for 1927 to 393,700,000l. An addition of 24,100,000l. for motor licences would bring the total tax revenue up to 664,800,000l. This with a total non-tax revenue of 132,050,000l. would yield a total revenue on the existing basis of 796,850,000l., which was 2,500,000l. more than in Mr. Snowden's Budget. Mr. Churchill pointed out that since that time there had been an actual increase in the country's revenue from various sources of about 73,000,000l., the chief items in which were 16,000,000l. from luxury, McKenna, and safeguarding duties, 18,000,000l. additional from the Road Fund and the Post Office, 13,000,000l. additional from reparations and debt settlement, 11,000,000l. from supertax, and 15,000,000l. from other sources, but that this had been nearly balanced by the decrease due to remissions of direct taxation made by himself and of indirect taxation made by his predecessors, and by diminution of special receipts from war stores.

The National Debt had been reduced during the preceding year by only 23,500,000l. instead of the 60,000,000l. which had been intended. With a prospective deficit of 21,000,000l. in front of him, the Chancellor admitted that there was a strong temptation to reduce the Sinking Fund for the coming year by that amount, but he refused emphatically to entertain such an idea on account of the injury which might thus be inflicted on the national credit; the maintenance of this credit was all the more important in view of the opportunities for conversion on a large scale which would present themselves in the coming years. So far, therefore, from reducing the Sinking Fund below the accepted figure of 50,000,000l., he intended to increase it by part at least of the arrears of the year just passed, at the cost of raising his prospective deficit from 21,000,000l. to between 35,000,000l. and 40,000,000l.

The whole of this sum, he admitted, could be covered by an addition of sixpence to the income tax. But from such an heroic remedy he shrank, and direct taxation was left at its existing level. All that was to be done with the income tax was to take certain measures for simplifying it, chiefly by including income tax and supertax in one graduated scale, and by a rewriting of the Income Tax Acts in more modern and intelligible language. Nor was indirect taxation laid under very large contribution to supply the Chancellor's needs. The duties on wine and tobacco were to be increased so as to bring in about 4,350,000l. in the current year, and 4,900,000l. in a full year, and safeguarding duties bringing in nearly a million were to be laid on imported tyres and translucent pottery. But for by far the greater part of the money he required the Chancellor had recourse to devices which were in effect nothing but an anticipating of the revenue of the succeeding year. Following the precedent set a couple of years previously, 5,000,000l. were to be procured by reducing the credit period of the beer excise from two months to one; 14,800,000l. was to be raised by the collection of Schedule A. taxes in one instalment

in January instead of two, in January and July, and 12,000,0001. by transferring the reserve of the Road Fund to the National Exchequer, which would in turn assume the responsibility for financing the expenditure of the Road Fund. By these means the Chancellor brought the total estimated revenue of the year up to 834,800,000l. against an expenditure of 833,400,000l., leaving himself a surplus of 1,400,000l., which he admitted was none too large and required to be fortified by current savings from the estimates of the year.

In opening the debate on the Budget next day, Mr. Snowden criticised its makeshift character, and caustically remarked that the Chancellor of the Exchequer, so far from coming before the House as a criminal about to receive sentence, had himself assumed the pose of the executioner. The fact that Mr. Churchill had now drifted into two deficits and was heading for a third was held by the Opposition to be proof of his failure as a financier; but Ministerial speakers, while lamenting the continued frustration of their hopes of economy, were inclined to congratulate the Chancellor on having extricated himself from a difficult position much more successfully than they had dared to expect. Both Sir Robert Horne, as representing the Conservative point of view, and Mr. Lloyd George, as representing the Liberal, insisted on the capital need for public economy in the interests of the nation's trade and industry, but with the typical difference that the former saw the best field for effecting savings in the restriction of social services, and the latter in the reduction of armaments. Regret was expressed by a number of speakers, including some Conservatives, at the proposed abolition of the Ministry of Transport, an office which seemed more than ever necessary in view of the growing complexity of traffic problems. Mr. Churchill replied to his critics with his usual vigour, and the reception of his remarks on the Ministerial benches showed that his Budget had not as yet alienated support from the Government in that quarter.

Before Parliament adjourned for the Easter recess, the Prime Minister, on April 13, announced that a Bill would be brought in during the next session to equalise the franchise as between men and women at the age of 21. It was calculated that this would mean an addition of about 5,000,000 new voters to the register. The announcement was hailed with delight by the Labour Party, which had long pressed for such a measure, but was received with misgiving and even bitter hostility by sections of the Conservative Party. The opinion was expressed in many quarters that it would have been better to make the age limit both for male and female voters 25 instead of 21, but no organised efforts were made to deflect the Government from its intention.

The annual Conference of the Independent Labour Party held in the Easter recess brought into relief once more both the unpopularity of Mr. MacDonald with a section of the Labour

Party and his indispensability as the party leader. Contrary to a custom of many years' standing, the I.L.P. decided that it would not nominate Mr. MacDonald for the post of treasurer of the National Labour Party at the annual election. This decision made no difference to Mr. MacDonald's position, as it was certain that he would be nominated from other quarters and elected; but it attracted considerable attention as a mark of want of confidence in Mr. MacDonald on the part of a body which, if it was no longer the soul of the Labour Party, as it once had been, still played an important part in its councils, and in which Mr. MacDonald himself had for so many years been a leading figure. The immediate effect of this attack was to strengthen rather than weaken Mr. MacDonald's hold on the party as a whole. A large number of members of Parliament took the opportunity of expressing their confidence in him by protesting against the action of the I.L.P. ; and Mr. Henderson delivered a speech in which he vigorously called them to account in the name of party discipline. The I.L.P. in answer adopted an apologetic tone, and, while not withdrawing its decision, declared its high esteem for Mr. MacDonald, and repudiated any notion of questioning his authority as leader of the Labour Party.

Parliament reassembled after the Easter recess on April 26, and the fight over the Budget immediately began in earnest. The Labour Party opened the attack with their proposal to reduce the tea duty to a penny. Mr. Churchill replied that owing to the general strike and the coal stoppage, any reduction of the tea duty in the lifetime of the present Parliament was out of the question. He went on to point out that the Opposition amendments, proposing the abolition of the duties on tea, sugar, silk, and betting, and of the McKenna and Safeguarding Industries duties, would involve a loss of about 20,000,000l. to the Treasury. Mr. Snowden retorted that even if the loss amounted to 40,000,000l. it could easily be made good by restoring the income tax and the supertax to the point at which Mr. Churchill had found them. This was not an agreement to carry weight with the Conservative benches, and the existing duty on tea was confirmed by a large majority.

The extension of the McKenna duties to include motor tyres was noted by Liberal speakers as another step in the direction of Protection. The same complaint was brought with even greater force against the proposal to impose a tax of 288. per cwt. on imported translucent pottery. There was hardly a pretence on the Government side that the tax fulfilled the conditions laid down in the White Paper on the safeguarding of industries; the President of the Board of Trade (to whom the Chancellor of the Exchequer left the task of defending it) could not deny that the proposed duty would in many cases be equivalent to a tax of from 50 to 100 per cent. on the value of the imported article,

instead of the 333 per cent. allowed by the White Paper; nor did he make any attempt to deal with the objections raised in a minority report presented by one of the three members of the Committee which had examined the application. In answer to Sir John Simon, who brought to light a whole list of irregularities in the proceedings of the Committee, he threatened that if the Opposition were not satisfied with the findings of these Committees of inquiry, the Government would propose such duties as it thought fit without going through the formality of holding an inquiry. Conservative members showed by their applause that they were not displeased with such a prospect, and the resolution was eventually carried by 245 votes to 143.

The discussion of the Trade Union Bill in Parliament was preceded and accompanied by a vigorous campaign in the country both for and against the measure. The Conservatives commenced before Parliament reassembled, sending speakers up and down the country to persuade the public that the main purpose of the Bill, apart from making a general strike impossible, was to protect the peace-loving minority in the trade unions against the tyranny of the majority. A week later the Labour Party opened an equally vigorous campaign, in which the Bill was denounced as an instrument for crippling the trade unions and depriving the working classes of rights which they had won through long years of toil and struggle. For financing the Labour campaign, the National Committee representing the various Labour bodies opened a Trade Union Defence Fund, on behalf of which an appeal was issued by Mr. Citrine and Mr. Henderson, calling not only on trade unionists, but on all who cared for industrial freedom to help to ward off the danger which threatened the working classes.

The attitude of the Trade Union Council to the Bill was defined at a special Conference of Executives of Unions affiliated to that body held in London on April 29-the anniversary of the historic meeting of the similar body which twelve months before had decided on the general strike. A resolution was introduced endorsing the steps already taken with the object of organising the most strenuous resistance possible to this "dangerously reactionary measure as it was called, and pledging the Conference to continue the campaign against the Bill with the utmost vigour, with the object not merely of frustrating it, but of driving its authors from power. The President, Mr. Hicks, in introducing the resolution, described the Government as the most bitter, relentless, and reactionary capitalist Government they had had for four generations, a class-conscious Government serving as the instrument of the meanest and most brutal class interests. Mr. Citrine, the General Secretary of the Trade Union Council, subjected the Bill to a searching analysis, in which he pointed out that, in view of the time and care which had been spent on the preparation of the Bill, the vagueness of its drafting must be regarded as deliberate, and

1927.]

Labour and the Blanesburgh Report.

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as designed to put weapons in the hands of the judges for depriving the trade unions of their rights. He also considered that the omission from the Bill of employers' combinations was deliberate.

A significant episode at the meeting showed how deeply the trade union world had taken to heart the lesson of the general strike and its failure. After Mr. Henderson, speaking on behalf of the Parliamentary Labour Party, had assured the Conference that the political and industrial sides of labour were completely at one in their opposition to the Bill, a "Left Wing" member, Mr. Gossip, was allowed to introduce an amendment calling on the Parliamentary Labour Party to obstruct the whole business of Government in the House of Commons, and on the General Council of the T.U.C. to make all preparations to use the industrial weapon, by a general strike if necessary. The present attack on the trade unions was certainly far more provocative to them than the miners' lock-out had been a year previously; yet the Conference now by an overwhelming majority refused to listen to the proposal, and Mr. Bevin denounced the Communists as being no less the enemies of the working classes than the Tories. The resolution was then carried with a few dissentients.

At the same time that one national conference of trade union representatives was considering the Government's Trade Union Bill, another was considering the Blanesburgh Committee's report on Unemployment Insurance, a subject which also was of vital importance to the Labour world. The chief object of the Committee had been to make the Unemployment Insurance Fund solvent, and for this purpose it had recommended certain reductions in benefit. A memorandum had been drawn up by the National Joint Council of the Trade Union Congress and the Labour Party, stating that the report contained many good features, and that if its recommendations were embodied in a Government Bill, the Labour Party should use its efforts to get it amended so as to harmonise with Labour policy. At the Conference on April 28, Mr. Wheatley and Mr. Cook moved that the Labour Party should reject the report in toto, at the same time strongly attacking the Labour members on the Committee who had signed it. The Conference, however, by a two to one majority, decided to follow the course recommended in the memorandum of the National Joint Council, and Miss Bondfield, as one of the Labour members who had signed the report, defended her action on the ground that it would have been useless to draw up a minority report, and that it was better for the Committee to draw up a scale of benefits than to leave it to the Government to introduce what it pleased.

By the end of April events in China had taken a new turn which effectually removed them from the arena of British party politics. Mr. Chen had replied to the British Government's Note demanding reparation for the Nanking outrages, with an offer to submit the events in question to an impartial inquiry.

The