HC Deb 01 May 1822 vol 7 cc280-97

The House having resolved itself into a Committee on the Naval and Military Pensions,

The Chancellor of the Exchequer

proceeded to call the attention of the committee, not to the general plan which his noble friend had laid before the House a few night ago, but to that detached part of it which related to the commutation of the expenses of the country in the items of half-pay, fixed annuities, or civil allowances. By adopting the plan of his noble friend there would be a saving to the country of between 2,000,000l. and 3,000,000l. a year. The public were naturally anxious to learn the means by which this saving was to be made. His noble friend had, however, so fully detailed the principles of his plan, that it only remained for him to fill up the details. And, in alluding to these details, it was obvious that much must be left to those who had the carrying the contract into execution, and much also to the wisdom of that House. In the present stage of the proceedings, all he asked was, that the committee should approve of the general principle upon which the measure was founded. It might be asked, "Why does not the chancellor of the Exchequer, acting upon his own responsibility, make any bargain by which he conceives the public will be benefited, and afterwards apply to parliament for their approval?" To this he answered, that this was a measure of so novel a nature, so much out of the track of his official duty, that he did not feel himself justified in adopting it without the sanction of parliament. This plan was not at all mixed up with the question of the currency; nor was it in any respect mixed up with the question of the charter of the Bank of England. As to the currency of small country notes, he hoped shortly to name a day for bringing that part of the measure before them. The single question for the committee that evening was, to consider how far the sums paid annually in half-pay allowances, pensions for civil services, &c. were to be looked upon in the nature of a public debt: and whether the public would not derive benefit from a commutation of the present fixed charge. The soldier or civil servant holding half-pay or pension, or other such allowance, might be looked upon as having as complete a right to that allowance (subject of course to the condition of being called into active service, or to the power of the Crown to remove him) as the public creditor had to the interest which he derived from money advanced to government. This principle was so clear that when at the close of the late war he proposed a more liberal provision for those retiring from service, he had called it the payment of a public debt of gratitude and justice. In proposing this plan, he did not mean to make the slightest alteration in the situation of the persons receiving half-pay, pensions, or other allowances. They were to continue, as they now are, at full liberty to exchange half for full, or full for half-pay—to sell out, or to alter their situations, with the same freedom that they had hitherto enjoyed. It might be proper just to state the classes of pensioners to which it was designed that this commutation should extend. It would com- prehend, as far as possible, all naval and military allowances, and all compensations arising from civil superannuation; reserving such of the latter as might in future be granted, to be charged upon the fund for that purpose about to be created. Those pensions and allowances to be excluded were, first, such as were paid out of the consolidated fund, amounting to between 400,000l, and 500,000l. a year. It had been considered that the payments to the royal family and to illustrious persons, as matters of justice and bounty for high and meritorious services, did not come within the object of this arrangement. However, this would of course be a matter open to discussion. It was also proposed to exclude all pensions upon the civil list, and upon the 4½per cent duties because they were charged on limited funds belonging to the Crown. The saving, if any, would place at the disposal of the Crown a larger sum than at present, for the display of its bounty; or if there was a loss, it would limit and restrain its liberality. The amount of the whole of the pensions and allowances included, would be about 5,000,000l. It had been found more convenient to take round numbers, than to attempt any exactness with regard to matters in themselves of a fluctuating nature; the death of some parties, and the accession of others, produced changes almost from day to day. The table of calculation which he had got made, though not perhaps minutely correct would be found tolerably accurate. The table was made out from the returns of the ages of 15,000 persons; about one-fourth of the actual number of the annuitants intended to be provided for, the whole amount being about 60,000, and was founded upon the natural decrement of human life. It was clear that the annuities of these persons composed a part of the debt of the country, subject, of course, to a gradual decrease year after year; but that charge, so heavy at present as five millions, would not, for a considerable time, be lessened to any considerable degree, and would not till a very remote period, finally cease to exist. It was probable that some of the persons who composed the number of annuitants to be provided for would exist for 60 or even for 70 years to come, though those cases would necessarily be very rare. In the course of 45 years, the amount of the annuities which at present stood at five millions, would be diminished in all probability to little more than 300,000l. If it should be asked why, instead of granting annuities for a determinate period of years, the government might not agree to pay to the contractors annuities for a stated number of years, he would answer, that such a plan would be full of difficulties; that contingencies might arise which would defeat it—that it might be attended with an ex-pence almost ruinous to the contractor, unless the government acceded to terms which parliament Would not be justified in sanctioning. As the case stood, the only uncertainty in the case was, the fluctuation in the value of money, which from time to time might take place; thus was it, stript of most of the elements of risk. The calculations were, indeed, much more difficult than on the ordinary case of a loan; but the extended period of 45 years gave the contractors the means of providing against contingencies. They might avail themselves of a rise in the funds, or of a fall in the value of money, and by temporary loans, remedy temporary inconveniences.—The proposition he had to submit to the House was, to offer a fixed annuity for a period of 45 years, to such persons as should contract to pay the annuities on the half-pay and superannuations, with which the country was at present subject. He mentioned the period of 45 years because, on the principle of the Sinking-fund, a sum of one per cent was held to liquidate capital. There was another reason for fixing on the term of 45 years. In 38 years time, the long annuities would fall in. Whatever relief that circumstance might afford the public, when it should take place, it would undoubtedly subject the parties more immediately concerned to loss and inconvenience; and if to that were added the withdrawing of annuities to the amount of two millions or two millions and a half, the inconvenience would be considerably augmented. It was therefore proposed to extend the period to seven years beyond the falling in of the long annuities, during which time the inconvenience he had just touched on would cease. He was aware that parties disposed to contract might prefer an indefinite annuity, dependent upon lives, to one which was terminated at a fixed period; but, whether it were of one kind or of another, the transaction would stand completely clear of the sinking fund. The principle on which ministers went, was a commutation of debt now existing. If, instead of being a debt, it had been an annuity terminating at an earlier period than 45 years, where would have been the objection to the plan now under consideration? If an annuity for 12 or 15 years had been commuted for an annuity for 45, what objection could have been made on the part of the public creditor? If it had been actually unfunded debt, payable from year to year, and provided for by the funding of chequer bills, what ground of resistance could have been offered? Another real son justifying the principle of commutation, was the novel nature of the charge proposed to be provided for, which had arisen out of extraordinary circumstances—the extended duration and the enormous expense of the late war. The resolutions stated, that the half-pay and other annuities, previous to 1792, amounted to only 650,000l. The sum was now increased to 5,000,000l., partly in the mode stated, and partly owing to news regulations, by which the allowances were made so much more liberal than formerly, and extended to cases not before provided for. The committee would feel the impropriety of his entering into such minute calculations, as could lead even to a remote knowledge of the terms on which government might be disposed to contract. Every thing necessary would be explained to the parties, when there was a probability that a bargain would be made; but the secret of government must be kept, until the transaction was in a shape to be submitted to parliament for its final approbation.—The right hon. gentleman then moved:—"1. That the amount of Military and Naval Pensions, and Civil Superannuations may be estimated at about 5,000,000l.—2. That this sum, calculated as an annuity guaranteed by parliament, may be considered as a burthen, forming a charge upon the public income of the country, for the lives of the annuitants, subject to such regulations as are applicable in each case.—3. That the amount of this charge has been increased principally by the long duration and extended exertions of the late war, from the sum of about 650,000l. to the said sum of 5,000,000l. and by regulations introduced during the war.—4. That, under this great accumulation of annual charge, and in the present state of the country, it is expedient to make provision for apportioning this burthen so as to insure its final extinction, either by an equal annual annuity, terminable within 45 years, or by permanent annuities, with such provision for the repayment thereof as is required by the act 32nd Geo. 3rd, c. 55. for the reduction of the National Debt.—5. That the Commissioners of his Majesty's Treasury should treat and contract (subject to the approbation of parliament) with such bodies politic and corporate, or other persons, as may be willing to undertake to provide for the charge of the above mentioned pensions and allowances, or any part thereof, in either of the above modes; and who shall give adequate security for the performance of such undertaking."

The first resolution being put,

Colonel Davies

thought, that the project was a covert attack upon the sinking fund: it was relieving ourselves at the expense of posterity. He thought that the public would be exposed to considerable loss, calculating upon a payment annually of 2,800,000l. For the first sixteen years of the 45, the contractors would pay 63,000,000l., and the public only 42,000,000l., which would be a gain to the latter of' 21,000,000l. But, for the remaining period, the contractor would pay 39,000,000l., and the public 84,000,000l. So that the latter would be losers to the extent of 45,000,000l., and the loss upon the whole would be 24,000,000l. Against this, it was true, should be set off the interest of the sum saved during the first period.

Mr. Bright

contended, that the whole scheme was a delusion, designed to direct the eye of the public from what ought to be the great object of parliament—a reduction of taxation. The salt-tax and the duty on leather might hereby be removed; but the country would eventually pay dear for it. Was it to be supposed, that a contractor who would receive no benefit until the expiration of 16 years, and whose term would not expire for nearly half a century, would be satisfied with any thing less than a very extravagant interest? This plan affected the whole system of superannuations. Many most illegal allowances had been made; and if this project were carried, these allowances could never be revised.

Sir J. Newport

insisted, that the principle of the scheme was directly in contravention of the sinking fund. If the sinking fund was to be abandoned, would it not be more rational to allow the commissioners for the redemption of the national debt to become the contractors? Thus, the double machinery now contemplated would be avoided, as well as the large bonus which the contractor must expect to be paid. He agreed with the hon. member for Bristol, that the attention of' the public should not be withdrawn from the reduction of taxation, and thought this measure would be prejudicial in that point of view.

Mr. Beaumont

said, it had been observed that this proposition would divert the attention of the public from the necessity of reducing the weight of taxation. If it were likely to have such an effect, he would so far be hostile to the measure; but he thought it would not be a probable consequence of the proposition. He entirely agreed with those who were of opinion that the taxes should be diminished; and, for that very reason, he looked upon this measure as desirable, because, to a certain extent, it would relieve the public burthens. He admitted that the proposition was not consistent with what the chancellor of the exchequer had so often said relative to the sinking fund: but he did not find fault with that inconsistency since it enabled parliament to relieve those who had already made great exertions, and left posterity to bear some portion of the burthen. If his project even went to remove the whole of the sinking fund, he would not object to it.

Mr. J. Martin

said, that if this proposition had been made by any of those who were hostile to the sinking fund, it would not have surprised him; but that those who expressed so much partiality to the sinking fund system should propose a motion like the present was indeed extraordinary. If the principle were admitted, why might they not convert the long annuities of 38 years into much longer annuities? Why might they not, in the same manner, convert the tontine and other annuities into long annuities also?, Now, it was remarkable, that at the present day, government were granting life annuities. The fact was, that ministers adopted this new plan, because they were determined not to reduce the expenditure. They had made up their minds to continue the employment of useless postmasters-general and expensive clerks. He thought it was absolutely necessary for the credit of the country that a sinking fund should exist beyond the expenditure; land as this measure militated against the principle of that fund, he would give it ' every opposition in his power.

Mr. Hudson Gurney

said, the charge for half-pay and pensions was that of a debt of five millions a-year, which debt had in its nature its own effectual sinking fund, in the dropping off of the parties lives. Instead of paying these annuities, ministers were about to contract with others to pay them for us—to be reimbursed at a very distant period, under circumstances of great hazard. And this no one could be found to undertake, without a most wasteful remuneration. He had voted for the motion to keep up a sinking fund of five millions; that is, an honest and real sinking fund, from excess of income beyond expenditure, which, yielding to what the noble lord had justly called "an ignorant impatience of taxation," ministers were now about to destroy, whilst they were going to accumulate a nominal and fallacious sinking fund, by their plan of suffering it to increase at compound interest—the end of which would be, that the minister of the day would seize it, after the example of the chancellor of the exchequer in 1813 [Hear, hear!]. If it were really necessary to reduce taxes to the amount of two millions, it would be much better, and far cheaper, to take them from the sinking fund at once, in a plain and direct manner [Hear, hear!].

Mr. T. Wilson

would support the proposed plan, because all the benefit would accrue from it which had been predicted from the infringement of the sinking fund, without the evils arising from such a course. It had been said, that if they did not change their measures willingly, they would be forced to do so by the taxes becoming unproductive. It. was for this reason that he wished to preserve the sinking fund, which might be useful in supplying deficiencies in case of such an event occurring. This plan, too, offered that relief for the agricultural distress which gentlemen had been calling for.

Mr. Ricardo

was astonished how ministers could come down with grave faces, and propose such a measure, after all the anxiety they had expressed on the subject of the sinking fund. This plan was nothing more nor less than an invasion of that fund. The chancellor of the exchequer had said, that these annuities were a part of the debt of the country. This he (Mr. R.) admitted. But, supposing the object of ministers was, to relieve the country from taxation to the amount of 2,200,000l., and they took that sum from the sinking fund, he would ask them to compare the situation in which the country would be placed at the end of 45 years, with that in which it would stand at the expiration of the same period by adopting the plan now proposed. In both cases the object would be to raise 2,200,000l. per annum; but, at the end of 45 years, acting on the plan now introduced, would not the country be more in debt, than it would be if the sum were taken immediately out of the sinking fund? Now, if this proposition were true—and it could not be controverted—was it not, he demanded, an invasion of the sinking fund? He, however, had no objection to it on that account but it was the greatest inconsistency in the right hon. gentleman to say that the sinking fund was to be held sacred, while he came to the House with a proposition that would leave the country more in debt 45 years hence than if 2,200,000l. were taken from it at once. He agreed with his hon. friend (Mr. Gurney), that the debt which was the object of this proposition carried a sinking fund alone, with it. Year by year, as lives dropped off, it was decreasing; and what was the object of the sinking fund but to place all public debt in the situation of this particular debt? Thus, if 30,000,000l. were owing in one year, to reduce it to 29,500,000l. in the next; then to 29,000,000l., then to 28,500,000l.; and so on progressively, until at last the whole was liquidated. A less beneficial effect would be produced by prolonging the debt beyond the term to which it would extend, but for this plan, which he could not help considering an entire fallacy.

Mr. Huskisson

did not mean to controvert the indisputable proposition of his hon. friend, that a debt of 5,000,000l. depending on lives, carried its own sinking fund with it; but he must deny that the proposed measure was any invasion of the act of 1792, which was the foundation of all the provisions on which the sinking fund now stood. The proposition of his right hon. friend carried with it the liquidation of debt as much as the operation of the sinking fund did; because it proceeded on the principle of an annuity terminable at the expiration of a number of years, instead of depending on lives. The act of 1792 contemplated two modes of extinguishing debt. One of these was the appropriating one per cent on the principal stock created, that one per cent being still placed under the control of parliament. But, was not the present plan of liquidating the debt preferable? Here an annuity was granted for a certain term of years—it required no sinking fund charge—the annuity was derived from parliament, and it could not be converted to any other purpose. Surely hon. gentlemen could not argue gravely that his right hon. friend, having a charge of 5,000,000l. to provide for, and procuring persons to contract for the payment of that charge, which would decrease in a gradual proportion, was thereby invading the sinking fund. Of course, the contractor would expect profit hereafter. To the extent of such profit, a certain burthen would be thrown on posterity, instead of the present generation bearing it all, by letting the annuities expire with the lives of the parties. But, the circumstances in which the country had been placed, the effect of which had been to increase a charge of 2,000,000l. to 5,000,000l., which charge now bore on the present time, left parliament at liberty, quite consistently with the provision of the sinking fund act, to raise a loan for the payment of that charge; taking care that, in raising such loan, it carried within itself the means of liquidation in 45 years. Supposing the country was 5,000,000l. in debt, on short annuities, at 5, 8, 12, and 16 years, and it was thought advisable to convert all these into annuities for 45 years, in what measure or degree would this affect the sinking fund? It would certainly throw a portion of the burthen on others, with reference to the period to which the annuities were carried beyond that originally proposed; but parliament was at liberty to adopt such a measure, because it was a question of expediency. It depended altogether upon this—whether, under the present circumstances of the country, after having, during a war of 25 years, taken upon themselves to raise about 230,000,000l. of war taxes, specially for the benefit of posterity, they were not justified in throwing on that posterity, the small burthen which was now made a matter of reproach? To show how beneficial it was, in producing a diminution of burthens, he need only refer, in opposition to those who disapproved of the sinking fund system, to the recent reduction of the 5 per cents. If the sinking fund had been destroyed some ears ago, would there have been the smallest prospect of reducing the interest of that stock? An hon. member had observed, that government were granting life annuities at the moment that they were converting the half-pay, &c., into annuities for years. But this did not affect the present plan. Parliament might convert those life annuities (which were now chargeable on the sinking fund for the year) into annuities for years. The hon. member for Bristol had stated, that the whole of the superannuations, many of which were on too liberal a scale, and others illegally granted, would, by this measure, be placed beyond the control of parliament. Now, his right hon. friend began by distinctly stating, that parliament would continue to enjoy the same power of regulation and revision, which it at present possessed. The bargain was one by which the contractors might gain, or by which they might make no benefit whatever; in either of which cases the public must be the gainer, and yet the hon. member for Portarlington contended that the country must, of necessity, be more in debt, at the expiration of 45 years, than it would be if a sum were taken from the sinking fund annually. Another objection made by the hon. member for Bristol was, that those who entered into this contract would not expose themselves for 16 years to a very great risk, unless they were certain of some extensive advantages. The hon. member did not, however, seem to understand the working of this plan. When these long annuities for 45 years were granted, they would be saleable in the market, like any other stock of the day. The contractors would, therefore, be enabled, when the stipulated annual payment came round, to sell so much of that stock as would be necessary fur the fulfilment of their bargain. Thus, the required sum would be made up, without the contractor being called on to furnish it all. He confidently trusted in the experience of his right hon. friend, to watch the speculations of the contractors; and that if he could not make a favourable bargain he would devise other means of' providing for an arrangement by which a relief similar to that now sought to be obtained would be given to the public.

Mr. Hume

said, that the noble marquis had promised a plan by which the public was to be relieved from a part of the dead weight for naval and military pensions. Now, the resolution before the committee applied no more to that dead weight of naval and military pensions than to any of the ether charges with which the nation was loaded. The boasted plan which ministers held up as some new system of finance, was neither more nor less than means of raising a loan by deferred annuities. Now this plan of making a new loan for relieving the present distress, and adding to the public debt by burthening posterity, was resorted to by the very ministers who lately spoke so loudly about preserving inviolate a sinking fund of five millions, that we might reduce the charge upon posterity. Our first object was to pay off our debt to relieve posterity; and for that we had provided a sinking fund. Our second was, to relieve ourselves from our burthens by increasing the burthen on posterity, and that would be accomplished by a remission of taxes. The plan proposed in the resolutions was intended to effect some immediate relief in direct opposition to the system on which we acted of keeping on taxes for a sinking fund to relieve posterity. Now it had been said, and justly, that we were to look at the expediency of the proposed measure, and that expediency would decide the question, whether or not it was profitable. He (Mr. H.) would ask bow was the country to be relieved in the most certain manner? Only by that system which was attended by the smallest expense. Let the scheme of the right hon. gentleman be examined by that test. We were said to have a sinking fund of 5,000,000l. a year, and we had a charge of 5,000,000l. for military and naval pensions, which, according to this plan, was to be extinguished by the death of the persons receiving the pensions in 45 years, by contracting with certain persons to pay the first year 4,900,000l., in the second 2,700,000l., and gradually reducing the amount until the 45 years, when the sum payable would only be 300,000l., whilst for these payments to the public, the contractors would receive from the public without variation the sum of 2,800,000l. annually during that period. Now he asked, would the country be in a worse situation at the end of the 45 years, by appropriating the sinking fund to the amount required; or, in other words, by borrowing from it to the same amount, than if it entered into a new agreement with certain contractors in the terms of the proposed resolution? It would be better, if, contrary to experience of the loss arising from these complicated money transactions, a loan was to be made, to make it with the commissioners of the sinking fund, than to go into the money market with this new stock. It was a well known fact, that better conditions were obtained for the public by funding in the old accustomed descriptions of stocks, than in one of a new denomination. This was felt on the creation of the 3½ per cents, which had never been a favourite with the public. How, then, could the right hon. gentleman reconcile it to the public Interest to create this new loan? He must lay his account in the impossibility of finding contractors, without offering larger profit than would have been required by a plan more generally appreciated. If there was to be any profit arising from the scheme, that profit ought to go into the pockets of the public. If the sinking fund was still to be maintained, why not allow the commissioners to become contractors for it at once; by which all the profits, if there were any, would accrue to the nation, and the money in the hands of the commissioners would be employed at the same rate of interest as the public paid for it? When it was suggested by his hon. friend (Mr. Grenfell) to borrow from the sinking fund to its full amount for the services of the year, the plan had been at first objected to, and for some time only partially adopted. Had his hon. friend's suggestion been acted on at first, and the commissioners of the sinking fund become contractors for the whole instead of a part of the then loans, a great saving would have been affected. It appeared from tables which he (Mr. H.) had drawn up, that in the course of the four last years there had been a surplus of revenue over expenditure of little more than 5 millions: and during that period we had borrowed, or added to our funded debt, 78,000,000l.; and he could show that about 4,000,000l. would have been saved by employing the sinking fund, instead of borrowing. He requested the House to bear in recollection what the noble marquis had said some time ago, on the necessity of keeping up a sinking fund of 5,000,000l. for the purpose of lessening the debt to our posterity, and on the sacredness of that fund. Yet now he came down and said, "We must relieve ourselves; posterity roust bear a part of the burthen; we will, therefore, throw off from ourselves the half of the charge for military and naval pensions, and spread the burthen over 45 years." Now he (Mr. H.) was far from objecting to this: he was glad to see that the noble lord proposed now to do, what he formerly accused the opposition side of the House of attempting to destroy public credit for recommending. He was glad to hear him now speak of immediate relief, and only desired that it should be obtained as economically as possible. This economy would be best consulted by making the commissioners for the redemption of the national debt contractors, in the same way as they had been for former loans. Nothing could be gained, and much would certainly be lost, by a new loan and new contractors. He had moved for papers by which he should be enabled to prove, that the country would have been many millions less in debt, had no sinking fund ever been created, and had the finance minister, instead of adding the amount of the sinking fund to the loan of each particular year, only borrowed so much less. This difference between our actual debt and what would have been our debt without this delusive fund, he was prepared to show amounted to 38,000,000l. of 3 per cent capital. Nothing could have been more inconsistent and contradictory than the plans and declarations of ministers for the last two months. There was one plan for paying off the national debt, and another contained in the present resolutions for adding to the national debt. By the former, we were to burthen ourselves to relieve posterity; by the latter, we were to relieve ourselves at the expense of posterity. If the House, however, should unfortunately sanction the proposed measure, he hoped the contract would be made by open competition, that it would not be given to any private body of men, or to any individual, that no favour would be shown to any company, and that the whole transaction would be as public and impartial as the general interest required. The noble lord was mistaken in supposing that the sum supplied by the contractors would be of the same nature as annuities. The income of the annuitants on the dead weight depended on the annual vote of parliament, and his majesty might strike off any of them from the list; whereas no 10l. annuitant in the public funds could be so dealt with. The resolutions, in fact, had nothing more to do with the military and naval half-pay, than with any other charge voted annually. The whole appeared to him a mere delusion.

The Marquis of Londonderry

could not refrain from expressing his surprise at the host of champions who had suddenly risen on the other side of the House defend that sinking fund, which on occasions, they had been ready to immolate on the altar of public expediency: If ever there was a proposition more clear than another, it was, that the present transaction would not operate as the slightest infraction of the sinking fund. All that was proposed was, to suffer the sinking fund of five millions to go on at compound instead of simple interest. In the general expenditure of the country there was a specific charge amounting to five millions. This charge was not strictly speaking a debt, but it was a charge covered with revenue, and arising out of the faith plighted to individuals to continue an advantage, in contemplation of which they entered the service. The present measure did not trench upon the noble principle of relieving posterity to the utmost possible extent: a principle which, God knew, no country had ever pushed farther than our own: it did not touch the question of the sinking fund, but it divided the advantage arising from the clear surplus of revenue over expenditure between the present generation and posterity. The hon. member for; Aberdeen had said, that this question had nothing to do with the dead expenses of the country: but he contended, that it had a great deal to do with them; for if this were a charge of an ordinary and recurring character, and not a charge sui generis, he admitted it would be a very dubious policy to meet it by such an expedient as the present. It had been said that lives had nothing to do with this, question; but, unless they went into the consideration of lives, it would be impossible to know what sum it would be convenient to have in each year; and having, resolved that problem, not with philosophical, but practical accuracy, to make their contract upon a corresponding scale. After all the sacrifices which we had made for the sake of posterity, and at the very moment of tying up five millions, at compound interest, it was surely necessary to throw the whole dead weight upon the present generation. He was surprised to hear the arguments which had been urged on the other side of the House, coming, as they did, from gentle men who were at other times ready to pull down the whole fabric of public credit. The hon. member offered his assist- ance, if the measure was conducted upon his views. He (lord L.) would not accept of the alliance, whether holy or unholy. They were going on very well without the connexion; and he flattered himself they would carry the country and the sinking fund triumphantly through the difficulties with which they appeared to be surrounded.

Mr. Grenfell

did not disapprove of the plan, nor did he think it interfered with the sinking fund. The whole question was, whether or not we should contract with person to pay 5,000,000l. in the first year of the contract, and about 300,000l. in the 45th year of it, on terms which would relieve us from a great portion of the whole charge during the earlier part of the contract, and throw it upon the latter. He agreed to the principle of the measure, and would remain silent until he heard the terms. He hoped the contract would be by open and public competition.

Lord Ebrington

considered the present plan to make against the principle of the sinking fund, as it went to relieve ourselves by throwing part of the present burthens on posterity. If acted upon, he thought it would be better to contract with the commissioners of the sinking fund. He wished to see the country relieved immediately from its present weight of taxation by means of that fund. If he could not get all that he wished for, that was no reason why he should not Like all he could get. He therefore felt bound to support the present measure. He was convinced that in the next session of parliament more taxes must be taken off; and he thought much had been gained on the present occasion by the admission of the principle, that we were justified in dividing the burthens so severely felt with posterity. In another session he hoped the sinking fund would be dealt with more largely; indeed, he trusted that it would be wholly given up to the public.

Mr. Maberly

contended, that this country had in reality had no sinking fund at any time. The course pursued by government was a perfect delusion. They first took five millions for a sinking fund, and now they came down with a proposition which amounted to a new loan. Was it not a plainer and better course, to take the sum directly out of the sinking fund, and by that means avoid the large expense, which they must incur by the present measure? The present plan struck directly at the principle of the sinking fund. The only effectual means of affording relief to the country was by reducing the expenditure.

Mr. W. Williams

was favourable to the maintenance of a real sinking fund, operating a reduction of the public debt. We had, in fact, never possessed one. The fund that went by that name had increased instead of diminished the debt, and all our plans of finance had led to a similar result. It was vain to say that the resolutions would lead to a diminution of the public debt. At the end of 45 years the public debt would be less diminished than if they had taken the sum directly out of the sinking fund. Reduction of taxation was the only effectual relief that could be afforded.

Mr. Benett, of Wilts,

expressed his satisfaction at the admissions implied in the proposed scheme, that the sinking fund was a delusion. He would support the present measure, as he had always been for applying the sinking fund to the relief of taxation.

Mr. Monck

thought the present scheme was directly opposed to the principle of the sinking fund. He, however, would support the measure as a wise measure, because it went to effect a reduction of taxation. He, however, thought it might be more advantageous to purchase the annuities enjoyed by young military officers. This might prove beneficial to those individuals, as well as advantageous to the country.

Mr. Brougham

said, that nothing had tended to alter the impression which he had formed on the first assumption of the plan. Ministers had not even attempted to disguise that this plan was in direct contradiction to the sinking fund. Every pound which it affected to save was so much taken from that fund. The noble lord had got hold of the sinking fund in one quarter, and in another the chancellor of the exchequer was to pay it away. Thus, the sum came from the same purse: the public always paid the piper: it was the same operation under different names. The present scheme was a commutation of an annuity on lives, into a fixed annuity for the period of 45 years. Government were to pay 2,800,000l. annually for an annuity which now was 5,000,000l., which would, according to the calculation, be two millions about 20 years hence, and which, at the end of 45 years, would be reduced nearly to nothing? Let gen- tlemen contrast this with the sinking fund, and they would find that we were bur thening posterity on the one hand, and relieving them on the other; and all this for no apparent purpose, save that of paying the expenses of management in both cases. This was the way to mystify, and to wrap up the import of a matter in the abstrusions of arithmetic; but it was not the way to relieve the country.

After some further conversation, the resolutions were agreed to.