HC Deb 01 February 1821 vol 4 cc298-308
Mr. Maberly

rose, in consequence of the notice he had given, to move for certain papers relative to the Revenue. The subject which he was about to bring under the consideration of the House, was one of primary importance;—it was a subject closely interwoven with the prosperity of the country; and by a due attention to which, they could alone hope to alleviate the distresses of the people. The papers he meant to move for were seven. He should call for the production, not only of the amount of revenues for the current but the past year, and also for an account of the management of the public expenditure and a variety of other papers connected with the financial state of the country. To the amount of the expenses of collecting the revenue he should particularly call the attention of the House. The expenditure was enormous beyond all calculation. In the year 1792, the expenditure was 7,800,000l. including the amount of collecting the revenue. What was the expenditure now? It was, including the amount of collecting the revenue, for the army, navy, ordnance and miscellaneous services, no less than 26,000,000l. making a difference in the expenditure of the government between the year 1792 and the present time of somewhere about 18 millions, and that occurring within twenty years. It was time now, in the sixth or seventh year of peace, to anticipate something like a permanent arrangement of the public expenditure, and, above all, an improved system of finance. This, indeed, had been promised. Instead of which, what had been the course pursued respecting the Sinking Fund? Instead of being preserved and applied for the reduction of the debt it had been used for the resources of the current year; and in this state, instead of bearing in the amount any affinity to its nominal value of 17,000,000l. the real bonâ fide value of the existing Sinking Fund was only 2,000,000l. and that was the sole amount in reality applicable to meet a debt of nearly 900 millions. This amount of debt was frightful, and showed a yearly increase of about twenty millions, since the period to which he had at first adverted—two millions being the only real fund available to the reduction of this enormous debt. It was during a time of peace, that the country should be called upon to look at this state of things; for, under such circumstances, to contemplate a state of war was most appalling. No time ought to be lost in endeavouring to place the finances of the country upon as solid a basis as the nature of the case admitted. There were, of course, great difficulties in reducing to a clear and intelligible system such complicated matters; but investigation was now imperatively necessary. It was his intention, upon a future, day, to bring under the consideration of: the House the state of the Sinking Fund, for the purpose of reducing its system and management to a simpler and clearer detail than that which it admitted at present. He meant to strip it of all its nominal and shadowy character, and to place it at once before the public in the only way in which it ought to stand—namely, in the actual and fair real amount which alone it possessed. A Sinking Fund, when properly understood, could Only consist of the excess of revenue over and above the whole excess of the public expenditure. It was quite a delusion for the right hon. gentleman opposite to pretend to the public that they had a Sinking Fund amounting to the nominal value of 17,000,000l. and then to bolster up this disingenuous device by borrowing 12 millions out of this nominal fund of 17,000,000l. and to keep up, by Exchequer Bills, the operation of this delusion. Nothing could be worse policy than to persevere in such a course, instead of at once laying before the country the real sum upon which it had to depend for the reduction of the national debt. From his majesty's late speech, it did not distinctly appear, what would be the reduction of the general expenditure for the year. The only reduction hinted at was in the military expenditure. But, with respect to that expenditure, he must complain retrospectively of the course which had been taken by the right hon. gentleman opposite. Two years ago, when that right hon. gentleman anticipated the amount which would be required for the army, navy, and ordnance, he estimated it at 17,000,000l. instead of which it ultimately proved to be 19,000,000l.—that was, an excess of 2,000,000l. over and above the right hon. gentleman's promise to the country. This was a bad mode of estimating the public expenditure—it went to destroy public confidence, and to make the people come forward, not for any reduction of the public expenditure, for that they saw was little attended to, but for a direct reduction of taxation. In the latter alone could they, under such circumstances, repose any hope of redress of grievances. To leave out this alternative to the people was the worst policy which the right hon. gentleman could pursue in the present state of the finances of the country. The agriculturist must at once see in what consisted a portion of his present distress: looking at the price of grain in 1790, it was nearly the same as at present; but the large increase of direct and indirect taxation bore directly upon the farmer; and connected with the larger increase since 1790 of the price of labour, the poor-rates, &c. furnished him with a clue to the causes of his present distressed state. For the purpose of bringing the subject of taxation before the House, he meant to move for an account of the duties upon Houses and windows, in order, after ascertaining the amount, to move (if it should appear to him expedient) for a reduction of these taxes. The country could not possibly go on without retrenchment, and the report of the committee of Finance ought to be adopted and acted upon systematically. He thought, that by adhering to the terms of that report, a saving of 2,000,000l. might be effected for the year 1821. There was another subject to which he thought it very material to call the atten- tion of the House; namely, the expense of collecting the revenue. Would it be believed, that this alone amounted to the enormous sum of between four and five millions, and showed a rate of per cent-age upon the collection, of no less than 8l. 1s. 9d. upon the aggregate of the whole? In Ireland it was still worse—it I was monstrous: for on the four millions: of revenue collected in that country, the expense of collection amounted to 21 per cent. The aggregate amount of collection upon the whole revenue was, he repeated, above 8l. out of every 100l. for the pocket of the collector, and out of that of the public. he was firmly persuaded, that by a more economical system, a saving of one million might be effected in the collection of the miscellaneous and other services—to this, add the saving of two millions which he had already noticed, and both together would amount to 3,000,000l. in the ensuing year. Unless this recommendation was attended to, he knew not what the country had to expect from his majesty's government. It was to elicit an explanation from the right lion, gentleman opposite, that he now meant to move for certain papers. He called for them at this early period of the session, and before the supplies were moved, to enable the House to judge of the financial state of the country, at a time when they might, if they pleased, withhold the supplies, unless the explanations, were satisfactory. There was also the further advantage in calling for the papers now, of having them in time for a full understanding upon the subject, before the business part of the session passed away. He concluded, by moving, for "an account of the deficiency of the Consolidated Fund on the 5th January, 1821, together with an account of the manner in which the same was made good."

The Chancellor of the Exchequer

said, that he saw no objection to the production of the accounts moved for by the hon. gentleman or to the inquiries which he seemed disposed to connect with these documents. As there would be other opportunities of considering this subject, it was unnecessary for him now to anticipate discussion, by entering into any explanation in detail; he should therefore reserve his observations until the accounts were regularly before the House. He might however, take the present opportunity of announcing, that the whole ex- penditure for the supplies of the present year would be met by the revenue without any new loan. The country, he thought, had arrived at a period, when it might bid adieu either to loans or new taxes for many years. In the way in which he contemplated the financial state of the country, he could by no means concur in the discouraging prospect held out by the hon. gentleman. On the contrary, he had the strongest reasons to expect the country would annually have the benefit of a surplus of revenue going to a diminution of the national debt. This was among the improving views which he took of the state of the country. With respect to the Sinking Fund, he could not consider it. as placed in the dilapidated state which had been described by the hon. gentleman; for he fully believed, that the result of the present year would show the Sinking Fund bearing away as large a proportion of the debt as it did in 1792. He wished to take that opportunity of explaining one circumstance upon which a mistake appeared in some quarters to prevail: it related to the state of the trade of the country. It appeared, from the accounts laid before parliament, that trade became depressed towards the close of the former year, and that consequently the revenue became diminished. But it might be consolatory to the House to know, that the present actual state of trade developed a considerable improvement. The account of the exports had only at present been made up for the three great ports, viz—London, Liverpool, and Hull. The exports of British and Irish produce from these ports, for the half-year ending on the 5th Jan. 1821, exceeded the corresponding half-year of the preceding year by 3 millions and a-half. The exports for the one year amounted, within that time, to about 13 millions and three quarters, and in the other to about 16 millions and a-half—making, on the whole, the increase 3 millions and a-half which he had mentioned.

Sir John Newport

said, he was in hopes, that the right hon. gentleman would have noticed some prospect of improving the net produce of the revenue, by a considerable diminution in the enormous expense of collecting it, upon which, most properly, great stress had been laid. He lamented the price of collection in Ireland, in particular, where the enormous increase of taxation, instead of being attended by a comparative reduction in the rate of collection, was accompanied by more than a twofold augmentation of that rate, contrary to every principle of reason and justice. In 1807, the expense of collection was about 11 per cent in Ireland—it was now 25 per cent. he was extremely gratified, that the House were likely to have the financial accounts on the table early enough in the session to take such steps as should be deemed necessary, upon the fullest information of which the subject was susceptible. When on former occasions information was asked upon the subject of the details of the revenue, it was said, that the particulars 'would be found in the annual returns; but then, these were printed so late, that no steps could be founded upon them during the session. Now, fortunately for the public, a different course was about to prevail. On the subject of the Sinking Fund, he entirely agreed with the hon. gentleman, that it should be reduced to a clear, simple, and compendious form—that it should be stripped of all its mystery, so as that the people could at one view comprehend what sum was actually available for the reduction of the debt. The only real sinking fund must, as had been said, consist in the excess of the revenue over the expenditure. This ought at once to be made apparent, instead of propping up a delusive system of nominal amount, with the farce of borrowing and lending conducted by the same hands. It was high time, that the financial state of the country should be rendered intelligible, and that the public should see, that instead of advancing, they were moving in a retrograde order. As to the boasted increase of trade being conclusively deduced from the exports, he must say he differed from the right hon. gentleman. Indeed, he always received the accounts of these exports with distrust; for over and over again he had seen these exports attended with ruin to the parties who made them, instead of being eventually beneficial to the public. Exports had been often made to every quarter of the world, and the goods then sold at half their original cost.

Mr. Grenfell

considered the House and the country much indebted to his hon. friend, for moving for the production of these papers at so early a period of the session. He was happy to hear the right lion, gentleman say, that he should not require any more loans. The right hon. gentleman did not say, whether or not it was likely he would fund any Exchequer Bills this year. Both his hon. friends had alluded to a subject to which he had repeatedly called the attention of the House, namely, the abolition of that part of the machinery of the Sinking Fund which was altogether delusive; and which contributed to make financial questions, though plain enough in themselves, obscure and unintelligible. He assumed, that the nominal Sinking Fund was 17,000,000l. He also conceded to the right hon. gentleman (although it was much beyond the reality), that the real Sinking Fund—namely, the excess of the revenue over the expenditure—was 5,000,000l. Now why not get rid of the 12,000,000l. of nominal Sinking Fund altogether? Instead of that, what did the right hon. gentleman do? If this year he should follow the precedent of the last, there would be the parade of an act of parliament to authorise the commissioners to borrow of themselves 12,000,000l. The commissioners were the only parties in the trans-action. They were to borrow, and they were to invest in the funds. It would be extremely satisfactory if the right hon. gentleman would signify his intention, either in this or in some ensuing year, to get rid of this delusive part of the Sinking Fund. Another important consideration was, the deficiency of the Consolidated Fund, amounting to no less than 8,800,000l. He knew very well, that the right hon. gentleman, was able to borrow this money at 3 per cent from the Bank. He entertained no kind of animosity whatever towards the Bank; but was it fitting, that the government of this country should be placed in such a situation as to be unable to pay the interest due to the public creditor without having recourse to the Bank for aid? The right hon. gentleman might easily relieve himself by a small loan, or a funding of Exchequer Bills. The right hon. gentleman had formerly predicted, that in a short period the deficiency in the Consolidated Fund would correct itself. How had that expectation been realised? The present deficiency was greater than that of the preceding quarter, and than that of the corresponding quarter of last year. At the corresponding quarter of the last year the amount was 8,500,000l.; now it was 8,800,000l. He wished especially to ask the right hon. gentleman whether he meant to get rid of the nominal Sinking Fund, and of his state of dependance on the Bank of England?

The Chancellor of the Exchequer

expressed his desire rather to wait for regular opportunities to discuss these important subjects, than to enter upon a premature and imperfect exposition of them in the shape of answering questions. He would, however, reply shortly to one or two points. With respect to the increase of expense in the collection of the Irish revenue, it was apparent and not real. It arose simply from the practice of bringing the whole forward as a charge on the public, instead of, as heretofore, laying it on the fees of merchants. Now, to the principal question put to him by the hon. gentleman, he had distinctly to state, that the public debt would not be increased by any means or in any way whatever this year. No stock whatever would be created, and what was outstanding at present, was, he affirmed, no more than was consistent with the public conveniency and service. The subject of the Sinking Fund had been often discussed; and he continued to be of the same opinion he had ever been upon it. He held, that it was far wiser to persevere in the present system which was well and practically understood, than to unsettle, under the name of simplification, the whole method with which public accountants were conversant. When the time came, that the Sinking Fund rose above what might be considered a sufficient sum for the gradual reduction of the national debt, then it might be desirable to adopt, with the surplus, the simplification now contended for; but, till that period arrived, he preferred going on in a known way; for so long as our revenue was fluctuating, which from its nature it must always be, there must, under whatever form it appeared, be an annual excess or diminution, liable to all the objections urged against the present system, at whatever sum the Sinking Fund was fixed. As to the deficiency in the Consolidated Fund, he still entertained the hope he had expressed, that it might be got over by the progress of the revenue. At all events, he could not be persuaded by the hon. gentleman (Mr. Grenfell), that it would be wiser to leave the public money in the hands of the Bank for its advantage, than to borrow from that body at a low rate of interest, while government received a larger interest for its own fund. The saving to the country in this respect was very considerable, and the public good was eminently consulted by the system.

Mr. Maberly

said, he was perfectly aware, that during the last quarter of the year 1819, 500,000l. of the new taxes had come in; but still he contended, that there was a falling off of a million in the whole accounts of the year; so that the revenue of the present year showed a deficiency of one million in comparison with the preceding year. Respecting the Sinking Fund, he felt confident, that the right hon. gentleman, so far from having an augmented real Sinking Fund in the current year, would find a deficiency as compared with the amount in the past, and also an arrear of interest upon the loan of 1820. One year he was charging his arrear upon the Consolidated Fund, and in another upon the Sinking Fund, without coining at once to the adoption of a steady, permanent system. Unless the revenue greatly improved in the current year, instead of a real fund of 2,000,000l. next year he feared there would be only a fund of 1,000,000l. In the present distressed state of all classes, he could not harbour the same confident expectations as the right hon. gentleman did. Instead of looking for an increase, he should be very glad if the year passed away without a deficiency. As to the mode of transacting business with the Bank; he was ready to admit, that some of the arrangements were beneficial, but, he could not think it creditable to break in upon the quarters in the manner in I which they were at present, by the mode of keeping the accounts and providing for the extraordinaries. In the year 1818, there was. on the 5th January, a defieiency of 2,386,000l. in the Consolidated Fund for that year. The next year showed an increase in that fund of 220,000l. but then the year that followed disclosed a deficiency of 2,300,000l. and at the present settlement of the year's accounts there was a deficiency of 429,000l. The plain fact was, that there only existed a Sinking Fund of 2,000,000l. to liquidate a funded debt of 800,000,000l. and an unfunded debt of an additional 100,000,000l. This was not a state of things to be looked at without alarm; the whole available Sinking Fund would not, if a war unfortunately met the country in the present state of its finances, supply the expenditure of six months.

Mr. Baring

could not imagine any good ground for persevering in the present system of the Sinking Fund. In substance it had been abandoned for years, and yet the right hon. gentleman persisted in adhering to all the forms. These, in his opinion, served only to vender the accounts unintelligible, and they ought therefore to be given up, and the real state of the country in regard to its revenue and finance be allowed to appear. On the subject of the arrangements with the Bank, however, he coincided with the Chancellor of the Exchequer. It was the most economical course that could be pursued; and produced a large saving to the public. The present state of our public accounts was so complicated, that even those gentlemen who were most conversant with the subject, declared themselves incapable of understanding them. As to the state of the revenue, he had felt an agreeable disappointment, if he might be allowed such an expression, at hearing the statements of the Chancellor of the Exchequer, and he trusted, the right hon. gentleman would not on any future occasion feel himself obliged to retract them.

The Chancellor of the Exchequer

wished to state the grounds upon which he had expressed a confident expectation of improvement in the revenue. During the latter half of the last year the revenue had improved above any half-year which he ever remembered; and consequently, as the last half-year was so productive, there was every reason to believe, that the revenue would continue to improve. With respect to what had fallen from the hon. gentleman, on the propriety of a simplification of the public accounts, that might certainly be in some degree to be wished; but the House ought also to be aware of the great evils that must ensue from an alteration in all the old forms. Such a measure would render them perplexed and unintelligible, and the whole for a century past must be new-modelled, to enable them to draw a comparison between any past year and that in which they were. He preferred going on in the way which use and experience had rendered clear and applicable to the general service.

Mr. Philips

inquired, whether the national business was to be impeded, because the Chancellor of the Exchequer had got a complicated system of accounts? For his own part, he knew many persons who were fully competent to understand any system of accounts, and yet those persons had been obliged to confess, that the accounts of the Chancellor of the Exchequer were beyond their comprehension. He saw no reason why the accounts of the nation should not be kept in as simple a manner as the accounts of a private merchant. It was as easy to arrange the accounts of millions "as of simple pounds.

The motion for the several accounts was then agreed to.