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THE LORDS AND THE BUDGET.

The House of Lords will presently be face to face with a dilemma in some respects more serious than any that has confronted it since 1832. More serious, because neither in 1884 nor in 1893 was the action of the Upper House likely to involve it in any real danger. In 1832 such a danger undoubtedly existed. Not only was a constitutional change of the greatest moment proposed, but the passions and the numbers of its supporters were such that, in all probability, a third rejection of the Reform Bill would have led to an outbreak of violence, in which the very existence, or at least the essential powers, of the Second Chamber might have been destroyed. Such a conjunction has not recurred.

The Franchise Bill of 1884 was a measure only second in importance to that of 1832; but the dispute between the two Houses turned, not on the principles of the Bill-which, however reluctantly, were accepted by the Lords-but on the question whether or not it should be linked with a Redistribution Bill, acknowledged by the Liberal leaders to be a necessary accompaniment of the larger measure. Narrowed to this issue, the conflict was not one which was likely to involve very serious consequences for the House of Lords, especially as the Parliament was then in its fourth year, and the position of the Governmentas the next session showed-was by no means secure.

In 1893 the measure proposed was one of a revolutionary nature, but it was put forward by a Government whose tenure of office had always been precarious, and it was carried by a small majority, which obviously failed to represent the opinions of the predominant partner in the State. Moreover, a similar measure had been re

jected, only eight years before, by the House of Commons itself; and this decision had been confirmed, on appeal, by an overwhelming majority of the nation. Lastly, it was clear that a hostile vote in the Upper House would not necessarily involve-as actually it did not involve either the resignation of the Ministry or a dissolution of Parliament. In these circumstances, not only could the Lords reject without anxiety a measure like the second Home Rule Bill, but it was their obvious duty to do so.

Very different are the conditions under which the Finance Bill of 1909 will be presented to the House of Lords. In the first place, whatever may be the defects of the measure, whatever may be its ultimate tendencies, especially those of the land taxation clauses, it would be an exaggeration to call it a revolutionary measure in the sense in which the Reform Bill of 1832, and the Home Rule Bills of 1886 and 1893, were revolutionary; still less does it entail such a revolution as would result from the overthrow of the Upper House or from a serious diminution of

its powers. The new land taxes, the heightened income tax and death duties, the enhanced charges on the liquor trade, and other items, are (as we have shown elsewhere) open to the gravest objections, and indicate a class hostility which is much to be deprecated. But, after all, with the possible exception of the taxes on land, they only carry further, if to a dangerous extent, principles applied in previous Budgets. The policy of substituting direct for indirect taxation is no new thing. The selection of particular articles or particular kinds of property for special taxation is a practice which has appeared in many successive Finance Bills; and these special taxes

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have frequently been increased. machinery which places the assessment of the land taxes in the hands of commissioners acting without appeal, and the abolition of those independent General Commissioners who have hitherto formed a court of appeal for aggrieved payers of income tax, are innovations which may possibly be dropped in committee. If not, the Lords would have a good case in demanding the revocation of changes in the law which savor strongly of "tacking," and can fairly be separated from the imposition of taxes, properly so called. At any rate, the Bill which imposes them is an annual Bill; and another year, under another Government, most, if not all, of the objectionable charges may be reduced, the old methods of assessment revived, and the bases of taxation broadened so as to modify, or even remove, the unfairness of their incidence. There seems indeed to be a possibility, if not a probability, that the clauses relating to land may be considerably modified, or even dropped, before the Bill leaves the Lower House. In any case, the mischief done, even if great, will not be wholly irremediable.

In the second place, the Finance Bill of this year resembles the Reform Bill of 1832, and differs from the Home Rule Bill of 1893, in having the support of a large majority of the House of Commons. It is not indeed a freshly-elected House, or a House elected ad hoc, as in 1832; there are signs of a "cave"; and the majorities are not what they were two or three years ago. Recent by-elections and other symptoms may give good ground for the belief that the country no longer supports the Government as it did in 1906, still less as it supported Lord Grey in 1832; but the fact remains, that a very large majority of the popular chamber is in favor of the Bill as a whole.

Thirdly, the Bill in question is a Finance Bill, that is, it concerns a matter which is recognized to be the special province of the Lower House, and in regard to which the practice of centuries has given that House, if not an entirely unrestricted, yet certainly an enormously preponderant influence. The field, therefore, on which the conflict-if conflict there is to be will be fought out, is one extremely unfavorable to the House of Lords. In the other cases to which we have referred, whatever might be the dictates of expediency, there could be no doubt that, according to the theory and practice of the constitution, the Lords were strictly within their rights in opposing the will of the Commons. In the present case, the constitutional rights of the Upper House are, to say the least, obscure and doubtful.

We have dealt with this question in another article, and need say little more about it here. According to the letter of the law-if the word "law" may be used where there is no statute, and not much applicable precedent -the House of Lords may reject a Finance Bill, as it may reject any other Bill. The consent of both Houses, and of the Crown, is required for any act of legislation. But, as regards financial legislation, the veto of the House of Lords has lapsed for almost, if not quite, as long a time as the veto of the Crown with regard to legislation in general. The precedent of 1860-the rejection of the Bill to repeal the Paper Duty-only served to show the way to a practical extinction of the right by the method adopted in 1861, and employed ever since. It was a simple application of the fable of the bundle of sticks. The Lords could break the sticks singly; they could not break the whole faggot. The method itself was an innovation; but it was an innovation which it cannot be denied that the House of Commons had

the power to introduce; and it has been practically successful. To reject the financial proposals of a whole year is a very different thing from rejecting a Bill which imposes, or repeals, a single tax.

Nor did the consequences of this momentous change stop here. It affected the right of amendment as well as that of rejection. So long as Tax Bills came up singly or in small batches from the Lower House, they could be, and were occasionally, rejected. This amounted to a power of amending, not indeed a single Bill, but the finance of the year. When all the financial proposals were grouped in a single Bill, the rejection of an item became a "privilege amendment" to that Bill, and was accordingly refused. Thus the policy of 1861 practically took away, not indeed the right, but the power of exercising the right, of amendment which the Lords had hitherto possessed, however sparingly it might be used. We may, and do, regret this; but we can hardly evade the fact.

It might have seemed that the right of rejection implied that of amendment, as the greater contains the less. But in politics we are nothing if not illogical. The constitutional right of rejection is, at least in theory, acknowledged; that of amendment, at all events of substantial amendment, is denied. It is obvious indeed that, while one party can reject, it takes two to pass an amendment. Either House has the power of rejection; an amendment requires the consent of both. Thus the Lower House, while it cannot prevent the Lords from rejecting a Bill, can, by refusing their amendments, prevent them from amending it; and it does. An insistence on amendment on the part of the Upper House is therefore practically equivalent to rejection. It is obvious that nothing short of substan

tial amendments are worth considering in the present case; and these it is certain the Government will not allow. Even if it were willing to accept a compromise in some particulars, it could not accept one from the Lords; precedent and the necessity of maintaining the Commons' privileges stand in the way. Nor can it, returning to an old practice, drop the Bill and bring in another which should include the acceptable amendments; if there were no other objection to this course, there is no time.

The question then resolves itself into a simple choice between acceptance and rejection. Is rejection likely to be for the good of the State? So far as we can judge at this stage, it is not. Granted -which is by no means certain-that the Bill cannot be appreciably improved in committee, granted, for the sake of argument, that it is a revolutionary measure, the consequence of its rejection may be-we do not say it will be a revolution of far greater moment than is contained or implied in the Bill. The inevitable consequence of rejection must be an appeal to the country; and the Lords would be staking their own existence, and with it the welfare of the country, on the result of that appeal. It would be a dangerous experiment. Are we to hazard the chief safeguard of all that is stable, and much that is admirable, in our political system on a single throw?

In the first place, there is an enormous majority to be wiped out. Byelections point, no doubt, to a change of feeling in the electorate; but byelections are apt to be deceptive. The change is not all in favor of Conservatism. In a good many cases Unionist principles have won, or the prospects of Tariff Reform; in others, the results point to an increase of strength or to better organization in the Labor

party, even to a growth of socialism. Hostility to a Liberal Government by no means necessarily implies adhesion to its chief opponents. The Irish party may be relied on, in a question of this kind, to take sides against the House which is the firmest bulwark against Home Rule. Further, we have only too often had occasion to note the electioneering value of a good cry; and what better cry could the Radical party desire than the cry that the Lords are claiming to control taxation, that they are leading a reactionary attack upon the constitution, that they are shielding the rich at the expense of the poor? We can easily guess the variety of mendacious shapes which such a cry would assume, the variety of interests to which it might be made to appeal. It would be shouted from a thousand platforms, and echoed by millions of throats. In such circumstances, all that has hitherto been gained might be lost; and the Radicals might sweep the country a second time.

It is, of course, not impossible that the result of a general election might be to reverse the verdict of the last, or at least to reduce the Liberal majority to a point at which a serious campaign against the House of Lords would be out of the question. But, supposing a dissolution to take place on the Budget, is such a result probable? It is, at best, but a chancewe cannot but think, a remote chance. If things fell out the other way-and he would be a rash prophet who would assert that they will not-what would be the consequence? It is a comparatively small matter that a Budget far more revolutionary than the present would be forced down our throats; and that a Home Rule Bill would followfor such a Bill would be the prearranged price of Irish support. There would be worse to fear. A determined attempt, with all the prestige

of recent victory, and victory gained on this very issue, would be made to abolish the veto of the House of Lords. The pledge given in 1907 would be redeemed. It must be remembered that the resolution then passed was a resolution in favor, not of the reform of the House of Lords, but of the abolition of the veto, which in grave cases enables it to appeal to the country against a casual majority in the House of Commons. Its passing into action would reduce the Upper House to impotence, and would give us practically a one-chamber constitution. That it was only a resolution is true. But litera scripta manet; it is on record that a huge majority of the House of Commons signed the pledge. This in itself was a great step, a revolutionary step, which a House elected under conditions such as we have sketched would be bound to follow up. No doubt action upon that resolution would require another appeal to the nation, perhaps more than one appeal; but think of the turmoil that would ensue! And in what conditions of external danger might not that disturbance find the country? The question of so great a constitutional change would take precedence of all other questions, even of that of the national defences; and these would suffer at a time when the national existence might depend upon their full and immediate consideration.

It may be urged that this is the occasion to make a stand; that, unless this Bill is resisted, the Radical party, carrying further and further the use of finance as a lever of political change, will introduce all sorts of revolutionary measures under cover of the Budget. But there is surely a limit to so violent a perversion of a constitutional understanding; the sound sense of the nation would rebel against such crooked and illegitimate methods; it would become as impossible to main

tain such an abuse of legislative forms as it was to maintain the trick of "tacking." All financial legislation has, and always has had, indirect political effects of one kind or another. We see no reason to suppose that these will be greater in the future than they have been in the past.

Nor, again, can it be said that, in a case like this, we are urging the Lords "propter vitam vitai perdere causas." They are asked to abandon none of the principles that make life worth living. The abandonment, in the seventeenth century, of control over taxation diminished the power of the House of Lords; it did not destroy its reputation or its utility. Political morality is not in question. There are no pledges to be redeemed, no interests to be protected so sacred as the welfare of the State. It is a question of expediency, the higher expediency. Is it good for the country at large that, in existing circumstances, such a conflict should ensue? Granted that the mischief of the Budget cannot be wholy undone, granted that capital, the life-blood of industry and commerce, will be straitened, granted that certain classes will permanently suffer, these evils are less than those which a defeat at the polls next winter would entail. An injustice to a class, a gross injustice it may be, is preferable to a fatal blow dealt at the foundations of the State. Nor is it an argument to say that, if the Upper House were swept away, a Second Chamber would still be recognized as indispensable; and we might get a better Second Chamber than we have. Who knows? What we do know is that what the Radicals desire is not a better Second Chamber, but the present House reduced to impotence; which would be worse than none at all.

Suppose, on the other hand, that resistance is not pressed to rejection,

what then? How much harm is done? The damage may be serious; most part, at least, is not irretrievable. Suppose the Bill passed; it will be some time before its full effects are felt. We assert that the industrial and commercial interests of the country at large, not those of a particular class, will suffer by the legislation proposed; and we make this assertion in good faith. But it is an assertion the truth of which cannot be brought home to the masses save by experience; and experience, if sure, is slow. The time is not yet ripe; let us have faith in our own predictions. A year hence, or it may be two years, the new taxes will have had time to work, and their general effects may be perceptible. Then we may go to the country with the tangible proof that all classes are suffering; now we can only assert that they will suffer, and assert it on grounds which we can hardly expect the masses to understand. We are doubtless at a certain disadvantage in attempting to judge the question at this moment. During the next two months many things may happen. On the one hand, the complexion of the Bill may undergo a considerable change. On the other hand, events may indicate so great a massing of opinion hostile to the Bill as to make resistance not only feasible but even obligatory. But, with nothing but present facts before us, we are driven to the conclusion that, for the sake of the Conservative and Unionist party, as well as for the good of the State, a Fabian policy is the wisest policy.

The choice, as we began by saying, is a hard one; a harder was never laid on the leaders of the Conservative party. That great pressure will be applied to force them into an attitude of stubborn resistance we cannot doubt. To renounce that attitude will give rise to great dissatisfaction in cer

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