Tag: Leo Amery

  • Leo Amery – 1940 Speech in the House of Commons

    Below is the text of a speech made in the House of Commons by Leo Amery on the 7th May 1940 criticising the Prime Minister, Neville Chamberlain. The speech was considered important in the subsequent downfall of Chamberlain and his replacement as Prime Minister by Winston Churchill.

     

    May I say that I agree wholeheartedly with what just fell from the lips of the hon. Member for Bassetlaw (Mr. Bellenger) as to the responsibility of the Opposition in playing a constructive part at this critical moment? The whole of Parliament has a grave responsibility at this moment; for, after all, it is Parliament itself that is on trial in this war. If we lose this war, it is not this or that ephemeral Government but Parliament as an institution that will be condemned, for good and all. I fully realise that this is not an easy Debate. There is much that ought to be said which cannot well be said in public. After listening to some of the speeches to-day, not least the profoundly impressive speech made by my hon. and gallant Friend the Member for North Portsmouth (Sir R. Keyes), it seems to me that the whole of recent events—not only in Norway, but the whole conduct of the war up to date—calls for searching inquiry, not for one stray private sitting, but for a series of private sittings in which all that Members of Parliament can contribute of their private knowledge should be put into the common stock and frankly discussed.

    Meanwhile, even to-day there is plenty that can be said, that ought to be said, and that must be said frankly; for there are no loyalties to-day except to the common cause. This afternoon, as a few days ago, the Prime Minister gave us a reasoned, argumentative case for our failure. It is always possible to do that after every failure. Making a case and. winning a war are not the same thing. Wars are won, not by explanations after the event but by foresight, by clear decision and by swift action. I confess that I did not feel there was one sentence in the Prime Minister’s speech this afternoon which suggested that the Government either foresaw what Germany meant to do, or came to a clear decision when it knew what Germany had done, or acted swiftly or consistently throughout the whole of this lamentable affair. I am not going to discuss the reasons for the actual evacuation. They may well have been conclusive in the circumstances. But the circumstances should never have arisen; and it is the story of those events—of the decisions, of the absence of decisions, of the changes of decisions which brought about those circumstances—which call for our inquiry and raise many questions which have yet to be answered.

    We were told by the Prime Minister on 2nd May that all except a relatively small advance guard of the Expeditionary Force which was earmarked for Finland had gone elsewhere and that the ships had been taken for employment for other purposes. Even the small, inadequate nucleus that was kept in being had no transports except warships. Why was this done? For months we had been aware that the Germans had been accumulating troops and transports and practising embarkation and disembarkation against somebody. It is perfectly true that they could spare the ships better than we could. But was there any reason which would make us believe that they were sending the men elsewhere? Obviously the danger was there and might develop into actuality at any moment. The Prime Minister suggested that we could not know which of many objectives it might be. Surely we had some good reasons for suspecting which one it might be. The Finnish war had focussed the interest of the whole world on Scandinavia. Within a week of its termination the Prime Minister declared, speaking of Norway and Sweden, that the danger to them—from Germany—”stands upon their very doorstep.” The Altmark affair had before that showed clearly the illegal uses which Germany was prepared to make of Norwegian neutrality. What is more, within a few days of that statement we ourselves decided deliberately to challenge Germany over her use of Norway’s territorial waters. All the world knew that that was the main theme of the deliberations of the Supreme War Council which met, I think, on 28th March. To make that perfectly clear to the whole world, including Germany, the Prime Minister said, on 2nd April: “We have not yet reached the limit of our effective operations in waters close to the German bases.” That was sufficient warning. On 8th April we laid our mines.

    What did we expect to follow? Did we know Hitler and his merry men so little as to think that their rejoinder would be slow or half-hearted, or that it would follow the lines of “too little and too late” with which we have been so familiar here? However, it was not a question of a German rejoinder at all, but of Germany making our half-hearted intervention an excuse for measures far greater in scope and far more daring than we seem even to have envisaged. My hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) was congratulating ourselves upon Hitler’s strategic folly in going to Norway. Does he realise that, from the moment we were in the war, Admiral Raeder insisted that this time the German Navy could not afford to be confined to the existing German coastline, but that, for the purposes of his air and submarine warfare, he must have not only egress from the Baltic but the whole of the indented, deep-water coastline of Norway?

    I understand that information as to this reached our Departments early in January. Was that aspect of the strategic situation considered? Again, it was known everywhere that Hitler had designs on Scandinavia. Was it not obvious that the first stroke must be directed against Denmark and Norway, not only because they were weaker, but because once Hitler had seized them, Sweden was automatically within his power without the need for conquest? I would ask another question: Is it not a fact that the most direct warnings of Germany’s designs against Norway were sent from both Stockholm and Copenhagen in the first few days of April? I am afraid that what really happened was that, while we thought we were taking the initiative, our initiative, such as it was, only coincided with a far more formidable and far better planned initiative of the enemy.

    I remember that many years ago in East Africa a young friend of mine went lion hunting. He secured a sleeping car on the railway and had it detached from the train at a siding near where he expected to find a certain man-eating lion. He went to rest and dream of hunting his lion in the morning. Unfortunately, the lion was out man-hunting that night. He clambered on to the rear of the car, scrabbled open the sliding door, and ate my friend. That is in brief the story of our initiative over Norway. In any case, even if we did not realise that the Germans were acting at the same time, why were we not prepared to meet their inevitable counter-stroke? We had only this inadequate little force, without transports, of which the Prime Minister has told us, in readiness to occupy Norwegian western ports if there were German action against Southern Norway. There was no plan to meet the contingency that Germany might seize the western ports as well or to meet any really serious attack by Germany upon Norway. As we know now, the German detachments for the more distant ports, Trondheim and Narvik, were despatched more than a week before, in readiness for the zero hour when all the German forces were to strike.

    On 8th April we laid our mines. That time happened to be just before Germany’s zero hour. On the morning of that day a great German convoy sailed up the Kattegat and into the Skagerrak on its highly dangerous mission. To cover this daring manoeuvre the Germans sent a large part of their fleet, 48 hours before, away up the West coast of Norway towards Narvik. That action was duly reported to us, and the Prime Minister has told us that the Navy went off in hot pursuit after that German decoy. Rarely in history can a feint have been more successful. The gallantry of our officers and men in the blizzards of the Arctic, and the losses of the German fleet, serious as they were, do not alter the fact that the main German expedition to Norway took place without any interference from the Fleet, except from our submarines. With amazing courage and resolution, our submarines inflicted heavy losses on the Germans. How much heavier would those losses have been if the Fleet or any substantial portion of it had been there then, or, at any rate on subsequent days. That raises very formidable questions to which answers will have to be given sooner or later.

    However, let me come to the next stage. What was our reaction when we learned that Oslo and all the main ports were in German hands? If we had any hope of retrieving the situation in Norway even partially, or of relieving the Norwegian forces, our obvious move was to retake one or other of those ports without a moment’s delay. We now know that the Germans seized them with only the tiniest handful of men. Only by seizing such a port would it have been possible to obtain landing facilities for our artillery and tanks, and above all, aerodromes, without which no operation could be conducted with any hope of success. The port clearly indicated by the circumstances was Trondheim, because it was farthest removed from the main German base at Oslo—which gave us time and the opportunity of maintaining railway connection with Sweden. We could have constructed a defensive line across the waist of Norway, behind which the Norwegian forces could have rallied, and from which we could have advanced, if necessary, to the recon quest of the country. That was the obvious plan.

    The Prime Minister’s statements, however, make it clear that such forces as we had were at once sent off to Narvik, and not to their original destination of Trondheim or Bergen. Why Narvik? If we had held Trondheim, the isolated German force at Narvik would have been bound to surrender in time, and it could have done no mischief to us in the meantime. If we had ever contemplated retaking Trondheim at the start, there could have been no more crass instance of the dispersion, the frittering away, of forces. It is clear, however, from what the Prime Minister said to-day that the decision to send troops to Trondheim to try and retrieve that position was an afterthought, taken only after a number of days, and only at the urgent request of the Norwegians. How was it carried out? We have listened to the impressive speech of my hon. and gallant Friend the Member for North Portsmouth. It is common knowledge that the original plan accepted by the Government for the taking of Trondheim was that the Navy should force its way into Narvik fiord while subsidiary landings took place to North and South. Once in the fiord our ships could command the whole of its vast coastline, with its roads and railway and its aerodrome. What we are entitled to ask is a very serious question: By whom and on whose authority was the indispensable hammer blow at Trondheim itself countermanded? Of course, there were risks. War is not won by shirking risks. Once the linch pin of the Trondheim operations was withdrawn, the rest was bound to fail precisely as it has failed.

    As to those operations, there are many stories that reach us which cannot be discussed here. Our men did their best in impossible conditions, and one can only be glad that they got away. At the same time there is something which I feel bound to say. The Prime Minister, both the other day and to-day, expressed himself as satisfied that the balance of advantage lay on our side. He laid great stress on the heaviness of the German losses and the lightness of ours. What did the Germans lose? A few thousand men, nothing to them, a score of transports, and part of a Navy which anyhow cannot match ours. What did they gain? They gained Norway, with the strategical advantages which, in their opinion at least, outweigh the whole of their naval losses. They have gained the whole of Scandinavia. What have we lost? To begin with, we have lost most of the Norwegian Army, not only such as it was but such as it might have become if only we had been given time to rally and re-equip it. It goes to one’s heart to think of the Norwegian force strapped in southern Norway and forced to surrender after their bitter protest against our withdrawal. I am glad that the right hon. Gentleman the Leader of the Liberal Opposition paid the tribute which he did to the gallantry of the Norwegian troops under adverse circumstances. What we have lost, above all, is one of those opportunities which do not recur in war. If we could have captured and held Trondheim, and if we could have rallied the Norwegian forces, then we might well have imposed a strain on Germany which might have made Norway to Hitler what Spain was once to Napoleon. All we can hope for now is that we may hang on to Narvik, and that will not be too easy, till the tide of war turns against Germany elsewhere. So much for the Norwegian chapter. It is a bad story, a story of lack of prevision and of preparation, a story of indecision, slowness and fear of taking risks. If only it stood alone. Unfortunately, it does not. It is only of a piece with the rest of it, of a piece with our hesitation and slowness in responding to Finland’s appeals for arms, in our handling of economic warfare and the reorganisation of industry, of our re-training of our workers, of the production of the essential munitions of war, of agriculture—in fact, the whole of our national effort, which, according to the Chancellor of the Exchequer, is apparently to be at most 10 per cent. higher in the course of this year than it is to-day.

    The right hon. Gentleman the Prime Minister—I fully understand the good reason for his absence—in a digression explained why he used a certain unlucky phrase about Hitler missing the bus. He explained that what he meant was that during these eight months of war Hitler had lost the opportunity which he had at the beginning of the war because we had been catching up on Germany’s preparations. Believe me, that is very far from the truth. While we may catch up on her presently if only we do what we ought to, there is no doubt that during these eight months, thanks to Germany’s flying start and our slowness off the mark, the gap between the German forces and ours has widened enormously as far as troops, their equipment, tanks, guns and all the paraphernalia of land war are concerned. It has widened in the air, even if we reckon in things which may be “accruing” to us. That is a curious phrase, the precise meaning of which is difficult to determine. I remember that on the very morning of that speech I was reading the financial statement of a company which among its prospects included interest accruing to it from a mine in which gold had not yet been discovered.

    We cannot go on as we are. There must be a change. First and foremost, it must be a change in the system and structure of our governmental machine. This is war, not peace. The essence of peace-time democratic government is discussion, conference and agreement; the Cabinet is in a sense a miniature Parliament. The main aim is agreement, the widest possible measure of agreement. To secure that it is necessary to compromise, to postpone, to rediscuss. Under those conditions there are no far-reaching plans for sudden action. It is a good thing to let policies develop as you go along and get people educated by circumstances. That may or may not be ideal in peace. It is impossible in war. In war the first essential is planning ahead. The next essential is swift, decisive action.

    We can wage war only on military principles. One of the first of these principles is the clear definition of individual responsibilities—not party responsibilities or Cabinet responsibilities—and, with it, a proper delegation of authority. What commander-in-chief attempts to command 20 or 30 divisions in the field? He delegates the task to a number of army corps commanders responsible to him alone, and with authority over the divisional commanders underneath them. The last thing such a commander-in-chief would ever dream of doing is to make some of his army corps commanders divisional commanders as well. What is our present Cabinet system? There are some 25 Ministers, heads of Departments, who have no direct chief above them except the Prime Minister. How often do they see him? How often can they get from him direct advice, direct impulse, direct drive? Who is to settle disputes between them? There should be someone, not chairmen of innumerable committees, but someone with authority over these Ministers and directly responsible for their efficiency.

    There is another cardinal principle of warfare: that is, the clear separation of the framing and execution of policy and the planning of operations, from administration. That is why every Army, Navy and Air Force has its General Staff. It is well known that the same man cannot do the work of administration and also frame and execute policy. How can you get either policy or administration from a Cabinet in which the two are mixed up hugger-mugger as they are at the present time? The next blow may fall at any moment. It may be in Holland; it may be in the Mediterranean. How many hours has any of the three Service Ministers been able to give during the last three weeks to the innumerable preparations required for that contingency? With the present organisation, there is not the slightest chance for them to consider these matters properly.

    The Prime Minister has told us to-day of the change that he has made in at last giving a director and guide to the Chiefs of Staff Committee. He said that this struck him as being a good idea. For four years or more, ever since the Chiefs of Staff Committee was first spoken of in this House, some of us have said that it was impossible to produce adequate plans from a committee of men representing three separate Services, and each concerned to guard the interests of his own Service, without a chief over them. The result has inevitably been what I might call plans based on “the feeblest common denominator.” Now at last something is done to place the responsibility for framing and deciding plans clearly upon my right hon. Friend. The Prime Minister tells us that this has no connection with recent events in Norway; it is just a happy new idea. It is curious how we have for years now so effectively been locking the stable door always after we have discovered the loss of the horse. Anyhow, if those are the right functions for my right hon. Friend, how can he also carry on the tremendous tasks of the First Lord of the Admiralty? The Leader of the Opposition said that it was not fair to him. It is not fair to his colleagues; it is not fair to the nation.

    Believe me, as long as the present methods prevail, all our valour and all our resources are not going to see us through. Above all, so long as they prevail, time is not going to be on our side, because they are methods which, inevitably and inherently, waste time and weaken decisions. What we must have, and have soon, is a supreme war directorate of a handful of men free from administrative routine, free to frame policy among themselves, and with the task of supervising, inspiring, and impelling a group of departments clearly allocated to each one of them. That is the only way. We learned that in the last war. My right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) earned the undying gratitude of the nation for the courage he showed in adopting what was then a new experiment. The experiment worked, and it helped to win the war. After the war years, the Committee of Imperial Defence laid it down as axiomatic that, while in a minor war you might go on with an ordinary Cabinet, helped perhaps by a War Committee, in a major war you must have a War Cabinet—meaning precisely the type of Cabinet that my right hon. Friend introduced then. The overwhelming opinion of this House and of the public outside has been demanding that for a long while. We are told that there would be no particular advantage in it at the present time. I ask, Is this or is this not a major war?

    We must have, first of all, a right organisation of government. What is no less important to-day is that the Government shall be able to draw upon the whole abilities of the nation. It must represent all the elements of real political power in this country, whether in this House or not. The time has come when hon. and right hon. Members opposite must definitely take their share of the responsibility. The time has come when the organisation, the power and influence of the Trades Union Congress cannot be left outside. It must, through one of its recognised leaders, reinforce the strength of the national effort from inside. The time has come, in other words, for a real National Government. I may be asked what is my alternative Government. That is not my concern: it is not the concern of this House. The duty of this House, and the duty that it ought to exercise, is to show unmistakably what kind of Government it wants in order to win the war. It must always be left to some individual leader, working perhaps with a few others, to express that will by selecting his colleagues so as to form a Government which will correspond to the will of the House and enjoy its confidence. So I refuse, and I hope the House will refuse, to be drawn into a discussion on personalities.

    What I would say, however, is this: Just as our peace-time system is unsuitable for war conditions, so does it tend to breed peace-time statesmen who are not too well fitted for the conduct of war. Facility in debate, ability to state a case, caution in advancing an unpopular view, compromise and procrastination are the natural qualities—I might almost say, virtues—of a political leader in time of peace. They are fatal qualities in war. Vision, daring, swiftness and consistency of decision are the very essence of victory. In our normal politics, it is true, the conflict of party did encourage a certain combative spirit. In the last war we Tories found that the most perniciously aggressive of our opponents, the right hon. Member for Carnarvon Boroughs, was not only aggressive in words, but was a man of action. In recent years the normal weakness of our political life has been accentuated by a coalition based upon no clear political principles. It was in fact begotten of a false alarm as to the disastrous results of going off the Gold Standard. It is a coalition which has been living ever since in a twilight atmosphere between Protection and Free Trade and between unprepared collective security and unprepared isolation. Surely, for the Government of the last 10 years to have bred a band of warrior statesmen would have been little short of a miracle. We have waited for eight months, and the miracle has not come to pass. Can we afford to wait any longer?

    Somehow or other we must get into the Government men who can match our enemies in fighting spirit, in daring, in resolution and in thirst for victory. Some 300 years ago, when this House found that its troops were being beaten again and again by the dash and daring of the Cavaliers, by Prince Rupert’s Cavalry, Oliver Cromwell spoke to John Hampden. In one of his speeches he recounted what he said. It was this: I said to him, ‘Your troops are most of them old, decayed serving men and tapsters and such kind of fellows.’…You must get men of a spirit that are likely to go as far as they will go, or you will be beaten still. It may not be easy to find these men. They can be found only by trial and by ruthlessly discarding all who fail and have their failings discovered. We are fighting to-day for our life, for our liberty, for our all; we cannot go on being led as we are. I have quoted certain words of Oliver Cromwell. I will quote certain other words. I do it with great reluctance, because I am speaking of those who are old friends and associates of mine, but they are words which, I think, are applicable to the present situation. This is what Cromwell said to the Long Parliament when he thought it was no longer fit to conduct the affairs of the nation: You have sat too long here for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go.

     

  • Leo Amery – 1911 Maiden Speech in the House of Commons

    Below is the text of the maiden speech made by Leo Amery in the House of Commons on 17th May 1911.

     

    I trust that I may have the indulgence of the Committee for venturing so early in my Parliamentary career to address the Committee on so an important and great a subject as the year’s Budget. I know that I cannot rival the eloquence of the hon. Member (Mr. Dillon) below the Gangway, who has just sat down, nor could I attempt to go into the intricacies of the Budget with that wonderful lucidity and grasp which was shown by the hon. Member for Chelmsford (Mr. Pretyman). What I would like to do, if you have patience with me, is to make a few reflections on the general features not only of the Budget as it stands to-day, but on the financial situation of this country as indicated by this Budget. Before I come to more general topics I should like to say how pleased, as one who has spent a little while in East Africa, I was to hear the Chancellor of the Exchequer say that the pledge given some three years ago by the Home Secretary as regards East Africa is to be fulfilled, and that a loan is to be advanced for the purpose of extending a feeder to the Uganda Railway in East Africa, and that money is to be spent on the splendid harbour of Kilindini and in improving the condition of the town of Mombasa. I am glad to say that there was almost universal approval on the other side of the House of the working and the success of the Uganda Railway. I may say that the success attained has been very striking, considering the great cost of that undertaking. I am not going to say that the work was extravagantly done, in the sense that money was wasted, but the railway was, in the opinion of engineers of Colonial experience in such matters, carried out on much too careful a scale and was much too well done for a new country. Even so, the railway has begun to pay its way. What is important is, that it should have feeders to help to develop East Africa. At present a great part of the traffic over that railway is not contributing to the development of British East Africa, but is bringing traffic from German East Africa from the south shore of Lake Victoria Nyanza. I was very glad to find the hon. Member for East Northants (Mr. Chiozza Money) come out as such an eloquent advocate of a policy of wisely spending money on the development of our possessions. I believe that there is no wiser way in which we can spend money. I May not be a financial purist, but I entirely agree with one who is considered to be so, the hon. Member for the City of London (Sir F. Banbury), who expressed the hope that the surplus might sometimes be devoted to development loans for productive works. The instance of the Uganda railway has not had so much attention paid to it in this House as it deserves. Immense good followed as the result of the loan advanced to the Transvaal and Orange River Colony. There you had a country as empty and utterly desolate as any part of East Africa to-day. There was hardly a farm standing. Ten millions of money spent on railways, and the building of various public works, and ten millions more spent in restoring farms, in bringing to them cattle and stock, brought that country, in six or seven years, into a condition far exceeding anything that could be claimed during the previous fifty years of its history. The lesson which I draw is that what has been done in what, to all intents and purposes was a wilderness, can be done in other wildernesses which exist in our Empire to-day. The Chancellor of the Exchequer said it was sometimes necessary to spend money to utilise previous expenditure. So it is with the expenditure in East Africa on the railway and on the improvement of the harbour of Kilinclini; but we do not know whether the benefit is to accrue to the German East Africa line or to British industry. It is a heavily subsidised line. The hon. Member for East Northants welcomed what the United States are doing in the case of the Panama Canal. The Chancellor of the Exchequer, like many Chancellors of the Exchequer before, has referred to the income which this country derives from the Suez Canal shares.

    For an original cost of less than £4,000,000 we are now earning over a million a year, the company paying between 25 and 30 per cent. But it is doing so at the cost of a very heavy burden laid upon shipping, certainly 78 per cent. of which is British. If I might make the suggestion, it is impossible, I believe, for this country with only a minority of representation upon the Canal Board, to insist upon the rate being lowered. What the Chancellor of the Exchequer himself suggested at the Imperial Conference four years ago was that a rebate might be given to British shipping off the Canal dues. There is this further advantage in that, if they are prepared to give two or three hundred thousand pounds of rebate, we should without doubt get a substantial further grant towards rebate from the Governments of Australia and New Zealand. Again I regret that there was no mention made in the Chancellor of the Exchequer’s statement of the All Red Route, a subject to which four years ago he promised to devote most earnest attention, but of which we have heard nothing since. It is the one subject on which His Majesty’s Government have shown the least indication of readiness to bind the Empire together. The Imperial Conference will meet in a few days, and one would imagine that at any rate the possibility of some contribution being made towards this scheme would be brought forward. I hold with the Member for Northants that every development of opportunities for trade, the opening up of pathways for commerce and finding employment, is money well spent. Money is better spent if you give five shillings to a workman to enable him to earn thirty shillings a week than if you give him five shillings for a week’s pittance. Let me return to the main question, the relation of our revenue to our expenditure. The right hon. Gentleman the Chancellor of the Exchequer spoke with eloquent contentment of the state of trade, and he was ready to wager that we should have another prosperous year. I think he is probably right. A year like the last, which was a very prosperous year, is always followed by large revenue. But the drop in the importation of raw material might indicate a slight check in that movement; whether that is so or not I do not know. But what I do know is that the present movement is not going to last for ever.

    There will be sooner or later, possibly sooner rather than later, a period of worse trade. In fact what other justification is there for that great scheme of insurance against unemployment which has been introduced to the House? The Chancellor of the Exchequer boasted of the present prosperity, and suggested that some of it was due to his own Budget. The hon. Member for Chelmsford (Mr. Pretyman) dealt with some of the details. But might I say that another part of the right hon. Gentleman’s speech somewhat demolished the credit accruing from these taxes against which we protested most strongly in this House, from which we foretold serious consequences, and taxes which, according to him, have not matured yet and have not begun to exercise their in fluence. When the present period of trade prosperity is over, and those taxes are beginning to mature, does he really think they will relieve a depression of British industry, or is it not very likely that they will tend to accentuate that depression? I will not attempt to follow the hon. Member for Chelmsford and the hon. Baronet the Member for the City of London into the discussion as to the extent to which the Death Duties are actually a tax on capital and not on income, or whether they are heavy burdens upon industry. The difficulty is you have the evil in operation, but the effect of it may not be seen for a very considerable period of time, but, generally speaking, I do not think any one who listened to the final remarks of the Chancellor of the Exchequer can doubt that even in this period of good trade we are perilously near the margin of elasticity of our revenue when compared with the steady and ever-growing burdens laid upon it. The Chancellor of the Exchequer has shown a spirit of optimism as to the future burdens to be laid on this country. I noticed that he said nothing about the possible future cost in connection with Ireland. The hon. Member for Chelmsford has referred to the possibilities of increased expenditure in connection with the scheme of Home Rule, and we had an eloquent plea made just now by the hon. Member below the Gangway. It seems to me if we have measures in contemplation of that character on that side of the House, we on our side will, in the same spirit, have to approach the question of Ireland as for the development of East Africa, and possibly to incur substantial burdens in order to develop Irish trade, and if possible to bring back to the population that prosperity which they should enjoy with the rest of the Empire.

    Then comes the question of naval expenditure. The right hon. Gentleman is sanguine because under the statutory provision now in force in Germany there will be a decrease in the German naval estimates in the next few years. But is the statutory provision now in existence in Germany to be the only and the last statutory provision to be put in force in that country? The only test you can apply as to what is likely to happen in the future is the general trend of German policy, and the general trend of German industrial development. The other day, at a meeting of the Iron and Steel Institute, they were deploring the fact that the German iron and steel industry is now twice as large as ours. Can Members of this Committee contemplate that, in the long run, we can attempt to maintain a two-to-one standard of battleships when the other side have got a two-to-one standard against us in the iron and steel industry? Apart from that, let us consider, not only the possibility of statutory provision being made in Germany, but the fact that there are new statutory provisions made in Austria. There may be a great problem before us in the Pacific. Certainly this concentration of the Navy in Home waters is a thing which cannot be continued always. If there should be a demand for warships in other waters, we would have at once either a large naval increase or we should have a considerable increase of military preparation. I for my part, own that our military preparations are utterly inadequate, and the expenditure of five millions more will not be sufficient, even with a cheap and effective system of national service, to secure our home safety, but even on present lines there must be increase of expenditure We have heard a great deal about the shortage of officers, and the fact that the pay of officers is inadequate. We have also heard of the shortage of horses, and if we are to have horses we must pay for them. We have also heard a great deal in the last few weeks about the serious state of the Territorial Army, and it is likely to be still more serious. If the Territorial Army be put on its proper basis, and is to be made to respond to what the Secretary for War expected it to be, it will have to have a very considerable expenditure made upon it. Naval and Military expenditure is necessary, and it is bound to increase.

    I consider it necessary, and I do think it has compensating advantages on which the right hon. Gentleman did not dwell. Certainly as regards naval expenditure it provides a great deal of skilled employment, and, furthermore, it does indirectly give a great deal more unskilled employment, payment for which does not come out of the pockets of the taxpayers. Take the great amounts given for building battleships for foreign Powers—a subsidiary development which is pure profit for the people of this country. Let me now come to the expenditure under this great scheme of insurance. The Bill has been welcomed in all quarters. The sickness part of the scheme has some basis of admitted calculation behind it, though it is bound to exceed the estimate already formed. But as to the unemployment part of this scheme, we have practically no evidence as to what the cost will be on the present narrow and restricted basis, or of what it would cost if other industries insist upon being included in its benefits. When you consider what this will involve in taxation, you must remember the weekly levy upon the employer and the workman, upon which the hon. Member for Leicester (Mr. Ramsay Macdonald) has eloquently insisted. What is the effect of this taxation going to be? The Chancellor of the Exchequer considers, according to an interview reported in the “Daily Telegraph” the other day, that the extra cost will fall on the consumers of this country. Why! he asked, should not the consumer contribute in some measure to the health, comfort, and happiness of those who produce. That is a very significant admission of the Chancellor of the Exchequer. There can be no one stronger on behalf of the cause of Free Trade than the right hon. Gentleman when he is conscious of the fact that he is discussing the fiscal question, but when his mind is on other matters his utterances must be a continual and terrible source of anxiety to the hon. Member for East Northants. If it is the case that the burden falls on the consumer, then what about its effect upon production? In his speech yesterday the Chancellor of the Exchequer noticed that a very small increase in the price of tea appreciably diminished consumption. An increase like this upon the cost of goods in this country would, judging by that, have a very serious effect upon consumption and upon production and employment, and possibly would do a considerable amount of harm to industry. I confess I do not hold the view that this burden is going to fall on the consumer. While, the consumer has got an alternative supply to draw upon, he is not subject to that burden. It would be imperative on the producers unless they wished to lose their employment to pay the tax themselves. If they do the question is upon what part of their expenditure will it fall? The hon. Member for Leicester (Mr. Ramsay MacDonald) suggested that it would fall upon the necessaries of life of the working people. If, as he suggests, the result of this scheme of insurance was going to be that the children of the working men will get less food or clothing, or that they will have to live in worse homes, then I am not sure whether the final result of that scheme will be a great benefit. But let us suppose that they pay it out of luxuries; the Chancellor of the Exchequer suggested that the money they would contribute would be equivalent more or less to an ounce of tobacco and two glasses of beer per week. Supposing it does fall in that way, has the right hon. Gentleman considered that practically six-sevenths of the cost of that ounce of tobacco and two glasses of beer per week is money taken away from the revenue, and that the revenue will thus lose, and that the shrinkage in the consumption of the working man’s luxuries, represented by the ounce of tobacco and the two glasses of beer, would have a very serious effect on the calculations of the right hon. Gentleman?

    Apart from that actual issue of the way in which the tax will be met there remains the fact that these measures add considerably to the burden resting upon the industries of this country. A few years ago a calculation was made, and I think it is generally admitted, that of the cost of production, or the price of any British article in a shop window, something like 12½ per cent. or 2s. 6d. in the £ represented local and Imperial taxation. I think the extra burdens imposed in the last few years, together with the burden now imposed by the Insurance scheme, would bring that amount somewhat nearer t o 15 per cent. If you have a burden of that extent resting on the production of goods of English manufacture, sold in the shops of this country, is it reasonable, and I am not talking at this moment from the point of view of a Tariff Reformer, but from the point of view of the Chancellor of the Exchequer, that £156,000,000 of manufactures coming into this country should he exempt from that duty. That exemption is equivalent in essence to having an Excise and no Customs to correspond with it. I can only imagine that any Chancellor of the Exchequer, who would really face the problem from that point of view, would be bound to deal with it. It is not satisfactory from the point of view of the consumer either, who now imagines that he saves money when he buys untaxed goods; he has still got to meet the burdens that fall on the industries of the country and to meet the taxation himself. Let me give a concrete instance. A man goes into a shop and sees two articles, one costing a sovereign and English made, and the other 19s. 6d. and German made. Hon. Gentlemen opposite recommend him to buy the cheaper article and save 6d., but the so-called dearer article really only costs 17s. 6d., and the remainder went to the Chancellor of the Exchequer. The man makes this assumed saving, but he has forgotten that he is defrauding the Chancellor of the Exchequer of half a crown or three shillings. The Chancellor of the Exchequer does not forget that and when the time comes round he has got to make him pay that sum of money, so that along with the cost there is to be added the half-crown, and thus, instead of having paid 19s. 6d., he has paid 22s. for the article.

    That is not the end of the story, for after buying that foreign article there is somebody unemployed in this country, somebody whose family are suffering and who is suffering himself. That suffering may not attract the attention of the Free Trade purchaser, but it attracts the warm-hearted sympathy of hon. Members opposite and of the Chancellor of the Exchequer, who comes to this House with a large scheme for insurance and relief which involves taxation. The Free Trade purchaser finds he has also got to pay for keeping the man whom he deprives of his employment? Even there the story does not finish, because this German article he has bought goes to strengthen the wealth and prosperity of Germany, and a considerable portion of it goes towards the revenues of that country, and a considerable portion of that may be devoted to battleships. Then the First Lord of the Admiralty comes down here and tells this House that he has discovered some time after the event that the Ger man navy has been increased, and the Chancellor of the Exchequer, hoping against hope that this may be the last time, asks for a further increase in the Naval Estimates. Thus your Free Trade purchaser who followed the advice of hon. Gentlemen opposite finds that the article for which he paid 19s. 6d. costs him from 24s. to 25s. I wish to suggest that to impose an equivalent burden upon those £156,000,000 manufactured in other countries equivalent to the burden upon our industries is not protection but equalisation. Hon. Members opposite, on the reasoning which they so very often employ against the advocacy of Protection, say that a disadvantage from the revenue point of view of a system of Protection is that you tax part of the supply, and only part, and that only the taxation on that part supplies revenue, and that the price of the whole supply is raised, and that consequently a heavy burden of taxation falls on the consumer and which does not find its way into the Treasury, but into the pockets of capitalists. If that is so I would ask the Members of the Committee to consider the present case, where we have a burden of from 12½ to 15 per cent. put upon the goods made in this country, and that the portion of the supply coming from abroad does not pay anything.

    The conclusion, according to the argument of hon. Gentlemen opposite, is that this country at this moment is paying from £15,000,000 to £20,000.000 to the capitalists of other countries and capitalists who are not amenable to the Chancellor of the Exchequer, whose incomes he cannot touch and whose deaths give him no satisfaction. To put on equalising duties, by the argument of hon. Members, would only mean that the revenue would be getting what at the present moment is going to foreign capitalists. As a matter of fact, I do not share that view in its entirety, and I do not hold that foreign capitalists are making a profit to that extent; but I imagine, in those instances where they are making a substantial profit, that an equalising duty would cause them to lower their prices to contribute the cost of that and relieve the taxpayer of this country. In other instances I believe the real truth is that they are not producing as cheaply as our manufacturers, but owing to the unfair handicap caused by their not having to pay an equalising share in our taxes, they at present can compete where they ought not to compete.

    That brings me to the point, or dilemma, that was raised by the hon. Member for Greenock, and also by the hon. Member for Woolwich. They said, “If you do impose those duties for revenue on the foreign importations, and if you do get your revenues, where does the case for employment come to, and if you do keep out those goods and get employment, what happens to your revenue?” A more absurd dilemma there never was. There is no dilemma. If the goods come in then the revenue gets the money; if the goods do not come in, and instead of that are produced in this country, then by all the channels of revenue that production will yield the extra money to the revenue. According to the existing basis of taxation they yield to the revenue at the rate of something like from 12½ to 15 per cent. Therefore there is no question of having a dilemma from which we cannot escape. If we can find employment and production, the revenue will come. That is really the main point. Look after the production of the country and the revenue will look after itself. That was the great point Mr. Gladstone made in his great Budget speeches when he said in taking off one tax and adding another, he did not care so long as they made for the development of commerce.

    The whole issue between hon. Members on this side and the other is that we hold that you raise your revenue from the production of the country, and that wherever you raise it and in whatever particular way you raise it, the cost of that burden is inevitably diffused over the whole of the production. Hon. Members opposite, more particularly the hon. Member for Leicester, the hon. Member for East Northants, and to a very large extent the Chancellor of the Exchequer himself, have a sort of notion that the annual wealth of the country is something that is taken out of a large sack, and distributed in unequal amounts into the pockets of different classes of persons, and that it is there, and that it ought to be taken to a larger extent out of those pockets where they are most full, and to a less extent where they are not so. That is an entire misconception of the nature of the income of this country. The income of this country is not something which is distributed and then remains in various pockets. It is something that is continually in circulation. To use the phrase of a leading economist, there is a continuous wheel of wealth production.

    Money goes into the pockets of one class, and is spent in supporting another class. That goes in its turn to still another class, and so on. To this rule there are certain exceptions. There is such a thing first of all as the circulation of wealth within a certain limited class. A very appreciable portion of the large nominal incomes of what the hon. Member for Leicester called the classes is due to the fact that they pay each other large sums. Thus you have successful barristers and doctors who exchange with each other in the guise of high fees. These fees are not a real addition to wealth, but they represent a certain scale or convention of living. Take the wealthier parts of London where you have high rents, which the same landlord class pay out in high fees to doctors who pay those rents and to barristers who pay those rents, and to dear shops and restaurants. In one way or another a very appreciable proportion of the nominal income of the so-called classes is money that circulates among themselves. If you tax income at a moderate rate you do not prevent the process of circulation amongst them, but if you raise Income Tax beyond a certain point you may find them stopping the circulation of money and you will have an appreciable shrinkage of wealth from which you can get revenue. There is a further point. The circulation of wealth need not take place wholly within the country. There is a necessary and salutary circulation, in which raw materials that are required are brought in from outside, and manufactured articles are sent out by us. There is also a circulation in which only a small part of the process is in this country. People get income from investments in other countries, and they spend income in supporting the labour of those other countries. In that case only a small portion of the circulation is in this country, and a very small portion of the income will serve its natural and proper purpose of providing income for other classes. I will not attempt to labour that somewhat elaborate economical point further.

    The ultimate source of revenue is the production in this country. If you want to lighten the burdens of the working people the task to which you should devote yourself is not that of discovering elaborate means of punishing this or that class, with a view to getting more out of one class than out of another, but that of finding means to increase the amount of production in this country, and to increase the demand for labour. In conclusion, though I believe the condition of the revenue can be enormously improved by a different fiscal system, I feel that the responsibilities which are going to be laid upon this country in future are so great that no fiscal system based on the resources of the United Kingdom alone can ever bear them. We have to face an immense task—a task which two islands like these can never face alone. If I may adapt the famous words of Canning we must call a new world of Empire into being to redress the balance of the old. The lesson I draw from that is that when you consider the proposals which have been made for drawing the Empire closer together by preferential tariffs, by expenditure on better means of communication, and so on, you should not look at them from the point of view of fiscal theory, or from the point of view of the immediate expenditure involved, but you should consider what their effect is to be on the Budgets and the social programmes of the future. Hon. Members should remember that every quarter of wheat brought from Canada carries in itself some contribution towards the ultimate solution of the great problem of defence, because the man in Canada is prepared to take a share in the defence of the Empire, either in his own person or in contributing to the revenues of a Government which has already done something, and mill in time to come do more. By that very act we are also contributing some thing towards solving the social problems of the country. I am not talking of the advantages to trade, because I am not now making a speech on Tariff Reform, except in its revenue aspect, but even in that aspect the task of the social reformer will be lightened.

    I conceive that the true object for social reformers to have in view is, not to aim at the impossible, not to demand reductions or armaments which would bring the country into danger, and undermine the whole groundwork on which any social reform must rest, but to find ways and means of diminishing the intolerable nature of the burden by calling in others to share that burden. May I appeal still more earnestly to Members of the Government, who in the next few days are going to enter into discussion with representatives of the dominions beyond the seas as to how best the Empire may be drawn together and strengthened? I ask there to forget for the moment that they are a party majority in this House, and to remember that they are the representatives not only of the England of to-day, but of the England of the future. I ask that, in considering the schemes brought before them, they should judge them not in a narrow spirit, but broadly, looking to what they may mean in the long run to the revenues of this country and its prosperity.