WAYS AND MEANS.—REPORT (Hansard, 17 April 1863)

§ SIR STAFFORD NORTHCOTE
said, there were several questions in connection with the Budget which he supposed the House would discuss separately as they came on. He did not wish to express any premature opinion on details, which could better be dealt with as they arose in due order; but he thought that wan an occasion on which he might make a few remarks as to the general character of the Budget, and he was sorry his right hon Friend the Chancellor of the Exchequer was not in his place, that he might have an opportunity of making those remarks in the right hon. Gentleman's presence. He thought the general feeling of the House, and the general feeling of the country, with regard to the Budget, would be one of satisfaction; and certainty it was not his intention to offer any hostile remarks on the general character and complexion of the financial statement which they had heard on the previous night. He was of opinion, that, as a rule, it was not desirable to criticise the financial statement at the moment it was delivered, because there were a number of important questions raised by it which required careful consideration on the part of those who desired to criticise the propositions of the Chancellor of the Exchequer in a fair and satisfactory manner. But he must say that the statement on the previous night was of such a character that it would have been easier to remark upon it on the moment than it would have been to do so in the case of most of the Budgets which had been brought under the notice of the House in former years; because the re- 364 commendations of his right hon. Friend the Chancellor of the Exchequer were; such as the House and the country had been pretty well prepared for. Though, perhaps, they had not been prepared to find the surplus as great as the Chancellor of the Exchequer had stated it to be, they had been generally aware both that there was a surplus and that propositions of the nature brought forward by his right hon. Friend would be made to the House. The first remark which he wished to offer was that he was afraid his right hon. Friend had fallen that year into the error which he had fallen into during three consecutive years in respect to one item of revenue—he meant the Excise For three consecutive years he had always over-estimated the Excise revenue. Last year he took the liberty of telling his right hon. Friend that he had over-estimated it. The Chancellor of the Exchequer assured him that he did not, and that he was in possession of particular information with respect to the malt duty which led him to believe that he would obtain the amount which he calculated on receiving. However, the result, had been as he (Sir Stafford Northcote) had predicted. The Chancellor of the Exchequer had been wrong for three years; and his accumulated error amounted, he thought, to no less than £3,500,000. He underrated the Customs and over-estimated the Excise. He attributed that to what he thought was one of the weaknesses of the Chancellor of the Exchequer. One of his right hon. Friend's views, which he thought was his besetting sin, consisted in the belief that he would always get an amount of Excise revenue from spirits in excess of the amount which experience proved to be the actual receipt from that source. In 1860, when he raised the duty on British; spirits from 8s. to 10s. per gallon, he thought he would get an increased revenue of £1,000,000 a year from that addition to the duty. He had never yet got such amount from it; but so obstinately did he cling to his opinion on the point, that on the previous night he produced figures to show it was a mistake to suppose that he had not got an increased revenue from spirits. From those figures it appeared that the year before the duty was raised the revenue from the duty on spirits amounted to £9,750,000; last year it amounted to £9,837,000; so that he had only got £87,000 out of his expected £1,000,000, after an expe- 365 riment of two or three years. He did not think his right hon. Friend realized this fact with regard to spirits, which, though he did not undertake to decide the cause to which it was attributable, was nevertheless indisputable—namely, that the consumption of spirits in this country was diminishing and not increasing, while the consumption of all other articles of food was increasing, and there was, of course, a proportionate increase in the revenue which the duties upon them yielded to the country. A Return, which he (Sir S. Northcote) obtained in the previous year, showed that in 1841 the consumption of spirits amounted, omitting decimals, to 90 gallons for every hundred persons; in 1851 it was 104 gallons; in 1859, 100 gallons; in 1860, 93 gallons; and in 1861 it had fallen to 85 gallons, or less than it was in 1841; whereas the consumption of tea, coffee, sugar, wine, malt and tobacco had in all those years largely increased, and had doubled, or even trebled, in the case of some of these articles. If the consumption of spirits were generally diminishing, it must be expected that it would, during 1863, fall off more than usual. During the last year the consumption of tea, sugar, and tobacco had increased, while that of spirits had diminished. It was a time of distress, and in times of distress, as was admitted by his right hon. Friend himself, people economized by reducing their consumption of spirits. We could not expect that in the ensuing year the operatives would consume excisable articles as largely as they did in the last year, and yet the Chancellor of the Exchequer had based his estimate upon the assumption that they would consume more. They were in a condition of uneasiness with regard to the labouring population. The Trade Returns of the past year had kept up wonderfully. The exports had fallen off much less than might have been expected, and the imports had very considerably increased; but if they looked below the surface, they would see that was not an unmixed good. There was the following very striking and, to him, very uncomfortable fact. While they had imported an extraordinary quantity of corn, tea, sugar, tobacco, and other articles which they had consumed, and which had no reproductive character, the expenditure upon, and the import of, the materials of industry, raw 366 cotton, silk, wool, and other articles which, were reproductive and added to the wealth of the country, had fallen off. During the last year they had expended in the purchase of articles of food £5,500,000 more than they spent during the previous year; but upon the materials of industry they had expended £300,000 or £400,000 less. But that did not fully represent the falling-off in the quantities of the latter class of articles imported, because for all these articles they were paying enormous and ruinous prices. Thus, while the quantity of cotton imported had decreased by 58 per cent, they had paid within 19 per cent as much for it as they paid the year before. They had imported 31 per cent more flax, but had paid 52 per cent more for it; they had imported 13 per cent more hemp, and had paid 40 per cent more for it; they had imported 17 per cent more wool and 18 per cent more silk, and had paid respectively 20 and 27 per cent more for them. That was a state of things which, if it continued, must drain the resources of the country. They were spending much more upon the provisions they consumed, and the materials they used, than they could afford, for they were not making a corresponding profit on the articles which they exported to pay for them. They were paying for them out of the savings of the country, and his point was, that after such an expenditure there must come a period of distress. They had entered upon that period of distress with a large fund in hand; and although they had reason to thank God that they had been able to bear it so well, they must not deceive themselves, or think that the end had come, or that the people would not suffer from the extraordinary exertions which the country had made; and if the people suffered, the revenue must suffer also. They were still suffering, and likely to suffer, in Lancashire and in Ireland; and there were matters connected with their foreign relations, especially in China and the East generally, which must make them very uneasy as to the prospects of the coming year. For all these reasons he was afraid that his right hon. Friend had over-estimated the consuming power of the country, and, in consequence, had over-estimated the probable produce of the Excise.
Notwithstanding that, however, he did not think that the Chancellor of the Exchequer's general estimate of revenue was too sanguine. There were circumstances 367 which led him to believe, that taking one thing with another, the estimates of the right hon. Gentleman might be realized, and to expect, that unless a great calamity should intervene, the surplus which he had promised would be obtained. He said that, because the anticipations of the Budget were founded upon the only true, safe, and wise basis of calculation for the reduction of taxation—upon wise and broad reductions of expenditure; and that constituted a great distinction between that Budget and some others which had recently been submitted to Parliament. Nothing could have been more seasonable and more proper than the reductions which the Government had effected in the course of the last year, and upon the Estimates for the ensuing one. He regretted that the Chancellor of the Exchequer in his statement had passed rather lightly over the reductions of the past year, and had not, as was the usual practice, stated to the Committee the amounts of expenditure in each particular Department. This general result, however, came out—that the Government had last year expended £800,000 less than the amount of the Estimates. He should have liked to hear how that £800,000 was saved; but it was a proper and creditable act on the part of the Government to have saved it, and was entirely in accordance with the policy which the Opposition pressed upon them last Session, when they urged them, after the Estimates had been voted, to take into consideration the state of the country, and, if possible, to save some portion of the sums which had been granted. It was upon that policy that the right hon. Gentleman the Member for Cambridge University (Mr. Walpole) founded Ids Motion. The noble Lord did not give them much hopes at the time that he should be able to adopt that course, but said, "If you press the Resolution you will force us to get rid of the House, or quit our seats on the Treasury Bench." That threat terrified them, or at least some of them, so much that it was impossible to bring the question to an issue; but he was happy to find that the noble Lord, though he then regarded the Resolution as so formidable, when he came to consider how he should act, found that the policy which it recommended was a proper one; and he rejoiced that that Resolution, which for the moment came to nothing, had borne its fruit, and had led to a reduction of expenditure 368 which had had its effect upon the Budget for the coming year. That was very satisfactory; but he hoped that the Government would not think that they had reached the limits of reduction. They had done as much as could reasonably be expected in one year; nobody could wish that there should be any sudden, violent, or miscalculated reductions; but at the same time the optional expenditure of the country, as the Chancellor of the Exchequer described it, was still considerably above what it was three or four years ago, and he believed that there was a margin of two, three, or even four millions upon which reductions might yet be effected. He did not wish to press the Government to go faster than they had done, but he trusted that they would not think that they had quite reached the end of the policy of reduction. He was not quite prepared to admit the entire correctness of the balance-sheet for the last four years which had been laid before the House by the Chancellor of the Exchequer. It included, he thought, certain sums which ought not to be included, while it excluded others which it ought to contain. The result of a correct balance-sheet would, he thought, be found to be far less favourable to the policy of the right hon. Gentleman than that which he had submitted to their notice; but, in. the absence of his right hon. Friend, he would not enter into a controversy upon this subject. There was another point also on which he wished to say a few words. He had been represented in the newspapers, no doubt very kindly, but at the same time very erroneously, as having, in the course of the financial statement the evening before, made use of an expression of which he was not the father. The Chancellor of the Exchequer happened to ask how the great development in the prosperity of the country was to be accounted for, and his right hon. Friend the Member for Droitwich (Sir J. Pakington) had suggested the possibility that Australia was at the bottom of the prosperity; upon which the Chancellor of the Exchequer took occasion to deliver a lecture on the political heresy into which he said the right hon. Baronet had fallen. Now, he did not wish at that moment either to endorse or to dispute the justice of the view which his right hon. Friend sought to convey by his ejaculation "Australia;" but, as the word had been assigned to himself, he wished to take that opportunity of stating that it had in reality 369 fallen from another Member. He might add, however, that there were figures which his right hon. Friend, if he had happened to have them by him, might have quoted in support of his opinion, and which showed, that while the exportation of British and Irish produce to Australia during the five years preceding the gold discoveries averaged £1,200,000, it amounted, during the last three years, to £10,776,000 a year. He could not help thinking, therefore, that the great development of the Australian colonies which had followed the discovery of gold had had some bearing on our prosperity during the last few years. At the same time he was, of course, prepared to admit that there were other causes at work. He had no wish to deny that the policy of free trade formed a very material element in the progess of the nation, while the introduction of railways and the great progress of colonization must also be taken into account. The Chancellor of the Exchequer was, he thought, somewhat in a hurry to magnify the results of recent operations as tending in that direction. He had, of course, a right to say that the repeal of the paper duty conduced to the prosperity of the country; but when he adduced facts to prove that such was the case, he ought to be careful as to the evidence which he selected. He had, for example, stated that there had been a great increase in the introduction of rags for the purpose of making paper; but it did not appear perfectly clear that they were introduced altogether for that purpose, inasmuch as—if he were rightly informed—they were extensively used in the manufacture of a material which was somewhat irreverently termed "shoddy." There was one other point with respect to which he might, in conclusion, be allowed to say a few words. It was, he thought, extremely desirable that hon. Members should have before them the Estimates of the revenue in such a form as to enable them to collect as far as possible what might be the receipts, not only for the present year, but for the next. They could not, of course, have the Estimates of the revenue from the Excise and Customs for the next year, but those were matters on which they could arrive at a tolerably fair conclusion for themselves. But there was another and a very important element in the calculation—he meant the miscellaneous receipts, on which they possessed no such information. The Chan- 370 cellor of the Exchequer, indeed, had said that those receipts were not to be considered as forming part of the revenue; but at the same time he estimated on £2,500,000 of Miscellaneous receipts, and it would be well to know of what those £2,500,000 consist, because then they could form some opinion as to whether the item was likely to come in another year. His right hon. and gallant Friend the Member for Huntingdon (General Peel), for instance, had just asked him if in those £2,500,000 were included the £500,000 which he said would be due on account of certain Votes with respect to the China war. He was not able to give his right hon. Friend the information he required, and which he said it was important the House should have, inasmuch as it might find itself £500,000 short when the Vote came on. He hoped, therefore, some more definite information, with reference to Miscellaneous receipts, would be furnished. Having made these observations, he begged again to express his general approval of the financial scheme which the right hon. Gentleman had submitted to the House.

§ MR. FERRAND
said, he could confirm the statement of the lion. Gentleman that a very large quantity of rags was constantly arriving in the country for the purpose of producing "shoddy," or "Devil's dust." They were submitted to some chymical process, by means of which the cotton was burnt out of them, and the rags were then converted into a sort of paste, from which the cloth in question, was manufactured.

§ MR. LOCKE
said, the hon. Baronet had misconstrued what was said by the Chancellor of the Exchequer with regard to rags. The right hon. Gentleman had said, it had been supposed that there would not be a sufficient quantity of rags to carry on the paper trade, but the export of paper from this country had largely increased, and there must be a sufficient supply of rags to make that paper. It appeared that in addition to the rags necessary for making paper, rags were introduced to make "shoddy" and "Devil's dust," but that did not interfere with the statement of the Chancellor of the Exchequer.

§ MR. CHILDERS
said, there were distinct accounts kept of the import of woollen rags and of linen and cotton rags. There had been a great increase in the import of woollen rags, from which shoddy 371 was made; but it was from the account of the import of cotton and linen rags that the Chancellor of the Exchequer took his figures in reference to rags.