HC Deb 02 June 1871 vol 206 cc1436-70
MR. WHITE

said, that he wished to make a Motion condemning the policy of increasing the income tax to feed a sinking fund, and, accordingly, he would beg leave to introduce to the notice of the House the following Resolution:— That in the opinion of this House it is inexpedient to make provision for the reduction of the National Debt by an annual charge upon the Imperial Revenue until a considerable diminution has been made in the Customs and Excise Duties now levied upon articles of domestic consumption. On the 4th ult., when he had seconded the Motion of the hon. Member for Finsbury (Mr. W. M. Torrens) in Committee of Ways and Means, the Prime Minister remarked— Do you mean to say that your care is only for the present, and that you would leave posterity to shift for itself? If so, say so plainly. Have the courage of your opinions, and lay on the Table of the House a proposal embodying your intentions. Having the courage of his opinions, he accepted the challenge of the right hon. Gentleman, and on the very next day gave notice of the present Motion. In reply to the question whether posterity should be left to shift for itself, he ventured to think that posterity would shift much better for itself than did the present generation, otherwise the system of national education just inaugurated would prove to be a miserable failure, and he was of opinion that nine-tenths of the maladies which afflicted our political and social constitution arose not from national selfishness nor indifference, but from national ignorance. The plague of pauperism; the equitable adjustment of Imperial and local taxation; the relations of capital and labour; fertile lands in abundance in our Colonies, yet vast masses unemployed at home: these and other perplexing social problems would, in a condition of higher intelligence, assuredly solve themselves; and he did not believe that the future Medical Officer of the Privy Council would report that one-fifth of our population could not, owing to scanty earnings, sustain themselves in good health. He did not believe that in the next century the extraordinary disparity between the longevity of the working classes and that of the well-to-do-classes, even in the Valley of the Thames, would be as startling as it was now; neither did he think that infant mortality, the shame of the present, would be the opprobrium of the next generation; nor that the future Earl of Derby would be able, as the present possessor of that title did only yesterday, to point out that one-third of the population of Liverpool, or some 150,000 persons, consisted of families living in a single room under conditions necessarily unhealthy and not consistent with decency. On the 18th of last month the right hon. Gentleman the Chancellor of the Exchequer informed the House, in reply to a Question he (Mr. White) put, that the total amount of Terminable Annuities existing on the 31st of March, 1871, was £4,559,380, of which amount £1,739,096 might be taken as interest, and £2,820,284 as principal applied to the redemption of the capital. The amount of Debt in a perpetual Three per Cent Stock, which those Annuities might be said to represent, was £57,969,885. Before coming to the question of the old sinking fund, he wished to refer to the recent scheme for the reduction of the National Debt. The Chancellor of the Exchequer, in his last Financial Statement, had taken credit for reducing the Debt by £10,468,728 between April 1st, 1868, and March 31st, 1871; but from an explanatory Return laid on the Table of the House a few days ago, he (Mr. White) gathered that of that sum £4,000,000 consisted of capital transferred from the Court of Chancery to the National Debt Commissioners, and another £2,000,000 of capital transferred from the Court of Bankruptcy, making together £6,000,000. The £4,000,000 consisted of money unclaimed, and securities purchased with surplus interest placed out for the benefit and better security of the suitors of the Court of Chancery; and the £2,000,000 arose from certain investments by the Bankruptcy Court as a banker—at its own risk—of cash belonging to bankrupt estates and of unclaimed dividends before August 6th, 1861. Therefore, the transfer of those £6,000,000 was nothing more or less than a book debt, and, of course liable to any claim that might hereafter be substantiated by the parties interested in the funds of those two Courts; and that fact ought to have been plainly indicated on the face of the Return. That Return, moreover, conveyed a very erroneous impression, because to call such an appropriation as that a reduction of the National Debt was a misnomer or misapplication of terms; for, irrespective of the contingent liabilities just mentioned, the salaries and expenses of the Courts of Chancery and of Bankruptcy, which were formerly paid out of the funds handed over to the National Debt Commissioners, were now placed on the Consolidated Fund or on the Civil Service Estimates. The total Vote for the expenses of those two Courts in the Estimates of this year was £261,319; and if the whole of that sum was before defrayed by those Courts, then it could not be deniedt hat a surreptitious sinking fund to that amount had been created. At any rate, the straightforward course would have been to state not only the credit but also the debit side of that financial operation. Again, he wished to refer to a popular delusion fostered by our present financial system. The public saw it announced, as it was last autumn, for instance, in The London Gazette, that the sum of £1,308,405 was, under the Sinking Fund Act, available during the quarter for the reduction of the National Debt, that sum being one-fourth of the surplus Revenue of the preceding twelvemonths, and the public believed that such reduction would be effected, whereas only part of that total was thus used, £500,000 of it having been really appropriated to repay the advances of the Bank. The utter absurdity of that sinking fund scheme would be acknowledged if it were remembered that from 1829 to the end of 1869, while the sums issued ostensibly for the reduction of the Debt had reached £48,000,000, no less than £21,000,000 were never so applied, but were absorbed in taking up deficiency bills or repaying Bank advances. Besides, how stood the case with regard to that sinking fund imposture — for he could call it by no other name—during the last 21 years? From the 5th of January, 1850, to the 31st of March, 1871, while there was £31,705,000 of surplus income, the amount of the deficiences was £42,903,000; so that by their sinking fund operations during the last 21 years, they had incurred a balance of deficiency of £11,198,000, and had actually added £10,250,000 to the National Debt, as was admitted by the Prime Minister in the debate on the 4th ult. Mr. Pitt's sinking fund system, than which nothing could be more delusive, was once deemed a masterpiece of financial wisdom; but with regard to the present ostensible, but unreal, appropriation, under the Sinking Fund Act, of one-fourth of each accruing annual surplus to the reduction of the National Debt, he must admit that the present Government did not originate but inherited that bad system. He might remark that the principal of our present National Debt was two-fifths more than the amount of capital advanced, and that the total amount of the Government Stocks created between the years 1793 and 1816 was £773,685,839. The cash actually received by the Exchequer, however, only amounted to £493,608,261. As an illustration of the mode in which the Debt had been incurred, he might mention that in 1798, £200 of Three per Cent Stock, and a Long Annuity of 4s. 11d., was given for £100 received, and in 1815, at the close of the French War, £174 of Three per Cent Stock and £10 in the Four per Cent Stock was given for every £100 received. Hence, as has been shown by the late Mr. M'Culloch, we were now paying £6,000,000 or £7,000,000 a-year more as interest on the National Debt than we should have had to pay had the same sum been borrowed at the current rate of interest, and funded without any increase of the capital of the Stocks created, as then might have been done. In order to prove the diminishing burden of the National Debt owing to the increase in the resources of the country, he (Mr. White) would quote a recent work by Mr. Dudley Baxter, in which it was stated that in the year 1869 the whole charge per head upon the population in respect of the National Debt was only 15s. 9d., whereas in 1815 it had been 34s. 8d. As a further illustration of the greater ability of the country to bear the burden of the National Debt, he showed that whereas the whole private income of the country amounted to about £350,000,000 in 1815, it was now estimated at fully £880,000,000. Thus the total amount of the National Debt was not now equal to more than one year's income of the whole nation. The relative magnitude of the Debt of this country, as compared with that of other nations, had also greatly diminished, inasmuch as while our Debt in 1815 was greater by one-half than the aggregate National Debts of all other countries, it did not now amount to more than one-fifth of the total, including the National Debts of America and Japan. As evidence of the increasing ability of the population to pay the interest upon our Debt, he pointed out that whereas 30 years ago an income tax of a penny in the pound only produced £750,000, now it produced £1,500,120. Under these circumstances, therefore, although he could not agree with the right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli) that the National Debt was a mere fleabite, still it was evident that in succeeding years the resources of the country would have increased so as greatly to alleviate the pressure it now occasioned. It was on this ground, therefore, that he protested against the income tax—a tax obnoxious because unjustly assessed—being augmented at the rate of 50 per cent, in order to enable the Chancellor of the Exchequer to invest yearly some £2,800,000 of income at 3¼ per cent towards a sinking fund by which the Debt might be paid off. In his opinion it would be much better to allow the money to fructify in the pockets of the people. Upon this point he entirely agreed with what had been said by Mr. Laing, a former Secretary to the Treasury—namely, that it was absurd to take 30s. at 5 per cent in order to invest 20s. at 3¼ per cent. That Gentleman had rightly put those figures, by calculating that to every pound taken by the tax collector a large percentage must be added for interference with trade, curtailment of employment and consumption, and other indirect consequences. It had been said that if an individual were bound to pay off his debts, a nation was equally bound to do so; but the right hon. Gentleman the Chancellor of the Exchequer, when speaking this Session on the Motion of the hon. Member for Sunderland (Mr. Candlish) had pointed out that the comparison of public and private policy did not hold good, because the expenditure of a nation was in some degree fixed, while the Revenue might be increased or diminished, whereas, while the income of an individual was generally fixed, his expenditure might be controlled. The annual sum of £2,820,284, which the Chancellor of the Exchequer had appropriated towards paying off the National Debt, would have enabled him to have reduced the sugar duties one-half, or to have totally abolished the duty on tea; or even £888,679 of that sum would have enabled him to have abolished the entire duty on coffee, currants, raisins, chicory, cocoa, figs, prunes, and plums. Had that sum been appropriated to the reduction of the malt duty, that duty might have been reduced one-half. The right hon. Gentleman, in reply to the hon. Member for Derby (Mr. Bass) on the 11th of May, told the House that, while direct taxation contributed but 25½ per cent, indirect taxation contributed 60½ per cent to the income of the country, which, for reasons he did not then propose to give, he regarded as being an under estimate of the amount of our indirect taxation. Out of the £70,000,000 of our national Revenue, £40,000,000 was derived—and mainly from the poorer classes—from tea, sugar, coffee, spirits, malt, tobacco, and from licences for manufacturing and vending the same, which was £13,000,000 more than the whole amount required to pay the interest of the National Debt and the Terminable Annuities. There never was a greater delusion than the notion entertained by some persons that the working classes were comparatively exempt from taxation, and that nearly the whole of the taxes levied in this country were paid by the middle or richer classes. He had taken the trouble to ascertain the present duties on the average cost of articles in bond, and he found that the duty on tea was 40 per cent; sugar, 20 per cent; coffee, 43 per cent; currants, 28 per cent; raisins, 23 per cent; tobacco, that was to say common tobacco used by working people, 500 to 600 per cent; cigars, 41 per cent; spirits, other than brandy, from 350 to 694 per cent. And whilst a poor man who indulged in a bottle of "Gladstone," which cost 1s., paid a duty of 2d. on that bottle, a rich man paid only the same amount of duty on a bottle of "Chateau Margaux," which cost as many shillings as "Gladstone" cost pence. Thus they still maintained a large and permanent taxation upon articles of import and of native growth which were mixed up with, and were essential to, the comfort of every cottager's family in the kingdom. Such a system never was and never would be just, because it fell most heavily on those who were least able to bear it. In fact, under their system, property paid too little and poverty too much. In 1852 Colonel Thompson—and no better authority could be quoted, said in that House that the poorer classes paid 10 or 11 times more than their proper proportion as compared with the richer classes. That ratio happily did not now hold, but he thought it was demonstrable that a man with a wife and three children, earning 25s. per week, paid on the average quite equal to a 10 per cent, or 2s. in the pound, income tax on the necessaries of life. He (Mr. White) said necessaries of life, because tea, coffee, and sugar had become necessaries of English life, as by our Poor Laws those articles of domestic consumption now formed part of the pauper dietary of our unions. As illustrative of the incidence of indirect taxation on the poorer classes, he would take the case of a man with a wife and three children earning 25s. a week. Assuming that he spent but 2s. 4d. a week in tea, coffee, and sugar, he would actually pay in the shape of duty, 19s. 6d. per annum, and if thereto be added the profits on those duties by the vendors, he had no hesitation in saying that in the case of such a man, with an income of £65 a-year, he was mulcted to the full amount of a fourpenny income tax. He thought this fact well worthy of consideration. To show the increase in the price of an article following the imposition of a duty, he might mention that when Sir George Lewis placed an additional duty of a penny on coffee, every poor man who wanted to purchase an ounce had to pay an extra farthing—for there was no smaller currency—or four times the amount of that new duty. And it should be borne in mind that for one who buys coffee by the pound, there are a hundred who buy it by the ounce in many parts of this Metropolis. In conclusion, he would beg to ask, who could accurately estimate how much our present heavy taxation checked the national industry, how much it curtailed production and lessened employment and profits? It should never be forgotten that of our total Revenue of £70,000,000, fully £50,000,000 were annually raised from Customs, Excise, and other imposts bearing upon the trade, the industry, and the subsistence of the people. In the face of the facts he had adduced, he ventured to think that, having regard to the present and also to the future, it was not expedient to make provision for the reduction of the National Debt by means of taxation levied upon articles in general consumption by the industrial classes of this country, and, should his Resolution be negatived, he hoped he would be forgiven if he avowed that he failed to discover the present or future advantages of our sinking fund system, which he held to be a specimen of what Lord Bacon called "sinister and crooked wisdom." The hon. Gentleman concluded by moving the Resolution of which he had given Notice.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "in the opinion of this House, it is inexpedient to make provision for the reduction of the National Debt by an annual charge upon the Imperial Revenue until a considerable diminution has been made in the Customs and Excise Duties now levied upon articles of domestic consumption,"—(Mr. James White,) —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."

SIR DAVID SALOMONS

said, he thought the House was indebted to his hon. Friend the Member for Brighton (Mr. White) for the industry he had shown in getting together the figures he had quoted. It was always difficult, without previous notice of the exact line intended to be taken, to prepare figures to counteract the figures that might be brought into the discussion; but having for many years of his life had his attention directed to figures, and to the subject not only of our own National Debt but the debts of foreign countries also, he wished to say a few words on the speech of his hon. Friend, who, he (Sir David Salomons) thought, had made a speech which would have come more fittingly as a reply to the Chancellor of the Exchequer on the Budget, than in support of the Amendment which he had moved. There was one point which his hon. Friend had not touched on, and that was the high credit we enjoyed in the money markets of the world. Why were our Funds now at 93? Because it had always been the great care of Parliament to be most scrupulous in everything that concerned our National Debt; and when we incurred that debt it was always with the determination that we should adopt every fair measure that presented itself for its reduction; that in time of prosperity we should husband our resources with that object; and that the public mind and the mind of Parliament should be constantly directed to it. In dealing with this subject it was not for us to proclaim to the world what a wealthy nation we should some day be and to leave everything to the future. Every nation was liable to contingencies, and what we should aim at was that in the maintenance of our financial system the National Debt should rather be diminished than increased, so that our successors should not be able to say that we had done nothing to reduce the burden of the Debt. An observation had been made in an American paper which was very àpropos, as showing not what we thought of ourselves, but what was said of us in connection with this matter of National Debt by a friendly nation, which had a right to speak, seeing how much it had already done to reduce a heavy debt. It might be said that the United States, having incurred a great debt in the Civil War, had taxed themselves heavily and reduced the debt in order to show the world what a great people they were. But if any nation had a right to count on futurity it was the United States, and he remembered hearing his hon. Friend the Member for Brighton say that the United States might presume to do anything on account of their vast uncultivated lands. The passage to which he had just alluded was the following: — The New York Times said— The history of nations has no more astonishing financial record than that which the Treasury at Washington has been able to issue on the 1st of May. Only to think of coming out of a stupendous war, prosecuted under financial difficulties which treason at home and widespread distrust abroad constantly aggravated to the last hour of wicked rebellion, with a debt of 2,755,000,000 dollars, and of reducing it in six years, of peace to be sure, but not altogether free from domestic trouble, 505,000,000 dollars, and lessening the burden of annual interest in the same time 38,000,000 dollars per annum! Great Britain came out of her great wars in 1815, and, after taking five or six years to settle up its accounts, found herself with a public debt of over 400,000,000 of dollars—say £800,000,000 sterling, which immense total in the intervening half-century, 1820 to 1871, has scarcely been perceptibly reduced. Now, we ought not to be open to a taunt of that kind, nor, indeed, was it quite true that our Debt had not been reduced, for no notice had been taken of the termination of the Long Annuities. At present the Debt was about £800,000,000, including the Annuities, which he hoped would be allowed to run on until 1885, when they would disappear, and then our National Debt might be looked upon as reduced to about £720,000,000 of funded debt with a corresponding reduction of taxation for the annuities which will have expired. Parliament having made a contract with the public creditor that a part of our funded debt should be turned into annuities to expire in 1885, was bound to adhere to that contract. No one could contemplate the number of 30,000,000 of souls which formed the actual population of this country without being deeply grateful to the Almighty for the many advantages we enjoyed, and if it were said that we could not now afford to pay the £2,000,000 in question in order to enable us to endeavour now to reduce our Debt, it would surely be virtually putting off its reduction to the Greek Kalends. As a commercial country we ought to take a more practical view of our position. It would be highly impolitic and undesirable to adopt the course recommended by his hon. Friend the Member for Brighton, and the House could do nothing better in support of the public credit of the Empire than to negative the Amendment of his hon. Friend.

SIR TOLLEMACHE SINCLAIR

then rose to move the Amendment of which he had given Notice— That in addition to the suspension of the Sinking Fund or Terminable Annuities, the taxation ought to be re-adjusted, so that all the taxes on the necessaries of life, including tea, sugar, and coffee, should be immediately abolished.

MR. SPEAKER

intimated that the hon. Member could not move an Amendment upon the Amendment of the hon. Member for Brighton (Mr. White).

SIR TOLLEMACHE SINCLAIR

observed, that as he was unable to move his Amendment, he wished to say a few words on that of the hon. Member for Brighton (Mr. White), and on the remarks which had just fallen from the hon. Baronet the Member for Greenwich (Sir David Salomons). The hon. Baronet had alluded to the fact that the funds were now at 93; but in 1852, it should be remembered, that they were really above par; and he did not think that it would be an unsound proceeding to suspend the operation of the sinking fund. The income tax, when first imposed, produced £750,000 at the rate of one penny. At present, the same rate produced £1,500,000; and, as compared with property, the Debt in 1871 was exactly half what it was in 1846, and there was every reason to hope and believe that the prosperity of the country would continue, and that in the course of another 20 years the income tax, instead of producing £1,500,000, would produce £3,000,000. He therefore considered the House would be justified in withholding for the present the payment of these Terminable Annuities. With respect to the taxes on the necessaries of life, there was a strong feeling that they ought to be repealed, inasmuch as they were taxes on production. He agreed with the hon. Member for Brighton that these taxes were equal to £1 a-year on each family. Taking a man's income at £50, these taxes amounted to 2 per cent, which made all the difference in production in competition with other nations; but, while it was only a tax of 2 per cent on the man's wages, it was from 10 to 15 per cent on the poor widow, who was only earning a scanty livelihood. As the Representative of a county constituency whose interests were bound up with real property, he could not be suspected of any political motive in advocating this question; but he had for many years taken a great interest in the working classes, and had had many opportunities of judging of the effect of the taxes on the necessaries of life; and, in his opinion, nothing could be done which would more tend to diminish drunkenness and to add to the welfare of the working classes than the remission of these taxes. It might be objected that this was not the proper time or opportunity for bringing forward a question of this kind. But he maintained that the time was singularly opportune in one or two respects. Only last year the taxes on corn, tea, coffee, and sugar, amounted to £10,000,000 sterling; but, owing to the policy of the present Liberal Government, the right hon. Gentleman the Chancellor of the Exchequer had been enabled to take off £3,500,000 from the tea, coffee, and corn duties, and it was much easier to deal with the £6,800,000 now remaining, than with the amount at which the duties stood before; and, next year, they were told that the re-payments on account of the Abyssinian War would cease, and that a larger sum would be required for the carrying out of the Army Regulation Bill, so that Parliament would be in a worse position for meeting this proposal next year than they were in at present. If it were true that the manual-labour classes of the country actually paid their fair share of taxation, and no more—which he entirely denied—he should still be in favour of removing taxes on necessaries, which pressed so heavily on women and children, and re-adjusting them on the shoulders of men who were much better able to bear them; and he would have no great objection to see the difference made up by adding to the taxes on malt and beer, and to make the taxes on all alcoholic liquors proportionate to their alcoholic strength. He did not wish to increase the duty on beer—he should even think that an unnecessary and a wrong policy—but so strongly did he feel the injustice of these taxes on the necessaries of life, that if there were no other way of arranging the matter, he would transfer these taxes to beer, or some other commodity used by the working classes. A great many of those who advocated the remission of these taxes on the necessaries of life, advocated also the repeal of all indirect taxation; but he contended that nothing would tend more to prevent the destruction of these large sources of revenue than the repeal of these taxes on necessaries. It was because the taxes on the necessaries of life were so unjust and oppressive upon the working classes, that they risked the whole cause of indirect taxation, and he would be prepared to accept the repeal of those taxes as a final settlement of the question between direct and indirect taxation. He would not be inclined to remit the taxes on spirits, tobacco, wine, or beer, for they were taxes which were voluntarily imposed by the people upon themselves. Some people contended that the taxes upon tea, sugar, and coffee were not taxes upon necessaries of life; but that objection was sufficiently met by the fact that tea, coffee, and sugar were universally given in every workhouse in the United Kingdom, which showed that those commodities were considered by medical men, and also by the taxpayers, to be necessaries, and not luxuries. Now, a "free breakfast table," as it had been called, would cost nominally £6,800,000; but the recuperative power of the Revenue would reduce that amount to £4,500,000 at least, and that balance might be met in various ways. In the first place, it might be met by suspending the Sinking Fund or Terminable Annuities, and by a slight re-adjustment of the licence duty on dealers in spirits and tobacco; or it might also be made good without even suspending any portion of the Terminable Annuities. The duty on tobacco was now 3s. 2¼d. per pound, and on cigars 5s. per pound; but if the tobacco duty were raised to 4s. and the cigar duty to 8s., that would bring in £1,500,000. It was said that such a change might lead to smuggling; but the same objection was urged against the raising of the spirit duty, and yet that objection was not verified by the result, and the duty on cigars in some of our Colonies was 5s. per pound, and in a large country like New Zealand, with a long coast line, it would be much more difficult to prevent smuggling than in England or Ireland. Another means of making up the deficiency would be by the re-adjustment of publicans' licences on spirits and tobacco according to rental. At present, a publican rented at £10 paid a £5 licence, and he could not see why a publican rented at £200 should not pay £100 for his licence, but as a matter of fact he only paid £17; and, in connection with this subject, he could not see the least reason why clubs should be exempted from the duty of taking out a licence. Then, again, the licence duty on grocers was at present of a prohibitory character; for while a publican rented at £10 paid a licence duty of £5, a grocer was taxed £28 for selling the same quantities of the same commodity, which was a monstrous injustice and a premium upon the publican as against the grocer, and by putting the grocer upon the same footing as the publican, they would do what was right for the grocer and for the interests of the public, and they would diminish drunkenness and make the solution of the licensing question very much easier. He estimated that the increase from this re-adjustment of the licensing duty would amount to £1,500,000, as the expenses of collection would be materially decreased, and a much larger sum would be derived from taxing grocers at the same rates as publicans. There was still another source from which this deficiency might be met, for it was said that the French Government meant to give notice of their intention to abrogate the Treaty with England, and in that case, it would be fair and right to raise the duty on wine to the same rate, in proportion to alcoholic strength, as the duty on spirits, and he could see no reason why wine, the beverage of the rich, should be taxed more lightly than spirits, the beverage of the poor. The amount of alcoholic strength should be taken as the standard for taxation, and by that means £2,000,000 would be added to the Revenue. In addition to the means he had already stated, another 1d. might be added to the income tax, thus making up the whole deficiency. It was objected that an addition of a penny to the income tax would be oppressive to the lower middle class with incomes up to £200 a-year; but with the deduction of £60 from their taxable income, their quota of tax on the extra penny would only be 11s. 8d., and they would save four times as much as that by the remission of the taxes on the breakfast table. Up to incomes of perhaps £1,000 or £2,000 a-year, any person accustomed to having a large household would find that the additional penny of income tax would be more than re-couped in the saving of the tea and sugar duties, and this arrangement would, therefore, benefit every man in proportion to his poverty and the number of his family. The incomes of the income tax paying class amounted to about £400,000,000 a-year, while the incomes of the manual-labour class had been variously estimated by eminent authorities at from £200,000,000 to £400,000,000 sterling; taking them at £300,000,000, however, it would be found that while the income tax-paying class paid about £60,000,000 a-year in taxes, including local taxation, the manual-labour class paid about £30,000,000; but the manual-labour class really paid, in addition, a considerable share of local taxation of the country, and the reduction of the tea and sugar duties might be made without disturbing the equilibrium of the taxation of the two classes. Another advantage gained by removing these duties would be found in the stimulus given to the production of beet-root sugar in this country, where there were many places well adapted for producing it, but where it never would be produced so long as these taxes and the Excise duties remained as they were. The operation of the present differential duties on sugar was most injurious, encouraging the lazy, unprofitable, and old-fashioned mode of cultivation, and some better plan ought to be adopted. Then the removal of the tea duties would increase our trade with China, which was one of our best customers; while the remission of the coffee duties would do the same thing in regard to Ceylon and other places. It was said that if we had "a free breakfast table," the manual-labour class would only spend more on spirits and tobacco; but it should be remembered that there were 1,000,000 widows in the kingdom and several million children, who did not smoke or drink, and they would derive immense benefit from such an alteration. Many people found fault with the working classes for their want of thrift, their drunkenness, and their other vices; but from his experience in the East-end of London and among the poorer classes of his own neighbourhood, he had the highest opinion of their moral virtues, and, considering the trials to which they were exposed, he thought they had nothing to fear in a comparison with the rich. If there were a larger amount of drunkenness among the lower than among the upper classes, that was only a recent matter; for many hon. Gentlemen could remember the time when drunkenness was at least as prevalent among the upper as among the lower classes. Again, he was of opinion that increase of drunkenness had been due very much to the neglect of Parliament, who had allowed our present abominable licensing system to go on for so long, and permitted magistrates to license publichouses, in some localities at the rate of one for every 40 or 50 of the population, while in other districts they only allowed one for every 1,000 or 2,000 of population; and, for his own part, he very much regretted that the Army Regulation Bill had not been sacrificed instead of the Licensing Bill in this year's "massacre of the innocents." Another reason for the faults of the working classes was their want of education; and although this country had had the example of Scotland for 200 years before her, it was not until last year that any large educational scheme was carried out in England. As to the alleged want of thrift among the working classes, he had been astonished at the returns of the benefit societies, which showed what enormous sums the working classes saved in proportion to their means. He did not believe that the upper classes saved anything like as much in proportion. In conclusion, if he wanted a higher authority for what he had stated, he found it in the Sacred Volume, where it was stated how difficult it was not for the poor man, but for the rich to enter the kingdom of Heaven. The working classes owed deep thanks to the Chancellor of the Exchequer for having so materially reduced the taxes on the necessaries of life, and he hoped the right hon. Gentleman would go further in the same direction, and then at the close of his career he might apply to himself the noble words which Sir Robert Peel applied to himself on a similar occasion— It may be that I shall leave a name sometimes remembered with expressions of goodwill in the abodes of those whose lot it is to labour, and to earn their daily bread by the sweat of their brow, when they shall recruit their exhausted strength with abundant and untaxed food, the sweeter because it is no longer leavened by a sense of injustice."—[3 Hansard, Ixxxvii. 1055.]

THE CHANCELLOR OF THE EXCHEQUER

*: The hon. Gentleman the Member for Brighton (Mr. White) moves in substance that it is expedient to arrest the payment of the National Debt in order to reduce considerably the taxes paid by the working classes on sugar, tea, and coffee. It is a large subject, quite sufficient in itself to occupy the attention of the House, and that must be my excuse for not following the remarks of the hon. Baronet the Member for Caithness (Sir Tollemache Sinclair) in detail. It appears, however, that the hon. Baronet contemplates our surrendering £6,800,000 of Revenue, making up this amount from two sources—by a penny income tax besides the additional 2d. just imposed, and by means of what he calls the recuperative power of taxation. Now, I gather that the hon. Baronet is a strong advocate of temperance; but if he takes off the taxes on tea, sugar, and all those necessaries of life on which the working classes now pay, and expects that taxation will be recuperative, in what way does he suppose that the working classes will then contribute to the Revenue? Why, they can do so only by adding more to that which is too much already—they will buy more beer and more spirits.

SIR TOLLEMACHE SINCLAIR

said, he had attempted to show that if the taxation was not fair as between the manual-labour class and the income tax-paying class, the tax on beer might perhaps be augmented to a rate more commensurate with its alcoholic strength.

THE CHANCELLOR OF THE EXCHEQUER

I do not think the hon. Baronet has met the point I have raised. If the taxes on tea, coffee, and sugar were removed, the recuperative power of taxation could only be shown if the working classes consumed more beer and more spirits and more tobacco, for in no other way could they contribute to the Revenue. I turn now to the hon. Gentleman the Member for Brighton, who has accepted the challenge of the right hon. Gentleman the Prime Minister, but I think has scarcely done justice to his theme. His Motion being in substance a comparison of the relative advantages of a further remission of taxation in favour of the working classes, and the repayment of a portion of the National Debt, it devolved on him not merely to show that a hardship is now inflicted on the working classes, but to make a comparison between the relative advantages to them and to the rest of the community of the remission of taxes to them, and the payment of Debt, and this he has entirely failed to do. He has carefully avoided the subject of the advantages and disadvantages of paying off the National Debt. It is easy to say that these taxes bear hardly on the poor. Of course they bear hardly on the poor, as taxation bears hardly upon all classes. It is easy also to say that if you take so much money from the payment of Debt, you will have so much left with which to make a remission of taxes in favour of the poorer classes. But what the hon. Gentleman the Member for Brighton failed to show was that, weighing the two things in a fair and impartial balance, it was for the interest of the nation that the payment of Debt, at the moderate rate at which it is now proceeding, should be arrested, and the funds thereby acquired should be appropriated in remitting these taxes. The hon. Member did not therefore satisfy the conditions he undertook to satisfy in the Motion he put down. I will endeavour, so far as I can, to answer, not so much the speech which he has made, as the speech which I think he ought to have made, and which should have put forward all the arguments against paying off the National Debt out of taxation which have been put forward, for instance, by Mr. Laing, formerly in this House, and more lately in a letter he has written to the newspapers. As the matter has been much canvassed, I shall state why I think on the other hand that, happy as we should all be to lighten the taxes on labour, it is still more important not to relax our efforts in reducing the National Debt. The subject is of enormous importance, and though I rather gather that the House is not in favour of the Motion of the hon. Gentleman the Member for Brighton, it is my duty, not having before trespassed at very great length upon the House in treating this subject, to ask their attention now for some little time while I give the reasons which induce me to believe that the outcry for intermitting the payment of the National Debt is not one which should ever succeed. I begin with a few general propositions respecting the Debt. And first I may point out that the payment of the National Debt is often treated as if the country were for the first time called upon to bear the burden of the outlay when it pays off the Debt. That is an entire mistake. The country has already spent the money. The National Debt is mainly held in the United Kingdom, and when the expenditure was incurred which was met by this Debt, that expenditure was made out of the wealth of the United Kingdom. The question is not as to the principle, which is gone, but as to adjusting the burden of its repayment between the persons inhabiting this kingdom. Now, the wealth of the kingdom consists of the wealth of the permanent residents in the kingdom. At present the general taxpayer is bound to pay annuities to the fundholders representing those who originally lent the money, and can also go into the market and buy up their rights. Should such a transaction occur it would, no doubt, transfer money from one part of the community to another, or rather from the community considered as a whole to certain smaller classes of the community who hold these securities against the Government. The effect, therefore, would be merely a transfer of money from one portion of the community to the other. The nation would be made neither richer nor poorer by the operation. One portion would receive, instead of the annuity, the value of the annuity; the other, paying the value of the annuity, would acquire the privilege of no longer paying the annuity. It would be a perfect equivalent on both sides. It would be different, of course, if the main part of the Debt were held out of the country. But as it is the resources of the country remain the same, neither more nor less. Now, what analogy can we take to guide us in this matter? In private life, when a prudent man is in debt, he sets himself to work to pay it off. He considers that, as a general rule, the best investment he can have for his money is its appropriation in the payment of his debts. But in private life that rule is not without exceptions. If he has only distant relations, and if his income is not more than enough to meet his wants, he may consider it unnecessary to burden himself with the payment of debt for the benefit of those for whom he has no particular regard or affection. Again, he may have his money invested at so high a rate that it would be a considerable loss of income to take his money from those investments and apply it to the payment of debt on which he may be paying only a low interest. But these two conditions do not apply to the State. The State ought to be looked at as a whole. We ought to look at it as one great undying corporation, of which we are all members, and to the life of which there is no probable termination, like an animal of enormous longevity—an antediluvian patriarch. Therefore, the considerations that apply to individuals do not apply to the State. It is not for distant relatives, but for the nation as a whole, that we are acting in this matter; and we are bound to consider its interests in a manner very different from that in which a private individual is bound to consider the interests of a remote heir. As regards investment, no Government ought ever to be trusted to speculate with public money, and there is no absolute security against speculation that I know of, after money has once been raised, except investment in our own public securities. There is a solidarity between the whole of the individuals composing the nation at one time and those who have formed and will form it from the first to the last of its career which nothing can dissolve or break, and we ought not to regard this matter from the point of view of our own present individual interests; but we ought to think and act for the nation, for whom we are for the moment trustees, soon to be replaced by others who will come after us.

Having stated these considerations, I would now point out to the House the advantages that would result, speaking generally, from the payment of a considerable portion of our Debt. One clear advantage would be that we should raise the value of our Debt in the market, so that if we were ever again called upon to borrow we should do so on better terms. The hon. Baronet the Member for Caithness (Sir Tollemache Sinclair) has pointed out that the Debt is now much lower in price than it was some years ago, and doubtless that is true; but the cause of its now being lower is not a matter that we should regret in itself, because it arises from an enormous extension of the sources of investment, for there are now many more means open for the lucrative employment of money than there were 30 years ago. These means have naturally competed with our Debt and drawn the money elsewhere; but if we were to pay off a considerable portion of the Debt, there is always a certain quantity of money that would wish to find its way into that very best of all possible securities which our Debt affords. If, therefore, we could make a sensible reduction in that Debt we should certainly increase the competition for it and raise its value; and if that operation were carried on with spirit and success, it might be continued up to a point at which we need not despair, even after a considerable amount had been paid off, of seeing that Debt again at par. Looking to the competition which now exists, it is not likely to be done while our Debt is at its present enormous amount, but supposing that it was diminished by a considerable portion, I think it very possible that the competition of persons who think it more desirable to have their money in perfect security rather than at a high rate of interest, might raise the Debt to par; and raising and maintaining the Debt at par is the only way to give the nation the relief of a reduction of interest. Then there is another point of enormous importance. It has been argued that there is no occasion to pay the Debt, because, as the hon. Baronet said, it will pay itself. Unfortunately, however, Debt does not pay itself. If the mere growth of wealth and population really paid the Debt, that would remove one of my greatest objections to leaving it at its present amount, without making any effort to pay it off. But the Debt remains by the supposition a constant quantity, and relative increase of wealth implies the possibility of relative diminution. That argument assumes that we are to count on perpetual and uninterrupted prosperity, and that we are not to expect a time when we shall again be called upon to borrow, or when we may find ourselves in difficulties. Nothing could be more foolish than such a dream as that. I suppose that no country ever had a fairer or brighter prospect of peace, tranquillity, and prosperity than England had when Mr. Pitt concluded his Commercial Treaty with France in 1785. We had settled our differences with America; we were at peace with all the world; the steam engine had just begun to assert its power; we had made a Commercial Treaty with France, and everything seemed as if we were entering on an era of prosperity. Yet we were on the eve of a war which was by far the most dangerous, the most difficult, and the most expensive in the history of all the long wars we ever went through, and one which left us a legacy that our latest posterity is not likely to forget. Therefore, there is no more foolish presumption than that we need not attempt the reduction of our Debt because we shall outgrow it. We are bound to consider that we live in an age when our destiny is not under our own control. The very agglomeration of mankind into large States by the adoption of the federal principle to a greater extent than has hitherto prevailed is in itself a source of danger. It is no longer a combination of various Powers which we have to dread—a combination which might be broken up, owing to their discordant interests or by the dexterity of diplomatists; but we have now single Powers of such magnitude and force that any one of the three or four that could be named might put this country to the necessity of incurring very heavy expense and serious danger. It must also be considered that there is always a point up to which a country can borrow with facility, if its credit is good. There is another point at which it can borrow at enormous sacrifices and with great difficulty, and then at last there comes a point at which it can no longer borrow at all. Take the present case of France, which is now called upon to make an enormous effort to borrow in order to pay the tribute which Prussia demands, and to meet her own expenses in consequence of the war she waged against Prussia, the civil war which followed, and the losses which she has sustained. It may be, and I dare say it is so, that France will be able to borrow this money; but think with how much greater facility, and on how much better terms, she would have been able to borrow it if she had not begun with £550,000,000 of Debt. How came £350,000,000 of that Debt to be incurred? Mainly by adopting the kind of policy of which the hon. Baronet has spoken. In a time of peace, abundance, and prosperity, instead of balancing her revenue and expenditure, instead of carefully avoiding an increase of her liabilities, she went on with a deficit from year to year, no doubt thinking that "to-morrow shall be as to-day, and even more abundant." That is a warning which this country cannot too much lay to heart. It is our duty to reflect that we may be called upon to make immense sacrifices, and that we should be ill able to make them unless we diminish our immense mass of Debt. I will also venture to say that the power of every country to maintain peace—which I take to be the desire of us all—depends mainly on the opinion that is held of it by foreign nations; and there is nothing so likely to give a favourable opinion of this country, of its strength, its prudence, its wealth, its foresight, of all that makes a nation respected and feared, as the fact that now, in the fulness of our prosperity, we do not allow ourselves to be enervated or relaxed by the ease of too fortunate times, but that we look, forward carefully and prudently to a time—and we know not how near it may be—when the present condition of things may change, and when we may be called upon, as we have been in the course of our history, to contend for our very existence. It must be remembered that we in England are not wont to put things on mere abstract grounds. I appeal to the traditionary policy of England in this matter. The hon. Gentleman the Member for Brighton asks us to suspend the payment of our Debt, and in doing so he asks us to violate all the traditions which have prevailed in England since this country has had a Debt. Our Debt began in the reign of William and Mary, and for a long time the contracting of it was always accompanied by some provision for a sinking fund in order to pay it off. The words "Sinking Fund" have now an evil reputation, and the fashion is to sneer at the idea. But there are two kinds of sinking funds, against one of which too much evil cannot be said. Any complicated device which seeks to persuade people that they can pay off their Debt by any other means than that of providing a large excess of revenue over expenditure is vain, and all those devices which amused and deluded our ancestors have now been thoroughly exploded. But there is a sinking fund of another kind—one which aims at laying hold of the excess of revenue over expenditure, and devoting it to the payment of Debt, and that is one against which there is nothing to say, except that it may be confiscated to meet the wants of a profligate Minister. That objection is entirely obviated by depriving it of the nature of a fund, and reducing it to a yearly payment devoted as soon as raised to the payment of Debt, in fact to a Terminable Annuity. From the Peace of 1815 to the present time we have never ceased to have Terminable Annuities in the nature of a sinking fund, by which not only the interest of the Debt has been paid, but capital has also been sunk or absorbed. The traditionary policy of England is to have some contrivance of the kind, and it has gone on ever since the Peace of 1815, when the Debt of this country amounted—according to Mr. Dudley Baxter—to £902,000,000. From that time to the present we have paid off £177,000,000, but we have re-incurred £77,000,000, of which £20,000,000 was for the liberation of the slaves; £34,000,000 was for the Crimean War, and another considerable sum was on account of the Irish Famine. At the present moment our Debt, including the capital represented in Terminable Annuities, stands at £796,000,000, and I should like to ask the hon. Gentleman the Member for Brighton whether he thinks that this country would have done more wisely if it had refrained from paying off that £177,000,000? Would the working classes, for whom he feels so much sympathy, have been in a better position if this country had been saddled with that amount of Debt, which would not have been paid off if his policy had been followed? It seems to me that no persons have a greater interest in the reduction of the Debt than the working classes themselves. I would just notice, in passing, two remarks that the hon. Gentleman the Member for Brighton has made about me. He spoke of my having been "un-candid," though I did not intend to be so, with regard to the Return as to the £10,000,000 of Debt which I stated had been cancelled during these years, and he says I ought to have gone into detail on the subject. In making a financial statement there is hardly any limit to the detail into which one might go, but such speeches always draw themselves out to a sufficient length without importing anything that can be helped. This Return, relating to the quantity of Debt cancelled, is made out exactly in the terms in which it was asked for. It is quite true that you take about £4,000,000 from Chancery, and £2,000,000 from Bankruptcy, but it is also true that that amount of Debt has been cancelled; and therefore the statement of the fact could not be avoided. Nor is it the case that the money so apapplied to reduce the Debt is the money out of which the salaries in Chancery are paid, for they are paid from another source. It is to the Fee Fund of the Court of Chancery that we looked for paying the Chancery salaries; but that Fee Fund is now paid into the Exchequer, and the salaries are placed on the Consolidated Fund. No doubt we have given a book Debt bearing no interest for the amount now used in buying up and cancelling Stock; but it is not the less true that we have cancelled £6,000,000 of Stock from sources which we shall never have to replenish. According to the Return, the Debt has been reduced in the years referred to by £17,000,000; but from that amount must be deducted £7,000,000 of Debt incurred for the Telegraphs. The Telegraphs, however, not only pay interest, but are beginning to furnish a sinking fund, which will abolish, in course of time, the capital of that Debt. Consequently, that item does not burden the country in any way. I have had nothing to do in drawing up or "cooking" the Return in question, or I should have been justified in taking more credit to myself. That is what I have to say with respect to the National Debt; and now I come to the alternative suggested by the hon. Member, that in preference to continuing the paying off of the National Debt we should reduce the duties on articles consumed by the poor—such as tea, sugar, coffee, cocoa, but not tobacco. The hon. Gentleman talked of the severe pressure upon the poor of having the necessaries of life taxed, but the expression "necessaries of life" is a mere question of words. One portion of society considers as necessaries of life articles which another portion does not think so. I do not object to the hon. Gentleman calling tea and sugar necessaries of life, but the mere calling them so does not make them so in the sense used in taxation. What is meant in reference to taxation by the phrase "necessaries of life" are the things required for the support of life. The shilling duty on corn amounted to a tax, in regard to wheat and the cereals entering into the composition of bread, of 2½ per cent on the bread of the poor; and when we hear so much of the hardship of a 2½ per cent income tax, it cannot be thought, I think, an unworthy act to have taken off the 2½ per cent tax on corn, which was in the strictest sense a tax on the necessaries of life. The hon. Gentleman considers that the duties on tea and sugar should be taken off altogether, as being necessaries of life, but that the poor should continue to pay the duties on stimulants and on tobacco. Such a course of proceeding would be tantamount to declaring that those of the working men who had no taste, or but little taste for stimulants, should pay no taxes, or be but slightly taxed. Nothing could be more dangerous than such a doctrine. As the electoral suffrage is now settled, the householders of the country have an influential voice in electing those who are to make laws for the country, and if it were made optional for them only to be taxed according as they consumed certain luxuries, the effect would be that you would have one set of persons empowered to impose taxes, while another set of persons would have to pay them. The poorer classes would tax the rich, while they themselves would be exempt from the burden of taxation. An inhabitant of New York once complained of the course pursued by the inhabitants of New York in electing persons who spent millions of the money of the city without having anything to show for it, and added that if they elected honest persons the money would be more beneficially expended. The person to whom this observation was addressed replied—"What is it to us? It is you who pay, and not we." The same would be the case here if the proposition of the hon. Member should be adopted; for then a privileged class would be created, and you would not have the only satisfactory check on their mode of imposing taxation. The adoption of such a proposition would also have prejudicial effect on the capital and resources of the country to an extent that can scarcely be conceived. If you are going to destroy all indirect taxation, where are the resources to come from to enable you to meet the requisite payments on account of the Debt, and to provide for the necessary expenditure of the country? It would hardly be possible to have a revenue sufficiently elastic to meet the burden of the public necessities. The Debt would remain, but the sources from which it is paid would be absolutely exhausted. If the tea and sugar duties were abolished, would any man believe that any Government would be able, even in the case of an extreme and pressing necessity, to re-impose them, and, if not, would not that by so much strike at the power of the country to meet the exigencies which a great nation like this is continually subject to? The result would be that, whenever any great demand had to be made on the resources of the country, it must be made by direct taxation, and that up to a point making it most oppressive to those who had to pay the taxation, and a greater evil also to the poorer classes than if they had to pay a certain portion of the amount required. If you try to carry direct taxation beyond certain limits, capital will make wings for itself and fly away. The idea seems to be based on the popular delusion that labour and capital are antagonistic. What is the great advantage of capital to a country? It is not the opulence of the few people who are nominally the owners of it, and can enjoy but a certain portion, but it is the fund out of which the great mass of the people are maintained. Therefore nothing could be more impolitic than to drive capital out of the country by any heavy system of taxation; and it would be far better for the interest of the working classes themselves that they should continue to pay a moderate duty on the quasi necessaries of life than that that credit by which this country alone exists, in its artificial state of society, should be destroyed.

I think I have shown the House very strong, indeed insuperable, reasons why this country should not give up the duty of reducing the National Debt; and I trust it will never allow itself to be persuaded to break down the system deliberately sanctioned by Parliament when the necessity for doing so is not urgent and overwhelming. It is very easy to sneer at these Terminable Annuities, and to say that it is only the Chancellor of the Exchequer lending to the Chancellor of the Exchequer. In one sense, that is the case. The Chancellor of the Exchequer, as borrower, is the representative of the people of this country; as lender, he is only one of the Commissioners for the Reduction of the National Debt, lending the money of the savings banks on security given to them. If you interrupt the system of Terminable Annuities you tamper, in a manner most injurious to the rights of the public creditor, with the security on which the money of the savings banks has been lent. I am satisfied that no more grievous injury could be done to our credit than to take advantage of the fact that we are trustees of the money of the savings banks, in order to withhold from them the payment we have deliberately covenanted to give, in order to apply it to the Ways and Means of the year. As I read the Savings Bank Acts, the depositors have no security but the Stocks in which their funds are invested. There is no book debt, as in the cases of Chancery and Bankruptcy, to make up the possible deficiency. It makes no difference when you take the money, which you are bound to pay the depositors, and apply it to your own use, whether you do it through the intervention of a trustee, or directly, as in the case of ordinary life annuities—you may call it a change of security—I call it a misappropriation of the funds of a public debtor for the use of his creditor. You may call it a change of security—I call it a default in paying what is legally and justly due. Having, therefore, shown that there are excellent reasons why, taking the nation in a corporate capacity as a whole, we should go on paying off the National Debt, and having also shown that there are good and substantial reasons why we should not wholly relieve the working classes from taxation. I should now like, if the House will allow me, to say a few words on another aspect of this subject, on which I have collected some statistics, which I am persuaded will be found to be not without interest, and the effect of which will be to exhibit the most remarkable evidence of national prosperity which the world ever saw. For this purpose I take three periods in the present century—1825, 1850, and 1870–1—and apply certain tests of public prosperity to these different periods. The total amount of funded and unfunded Debt was, in 1825, £809,831,468; in 1850, £787,029,162; and, in 1870–1, £737,400,237. The total payments for interest, &c, of Debt, including Terminable Annuities, were, in 1825, only 10 years after the war was over, £30,205,268; in 1850, £28,297,583; and, in 1870–1, £26,826,436. So that at this period, when we are invited to stop our payment of Debt and apply the money to the reduction of taxation or to the service of the year, we are actually paying nearly £4,000,000 annually less for the charge of the Debt than in 1825. I must beg the House to bear that in mind, because it will show how different was the position of the country in 1825, and how much more heavily this burden bore upon it then than it would do now. The population in 1825 was 22,281,000; in 1850, 27,523,000; and, in 1870–1, 31,437,000. So that when the population was 22,281,000 we were paying £30,205,268 as the annual charge of the Debt; and now that the population is 31,437,000 we are paying only £26,826,436; and yet that is called a burden too heavy to be borne. The Revenue raised by taxation, direct and indirect, including the Post Office, Telegraph, and other payments into the Exchequer, fees in the Courts of Justice, &c., which cannot fairly be called taxation, being payments for which service is rendered, and miscellaneous receipts which are in the nature of a repayment; deducting these, the Revenue raised by taxation was, in 1825, £54,869,654; in 1850, £54,079,243; and, in 1870–1, £60,472,114. The population had increased 9,000,000 since 1825, while the Revenue raised by taxation had increased in the same period by only £6,000,000. Dividing the amount of taxaton by the number of the population, we get the rate calculated per head. The rate of taxation per head—that is, under that particular class of revenue, not on the whole, was—in 1825, £2 9s. 3d.; in 1850, £1 19s. 3d.; and in 1870, £1 18s. 5½d. The receipts other than revenue raised by taxation were—in 1825, £4,893,396; in 1850, £3,440,727; and in 1870–1, £9,473,106,—so that these receipts are double what they were in 1825, and almost three times as much as they were in 1850; while it should be recollected that these payments may be said to cost the public nothing, being payments for service received. I now come to the consumption of the country; and, first, I take beer. The number of barrels consumed by the people of this country (England only) in 1825 was 7,995,973; in 1850, in the United Kingdom, 15,303,767; and in 1870–1, 25,889,743; and the consumption of each individual was, in 1825, in England, .358, or about one-third of a barrel; in 1850, in the United Kingdom, .556, or about one-half of a barrel; and in 1870–1, .823, or four-fifths of a barrel. I now take the article spirits. The number of gallons of homemade spirits consumed in this country in 1825 was 18,928,342; in 1850, 23,862,585; and in 1870–1,22,961,125, being a slight reduction, as the House will observe, on the consumption of 1850; but the devil loses nothing by that, because it is well made up by the consumption of foreign spirits. The quantity of foreign and colonial spirits consumed in 1825 was 1,317,671 gallons; in 1850, 2,229,063; and in 1870–1, 8,439,385 gallons; so that the consumption in 1870–1, adding foreign, colonial, and home spirits together, was considerably larger than that of 1850. The individual consumption of home-made spirits in 1825 was .849 of a gallon; in 1850, .867; and in 1870–1, .730; and of foreign and colonial, in 1825, .059; in 1850, .081; and in 1870–1, .268 of a gallon for each man, woman, and child in the country. If I take tobacco, the figures are still more remarkable. In 1825 the tobacco consumed was 16,832,826 lbs; in 1850, 27,553,236 lbs; and in 1870–1, 41,371,507 lbs. The income tax produced per penny, in 1850, £867,880; and in 1870–1, £1,520,000. The house tax yielded, in 1852, £727,026, and 1870–1, £1,129,125. The official value of the imports was, in 1825, £37,408,279; they had risen in 1850 to £105,874,607; and in 1871, the real value of the imports was £303,257,493, nearly trebling themselves in 20 years. The exports were in 1825 (official value), £58,935,252; in 1850 they had risen to £190,089,643, and the real value is now £244,080,577. The shipping inwards represented, in 1825, 3,102,730 tons; in 1850, 7,100,476 tons; and in 1870–1, 18,113,364 tons. The shipping outwards represented, in 1825, 2,699,514 tons; in 1850, 7,404,588 tons; and in 1870–1, 18,526,818 tons. That, Sir, is my account rendered of the state of the country. Then we are told we are so oppressed by taxation that we must give up the hope of strengthening the hands of the country and improving our financial prospects by continuing the very moderate reduction of Debt.

MR. SPENCER WALPOLE

said, he must beg the right hon. Gentleman's pardon; but had the right hon. Gentleman any statement of the estimated increase of the income of the country?

THE CHANCELLOR OF THE EXCHEQUER

No, not exactly; but Mr. Dudley Baxter estimates it at £860,000,000, or about £60,000,000 more than the amount of the Debt. Such, then, being the state of the case, can it be said that penury, want of resources, want of means, are so very pressing as to force us to give up that system we have so long adopted for the payment of the Debt? The question remains, supposing it granted to me—and it can hardly be denied that it is for the interest of the nation that that system should be continued—the next question is, what is the interest, not of the nation, but of this generation? Is their interest really separate from that of the nation? Have we a right to say that, posterity having done nothing for us, we should do nothing for them? Have we a right to say that we have abundance, and are likely to enjoy abundance for the rest of our lives, and therefore we decline to put ourselves to inconvenience for the sake of those who are to come after us, no matter whether it is our duty to do so or not? The history of this country should be a sufficient answer to that. You say the country is prosperous, but that prosperity did not come of itself. It is the result of a long course of self-denial, which has not been equalled, certainly not been excelled, in the history of the world. All that we now enjoy is the fruit of the incredible toiling of countless generations, and is it to be said we are to come in for this rich inheritance and do nothing for our children? During the great war with France our ancestors were as prodigal of their money as their blood, at a time when money was far less abundant than it is now; they never thought, especially during the latter part of the war, of the pressure upon them, but were always ready, not only to bear their own charges, but to furnish to our foreign allies subsidies whenever they were wanted. Are we, then, in this period of prosperity, the like of which the world has never seen, to say we will do nothing for posterity? As Horace taught— Non his juventus orta parentibus Infecit æquor sanguine Punice. It will not be believed that we are the children of the men of Trafalgar and Waterloo if we satisfy ourselves with merely looking after our individual interests, simply because it is easier than to provide for the future welfare of our country, if we suffer ourselves to be persuaded to sit down in luxury—English luxury, as it is now called in France—and do nothing whatever in the spirit of those who expended their blood and treasure to earn for us this prosperity and tranquillity which we now enjoy. In France, the idol of the nation is glory, and a miserable idol it is; but a worse idol than that is the individualism and selfishness which lead a man not to consider public questions with respect to the community of which he is a member, or the interests of his fellow-men, but to confine himself within himself, and if he sees his way clear to pass his own life in tranquillity and ease, to be content to let others shift for themselves. That is the danger of this time. The sinews of public morality and public duty are relaxed when people encourage a policy of selfishness. We have always been in the habit of saying that, although France fought for glory, England fought for duty; and duty has been the mainspring of everything we have done, the agency that has raised this country to its present height. But if this is so, how must we regard those who say—"I have none but myself to think of; I care nothing for those who come after me; I happen to belong to a country which has been toiled for by past generations; I will enjoy to the full all the privileges that toiling has earned for me, and I will contribute nothing whatever to the common stock; I will not make a single sacrifice, or forego a single pleasure, in order to strengthen the country in the way in which she needs strengthening for the sake of posterity?" I beg pardon of the House for having taken up so much of its time; but I thought it necessary, as the unworthy representative of the financial policy of the Government, to make this protest against the feeling that seems to be gaining ground—that all we have to do is to make things easy for the present, and disregard alike those who came before us and those who come after us. That is not the way in which it came to be written, Sic fortis Etruria crevit; and if England is to maintain her position among the nations, it will be by following different counsel from that suggested by the hon. Gentleman the Member for Brighton.

MR. W. FOWLER

said, he heartily agreed with the general views of the right hon. Gentleman the Chancellor of the Exchequer, and although perfectly willing to pay far heavier taxes than were levied at present, if by so doing the National Debt could be reduced, he objected to a system of payment of Debt by Terminable Annuities, because the advantage resulting from that payment was not felt by those who made the payment, but by the taxpayer of the future. If Debt were paid off, the taxpayer who reduced the Debt should have the satisfaction of reducing the interest on Debt to be borne by him. In the case of America, which had been instanced, a reduction of £10,000,000 of Debt was followed by an immediate reduction of interest; but under the system of Terminable Annuities, those who this year paid an additional 2d. on the income tax would not get a single farthing benefit unless they chanced to live until 1885. It was no exaggeration to say that before 1885 the country would have saved an amount equal to the whole of the capital of the National Debt, and, under such circumstances, would be far better able to pay the interest on the Debt than it was at present. That was no argument against payment of Debt, but against deferring the advantages resulting from that payment. The proper way to pay Debt was to make provision in each Budget to cancel Stock. The only argument urged against this proposal was that the House was not to be trusted, and would invariably prefer to reduce taxation to paying Debt. Was there any justification for saying that the House of Commons was made up of a parcel of fools, who, being unable to trust themselves, were obliged to go through the "hocus pocus" of a system of Terminable Annuities? He objected to the Chancellor of the Exchequer's views respecting the contract the nation was supposed to have entered into. The nation had contracted with itself, and there was no reason for saying it could not contract from year to year. The Chancellor of the Exchequer had said the savings banks depositors had not the security of the nation for the money, but only the security of the Terminable Annuities. If he looked at the Act he would find he was in error; and if he were not it was high time the Act was amended, that the savings banks depositors should have the security of the nation. The Chancellor of the Exchequer had spoken of the contingencies of the future; but there was equal possibility that the future would be characterized by prosperity as by misfortune, and the chances were in favour of the presumption that the people of 1885 would be far richer than the people of the present. In opposition to the hon. Member for Brighton (Mr. White), he would prefer to reduce the Debt even to double the extent it was being reduced at present; but he protested against a system by which those who reduced the Debt did not get an immediate benefit from such reduction.

MR. SINCLAIR AYTOUN

said, he should support the Motion of the hon. Member for Brighton (Mr. White), and would point out that his hon. Friend's arguments were directed, not against the reduction of the National Debt, but against the carrying on of that process by funds supplied from indirect taxation, such as the Customs and Excise. He wished to call attention to some of the hon. Member's statistics. The hon. Member had taken the case of a working man whose income amounted to £65 per annum. He supposed that that working man, with a wife and two or three children, would expend 2s. 4d. per week in taxes, which would amount to £6 1s. 4d. per annum. In another portion of his speech the hon. Member stated that this same artificer paid an amount in the shape of taxes which might be considered equal to 2s. in the pound of income tax.

MR. WHITE

No, not that man.

MR. SINCLAIR AYTOUN

Another man?

MR. WHITE

Yes.

MR. SINCLAIR AYTOUN

Who was that other man?

MR. WHITE

I must explain. I stated, with reference to the individual whose case I had assumed, that 2s. 4d. was equal to him to 4d. in the pound of income tax: but I believe if we went through the whole category of the consumption of the working classes, it would be found that the working class, as a class, paid what was equivalent to 2s. in the pound to Government.

MR. SINCLAIR AYTOUN

replied that he had misunderstood the hon. Member, who had taken the case of an artificer whose income was £65 a-year, and stated that the amount paid by that artificer to Government was equal to 2s. 4d. per week. [Mr. WHITE: Not to him.] Very well; that showed how difficult it was to enter into this question of statistics in a general discussion. The hon. Member had stated that such a man and his family spent 2s. 4d. a-week in taxes, and then he stated that artificers in general would spend a sum equal to 10 per cent of their income; but he had not taken the same standard in both cases, and that showed the difficulty of discussing such subjects in that House without having the figures before them. The hon. Member would better promote the object in view by moving for Returns to find out the taxation of the different classes of the community. He had seen statements made by societies whose object was to obtain a repeal of direct taxes which seemed to him to be entirely irreconcilable with the facts which came under the notice of everybody. He wished to make one remark in reference to a statement of the Chancellor of the Exchequer. The right hon. Gentleman had stated that if we redeemed the Terminable Annuities we should be breaking faith with the deposits in the savings banks; but nothing could be more entirely inconsistent with the fact. When the First Lord of the Treasury introduced the scheme for converting the Debt into Terminable Annuities, he stated that whether there was a profit or a loss on the investment, we still owed them the money they had deposited. There could not be a doubt that the security of the depositors in the savings banks was entirely independent of the mode in which the money was invested.

MR. RYLANDS

appealed to his hon. Friend the Member for Brighton (Mr. White) not to divide the House on the question.

MR. WHITE

said, he would withdraw his Motion.

Amendment, by leave, withdrawn.

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