§ Then it was moved "That the House do now resolve itself into the Committee of Ways and Means."
§ MR. HUNT
said, this appeared to him the proper time to examine the Financial Statement of the Chancellor of the Exchequer, and the general plan which he had proposed for the financial year. He should have been glad to have made his observations at an earlier period of the evening; but the important Motion brought forward by his hon. Friend (Sir Henry Selwin-Ibbetson), had occupied a longer time than he expected. He did not by any means regret that Motion was brought forward; but the consequence was that the remarks which he felt it his duty to make to the House would have a very much smaller audience than would otherwise have been the case. He believed this was the fourth year in which the Chancellor of the Ex- 922 chequer had been enabled to come forward on the Budget night with a large surplus in hand. It had been the right hon. Gentleman's happy lot to obtain a large surplus not only without imposing fresh taxation, but even with a considerable reduction of taxation, and his only embarrassment had been to know what to do with it. But there was one point in his statement with reference to the estimated revenue and the revenue actually received on which he (Mr. Hunt) wished to make a few observations. It was a very remarkable circumstance that this year the revenue exceeded the Estimates by no less than £4,781,000. He believed so large an excess of actual revenue over estimated revenue Lad never been announced by a Chancellor of the Exchequer—at all events, never since he had had the honour of a seat in the House. He could not see that this was a great merit in the Chancellor of the Exchequer. He thought it was the duty of the Chancellor of the Exchequer to estimate the revenue as well as the expenditure as closely as possible. No doubt the fault committed by the Chancellor of the Exchequer was a fault on the right side. It was his (Mr. Hunt's) unhappy fate to find revenue below estimate. At the same time, he (Mr. Hunt) could not view with indulgence the practice of considerably underestimating the revenue, because when the practice became frequent it lessened the authority of the Chancellor of the Exchequer when he made his Statement to the House. If they found year after year that, from either excess of caution or excess of craft, the Chancellor of the Exchequer was in the habit of very considerably under-estimating his revenue, the faith of the House in the Chancellor of the Exchequer was very considerably lessened. When the right hon. Gentleman announced his Estimates a year ago, he (Mr. Hunt) thought he was reminded by many Members of the House that he was not sufficiently sanguine with regard to the amount he would receive; and he believed there was not a single Member of the House who did not believe his Estimates would be very considerably exceeded. One of the consequences of that large under-estimate of revenue was that there had been extracted from the pockets of the taxpayers a large amount of money which was not necessary for the service of the year. 923 He regarded that as a great vice in a Financial Statement. The right hon. Gentleman would, no doubt, say that by that course we had been enabled to reduce a large amount of duty. He (Mr. Hunt) admitted that it was a public advantage to reduce duty; but he denied that the end justified the means. If the Government intended to retain taxes so as to obtain a large surplus for the purpose of reducing duty, they ought to announce that purpose to the House of Commons. To use a common expression, the right hon. Gentleman had been doing evil that good might come. There was another matter on which he wished to criticize the statement of the Chancellor of the Exchequer, and that was with regard to the Exchequer balances. The right hon. Gentleman told the House with very considerable pride that the Exchequer balances during the four years in which he held the office of Chancellor of the Exchequer had been increased by £7,285,000. When he stated that, he ought to have explained that the increase of the Exchequer balances was only an apparent increase. With regard to £2,000,000 of those balances, the right hon. Gentleman said they were attributable to the fact that the repayment of certain loans had exceeded the advances, and that a certain amount of loanable capital which was out at interest had got back to the Exchequer. That was a matter more or less of accident. Next year the advances might exceed the repayments. But, as he (Mr. Hunt) had stated on a former occasion, the main apparent increase of the balances was owing to the change made in the time of collecting the taxes. By accelerating the time for collecting the income tax, the land tax, the house duty, the licence duty, and the assessed taxes, £4,000,000, or thereabout, had been brought into the Exchequer. That increase of the balances, therefore, he would call factitious. The way in which that increase of £4,000,000, of which the right hon. Gentleman boasted, had originated was very well known to him (Mr. Hunt), and to many Members of the House who had followed closely the course of our finances; but it was not known to all the Members who had not done so, or to the public out-of-doors. It was calculated to mislead many Members of the House and public opinion when the 924 Chancellor of the Exchequer stated that the balances between April, 1869, and the present time, amounted to over £7,000,000, without giving an explanation of the matter. With regard to these balances, it appeared to him (Mr. Hunt) that, having extracted this money from the pockets of the taxpayers before the money was wanted, the taxpayers ought to reap some benefit from its lying at the Bank of England. That was a matter he had urged on the House before, and he thought it was worthy of the attention of the right hon. Gentleman. If the money was not wanted for the public service, let it remain in the pockets of the taxpayers; but if it was to be extracted before it was wanted, the Bank of England, which might make use of it, ought to pay interest on it. [Mr. CRAWFORD dissented.] He saw the hon. Member for the City of London shook his head; but the Bank ought certainly to pay interest on it. The right hon. Gentleman hitherto had paid no attention to that suggestion, and probably he would continue to think it ought not to be acted upon. He thought there was a very strange omission in the Financial Statement of the right hon. Gentleman. The right hon. Gentleman gave the House the total expenditure; but he never gave them the principal items of that expenditure. He estimated the total expenditure at £71,871,000, exclusive of half the Alabama Claims; but even now the House of Commons was without information as to the items constituting the expenditure. He should not forget in a hurry the animadversions of the Prime Minister in Lancashire upon the extravagance of the Government which preceded his own. The expenditure to which the right hon. Gentleman referred did not quite amount to £70,000,000. But now, having been in office four years, and having scrutinized the Estimates, so as to excite at times the ridicule of the country by the cheese-paring economies which were insisted on, the expenditure exceeded by £1,871,000 that of 1868. It was true that a part of this expenditure might be accounted for by certain changes in the services which did not appear in the Estimates. Thus the Telegraph Estimate, amounting to between £800,000 and £900,000, must be added, and the sum payable in respect of Army Purchase. But, making every allowance for these changes, the 925 Government which charged its predecessors with such gross extravagances had been unable to reduce its Estimates below those of 1868. He hoped that as hustings had unfortunately been abolished, the Prime Minister, when he appeared on the Greenwich platform or any other place, would do penance in a white sheet for the remarks he made during his Lancashire campaign. Turning now to the estimate of revenue during the current year, there was an extraordinary change in the course taken by the Chancellor of the Exchequer. In previous years he had been accused of excess of caution; and certainly he had either been over-cautious or anxious to under-estimate revenue, wishing to accumulate a large surplus. This criticism, however, did not apply to the right hon. Gentleman's Estimate for the current year; indeed, he had been warned that he was rather too sanguine. The right hon. Gentleman estimated an increased revenue of £8,230 in 1873–4 over the revenue of 1872–3, and in his exordium he congratulated the country on the fact that, notwithstanding the price of coal, the revenue had still kept up. The right hon. Gentleman, however, overlooked the fact that with regard to many of the larger enterprises in this country, the price of coal was not the price of the day, but the price under certain contracts which had now had time to run out. These enterprises would now, therefore, be greatly affected by the price of coal. Another point for consideration was the prospects of the next harvest. We had had the most remarkable season for seed-sowing he ever remembered. The farmers had not been able to sow a large extent of land, agricultural operations having been suspended by the wet; and the extraordinary rainfall was so general throughout Europe that we must expect the next harvest to be short, not only in England, but on the Continent. The Chancellor of the Exchequer ought, therefore, to have been a little more cautious in his Estimate of revenue for the current year. In his Budget speech the right hon. Gentleman mentioned a fact which seemed to show that the prosperity of the working classes had reached its zenith. Unfortunately, we looked to the consumption of ardent spirits as the test of that prosperity. Now, the right hon. Gentleman told the House that the revenue from spirits 926 had increased £30,000 a week during the first six months of the year, but in the last six months only £20,000 a week. This diminution showed that the tide had turned, and, coupled with the high price of coal, the prospects of a bad harvest, and the difficulties of the labour question, it was a symptom which should have alarmed the Chancellor of the Exchequer and inspired caution in his estimate of income. Now as to the disposal of surplus. The right hon. Gentleman set down revenue at£76,617,000, and expenditure at £71,871,000, leaving a surplus of £4,746,000. He devoted £1,600,000 to pay half the Alabama Claims, remitted sugar duty to the amount of £1,430,000, income tax amounting to £1,425,000, and £30,000 by abolishing duty in the case of hotel waiters—a concession to the licensed victuallers which might be looked upon as the contribution of the hon. Member for Shaftesbury (Mr. Glyn) to the Budget of the year. But when the Chancellor of the Exchequer had so enormous a surplus to dispose of, he (Mr. Hunt) could not help joining with those who condemned the proposal to go into the money-market and borrow £1,600,000. Surely if ever there was a year in which we might meet our liabilities like men it was in a year when so large a surplus was anticipated? Such a proposal, however, was inconsistent with the tenor of the right hon. Gentleman's speech. Half the burden of his song was the amount of debt he had been able to reduce during his tenure of office; whereas in this year of marvellous anticipated prosperity he was reducing the debt by the operation of the Terminable Annuities and at the same time borrowing money. That was a proposition which was, he thought, entirely inconsistent with the right hon. Gentleman's whole management of the finances, and he, for his part, must beg to enter his protest against it. He did not, he might add, believe that the scheme which the right hon. Gentleman had submitted to the House was that which he had originally intended. It appeared to him that the speech which he had delivered when introducing the Budget had been prepared for an entirely different scheme. There was in that speech one sentence which seemed to him to show that the right hon. Gentleman had it absolutely in his mind to pay off the whole of the Alabama 927 Claims out of the revenue of the year. The sentence to which he alluded was that in which the right hon. Gentleman said that he considered this particular matter as one of the services of the year; but when the right hon. Gentleman went on to explain the different modes of meeting the payment, it became clear that the payment of the Alabama Claims out of the revenue of the year did not at all suit his purpose. He would also remind the House of what fell from the right hon. Gentleman on the occasion of a visit paid to him in Downing Street by an important deputation, as giving a further indication of what were his original intentions. When asked on that occasion to make certain remissions of taxation, the right hon. Gentleman observed that the deputation treated the matter as if he had a large surplus; whereas he, in reality, had no surplus worth mentioning, although everybody else at that very time was of opinion, from the state of the Revenue accounts, that he would have a very considerable surplus. It was perfectly clear that the right hon. Gentleman, when he gave that answer, had in his mind the intention of paying the Alabama Claims out of the revenue of the year. We have been accustomed to look on the Chancellor of the Exchequer as like the heroic man mentioned by Horace justum et tenacem propositi, whom nothing would divert from his purpose, not even all the storms of the Adriatic. But a storm came across the Irish Channel, and, to use the right hon. Gentleman's own metaphor—he was no longer the oak, but the sapling, and did not hesitate to adopt, instead of an heroic, a temporizing and unmanly course. The right hon. Gentleman in taking that course instead of the one which he originally proposed, might no doubt have been over-persuaded by his Colleagues; and it was probable that when he gave the answer to the deputation to which he had just referred he had not the advice and assistance of the hon. Member for Shaftesbury (Mr. Glyn), or of the right hon. Gentleman at the head of the Government. Be that as it might, the present proposals of the right hon. Gentleman seemed to him to be of a very happy-go-lucky character. He would appear to have followed that somewhat Epicurean maxim— 928Dona præentis rape lætus horæ, ac Linque severa.As to his reduction of the sugar duties, he must say that, notwithstanding what had fallen from his hon. Friend the Member for London (Mr. Crawford) he doubted whether the consumer would get the benefit of that reduction. Statistics had been given to show that former reductions had been followed by a large increase in the consumption; but it was not clear that it was not a case of post hoc, and not propter hoc. There had, for example, been a great increase in the consumption of ardent spirits, although the spirit duties had remained unaltered. His hon. Friend the Member for Northumberland (Mr. Liddell) had cautioned the House against relinquishing such a source of revenue as was furnished by the sugar duties, and the means of maintaining those duties, it was clear, would be very considerably weakened in consequence of the proposal for their reduction which was now made. At present we depended largely on the revenue derived from spirits, and he certainly trusted we would not always rely on so large a revenue from that source. It was, in his opinion, most sad and lamentable to think that the larger consumption of ardent spirits was regarded as a test of the prosperity of the working classes. He hoped that in that respect there would be a great change before long in their habits, and that as the time when persons of the rank in life of Members of that House deemed it no reproach to be guilty of intemperance had passed away, better education and increased thoughtfulness would lead to the same result in the case of the working classes. Supposing that state of things should come about, and that we could not in consequence expect to receive in the future the same amount of revenue from the duty on spirits, how, he should like to know, was the vacuum which would thus be produced in the revenue to be filled up? It was, in his opinion, a serious matter for a Chancellor of the Exchequer to cut off any one source of indirect taxation needlessly. But there was another point of view in which he desired to put the matter before the House. Were the remissions of taxation of which he was speaking consistent with the solemn engagements of the Government to the House in connection with the subject of local taxa- 929 tion? Only a day or two ago the right hon. Gentleman at the head of the Government had, in reply to his hon. Friend the Member for South Devon (Sir Massey Lopes), stated that although the Government were not prepared with their whole scheme on that subject this year, they had not departed from the principles on which they proposed to proceed on a former occasion. There were, too, not only the engagements of the Government, but the determination of the House to be taken into account in the matter. The House had, by the large majority of 100, carried the Resolution of his hon. Friend the Member for South Devon, which involved a question of something like £1,500,000. The proposal of the Government was to transfer the house duty from the Imperial Exchequer to the local Treasury. That would require an amount of £1,200,000, not much less than the amount involved in the Motion of the hon. Member for South Devon. That being so, he was, he thought, justified in characterizing the proposals of the Chancellor of the Exchequer as happy-go-lucky, for it was clear that he could scarcely have considered the result of the remissions in taxation which he had made. If we had to pay out of the revenue of next year Exchequer Bonds to the extent of £1,600,000 how was the revenue to be kept up, and how was the question of local taxation to be dealt with? The right hon. Gentleman might say that the Government did not adhere to the proposal to transfer the house duty to the local Treasury; but it was, at all events, quite clear that no assistance could be given towards meeting local burdens, except by some transfer from the Imperial Exchequer, be it done by a vote of that House giving a certain amount for the maintenance of the police, of lunatics, the administration of justice, or in any other way. That being so, the financial proposals of the Government left no room for assistance from the Imperial Exchequer except by a resort to a very large increase of the revenue. How, under these circumstances, could those who voted for the Resolution of his hon. Friend the Member for South Devon support those proposals? They had these three disadvantages—that they would create debt in a time of unexampled prosperity, and throw on the future the liabilities of the present; that they would weaken the means of sus- 930 taining a source of revenue which would be wanting he felt convinced, hereafter, and would make it impossible to fulfil the pledges which the Government had given on the subject of local taxation, or to carry into effect the determination with regard to it at which the House had arrived.
§ MR. CHILDERS
* Mr. Speaker,—I do not intend to follow my right hon. Friend (Mr. Hunt) through all the questions to which he has just referred, as many of them will be better dealt with by the Chancellor of the Exchequer. But there are one or two points, especially in connection with the Estimates and the balances, which appear to me to require an immediate reply; and I think I shall be able to show that the reproaches of my right hon. Friend are altogether undeserved. He complains, in the first instance, that the Chancellor of the Exchequer has in each of the last four years under estimated his revenue. This is no doubt the case, though my right hon. Friend is the last person who should have made such a charge. There may be inconveniences in successive Budgets turning out so much better than the estimate, and in the last four years it is true that the revenue has exceeded, and the expenditure has fallen short of, the Chancellor of the Exchequer's anticipations. But this fault is a trifle compared with its opposite. My right hon. Friend and the Member for Buckinghamshire (Mr. Disraeli) did exactly the reverse. They over-estimated their revenue and underestimated their expenditure. In each year of their administration the revenue fell short, and I need only remind the House of the Abyssinian estimate to show their laxity in matters of expenditure. Instead of £2,000,000 or £3,000,000, which the House was first told would be the cost of that war, the expenditure reached £9,000,000, a mistake which disturbed the Exchequer balances more seriously than any operation of any Government for many years past. Their ordinary expenditure, as I will show in a few minutes, was also so high, and so lightly controlled, that during their term of office the taxpayer had no relief, and no prospect of relief. I cannot, therefore, but think, Sir, that the country will prefer the policy which estimates revenue cautiously, keeps expenditure within bounds, reduces taxes, and pays 931 off debt, to that which over-estimates revenue, and not only spends the whole of the votes but outruns the constable. My right hon. Friend also complains that, in accounting for the increase in the balances between March 1869 and March 1873 the Chancellor of the Exchequer omitted, from among the causes of that increase, the acceleration of the time for collecting the income tax, the house duty, and the licences which have taken the place of the assessed taxes. In making this charge my right. hon. Friend did not do justice to his own knowledge of the details of Treasury business. If he had considered the operation of the law under which the surplus of each period of 12 months is in part applied to the reduction of the National Debt he must have seen that the augmentation of the March balances, arising from the anticipation of the Midsummer receipts, which undoubtedly took place in the first year of the new system, would be entirely neutralized in less than two years. That augmentation would produce a surplus of revenue for the first financial year, inasmuch as the financial year ends in March; but this surplus will have been exhausted by the debt operation within 18 months, and the Budgets of succeeding financial years will have been founded on estimates of receipt and expenditure each for its own year. As to these, it would make no difference in which of the four quarters the largest amounts were collected. Therefore, considering that the change was made early in 1870, its whole effect disappeared before 1872, and the excessive balances of last March were solely due to the causes explained by the Chancellor of the Exchequer. I now, however, come to that part of my right hon. Friend's speech to which I rose to address myself—I mean his taunt against the First Lord of the Treasury, that in 1868 he had animadverted on the extravagance of the previous Government, but that he had been unable to reduce his estimates below theirs. The taunt itself I will show is unfounded, and that we are not those who should do penance in a white sheet for extravagance. But I admit that the charge has been pretty freely made in the country; and now that a Member of the late Government ventures to make it here, I think it should be met and exposed in detail. It is quite true that to a super- 932 ficial observer the figures in the public accounts appear to justify this charge, and by going back a few years you might imagine that the increase in the public expenditure within the control of Government was not only £1,000,000 or £2,000,000, but as much as £5,000,000, or £10,000,000. I propose to analyse these figures, and I undertake to prove that the charge on the public is no greater now than it was 15 years ago, much less than it was under my right hon. Friend's control. Let me, in the first place, explain briefly the great changes which of late years have taken place in the manner of voting the public expenditure and stating the public account. It is not so long ago, though I admit outside the period to which I shall particularly refer, that no part of the expense of collecting the revenue appeared in the Votes of Parliament. But since this was altered, and the charges for the Customs and Inland Revenue Departments were annually voted, other improvements in the same direction have been effected, each of which has had the effect of swelling both sides of the public account. For instance, if any hon. Member will refer to the Estimates of 15 years ago he will find no such items as those for the Court of Chancery or the Common Law Courts, which now figure for very large sums. Formerly the expenses of these and other Courts of Justice were, with the exception of the Judges' salaries, defrayed from fee funds, of which the public had little or no cognizance, and thus these enormous establishments entirely escaped the annual scrutiny of the Estimates. One by one these Courts have been brought upon the Votes, the consequence being an increase, in the Law and Justice division of the civil estimates (Part 3) and in the Superannuation division (Part 6), of considerably more than £1,000,000; the miscellaneous receipts being augmented proportionately. Some other Courts, again, such as the County Courts, though they appeared upon the Estimates for considerable sums, did not really charge their whole expenditure upon the Votes, the fens they collected being allowed to go in aid of the appropriation. This has also been altered, and the case of the English County Courts alone accounts for an apparent increase of nearly £400,000. A similar change has taken place with respect to 933 the Packet expenditure. For instance, a very few years ago the extensive service performed by the Peninsular and Oriental Company in the East, and in the direction of our Australian Colonies, was only provided for in the Imperial Estimates to the extent of the Imperial contribution. Now, the entire payment under the contract is included in the Packet estimates, the Indian and Colonial contributions to the extent of about £150,000 appearing among the extra receipts. So, again, the Army and Navy appropriations of the last few years have been largely swollen by receipts in aid, not being deducted, as formerly, from the Votes. I give these illustrations as a few among many of the reforms in matters of account only, which make the public expenditure look larger than it was. There is another operation which, in instituting a mere accountant's comparison, should not be forgotten. Fees to a large extent, which formerly went to fee funds, were in the first instance, as I have stated, carried to the miscellaneous receipts of the Exchequer. But a second change has been effected, and now these fees are collected, in many instances, by means of stamps issued by the Board of Inland Revenue, the sale of which is included under the general head of Stamps. Fifteen years ago, stamps of this character only produced a little more than £50,000. They have now reached nearly £600,000. But there is a much larger item, both of receipt and of expenditure, which, in comparing the cost of the public administration at different times, requires especial attention. The receipt to which I refer is not a tax; and its augmentation, under wise administration, the most fervid economist will not regret. But every increase in that receipt necessarily involves a corresponding increase of charge. I allude, of course, to the Post Office and Telegraph service. In 1860–61 the Post Office expenditure was just £3,000,000. In 1867–8 it amounted to nearly £3,250,000. Last year it exceeded £4,500,000. This year it will amount to nearly £5,000,000. I might, perhaps, here mention another item which, if wisely controlled, I conceive that we shall all desire to see increased rather than reduced, however zealous we may be for economy. I mean the charge for public, especially primary, education, which is by £1,000,000 larger now than 934 it was 10 years ago. But I am so anxious to avoid the remotest suspicion of unfairness in the comparison which I am making that I will not separate the Education Vote from the rest of the civil expenditure. I will rather treat it as an additional burden entailed upon the country by the present Government, showing in greater relief their successful endeavours to defray new charges in one direction out of economies in others. But having explained to the House the disturbing causes which prevent the mere comparison of the gross totals of any two years being any test of the actual increase or diminution of charge on the public, let me state what appears to me to be a fair basis for such a test. The right process is a very simple one. We should take in each year the gross expenditure as furnished by the official accounts, and set off against it the receipts which are not in the nature of taxes, and many of which, as I have shown, at one time have, and at others have not, passed into the Exchequer. The net result will be the true criterion of the energy and success of Governments in dealing with the public expenditure, inasmuch as it will be the real amount which the public service will have cost the taxpayer of the country. Now, Sir, I have with much care, and with a studious desire to be absolutely impartial as between different Governments, instituted this comparison with respect to each year, and also with respect to particular groups of years, since the Crimean War. The first of these groups should be the years 1857–8 and 1858–9, when the naval and military expenditure was at its minimum. The next will be the five years from 1859–60 to 1863–4, which witnessed the reconstruction and augmentation of our armaments in view of the preparations for war made by one of our neighbours. The third period will be the last two years of the former Liberal Government, 1864–5 and 1865–6, in which the Motion for economy of my right hon. Friend the President of the Local Government Board (Mr. Stansfeld) took full effect. I take next the year 1866–7, the transition year between Lord Russell's and Lord Derby's Governments, and afterwards the two years 1867–8 and 1868–9, for which the administration of right hon. Gentlemen opposite was responsible. Lastly, I will bring into this 935 comparison the expenditure during the four completed years of the present Government, and the Estimates for the current year. Now, what are the figures? In the two years 1857–8 and 1858–9, the Army and Navy expenditure, exclusive of the charges on the Russian, Persian, and China War Credits, averaged £22,616,000. The civil charges—excluding, however, the credits for redeeming the Sound dues—averaged £13,504,000, giving a total ordinary charge of £36,120,000. The miscellaneous receipts, not in the nature of taxes, including the Post Office and Crown Land Revenues, and the sale of stamps for departmental and court fees, averaged £5,280,000. The net charge on the taxes was, therefore, £30,840,000, or, including the interest of the National Debt, £59,418,000. In the second period, from 1859–60 to 1860–64, when the expenditure was influenced by the French armaments, the Army and Navy charges, exclusive of the China War expenditure, averaged £27,106,000. The average civil expenditure was £15,053,000, giving a total of £42,159,000. The receipts not in the nature of taxes averaged £6,136,000, and the net charge on the taxes for the ordinary purposes of Government was thus £36,023,000, or, including the interest on the National Debt, £62,714,000. In the two last years of the former Liberal Government, 1864–5 and 1865–6, the expenditure fell again to about the same level as after the Crimean War. The military and naval charges, besides those for the New Zealand War, averaged £24,673,000, and the civil charges £14,745,000. The total ordinary expenditure, therefore, averaged £39,418,000, and the receipts, exclusive of taxes, being £7,615,000, the net charge on the taxes for these purposes averaged £31,803,000—in 1864–5 it was £32,327,000, in 1865–6 £31,297,000—or, including the interest of the debt, £58,104,000. And now the tide turned. The accession of the right hon. Gentlemen opposite to office was the signal for a rapid augmentation of the public charge. In 1866–7 the naval and military expenditure amounted to £25,352,000, and the civil expenditure to £15,346,000, or a total of £40,698,000. The revenue not in the nature of taxes was £8,077,000, so that the charge on the taxes for the public establishments 936 was £32,621,000, an increase of nearly £1,400,000 on the preceding year. The debt charge was £26,082,000, the total sum defrayed out of the taxes being thus £58,703,000. Then I come to the two years when the Member for Buckinghamshire and my right hon. Friend were entirely responsible for the public finance. At a time of profound European peace they raised the charge for the Army and Navy in 1867–8 and 1868–9 from £24,064,000, at which it had stood in 1865–6, to an average—not including the cost of the Abyssinian expedition—of £26,476,000. The civil expenditure rose to £16,533,000, giving an average total of £43,009,000. The miscellaneous revenue was £8,284,000, so that the average charge on the public taxes in the two years when, of all others, viewing the commercial state of the country, it ought to have been lowest, reached nearly £3,500,000 more than it was in 1865–6, or £34,725,000. The charge for the debt was £26,595,000, and the total expenditure defrayed from taxation, exclusive of £7,000,000 in the two years for the Abyssinian War, averaged £61,320,000. I now, however, come to the last four years, and the House will see how great is the contrast. I exclude from this comparison the cost of abolishing army purchase, which is a capital charge; and I might also have fairly excluded the expenditure under the vote of credit on account of the war in Europe, but I will not do so, and I treat it as among the ordinary charges of 1870–71 and 1871–2. Here is the result. During those four years, 1869–70, 1870–1, 1871–2, and 1872–3, the average Army and Navy expenditure was £24,273,000, and the civil expenditure £18,353,000, being together £42,626,000. The receipts not in the nature of taxes averaged £9,762,000, giving as a net result an average charge on the taxes of £32,864,000. Last year this figure was £32,399,000, or nearly £2,350,000 less than when my right hon. Friend opposite was in office. Adding the interest on the National Debt, the total ordinary charge on the taxes during the last four years has averaged £59,745,000, or, very nearly the same sum as the average charge in the years 1857–8 and 1858–9. What, Sir, do all these figures—and I am sorry to have been obliged to trouble the House with so many—clearly show? 937 They prove to demonstration that, both when the present head of the Government was Chancellor of the Exchequer, and also since he became First Minister, there has been a constant and successful struggle on the part of the Government to reduce the public burdens. Let me state the result in round numbers. From £38,200,000, at which the charge on the taxes for the naval, military, and civil expenditure stood in the panic of 1860, it was reduced in five years to £31,200,000. When the right hon. Gentleman opposite took office they allowed this charge to rise to £34,700,000, an increase of £3,500,000 in two or three years. It has now been brought down again, in spite of the recent Franco-German war, to less than £32,400,000; and as the gross amount of the Estimates for the current year, according to the Chancellor of the Exchequer's statement, is almost exactly the same as the gross amount for last year, this economy, in spite of the rise of prices, is being maintained. Indeed, it is more than maintained; for, excluding the Post Office and Telegraph Services, those Estimates show a considerable reduction. What we have done, then, compared with our predecessors, may be thus expressed. They, in two years and a half of ordinary times, added £3,500,000 per annum to the expenditure, and precluded themselves from giving the public the benefit of any remission of taxation. To be quite accurate, I ought perhaps to say that they remitted about £200,000 a year of marine assurance duty. We, however, have given the public the whole benefit of the increase in the revenue, besides largely reducing the National Debt. I do not take into account the 2d. which the Chancellor of the Exchequer took off the Income Tax in 1869 and 1870, as it had been imposed on account of the Abyssinian War; but, irrespective of that remission, my right hon. Friend, in his five Budgets, will have taken off taxes to the extent of above £9,000,000 per annum, of which £5,300,000, or something over one-half, formerly fell on the food of the people, in the shape of duties on corn, sugar, and coffee. During the same five years, allowing for the investment of the surplus of 1872–3, which is now going on, he will have reduced the debt by £25,000,000, 938 not to speak of the £10,000,000 which would also have been applied to its reduction had it not been for the purchase of the telegraphs and the completion of the fortifications. If Sir, I had time, I should have liked to show the House in detail how the economy which has assisted to produce these results has been carried out in the different branches of the service. As to some of those branches I can only speak from imperfect knowledge, but the two years which I passed at the Admiralty enables me to say something about the economies affected in our naval service. I found a naval expenditure which had averaged during the two preceding years of the late administration over £11,200,000. During the last four years—I will add to them the fifth year, of which we have the Estimates before us--that expenditure will have averaged a little over £9,700,000, exhibiting a saving of £1,500,000 per annum. These economies were not, as has been said, fitful or spasmodic, but have been maintained with singular uniformity during the whole period. In 1869–70, my first year at the Admiralty, the expenditure was less than £9,800,000. In the second, somewhat swollen by the consequences of the war in Europe, it was £9,900,000. In 1871–2 it was over £9,800,000. Last year it fell below £9,600,000, and again this year my right hon. Friend (Mr. Goschen), notwithstanding the rise in prices, only proposes to vote a little more than £9,800,000. I hope and believe that these figures are a fair sample of what may be found in other Departments, and, if there have not been, in respect of some of them, the means or the opportunity of applying the scrutiny which I undertook in 1869, I have little doubt that the inquiries which Parliament is now making will open fresh fields for economy. What, Sir, then, is the financial history of the 15 years from 1859 to 1873? What has been done in them to reduce the public burdens, and by whom? In spite of the additional charges imposed in 1859, those years will have seen a net remission of taxation to the extent of £21,000,000 a year; and, in spite of the Abyssinian War, the purchase of the telegraphs, the construction of permanent fortifications, and the abolition of army purchase, a net reduction of £47,000,000 in the National Debt. The whole of this, except an in- 939 significant trifle, will have been effected in the years of Liberal administration; so that there never was, as I hope I have shown, a more unfounded taunt than that which my right hon. Friend has ventured to night to fling at us. I thank him heartily for having given me an opportunity for making this statement, and as, if I remember rightly, he favoured us during his speech with four Latin quotations, perhaps he will allow me to cap them with a fifth—"Suo sibi qladio hunc jugulo."
§ MR. G. BENTINCK
said, that the right hon. Gentleman who had just sat down had converted a discussion upon the Budget into a comparison of the respective merits of the two parties on the opposite sides of the Table. He (Mr. Bentinck) would not follow the right hon. Gentleman through the latter part of his speech; but he had no doubt when the proper time came there would be found right hon. Gentlemen on the opposition side of the House who were quite prepared to answer him. He could not help thinking that, with all submission to the distinguished Assembly which he was addressing, they were placed in a false position in regard to the question of local taxation, and that a wrong course had been taken by the Chancellor of the Exchequer, and had received the sanction of the House. Reduction of expenditure would be impossible, for the necessities of the Government required the present amount, and therefore he should have no belief in political programmes which proposed reduced expenditure. Looking back to the Resolution passed last year on the Motion of his hon. Friend (Sir Massey Lopes), he could not understand how, after passing the Budget now proposed, it would be possible to deal practically with the question of local taxation in the present Session. Believing that the incidence of local taxation was most injurious to a large portion of the community, he regretted that another Session should elapse without something being done in this matter. An hon. Gentleman lamented the position of the rural districts, especially with reference to the malt tax. He (Mr. Bentinck) had always contended that so long as free trade principles were in the ascendant in their financial policy the rural districts were entitled to call for the abolition of the malt duty. This country depended for 940 its very existence upon the rural districts. They might live, though in poverty, without commerce; but they could not live at all without the cultivation of the land. How was it that the interests of the rural population, though they outnumbered the rest of the country, were invariably ignored and trampled upon in this House? The cause was simply this—that instead of supporting each other, like any other great commercial interest—for agriculture was a commercial interest, they split themselves between the two parties in the State, who did not care for them, and who were struggling for the occupation of the Treasury bench. So long as the rural districts failed to ignore the existence of political parties in the House of Commons, so long would they be overtaxed and unjustly dealt with. His chief object in rising was to express his regret that no hon. Member of the House had, in the course of the debate, uttered one word of condemnation upon what he regarded as the darkest blot upon the history of the country—the Alabama Indemnity. He was not going to enter into the question of how they were to pay that disgraceful black mail; but, as an Englishman, he deplored that not one word had been said in condemnation of the proceeding. He hardly thought he was wrong in saying that 20 or 30 years ago such a thing would not have occurred. He saw that the hon. Member opposite (Mr. White) laughed. It might be a matter of joke to him; but as an old-fashioned Englishman he (Mr. Bentinck) lamented that the absence of the sense of shame among his countrymen should be a matter of amusement to the hon. Member. It was impossible for any nation to occupy a position of more utter degradation than that in which the country was placed with respect to the United States; and he could only regret the moral change which had come over his countrymen when the position we occupied provoked no expression of regret or indignation. There seemed to be no sense of degradation in doing that which the Secretary of the Treasury had told them was cheap —namely, pay £3,000,000, to escape war [Mr. WHITE: Hear, hear.] The hon. Member cheered that sentiment, and it confirmed him (Mr. Bentinck) in his statement that they were paying black mail in order to escape war. It was 941 admitted by all who had studied the question that as international law stood at the time of the escape of the Alabama we were not liable for one shilling of the damage which that vessel committed. What did they do? They were so anxious to be placed in a position to buy off the animosity of the United States that they consented to alter international law and make a law by which they could be brought in guilty of the crime of which they were innocent. Was that the act of a wise man or of a wise nation? They went further than that and assumed a proposition so monstrous that it was hardly possible that any man could rise in his place and defend it. An hon. Gentleman, in whose judgment he had little faith, had propounded the doctrine that all disputes, irrespective of considerations of national honour or of right and wrong, would henceforth be referred to arbitration, and that whenever it suited the purpose of a nation to pay black mail it would always be at liberty to do so. Human nature, however, could not be changed by Act of Parliament, and the animosities, and impulses which had driven countries to war, often in spite of their rulers, could not be got rid of by legislation. Would any man assert that the course which they had taken with regard to the Alabama was not a distinct temptation to the United States or to any other country to quarrel with them for the purpose of levying a fine upon the country? From the moment that they announced that their intention was, not to fight, but always to pay, they offered a perpetual inducement to aggression. Did any man suppose that there was no amount of contumely and no amount of insult which could arouse England to go to war? The principle of arbitration was a rank and glaring absurdity; the result would be that after much altercation this policy would sow the seeds of more dissension than could any policy ever suggested by the folly of mankind. In conclusion, he desired to express his unmitigated disgust at the whole proceedings connected with the Alabama Indemnity, and the determination, so far as he was concerned, never to vote a single shilling for it.
§ MR. RYLANDS,
while thinking that the right hon. Member for Pontefract (Mr. Childers) had the best of the argu- 942 ment that night between the two front benches, and that the Liberal party had, on the whole, been more economical than their opponents, still was bound to say that neither of them had very much to boast of in that matter. The present Government came into power upon the promise of great economy, yet they had accomplished but very little. During the first 18 months of their term of office they effected a very considerable reduction of expenditure, but they lost their heads during the panic of 1870, and they had still considerable leeway to make up before they attained the point which they reached at the beginning of 1870. When they incurred such an enormous and extravagant expenditure in time of peace as they were now doing, they had no right to look with satisfaction on the proceedings of the Government, as the right hon. Member for Pontefract asked them to do. It was not enough to prove that Gentlemen on the other side had been worse sinners than themselves. What the Government had to prove was that they had reduced expenditure to the extent the country had a right to expect. That they had not done; but, as they had a little further time for repentance and to set their house in order, he hoped that next year the Chancellor of the Exchequer would accomplish much more for the reduction of the public burdens. If the Government were to go to the country with an expenditure of over £70,000,000 hanging round their necks, they would find it difficult to satisfy the public at large that they had fulfilled the pledges of economy given by the Prime Minister in his Lancashire tour. If they did not fulfil those pledges before they appealed to the constituencies, the Liberal party would greatly suffer. He was prepared to support the present Budget, which, however, he regarded as only a commonplace Budget. He thought the proposed reduction of the sugar duty and the income tax would make the Budget popular with the country; but he desired to see a fairer share of taxation imposed on real property. As to reducing the National Debt, it should be remembered that the National Debt was a mortgage on the real property of the country; and if they wanted to clear off that mortgage, they ought to tax real property—the security to the national creditor—for that purpose. They imposed on the indus- 943 trious and provident classes a considerable tax from which land was to a great extent exempt. During the last 75 years £148,000,000, or about one-sixth of the entire National Debt, had been levied on personalty in the shape of legacy and probate duties; while from 1853 down to March, 1872, the succession duty raised upon real property only amounted to £12,000,000. If the right hon. Gentleman the Chancellor of the Exchequer had proposed a tax on real property equal to the legacy and probate duty he would probably have been met by an adverse vote in that House; but the country would have supported the Government in a proceeding of such evident justice. It had been said that the rural interest was neglected. He (Mr. Rylands) denied that such was the case. The taxation of the country for many years had been very much in the interest of land. So much was this the case that he had heard it said that if a being from another sphere were to come here he would have no difficulty in seeing from the Statute Book that the power of the country had been in the hands of the landowners, so greatly was the interest of the land above all other interests consulted in our legislation. The repeal of the malt tax would not be of much interest to the farmer, though the landowners would no doubt derive benefit from it. He was glad that the Chancellor of the Exchequer had taken his present course with respect to the sugar duties. It was perfectly true, as had been stated on the other side, that three years ago the Chancellor of the Exchequer said it was clearly to be understood that in making the proposal which he then made he was not preparing the way for further reduction or abolition. He was glad that the views of the right hon. Gentleman had undergone a change. Whether that change was owing to some new light which had dawned upon his mind, or to pressure put upon him by his Colleagues, and especially by the Prime Minister, whose views with regard to import duties were well known, did not much matter. Whatever the cause the country would be very well satisfied with the result. It was said, indeed, that the public would receive little or no benefit from this reduction of the sugar duties; but the experience of the last 30 years proved to demonstration that we could 944 not reduce any tax without largely increasing the consumption of the article affected by it. Since the alteration of the duty in 1844 the consumption of sugar had increased from 17 lb. per head to 50½ lb.; whereas during the whole of the first 40 years of this century, while the duties were prohibitive, the consumption, so far from increasing, had slightly diminished. The Chancellor of the Exchequer must see, however, that he could not stop here, but must go on until the sugar duty was completely abolished, since it would not be worth while keeping up an army of officials to collect it. And then when the tea duty and the coffee duty were taken off, and we had reduced our extravagant expenditure, the time for the reduction of the malt tax would come, though he did not, like hon. Gentlemen opposite, believe that it was a tax which pressed heavily on agriculture, inasmuch as it was the consumer who really paid it. He must protest, however, against any large amount of money being applied to the reduction of the National Debt until the duties were taken off from all those articles used by the working classes which might be considered necessaries of life.
remarked that it would be hard to tax real property to pay the Alabama Claims when those claims could in no way be regarded as chargeable to real property, and he was surprised the hon. Member for Warrington (Mr. Rylands) did not include the malt tax among those he wished repealed in the interests of the working man, because beer was peculiarly the beverage of the lower classes. He protested against imposing taxes on real property in the interest of those who came from all parts of the world to amass fortunes in this country. His only complaint against the Chancellor of the Exchequer was the folly he had exhibited in choosing troubled waters when he might have realized everybody's expectations by repealing no taxes and paying off the Alabama Claims out of the ordinary revenue. The Chancellor of the Exchequer had evidently fallen under the influence of the greatest power of the age—the influence of phrases. He had been captivated by the proposal to "lighten the springs of industry," a phrase which had taken the place of "fructification;" but he presumed a widow ex- 945 petting the payment of her jointure would not be well pleased if her trustees told her the money was "lightening the springs of industry."
§ MR. WHEELHOUSE
said, it would be a fairer question to consider, after the Alabama Claims had been discharged, how far the income tax could be reduced, if not abolished altogether. The income tax, especially in Schedule D, was most inequitable, vexatious, inquisitorial, and unjust in the way it was levied and collected, and it was a mistake to suppose the working classes did not pay their share of it. They clearly contributed towards it in the increased profits upon goods supplied to them by the manufacturer and retailer. It appeared to him that the Chancellor of the Exchequer would have done much better if he had removed or modified this tax that pressed heavily upon large classes of Her Majesty's subjects.
§ MR. LAING
said, he wished to call the Chancellor of the Exchequer's attention to a point upon which considerable anxiety was felt in commercial circles—namely, as to the time at which the Alabama Indemnity was to be paid. Strictly speaking, it would be payable in the month of August; but between July and October there was generally a drain upon the bullion and reserve at the Bank, partly caused by harvest operations and partly, perhaps, by the gold taken by persons travelling. The wise course would have been to pay some portion of the Indemnity with the large balances. This might have been done under an arrangement for discount, and the Bank could then have parted with the money without inconvenience. Such an arrangement would have been desirable also for the sake of the revenue; because although the Estimates of the Chancellor of the Exchequer were fair Estimates, provided nothing occurred to cause commercial pressure; on the other hand, if the Bank were compelled hereafter to raise its rate, the right hon. Gentleman might find his Estimates somewhat deficient. He hoped the right hon. Gentleman would consult the authorities of the Bank of England so as to make this payment in a mode and at a time which would avoid inconvenient pressure to the commercial community.
§ COLONEL BARTTELOT
said, the hon. Member for Warrington (Mr. Rylands) seemed to be a man of universal know- 946 ledge. He knew everything, and among the rest knew exactly the incidence of the malt tax, declaring that it was a tax paid by the consumer, and had nothing whatever to do with the producer. He added that he should like to see the sugar duty wholly abolished, and the tea and coffee duties further reduced, being taxes which pressed upon the working classes. But, supposing the hon. Member were right as to the incidence, did not the malt tax press especially on the working classes? If the hon. Gentleman would only consult his constituents upon this point he was sure that they would say they should prefer the duty to be taken off their beer—for it did them more good than tea or coffee—and they would rather have the duty taken off that than off any other articles. If, therefore, the hon. Member stood to his guns he should claim him as a supporter of his Motion when he proposed his Resolution for the reduction or remission of the malt duty. As to the statement that the malt tax did not press on the producer, the hon Member knew nothing whatever about it, for if a man grew an inferior class of barley, the tax pressed heavily upon him, and he had to sell his crop at a reduced rate for feeding instead of for malting purposes. If all these indirect taxes were repealed, and you trusted to the spirit and malt duty, the result would be that when wages were low and work was scarce it would be necessary to increase the income tax. That was a point of view well worth consideration by the Treasury bench and by the country. It had been stated by the right hon. Gentleman at the head of the Government that they would be placed in no worse position by passing those Resolutions on the last day before the holidays than they were in now. But he complained of the Budget being brought forward on the eve of the holidays, leaving the country a fortnight or more without the opportunity of discussing it through their representatives in that House. He thought that those with whom he generally acted there were placed at a tremendous disadvantage in deferring the discussion of the subject to that moment. This was not the Budget of the Chancellor of the Exchequer who told the malt tax deputation that waited upon him that there was no surplus— 947 the man who had declared it to be his intention to pay the Alabama Claims out of the revenue of the year. But there was a variety of political opinions in the Cabinet which had to be considered. The policy of the Government would probably leave the country with an empty Exchequer, and in the event of a change of Ministry their successors would have to encounter a difficulty out of which they would have to get the best way they could. This was a sensational Budget, not a sound, constitutional Budget; and by reducing the sugar duties revenue would be thrown away without any necessity. He hoped the Motion of the hon. Member for Westminster (Mr. W. H. Smith), that the sugar duties should not be reduced, would be carried.
§ MR. ASSHETON CROSS
said, the question which yet remained unsolved was what surplus Her Majesty's Government had to deal with when they came to lay the Budget before the House. There was a sort of impression in the country that there had been a cooking of the Government accounts to make up the figures of the Chancellor of the Exchequer. The country thought the Budget which the Chancellor of the Exchequer had submitted to the House was not such a Budget as he would have brought forward if he had been allowed to take his own course. He was quite sure the country would expect from the Chancellor of the Exchequer a sound reason for having postponed the payment of the Alabama Claims before he dealt with the surplus. What was the real surplus, and why had the right hon. Gentleman not provided for the payment of the Alabama Claims this year, in accordance with duty? When the Government were candidates at the last Election they led the country to expect that the costs falling on the year would be paid out of the income of the year. That matter was entirely slurred over in the Financial statement of the Chancellor of the Exchequer; but it was one on which the country expected a clear explanation from Her Majesty's Government. Suppose the late Government had taken with regard to the cost of the Abyssinian War the same course as the Chancellor of the Exchequer proposed with regard to the Alabama Claims, there was not a Member of the present Government who would not have op- 948 posed such a course. The sound course was this—if you were indebted, pay all your debts; and if you had a surplus, dispose of it in the way which would be the most beneficial to the country. The present Budget was what was called a popular Budget. Its object was to make things pleasant and easy all round. But the country thought that before things were made pleasant and easy we ought to pay our debts. The country thought that it was with a view to the next Election that Her Majesty's Government had proposed a Budget professing to give to the taxpayers money which practically the Government had not to give. He doubted if the Government had contemplated the real financial position of next year. The country wished to know why the payment of the Alabama Claims was spread over two years instead of one.
THE CHANCELLOR OF THE EXCHEQUER
said, it was not very easy to answer the questions of the hon. Gentleman (Mr. Cross), for he thought he did not know what the questions were which he asked. The payment of the Alabama Claims was not spread over two years instead of one. It was impossible to spread it over two years. The money must be paid before October this year. [Mr. ASSHETON CROSS said, he meant that the Claims should be discharged out of the taxes of this year.] The hon. Gentleman wished to know what would be his (the Chancellor of the Exchequer's) position next year. The hon. Gentleman did not seem to have considered what would be his position next year, nor did any Gentleman who had spoken on the opposite side of the House. His position next year would be a very agreeable one. He would start next year with £1,600,000 to the good. Suppose the revenue and the expenditure balanced each other next year, there would be a surplus of £1,600,000. Of course, it might be possible that he would have to borrow half the money; but he did not believe that for a moment. He was encouraged in that belief by the prosperous state of the revenue since the year commenced, and Gentlemen looking to the Returns had been misled, because it was impossible to tell by looking at one or two Returns how matters really stood. The state of the revenue was one thing, and the state of the balance of expenditure was another. The revenue was, in fact, in an exceedingly flourishing and 949 prosperous state. The right hon. Gentleman the Member for Northamptonshire (Mr. Hunt) observed very justly that he (the Chancellor of the Exchequer) did not state, when he introduced the Budget, the estimated items of expenditure for the year 1873–4. He was sorry the right hon. Gentleman did not call his attention to that omission at the time. He would now state those items. The estimated expenditure for 1873–4, compared with the grants of 1872–3, was as follows:—The estimated amount of the interest of Debt for 1873–4 was £26,750,000, while the grant for 1872–3 was £26,830,000, being a decrease of £80,000. The other charges on the Consolidated Fund were estimated at £1,570,000, being a decrease of £210,000; the estimate for the Army was £14,417,000, being a decrease of £407,000; the estimate for the Abolition of Purchase was £842,000, being a decrease of £96,000; the estimate for the Navy was £9,873,000, being an increase of £341,000; that for the Civil Services was £11,068,000, being an increase of £127,000; that for the Post Office was £2,745,000, being an increase of £135,000; that for the collection of Customs, and Inland Revenue was £2,661,000, being an increase of £40,000; that for the Telegraph Service was £815,000, being an increase of £145,000; and that for the Packet Service was £1,130,000, being a decrease of £5,000. Thus the total Estimate for 1873–4 was £71,871,000 as against the grants of 1872–3, amounting to £71,881,000, the decrease of the Estimates over the grants for the previous year being £10,000. He could only regret that the right hon. Gentleman had not been placed in possession of these figures sooner. He had been accused of having been too sanguine in his estimate of the revenue for the ensuing year. He feared that it was impossible for him to escape from the charge of either being too sanguine or not sufficiently sanguine on this subject. He had a modest confidence that whatever might happen he should be sure to be blamed on one side or the other. With reference to the estimated production of the spirit duties, he thought it had been arrived at in a very fair manner. The great annual increase in the amount of those duties commenced in 1868. In that year those duties in- 950 creased over those of the previous year by £44,000. In 1869 they increased by £410,000; in 1870 by £450,000; in 1871 by £810,000; and in 1872 by £1,330,000. Striking the average of these five years, he found the average annual increase in these duties to amount to £600,000, at which sum he had calculated the increase for the ensuing year; and he had every reason to believe that the estimate would be borne out. He might mention that recently the duty had been affected somewhat by a discouraging report that had got abroad that it was the intention to increase the tax upon spirits; but, nevertheless, the duties upon those commodities had remained perfectly firm, and had increased as usual. He was asked why it was that the Government had chosen to divide the Alabama Indemnity, instead of taking it all out of one year. It must, however, be remembered that the payment of the Indemnity was not like taking off a tax—it was paid once for all, and there was an end of it. Had this Indemnity been paid out of the surplus for the present year we must have pinched ourselves hard in order to have given the Chancellor of the Exchequer an opportunity of being extravagant next year. By dividing the payment, however, we had been enabled to obtain present relief, with a prospect of having a surplus next year of £1,600,000. Under these circumstances there was, therefore, no necessity to be too anxious for the future. With regard to the time when the payment of the Indemnity would be made, he could only say that he had not yet made up his mind on the subject, and that, if he had done so, there were many reasons which would render it undesirable that he should make any statement respecting the matter.
§ Motion agreed to.
§ WAYS AND MEANS—Considered in Committee.
§ (In the Committee.)
§ Motion made, and Question proposed, "That, &c."
§ MR. CRAWFORD
rose to call attention to the subject of the Sugar Duties, and to the position in which this country stood at the present moment with reference to the Conventions entered into with France, Germany, and Holland 951 with regard to the manner in which those duties were to be levied. His object was to bring about a fair and equitable arrangement with regard to the drawbacks which were allowed on exported sugar. When the question of origin in reference to sugar had been settled, a struggle took place as to the differential scale. In 1854 the duties were fully considered in that House, and in 1862 a Committee was appointed on his Motion to investigate the whole question; a scale of duties having been fixed which practically had remained in force down to the present time. The result of the various propositions which had been submitted to the Committee was that a proposal came from the French Government to regulate the import duties according to the qualities imported. A Convention had accordingly been entered into, and the first step taken was to agree to certain standards of sugar in accordance with which the duties should be levied in those countries which were parties to the Convention—Belgium, France, Holland, and Great Britain. In the issue the arrangement had been found to work exceedingly unfavourably to this country. The sugar of commerce was generally known in reference to what were termed Dutch numbers, the various qualities ranging from 1 to 19. It being found impossible to levy 19 grades of duty, refined sugar at the present moment, from Nos. 19 to 15, paid 5s. 10d.; 14 to 10, 5s. 3d.; 9 to 7, 4s. 9d.; and all under 7 paid 4s. When the duties should have been removed, as proposed in Committee, the imposts in England would be about one-tenth of those in France, the maximum here being 3s. and the minimum 2s., while the highest duty there was 27s.; but the circumstances under which the business of sugar manufacture and production in that country was conducted differed entirely from those which prevailed in any of the States which were parties to the Convention. In France sugar was produced almost altogether from the cultivation of beetroot, and the manufacture was conducted on principles so highly scientific that the manufacturer was able to produce sugar of any particular quality required differing only in a very slight degree from the number next above it, while it remained at the same time of a sufficiently distinct character not to come under the superior 952 standard. He was therefore able to proceed with his business on terms which were more advantageous to him than the English manufacturer, who had to buy his sugar in this country in the market of such a quality as he might find there available for his purpose. The English refiner, too, had to pay duty on the article when he cleared it from the Custom House, while the French refiner had nothing to pay. In the case of Holland and Belgium also, the state of things was very different from that existing in this country. We were over weighted in the matter, and the consequence was that we now found ourselves completely at the mercy of the French exporter; that out of 23 refineries which existed in London some years ago only three remained; that in every foreign market we were beaten by the French, and that our export trade had in point of fact entirely gone from us. He, for one, laid the result at the door of the Convention. That being so, a resolution had been very generally arrived at that the evil complained of could be best met by the method of refining in bond. The Dutch and French had, he believed, agreed to the adoption of that system, and Belgium was the only country which stood out against it. The Convention was now sitting in Paris, and he believed what they had principally in hand was the question whether refining in bond should by general agreement be substituted for the present system. One of "three courses" might be pursued—to let things remain as they were and wait for the Convention to come to an end; to adopt the principle of refining in bond, leaving Belgium to adopt her own course, according to the general consent of the Convention; or to let things return to their former state, when we should be at liberty to take that course which was most conducive to our own interest. This, he thought, would be much better than being hampered by the course adopted by other countries, who in the end generally obtained a great advantage over us. It was impossible we could derive any advantage from the Convention so long as it remained on its present footing; and the sugar interest required that some step should immediately be taken to bring the matter to an issue. The French refiner and exporter derived a great advantage in the nature of a bounty 953 under the operation of the present law. That bounty was estimated to amount to not less than £800,000 in the year. The eyes of the French people were now opened to the fact, and they were no longer disposed to be parties to that payment. In the meanwhile, no doubt, we obtained sugar at a lower rate in this country; and therefore it might be said we should not be the first to complain; but the French manufacturer, being enabled by the bounty to undersell us, would soon obtain control of the market, and we should be at the mercy of a monopoly entirely in the hands of the foreigner. He hoped that an intimation would be made to those who represented our Government at the Convention that some step should be taken in the direction he had indicated, either at once for bringing the Convention to an end if possible, or procuring refining in bond even at the expense of Belgium retiring, if willing to do so, from the Convention.
§ GENERAL SIR GEORGE BALFOUR
drew attention to the sugars of the Mauritius, which were formerly excluded by being taxed at a higher rate than those of the West Indies. That island was famous for the production of sugar of the best quality. The planters were proud of their sugar estates, and availed themselves of every improvement in cultivation and manufacture to make that remarkable island yield the largest quantities of the best sugars. That inequality in the rates of duties on sugars of different countries had now been removed, but a difficulty still existed in the present classification of Customs duties on different qualities of sugar which tended to exclude the superior sugars of the Mauritius, although they were the finest in the market of all the cane juice sugars. This classification of duties was practically a tax on manufacture, and labour which had long ceased to be an English system of taxation. He also complained of the bounty given to the French manufacturer, under which, although we obtained cheap sugar at the expense of France, our refiners had been well nigh ruined. The system of drawbacks in France on all sugars had ended in giving to the refiners of France an excessive and an unjust bounty. The deputies appointed by France to the Sugar Conference between Holland, Belgium, France, and England 954 had acknowledged to a payment in the shape of bounty on export of the French sugars of 8,000,000 francs, or nearly £320,000 out of the French revenue; but he had good grounds for estimating the actual payment at upwards of £1,000,000 sterling paid in the shape of bounties on exported refined sugars. The effect of this stimulant was seen in the large increase of imports from the Continent into England, which had increased from 765,665 cwt. of refined sugar—that is loaf sugar, in the year ending 31st March, 1866, to 1,618,786 cwt. in 1872; so that the sugar refiners of France had actually been able to sell this beet-root sugar in English markets at a lower rate than it could be manufactured in this country out of the cane juice sugars of our colonies and other foreign grown sugars. The consequence was, that beet-root cultivation in France had largely extended, not from its superiority over cane-juice sugar, but owing to the large bounty given. He also pointed out that besides the duty on imported refined sugar, the other qualities of sugars were divided into four classes on which four different rates of duty were levied by our Customs; but so injudiciously had the classification been made that notwithstanding the large increase in the total quantity of sugar imported within the last few years, it was seen that the imports of sugar under the second and third classes had actually fallen off since 1866, although the imports under the first and fourth classes had largely increased—the first class to the extent of eight times the quantity in 1872, as compared with that in 1866, and two-and-a-half times the quantity under the fourth class as compared with that in 1866. In this view he pointed out, that the classification having failed, he expressed an opinion in favour of abolishing all distinctions between sugars by fixing a uniform duty of a farthing a pound on all sugars, and this rate, he believed, would produce as much revenue as the present varying rates of duties on our defective classified system of sugars, thereby greatly simplifying the business of the Customs, besides lessening the cost of management. The next great step was an entire abolition of the duty on sugar. It was an article largely consumed by the poorer classes, and yearly on the increase. The relief to those of moderate means from the cheapening of sugar by 955 the abolition of the duty would be considerable, and would serve in a degree to reconcile them to the continuance of the income tax. The supply of sugar could be increased in quantity to almost any extent, and production was actually largely on the increase in various parts of the world. It was in course of being increased, not only under improved systems of cultivation, but also of manufacture, and at a cheaper rate. There could therefore be no doubt as to its being available in this country in any quantity at lower prices than have hitherto prevailed. There could also be no doubt that sugar and molasses might be extensively used for fattening cattle for the meat market, and in this way greatly benefit the farming interest, which stood so much in need of assistance, to enable it to compete with the duty-free cattle from the Continent, and with the grain now imported duty free from countries lightly taxed, thus competing with our cattle and grain raised on lands so heavily burthened with rents and taxes, and far in excess of the burthens of Continental lands. He closed by urging the Government to follow the course of free trade by abolishing the remainder of the sugar duty, and thus free the country from the entanglements which existed from having entered into conventions with the Continental States, to the injury of our own Colonies and refiners, by which France also suffered from the large bounties now unfairly paid to the refining class of that country, to the injury of the revenue and of the morality of the people of that fine country.
§ MR. CRUM-EWING
said, the refiners had been against refining in bond, but they had now come round to it. He spoke on behalf of the growers, whose interests were the same as those of the refiners, and who were greatly injured by the Convention. It was all very well to say that sugar was cheaper in this country—cheaper than in Paris; but if we extinguished refining in this country what was to become of our carrying trade? He trusted the Convention would, if it were possible, be put an end to.
§ MR. GREENE
said the Convention would soon put an end to the cultivation of beet in this country. The Convention ought to be carried out in its integrity, or else we ought to recede from it.
§ MR. J. B. SMITH
remarked that the system of classifying the sugar duties and levying them by colour was contrary to common sense, and had led to all the difficulties which had been experienced. To levy these classified duties it was necessary to examine and value every package of sugar, and as there were 5,000,000 packages imported every year, the expense of levying the duty was very large, and would be just as large with the proposed duty of a farthing a pound as when the duty was 4d. per 1b. or 16 times as large. The right hon. Gentleman the Chancellor of the Exchequer had, he thought, brought this country into unfair competition with France in regard to sugar. The Committee of 1860 fully considered the question of refining in bond, and by 10 to 3 refused to recommend it, because the evidence of sugar refiners themselves showed that nothing would be easier than to defraud the revenue, while the restrictions of the Excise to prevent fraud would render the prosecution of the trade intolerable. The system of classified duties was eminently fruitful of fraud, as was also that other 'dodge which the refiners sought—namely, refining in bond, and the only sensible course would be to propose to the French and all other Governments a uniform rate of duty and a uniform drawback. The system of giving the sugar refiners bounties in these free trade times was a disgrace to the House and to the country.
§ MR. MACFIE
complained that the sugar refiners had been much misrepresented; they had not used the law to defraud the revenue. At present the French refiner gained a great advantage at the expense of his own Government, and to the injury of the English refiner. He (Mr. Macfie) believed there was now a general conviction that refining in bond was the true and simple solution of the difficulties attending this question. The importance of the refining trade consisted not in the capital or the number of hands employed, but in the fact that it brought the raw material to the country and gave them the benefit of the export trade. He trusted that the English Government would not abandon the Convention, but would urge the French Government to stand steadily to its principle, and to carry Belgium along with them.
THE CHANCELLOR OF THE EXCHEQUER
said, that the course adopted by 957 the Government was to send two representatives to the Conference, but not to give them directions to put an end to the Convention. They were instructed to support the refining in bond.
§ Motion, by leave, withdrawn.
Motion made, and Question proposed,
That, towards raising the Supply granted to Her Majesty, on and after the under-mentioned dates, in lieu of the Duties of Customs now charged on the articles under-mentioned, the following Duties of Customs shall be charged thereon, on importation into Great Britain or Ireland, viz.:
On and after the twenty-eighth day of May, one thousand eight hundred and seventy-three,—
|Sugar, viz.:—||£ s. d.|
|Candy, Brown or White, Refined Sugar, or Sugar rendered by any process equal in quality thereto, and manufactures of Refined Sugar the cwt.||0 3 0|
|On and after the eighth day of May, one thousand eight hundred and seventy-three,—|
|Sugar not equal to Refined:—|
|First Class the cwt.||0 2 10|
|Second Class the cwt.||0 2 8|
|Third Class the cwt.||0 2 8|
|Fourth Class (including Cane Juice) the cwt.||0 2 0|
|Molasses the cwt.||0 0 10|
|Almonds, Paste of the cwt.||0 2 4|
|Cherries, Dried the cwt.||0 2 4|
|Comfits, Dry the cwt.||0 2 4|
|Confectionery, not otherwise enumerated the cwt.||0 2 4|
|Ginger, Preserved the cwt.||0 2 4|
|Marmalade the cwt.||0 2 4|
|Plums preserved in Sugar the cwt.||0 2 4|
|Succades, including all Fruits and Vegetables preserved in Sugar, not otherwise enumerated the cwt.||0 2 4|
§ And that the said Duties shall be paid on the weights ascertained at landing.
§ Resolution agreed to.
§ Motion made, and Question proposed, "That, &c."
§ Motion, by leave, withdrawn.
Motion made, and Question proposed,
That on and after the eighth day of May, one thousand eight hundred and seventy-three, in lieu of the Drawbacks now allowed thereon, the following Drawbacks shall be paid and allowed on the under mentioned descriptions of Sugar refined in Great Britain or Ireland on the Exportation thereof to Foreign parts, or on removal to the Isle of Man for consumption there, or on deposit in any approved warehouse, upon such terms and subject to such regulations as the Commissioners of Customs may direct for delivery from such warehouse as ship's stores only, or for the purpose of sweetening British Spirits in Bond (that is to say):—
|£ s. d.|
|Upon Refined Sugar in Loaf complete and whole, or Lumps duly Refined, having been perfectly clarified and thoroughly dried in the stove, and being of an uniform whiteness throughout; and upon such Sugar pounded, crushed, or broken in a warehouse approved by the Commissioners of Customs, such Sugar having been there first inspected by the Officers of Customs in Lumps or Loaves, as if for immediate shipment, and then packed for Exportation in the presence of such Officers, and at the expense of the Exporter; and upon Candy. for every cwt.||0 3 0|
|Upon Refined Sugar unstoved, pounded, crushed, or broken, and not in any way inferior to the Export Standard Sample No. 2, approved by the Lords of the Treasury, and which shall not contain more than five per centum of moisture over and above what the same would contain if thoroughly dried in the stove for every cwt.||0 2 10|
|Upon Sugar refined by the centrifugal or by any other process, and not in any way inferior to the Export Standard Sample No. 1, approved by the Lords of the Treasury for every cwt.||0 3 0|
|Upon other Refined Sugar unstoved, being bastards or pieces, ground, powdered, or crushed:—|
|Not in any way inferior to the Export Standard Sample No. 3, approved by the Lords of the Treasury for every cwt.||0 2 10|
|Not in any way inferior to the Export Standard Sample No. 4, approved by the Lords of the Treasury for every cwt.||0 2 8|
|Not in any way inferior to the Export Standard Sample No. 5, approved by the Lords of the Treasury for every cwt.||0 2 5|
|Inferior to the above last-mentioned Standard Sample for every cwt.||0 2 0|
§ MR. HERMON
asked up to what period the drawbacks would be allowed? He supposed between the 8th and 28th of May.
THE CHANCELLOR OF THE EXCHEQUER
said, that the drawback would continue at the old rate until the 8th of May, and from that time the new rate of drawback would be allowed. The duty on refined sugar would be continued at the present rate until the 28th of May, to give refiners an opportunity of getting rid of their stocks on hand. They did not, however, ask, nor was it 959 necessary, that the drawback should last longer than the period when the duty on refined sugar was taken off.
§ Resolution agreed to.
Motion made, and Question proposed,
That, in lieu of the Duties of Excise now chargeable on Sugars made in the United Kingdom, the following Duties of Excise shall be charged thereon (that is to say):
|On and after the eighth day of May, one thousand eight hundred and seventy-three, Candy, Brown, or White Refined Sugar, or Sugar rendered by any process equal in quality thereto, and manufactures of Refined Sugar the cwt.||0 3 0|
|Sugar not equal to Refined,—|
|First Class the cwt.||0 2 10|
|Second Class the cwt.||0 2 8|
|Third Class the cwt.||0 2 5|
|Fourth Class the cwt.||0 2 0|
|Molasses the cwt.||0 0 10|
§ That, on and after the eighth day of May, one thousand eight hundred and seventy-three, in lieu of the Duties of Excise now chargeable upon Sugar used in Brewing, there shall be charged and paid upon every hundredweight, and in proportion for any fractional part of a hundredweight, of all Sugars which shall be used by any Brewer of Beer for sale in the brewing or making of Beer, the Excise Duty of Nine shillings and Six pence.
§ Resolutions to be reported upon Monday next;
§ Committee to sit again To-morrow.