HC Deb 13 February 1857 vol 144 cc629-78

House in Committee of Supply.


in the chair.


Sir, however conscious I may be of the difficulty of the task which I am about to discharge, I can assure the Committee that my feelings would be altogether misconstrued if it were supposed that I had any reluctance to lay before them, at the earliest possible opportunity, a statement of the expenditure and of the Revenue of the country. The Committee are well aware that the ordinary course adopted upon this subject is that the House should first consider the Estimates for the great branches of the public service—for the Army and Navy especially—in a Committee of Supply, and that when some progress has been made in those Estimates, that the Chancellor of the Exchequer should submit to the House the Ways and Means by which the expenditure of the ensuing year may be met. Such is the course which is usually pursued. But as soon as I became aware that it was the general wish of the House that the financial statement should be made before the Estimates for the Army and Navy were considered in Committee of Supply, I gave notice that I would make that statement to-day. I wish the Committee to observe that this is the earliest day on which the financial statement could be made. It was only on Monday last—the last Government night—that, in a Committee of Supply, an Address was agreed to for the production of the Estimates for the Army and Navy. These Estimates have since been presented. This is the second Committee of Supply. The Estimates are now on the table of the House; but as up to the present moment no Vote has been taken in Committee of Supply, no Committee of Ways and Means has been appointed; so that this is the first occasion on which it was competent to me to make the statement which I am about to submit to the Committee. I hope, Sir, therefore, that the Committee will be satisfied that there has been no delay or reluctance upon my part to lay before them the annual financial statement. In ordinary years, no doubt, it is desirable that the consideration of the Army and Navy Estimates should take precedence of that statement. I fully admit, however, that in an extraordinary year, such as the present one, it may be convenient to adopt a different course. The reason for the course usually followed is this—that the House fixes what amount of expenditure is necessary for the service of the year, and after that amount has been fixed, it becomes the duty of the executive Government to lay before the House the plan by which they propose that that expenditure should be defrayed. But although a considerable portion of the expenditure of the country may be regarded as essential and inevitable for the service of the year, there is also a not inconsiderable portion of it with respect to which a discretion may well be exercised. There are certain expenses which may not be thought necessary in one year, and may be postponed to a future year. There are also certain purposes to which the expenditure may be applied to a greater or less degree, and which may be accomplished in a more or less complete manner, and as to which, therefore, the House may reasonably say—"We wish to know what is the pressure of taxation on the country—we wish to know whether there may be any impost that is exceedingly grievous and oppressive, before we sanction that portion of the expenditure which is not strictly necessary, but with respect to which we may exercise a reasonable discretion." Now, Sir, this is undoubtedly a period to which that description applies. We are passing from a state of war to a state of peace; we are passing from a period of large expenditure to a period of comparatively limited expenditure; and it is not an unreasonable demand on the part of the House of Commons that they should be informed of the probable taxation—the probable ways and means of the ensuing year—before they enter into a consideration of the Estimates. My hon. Friend the Mover of the Address (Sir John Ramsden), on the first night of the Session, bestowed much commiseration on what he described as the condition of a plethoric Chancellor of the Exchequer suffering under the pains of repletion; he spoke of the numerous claimants for his favourable consideration at a period when it is thought probable that there will be an excess of revenue over expenditure; and he extended to me a large amount of commiseration for the position in which I should be placed during the first weeks of the Session. I accept with much gratitude the sympathy of my hon. Friend; but at the same time I cannot but feel that I have a far more agreeable task to perform this year than that which devolved upon me on those preceding occasions on which I have had to ask the House to agree to measures of increased taxation; on which I had to represent to them the necessity of imposing additional burdens on the country, and when I had to request them to sanction loans and the issue of Exchequer bills for the purpose of covering a large deficiency in the annual income of the State. That, Sir, is an additional reason why I should not be unwilling to avail myself of the earliest opportunity of submitting to the Committee a statement of the finances of the year.

Sir, I will begin by calling the attention of the Committee to the expenditure and the revenue of the current financial year, that is to say, the financial year which began on the 1st of April last, and which will end on the 1st of April next. I wish to direct their attention to the expenditure and revenue of the current year, not merely for the purpose of comparison and information, but also for the purpose of removing some important misapprehensions which, from what I have observed to pass in this House since the beginning of the Session, appear to prevail with respect to the expenditure and taxation of the current year. In the statement which I made last Session after Easter, I estimated the revenue of the current year—that is to say, the year ending on the 1st of April next—at £71,740,000. I ought, however, before I proceed further, to remind the Committee that at the period at which I make this statement—the financial year being still incomplete—I am compelled to determine the revenue and the expenditure of the unexpired portion of the year by an estimate, that is to say, I can at present only make an estimate of the amount either of the revenue or of the expenditure of the year during the next month, and during the remaining portion of the present month. I believe, however, that the estimate which I am able to form approaches with sufficient closeness for all practical purposes to what probably will be the public receipts and the public outlay from the present moment up to the termination of the financial year. In following, however, the figures I am about to read, the Committee will remember that a portion of the calculation, embracing a period of about six weeks, rests on estimate, and not on account. The estimate which I made after last Easter of the revenue of the current year was £71,740,000. The actual and estimated receipts are somewhat more than that sum, but they are not very much more; they will probably amount to £71,885,000. The only important branch of the revenue which has produced a sum less than my estimate is the Customs. I estimated the Customs' revenue at £23,850,000; but it will probably produce not more than £23,600,000. That deficiency appears to be principally owing to a short stock of sugar, and also, in some degree, to a check in the consumption of tea. I will now read the details of the estimated revenue of 1856–7, and the sums actually received, together with the estimate of the further sums to be received up to the 31st of March next:—

Service. Estimate per Budget. Actual and Estimated Receipts to 31st March next.
£ £
Customs 23,850,000 23,600,000
Excise 17,170,000 17,600,000
Stamps 7,185,000 7,265,000
Taxes 3,110,000 3,110,000
Property and income tax 16,355,000 16,250,000
Post Office 2,810,000 2,800,000
Crown lands 260,000 260,000
Miscellaneous 1,000,000 1,000,000
£71,740,000 £71,885,000
The expenditure for the current year, including a loan to Sardinia of £1,000,000, and a Vote of Credit for £2,000,000, was estimated by me at £82,113,000; showing, therefore, as compared with the estimated revenue, a deficiency of £10,373,000. That sum represents the estimated deficiency for the present year, including a margin for contingencies to the amount of £2,000,000; and, deducting that margin of £2,000,000, the deficiency on the expenditure of the year as voted by the House amounts to £8,373,000. In order to cover that deficiency, certain loans were effected. In the first place, there was a receipt of £1,499,000 as part of the loan of £5,000,000 which was effected before last Easter; there was a second loan of £5,000,000 effected after Easter; and further, there was an issue of Exchequer bills to the amount of £1,000,000; making a total amount of money borrowed during the current year of £7,499,000. A power was conferred on the Government of borrowing on Exchequer bills to the extent of £4,000,000; but that power has only been exercised to the extent of £1,000,000, and we shall not require for the service of the year any further exercise of that power. The Act of last Session was intentionally so drawn that the power should expire on the 1st of April next; but the Government will wholly surrender the power of borrowing any portion of the remaining £3,000,000 for the service of the year. The total sum raised by revenue, and by loans and Exchequer bills, during the year, we now set down at £79,384,000. The expenditure of the year, including the payment of the loan to Sardinia, will probably amount to £78,000,000; thus leaving a balance of £1,384,000 to be carried over to the service of the next year.

Sir, on the first night of the Session the right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli) stated that we were at present in the extraordinary position of having a war taxation during a time of peace. Now, if that epigrammatic sentence has any very distinct meaning, I apprehend it must be understood in this sense—that we have war taxation during a year of peace expenditure. If that be not its meaning, it can involve no censure of the course which has been taken by Her Majesty's Government. Now, I am desirous of impressing on the Committee the fact that this has not been a year of ordinary peace expenditure, but that it has been a year of extraordinary expenditure—a year in which the charges necessitated by the war terminated now nearly a year ago had not yet ceased. I say that that fact was fully within the cognisance of Parliament—that they were aware, when they agreed to the financial plans of last Session, that this would not be a year of ordinary expenditure. That must, I think, be within the recollection of every Gentleman I have the honour of addressing. But lest there should be any doubt upon a matter of such importance I will, with the permission of the Committee, read an extract from the statement I made last year at the time I proposed the Government financial plan. I am naturally unwilling to repeat my own words; but they are important in this instance, as showing what was my understanding of the case, and to satisfy the House that, as far as I was able, I brought the state of the case clearly under their notice. On the 19th of May last I addressed to the House the following observations:— Although peace has been happily concluded and ratified, and although we are not now in a state of war, nevertheless the present year, for all practical purposes, must be looked upon, to a great extent, as a year of war expenditure. The preparations which have been made for a campaign, both by land and by sea, during the winter and early part of this year, were such, that had the war continued we were in a condition to carry on this year's campaign most effectively, both with our land and sea forces. That expenditure, I rejoice to say, has proved unnecessary; we have not been called on to enter on a third campaign; but, nevertheless, the expenditure was incurred—it will become payable during the present year, and we shall not reap the entire benefits of a return to a state of peace until another year. There will also be the expense of transporting our troops home from the Crimea; there will likewise be the expense of paying off the troops, and all the other expenditure connected with disbanding the army and navy, the whole of which will have to be defrayed during the present year. To these must be added the expense of the re-transport of the Sardinian troops from the Crimea, which, though not necessarily a part of our war expenditure, is yet connected with it, and is an expense which we ourselves undertook, and will be effected by our ships."—[3 Hansard, cxlii. 334.] I think that these remarks must have brought most distinctly under the notice of the House the fact that this would not be a year of ordinary peace expenditure; and as these remarks were acquiesced in by the House, I assume that no doubt could be entertained that the current year could not, as regarded its expenditure, be regarded as an ordinary one. In addition to the extraordinary payments to which I have already adverted, there has been a sum of £1,000,000 paid as a second instalment of the loan to Sardinia, which falls entirely on the revenue of the current year. There has also been a payment for the redemption of an hereditary pension effected under the authority of an Act of Parliament passed last Session; that payment amounted to £91,000; but it may be considered as the redemption of so much debt and in the nature of an extraordinary payment, altogether independent of the extraordinary charges of the year. In addition to the extraordinary charges of the year there is also a loss occasioned by the cessation of the war duty on malt. The war duty on malt was limited by Act of Parliament to the "5th of July next after the ratification of a definitive treaty of peace." Now, the definitive treaty of peace was ratified on the 27th of April last; and therefore the war duty on malt expired at the beginning of the following quarter, which was the earliest period at which that expiration could possibly take effect. There is a credit given on malt, and the whole of the revenue is not lost in the first year; but there will be a loss, I think, of about £200,000 in the revenue on malt this financial year; and there will be also—what is the principal cause of the defalcation in that branch of the revenue—a payment of a drawback on the stock in hand, which has become necessary, amounting to £840,000; so that the loss on the article of malt from the cessation of the war duty during the current year exceeds altogether a sum of £1,000,000. That is a deduction from the revenue of the year which has already taken place in anticipation of a peace expenditure; and, therefore, it is not correct to say, that in the present year no reduction in the war taxation has been made.

I am now desirous of calling the attention of the Committee to a few figures, which I believe are of considerable importance, as illustrating the elasticity of our national resources, and the spring which the trade and industry of this country have taken immediately on the removal of the pressure of the war. We know that even during the war the resources of this country exhibited themselves in undiminished power, while those of our enemy underwent a sensible abatement:— Secto corpore firmior Vinci dolentem crevit in Herculem. These are facts which do not rest merely on general assertions—they admit of being reduced to arithmetical proof; and, with the permission of the Committee, I will briefly call their attention to some of the most remarkable results of the returns that have lately been laid before Parliament. I think it of material importance that the Committee should bear in mind the present state of our trade as compared with its state in former years; and the more so as we are told that the pressure of taxation has been so great in this country as sensibly to diminish its productive force and energy. I will begin by calling the attention of the Committee to the increase which has taken place in the value of our exports in the year 1856. The declared value of our exports in that year exceeded that of any previous year, and reached the sum of nearly £116,000,000, being an increase of £20,000,000, or 21 percent over our exports of 1855, and an increase of £16,957,000, or of 17 per cent over those of 1853—the year immediately preceding the war; in which, however, there was an unprecedented increase in our exports. With the permission of the Committee I will read the figures, which show the declared value of the exports of Great Britain and Ireland in the three years 1853, 1855, and 1856. In the year 1853 it was £98,933,000; in the year 1855—a year of war—it had fallen to £95,688,000; and last year it rose to £115,890,000. I will take two of the principal branches of the manufactures of this country, and state what has been the amount of the exports in those branches during the same years, and we shall find the result equally encouraging. The first of those branches embraces all sorts of textile fabrics. The declared value of the exports of those fabrics amounted,—

In 1853. In 1855. In 1856.
£52,299,000 £51,123,000 £59,915,000
The other item I shall select comprises all kinds of metal fabrics. The declared value of the exports of these fabrics amounted—
In 1853. In 1855. In 1856.
£19,563,000 £17,892,000 £23,538,000
I have only to add that these items afford fair examples of the value of our exports of other manufactured goods, and of the general increase which will be found to pervade the whole export trade of the country. With respect to our imports I will take but one article for the purpose of showing the alterations which have taken place in their amount during the same years; and the article I am selecting is the important one of raw cotton. Our imports of raw cotton, retained for consumption, amounted to—
In 1853. In 1855. In 1856.
746,709,000 lb 767,406,000 lb 877,814,000 lb
The general result is, that our exports of British and Irish produce have doubled in value since so recent a period as the year 1849; and comparing in this case the first year after the pence of 1815, with the year in which the last peace was ratified, we find that we commence this period of peace with exports three times greater than they were in 1816. Our imports of grain were less in 1856 than in 1853, but were greater than in 1855. The Committee may perhaps be interested to learn that our imports of grain from Russia, which had fallen by one-half in 1854 as compared with 1853, and which in 1855 were altogether suspended, reached the amount of l,208.000quarters in 1856, and were 14 per cent on the whole of our imports of grain that year, against 16 per cent on our imports in 1853—thus showing the rapidity with which a suspended branch of trade was restored on the return of peace. I am sorry to weary the Committee with these details; but after the gloomy view that has been taken by some persons of our present prospects, and of the extent to which, in their opinion, the war taxation has diminished the productive energies of the country, I have thought it important that the Committee should be put in possession of the most material facts bearing on the condition of the great branches of our trade and industry. Now, if we turn to our shipping, taking together the tonnage of the entries and clearances of British vessels in cargo, I find that the return for the year 1856 shows a considerable increase over that for any preceding year. There was an increase last year as compared with the year 1855 to the amount of 1,760,000 tons, or 19 per cent; and there was an increase last year as compared with the year 1853 to the amount of 1,906,000 tons. In order to comfort those Gentlemen who some two years ago anticipated the ruin of the shipping of this country from the alteration then effected in the Navigation Laws, I will read to them returns of the tonnage of vessels in cargo entered and cleared in each of the three years 1853, 1855, and 1856. They are as follow:—
British Foreign Total
Tons. Tons. Tons.
1853 9,064,000 6,316,000 15,380,000
1855 9,211,000 6,156,000 15,367,000
1856 10,971,000 6,933,000 17,904,000
The Committee will of course remark that the increase of last year has taken place principally in British shipping, and not to any great extent in foreign shipping. It is also not a little remarkable that the large amount of tonnage taken up by the Government during the war, which comprised an aggregate of not less than 200,000 tons, should have fallen back for employment in the ordinary channels of trade, without having created any perceptible embarrassment to the shipping interest. That is another proof of the elasticity of demand and of the rapidity with which the industry of the country has returned to its ordinary condition immediately after the termination of the war. There is only one other point to which I wish to advert, as proving in a very short compass the demand for labour which now exists in this country, and which has not been diminished even by the disbanding of troops and seamen after the ratification of the peace. The total number of emigrants from the United Kingdom in 1852 was 368,764; last year it was only 176,554; showing a great reduction in our emigration since 1852, notwithstanding our transition since that period from a state of war to a state of peace.

I fear that I have wearied the Committee with these statistical details: I will now call their attention to something which perhaps may appear to them of more pressing interest; I mean an account, or an estimate, of the actual expenditure which has been incurred on account of the war, and the manner in which that expenditure has been or will be defrayed. I first take the net expenditure of the three years 1854–55, 1855–56, 1856–57, including the loan of £2,000,000 to Sardinia; and I find that the expenditure of those three years, being the three years of the war, amounted to £228,721,000. I now take the net expenditure of the three years of peace immediately preceding the war— namely, the years 1851–52, 1852–53, and 1853–54—and I find that the expenditure of those three years of peace amounted to £152,323,000. I think that by deducting the amount of the expenditure of those three years of peace from the amount of the expenditure of those three years of war, we shall be able to arrive at a pretty close approximation to the cost of the war. I find that the cost of the war, so estimated, amounts to £76,398,000. The net revenue of the three years of war—that is to say, the revenue arising from the ordinary branches of taxation, and independent of borrowed money—was £192,685,000. Deducting from that net peace expenditure of the three years, 1851–2, 1852–3, 1853–4, which was £152,323,000, there remains a surplus revenue applicable to the war expenditure of £40,362,000. That sum represents the revenue which was derived from the war taxation, and the difference between the war revenue and the net revenue of three years' war and three years of peace. To that £40,362,000 I add the money received by adding to the funded and unfunded debt £41,041,000. Thus if we add together the additional war taxation of £40,362,000, and the £41,041,000, which was borrowed in excess of the taxation, we shall have a total of £81,403,000. The total amount of the war expenditure was £76,398,000; and, therefore, the difference between those two sums, owing to the more flourishing state of the revenue at the end of the war as compared with its state at the beginning, shows that a proportion of the money borrowed for the purposes of the war still remains in the Exchequer.

I will now proceed to the more practical portions of the subject—namely the estimated expenditure for the ensuing year 1857–8. The interest of the funded and unfunded debt will be £28,550,000. The permanent charges on the Consolidated Fund, £1,770,000. The charge for the army—including a sum of £400,000 for the militia, the estimate for which is not yet upon the table, but which, I think, will probably be about that amount—is £11,625,000. The charge for the navy, including the coast-guard, will be £8,109,000. The packet service, £965,000. The civil service will be about £7,250,000. The collection of the revenue, which used to be excluded, but is now brought into the annual budget, is £4,215,000. The superannuations which were removed from the revenue by an Act of last Session, and are now brought for the first time into the annual statement, are £475,000. And I think that portion of the expense of the Persian war which is, by agreement with the East India Company, to be charged upon the revenue, and which agreement was, that the Exchequer should pay half the extraordinary expenses of the war, will amount for the estimate I propose to take of expenses incurred up to the 30th of April next, to £265,000. That is all I intend to ask for on account of the extraordinary expense, in the ensuing year. The total amount of these various charges will be £32,904,000, which, added to the interest of the debt and the charges on the Consolidated Fund, will make a total expenditure of £63,224,000, independent of the repayment of debts. I now come to a portion of the burdens of the year which is consequent upon the late war, namely, the repayment of loans contracted for the war, and made chargeable on the revenue of the ensuing year. The first of these arises from the series of Exchequer bonds issued in 1854, and payable on the 8th of May, 1857, which amount to £2,000,000, and with reference to which it will he necessary for me to move a formal Resolution in Committee of Supply, as the first step for the repayment of the bonds. There is also the sinking fund on the second loan of £5,000,000, the interest of which was made chargeable by Act of Parliament on the Consolidated Fund—that amounts to £250,000. The amount of debt, therefore, repayable, partly by specific engagement under Act of Parliament, and partly by distinct charge upon the Consolidated Fund, and for the repayment of which it will be incumbent on the Executive Government to make provision during the present year, is £2,250,000. The total outlay to be provided for in the ensuing year is £65,474,000. The Committee, however, will bear in mind that this estimated expenditure, which is apparently so much in excess of the amounts of former years, includes a sum of nearly £5,000,000 for the collection of the revenue, which was not included in former Estimates.

Now, I will lay before the Committee, as shortly as I can, an explanation of the principal heads of charge for the ensuing year, and in this portion of my statement I feel that I shall labour under some disadvantage, because the Committee will probably expect to hear some explanation, however general it may be, of the sums which are estimated for the Army and Navy charges, those Estimates not having yet undergone any consideration in Committee. I do not know that I can take a fairer course with regard to the Army and Navy Estimates than to compare them with the amounts as they stood before the war. As compared with the reduced Estimates of last year, there is a diminution of the Army and Navy Estimates amounting to about £17,000,000. That is the absolute reduction on the Estimates of the present year. The Committee must, of course, be aware that, however desirous the Government may be to bring the War Estimates to a peace standard, that change cannot be made by magic—it cannot take place in an instant—it cannot be made by the stroke of a wand—and some time must necessarily be allowed to make the changes by which alone the transition can be effected. In instituting a comparison, therefore, with the year of peace immediately before the breaking out of the war, I do it in a manner which everybody must admit not only to be fair, but something more than fair, for the circumstances of the case impose upon the Government certain conditions, which they must observe on the return from a state of war to a state of peace. It must be obvious that it would not be possible to bring the Army and Navy Estimates at once down to the standard at which they stood immediately before the war.

With that observation I will now state to the Committee the amounts of the Army, Navy, and Packet Estimates in the three years of peace immediately before the war.

The Army Estimates were as follows:—

In 1851. In 1852. In 1853.
£8,955,000 £9,408,000 £10,113,000
The Estimates for the Army for the ensuing year have been laid upon the table, and will be found to be £11,225,000.

The Navy Estimates were—

In 1851. In 1852. In 1853.
£5,734,000 £5,835,000 £6,285,000
And in the year 1857–8, exclusive of the sum for the coast-guard, which would disturb the comparison if taken into the calculation, inasmuch as the transfer of that item to the Navy Estimates will only be made next year, the amount of the Estimate is £7,623,000. Now, I think the Committee must see when they compare the Estimates for the two services of the present year with the Estimates which were actually voted for the three years immediately before the war, that no charge can be more unfounded than that which has been brought against the Government, of wishing to perpetuate an extravagant war establishment in a time of peace, to alter the whole constitutional settlement of the country, and, by keeping up an enormous military establishment, to overawe the people and threaten their liberties; for to that extent went the assertions made the first night of the Session. Any addition to the Estimates for the public service over the years with which I have been comparing the present, and especially the addition to the Navy Estimates, the Committee will at once see is mainly due to the increase during the recent years of war. I now come to the Packet service, with respect to which the Estimates are as follows—
In 1851. In 1852. In 1853.
£809,000 £870,000 £835,000;
and this year the estimate has been increased to £965,000. Now, the foreign packet service is supposed to be of the greatest importance to the mercantile interests of the country, and has nothing whatever to do with military affairs; and if ever there is any question for the extension of lines of packets—if there are, as indeed there frequently are, wishes expressed for the more frequent and speedy delivery of the mails, Her Majesty's Government being always urged by strong representations from various bodies of foreign and English merchants engaged both in foreign and domestic trade—they are only restrained by the fear of overloading the Estimates from giving a higher sum to the packet service. However, whatever may be the increase in that estimate, it has nothing to do with our military expenditure. As I have already remarked, the Army and Navy Estimates have not yet been considered in Committee of Supply, and therefore the Committee may be of opinion that I should, without undertaking to anticipate the labours of my right hon. Friend the First Lord of the Admiralty, or my hon. Friend the Under Secretary of State for the War Department, briefly mention some few of the causes that have led to the increase of the Army and Navy Estimates for the ensuing year, as compared with the Estimates for the year immediately preceding the war. Now, in the Navy Estimates there has been some increase in the marines, and also in the coast-guard force. Let me just remind the Committee that the increased charge for the coast-guard force was made in pursuance of an Act of Parliament passed last Session, by which the coast-guard was transferred from the department of the Customs to the Admiralty, the object being to create a reserve naval force. The plan was deliberated upon in the House of Commons last Session, and it met the approbation of persons most qualified to form opinions upon the subject. I remember that it received the approbation of two Gentlemen of great weight and authority in this House, two former First Lords of the Admiralty, my right hon. Friend the Member for Carlisle (Sir James Graham) and my right hon. Friend the Member for Portsmouth (Sir Francis Baring). It was also received with more than assent on the opposite side of the House, and it was considered a legitimate, and, on the whole, an economical way of maintaining and increasing our Navy in a time of peace. That plan, however, necessarily led to an increased expenditure, and therefore to the increase in the present Naval Estimates, which consequently, must be considered as the result of an Act of Parliament passed, after due deliberation, in the last Session. The increased price of provisions, as compared with the price in the year which immediately preceded the war, also leads to some increase both in the Navy and in the Army Estimates. There is also an increase in the scientific Vote for the Navy. That surely cannot be considered at all dangerous to our liberties. Then, again, there were contracts, as could not fail to be the case in time of war, which have not yet been completed, but which will all cause expense for the ensuing year. Hon. Gentlemen must be well aware that it was impossible to foresee the exact period of the termination of the war, and therefore it was necessary for the Government to be provided for its possible continuance, and while it was raging they must enter into contracts on the supposition that it might last some years. Peace being concluded, the Government must either allow these contracts to be fulfilled or pay forfeit. Whatever course is adopted loss is necessarily incurred to some extent. The providing of steam machinery for the screw fleet formed another charge, and was of course another cause of contracts. The general acknowledgment of the utility of steam in our Navy, and its introduction into it, will, I fear, cause a permanent increase of charge in our Navy Estimates, inasmuch as navigation by steam is in itself more expensive than navigation by sails. So also in the item of coals. There is also a large increase in the charge for factories for steam machinery as well as for the enlargement of docks, basins, and slips for the increased size of the ships now built for the service. The result is that, including the coastguard, there is in the present Navy Estimates an increased charge for war steamers of £450,000; an increased charge for stores, of £400,000; for works, of about £300,000; for dockyards, of £200,000; and for miscellaneous, of £30,000, making, with the charge for the coastguard, a total of £1,380,000 for the increase above the Estimates for 1852. I must say that I do not conceive that such an increase is at all indicative of the dangerous designs of the Government, or that it affords any ground whatever for those alarms to which I have alluded.

Leaving out the militia, I find that the several Army Estimates for the year 1853–4, amounted to £9,952,000; those for the ensuing year amount to £11,225,000, showing a difference of £1,273,000. Now, this is the explanation of the principal sources of increase. The first cause of the increased expenditure is the increase—though certainly not to a dangerous extent as urged by some persons—of men. There it is, if anywhere, that the dangerous designs of Government must be discovered. Exclusive of the Queen's regiments in India, the increase of men in this year was 126,796, as against 119,881 in the year 1853–4, being an increase of 6,915 men. Now, I will account for this increase of men. It has been owing principally to the augmentation of the Artillery corps, and also to the creation of two new corps—the Military Train or Land Transport Corps, and the Hospital Corps, which is a body of orderlies to attend the military patients in hospital. Now, I think this explanation ought to relieve the Government from the charges that have been made of their wishing to introduce, during this transition from war to peace, an entire innovation in our military system. The next increase to which I will allude is that of pound;225,000 for warlike stores, which is owing to the purchase of the new-pattern musket, and also on account of the fulfilment of contracts for gunpowder entered into during the war. To that item the same remarks apply as those which I offered with regard to the purchase of timber and machinery. While the war lasted it was the duty of the Government to make provision to sufficient extent to meet all the possible events of the war. Gunpowder is an article which cannot be obtained in a moment; it is necessary that the manufacturer should have some time in order to make his pre- parations. If the war had continued, and the Government had been found not to have made sufficient provision for such an article, they would have been justly liable to the severest censure of the House. That is an article, however, which is in constant requisition in some form or other, and, therefore, the expenditure on that head cannot be considered an entire loss. Another item of increase is the Wages of artisans, which amounts to £240,000, on account of the addition to the manufacture of various articles to which I have referred. Under the head of Works and Buildings there is an increase of £243,000, which is owing to the increased barrack accommodation which is to be provided for the army, the great military hospital at Southampton, and works of defence on progress on the coast. There is an increase in the vote for educational purposes of £67,000. Those are the principal items of increase in the Army Estimates.

We now come to the Civil Service Estimates, in which there is likewise an increase. The Civil Service Estimates, the amount of which I stated at £7,250,000, exhibit an increase of about £500,000 over the Estimates of the past year. There are, as the Miscellaneous Estimates will inform the House, augmentations under certain heads, and diminutions under others, which must be set off against each other; but the general result is an increase of about £500,000, which is accounted for in the following manner:—There is an entirely new charge for the County Courts, now for the first time brought into the Estimates, in consequence of an Act passed during the last Session. That Bill was received with great favour in this House, and there was manifested by many Gentlemen a disposition still further to increase the charge. This charge for the County Courts, which was previously defrayed by fees, will amount, at least, to £180,000. There is also a charge for County Constabulary—no doubt a most useful expenditure, but one to which a similar observation applies—namely, that it was proposed in this House that the sum granted from the Exchequer for that purpose should be increased. The sum estimated for the County Constabulary is £146,000. There will be an increase in the amount of the Vote for Public Education in England, arising from the extension of the operations of the Committee of Privy Council, an extension which I hope will not be other than acceptable to a large majority of the Members of this House, who appear to think that it is in this manner that assistance can best be given to the voluntary efforts so creditably made for the improvement and extension of education. The addition to this Vote will be £129,000. I shall also propose to take a Vote for purchasing a site on which to build certain public offices, a matter which has now become one of necessity. I shall ask for money sufficient for the purchase of a site on which to rebuild the Foreign Office, which is in a state requiring immediate attention—a new War Department, which is now scattered under different roofs; and also a new Colonial Office. The estimated cost of the site in question is £80,000. These four items together make up a sum of £535,000, and therefore I have fully accounted for the increase of £500,000 to the Civil Service Estimates, the chief part of which arises from two new charges which are now for the first time brought upon the Votes of this House—namely, those for County Courts and County Constabulary. There will also be an increase in the charges for the collection of revenue amounting to £111,000. That is, I believe, principally owing to the increased facilities which have been given for the transmission of letters and the consequent augmentation of the charge for the Post Office.

Having thus called the attention of the Committee to some items of the Miscellaneous Estimates, I may, perhaps, be permitted to refer to a remark made by my right hon. Friend the Member for the University of Oxford (Mr. Gladstone) on the first night of the Session—that he had observed a desire generally both in the country and in this House to increase the expenditure and yet to diminish taxation. Now, Sir, it was a dictum of Dr. Johnson, I think, that it rarely happens that more than half of an antithetical sentence is true; but I can nevertheless vouch for the literal truth of both clauses of the antithesis of my right hon. Friend. I can bear witness, from my own personal experience, that there exists at present a very great desire to increase expenditure, and a no less strong desire for the reduction of taxation. Well, Sir, we hear a good deal of complaints—made sometimes in this House, but more frequently at public meetings in the country and through the medium of the Press—of the jobbing tendencies of Governments, of public men, and even of the Members of this House; and it is affirmed that the great cause of the increase in expenditure and of the demands made upon the national Exchequer is this tendency to corruption. It seems to me that the Gentlemen who make these complaints form their opinions of the existing state of things from books such as Horace Walpole's Memoirs, Doddington's Diary, or other well-known historical works of the last century rather than from observation of facts and events passing under their eyes. I must say I think that there is no real danger to the Exchequer, to any serious extent, in the present day, from jobbing or corruption. I should be very sorry to forfeit the opinion of hon. Gentlemen for my supposed credulity, innocence, and simplicity, but I think that I may venture to assert, that, looking to the perfect publicity which surrounds public men, looking to the discussions which take place in this House, looking to the unceasing vigilance of public opinion and of the Press—I may venture to say that the Exchequer of the country is in no great danger from personal jobbing and corruption. The real danger to the Exchequer comes from a totally different quarter—from useful projects, and from the ardent philanthropy of various persons, each intent upon realising his own plans for the good of the country. I can speak with some feeling upon this subject, inasmuch as it is my lot to receive a great variety of representations from gentlemen forming deputations, or in writing, a large proportion of whom are prompted by the best motives, and who have the most beneficial objects in view, but all of whom it would be impossible to satisfy if the taxation of the country were, not £60,000,000, but £120,000,000 a year. In fact, no moderate amount of taxation would be sufficient to meet all the useful objects now projected. It is only a little while ago that an application was made to me by the Metropolitan Board of Works for no less a sum than £4,000,000. [Laughter.] Hon. Gentlemen may treat the subject with levity, but I can assure them it was by no means so considered by the gentlemen who made the application. They were very unwilling to receive the answer I gave, but it was the only one I could give—namely, that the subject should receive the attentive consideration of Government. They seemed to be surprised that I did not at once enter—I presume on behalf of Parliament—into an engagement to effect a loan to the extent of £4,000,000 for the object which they have in view. I merely mention that as a project in which a very large portion of the population of this metropolis takes an interest, and which many persons consider to be a national object of no ordinary importance. There is also a plan which was recommended by a Committee of last Session for the concentration of all the public offices. That Committee recommended that there should be a large purchase of land in Westminster,—intending, I presume, that public offices should, without loss of time, be erected upon it. I believe that the lowest estimate for the purchase of the land was about £1,500,000, and I suppose that for the erection of buildings in accordance with the views of those who promoted this plan a sum of not less than £5,000,000 or £6,000,000 sterling would be required. There are numerous plans for museums, for collections of science and art,—all of them highly useful, and tending to the improvement of all classes of the community,—not confined to the metropolis alone, but proposed for Edinburgh and Dublin, and even for other large towns in the United Kingdom. There are plans for the laying out of parks in the metropolis and other large towns,—and I need not say that the purchase in the neighbourhood of London of a space sufficient for a public park implies a considerable outlay of money—and also a plan for the purchase of Hampstead-heath. There are numerous plans for widening the streets and improving the approaches and communications of the metropolis. There are plans connected with bridges in the metropolis and elsewhere; plans for pulling down houses and making splendid approaches to the heart of the city. There are plans for electric telegraphs connecting the most distant regions of the earth, passing over hundreds of miles of land, and under thousands of miles of sea. There are also numerous and undoubtedly most beneficial plans for the extension of education, and for the erection of schools of different sorts and for different classes. Furthermore, there are also plans and proposals, of which we used to hear so much last Session, for the increase of half-pay and superannuation allowances, and for allowances to widows and other persons who have suffered from the consequences of the war. I dare say that the experience of hon. Members would easily enable them to increase this list. They are all plans of the most legitimate nature, and highly advantageous, supposing the Government to have millions of money at its disposal. But it is from proposals of this kind, and not from proposals for the benefit of individuals or for purposes of corruption, that the real difficulties of the Government arise at the present time; inasmuch as it is utterly impossible, however wealthy the country may be, however willing to submit to any reasonable load of taxation, for it to provide the funds required for all these different projects; and therefore the task of selecting those of them which are the most useful, the most urgent, and most deserving of the attention of the Government and of this House is anything but an easy one.

Let me, Sir, now recall the consideration of the Committee to the debt which has been created by the war, and which has imposed obligations on the nation which it is now necessary to fulfil.

Increase of Debt. Annual Charge thereon.
Total addition to the Funded Debt during the war £30,265,000
On which increased annual charge is £907,000
To which must be added Terminable Annuities 116,000
Exchequer bonds £7,000,000
Annual charge thereon 245,000
Exchequer bills £5,041,000
Annual charge thereon 191,000
Total increase of annual charge upon the revenue on account of debt created during the war £1,460,000
In addition to this, however, there are certain items of capital which have to be redeemed, and to which I shall shortly advert.

I have now, Sir, completed the explanation which I have to offer on the subject of the expenditure; but before I come to the plan of taxation for the ensuing year I must trouble the Committee with some remarks upon expressions that fell from my right hon. Friend the Member for the University of Oxford (Mr. Gladstone) on a former night. I am not quite sure that I fully collected the purport of his observations, but I remember that he alluded to a "compact" entered into in the year 1853 between the Government and Parliament, or the country, with regard to the permanence of the financial arrangements of that Session. Now, I can understand a "compact" such as that made at the time of the union between Scotland and England, or at the time of the union between Ireland and England, and embodied in an Act of Parliament, by which one of the contracting parties may be said to be extinguished; I can understand an arrangement of that kind having the sacred nature of a contract which cannot be disturbed without a manifest breach of public faith. But, in order to establish the doctrine that a financial arrangement entered into for a particular year or series of years has the qualities and incidents of a "compact" it is necessary, it seems to me, to show that the state of things which was assumed as the basis of that "compact" has not been varied by subsequent events, but still remains unchanged. In the first place, then, the whole arrangement of 1853 was entered into on the assumption that pence would continue unbroken. I need not say that that assumption unfortunately did not prove to be correct. War, in its actual expenditure, as well as in its consequences, is unhappily, in matters of finance, a disturbing cause of the first magnitude; and it is only necessary for me to refer to the facts which I have just narrated in regard to the large increase of annual charge on account of the debt, owing to the recent hostilities, in order to show that the foundation of the arrangement of 1853 has, in the most important respect, been overturned. But not only has the annual charge of the debt been increased; there are also certain payments in the nature of the redemption of capital debt which must take place within the years comprised in the period covered by the arrangement in question. That settlement extended over the period from 1853 to 1860. Well, according to the obligations fixed by Acts of Parliament now in force, there become payable in the year—

1857 on acc. of Exchequer bonds by 17 Vict. c. 23 £2,000,000
1858 2,000,000
1859 2,000,000
1860 by 18 & 19 Vict. c. 130 1,000,000
Then there is the sinking fund for war loans charged on the Consolidated Fund, payable in—
1857 £250,000
1858 l,500,000
1859 1,500,000
1860 1,500,000
To which must be added the increased annual charge on account of the debt—that is to say, the annual addition to expenditure will be in each of the four yours from 1857 to 1860 (inclusive) as follow—
1857—Capital debt to be redeemed £2,250,000
Increased annual charge 1,421,000
Total £3,671,000
1858— Capital debt to be redeemed £3,500,000
Increased charge 1,324,000
Total £4,824,000
1859— Capital debt to be redeemed £3,500,000
Increased charge 1,207,000
Total £4,707,000
1860— Capital debt £2,500,000
Increased charge 1,108,000
Total £3,608,000
Now this series of obligations in the shape of annual interest and repayments of the principal of the debt, must, it is manifest, have disturbed the basis of the settlement entered into in 1853—a settlement which had every prospect of a satisfactory issue if we had remained at peace, but the basis of which was altogether deranged by the stern reality of subsequent events. Since the year 1853 not only has a large additional charge in the way of interest on debt and repayment of the principal been imposed on the resources of the country for the next four years, but during the same interval large remissions of taxation have been made, materially diminishing the public revenue. So that, while we have increased our expenditure, we have concurrently lost part of our income. Thus there have been the following reductions or remissions of taxation since 1853,—
1854—Reduction of duties on Bills of Exchange, causing an annual loss of £150,000
1854—Reduction of the Assessed Taxes, causing a loss of 290,000
1855—Remission of Newspaper Stamp duty, causing (after allowing for increase of postage) a loss of 260,000
1855—Remission of Carriage duty, causing a loss of 60,000
Total remission of taxation since 1853 £760,000
I conceive, then, that the hands of this House are perfectly free to deal with this question at the present time, and that Parliament cannot deem itself in any way tied tip up by an arrangement made on an assumption, which I wish as sincerely as any one had been supported by the result, but which was unhappily falsified by the subsequent course of events.

I now come, Sir, or rather I approach more closely, to the arrangements I propose for the taxation for the ensuing year; but I will first trouble the House with some explanation on the subject of direct and indirect taxation, upon which those arrangements mainly turn. I think there is an exaggerated idea as to the amount of di- rect taxation which is now levied upon the country. The current of feeling runs strongly, as it seems to me, against any form of direct taxes. Such a feeling appears to be expressed in many quarters. One mode of trying the justice of that feeling is to examine what are the relative amounts levied by direct and by indirect taxation. I think this is an important matter, bearing in a most direct and practical manner on the solution of the question which is about to engage the attention of the House. The amount of those taxes which strictly bear the name of direct taxes is not large, if we put out of view the war income tax. The war income tax is no doubt principally owing to the exigency of circumstances; but, that being put out of consideration, and reverting to the income tax as it was originally proposed by Sir Robert Peel, the House must, I think, be of opinion that the amount of direct taxes, strictly so called, is by no means considerable. I have divided the taxation of the country into three classes. I have taken first those direct taxes which are paid at fixed periods—that class of taxes to which alone French financiers give the name of direct taxes. They do not give the name of direct taxes to those taxes which seem to me to deserve the name, though they are not paid at stated and fixed periods. I have divided our taxes into three classes:—first, those which are strictly "direct;" next those which must be included under the same head, though differing in some respects; and lastly, indirect taxes. First, then, as to our direct taxes, strictly so called. They are as follow:—

Land tax £1,150,000
Assessed taxes 2,000,000
Income tax 7,100,000
Total of taxes strictly direct £10,250,000
That is to say, this is the total amount of direct taxation, in the case of taxes paid at fixed periods, taking the income tax at the amount originally imposed by Sir Robert Peel. Then there is a class of direct taxes paid at uncertain periods—taxes, therefore, not paid in the same compulsory manner as those first mentioned, but still direct taxes; and among these I include the postage; although there is an equivalent, and ample equivalent, for it—
Stamps, probate, legacy, and succession duties £7,450,000
Postage 3,000,000
Total £10,450,000
I must here make an explanation as to the succession duty, about which, it seems to me, great misunderstanding prevails. I have heard it stated that the succession duty is a heavy burden on landed property, that it tends to the confiscation of the estates of landowners, that it forms a great and material increase to the direct taxation of the country, and that it may be considered almost as another income tax. The present amount of the succession duty is about £500,000 a year. It is anticipated that, increasing by slow degrees, it will rise to maturity about 1863, and it is estimated that it will then produce only £1,200,000 a year. Thus, then, our direct taxation amounts to about £20,500,000; that is to say,—
Direct taxes of the first class £10,250,000
Direct taxes of the second class 10,450,00
Total £20,700,000
Now our indirect taxation—that is to say, our Customs and Excise—amounts to nearly £40,000,000; that is, to £39,850,000. Thus, then, our indirect taxation is about double the amount of our ordinary direct taxation, assuming the income tax to be levied at its original rate, and allowing the £3,000,000 for postage.

There are some Gentlemen who, notwithstanding the general desire to diminish direct taxes, and especially to remove the war rate of the income tax, say that they would wish to keep up the income and other direct taxes to a considerable amount, for the purpose of reducing certain indirect taxes, pressing, as they think, with great severity on the trade and industry of the country. One of these is the Paper duty, and I received, not many days ago, a deputation, headed by the right hon. Gentleman the Member for Manchester (Mr. M. Gibson), who pressed on the consideration of the Government the reduction of that duty. The duty falls on three classes of paper—namely, paper used for printing, paper used for writing, and paper used for packing—and being charged, not according to value, but according to weight, financially speaking the burden is by far the heaviest on the large quantity which is used for the purpose of packing. Instead of being most oppressive on that class of paper which leads my right hon. Friend to denominate it a tax on knowledge, it falls more heavily on the two other descriptions. But, with regard to packing and writing papers, I confess I do not see that those descriptions, in the present state of our revenue and expenditure, are not proper subjects of taxation. With regard to paper used for the purpose of printing, we must consider not merely the demands of the manufacturer, but what will be the probable advantage to the consumer. I confess, having carefully considered the subject, I do not believe that the total abolition of the paper duty would produce to the ordinary purchaser of books and newspapers any appreciable advantage. Therefore, Sir, without at all denying the claims of the paper duty to be considered at a time when our expenditure may be less and our revenue may be greater, I cannot admit that at the present moment it is a proper subject for remission. There is another article the duty on which some persons wish to see diminished. The hon. Member for Pontefract (Mr. Oliveira) has given notice of a Motion for a Committee to inquire with a view to a reduction of the duty on wine. For that reason, I do not think it at present necessary to go into that subject further than to say that, from accidental and natural causes, the production of wine has undergone a great diminution; that the exports of spirits from this country have increased in consequence; so that, instead of the Continent being able to give us a redundant supply of wine, we are exporting spirits to supply their demands. This would not, therefore, be a happy moment for the trial of an experiment which I am sure my hon. Friend must himself regard as somewhat perilous to our finance. There is only one other duty to which I will refer. It is one which interested many Gentlemen last Session, and which was brought forward for discussion in this House—I mean the duty on fire insurance. I have lately laid upon the table a Report upon this subject. I have caused it to be carefully investigated during the recess, and you will find in that Report the materials for arriving at a judgment on the question, which did not exist in an authentic and official form before. The result of a careful consideration of the question has been to convince me that it is a duty which falls exclusively upon realised property, for which reason it ought to receive the support of those Gentlemen who wish to transfer all taxation to realised property: that it is a duty which adapts itself with singular felicity to the circumstances of the taxpayer, which is heaviest when the insurance is lightest, and lightest when the insurance is heaviest; and which has advanced in its contribution to the revenue with a steady progression for a great number of years, and it would not, so far as I can judge, increase if the rate of duty were diminished. I confess that I can see no ground whatever for acceding to the propositions which have been made for the reduction of that duty, and, so far as I am able to judge, I believe it to be one of the last duties which ought to be relinquished. [Murmurs.] I am sorry to differ from hon. Gentlemen upon this subject, but I must ask them to suspend their judgment until they have had an opportunity of reading the Report to which I have referred, in which the matter is treated in detail, and with great clearness and ability. At all events, if the conclusion at which I have arrived be distasteful to hon. Members behind me, I assure them that I have only come to it after a careful consideration of the subject, and I think that they can hardly—at present—press for the abolition of the duty on fire insurances.

Sir, in dealing with the taxtion of the current year, I shall propose, therefore, to confine myself to those taxes which were imposed during the war, and I shall not make any modifications of any other portion of our taxtion than that which underwent revision during the war. In proposing the modifications which I am about to do, I would bear in mind the dictum of a writer whose opinions I think should command some authority in this House—a writer in no degree obnoxious to the charge of being a speculative theorist, but a practical man, conversant with various branches of economy, and particularly of agricultural economy—I mean Arthur Young, whose Travels in England, Ireland, and France are doubtless well-known to Members of this House. After pointing out what are in his opinion the principal attributes which a system of taxation ought to possess, and dwelling especially upon the importance of equality, he makes the following observations:— The mere circumstance of taxes being very numerous, in order to raise a given sum, is a considerable step towards equality in the burden falling on the people; if I was to define a good system of taxation, it should be that of bearing lightly on an infinite number of points, heavily on none. In other words, that simplicity in taxation is the greatest additional weight that can be given to taxes, and ought in every country to be most sedulously avoided. Now, Sir, that opinion, though contrary to much that we hear at the present day, seems to me to be full of wisdom, and to be a most useful practical guide in the arrangement of a system of taxation.

I will now go through the war taxes, to which I think it necessary to call the attention of the Committee. In the first place there is the duty on spirits, in which a permanent increase was laid during the war, and which may be reckoned on as producing a permanent addition to the revenue of about £1,500,000 a year. The additional duty was imposed as a permanent tax, and does not cease upon the termination of the war. I think that the Committee will agree with me that spirits are legitimate objects of taxation at a time when a large revenue is required, subject to the condition that the rate of duty must not be so high as to lead to illicit distillation. Illicit distillation is so great an evil, and it so demoralises the country in which it prevails by producing lawless habits, that any amount of revenue is clearly purchased at the cost of promoting illicit distillation. Hitherto, however, it has not been found that the present rate of duty either in Ireland or Scotland has led to illicit distillation. I can assure the Committee that this is a subject to which I am quite alive, and so long as I have the honour to hold my present office, it is one which I shall most carefully watch with a view to discover any increase in the practice; but while matters remain in their present position, I see no reason for proposing any alteration in the spirit duties. The next duty to which I must advert is the duty upon malt. Last year there was a loss upon malt to the amount of £200,000, exclusive of the drawback of £840,000 repaid on stocks on hand. The duty ceased upon the 5th of July last, but, on account of the long credit given, a portion only of the war duty became payable last year. In the ensuing year, the entire effect of the remission of the war duty upon malt will be experienced, and it will occasion a loss of about £2,000,000. The additional war duty is now removed.

Sir, I now come to the income tax. I will first inform the Committee of the present position of that tax. It was imposed upon the proposal of Sir R. Peel in 1842, at the rate of 7d. in the pound upon incomes above £150 a year for three years. It was renewed in 1845, and again in 1848, at the same rate. It therefore continued for nine years, being renewed at triennial periods, at the rate of 7d. in the pound on all incomes above £150 a year,— incomes below that amount being exempted. In 1851 a similar renewal at the same rate and for the same period was proposed by my right hon. Friend the present First Lord of the Admiralty (Sir C. Wood), but it met with a good deal of opposition on the ground of the mode of assessment; and, in deference to the prevalent opinion of the House, it was renewed only for one year, and a Select Committee was appointed to inquire into the mode of; assessment. I ought to state that my noble Friend the Member for the City of London (Lord J. Russell), who was then at the head of the Government, while he assented to the appointment of the Committee under the special circumstances, objected to so large a portion of the revenue being made to depend upon an annual Act. In 1852 the income tax was renewed at the same rate by the Government of Lord, Derby, but it was again renewed for only a year in consequence of the peculiar position of that Government, which did not allow them to propose any important renewal or change of taxation. I now come to 1853—the year in which the settlement which has been so much referred to was come to. In that year the income tax was fixed at 7d. in the pound for two years from the 5th of April, 1853; at 6d. in the pound for two years from the 5th of April, 1855; and at 5d. for three years from the 5th; of April, 1857; so that if the war had not intervened the tax for the year now current would have been 6d. in the pound,; and for three years from the 5th of April, 1857, it would have been 5d. in the pound. Therefore, what is called "the war 9d." is in fact the difference between the tax as it stood at the commencement of the war and the tax as it stands at present. If the duty were raised according to the Act of 1853, the income tax would be 6d. in the pound in the present and 5d. in the ensuing year. By the same Act of 1853 the income tax was extended to Ireland, and it was also extended to incomes above £100 and less than £150 at 5d. in the pound. The war now supervened, and the result was that the income tax did not fall from 7d. to 6d.; on the contrary, in 1854 it was increased from 7d. to 14d. and from 5d. to 10d. in the pound—that is to say, it was raised to 14d. on incomes above £150, and to 10d. on incomes between £150 and £100. At the same time it was continued at those rates "till the 6th day of April next after the ratification of a definitive treaty of peace, and no longer." But in 1855 the tax was increased to 16d. and 11½d.—in other words, 2d. was added to the 14d. and 1½d. to the 10d. It was continued during the war "and until"—these are the words upon which so many comments have been made—"and until the 6th day of April which shall first happen after the expiration of one year from the ratification of a definitive treaty of peace, and no longer." That, Sir, is the present state of the income tax. For the present year it stands at 16d. in the pound upon incomes above £150, and at 11½d. upon incomes between £150 and £100; and it is continued, by the operation of the words which I have read, for another year, commencing on the 7th of April next. It would fall for the following two years to 5d. in the pound, and then altogether expire. That is the legal position of the income tax. Sir, it has been supposed that there was some design or reason on the part of the Government for making a distinction between the income tax and the duties on tea, sugar, and coffee. I can assure the Committee that the difference in the wording of the Acts was not at all the result of design; it was the result of a mere accident, and owes its existence to a singular coincidence of dates, which it was impossible for the Government or any person to foresee when the Acts were passed. According to the Act passed in 1854 the present rates of the income tax were limited to continue until the 6th of April next after the ratification of the treaty of peace. Consequently, if the treaty had been ratified on the 5th of April, the income tax would have ceased a day after the ratification. The Committee must be aware from the statement I have already made that war expenditure does not cease with active hostilities, but that it is necessary for the Government to be provided with funds, or else to appeal to Parliament to meet that expenditure which, though not falling within the period of hostilities, fairly and properly belongs to the time of war. Therefore, when the income tax was increased in 1855, the words which I have read were inserted in the Act. It was intended to levy the tax at the increased rates during the remainder of the financial year, whatever that remainder might be, in which the treaty of peace might be ratified, and for one clear year beyond that period. The word, "ratification" of a treaty of peace oc- curred in the former income-tax Act, and was transferred to the Act of 1855; but it did not occur in the Customs Act. In that Act the words used were, that the duties on tea, sugar, and coffee should continue during the war, "and until the 5th day of April inclusive which shall first happen after the end of twelve months from the date of a definitive treaty of peace with Russia." Instead of using the word "ratification" as in the income tax Act, the word "date" was inserted in the Customs Act. That difference of expression arose from inadvertence, not from design, and it was intended that both Acts should have the same effect. It so happened, however, that the treaty of peace was signed on the 30th of March; but the ratifications were not exchanged till the 27th of April, and therefore the 5th of April, the day mentioned in the Customs Act, intervened between the signature and the ratification of the treaty—an event altogether impossible for the Government to foresee. Now, it appears that the phrase, "the date of a treaty," means the date of the signature, and not the date of the ratification; although the treaty takes effect only from the latter period. But from the circumstance to which I have referred, the Act relating to the income tax, and that with respect to tea and sugar, received a different construction, and it was held that the tea duties would expire on the 5th of April next. That, Sir, is a simple explanation of a subject which has occupied much of the attention of the public; but the House must not suppose that the difference arises from anything more than accident, I will only further say, that although, in answer to a question put to me by the hon. and learned Member for Wallingford (Mr. Malins), I stated what was the legal effect of the accidental and undesigned phraseology of the income tax Act, I never for a moment entertained the idea of asking the House to continue the tax longer than the exigencies of the public service should require it. Well, Sir, as the law stands at present the sum which the Exchequer would be entitled to receive from the income tax would be 16d. for the ensuing year, and 5d. for each of the two following years: that is to say, it would be entitled to receive 26d., each penny of which may be taken as representing £1,000,000 sterling. Consequently, the total sum payable under the income tax Acts for the next three years is £26,000,000. The proposal which I have to make to the Committee, looking to the increased charges upon the revenue for some years to come, owing to the debts contracted during the war, and to the remission of taxation in the same period, is to fix the income tax as it was originally fixed by Sir Robert Peel, and at two subsequent periods, taking it for the next three years at 7d. in the pound. [A considerable number of Members hurried from the House as soon as the right hon. Gentleman had made this announcement.] I am sorry, Sir, to have to continue my explanation to an audience so greatly reduced in numbers; nevertheless, I must state to those who remain what will be the effect of the proposed alteration. The number of millions to which the Exchequer would be entitled under the existing law is twenty-six, distributed over the next three years. The effect of the change which I propose will be that the Exchequer will receive £21,000,000, being a diminution of £5,000,000, spread over the same period. Another effect will be that more than a half of the tax will be remitted in the ensuing year; for, whereas the present rate of the tax is 16d. in the pound, I propose to reduce it to 7d. Sixteen pence in the pound is equal to £6 13s. 4d. per cent; 7d. in the pound to £2 18s. 4d.; and 5d. to £2 1s. 8d. The difference, therefore, between the rate at which I propose to fix the tax and the rate at which it would stand for the next two years, if no alteration were made, is only 16s. 8d. per cent. The Committee will thus see that, while the relief granted in the ensuing year will be great and sensible, the additional charge in the two following years will not be such as to be injuriously felt by the country. The relief will not be confined to the class of incomes exceeding £150 a year. I propose to reduce the rate of income tax levied upon incomes between £100 and £150 a year, which is 11½d. in the pound or £4 15s. per cent, to the rate adopted in the original measure of my right hon. Friend (Mr. Gladstone)—namely, 5d. in the pound, which will amount to £2 1s. 8d. per cent. I believe the high war income tax has pressed with great severity upon the class of small incomes, and I think I can explain why that has been the case. My right hon. Friend, in proposing this extension of the tax, expressed an opinion that he ought not, as he phrased it, "to trench upon the territory of labour;" for he thought that by limiting the tax to amounts exceeding £100 it would not affect any considerable number of persons in receipt of weekly wages. I am unable to obtain a very exact account of the number of persons receiving weekly wages who are contributors to the income tax; but I have reason to believe that it is not less than 20,000. Persons in receipt of £2 a week are liable to the tax, and the sum of £4 15s. 10d. per annum, payable half-yearly, must have been extremely burdensome to individuals in such a position. The tax would become still more burdensome if it fell into arrear, and if a person receiving only £2 a week was called upon to pay at once £4 15s. 10d.—more than double his weekly earnings. The effect of the change I propose will be that a person receiving £2 a week will only be liable to an income tax of £2 1s. 8d. per annum, which is about £1 half-yearly; and therefore the reduction will afford great relief to the possessors of small incomes, and must have the effect of diminishing the objections felt in many quarters to applying the tax to that class of persons.

But, Sir, I have unfortunately not now concluded my statement. There is another war tax with which I shall propose to deal, but with regard to which I cannot pursue the course I have suggested in the case of the income tax—I allude to the duty upon tea and sugar. According to the existing Act the duty upon tea is for the present year 1s. 9d. per lb., and would fall to 1s. 3d. on the 1st of April next, and to 1s. for the next and succeeding years. The duties on sugar are also arranged upon a similar plan of reduction, and consequently there would be a corresponding fall. It happens that at this moment the stock of sugar is very low, and it cannot therefore be expected that a reduction in the price of that article consequent upon the diminution of the duty would be attended with any great increase of consumption. A similar remark applies to tea, inasmuch as recent events at Canton have opposed obstacles to future exportations. With regard, therefore, to both these articles it cannot be expected that a considerable reduction of duty would be followed by any material increase of consumption in the course of the next year. The diminution I propose in the rate of the income tax will lead to a great reduction of the revenue, not so much in the present year as in the two succeeding years. The difference between a tax of 7d. in the pound and one of 16d. would involve a diminution of revenue to the amount of £9,000,000, which would probably leave a deficient income as compared with the probable expenditure of the country. I therefore intend to propose a new scale for the reduction of the duties upon, tea and sugar, rendering the diminution somewhat slower than it would be under the existing law, and thus providing for a more gradual diminution of the revenue. I will state what are the duties I propose to adopt:—The duty on tea now stands at 1s. 9d. per lb. I propose that for the next year, 1857–8, it shall be 1s. 7d.; for 1858–9, 1s. 5d.; for 1859–60, 1s. 3d., and that from that period it shall be 1s. The present duty on refined sugar is 20s. per cwt. I propose that next year it shall fall to 18s. 4d.; in the following year to 16s. 8d.; in 1859 to 15s., and in subsequent years to 13s. 4d. The duty on brown sugar is now 13s. 9d.; I propose that in 1857–8 it shall be 12s. 8d.; in 1858–9, 11s. 8d.; in 1859–60. 10s. 7d.; and that after that period it shall be 9s. 6d. The duty on yellow sugar is at present 15s., and I propose that it shall be 13s. 10d. in 1857, 12s. 9d. in 1858, 11s. 8d. in 1859, and subsequently, 10s. 6d. In the first week of February, 1855, the stock of sugar was 73,412 tons; in 1856 it was 56,266 tons; and at present the amount is only 42,745 tons, and it is not to be expected that any large increase will accrue.

I will now state to the Committee the estimated gross revenue for the ensuing year. I estimate the—

Customs £22,850,000
Excise 17,000,000
Stamps 7,450,000
Land and Assessed Taxes 3,150,000
Income tax 11,450,000
Post Office 3,000,000
Crown Lands 265,000
Miscellaneous 1,200,000
The expenditure, including the discharge of Liabilities, I estimate at 65,474,000
Leaving a surplus of £ 891,000
—a sum not more, I apprehend, than I ought to reserve for the contingent expenditure of the year. The House should understand that owing to the arrears of income tax, and the manner in which the tax is paid, a portion of the amount will be receivable in the ensuing year; and although the diminution of the rate will take effect on the 1st of April, a portion of the receipt of the high rate will come in in the ensuing year, and the full effect of the reduction will not be felt until the following year. The total amount of taxation which will cease after the first of April next, will be found in the following table:—
Malt tax loss in 1857–8 (in addition to £200,000 in 1856–7) £2,000,000
Income tax (to be reduced to 7d. and 5d. 9,125,000
Tea (to be reduced from 1s. 9d. to 1s. 7d. per lb. 369,000
Coffee (to be reduced from 4d. to 3d. per lb.) 135,000
Sugar (to be reduced from an average of 14s. 4d. to 13s. 4d.) 342,000
Total reduction £11,971,000
Of this total of £11,971,000, about £7,600,000 will be a deduction from the Exchequer receipts for the ensuing year, 1857–8.

If the Committee should adopt the plan which I have proposed, I believe that sufficient revenue will be provided to meet the liabilities of the Exchequer for the payment of the bonds due in the three years commencing from the 1st of April, for the extinction of the war sinking fund, and also for the payment of the increased interest on the debt; leaving some margin for any slight increase in the Army, Navy, or Civil Service Estimates. If the liabilities created by the £40,000,000 of debt contracted during the war should be discharged according to the plan which has been laid down by Parliament, and according to that which I am now proposing for the next three years, and if further accruing liabilities should be met by a corresponding provision, I calculate that the entire debt created by the war will have been extinguished by the year 1877. More than half of the extraordinary expenditure of the war was defrayed from taxation, the remaining half by loans; and this portion, as I have just said, if the arrangement I propose is adopted, will be extinguished in about twenty years. It seems to me that such a state of things affords a favourable retrospect of the arrangements made during this war. It shows the greater providence of the present generation; and if our ancestors had treated us as well as we are, I hope, about to treat posterity, we should not at the present time be loaded with the burden of a debt of £800,000,000.

I am afraid, Sir, I have detained the Committee at an unreasonable length; but they must be aware that in the performance of important duties such as that which I have just attempted to discharge it is important that every material fact bearing upon the question at issue should be laid before those with whom the decision rests, and I would rather incur the charge of tediousness and prolixity than fail to submit to the consideration of the Committee any matters which may be necessary or useful to guide their judgments. I do not believe that I have troubled them with anything which is immaterial to the matters under consideration. I can only say, in conclusion, that as the plan I have proposed has been dictated by public motives, and I hope will conduce to the general welfare of the country, so I have no doubt it will receive the dispassionate and careful consideration of the Committee; that it will be judged without reference to the particular sides of the House on which hon. Gentlemen may sit, but with more enlarged views, and with a sense of the responsibility under which we labour in making provision for a subject so momentous to the future happiness and prosperity of the community. The right hon. Gentleman concluded by moving— That a sum, not exceeding £2,000,000, be granted to Her Majesty, to pay off and discharge Exchequer bonds, issued under the provisions of the Act 17 Vict., cap. 23, and dated the 8th day of May, 1854, which will be due and payable on the 8th day of May, 1857.

Resolution read.


I am aware that it is the rule on these occasions—or if not a rule, a practice which has almost the force of one—to abstain from discussing in detail the various propositions of the Budget on the night on which it is brought forward; and, considering the comprehensive nature of the statement which my right hon. Friend has made, and the gravity of much of the matter which it contains, I have never known an occasion on which it would be more inexpedient to depart from that rule. I have no intention, therefore, of making any remarks upon the important questions which arise out of my right hon. Friend's speech. My only object in rising now is to ask him one or two questions as to matters of fact. I take it for granted that, as the Resolution which he has just moved seems to form a portion of the policy of the Budget, he will not ask us to give a vote upon it to-night. It does not refer to the execution of any contract immediately pending; but it does form part of the policy which this House will have to decide upon; and, therefore, before taking any vote upon it, time ought to be given to allow of a calm and impartial consideration of his whole scheme. I now refer simply to matters of fact. When my right hon. Friend spoke of the sum of £150,000 as being the loss consequent upon the change in the law respecting bills of exchange, I presume that before charging that loss he took credit for the proceeds of the stamps on foreign bills of exchange. On one part of his statement I wish to put my right hon. Friend right—it is not a very important one. My right hon. Friend spoke of the loss of £285,000 upon assessed taxes in the year 1854–5 as a loss which was to be reckoned in the light of an addition to the remissions since 1853. In answer to that I beg to assure my right hon. Friend that that loss was distinctly included in the calculations of 1853, and was before the House when those proposals were adopted. I wish, also, to ask my right hon. Friend a question with respect to the table which he has given us of the proposed relief to consumers. Apart from the income tax, he spoke of a loss of £2,000,000 on the malt tax as part of the remissions included in his proposal; but, if I understand rightly the state of the law, that loss of £2,000,000 does not depend upon any proposal of his, but is one of the consequences of the law as it now stands, and therefore does not form part of any loss which we are going to inflict upon the revenue, or of any relief which we are going to give to the consumer by any proceedings of ours in the present year. My right hon. Friend also spoke of a loss upon tea, coffee, and sugar—of £369,000 on tea; £135,000 on coffee; and £342,000 on sugar. But, if I understand the state of the case rightly, as regards tea and sugar, he is not going to lose money, but to gain it—that is, he is going to impose upon those articles a duty, lower certainly than that which is leviable at the present moment, but higher than that which would be leviable after the 5th of April next according to the present law; and therefore it is not a question of granting relief from taxation upon tea and sugar; but it is, as far as it goes, a question of increasing the rates of duties payable upon these commodities. If that be so, I think it would be for our convenience if my right hon. Friend, having stated the case one way—having shown the loss which will be sustained in the reduction from the war rate of duties—would supply us with figures showing the gain he expects to realise from his new duties as compared with those which would take effect under the present law. I confess I should like to know the calculations of my right hon. Friend on these points. They comprise matters merely of fact; all discussion upon the case I propose to reserve. It would be therefore convenient, as well as, I think, in accordance with usage, not to take a vote upon the Resolution to-night.


said, he was glad to find that the Chancellor of the Exchequer had not been induced by any alarm as to what had taken place, either out of doors or in this House, to propose a reduction of the tax on incomes beyond the point he had stated to-night. He (Mr. Alcock) confessed he was one of those who were in favour of direct taxation, who thought well of the Liverpool Financial Association, and who believed that if that association could have its way to a certain extent in regard to the finances of this country very great benefit would result. The Liverpool Association asserted that the national income was £650,000,000 a year. Now, a tax of ten per cent. upon this sum would produce £65,000,000, and this would allow of the entire abolition of all other taxation. Probably there was some exaggeration in that calculation; but no one could doubt that the income of the country could not be less than between £500,000,000 and £600,000,000. If this question could be decided by working men, he thought they would be in favour of the taxation of all incomes from the lowest to the highest, so that they could be exempt from indirect taxation. The late Mr. Hume and Mr. Babbage expressed themselves in favour of that principle. With regard to the tea duty, he was astonished to hear that the Chancellor of the Exchequer was not going to make a greater reduction. Last year the consumption of tea was only 2 lbs. per head throughout this kingdom, while in the flourishing colony of Victoria the consumption was 10 lbs. With such a difference as this, could any one doubt that it would be for the advantage of working men to pay income tax, provided they could be free from taxes upon the necessaries of life? He was also astonished that the Chancellor of the Exchequer proposed to do nothing with regard to the fire insurance duty, which amounted to the enormous impost of 200 per cent. In France, it would be remembered, seven-eighths of all the property was insured against fire; while in England only one-third was so insured. Was anything wanted to show more clearly the operation of the Government duty? Recurring to the income tax, he thought it a great pity that the Chancellor of the Exchequer did not give greater facility for appeals against the assessment. Let them depend upon it, the unpopularity of the tax was in a great measure owing to the harsh and dictatorial manner in which appeals were treated in the different courts throughout the country. He thought, too, that the Government ought to provide against the defalcations of collectors, which the districts were obliged to make good. In some cases parishes had to pay two or three times over in consequence of these defalcations. The taxpayers of Newcastle had had to pay £1,800 on this account, and now the parish of Lambeth was in the same predicament. He considered the Government ought to appoint these persons, see that they provided proper security, and take the responsibility as to their conduct. Another point to which he wished to call attention was the tax on dogs. A few years ago this duty was raised from 8s. to 12s.—a rate which led to a vast deal of fraud throughout the country by people who evaded the tax, and which in other cases operated as a great grievance upon poor people, who lived, perhaps, in solitary parts of the country, and who were taxed, while the sheep-dogs of farmers were exempt.


would follow the course recommended by the right hon. Gentleman the Member for the University of Oxford, and abstain from all discussion of the details involved in the statement of the Chancellor of the Exchequer. Indeed, upon two main points in his address the right hon. Gentleman met with his (Sir H. Willoughby's) cordial concurrence, for he found the Estimates for the naval and military services had been materially reduced, and the war income tax had ceased to exist. However, he should turn to another point. Upon a former occasion he (Sir H. Willoughby) had asked the right hon. Gentleman whether the sum advanced to Sardinia was to be a loan or not? He would repeat that question now, adding, that if it was a loan, when would it be repaid, and in what manner? Those were points very desirable to be cleared up to enable them to judge of the country's liabilities. Another point which required some elucidation on the part of his right hon. Friend, was connected with his estimate of the expenditure on account of the war with Persia. He estimated the whole expenditure which would devolve upon this portion of the Empire, as its share of the cost of the war, at £265,000. Now, it appeared to him, that that was an estimate so entirely under all probable calculations, that it really appeared as if his right hon. Friend were shirking his liabilities. It seemed to him that the cost of the war with Persia would be very considerable, and some one or other must bear it. Hoping that the right hon. Gentleman would inform the Committee as to the foundation of his calculations relative to the Persian war, he should sit down, limiting his inquiries to those two points.


said, that he had not quite understood from the Chancellor of the Exchequer's statement, how he proposed to raise the whole amount which was required for the public expenditure. He had estimated the expenditure at £65,000,000; but he did not think his taxes covered that amount. The right hon. Gentleman no doubt would be able to explain that. The scheme laid before the Committee would, in his opinion, give general satisfaction out of doors. The right hon. Gentleman was right in not touching the taxes which had not been put on for war purposes. He should be glad to hear what the right hon. Gentleman proposed to do with the income tax after the three years had expired when the tax ought to cease—whether it was to be regarded as forming part of the general system of taxation, or as an extraordinary tax? If it was retained as a permanent tax it would prove an endless source of agitation, and of ill-will to the Government. It was the only direct tax, and yet it caused more ill-will than all the other taxes put together. This was not an encouragement to proceed further in that direction. Direct taxation should be levied, if at all, on realised property, and not on labour, whether of the head or hand. The hon. Member for Birmingham (Mr. Muntz) had a Motion, proposing to place taxation on capitalised incomes, and he hoped the Government would be able to say, before that Motion came to be discussed, whether they saw a fair probability, or not, that the tax would finally cease in 1860.


said, the Chancellor of the Exchequer had laid his Budget before the House in an able, clear, and intelligent manner. There was one point, however, upon which he could express no satisfaction; namely, the proposed expenditure for next year. It was the highest expenditure of any year since the termination of the French war to the commencement of the Russian war. He would beg to call the attention of the Committee to the expenditure proposed by various Prime Ministers during that period. In 1830, under the Administration of the Duke of Wellington, who was not likely to leave the defences of the country in an inadequate condition, the whole expenditure was £13,000,000 less than the proposed expenditure of next year. The Army and Navy expenditure was less by £5,150,000. Yet this was under a boroughmongering Parliament and a Tory Administration. Under Lord Grey's government, in 1833, the total expenditure was less by £15,000,000, and the Army and Navy expenditure less by £6,400,000. In 1834, under Lord Melbourne's Government, the total expenditure was less by £15,200,000, that of the Army and Navy by £6,984,000. In 1835, under Sir Robert Peel, the total expenditure was less by £16,600,000, that of the Army and Navy by £7,390,000. In 1850, under Lord John Russell's Government, the total expenditure was less by £10,500,000, and that of the Army and Navy by nearly £4,000,000, although there was the Kaffir War. Under Lord Aberdeen the expenditure was less by £10,500,000. It was time for the House of Commons to consider and cut down this great expenditure. As regarded the income tax, if the Chancellor of the Exchequer had reduced the expenditure to what it was in 1852, he might have been able to get rid of the tax altogether, but at any rate to reduce it to 5d. The operation of the income tax on persons having under £150 a year, was incredibly severe, and when the right hon. Gentleman brought forward his Income Tax proposition, he (Mr. Williams) should propose that persons having less than £150, a year should be exempted from the income tax. The right hon. Gentleman had referred to the application for a loan of £4,000,000 made by the Metropolitan Board of Works; but all they wanted was to have the benefit of the credit of the Government, and would have given ample security for the repayment of every penny. The hon. Member for East Surrey (Mr. Alcock) had stated that a great deal of the dissatisfaction against the income tax was produced by the misconduct of collectors, and the fact that the parishes were obliged to make good their defalcations; but by an Act passed three years ago they might avoid all that risk, for, on their making an application to the Board of Inland Revenue, the latter would appoint a collector, and take all the responsibility.


wished to ask one or two questions of the Chancellor of the Exchequer. The right hon. Gentleman stated the loss on the malt duty at £2,000,000, and then mentioned two further sums of £800,000 and £200,000. Was he to understand that the loss amounted to the total of these sums, or £3,000,000? [The CHANCELLOR of the EXCHEQUER—Yes]. He wished also to express a hope that the right hon. Gentleman would place on the table a statement as to the liability on the bonds now falling due, and the increased charge on the sinking fund, and let them know what day he proposed to take the debate on his Resolutions.


was understood to say that the loss to the revenue would in reality be £3,000,000, which would be £2,000,000 in addition to the losses of the present year.


said, if he understood the right hon. Gentleman right, the total expenditure for the year would be £65,500,000, including £2,000,000 of Exchequer Bonds to be paid off, while the income was estimated at £66,500,000. In a previous part of his speech the right hon. Gentleman estimated the total cost of the war at £76,000,000, £40,000,000 of which were to be raised by taxation, and £36,000,000 by loans. But as a matter of fact £41,000,000 were raised by loans. It appeared, therefore, there was a balance of £5,000,000 somewhere. Now, if that had been included in the income, as the payment of Exchequer Bonds had been in the expenditure, the surplus would have appeared much larger.


observed that the Chancellor of the Exchequer had commented on his speech on what he termed to be a prevalent notion amongst many people throughout the country that there was much corruption on the part of those who hold high office in the Government. Now, he (Mr. Cochrane) doubted very much whether any such belief did prevail; at the same time he should not have been surprised if it had prevailed, when certain speeches were made by gentlemen of high authority at public meetings accusing the Government of such corruption. The Committee would remember a speech delivered by the hon. Member for Sheffield (Mr. Roebuck), two or three weeks ago, in which he reflected strongly upon all classes in the country. The hon. Gentleman appeared to be almost the only honest man left to the country; he was, as it were, a kind of moral Diogenes going about with his lantern in search of honest men. The House might not be aware of another speech delivered by the hon. Gentleman of which the Government might have taken cognisance. In that speech he distinctly told his auditors that many mercantile firms refused to have anything to do with Government contracts because they were obliged "to preface the proceeding by bribing the departments. That was a speech made by a Member of that House—a speech charging the governmental departments with corruption and foul dealing; and if a speech of that nature were delivered by a gentleman of such influence and authority, it would not be surprising if the feeling alluded to by the right hon. Gentleman prevailed in the country. He must say he thought he was only expressing the feeling of the House of Commons when he declared it was not becoming of one of their body to make such charges against the Government of the country. He was delighted to find that which might be termed the spasmodic state of taxation—alluding to the income tax—was about to terminate.


said, he thought it would have been fairer to his hon. and learned colleague if the hon. Member for Lanarkshire (Mr. Cochrane) had either given notice of his intention to comment upon a speech delivered by him at Liverpool, or that he should have done so while the hon. and learned Member was in the House. He (Mr. Hadfield) would venture to say this—his hon. Colleague would be at any time prepared to accept any challenge that might be given in reference to his expression of opinions upon public affairs. Passing to a more important subject—the financial statement of the right hon. Gentleman, he (Mr. Hadfield) could not help regretting that while engaged in untaxing themselves they had done so little for the working classes. He thought the working classes would have reason to complain of the present Budget—while the upper classes would be relieved of their 9d. income tax, there was not a penny of relief to the working man, who had been made to smart under the war taxation. He thought also they might have looked for some diminution in the tax on fire insurances. As to the duties on assurance, they were very heavy. The assurer had to pay £200 per cent on the risk, besides the risk itself. It was a tax upon prudence, and was at once impolitic and unjust. There was another tax, to which he was so averse that he was determined, on the fitting occasion, to take the sense of the House upon it—he meant the tax upon railway passengers. He knew of one railway company that was connected with Sheffield which had invested £4,000,000, to the great advantage of the public, but who had never received 1 per cent for their money altogether, although they were required to pay 10 or 12 per cent on their net receipts to the Government.


, in explanation, said, that he could not have given the hon. and learned Member for Sheffield notice, because the observations he had made resulted from those which the right hon. Gentleman the Chancellor of the Exchequer himself had made in respect to the charges of corruption made against the Government. He denied that he had made any accusation against the hon. and learned Gentleman. He had merely quoted a speech purporting to be that of the hon. and learned Gentleman, which he saw published in the newspapers.


said, that the plan proposed by the Chancellor of the Exchequer for the reduction of tea duties would prove more disadvantageous to the revenue and obstructive to the trade than if the duty were lowered and at once made equal over the three years. When there was a drop in a duty at certain periods, trade in the article usually ceased some time before each drop occurred. In other respects he thought the statement of the Chancellor of the Exchequer satisfactory.


said, that no Minister had ever resigned a tax more ungracefully than the right hon. Gentleman had the war tax on the present occasion. When the right hon. Gentleman thought it necessary to give the Committee a history of that tax he should have gone further back than the year 1841. The first tax of the kind was introduced in 1791, at a time when rebellion raged in Ireland, when there was a mutiny at the Nore, and when we were suffering disasters abroad. When peace was restored that tax was at once repealed. When war again broke out the tax was renewed, and on the return of peace in 1816 the war tax was readily given up. He hoped that when the Resolution of the right hon. Gentleman came formally before the House, that some Member of the House, with a party at his back, would have the honesty to move for its total and immediate repeal. The tax was one which was dedicated to public peril, and should be preserved for such occasions. The whole object of the late Mr. Hume in regard to it was to bring it down to incomes of £50. If the tax were to be eternal, thy should make it also infinite. But if not, they should abolish it altogether upon the conclusion of war.


wished to say a few words in reference to the succession duty. There was one provision which, in some circumstances, operated unjustly, by making the person who succeeded to property pay, not according to the relation in which he stood to the person he succeeded, but according to that person's relation to the original settler. If the Chancellor of the Exchequer should have any available surplus he (Mr. Philipps) recommended that it should be applied to the relief of those parties upon whom the succession duty pressed with undue severity.


said, he concurred in the recommendation of the hon. Member for Glasgow (Mr. Alexander Hastie), that the reduction in the tea and sugar duties should be equalised at once and made to spread over the whole three years. As regarded the property tax, he did not see how the commerce of this country was to be liberated from injurious restrictions unless such a tax were in some degree retained. The time would come when the United States would reduce their duties, and a property tax would be necessary to enable this country to make a corresponding reduction.


said, he thought the plan of the Chancellor of the Exchequer would be well received by his constituents. He was not aware of any general call having been made for the remission of the duties on fire insurance, and he therefore hoped that the Chancellor of the Exchequer would not remit them, if by so doing he should at all endanger the total abolition of the income tax of 1860.


had no hesitation in saying; that the Budget would be very badly received by his constituents. They had had a very large meeting in Dublin the other day; and when his hon. Colleague moved a Resolution to the effect that the compact entered into in 1853 should be preserved, the meeting indignantly refused the proposition, and agreed to petition for its total and immediate repeal. Under such circumstances, the Committee might imagine what their disappointment would be when they heard the statement of the right hon. Gentleman. It should be recollected that he represented one of the largest constituencies in the United Kingdom. It had been said they had arrived at a system of free trade. There was no such thing as free trade in this country. He had purchased that day a publication lately issued, called The British Tariff, in which he found a great many articles still subject to very high duties, while others were comparatively free. Silk, for example, was subject to a duty of 15 per cent, while woollens were admitted free. Upon what principle was this difference made? He had called at the office of the French consul that day, and asked for some information respecting the fixed duties of France. That gentleman told him that our cotton, silk, and woollen manufactures were either entirely prohibited, or were made subject to such high duties as rendered it impossible to introduce them into France. Our exports of such goods into France were annually diminishing, while the woollen manufactures of Germany and Belgium were gradually increasing in the importations of this country. He (Mr. Vance) traded with America, and found that the importation of British manufactures into that country was subjected to duties ranging from 20 to 30 per cent. There was one branch in particular that had immensely suffered by the free-trade system—he meant the boot and shoe trade. It was every day diminishing in consequence of the extremely low duties upon French shoes and boots. Our free-trade system was a one-sided measure; there was no reciprocity in our arrangements. He believed that great disappointment would be felt in the country on the publication of this Budget.


said, notwithstanding what had fallen from the hon. Member for Norwich (Sir S. Bignold), he could testify that there was a strong feeling prevailing in the country in favour of a reduction of the duty on fire insurances. He quite agreed with the hon. Member for Glasgow (Mr. Hastie) that the same course should be pursued with regard to tea and sugar as regarded the reduction of duty that had been followed with respect to timber.


believed the statement of the Chancellor of the Exchequer would give very great satisfaction in Scotland. Many would, no doubt, have liked to have had the duty on particular articles reduced. He himself, for example, would be glad to see the paper duty removed; but he was not prepared to say that that was a duty which ought to be repealed before some others that might be named. He agreed, too, with the hon. Member for Dundee (Mr. Duncan), that the duty on, fire insurances ought to be abolished as soon as possible. He did not think the remission of £2,000,000 of malt duty led to a corresponding reduction in the price of beer, and thought fire insurances, and tea and sugar, were entitled to a preference over malt, as regarded the remission of taxation.


inquired whether the Chancellor of the Exchequer intended to press his Resolution that evening?




wished to observe, with regard to the wine question, that if the Chancellor of the Exchequer would consent to the appointment of a Committee, he should be able to show that the produce this year would be large; and he thought the extent of the interests involved, and the importance of the commercial intercourse between this country and Spain and Portugal, demanded that the subject should be carefully considered by the House.


said, that in that case he should not make any comments on the subject, but he must say that the prospect of getting rid permanently of the income tax in 1860 did not seem so certain as could be wished. He thought hon. Members would do well to consider the financial statement with reference to the income tax before the Resolution was again discussed.


said, that with regard to the sugar and tea duties, hon. Gentlemen would find that the objections which they urged were more applicable to the plan they suggested than to that of his right hon. Friend. Every reduction of Customs or Excise duties that was known beforehand disturbed the article in question in anticipation of that reduction; but it was found that the disturbance in the market was exactly in proportion to the size of the reduction. If the reduction was large, people withheld their purchases for a considerable period beforehand at great inconvenience to themselves. But if the reduction were small, and were made from time to time the motive for withholding purchases, and the disturbance of trade were not so great. It had been found by practice, in reducing the sugar duties from 25s. to 10s., as they had done within a few years, that in proportion as the reduction was gradual and small from year to year the inconvenience to the trade was the least felt. As the law now stood, half the war rate came off on the 5th of April next, and the other half on the 5th of April in the succeeding year. The only difference between the present regulation and the proposal of the Chancellor of the Exchequer was, that the duty, instead of coming down £2 at twice, would come off at four times, the reduction being £1 each year.


said, that the hon. Gentleman who had just sat down spoke as if the Government were about to accord a favour, and were about to reduce the duty on sugar, when there was really to be an increase of duty, and when the holders of sugar and tea were about to be deluded to a certain extent by the Government, because they had passed an Act declaring that the sugar duties after a certain period were to drop at a certain rate, and now they proposed to levy an additional duty. The hon. Gentleman might talk about giving ease to the trade, but the proposal of the Government was rather hard upon the holders.


had treated the question as between a sudden drop three years hence and a more gradual diminution. The question was not as to the reduction, but as to the mere mode of making the reduction.


It is not my intention to press my Resolution upon the House to-night, is some hon. Gentlemen wish for further time for its consideration. But before the discussion closes I wish to answer one or two of the questions put to me in the course of the evening. The hon. Baronet the Member for Evesham (Sir H. Willoughby) asked whether the Sardinian loan was a real loan, and whether the interest was regularly paid by the Sardinian Government? The answer I have to make is, that the arrangement with the Sardinian Government was, that the interest at 3 per cent, and a sinking fund of 1 per cent, should be annually paid. Since this arrangement was made the payments due have been made with perfect regularity. There is, therefore, no complaint that can be made against the good faith of the Sardinian Government, such as the hon. Baronet's remarks seem to imply; and there is, no doubt, on their part every intention of preserving that good faith in future. The advance has, in fact, all the attributes of a loan. The hon. Baronet also inquired as to the course intended to be adopted with respect to the Persian war? The statement I made was that the estimate for the expenses of the Persian war up to the 1st of April next would be, as far as related to the extraordinary expenses, divided between the Government and the East India Company. But the House has been informed that negotiations are pending with the Persian Minister at Paris, and, so far as the information of the Government extends, we hope that those negotiations may be reasonably expected to lead to a satisfactory adjustment of the differences at issue with Persia. At all events, we are not entitled to assume, as a matter of course, that the war will be continued for a year from the 1st of April next, and to estimate for a longer period the probable expenses of a war which we hope may not be continued after that time. All that we can do is to ask for a Vote during this Session for covering that portion of the expenditure of the East India Company which will be due before the 1st of April this year. I was also asked a question with respect to that portion of the debt incurred during the war which was not applied to the service of the war, and which is now in the Exchequer. The hon. Gentleman seems to think that this balance might be brought in aid of the service of the coming year. What I gave was the estimate of the receipts and expenditure of the coming year. With respect to the balances in the Exchequer at the commencement of the year, that is a separate account, and can only be compared with the corresponding balance of last year. My right hon. Friend the Mem- ber for Portsmouth (Sir F. T. Baring) asks me to lay on the table a return of the liabilities of the country with respect to the debt and the interest of the debt in future years. I have that account in a distinct form, and I will lay it on the table. I have also been asked a question relative to the malt duty. During the present year—on the 5th of July—the war malt duty ceased. There is a long credit given for malt; and, with regard to malt, the loss will be £200,000 this year, but there is also lost the repayment of the drawback on the stock in hand, which is about £840,000, so that the actual loss is £1,040,000. Next year the reduction of the war duty will be felt, and the loss next year, compared with the total amount of war duty on malt, will be £2,000,000. I do not propose to trespass upon the House at greater length. I thank the House for their indulgence, and I do not propose now to call upon them so early, to express a definite opinion upon the statement I have submitted to them. A question has been asked me by the right hon. Gentleman the Member for the University of Oxford, but as my right hon. Friend is not here I shall reserve my answer until Monday, when we shall resume the debate on this Resolution. I shall then ask the House to come to a vote on the Resolution.

Committee report progress; to sit again on Monday next.

House resumed.