The Chancellor of the Exchequersaid that he had no objection to the interest of the loan being secured for the present year according to the mode pointed out in the plan of the noble lord (H. Petty). He wished, however, to avoid pledging the house to approve of any part of that plan for the future. He was very ready to agree to the first object that was stated, to prevent any new taxation in the present year; he was ready to agree to the 10 per cent. which was created for the interest of the loan of the present year, and the sinking fund; but there were other parts of that very complicated system which required a more ample consideration than could be well bestowed upon it in the course of the present session. There were many objections to the principle of making permanent those taxes which were originally raised as mere war taxes, and making them the fund which was to secure the interest of the loans. He had been well informed, that a considerable degree of sensation and alarm had been excited by the idea of continuing the duties on exports and tonnage after the war, and he thought that was a part of the noble lord's plan which ought not to be persevered in. What he meant now to propose was, that the interest of the loan of this year should now remain on the war taxes as charged in the noble lord's plan; but that six months after the conclusion of peace, unless some other mode were resolved on by parliament, of securing it either by continuing the war taxes for the purpose, or by new taxes, it should then be chargeable on the surplus of the consolidated fund. He trusted, however, that the house would see that enough had already been done in the present session for providing for the interest of the loan of this year without any new taxes; and he should wish to leave the general question open for the enquiry of the house 428 in the next session. The completion of any permanent system must take a considerable time; and since the plan was originally proposed, a great deal of new light had been thrown upon the subject, both in the discussions which took place in and out of that house. He concluded by proposing an amendment to the clause in the bill agreeably to the observations he had thrown out.
§ Lord H. Pettysaid, that if the loan of the present year were secured in the manner which had been already determined by the resolutions of that house, he could have no objection to adjourn the consideration of the general merits of the plan he had the honour to bring forward to a future time, when it might be submitted to the fullest enquiry, and to the final judgment of parliament. As to the alarm and sensation produced, if any such alarm did exist, it must have proceeded from a misunderstanding of what he had said. He had stated most expressly, that he did not wish to pledge the house to the continuance of any one of those taxes, but that he meant merely to assign that portion of the taxes, which was now represented by the war taxes, as the security of the loan; and to pledge the house only to substitute other taxes for any of those which they might resolve to discontinue. As for what taxes should be continued after the war, and what should be discontinued, he had always stated, and still was of opinion, that the return of peace would be the proper period, in which that subject should be taken into consideration
§ Sir T. Turton rose ,to enter his protest against the plan of the noble lord, and particularly that part of it which made the income or property tax permanent. He had received a number of letters on the subject of the income tax, and he thought that—
§ Mr. Hobhouse ,chairman of the committee, here interrupted the hon. baronet, and told him that the property tax was not mortgaged by the present bill, and had nothing to do with it.
§ Lord H. Pettysaid, that if the hon. baronet would keep his speech for 3 or 4 years, it might possibly then apply to some question relating to the property tax.
§ Sir T. Turtonsaid, that he had no ambition to make a speech upon the subject in three or four years. However, as he now found that the property tax was not mortgaged at present, and that the loan was to be secured on the war duties on customs and excise, he felt that he could not then offer his objections to the property tax.
§ Mr. H. Thorntonobjected to the principle which had been proposed by the chancellor of the exchequer, of throwing generally upon the consolidated fund a loan which had been contracted for on a different security. He thought that this was not only contrary to all precedent, but to that good faith which parliament owed to the public creditor.
§ Mr. Huskissondid not think the principle so very objectionable. By the present plan, the excesses of the consolidated fund were to be applied in a manner different from their original destination, which might as well be called a breach of faith. It appeared to him that it would be giving to the public creditor an additional security.
§ Mr. Tierneysaid, that the principle of the right hon. gent. was merely that the war taxes should be security for the interest of the loan, and that after the peace that security was no longer to be continued. There never was before an instance of any loan being secured merely on the future excesses of the consolidated fund. It had happened at different times last war, that there was no surplus, and that was a case which might again occur. Sometimes there was an actual deficiency, and in that case this would provide no security at all for the loan of the present year. He could not conceive any objection to letting the thing stand as it did at present, at least as far as regarded the loan of this year.
The Chancellor of the Exchequerwould have no objection to extend the period to twelve months, after peace, instead of six; in which case parliament must meet, and would have time to decide finally on the subject. He thought nothing could be more objectionable than the principle of the present plan, which went to pledge the house to continue 9½ millions of taxes as a security for 12 millions of money. The surplus of the consolidated fund was now 3½ millions, and he thought that was a very abundant security. It certainly would be possible to avoid the pledging the whole of the war taxes, by making permanent some of the least objectionable of them.
§ Mr. Tierneyagain protested against looking to a supposed future excess of the consolidated fund as a security. It would be entirely departing from all the principles of finance which had been established in this country. The fact now stood thus: the original bargain with the contractors for the loan was, that it was to be secured on those 430 taxes, and in consequence of that bargain, the ministers received their money, and had it now in their pockets. It was, then, too much now to say, that we would neither give them that security for which they bargained, nor any other security, such as was ever given for a loan, but throw them merely on the chance surplus in the consolidated fund, when peace should be restored.
The Chancellor of the Exchequersaid, that the public creditor was not entitled to more from the war taxes, than a security for the interest of the loan, and for the sinking fund created. As to charging loans on the surplus of the consolidated fund, it was not so extraordinary as had been represented. The chancellor of the exchequer of Ireland (sir John Newport) had charged any deficiency in the product of the sugar tax upon the surplus of the Irish consolidated fund.
§ Mr. Tierneysaid, the arguments of the right hon., for he could no more call him the learned, gent., were such as could not be excused in a man who had been five days chancellor of the exchequer. If he were appealed to as a lawyer, he could not argue that it would be better for his client to have one security than two, and that if he already had two, it would be doing him no injury to take away one of them. There never was an instance of any loan charged upon the consolidated fund without making some increase to it by taxes. If the right hon. gent. would assign 1,200,000l. taxes, for the interest and sinking fund of the loan of this year, he would be content; but if he did not, the contractors had, in common justice, a right to the security for which they originally bargained.
§ Sir John Newportstated, that the difference in the case of the Irish loan was, that it was secured upon annual, and not upon permanent taxes.
The Chancellor of the Exchequersaid, that no absurdity could, in practice, be greater than that of assigning a portion only of the war taxes for the loan. It would be impossible to tell the collectors of the customs or excise, that they must stop collecting the taxes when they had got so much money. He did not, however, now wish to press his amendment, if it did not meet the sense of the house; but it appeared to him that the house had an undoubted right to substitute the security of the consolidated fund for that of any particular taxes
§ Lord H. Pettysaid, that, in the present case, there was no substitution at all. The 431 right hon. gent.'s idea would go merely to take from the contractors of the loan one of their securities, without giving them any thing in the place of it. As to the general security of the consolidated fund, and the faith of parliament, they were already possessed of that. The right hon. gent., therefore, appeared to him to wish to take from them the specific security of the war taxes, without giving them any thing else in the place of it.—After a variety of explanations, it was resolved to postpone the discussion till to-morrow.