HC Deb 19 February 1807 vol 8 cc921-30
Lord Henry Petty

moved the order of the day, for taking into further consideration the report from the committee of the whole house, to whom it was referred to consider farther of the Finances of the country.

Sir James Pulteney

contended that it was erroneous to suppose any violation of faith towards the stockholder in diverting the sinking fund. It was not alone from the quantity of sinking fund brought into the market, but from the proportion of the sinking fund to the debt untouched within the year. The price of stocks was at its highest in 1790, when the 3 per cents. were at 96, and at that time there was scarcely any sinking fund; the price of stocks was therefore not proportioned to the amount of the sinking fund. The quantity of capital to be invested in stock was always the best security for keeping up the price. It was agreed that the accumulation of the sinking fund should stop at some time; he thought it should stop now. The accumulation of debt would thus be prevented, and the situation of the stockholder not deteriorated. Then the hon. baronet went into a series of calculations to shew the effect of the noble lord's plan and his own. He contended, that the comparison was much against the noble lord's plan. A great accumulation of debt would be avoided, and the war taxes would be preserved un- charged. He contended also, that even on the plan of taking the war taxes, his system was better than that of the noble lord's.

Mr. H. Thornton

deprecated equally the continuance of heavy taxation, and the immediate invasion of the sinking fund. On these considerations he was inclined to approve of the noble lord's plan, and also because the most maturely weighed of the plans brought forward on the other side approximated very nearly to that of the noble lord. He complained of the statement of the noble lord opposite (Castlereagh), that in his calculation he had omitted the charge of the yearly loan of 11 millions, which would require the payment of interest for 14,000,000l. It was unpardonable to delude the public with statements representing the charges of the new plan as comparatively burthensome, and to exclude from the comparative view all this consideration of the great expence of interest belonging to the plan of the noble lord opposite the noble lord's plan for taking the excesses of the sinking fund was an invasion, which called for every friend of the sinking fund to come forward in its defence. Here the hon. gent. went into a history of the progress of the sinking fund from its origin. The benefits we had experienced, ought to bind us in policy and in gratitude to preserve the source of all these advantages. The interference of Mr. Addington, and that of the noble lord near him, with the sinking fund, had been coupled with benefits which compensated the invasion. But the noble lord's plan invaded the security of the stockholder, by taking the excesses of the sinking fund, without offering any compensation. The plan of taking the excesses of the sinking fund, and raising only the difference between that and 11,000,000l., would be very unjust as well as very impolitic. There was extreme danger in laying down the principle, that the sinking fund was to be diverted to the current service in every war. Taking the surplus of the consolidated fund to pay the interest of the debt contracted in the year, was a violation, if he might so express it, of public credit, at best. But it might happen that the consolidated fund would barely cover the charges imposed upon it; and what was to be done in that case? With respect to the war taxes, no pledge was incurred to continue them, but only taxes to the same amount to extinguish the sums borrowed. The objection of borrowing at compound interest was answered, by exhibiting the compound already produced, and about to be produced by this plan, and by the noble lord's recent measure. It was the noble lord that had raised these very war taxes last year nine millions above their former amount, and had thus furnished a foundation for the whole superstructure of this plan. The plan was supposed to under-rate the expenditure, but it provided in fact for an expenditure to that amount, with an increased facility of raising larger sums, if that should be necessary. He hoped the experience of one year would confirm the favourable expectation entertained of the noble lord's plan, and prove its efficacy towards raising a great part of the expenditure, not directly in the same year, but so as to be redeemed in a few years. This little island was carrying on war almost against the powers of the world, for the benefit of the world, and with such an extent of colonial empire to secure, it was necessary to preserve our sinking fund, and to reduce, and diminish the public debt, so as to allow us, if necessary, to go into a new war with ample resources. Though that was not done as much as he could wish by the noble lord's plan, it was very nearly done. The national debt was certainly a great and awful weight upon the exertions and industry of the country; but it was still a pleasing reflection to consider, that the annual income of the nation was brought within 2,500,000l. of the expenditure; that whilst the enemy had supported the expences of warfare by confiscations, by a diminution at one period of the public debt, and next of the interest on the debt, by an illusory system of assignats, by spoliations on foreign states, and extorting from others a tribute, as the price of a mock independence, Great Britain, in the progress of a war avowedly undertaken and conducted against her resources, had risen superior to her difficulties, and had in this period of its progress almost equalised its income with its expenditure. In expressing his approbation of the plan of the noble lord, even on its own merits, he felt that opinion considerably strengthened, by contrasting it with those recommended by the hon. gentlemen on the opposite side, which increased the public burthens in the present instance, and in no degree diminished the accumulation of the public debt.

Mr. Johnstone

could not hope to make himself understood in what he had to say on this subject, if the statement of his noble friend (lord Castlereagh) had failed of conveying a clear idea of its purport. Before he entered on what he had to say, he purposed to make one or two observations on the preliminary topics which had been introduced into the discussion. The debates on this subject would have the effect of shewing to the public, that the expenditure of the country, which had been taken at 38 millions, would not be the whole of the expenditure, and therefore of removing any delusive hopes that might arise from such an impression. But though the noble lord could not have accurately estimated the amount of the actual expenditure, yet as increased expenditure ought to have been provided for, and he understood that they were likely even in the present year, to be called on for a much larger sum than any that bad been yet mentioned. Either Russia was to be abandoned, and peace to be the consequence on the continent, or this country should advance the necessary subsidies to our allies. There was also a charge of 500,000l. due from government to the East-India company, which ought to have been included in the civil expenditure of the country. The document that had been circulated to the public, held out a more favourable prospect than was borne out by the papers before the house, upon which it was founded. That paper represented that the addition to the debt under the proposed system, would be on the average of 20 years, 3 millions and a half, whereas it would in fact be 4 millions and a half. If, as had been said by the last speaker, the additions made to the taxes last session, had been adapted with a view to this plan, it seemed strange, that in the speech at the opening of the session, his majesty was made to lament the necessity of adding to the burthens of his people; this plan being intended to prevent further taxation. It had been the fashion formerly to argue for the necessity of relieving posterity from burthens, but now the argument was to relieve the present moment, and leave the burthens to posterity. He was a friend to the plan of leaving the burthens to affect posterity, because he found the system had not been prejudicial to us, so far as concerned the burthens handed down by our ancestors. But he had an objection to the complicated machinery of the noble lord's plan, which, under the specious garb of complicated details, was, in fact, only to raise two millions and a half a year, over the amount of the sinking fund. The hon. gent. then said, that if 11 millions were to be raised annually, in addition to the war taxes, and interest to be provided only for the difference between the amount of the sinking fund and the loan, the difference between the sums raised by his plan and that of the noble lord, would be 44 millions; and by the noble lord's plan 2,051,000l. permanent taxes would be imposed in 20 years, whilst by his only 1,700,000l. would be imposed, and the Whole of the war taxes would, in the former case, be mortgaged, which, in the latter, would be free. It was natural for every person to be attached to the production of his own brain, and he certainly thought his plan superior to that of the noble lord's; as, according to his plan, each loan would be paid off in 45 years, according to the engagement to the public creditor.

Mr. Bankes

thought that the hon. member who had just sat down, had taken the sinking fund into his calculation two ways both as a means of redeeming the debt, and as a fund applicable to the service of the year. There was a fallacy, therefore, in his reasoning. If the government was only to provide for the interest of the excess of the loan, over the amount of the sinking fund, and to provide for the remainder out of the proceeds of the sinking fund, that fund would be stationary during the war. Should the war last ten years, its progress would therefore be interrupted, and the redemption of the loans would be effected in 55 instead of 45 years. He objected to all the projects that had been proposed as substitutes for that of the noble lord opposite because they all were founded on the principle of invading the sinking fund, which was sacred, and not to be touched, except in cases of extreme necessity. The plan of the noble lord afforded more prospects to the country than any other, because it was to release it from taxation for 3 years without diminishing its resources; and these 3 years were likely to be more important, than the same number of years in any period of our history. This relief to the country was wise, in the hope that Providence, who had so often signally assisted this country, would again interfere in its behalf. He did not think it wise, however of the noble lord, to have stated the expenditure of the country so low as 32,000,000l. because if any addition were to be made to that expenditure, it would create disappointment to the public. He trusted if such an addition should be necessary, it would induce the noble lord to make not parsimonious but economical retrenchments in the public expenditure. It had been said, that the sinking fund might become too great, but he had no apprehensions of that description, as that fund had been intended to act against the debt, and he wished to see that reduced as early as possible. The appropriation of the war taxes had been stated to be a violation of the pledges given to the public, and a disappointment of their reasonable hopes, but necessity called for it, and it was only to be feared, that under a pressure of future circumstances, the minister of the day might make the additional appropriation of 4 per cent. the ground of future loans. If the taxes appropriated should not be productive, parliament would be bound to make them good. But he thought the property tax more equalized between the landed and moneyed interest, not descending so low as at present, with an allowance to persons having small incomes, with larger families, and facilities of recovery of the tax where proved by those who had no right to pay, would be better retained than the other war taxes. Taxes which came in by a circuitous operation were felt more than a direct tax. But if any thing could keep down the price of articles, and insure the economical expenditure proposed by the noble lord, it was the cessation from taxation for 3 years. As to subsidies to foreign powers, he had never been a friend to them and did not approve of the grant of them in older or more recent times. He regretted the whole of the expenditure of that description, because the powers of the continent always pursued their own objects and interests. It was difficult, nevertheless, for an individual member of that house to oppose such grants, when recommended on the great and grave authority of persons who had access to documents shewing the views of foreign powers. He approved of many parts a the plan of the noble lord, and he lamented that other parts of it should be contained in it, but on the whole he thought that the plans which had been recommended by his hon. friend, would not obviate any of the imperfections of the noble lord's plan, and would augment many of them.

Mr. Rose

observed, that the hon. gent, who had spoken last had approved of the plan of the noble lord, which was only an anticipation of the war taxes, though he had expressed a doubt of the taxes being productive in time of peace. The hon. gent. had stated, that it would be better to continue the property tax than the other war taxes. But he apprehended that the appropriated war taxes would not redeem the loans for which they might be mortgaged in 14 years, but would require a much longer time, in proportion as the price of the funds would rise, and with this impression he thought it would be madness to pledge the war taxes. The right hon. gent. then repeated his former observations to prove that none of the war taxes, except the property tax, could be expected to be productive in time of peace. He was not prepared to agree to any one of the many projects that had been submitted to the house, but as no inconvenience could arise from the delay of one year, he again pressed the necessity of putting off the final adoption of the measure till next session. He particularly objected to the continuance of the duty on tonnage after the war. This country was at present in possession of the whole trade of the world, and no person could be so sanguine as to suppose, that we should not have rivals for that trade in time of peace. A duty on tonnage and landage had been laid on in the reign of Charles II. when the principles of political economy were not so well understood as at present, but this had been taken off in the reign of William III. so far as related to woollen manufactures, and was entirely done away in 1720, in the reign of George II. Was a duty repealed in that reign to be resorted to in the present? It would be a serious motive for the consideration of the house, that the German linens rivalled our manufactures of that article in our West-India islands, and even undersold them. The plan of the noble lord resembled that of Mr. Neckar, which had been the chief cause of the French revolution. He could not reconcile it to himself to give a silent vote on the subject, considering, as he did, the resolutions of the noble lord fraught with the greatest mischief to the country.

Mr. Corry

observed, that the right hon. gent. had impugned the plan of the noble lord, on the ground that the taxes would not be productive during peace. But if so, the parliament would be bound to make good any deficiency that might arise, or to substitute other taxes in their place. But it appeared to him a strange illustration of the impolicy of continuing the tonnage tax, that the German linens rivalled our linens in the West-India market, because no German linens could reach our islands but through this country.

Mr. Perceval

at any other time and under any other circumstances, would have been disposed to trouble the house more at length, than at that hour of the night he was inclined to do. When the bills should be brought in, on the resolutions of the noble lord, he should have sufficient opportunities of delivering his sentiments upon them, and he should feel it his duty to oppose them in every stage. The taxes proposed to be continued by the first resolution, were represented as not likely to be productive in peace, and to this it was answered, if they were unproductive, parliament would be bound to make them good. If they were to be made permanent only with a view to have them afterwards repealed, this would be to make the act of the legislature speak a language which it did not mean. In the same way the property tax, which the house had been given to understand, in the opening speech of the noble lord, was to be repealed at the end of the war, had been in his subsequent explanations represented as liable to be continued in peace, yet the second resolution pledged the house positively to the repeal of the war tax the moment the war should cease. The first resolution was to pledge the war taxes, which were afterwards to be repealed; and the second resolution declared, that the property tax, which was likely to be continued, should be repealed. If the taxes mentioned in the first resolution were to be repealed, why enact their continuance? and if the property tax was to be continued, why resolve that it should be repealed? He thought that it was improper in the house to legislate for futurity. These observations he made with a view to press the suggestion of his right hon. friend that the provision for the loan should be charged upon any fund, and the discussion of the noble lord's plan deferred to next session. It had been said, that the duties, if appropriated, might afterwards be repealed; and this he looked upon as the best argument that had been urged in favour of the measure. The plan of the noble lord might be very good, and his majesty's ministers might have bestowed all due attention upon it, but yet the house had not had sufficient time to consider so complicated a question. It was only that day that some of the papers, necessary to form a judgment on the subject, were laid before the house.

Lord Henry Petty

maintained that the resolutions contained no pledge whatever for the continuance of any particular tax. The object of the plan was to provide for the exigencies of a protracted war, and at the same time, by abstaining from imposing fresh taxes, to relieve the country, to repair its strength and recruit its resources, whilst its operation would provide the means of resorting again to taxation, if that must be the case, a resort which would still remain, even supposing the plan totally to fail. His lordship entered into a comparison of the plan he had proposed, and those suggested on the other side, and contended that his plan had this great advantage, that it would operate to increase the sinking fund, in a larger proportion to the debt, up to a certain point when its excesses were to be taken, whilst the plans proposed on the other side would operate to increase considerably the debt, and leave the sinking fund as it now stood. He proposed, after a certain accumulation of the sinking fund, to appropriate the excesses; but they would attack that fund immediately. He remembered a story of a man who said he had a sure method of curing sheep of all disorders, and that was by cutting their throats; so gentlemen on the other side would get at the sinking fund by immediately taking it, and this constituted the boasted simplicity of their plans. His plan, on the contrary, by the proportionable magnitude of the sinking fund, would insure to the stockholder a certain market for his stock, and instead of mortgaging all the resources of the country, as some hon. gentlemen had contended, there would, if it continued to operate, be a sum of 25,000,000l. available for the service of the country in the year 1822.

Lord Castlereagh

contended that the system before the house was a much greater infraction of the act of 1786, than that which had been done in 1802, which had been alluded to in the course of the debate. After touching on several other points, his lordship observed, that he would speak more fully on the subject next Monday, when the resolutions which he had submitted to the house would be under consideration.

Mr. Huskisson

had heard much of the delicacy and scrupulosity which gentlemen on the other side professed to feel for the strict observance of the public faith. Yet if on any side there was any disposition to infringe it, that disposition or tendency was to be found in the plan of the noble lord. Let the different acts be referred to, more particularly that of 1792, for securing inviolate the public faith respecting the sinking fund, and it would be seen how far the present plan was reconcileable either with the spirit or the letter of these acts.

Mr. Vansittart

pledged himself to prove upon the same occasion, that there was no inconsistency between the plan of his noble friend, and the acts referred to by the hon. gent.

Mr. Canning

declared his most decided objection to the whole principle of the measure: at that late hour he should not trespass upon the time of the house, but should reserve himself for a more convenient opportunity.—The question was then loudly called for, and the resolutions read a second time, and agreed to.