FISCAL RELATIONS BETWEEN GREAT BRITAIN AND IRELAND. (Hansard, 13 July 1849)

§ MR. J. O'CONNELL
rose to move, pursuant to notice, for a Committee to inquire into the fiscal relations between Great Britain and Ireland. One good effect of the appointment of the Committee would be, that it would be proved that Ireland had been unduly taxed. It would be proved, also, that the fact of the Irish standard of taxation being lower than in England, was not the result of any merciful consideration for Ireland, but was owing to the experience of English statesmen, who found that increased taxation in Ireland would not increase the revenue, but would diminish the amount contributed to the imperial exchequer. The appointment of the Committee would further tend to show that this country had not been lavish in her grants to Ireland. If a Committee was appointed, it could only sit for a short time at that period of the Session; but it was not his fault that his Motion had been delayed for such a long period; but if it only met for one week, they would be enabled to see what documents should be called for, which could be considered during the recess, and another Committee be appointed at the commencement of next Session. If his Motion was agreed to, he should be able to show that if they took the gross revenue of the two countries at 56,000,000l., the excess of taxation paid by Great Britain was not more than 13,000,000l If from this amount they deducted the 5,000,000l. paid for income tax in this country, the excess would not be more than 8,000,000l. Taking this 13,000,000l. from the gross revenue, there remained 43,000,000l., to which both countries contributed in equal proportions—that was, that England paid 38,200,000l., and Ireland 4,810,000l., or in the proportion of one to eight. He could not bring forward a more striking-proof than this, that Ireland was subject to one-eighth of the general taxation of the empire. If, however, Ireland was placed on the same footing as England, as regarded the development of her natural resources, she would be entitled to 10,000,000l. or 12,000,000l. for her share. This showed what a strong interest England had to raise the condition of Ireland. He would here ask two questions—the first was, whether Ireland was rightfully or not exempted from the excepted taxes paid in this country to the amount of 13,000,000l.; and, secondly. 334 whether she was so exempted from any merciful disposition on the part of this country, or because no more could be got from her I In answer to the first of these questions, he would say, that, after due consideration, Ireland was exempted from the payment of them by the Act of Union; and his answer to the second question was, that such exemption did not take place from any merciful feeling on the part of this country. He would not go into the question of local taxation in Ireland, as he believed other Members would do so. He might observe, however, that on this subject a very striking protest had recently been placed on the Journals of the House of Lords, to which the name of the Earl of Rosse was affixed. This document strongly pointed out the injustice of the present system. At the time of the Union, the public debt of England was so much larger than that of Ireland, that it was distinctly declared that it would be utterly monstrous to make Ireland responsible for the whole of the debt of England, so that some arrangement must be made. At the time of the Union with Scotland a sum of money had been voted to that nation for any loss that might arise from the junction of the exchequers of the two countries. The amount was 300,000l., which was a large sum in those days in a poor country like Scotland, although it might not be regarded so now. It was found, however, that compensation could not be given to Ireland at the time of the Union, as the difference in the amount of the debts of the two countries was so great. According to a Parliamentary paper which he held in his hand, the amount of the debt of Great Britain on the 5th of January, 1801, which was the period of the Union, was 450,505,000l., while the annual charge for the debt was 17,720,000l. At the same period the amount of the debt of Ireland was 28,550,000l., the interest on which was 1,244,500. The consequence was, that the separation of the debts continued for several years, A calculation was then made as to the charges which should be made in each country for the common expenses of the empire; and the basis then taken had since been admitted to have been unjust to Ireland. At the time of the Union it was considered proper that the expenditure of the country should be divided into seventeen parts, and of this amount Ireland was to contribute two parts, and England fifteen parts. It was provided by the seventh article of the Act 335 of Union that the exchequers of the two countries should not be consolidated until either of two contingencies arose: the first was, that the two debts should be paid off, which condition he had hardly need state had never occurred; and the second was, when the proportionate difference between the taxation of the two countries should be at the rate of two to fifteen. There was also another condition, which was of an accumulative character, and which was as binding and as stringent as the others. It was, that the respective circumstances of the two countries became such that they would be able to contribute equally to the common taxes. The arrangement at the Union, instead of increasing the prosperity of Ireland, had tended much to the impoverishment of that country. It should not be forgotten that 3,000,000l. had been expended in bribery to promote the Union, and to induce the Irish Parliament to sell the country, and to give compensation to the proprietors of the rotten boroughs. This charge also was forced on Ireland, and thus again was her debt forced up. Again, in the report of the Finance Committee of 1815, he found the following-statement:— For several years Ireland has advanced in permanent taxation more rapidly than Great Britain itself, notwithstanding the immense exertions of the latter country, including the extraordinary and war taxes, the permanent revenue of Great Britain having increased from the year 1801 in the proportion of 16½ to 10; the whole revenue of Great Britain, including war taxes, as 21¼ to 10; and the revenue of Ireland in the proportion of 23 to 10. But in the twenty four years referred to your Committee, the increase of Irish revenue has been in the proportion of 46¾ to 10. In the debate also on the consolidation of the Exchequers in 1816, Mr. Vesey Fitzgerald, the then Irish Chancellor of the Exchequer, referred to this declaration, and said— You contracted with Ireland for an expenditure she could not meet, your own share of which you could not meet but by sacrifices unexampled—by exertions the tension of which only England could have borne. Ireland has been led to hope her expenditure would have been less than before she was united with you. In the fifteen years preceding the Union, it amounted to 41,000,000l.; but in the fifteen years of Union, it swelled to the enormous amount of 148,000,000l. The increase of her revenue would have more than discharged, without the aid of loans, an expenditure greater than that of the fifteen years which preceded 1801. Your own Committee have shown you what an advance in permanent taxation Ireland has made. The Marquess of Lansdowne, also, in a speech on the state of Ireland in 1822, 336 complained that the increase of the Irish taxation since the Union was so excessive as to destroy revenue. He said that— In 1807 the revenue amounted to 4,378,241l.; that between that year and 1815, new taxes were imposed from which an additional income of 3,370,000l. was anticipated, but that the result was an absolute diminution of income, the revenue in 1821 having been 533,000l. under its amount in 1807. He would also quote an extract from a speech of Lord Sydenham, then Mr. Poulett Thompson, delivered on the 20th of March, 1830, when he moved for a Select Committee to inquire into the expediency of making a revision of the taxes, and then took occasion to refer to Ireland as furnishing the most remarkable instance in history of the effects upon revenue produced by excessive taxation. He said— A case is established in the instance of Ireland, which is written in characters too legible not to servo as a guide to future financiers—one which ought to bring shame upon the memory of its authors. He then stated the facts as to the decrease of the revenue between 1817 and 1821, mentioned by the Marquess of Lansdowne:— Here is an example to prove that an increase of taxation does not tend to produce a corresponding increase of revenue; but, on the contrary, an actual diminution. He believed also the right hon. Gentleman the Member for the University of Cambridge, the late Chancellor of the Exchequer, stated in the course of a debate in 1822, that the proportion of two to fifteen as the contribution of the two countries to the public expenditure, was admitted on all hands to be unjust. The pretence for the consolidation of the two Exchequers, was to relieve Ireland from the burden of the debt. Now, how did the debts of the two countries stand on the 5th of January, 1817? The English debt had increased from 450,050,000l. in 1801, to 734,522,100l. at the commencement of 1817, the interest on which was 28,238,400l. The Irish debt had increased from 28,550,000l. in 1801, to 112,704,800l. in 1817, the interest on which was 4,104,500l. Thus the increase on the charge of the British debt between January, 1801, and January, 1817, was 60 per cent; while the increase on the charge of the Irish debt in the same sixteen years was not less than 230 per cent. What had been the effects of the consolidation which took place? He thought it was perfectly clear, if nothing of the kind had taken place, it would have been for 337 the advantage of Ireland. At the time of the consolidation, the Chancellor of the Exchequer had been obliged to take off the income and some other taxes, which together produced 17,000,000l, and then he determined to have Ireland at his mercy, to see whether he could not make up the deficiency by putting the screw on that country. By the proceedings then taken, Ireland had been made liable for every farthing of the English debt. The projectors of this Act stated that such an amount of debt had been thrown on Ireland that she could not continue to pay it; therefore they nominally took off the debt from that country. As it was, instead of having to pay only 2–17ths towards the charge for the expenditure of the country, Ireland had to contribute one-seventh, or 2–14ths. After quoting some further details in illustration of the disproportionate and unjust amount of the general taxation which he alleged was borne by Ireland, the hon. and learned Gentleman alleged that, speaking generally, the ability of Ireland to pay was as one to nine, but that, whenever it could be got, she was made to pay as one to seven. There was a vast amount of uncredited taxation paid by Ireland. For example, there was upwards of 60,000l. Crown rents, for which she got no credit whatever. Then there were the duties paid in Ireland on manufactured articles coming through England, but for Irish consumption: all these were credited to the English revenue, although it was the consumer who actually paid the duties. The customs thus paid had been estimated by Sir Henry Parnell at 350,000l. a year. If Members would look at the tables of the receipts of the revenue of the two countries from customs articles, they would observe the ridiculously small sums which were put down to the credit of Ireland upon articles which must obviously be of very large consumption, such as oils and silks. Some of these items were credited as low as 5l., 2l., and in one case 1l. 10s. What the meaning of this was, or why it was so put, he knew not; but the great bulk of the articles consumed in Ireland paid the duty in England on passing through; and, therefore, on a largo proportion of the customable and excisable articles thus paying duty in England, Ireland got no credit for this amount of taxation. Ireland paid more than her fiscal abilities warranted. The excess of the debt charge of England over that of Ire- 338 land was more than fifteen millions; and in this respect the conditions of the Union had been violated; for by an unjust consolidation England was only paying thirteen millions, instead of between fifteen and sixteen millions. It was said that when there had boon a deficit in the accounts of the two countries, England had paid it. That might be true; but how had she paid it?—out of the surplus of proceeds common to both countries. This was the injustice of associating in partnership a rich man and a poor man, and making the latter liable for the expenditure of the former. The hon. and learned Gentleman than quoted further extracts from the Parliamentary returns and reports of Committees on finance and taxation to show that the burdens of Ireland had been un duly increased by her disproportionate liability to taxes, which should have been supplied by a separate taxation, and that since the Union she had been made unjustly liable to sixty-four millions of money which England ought to have defrayed by separate taxation. The hon. and learned Gentleman then urged that this injustice might be repaired by taking off the stamp duties, and the remission of other imposts which would not involve those commercial difficulties which would arise if the customable and excisable duties were different in the two countries. He then compared the remission of taxation which had taken place in England and Ireland, arguing that the result was anything but favourable to the latter country. From 1814: to 1846 inclusive, Great Britain had been relieved from 51,2,36,420l. of taxation, while, in the same period, the taxation remitted in Ireland was only 2,903,995l, The hon. and learned Gentleman then went through some further details of the kind, and then alluded to absenteeism as the bane of Ireland. Absenteeism was sapping the vitality of the country. Not alone did it cause the cattle and goods to go out from Ireland, but oven the money they brought was not returned to that country, or if it was it quickly went out again in the payment of absentee rent. He concluded by recommending the state of Ireland to that deep and anxious consideration winch every statesman must feel that the safety of the empire rendered it incumbent upon him to bestow upon so momentous a question. It would be well that the leading parties and leading men in the House should consider the subject during the recess, for the exigencies of 339 Ireland could not be postponed much longer. There could be no greater mistake than to grind down with the screw of taxation an already impoverished country; but if they would allow the resources of Ireland to grow, she could better hear taxation. If they would grant the Committee for which he now moved, much useful and valuable information might even now be obtained for consideration during the recess.

§ The CHANCELLOR OF THE EXCHEQUER
said, he did not intend to follow the hon. and learned Gentleman through the long details of figures which he had gone through; but he assured the hon. and learned Gentleman that whatever returns upon this subject might be desired, he should have great pleasure in acceding to; and it was by returns that the points could be most advantageously laid before the House. But although he could not accede to the Committee which the hon. and learned Gentleman had moved for, he should yet make a few observations in reply to the statements which he had made. Whatever Ireland might contribute to the general revenue of the empire, so far as regarded the injustice of which the hon. and learned Gentleman had been complaining, his statements were not borne out by the facts of the case. Without any Committee on the subject, the various returns which already lay upon their table were sufficient to show that since the time of the Union downwards, the expenditure of Ireland had never been met by her income, not even with the additions which the hon. and learned Gentleman had taken credit for on account of the customs received on goods now landed in this country. The hon. and learned Gentleman had talked of the proportion of payments to be made by the two countries, and had quoted figures, which, if he had only looked at the last returns, might have been stated in round numbers at 48,000,000l. for England, and 4,000,000l for Ireland; the proportion for the first twenty years after the Union being fixed at 15 to 2. But speaking of the debt, the hon. and learned Gentleman himself had acknowledged that since the Union Ireland had never paid the interest of her own debt; and the returns on the 340 table showed that between 1803 and 1817 her income, so far from equalling her expenditure, was necessarily augmented from the British Exchequer to the amount of 61,700,000l., to defray the charges upon the expenditure for Ireland. Even with such deductions as could be fairly made for the customs in this country—and the hon. and learned Gentleman fairly took credit for them—that was yet a large sum. But, again, the hon. and learned Gentleman in taking credit for the receipts which came into this country, did not look at certain charges not one sixpence to which did Ireland contribute either to the military or to the naval expenses incurred for the protection of our colonial trade, or to the general expenses of the country. As for the local charges upon Ireland, he found that during the last two years previous to the distress now prevailing in the country, a charge had been made upon the Consolidated Fund to the amount of 7,000,000l. to be laid out for local purposes alone. He would not say more on that occasion. He admitted that the returns were somewhat below the truth in regard to the receipts, and very far below the truth as to the true amount of the expenditure. He could not say that the hon. and learned Gentleman was at all justified in the statements he had made to show that the sister country was unfairly taxed in proportion to England.

§ MAJOR BLACKALL
conceived that the speech of the Chancellor of the Exchequer was an argument for the Committee that had been moved for. That speech showed that a return when moved for was not sufficient, for how were the same returns read in an opposite sense by two hon. Gentlemen? The matter was an important one, and it ought to be set at rest. It was not right that taunts should be thrown out against Ireland on the subject of her taxation. If the Chancellor of the Exchequer stated what was true, Ireland was not fairly taxed. Then if she were not, let the matter be justly settled, and let her bear her fair proportions. Let them, he said, by a fair and full inquiry, put an end to this bandying of words that was constantly going on upon both sides of the House—the Irish insisting that they had paid too much, and the English declaring that they paid too little. The question could be settled by a Committee, and a Committee ought to be granted.

§ Mr. W. FAGAN
thought there were good grounds for granting this Committee. 341 For supposing all the accounts were correct, and that the contribution of Ireland was 5,000,000l. a year, he yet believed it could be shown that she paid more than her fair amount of taxation. The principle of the financial union of England and Ireland was, that both countries should contribute to the expenses of the empire according to the ability of the two countries; and the proportion was stated in a speech made by Lord Castlereagh on the subject to be 2–17ths. Admitting that proportion to have been fair for Ireland in 1801, subsequently to that year circumstances occurred which made that amount vastly more than Ireland was able to pay. The question for the Committee would be whether that principle was fair and just. By the returns of the hon. Member for Glasgow, it appeared that the debt of Ireland, in 1817, was 130,561,000l.; that in 1801 it was only 27,792,705l.; so that she borrowed in the meantime 102,768,295l. But if her fair contribution was at the rate 2–17ths, the amount borrowed by her ought to have been not 102,000,000l., but 31,000,000l. only. The hon. Gentleman then quoted returns to show that Ireland's payments since 1801 had varied from 1–16th to 1–12th in 1840, and argued that he was justified in saying that was a sufficient contribution from that country. Supposing the exchequers of the two countries had not been consolidated, what would have been the consequence? Since 1817 the general expenditure of the country had been, say 54,000,000l.; from which, do-ducting the interest of the debt, there would remain 24,000,000l. to be contributed by both countries. Quo twelfth of that gave him 2,000,000l. as the proportion for Ireland in the general expenses of the Government; add to which the interest on the debt, another 2,000,000l., and the round sum became 4,000,000l. or 4,500,000l. to be contributed by Ireland. He concluded by expressing his hope that the right hon. Gentleman would accede to the Committee.

§ MR. F. FRENCH
insisted that the Motion of the hon. Member ought to be acceded to. He was convinced that Ireland in proportion to her means was paying as largely as England. In fairness to England and to Ireland, the Committee ought to be agreed to.

§ COLONEL DUNNE
did not see it was for the benefit of Ireland that England had colonies, or that she had such an interest in them as to be called on to pay for them, 342 for the balance of trade with the colonies was against Ireland. If the hon. and learned Gentleman pressed his Motion to a division, he would vote for it; but he hoped the Motion would be now withdrawn, and a Committee moved for early next Session.

§ MR. J. O'CONNELL
ultimately withdrew the Motion, saying he should bring it forward next Session.