperity and American pros­perity have grown up at the very moment, or at all events contemporaneously with the imposi­tion of high protective duties. But I will suggest to them an answer conforming with their own doctrines. I suggest to them that a part of that marvellous growth has been due to the fact that, whereas in times past Germany was cut up into different states, with different tariff systems, it is now a great homogenous empire, with free trade with its other states, which from these commercial treaties are brought into economic relation, and extend the area through which Free Trade - or perhaps I should say freer - is allowed to prevail. To return to America, you have the same phenomenon in the enormous area within which there is this free interchange of economic forces. May I suggest to them that if they really be open to learn from the lessons of their age, if they can modify their theoretical teaching in conformity with experience, they ought to make a great effort to extend the economic bounds of these islands, and bring into freer economic relations with us those parts of the Empire bound to us by senti­ment, but divided from us more or less by these fiscal arrangements. (Cheers.) My belief is that if the author of the French Treaty could be with us - he might not indeed agree with me or others who take strong views on this subject - ­I am perfectly confident he would hold very different views from what in his name are put forward as Cobdenite ideas; but he would open his eyes to the actual facts of the world in which we live, and being deprived of his dream of universal Free Trade he would modify his views as to the commercial value of empires, and would say ‘let us have a freer trade if we were isolated and highly protected communities, we could hope to attain.’ Well I don’t mean to - I have got a good many things I want to say - and I don’t mean to deal further with this particular aspect of the question.

Budget of Bad Finance

Disastrous to Lancashire and every other great industry.

I turn now to another reason why Lancashire ought to welcome the advent to power of the party to which I belong. The only practical alternative - of practical politics as we all know them to be - the only practical alternative to Tariff Reform is the Budget. (‘Hear, hear,’ and ‘No, no.’) Some gentlemen seem to think they have another expedient, and if they were in power that expedient might take shape, but any man who looks at the world in which we live, at all events, knows that in November 1909 there is before the country no other than those two alter­natives - the Budget or Fiscal Reform. (Cheers.) Put me down in my study with pens, ink, and paper, and I can discover a dozen things which might look like alternatives. But the only two practical alternatives are these two. And the Budget, I say, for reasons I am to give you, is disastrous - (cheers) - disastrous to Lancashire and for every other great industry in this country. (Cheers.) Now, just for a moment consider what that Budget is. (‘Whose Budget is it?’) I am not going to attempt to enumerate the number of speeches I have made on it, and I am not to repeat, or even attempt to summarise them, but you may say truly of this Budget that it is a combination of bad finance - (cheers) – and muddle-headed Socialism. (Loud cheers.) It is bad finance because, for instance, it has raised the tobacco duties to a point which is perfectly pre­posterous. It has destroyed the spirit duties, it has rendered alcohol useless as a fiscal engine at all. It has thrown a gigantic burden on the country the necessity to carry out a universal land survey which is to bring in nothing in the immediate future, and as I believe, very little in the remote future. (Cheers.) And some of its provisions seem to me directly calculated, some of its purely financial provisions, the great augmentation of the old death duties, seem to be directly calculated to produce unemployment in many parts of the country. (Cheers.) I do not see that anyone has ever explained how you can take great fragments of capital suddenly on the death of an individual, which may happen at any moment, how you can take these great masses of capital and put them in the Exchequer without injuring the industry of the locality where that capital is invested. (Cheers.) Well, that I call bad finance, but I am not going to discuss that part of the Budget which deals with bad finance. I am going to deal with another part of it, which I describe as muddle-headed Socialism. (Cheers.) There are more than one part of the Budget which comes under that description. I think, for example, that the method of dealing with licenses is abominable and unjust. (Loud cheers.)

Muddle-Headed Socialism

Some remark not very audible was made by a member of the audience, but the chairman asked the speaker not to pay any attention to it.

Mr. Balfour said: I did not hear it, and I should like to pay attention to it. I am not going to discuss them, having given this concise and unexaggerated view of my estimate and their character, because they are complicated with controversies about temperance, controversies about the monopoly value given by the State, and the rest of it. I am going to take as what I am told is the popular part of the Budget, the land taxes. I am told that is the only popular part of the Budget. Those who like nothing else about the Budget like that. That is the thing that anybody who wishes to do his best, I will not say to instruct his countrymen, but to give his ideas to his countrymen irrespective of whether it is popular or unpopular. Very well, then, may I just say what I think about the tenure of land in a few sentences in this country. There are people who tell you that the land of the country belongs to the people. When you ask them what they mean by that they tell you they do not believe it belongs to the people of the country. They think it ought to belong to some public office which should manage the whole land of the country. In other words, the land is not to belong to the individual of the country at all. I do not think that that is a reasonable way of looking at land; and it is not the way that any progressive community has ever looked at land. I think the land, personally, ought to be in private ownership, and the wider that private ownership is extended - (cheers) - the better that would be. I do not want all the land of the country to belong to the Woods and Forests. I want it to be distributed as far as possible in private ownership; that it should be held widely by individuals; that it should be regarded a favourite investment for building societies; that it should be regarded as perfectly safe for invest­ing benefit funds; that it should be regarded as a legitimate way in which friendly societies might put those great resources which the thrift of the community has so happily committed to their charge.

The Taxation of Land

The land values of Manchester are not going to Manchester.

And I wish also to see that business in land shall be like any other business, freely transacted without perpetual interference by a depart­ment, or a valuer, or an inspector, or anybody else. (Cheers.) I am, of course, in favour of land being taken at a fair value, but the idea that you are going to improve the lot of any man in this country by destroying private ownership in land, or by endangering it, appears to me to be pettifogging. I am one of those who are most anxious to see small agricultural ownership greatly increased. (Cheers.) What is one of the reasons why I am anxious to see that? I am anxious to see it because ownership, not the ownership of the State, but under the individual, carries with it now, and through all history carried with it, a stimulus, an energy and self-sacrifice which nothing else can give. It is a great mistake to suppose that as a matter of plain and obvious necessity the life of the agricultural small owner is easier than that of the agricultural labourer. It is a harder life, but it has great advantages, and those who feel that they have in them the spirit of the agriculturist and the power to improve, let us help them by all means, let us help them by every means that either the State or the individual can give to obtain that ownership, which does not carry with great hopes of immense profits, but which, though laborious, is honourable, which is independent, and which is certainly in the interests of the community at large. Now I should like to know how you are going to estab­lish agricultural small ownership, or indeed any other kind of small ownership. (A voice: ‘By the taxation of land values.’) Here is a gentleman who thinks that the security of the agricultural small owner and his happiness in his holding will be increased by the taxation of land values. (Laughter.) I beg most respectfully to differ from him. If you are honestly desirous of encouraging this form of ownership do not subject it to special and invidious treatment at the hands of the Chan­cellor of the Exchequer. No man who really understands what he is talking about - (cheers) - no man can really say that the multiplication of small owners, whether in town or country, can be promoted by the kind of legislation about land for which this Government has made itself responsible. If that is true of the small owner­ship, it is also true of that other department of energy and enterprise connected with the land, the land treated as a business for building investment. (Cheers.) I venture to assert that no competent authority has ever suggested that the treatment which land near towns is receiving under this Budget will not diminish enterprise in that land, because it diminished security. (Cheers.) And distinguish in your own minds between two things which are perpetually con­fused by the advocates of the Budget They say the taxation of land values for the purposes of the rates has been recommended by a great many quite independent individuals, many of them well known. How does the taxation suggested in the Budget differ from the taxation of land values?

Taxation of Land Values

It differs by the whole difference between the Pole and the Equator. (Laughter.) Taxation of land values for rating purposes is legitimate if it can be shown that the land or the values which they desire to rate are values which are not paying their fair share of the local rates. (Hear, hear.) That is a perfectly legitimate argument in my opinion, just as it is legitimate to say that the personalty in the town which certainly does not pay its fair share might be legitimately asked it you can discover the necessary machinery to contribute to the rates from which it profits, and that all forms of property which benefit by rates should contribute if you can find machinery for it. I have no quarrel with the broad doctrine whether it be applied to personalty or realty. That is not the doctrine of the Budget. The doctrine of the Budget was - (loud laughter) - that all these land values should be taxed, not for the benefit of the rates, but for the benefit of the Exchequer. (Hear, hear and a voice, ‘Lloyd George.’) Some gentleman in the audience has summarised by saying ‘Lloyd George.’ Well, that was modified. It is quite true that it ‘was’ - (cheers) - but now let us say ‘is.’ The doctrine of the Budget is that half of these rates are to go to the Exchequer and the other half - to the rates? Not a bit of it. Nobody knows where they are going. (Laughter and cheers.) All we do know is that the land values of Manchester are not going to Manchester, but we do not know where else – whether to a bog in Ireland, or a mountain in Wales – (laughter) – or wherever it may be. (Cheers.) They are, at all events, not going to Manchester, and the whole point of these observations of mine is this - taxation of land valuation - or, at all events, the principles I have enunciated - means a dropping of the rates. What the Budget does is to select a par­ticular form of property - it may belong to the rich, it may belong to the poor, it may belong to any class of the community at all and isolates it and puts it on a special taxation. Now let me tell you that you cannot do that avowedly, of set purpose, and as a principle of your Budget without endangering that security which is the very basis of all enterprises whether in Lancashire or elsewhere. (Cheers.) A correspondent has been kind enough to send me this morning an extract from a Socialist newspaper of repute - (laughter) - which seems to me to bear precisely on this point. The three lines which I am going to read to you are very well worth the study especially of Liberal politicians. (Laugh­ter.) I will read you three lines. ‘The Liberal Party,’ says this Socialist organ, ‘is digging its own grave by using arguments against the landowner which are at least applicable to capitalists.’ I do not think that Socialists are practical, but they are logical, and there is not the slightest doubt that what this Socialist organ says is absolutely true. (Cheers.) You cannot invent a series of work like this which the present Government has invented against not merely a particular kind of property in general, but a particular kind of land with which I am glad to say I have no connection.

The Security of Property

The so-called popular part of the Budget requires the serious attention of the working classes.

The Government cannot invent or use these arguments without destroying the security of every kind of property. If you think a rich man ought to pay more than he does to the national needs tax him according to his wealth, but do not tax him according to the kind of property he holds or happens to have. (Cheers.) Nothing will justify that, nothing will justify it in policy. It is very difficult to frame systems of taxation which shall be fair all round, but these people are doing it on purpose. (Cheers.) It is not an unhappy incident of their Budget, it was the object of their Budget, and an object like that destroys all security, and my Socialist friend whom I quoted is absolutely right, and the Liberal Party are undermining their position by using arguments against one particular kind of property which, in the words of the article, are at least as applicable to the capitalist as they are to the landlord. (Hear, hear.) Let Lancashire, and let Britain, beware of anything which shall render a man insecure in the possession of that which he has honourably acquired by honourable means, and invested in legal investments. (Cheers.) Cast these principles to the winds, and, in my judgment, you will have done more to prompt the owners of capital to employ it else­where, to diminish the employment of your people, to aggravate the evils under which we all suffer, than any other kind of legislation, any other kind of either wisdom or folly, in the matter of arrangement of tariffs, can possibly produce. I feel that it is this part of the Budget, so-called popular part of the Budget, which requires the serious attention of the working classes of this country, more than any other part; and it is to that part of the Budget that I would I respectfully invite them to give their attention. Don’t let them entertain the folly of supposing that they are attacking a rich class. They are doing nothing of the kind. They are first attacking the owner, rich or poor. If you attack the mortgagee you attack the debenture holder, and if you attack the debenture holder you are not far from attacking the shareholder, and there comes into our competitive system of modern industry that fear of insecurity you have rashly produced at the base of your fabric, and which will spread through every vein and fibre of the system. (Cheers.) After what I have said, is there a man or woman who doubts that the issue which the Government have raised with this Budget is one of the greatest questions before the country within the memory of most who are present here tonight. If it be an issue of that gravity, who is going to decide it? (Cries of ‘The people.’)

What Happened in 1906

Is it going to be the Chinese Labour Majority? (‘No!’ and cheers.) Is it going to be the Chinese Labour majority of 1906? If it is, can we any longer really maintain that the people of this country manage there own affairs? Was there anybody in 1906 who foresaw a Budget of this character? (‘No,’ cheers, and a Voice: ‘Only Churchill.’) Even he (Mr. Churchill) kept his prophetic powers secret. (Cheers.) Compare the treatment which two successive Governments have given to two great fiscal issues. The fiscal controversy, as you all know, was raised before the late Government left office. We always said it had never been before the people of the country, that they had never had an opportunity of pronouncing on it, and that it would have been a misuse of the majority which we were given in 1900 if that majority had been used to press forward Tariff Reform. We may have been right or we may have been wrong - that was our view. Now this Government have not the smallest right to come forward with these novel, and, as I think, dangerous proposals - (cheers) - force them through the House of Commons in these endless sittings, and then make them law before the people of the country had had a word to say on the subject. (Cheers.) For my own part, there­fore, I rejoice to see that Lord Lansdowne - (prolonged cheers) - has embodied in one concise and complete phrase the whole doctrine I have endeavoured to preach to you. He has moved, or he has put down on the paper to be moved next Monday, a resolution which, as you know, is couched in these words:

'That this House (the House of Lords) is not justified in giving its consent to this Bill until it has been submitted to the judgment of the country.'

(Loud and prolonged cheers.) Your cheers tell me that, at all events, in your judgement, he was amply justified in the course which he has taken. (Hear, hear.) And surely that is so. I am not going to weary you - (cries of ‘Go on’) - with antiquarian law as to the precise historic position of the House of Lords in connection with money Bills.

Duty of the House of Lords

To see that there shall be referred to the people that which concerns the people.

Like all histories of the evolution of our institutions, there are controverted points in it.  It is difficult to reduce it to an absolutely coherent or logical theory. And to all events I do not mean to deal with it tonight. I mean to take broader grounds. Nobody really doubts that Mr. Glad­stone was right when he said that the House of Lords were perfectly justified in rejecting a Budget - technically it was within their power as part of the constitutional machinery of the country, to carry out this course. No one really doubts that. Again, I imagine nobody doubts that the course is a grave one; that it involves a serious responsibility and raises important issues. We are all agreed in these two propositions, I think. I am going to suggest a third one, which you won’t find in the textbooks of con­stitutional lawyers, which has been embodied in no resolution I know of either to the House of Lords or to the House of Commons, but never­theless is a most important element to the free institutions under which we live. What is the principle? The principle is that the old equality between the two Chambers has been modified in the course of time, and that we all recognise that it is a representative Chamber which in most respects takes a leading share, and has a leading responsibility in proposing legisla­tion, and more especially in dealing with money Bills. But there is another side than that. While the House of Lords is no longer, as I think, in the position that many people supposed it to be, let us say, one hundred years ago, of co-equal authority, it will be absolutely fatal to the free institutions of this country if you were to deprive it of the power of saying there are some matters of such grave moment on which the country has been ill-informed or with which it has so few opportunities of considering that we much insist that the country shall declare its will before we give our assent. What is the object according to the modern constitutional power. The object of a Second Chamber is not and never has been to prevent the people, the mass of the community, the electorate, the constituencies, determining what policy they shall pursue. It does not exist for that. It is for the purpose of seeing on great issues that the policy which is pursued is not the policy of a temporary majority elected for a different purpose, that represents the several convictions of the people who are returned to the House of Commons for the few years in which they exercise their mandates, and uses the power with which they have endowed it. There are other purposes, important purposes but subsidiary, but the great function which the House of Lords has to perform is to see that the Govern­ment of this country is a popular Government. (Hear, hear.) What it has to do on this fortunately rare, but all the more important, occasion is to insist that this or that Ministry, powerful for the time, whose powerful principles - no longer powerful it may be - that this or that Ministry is not to be clothed with that all-tyrannical power we have done so much to prevent. (Hear, hear.) The object is to see that there shall be referred the people that which concerns the people, and that the people shall not be betrayed by hasty legislation, interested legislation, legislation having had, it may be, some electoral object in view, or some vindictive policy to carry out (Cheers.) They exist in order to see that before such abuses are permitted, the country, at all events, shall make itself responsible for the action, and if the action ends in disaster, the country, and the country alone, will have to beat the responsibility. That course Lord Lansdowne has recommended the House of Lords to take. He has asked them, or is going to ask them, on Monday next, to take such action as will compel the constituencies of this country to be consulted before they commit themselves to a scheme which I, at all events, from my heart believe inimical to the interests of the poor. (Cheers.) Is he wrong? (Voices: ‘No.’) He is abundantly right. Never was there an occasion on which this power vested by Constitution in the Second Chamber could be more legitimately exercised. It may be a matter of doubt how the country will pronounce. (Cries of ‘No.’) You and I may hold that good sense, honesty, public interest, the recognition of all that is involved in public faith and public security will ensure that this unhappy Budget will be rejected just as we may hope, and as I do hope, that a wiser system of taxation, one more suited to modern times, to modern necessities - (hear, hear) - to the modern difficulties of a great producti­ve country may be put in its place.

The Great Issue

Whatever be the issue which is going to take place before the only final tribunal of arbitrament that we know, whatever the final issue of that trial, I say that Lord Lansdowne is right - (cheers) - and unless I greatly mistake the temper which this great meeting has shown, unless I am wholly wrong in my estimate of the feeling which prevails with increasing strength day by day, week by week, in every constituency in the country, we may yet hope that our countrymen will show now, as they have ever done in crises so many and so varied in our long history, that moderation and that resolution which has prevented our suffering from any of the catastrophes that have visited our neighbours, and that it may yet please Heaven to see us through all the difficulties, and they are not small, which beset our path both as an industrial and as a military community in the near future. These, ladies and gentlemen, are the thoughts suggested to me on this great occasion by the crisis in which we find ourselves. I believe that you feel as I feel, and that all of us are prepared to come forward and take our part in the contest which is before us, knowing that the contest will be severe, knowing that it will involve sacrifice, labour, and energy on the part of any one of us, and knowing also that in its results are involved great issues for good and evil for the country and for the empire to which we belong. (Pro­longed cheers.)

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