§ SIR JOSEPH M'KENNA, in rising to call the attention of the House to the unequal Incidence of Imperial Taxation in Ireland; and to move for the appointment of a Select Committee—
To inquire and report whether, since the year 1851, the new and additional Duties which have been levied off Ireland have not increased the pressure of Imperial Taxation on the population of that portion of the United Kingdom to such an extent, that, having regard to the total property and income of the inhabitants of each Island respectively, the Imperial Taxation of Ireland is now doubly heavier than that of Great Britain; whether the entire Imperial Taxation of Great Britain does not barely exceed the produce of an Income Tax of 2s. 6d. in the pound; and, whether that of Ireland does not exceed what would be produced by an Income Tax of 5s.,said, the case to which he asked their attention was quite distinct from that upon which a Committee of the House sat and reported in 1865. There was not any finding of that Committee which anticipated, answered, or decided in any way upon the issue raised by his present Motion, which was one for the appointment of a Committee to inquire into a state of facts without parallel in modern history, into a course of legislation for the last 29 years which had led to results without precedent in this or any other country in the world. Calling things by hard and bad names was not his habit, for that was neither proof nor argument; but it was almost impossible to find words in which to describe the financial policy pursued towards Ireland since 1853, unless one had recourse to very strong terms. His chief difficulty, however, was not to be moderate in referring to the injustice which had been done, but in finding words to describe the ignorance of hon. Members in former Parliaments and in this on the subject. Even this lack of information was scarcely so remarkable as the self-complacency with which those hon. Members seemed to contemplate the conduct of Great Britain and this Parliament towards Ireland in modern times, for it was not infrequent to hear the fiscal legislation for the United Kingdom referred to as if Ireland were in that respect a favoured and cherished sister. There never was a greater delusion. He (Sir Joseph M'Kenna) ought to know whether that was the true relation in which Ireland 913 was dealt with or the true state of the case. He had no interest in misrepresenting England or Englishmen, and he said deliberately that he knew of no country in Europe, and that there was none except Ireland, in which so large a proportion of the total income of its people was levied by the State tax-man. He did not ascribe the evils of which he complained to intentional injustice. He could not believe that the injustice was designed, no matter how it had come about. He believed the right hon. Gentleman now at the head of Her Majesty's Government, when he instituted and led the way in 1853 to the system of taxation which had impoverished Ireland, deceived himself by assuming that identity of imposts was equivalent to, and almost synonomous with, equality of taxation. But this assumption was in the case of Great Britain and Ireland, and would probably be in the case of any two countries so linked together, a monstrous delusion. If there were but one tax on the inhabitants of both countries, and if that tax were an Income Tax, then he admitted that identity of impost would imply equitable distribution of burden. But when, as in the United Kingdom, a comparatively small portion of the Revenue was raised by an Income Tax, and the great bulk raised by sumptuary taxation levied on selected articles, equality could be ascertained only when they had analyzed and affirmed the fairness of the selection. And what was the test of the fairness of selection? It would be found when they had answered the following question:—Were the articles selected for taxation such as, under ordinary circumstances, were equally in demand, equally used, equally consumed in both countries? If they were not equally in demand and equally used in both countries, then identity of imposts might mean the very opposite to equality of taxation; and in the case of England and Ireland the selection made was the very reverse of equality. It was simply legalized injustice. But England and the English Minister had the selection, and they knew what had come of it. It would have been quite easy to have selected articles for taxation on an equally identical plan for the whole United Kingdom, which would have spared Ireland and worked unfairly against England. A moderate tax on 914 cheese would fall heavily on the bulk of the English people, and scarcely affect the Irish in the least; a high scale of taxation on the alcohol of beer, and a lower one on the alcohol in distilled spirits, would be unfair towards the English people, and might be oppressively so. He mentioned these things to illustrate and explode the fallacy of assuming, as it was the habit to assume, that, as all the taxes affecting the Irish people also affected the English, there must be equality of taxation. He would show that these taxes were unequal and unfair in their incidence, that they favoured the richer country, and fell with extraordinary severity on the poorer and more temperate nation. He must now advert shortly to the relative taxation of Great Britain and Ireland anterior to the epoch of 1853. Could any hon. Member, who, from personal memory—as in his own case—or from authentic history, knew what was the condition of Ireland in 1841, or what it was in 1851, testify that Ireland was better able to pay the taxes then imposed upon her than Great Britain was to bear those which fell on herself? He did not apprehend that anyone would maintain seriously that Ireland was not in 1841, before the Famine, and in 1851, after the Famine, taxed as nearly to the full level of her ability to pay taxes as was Great Britain at either of those dates. But, lest there might be anyone ready to assert that Ireland was at either of those dates more lightly taxed relatively to her means than Great Britain, he would now inquire what was the total Revenue raised by the Imperial taxation of Ireland in 1841 and 1851? He referred to the Parliamentary Returns in his hands. In 1841 the Imperial Revenue raised by taxation in Ireland was slightly under £4,000,000. In 1851 it was slightly over £4,000,000. The Revenue raised by taxation of Great Britain in 1841 was over £46,000,000, and in 1851 it was over £49,000,000. At those dates, then, the Imperial taxation of Ireland amounted to a sum equal in round figures to one-twelfth of the sum raised in Great Britain. He would prove to any Committee of the House in more detail than was possible in his present statement that, relatively to the entire wealth of both Islands respectively, the contributions of Ireland to Imperial Revenue in 1841 and 1851 not 915 only equalled but exceeded her equitable quota. Of that excess, however, he did not complain; it was not a proper subject for clamour or popular agitation, even if people understood it, which they did not. He merely referred now to the fact that even then the Irish quota was somewhat excessive in order to emphasize the statement and the fact that, nevertheless, in 1853 a new system was commenced for reducing the quota of taxation borne by England, and for securing the maximum contribution out of Ireland in relief of several Excise and Customs Duties of the United Kingdom, of which latter Ireland's share was scarcely equal to 5 per cent of the new burdens laid upon her. The financial result of the policy of 1853, which he would describe and explain before he sat down, was not long obscure nor long delayed. They would find by the Return in his hand that the Revenue raised by taxation in Ireland in 1861 was £6,420,378, as compared to £4,006,711 in 1851, forcing up on seven years' operation of the new policy the quota of the taxation of Ireland from a twelfth to a ninth, as compared to Great Britain. By the end of the next decennial period the taxation of Ireland was forced up to £7,086,593, or to within a fraction of one-eighth of the sum raised by taxation of Great Britain. This was the modern way of sowing dragon's teeth, with somewhat a parallel result to that of the ancient precedent. All this time illusory statements were being made under the auspices of Dublin Castle, not with the intention to deceive, but none the less deceptive on that account, and Ireland was represented as making great strides in material prosperity because her Revenue, or rather her tribute to the Imperial Revenue, was swollen by new taxes, and under favour of occasional good harvests, she struggled, and, as it turned out, struggled in vain, to make headway against the wasting process and the new impediments to her progress. There was, however, great joy in Downing Street as each fresh additional million was dredged out of Ireland, and poured into the abyss of the British Exchequer, in place of being allowed to remain with the people to reward Irish industry, and to help to fortify and provide the people against the lean years, bad harvests, and hard times which had 916 since come with a vengeance. The vengeance, however, was not wholly for Ireland, for the problem of her pacification remained to be solved, and it would be well if all these millions rendered back could suffice for the solute on in peace. He would now explain precisely how the new taxes came to be cast on Ireland in 1853, and how radically unjust they were. The explanation of what was done in that Session of Parliament practically explained the whole, for the right hon. Gentleman the Chancellor of the Exchequer then announced that he was going in for a system of identity of imposts, and it never appeared to dawn on his ingenuous mind that identity of imposts did not mean actual and equitable equality of taxation; and although other Chancellors of the Exchequer, other Governments, and other Parliaments had since then, from time to time, increased the Spirit Duties and varied the Income Tax, they merely proceeded in grooves defined and deeply cut for them by the legislation of 1853, which laid down the lines of a financial system which, save that it succeeded in extracting a greater Revenue from Ireland than ought ever to have been exacted, was at once unscientific, unjust, and unfortunate. He would next refer to the best records obtainable in an exact and statistical form of the total incomes of the inhabitants of the two Islands respectively, to the extent which the Income Tax Returns reached. He would not commence with the earliest years of the working of the Income Tax in Ireland, for all the sources of income were not at first made out; but he took the Returns for 1861, when the Income Tax had been seven years working. In that year the yield from Income Tax in Ireland was £715,269. In the same year the Income Tax for Great Britain was £9,755,938, which showed approximately taxable incomes 13 times greater in Great Britain than in Ireland. It should be borne in mind that these were the proportions they would find without descending to compare the earnings and incomes of the wage-earning classes in both Islands, in which he could show, were it necessary, that a still greater disparity existed; but he was not driven to force the figures by substituting estimates and hypothesis for statistics. On the contrary, he would make allowance for the 917 fact that the rating of houses and lands in Ireland was made under the Poor Law, or Griffith's valuation, and, the rating in England was presumed to be taken at a fuller value, and, making other trivial allowances, he would adopt the conclusion that the rateable incomes of Great Britain under all the Schedules would indicate the relative ability of one Island to the other at that time as about 1 to 12. There was no rational theory to sustain an assumption that Ireland relatively to Great Britain was better able to bear taxes in 1853 than what the Returns of 1861 would denote; but, if such was the fact, so much the worse for those who argued in favour of the taxation scheme of 1853. It sufficed for him (Sir Joseph M'Kenna) to show that the taxation of Ireland in 1841 and 1851, being already as 1 to 12 of Great Britain, no fresh taxation should have been laid in 1853 on the poorer country, and he had explained that if Parliament were to have measured the taxation to be levied in Ireland by the Schedules prepared for the purposes of the Income Tax, the total contribution of Ireland to Revenue would have been laid down at a thirteenth of that of Great Britain. What excuse, therefore—what plausible pretext—what cogent reason was there for imposing upon unfortunate Ireland in the year 1853 a fresh burden destined to grow weightier and weightier year by year? He might answer that in truth there was, to his thinking, neither cogent reason, rational excuse, nor plausible pretext for doing what was then done; but that which stood in place of reason, excuse, and pretext was this sophism that indentity of imposts was equivalent to equality of taxation, and this corollary that indentity of imposts was to be established as speedily as possible. He gave the right hon. Gentleman now at the head of Her Majesty's Government credit for believing he was doing no injustice; but he was at best legislating in the dark, for there was then no Income Tax Schedule for Ireland to demonstrate the injustice of the scheme. What that scheme was, and how it was followed up, it was his (Sir Joseph M'Kenna's) duty to review by the clear and unsparing light of events. When the present Premier, then Chancellor of the Exchequer, on the 18th April, 1853—that day 29 years—introduced his Budget to Parliament, he had, from 918 several points of view, a gratifying statement to make; but the case had, nevertheless, a shady side, and there was a spectre which it was his business to lay or banish somehow from the feast he was about to spread before an admiring Parliament and an appreciative British public. The spectre, which would have scared anyone else, rose before him in this way. There had been a grim Famine in Ireland in 1846–7. It was no portion of his (Sir Joseph M'Kenna's) present duty to review that terrible chapter of Irish history, some of the details of which would never vanish from his memory. But, as one of the results of that Famine, there were certain debts due by the famine-stricken districts to the Treasury, the greater portion of which a Committee of the House of Lords had already recommended to be treated on distinctly equitable grounds as Imperial Expenditure, and discharged from being a debt of the districts. They were called, in official language, "Consolidated Annuities," and the charge to extinguish them amounted to £260,000 a-year. As was natural under these circumstances, those who were made liable to repay were very fretful, and appealed to the good feeling and justice of Parliament to have them treated in accordance with the recommendation of the Lords' Committee. How this appeal was responded to hon. Members should hear, and how the Chancellor of the Exchequer improved the occasion by an apparent remission of the Famine Debt, whilst he added burdens to Ireland of fresh taxation to an immensely greater extent, laying the foundation or opening up the way for still further levies in the future, until it had come to pass that the drain from Ireland, poverty-stricken as she was, was ratably more than double the amount drawn from the more prosperous inhabitants of Great Britain. What he (Sir Joseph M'Kenna) described was carried out in this way. The Chancellor of the Exchequer made his statement with that matchless power of exposition which not only persuaded the majority of his audience that whatever he said was right, but actually appeared to have the same effect on his own mind. The Income of the year just closed was £53,000,000, the Expenditure something over £50,000,000, the Surplus £2,460,000. What would he do 919 with it? Well, that was a simple question, and the right hon. Gentleman preferred to deal with complex problems; so he set his audience to think upon this one. He proposed to lower his nets again into the waters and make a fresh haul, then to compute what that would amount to before he unfolded what distribution he would make of the loaves and fishes he had already available, and of the further draughts he expected to bring to land. He then made his computations, which had been since all realized, as well as some things consequential which did not appear to have occurred to the mind of the right hon. Gentleman at the time. Well, this was what he said he would do, and did—abolish the Duty on Soap, reduce the Duty on Tea, the Stamp Duty, the Advertisement Duty, and the Duties on about 130 articles in the Customs Tariff. The Consolidated Annuities he would remit in toto.
§ Notice taken, that 40 Members were not present; House counted, and 40 Members being found present,
§ SIR JOSEPH M'KENNA, resuming, said, all these, except the last-mentioned, were bonâ fide remissions and reductions; but the remission of the Consolidated Annuities was quite of another character. This was the policy towards Ireland which the Government pursued. It was a portion of the Budget Scheme to continue the Income Tax for Great Britain. They now determined to extend it for the first time to Ireland; as also to increase the Irish Spirit Duties 8d. a-gallon. The amount of these increases far exceeded—even at that time nearly trebled—the amount of the remission, although that was not quite apparent at the time. At this point, he (Sir Joseph M'Kenna) would shortly observe that he had no objection to an Income Tax for Ireland, nor to a high Spirit Duty. As taxes had to be raised, there were no fairer subjects for impost than income and alcohol; but he maintained that it was monstrously unjust to spare or only lightly tax alcohol in the form which suited English habits, taste, diet, and climate, and to tax more than five-fold alcohol in the form which suited Irish people. But that was what had been done; and he (Sir Joseph M'Kenna) prayed attention to these facts. Before 1853 the tax on the alcoholic equivalent 920 of a gallon of proof spirits, in the form of beer or other brewers' drinks, levied in the Malt Duty and in the Hop Duty, considerably exceeded the Duty on Irish Spirits. The Malt Duty was at the time 2s. 8½d. a-bushel—it was now 6d.—and the Duty on Irish Spirits payable in Ireland was 2s. 8d. in respect to every proof gallon. Beer was then, as it was now, the popular beverage of England; whilst whiskey, diluted in water hot or cold, was the popular one of Ireland. There was not then and there was not now any valid reason why alcohol should be more taxed in one vehicle than in the other; but no serious injustice then arose from the disparity, because, as he (Sir Joseph M'Kenna) had shown, the incidence of the taxation as a total was in the result fairly distributed between the two Islands previous to 1853. But the Budget of 1853 inaugurated a new departure, since which the constant effort of successive Chancellors of the Exchequer appeared to have been to raise the Duty on Spirits in Ireland and to reduce the Duty on Malt, until the fiscal policy toward Ireland had culminated in this incredible injustice—that the tax on alcohol in the popular English beverage was less than one-fifth of the tax on an equal volume of alcohol in the Irish. It must not be lost sight of that this disparity was an innovation—that it dated no further back than 1853, so far as the disparity was complained of, although there were slight variations in the Duty before that date; and, above all things, the innovation had nothing to do with the discouragement of intemperance. When official excuses were made in this House for the inequality of taxation, and the disproportionate sum latterly levied off Ireland, the line of reply generally adopted was of this sort. It was admitted that some inequality did exist, but that such complaints were not confined to Ireland—that the incidence of taxation probably varied as considerably in some parts of England as compared to others as it did between Ireland as a whole and Great Britain as a whole. And the Chancellor of the Exchequer in 1875 proceeded somewhat in that strain. Of course he should say something, and his line was the nearest resemblance to a defence which he could think of. But, with all respect to him, it was no defence whatever—it was the merest evasion. What was complained of was not any 921 defect incidental to all schemes of taxation, except to Income Tax per se; what was complained of was the monstrous inequality brought about in their own time by an innovation made in 1853, which, under the pretence of making some sort of concession by forgiving a comparatively small debt, cast new burdens on the Irish people, already taxed to the full level of Great Britain. This question of the disparity of the incidence of Imperial taxation on Ireland was last brought under the notice of this House by the hon. Member for County Galway (Mr. Mitchell Henry) in the last Parliament. On that occasion the House heard a characteristic critique from a right hon. Member once himself Chancellor of the Exchequer (Mr. Lowe), and now a noble Lord. His line of argument was peculiar and characteristic; he regarded Ireland and Great Britain as geographical expressions merely, and they were not taxed at all; and then he went on to say it was true that individuals happening to reside in these countries were taxed, but they were taxed quite equally, and on the same identical tariff, and there was an end of it—that settled it—argument was exhausted—all was fair. Such absurdities as were here involved scarcely deserved notice, save to exemplify the shifts to which people were driven who had to struggle to defend the innovation of 1853. According to that argument France and Tunis were merely geographical expressions; and if Tunis were incorporated with France, and if there was a heavy tax laid on the date crop and a light one on grapes, it would be quite fair as between the French and the Tunisians, provided the heavy tax on dates applied to dates grown by Frenchmen in Tunis or in France, and the light tax on grapes applied to grapes grown by Tunisians in either country. He (Sir Joseph M'Kenna) had really thought that Æsop's fable of the Fox and the Stork had long since put boyhood as well as manhood on its guard against such shallow sophistry. The legislation of 1853 on this subject did not take place without some earnest protest from an Irish Member. Mr. John Francis Maguire, then Member for Dungarvan, and afterwards Member for Cork City, was reported to have said—
The right hon. Gentleman in the course of his speech—which for a Chancellor of the Exchequer to make was, he thought, one of the 922 jauntiest he had ever heard—said that the justice of the tax was generally felt and acknowledged in Ireland. Now, if that were the case, such a feeling ought to have manifested itself where the Consolidated Annuities were particularly oppressive, and where the Income Tax would be scarcely felt; but what was the fact? Why, it was from those portions of Ireland in particular where the Consolidated Annuities pressed heaviest, and the Income Tax would be felt the lightest, that petitions and remonstrances against the proposal were poured into that House. All the counties in the South and West of Ireland had pronounced against the impost. The attempt to gull the people of Ireland into an approval of the tax by saying that the present proposition was a good bargain, because they would have to pay £460,000 instead of £260,000, to which they were at present liable, was worse than a financial juggle—it was, if he might say so in Parliamentary language, an Exchequer swindle. The trick was so stale, the juggle so plain, and the real object so unconcealed, he could only express his wonder at any man representing an Irish constituency being gulled by it."—[3 Hansard, cxxvii. 530–1.]So spoke John Francis Maguire in that House one day in May, 1853. He thought he had mastered the subject and understood the scope and nature of the transaction, but he had not penetrated far into the future; for, in place of this being the laying on of an impost of £460,000 a-year in lieu of £260,000 remitted, the transaction was ab initio an immensely worse one for Ireland than Mr. Maguire believed it to be when he denounced it—for its author then announced a principle which had been unsparingly applied ever since, under which there had been raised by taxation of Ireland for the last 20 years—not to go farther back—about £3,000,000 a-year more than her previous normal contribution, being at least £3,000,000 a-year more than her quota, if the entire Revenue of the United Kingdom were raised by an identical Income Tax for England, Ireland, and Scotland. There was no test nor analysis of the wealth of Great Britain and Ireland that would not disclose the extraordinarily unfair disparity which existed between the taxation of the people of the two Islands. The latest Return of the comparative population and taxation of Great Britain and Ireland at the decennial epochs was that issued in August, 1874, which dealt with the financial years 1841, 1851, 1861–2, and 1871–2. It was too soon to expect the Return for 1881–2; but there had been no change to affect the case based on the four com- 923 pleted decennial Returns. The respective totals of the incomes of £ 100 and upwards for Great Britain and Ireland were, in the year 1871–2—for Great Britain, £455,750,000; for Ireland, £26,500,000. The total Revenue raised by taxation was, from Great Britain, £57,534,683, which was the merest fraction in excess of 2s. 6d. in the pound on the total incomes; and the Revenue raised from Ireland in the same year was £7,086,593, which equalled 5s. 3d. in the pound, on the total of Irish incomes under all Schedules. What wonder was it that, under these circumstances, an agricultural people would be unable to pay fair rents, not to speak of rack rents? One independent English Member at least expressed in April, 1853, his objection to heaping new taxes on Ireland before she had recovered from the effects of a desolating Famine which had reduced her population from 8,000,000 to 5,500,000 between 1841 and 1851. Sir Francis Baring, on 28th April, 1853, showed that—The relief given to Great Britain by the immediate operation of the Budget of that year would be £1,443,000, and the taxes imposed—new and peculiar to Great Britain—£403,000, making the amount less to be paid by England £1,040,000. He submitted for the fair consideration of his fellow-countrymen, whether it was quite fair, when they would be immediately receiving a relief of £1,040,000, to place a new Income Tax on Ireland, and a whole amount of additional taxation of £413,000."—[3 Hansard, cxxvi. 732.]He had said that the increase of the Duty on Irish Spirits had no connection with a temperance policy, for it singled out the soberest population to mulct them most heavily. The Irish people were in 1853, and were now, the most moderate of the three nations in their consumption of alcohol. The alcohol consumed in beer, spirits, and wine for each unit of the population of England for the year ended 31st of March, 1877, was slightly in excess of four gallons and three quarts.
§ Notice taken, that 40 Members were not present; House counted, and 40 Members not being present,
§ House adjourned at a quarter after Eight o'clock.