§ WAYS AND MEANS considered in Committee.
§ (In the Committee.)
§ THE CHANCELLOR OF THE EXCHEQUER
I am afraid, Mr. Raikes, that the exciting overture which has just concluded is not a very encouraging one for the tame speech and uninteresting details to which I shall have to invite the attention of the Committee. But I have at least this consolation—that the state of our finances in the present year is, happily, not such as to cause any great anxiety, or to occasion much alarm, in the mind of the House; and although I hope that I may be favoured with the attention of hon. Members for the few remarks which I shall have to make upon the condition and prospects of the Revenue, and the arrangements which I shall invite the Committee to co-operate in, still, there will be nothing which is likely to cause any very considerable excitement.
Sir, the income of the year 1874–5, which has just terminated, was estimated by me, when I brought forward the Budget last year, at £74,425,000, and it has proved in the result to be £74,921,873, showing a surplus—an increase of Revenue beyond the estimate—of £496,873. The Expenditure Estimate in the Budget was £73,958,000. The Estimate as it stood in the Appropriation Act passed at the close of the Session, was £74,083,527, and the expenditure in the result was £74,328,040, exceeding, as a result, the Budget Estimate by £370,040, and the Appropriation Act Estimate by £244,513. The surplus, which in the Budget Estimate I took at £467,000, and at the time of the Appropriation Act at £342,000, has proved to be £593,833, being more than the Budget Estimate by £126,000, and more than the Appropriation Estimate by £251,000.
Now, Sir, I think that this is a statement which, upon the whole, may fairly be described as a satisfactory result of the year. I am aware that in some quarters criticisms have been passed, and dissatisfaction has been expressed; but I hope I am not wrong in attributing 1019 that to the proverbial love of grumbling which prevails among Englishmen, and to some natural feeling in a few quarters, perhaps, of disappointment—agreeable disappointment, of course, I mean—of many of the predictions which were freely indulged in in the course of the year. I have been told that my Estimates last year were exceedingly over sanguine—that the position into which I led the House and the country in the matter of finance was a perilous one, and that if it had not been for the happy accident, or, as I should rather say, the happy Providence of an exceedingly good harvest, we might have found ourselves landed in a most terrible and disastrous deficiency. I think it will be seen that these complaints have been somewhat exaggerated. I cannot say that there were no mistakes in the Estimates of last year, no mistakes in details. I admit there were some mistakes; and I suppose there never was a Budget in which some mistakes were not made—some errors on one side or the other. But I think those who candidly consider the general results of the Budget will admit that the errors on the present occasion were not of a very serious or dangerous character; and I must frankly say that, as to the idea of there having been any danger of a serious deficiency, such an idea was something in the nature of a delusion. It is said that we should be in a more comfortable position at the present time if we had taken a less sanguine Estimate last year. If by that it is meant that we should be in a more pleasant and comfortable position if we had kept the Income Tax at 3d. instead of 2d., and extracted something like £2,000,000 more than was required from the pockets of the people in order to show a great surplus now of between £2,000,000 and £3,000,000, and so have the pleasure of taking off taxation, I must say that is a view I do not concur in. I am better pleased to think that the money has been left in the pockets of the people, than that I should have to come forward on this occasion and parade before the House a very large and handsome surplus. I would rather stand in a reverse position to that of a gentleman we read of, who was believed to be distinguished at Athens, but who, being a miser, was despised. He found himself unpopular with the 1020 people, and when he ventured abroad he was hissed; but he used to console himself when he went home by looking at the huge sums of money in his cash-box. I, on the other hand, console myself—whatever may be the hisses of a few instructors of public opinion—with the reflection that the money is not in my cash-box, but in the pockets of the people.
Sir, I am told that the Estimates, though they have in the gross been fairly justified, were in detail very erroneous. I should like just to say a word on that subject. The Customs Estimate has very considerably exceeded my expectation; and the Excise Estimate has by a less considerable amount fallen short of my Estimate. But I think I did on one occasion last year say that which I know has been frequently and justly said by other Chancellors of the Exchequer, that in estimating your Revenue you ought to take, in practice, Customs and Excise together. Because your Estimate is founded very much upon a calculation of the power and ability of the people to consume taxable articles, and those articles are to be found not under the head of Excise alone, but under the head of Customs also; and I certainly myself expected that if there should be any deficiency on one of these heads, it would probably be made up by a surplus on the other. And so it has proved, and very naturally proved. In the first place, let me ask where has the deficiency been? There has been a deficiency, and a considerable one, in the result of the Estimate for Spirits in the Excise Revenue. But, on the other hand, there is a remarkable excess in Customs, also under the head of Spirits; and if we carefully look into the peculiar circumstances of the case, you will find that that is owing to a rather remarkable cause. There was a very good potato harvest in this country last year; there was also a good potato harvest in Germany. When there is a deficient potato harvest in this country, large quantities of potatoes are imported from abroad, but there happening to be a large potato harvest here, that quantity of potatoes was not needed in the form of vegetables. The consequence was that a very large quantity of potato spirit was made in Germany and sent into this country; that potato spirit is used for various purposes—very much of it, I believe, 1021 for methylation; whatever purposes it was used for, it took the place of a large quantity of British spirit; and my friends at the Board of Inland Revenue are a little jealous at finding that their Estimate has fallen short by something like the same amount as that by which the Customs Revenue has exceeded the Customs Estimates; and they say you ought to give us, and not the Customs, credit for this excess of Revenue from rum and from the German spirits. I do not go into this question. I do not think it is worth going into. But there is another consideration, and one which, I think, is so curious that I should like to call the attention of the Committee to it. It is not only the competition of one class of spirits with another, but it is the competition of those articles which pay duty under Customs with those articles which pay duty under Excise to which I wish to call attention. The Revenue from spirits has somewhat disappointed calculations, but the Revenue from tea has very largely exceeded expectations; and it occurred to me that it would be interesting to have a comparison made in order to see whether we had misjudged the consuming power of the people—to have a comparison made of the amount which the public must have been expending in the purchase of tea, which produced a large Revenue this year, with what they must have expended to produce a corresponding amount of Revenue from spirits. I find these remarkable results. The duty on tea produced last year £320,000 more than the year before. That represents an additional consumption of 12,800,000lb. of tea, at 1s. 11d., the average market price in bond in 1874, including the duty, which would cost £1,226,750. If the consumers, instead of spending that £1,226,750 on tea, had spent it on British spirits at 13s. 3d. a gallon, which was the average price for the same period, it would have represented 1,851,700 gallons, and produced an increased Revenue of £925,000. Thus, instead of a Revenue of £320,000 from tea, we should have got, at the same cost to ourselves, £925,000 from the people on spirits. That is remarkably satisfactory. It is satisfactory, in the first place, as showing that tea is to some extent, perhaps, taking the place of spirits; and, secondly, as showing—as I hope we may infer— 1022 that the relief given last year by the reduction of taxation was relief that was especially valuable to that class of the community who are consumers of tea rather than of spirits. I can hardly venture to think that this curious result can be taken as evidence that the great masses of the people who are spirit drinkers have to any great extent given up spirits in favour of tea. But it may be taken as evidence that the class of people who, with their families, are habitually consumers of tea to a much greater extent than of spirits—that is, probably, the lower class which pays income tax, the house duty, and the charges upon persons possessing incomes from £100 to £300 or £400 a-year—were so much relieved by the remissions of last year that they have increased their expenditure in a direction which has led to the result we have witnessed. When I consider how much relief was given by the abolition of the sugar duty, the reduction of the income tax, and in the form of subventions to the rates last year, I cannot help hoping that some cause like that may have been at work, and may have produced the remarkable result to which I have referred.
I am anxious not to detain the Committee by going into figures, although I have them in my hand, which might be interesting as showing what the present condition of the people is. ["Go on!"] If I were not afraid of being wearisome I could read them. ["Go on!"] Well, if the Committee are patient I will quote some of the figures. In the first place, I would observe, in regard to the consumption per head of the population, that, taking the article of tea, in 1872 the consumption per head was 4 lb.; in 1873, it was 4 lb. 1 oz; in 1874, it was 4lb. 4oz. Of malt the consumption per head in 1872 was 1.93 bushel; in 1873, it had risen to 1.97 bushel; and in 1874, it dropped again to 1.93 bushel. But although the consumption of malt has fallen off this year, the consumption of sugar used for brewing has considerably increased, sugar having, to a considerable extent, come into competition with malt. That may be due partly to the cheapness of sugar, and partly to the high price of barley; for, although last year there was a very abundant wheat harvest, yet the barley harvest, though good in 1023 quality, was not abundant in quantity; and the price of barley has, I think, been higher in proportion to that of wheat than it has been known to be for many years. That circumstance has, doubtless, had some effect. Again, the consumption per head of tobacco has a little increased. In 1872, it was 1 lb. 6 oz; in 1873, it was 1 lb. 7 oz; and last year it was also 1 lb. 7 oz. Taking spirits, the increased consumption of which is not, perhaps, an advantage, except financially, the increase has continued, though not at so great a rate as before. In 1872, the consumption per head was 1.14 gallon; in 1873, it was l.23 gallon; and last year l.26 gallon. Then I take the Savings Banks. The excess of deposits over withdrawals for the year has been £1,398,000. That is not quite so high an excess as there was in the year before, when it amounted to £1,566,000; still less was it equal to the year 1872, which was £2,470,000. Although there has been a decrease in the rate of the excess, the excess has continued, and the people have apparently been able to deposit their savings in the savings banks. With regard to the number of paupers, I am happy to be able to give a good account. The total number both of indoor and outdoor paupers in England and Scotland last year was 937,000, against 999,000 in the year before. I have not got the return for Ireland upon the whole of these points. I do not know that there are any other figures with which I need trouble the Committee; but, looking at these points, I think that, on the whole, we may say that the condition of the people is fairly satisfactory, and that, although there may be nothing that should be depicted in very glowing colours, yet there is nothing that need cause us any present uneasiness.
As to another head of Revenue, on which there has been a falling off—namely, Stamps—I must freely confess that there was an error in the Estimate. We were, perhaps, too sanguine as to the revival of trade which we hoped for last year; and when I say that on almost every head of Stamps there has been a disappointment in the rather sanguine Estimate of last year—which principally shows itself in Bills of Exchange, on which there has been a loss of £75,000—I admit frankly that the anticipations of last year's Budget were higher than 1024 circumstances have justified. At the same time, although Stamps have fallen nominally £10,000 below the receipts of the previous year, yet that is a small sum in comparison with the size of the Revenue; and when we remember that last year was a peculiar one, because there were two Easters in it, and therefore there was a great number of holidays, when no business was done, I think we may regard the Stamp Revenue as showing something like an equilibrium.
The next item is the Post Office. The Budget Estimate was £5,300,000. The receipts were £5,670,000, or £370,000 over the Estimate. The Committee will bear in mind that all these accounts are accounts not so much of receipts as of Exchequer payments; that they do not represent the exact amount received by any Department of Revenue, but the amount which that Department is able to pay into the Exchequer. That is a distinction with which right hon. Gentlemen and a few others who have studied these subjects are conversant, but I very much doubt whether the general public are always alive to this fact; and that explains some of the wild and altogether unsound conclusions which were occasionally drawn in the course of last year from the statements showing the Exchequer receipts from week to week, because persons would look on them as if they represented the receipt of the Revenue, which was not the case. Many circumstances would make a difference between the two. Undoubtedly, surprise has been expressed that there has been irregularity in the progress of the Revenue from the Post Office. But that is not due to any irregularity in the net receipts, but from the mode in which the Exchequer payments were made. A year or two ago a good many remarks were made as to irregularities in the way in which the Post Office revenues were dealt with, and several rectifications had to be effected in order to bring the Exchequer payments into proper relation with the receipts week by week. I am happy to say those rectifications have now been satisfactorily made, and we may rely upon the payments from the Exchequer to the Post Office, fairly representing the net receipts of that Department. I have here a statement for a good many years past of the Exchequer payments 1025 and the net receipts of the Post Office. I will not trouble the Committee with the figures; but they may take it on my authority that the net receipts represent, on the whole, a very fair and steady rate of progress, much more than is indicated by the Exchequer payments, which have been fluctuating from the cause I have stated. The Committee may also take this on my authority—that the receipt which has been carried to our credit in the present Budget, £5,670,000, represents payments into the Exchequer duly proportioned to the bonâ fide net receipts of the Post Office for the year. The net receipts of 1872 were £5,212,000; in 1873, £5,481,000; and in 1874–5, they are estimated at £5,750,000.
As regards the Telegraph Revenue, I am sorry to say there has been a falling off; and it is of a character which I can only present as illustrating the difficulties of that undertaking. Undoubtedly, the Telegraph Service has not as yet been brought into a remunerative condition. We are not, as yet, really paying our way, or paying anything towards the interest even, of the debt which was incurred for the purchase. And we can only hope that, by exertions that are being made to improve the service and bring it into a more economical state, we may by-and-by set that matter right. The difficulties under which we have to administer a service of that kind—a service which interests everybody, and which leads to demands being made in all directions—are very great indeed. I know well that hon. Members are continually pressed by their constituents to make complaints that proper telegraphic communication is not afforded to this part of the country, or another part, and hon. Gentlemen are very reluctant to accept the answer that the Government cannot afford to deal with the matter. There is a feeling that the Government ought to be able to deal with it, and Government cannot give the answer that private companies could and I am sure did give. This is a point worthy of consideration, not so much in regard to the Telegraph Service itself, in which we are now fairly embarked, and of which we must make the best we can, as in reference to suggestions of acquisitions of other forms of property, and the conduct of other kinds of business, in which I hope the House will 1026 never be led to embark without very carefully weighing the results of this remarkable experiment.
I do not know that there is any other head of Revenue with respect to which I need say anything, except that which is called by the mysterious word "Miscellaneous." The Committee have observed, no doubt, that the Revenue from "Miscellaneous" has fallen below the Estimate. But I think it right, in perfect frankness, to say that this is not an accident. It was owing to my having given instructions that there should be no haste in calling in certain receipts which might have been paid in before the 31st of March, but which it did not appear necessary to call in, and which it would be better to leave for this year. They amount to something like£300,000. The reason for that step, as I think it is only candid to mention, was this:—Last year we made considerable reductions in taxation. Those reductions were intended to affect the finances, not only of last year, but of this, and among those reductions were considerable subventions to local rates. At the time I brought forward the Budget last year, I over-estimated the proportion of those subventions which would have to be paid within the last financial year. When I found that a great proportion of them would not come in course of payment last year, it appeared to me that we should have for that year a larger surplus than would be necessary, and that the finances of this year might be somewhat embarrassed. I thought, therefore, that it was fair, regarding the two years as one, to give instructions that certain payments which might have come into the Exchequer before the 31st of March should be made afterwards. If those receipts had been called in at the usual time we should have had a surplus of nearly £1,000,000. As it is, the finances of the present year benefit by that arrangement.
Having gone over the Revenue of last year, I do not know that there is anything in the Expenditure which calls for special remark except the point to which I have just referred—namely, the difference between the amount paid for the subventions to different local taxes which were promised last year and were not paid. The total amount on account of local expenditure last year was £512,000, and the amount which stands over for 1027 this year will be an addition of £642,000, making a total for the two years of £1,154,000. One of the items was the subvention or contribution made by decision of this House in aid of the rates on places where the Government has property. I think it right to inform the Committee that the process of ascertaining the amount to be paid for those subventions has been carried on under the immediate direction of the Treasury through one of its officers, Mr. Vincent Griffiths, who has discharged his duty with the greatest care and ability. Very satisfactory settlements have been arrived at with the greater part of the places concerned; with Chatham, where we have a dockyard, arsenal, and barracks; Rochester, Woolwich, Plumstead, Portsmouth, Portsea, Plymouth, Greenwich, Deptford, Sheerness, and, in short, a large number of places which I need not enumerate. The arrangements have been made in a manner which has satisfied the Treasury and has also obtained the assent of the local authorities. I think we may arrive at a very fair and reasonable basis for the settlement of this difficult question by the course adopted. The general feeling of the persons interested in the receipt of those contributions has been consulted, and, at the same time, the Treasury have kept a vigilant eye on the bargain made with a view to the interest of the public. I may mention that the expenditure on the Ashantee Expedition has been closed, and it has been found that the total is only £933,544. It is right that the fact should be put upon record, for it is very much to the credit of the Government which conducted the Expedition.
With respect to the expenditure of the coming year, there will be an increase. I will give the items in the usual manner. The Estimate for the interest of the Debt is £27,215,000. That is £70,000 more than last year, owing partly to the effect of the arrangement made with regard to the Terminable Annuities. The Consolidated Fund Charges will be £1,590,000. And here I ought to apologize to the hon. and learned Member for Oxford (Sir William Harcourt) for not having this year done what he asked us to do—namely, to lay a statement of the Consolidated Fund Charges on the Table, but before I conclude he will see why I have not done so. The 1028 Estimate for the Army is £14,678,000, and for the Army Purchase Commission, £638,000. The Estimate for the Navy is £10,785,000. For the Civil Service it is £12,656,000. I can hardly mention the Civil Service without expressing my thanks to my hon. Friend the Member for Westminster (Mr. W. H. Smith) for the very great pains he has taken in keeping down, as far as possible, the Estimates for the various branches of the Services. The Estimate for the Post Office is £3,036,000; collection of Revenue—Customs and Inland Revenue, £2,694,000; and collection for the Telegraph Service, £1,098,000. The Packet Service Estimate is £878,000, and the total estimated expenditure of the year, £75,268,000. The increase in the Post Office is due to the very considerable advance in the salaries, amounting, since the Estimates of the last Budget were presented, to £117,000 a-year. The Packet Service has a decrease of £121,000, which is mainly due to a reduction of subsidies.
I now come to the estimated Revenue of the year. I may say in approaching the Estimates of Revenue, that I propose to build them upon as safe and cautious a principle as I can. I do not think it right altogether to disregard the undoubted fact of the normal growth of Revenue. It is quite certain that for many years past there has been—good years and bad years taken together—a very considerable and, upon the whole, a very steady growth of Revenue. But it should also be borne in mind that although the result of a series of years may be drawn to an average, the results undoubtedly fluctuate from year to year, and therefore it is always necessary for a Chancellor of the Exchequer in reference to the immediate arrangements for a Parliamentary year, to look to the particular circumstances of the moment at which he stands. He may feel confident that any causes which may prejudicially affect the progress of the Revenue will be only of a temporary character, but still he is bound to look to both the present and the future; and although at the present time there is, as I have said, a very fair and reasonable ground for being satisfied with the general condition of the people, still there are causes for prudence and caution. We have not yet seen that revival in trade which we are looking for; and 1029 some of the figures I read to the Committee earlier in my Statement, I think show that we must not look on this year as one likely to be very remarkable for a great advance of the Revenue. At all events, it would not be wise to treat it so. At the same time, I must remind the Committee that this will be in some respects a favourable year. It is Leap Year, which gives us a day more, and makes a considerable addition to the Revenue; and, in the second place, it is a year in which there is no Easter or Good Friday, and therefore it is a model year for the financier.
I have gone very carefully, with the heads of Departments, through the Estimates I am about to submit to the Committee, and I submit them with confidence that they are reasonable Estimates, and such as the Committee may fairly accept, as being neither deliberately too cautious, nor, on the other hand, over-sanguine. I take the Revenue of the Customs, which last year produced £19,289,000, at £19,500,000. I take the Excise at £27,800,000. That is an addition to the Revenue of last year, which was £27,395,000; but it is an addition which has been very carefully calculated, and by which I think we may fairly undertake to stand. Stamps I take at £10,600,000. Last year they produced £10,540,000; but with an extra day this year and the absence of holidays, I think I may take them at £10,600,000 as an equilibrium. The Land Tax and House Duty, which last year produced £2,440,000, I take substantially at the same figure—£2,450,000. The next item is the Income Tax, which produced last year £4,306,000. It has been growing very steadily, and there has been a remarkable increase in the produce of the penny per pound. It is customary to compare the present yield of the penny with what it was when Sir Robert Peel first imposed the tax; but that is not altogether fair, for the tax has since been extended to Ireland, and there have been other changes. Still the growth of the yield has been very remarkable. In the early years of the Income Tax, from 1842 to 1852, when the rate of the tax stood at 7d. in the pound, there were fluctuations from year to year, and the progress of the yield was very small. The yield per penny, which was £800,000 in the first year, had only risen to 1030 £847,000 in the last. In the next period, from 1853 to 1862, when Great Britain and Ireland were included and certain other changes in the assessment were made, the rate rose to £1,030,000 in the first year, and £1,249,000 in the last. In the years since 1863–4, when there have been constant fluctuations in the rate of the tax, as indeed was the case in the preceding period also, there was a steady rise in the value per penny, rising from £1,249,000 in 1862–3 to upwards of £1,900,000 in the year last passed. The explanation of the Income Tax receipt is shortly this:—It was estimated last year upon a scale in which I took the penny as yielding £1,840,000. The tax produced £4,306,000. Undoubtedly the arrears were under-estimated. But the produce of the penny, instead of £1,840,000, was more than £1,900,000; and we take it this year at £1,950,000. The estimate of the assessment at 2d. I take at £3,900,000. I have a statement showing the amount of arrears actually now due and in hand, and I can give to the House the amount outstanding. It was about £800,000 at the beginning of this year, which will be brought in. The sum received from the 1st of April is £319,000. The Post Office I take at £5,750,000, being a moderate increase over the receipts of last year, which were £5,670,000, and fully justified, I think, by the experience we have had. The Telegraph Service I take at £1,200,000; last year it produced £1,120,000. Crown Lands I take at£385,000, the same as last year. The Miscellaneous Estimates I take at £4,100,000, and this will produce a total Revenue of £75,685,000, as against an estimated Expenditure of £75,268,000. We have, therefore, a prospect, on these figures, of a surplus of £417,000. I am bound, however, to say that although the surplus may be estimated at that amount, there will still be some Supplementary Estimates, especially for Irish Education, the precise amount of which I cannot now state, and this must be taken into consideration in deciding on the arragements for the year. Well, Sir, that may appear a very small and unsatisfactory surplus; but I must remind the Committee that the remissions of taxation made last year were made not for one year but for two, and that a considerable proportion of them are due this year. The total amount of remissions of Imperial taxation last year may 1031 be stated at £3,830,000, and there will be some £490,000 due to this year. A great part of that is due to the balance of the remission of the penny of Income Tax, and a certain portion to the balance of the remission of the Sugar Duties. I forgot to mention that last year we received as the balance of Sugar Duty £68,000; we also received as part of the Horse Tax, in operation in the early part of the year, about £25,000. Something like £90,000 is due to these two heads, and about £400,000 of Income Tax makes a remission for the two years of £4,321,000. With regard to local taxes, the subventions, which are, in fact, remissions of taxation in the form of rates, amounted last year to £512,000, and this year they will be £642,000, making together £1,154,000. The total relief of taxation, Imperial and local, in the two years will thus amount to £5,476,000, of which £1,133,000 will become due in the present year. We must not, therefore, consider that we begin with a surplus of only £417,000; we may rather look at it as though we were beginning the year with a surplus of £1,500,000, and were proposing to give £1,100,000 in remission of taxation. It was pledged beforehand; it comes, nevertheless, out of the finances of the present year. We thus arrive at a surplus of £417,000, subject to some deductions in the way of Supplementary Estimates. Every pains will be taken to keep them low, and I have no reason to suppose they will be of great consequence. Even if the surplus could be taken at the full amount of £417,000, the House and the country would be satisfied it was not a case in which we ought to think of any reductions or remissions of taxation. I must mention two small re-adjustments which we propose to make. The most important is what I practically promised last week in the discussion upon Brewers' Licences. I have carefully re-considered the scale of those licences, and I am satisfied that the scale as it at present stands is not fair to the small brewer, and that it weighs heavily upon him in comparison with large brewers. I therefore propose that the present scale shall be superseded by a scale of a uniform character, in which the charge shall be at the rate of 12s. 6d. for every 50 barrels brewed. The effect will be that nobody will be a loser, and the small brewers will be gainers. The result to the Revenue will 1032 be a loss of £60,000. With regard to any other remission, and especially with regard to the suggestion which was made, and which I said I would consider, without pledging myself on the subject—namely, the postponement of the payment of any portion of the duty—I find myself unable financially to attempt such a thing: and, after ail, it is clear it would be a mere gift to the brewers, and that those who would profit by it most would be the large, and not the small brewers. I therefore consider it, will not be in my power to make any offer of the kind. I content myself with remedying what appears to me to be a decided injustice in the scale. This is the only re-adjustment which will cost anything to the Exchequer. There is another small re-adjustment which I propose to make, and which, so far as I can judge, will produce no financial effect—it relates to one of the Stamp Duties. As the Committee will remember, last year attention was called to the heavy Stamp Duty which the Lord Lieutenant of Ireland and other officers were called upon to pay in respect of their appointments; and it was then stated that the Government were looking into this question of the Stamp Duties. They are in a very unsatisfactory position. The present state of the law is that a duty of £5 per cent. with smaller ratios upon small incomes, is charged upon the first year's value of every appointment made in writing; while appointments which are not made in writing pay nothing. That applies not only to the public service, but also to all private employments; and, although I do not suppose the Stamp Duty is always rigorously paid, it is certain that, under the regulations, all such persons as secretaries of railway companies, clerks in banks, and persons accepting any kind of private appointments made in writing would have to pay a duty of £5 per cent upon the first year's income. In the public service that operates in a most extraordinary and unequal manner. There are certain appointments which must be made in writing, and which are so taxed. There are certain others of equal or higher value not made in writing, and which escape being taxed. I am speaking not only of political appointments, but of appointments in the permanent Civil Service, The Controller of the 1033 National Debt Office has been challenged by the Auditor General, and has been told he is liable to stamp duty on his appointment. The permanent Assistant Secretary to the Treasury, who receives a higher salary, is not appointed by writing, and he pays nothing. This uncertainty is very inconvenient, and I propose we should solve the difficulty by largely reducing the amount of the tax, which is really unreasonable, by making it uniform, and, so far as relates to the Civil Service, making it a rule that all appointments shall be made in writing. The proposal, therefore, is that the charge, instead of £5, be 5s. per £100 of the first year's salary. That will be a very moderate tax on first appointments, which those who are appointed will generally be willing to pay. This arrangement will have an incidental effect upon Civil Service appointments in this wise. We now appoint young men upon probation, and the understanding of that probationary employment is that if the person is found after 6 or 12 months to be unfit for the employment he is to he told that he cannot have the office and that he must look out elsewhere. This is a very invidious duty for the head of an office to perform, and it is very often not performed. Now, if the rule is made that every man upon his appointment should receive a writing, and pay a small stamp duty on it, it would be easy to see that a person would not pay upon an appointment on probation. This is an incidental advantage; but the object of the proposal is to get rid of the inconvenience to which I have referred. [An hon. MEMBER: Will it apply to the Chancellor of the Exchequer?] It will; but it is not to be retrospective. We have thus reduced the moderate surplus of £417,000 to £357,000. As I said, looking to our general position, further remissions are impossible. Although there are no remissions, I may be asked whether there are any re-adjustments. I really do not think it would be agreeable to the Committee, to Parliament, or to the country that in the present state of our finances and of our taxation, we should attempt to revise the system under which we find ourselves—that being, as I may say in general terms, pretty well off, we should attempt to make revisions, in the hope of finding ourselves in a better position, but with the chance of finding our- 1034 selves in a worse position in the end. I do not mean to say that the present financial arrangements of the country and our fiscal system are absolutely without blot; I do not mean to say that our system is ideally the best that could be proposed. I am not prepared to say that in the years before us there may not arise cases for modifications and improvements in our system; but I do think we may fairly hold up our heads and say that there is no great cry or urgent necessity for any great reform or re-adjustment in our system of taxation. Looking back for a considerable period of time, we have seen how one tax after another which pressed upon national industry has been removed, and how in one way or another great relief has been given to the public. I do not say that there are not taxes that are disagreeable to those who pay them; but I doubt whether there are any that can be fairly said to be injurious to the public interests of the country. There is, no doubt, a good deal of feeling which exists in reference to one tax. It is one that the Committee have heard a good deal of for many years, and it is, perhaps, one upon which my Estimate of our financial condition might by some be challenged—I refer to the Income Tax. Last year we claimed that, considering how recently we had acceded to office, and considering the position of the finances, we might reserve our opinions with regard to this tax. I do not think that it would be candid to attempt to make a case with regard to that tax in exactly the same spirit now. Of course, we have been obliged to consider it, and whether it would be desirable to do that which it is quite possible to do—to make arrangements and re-adjustments by which we may dispense with it, or materially modify it. The Income Tax has its merits and demerits. It has merits as a war tax, for it raises enormously the power of the country, with reference to any strain upon our military resources. We all know, also, that it has merits as an engine for effecting great reforms in our system of taxation, and that what has been done with its assistance during the last 30 years has been work of a very important character. This could not have been carried out if it had not been for the assistance derived from the Income Tax. 1035 On the other hand, I admit the objections which are raised against it and against the inequality in its incidence. It is, no doubt, a tax unequal in its incidence, and with all respect for my right hon. Friend the Member for the City of London (Mr. Hubbard), who has hopes of getting rid of these inequalities and of making it fair for everyone, I must say I am afraid that those inequalities are inherent in the nature of the tax, and that it is impossible to do more than shift the inequality from one quarter to another. There are also other objections to it which are undoubtedly patent, as, for example, the disagreeable manner in which it presses upon certain classes of people, and especially upon those who have to undergo what they call an inquisitorial examination of their affairs. But I am afraid that if you are to keep the tax at all, it will be exceedingly difficult, if not impossible, to divest it of this inquisitorial character. Something might be done to mitigate it, and, undoubtedly, whatever can be done, it is our wish to do. Anything we can do to mitigate these objections, and to make the pressure less felt, it will be our duty to do; but I cannot hold out any glowing hope of our being able to remove all such objections. These objections against the tax, however, press a great deal more against the tax when it is high than when it is low. Certainly, if we look at the tax with reference to its inequality, there is no doubt that this objection fades almost into insignificance when you keep the tax at a low rate; because though it might be exceedingly unfair if you raised the whole or the greater part of your Revenue by it, the unfairness on particular persons is very much less when you are only raising an insignificant proportion of your Revenue by it. I may also say that there is another objection which has been felt against the Income Tax, and that is the uncertainty which has attended for many years the use to which it was put and the rate at which it was likely to levied from year to year. When a man was unable to say whether the Income Tax of the coming year would be 8d. or 10d. or 1s. in the pound—when the Chancellor of the Exchequer, whatever the state of the finances of the year, might come down and say he had great reforms to propose and great experiments to make, and when he might propose, at a mo- 1036 ment's notice, to double the Income Tax—then, undoubtedly, the tax was much harder and more oppressive than it could be if it were kept low, uniform, and, as far as possible, steady. Now, if we have not made our fiscal system perfect, we have gone so far in that direction that with a prospect before us of a fair annual growth of the Revenue and a reasonable hope and trust in the prosperity of the country, we may say that this use of the Income Tax may be considered to be at an end. We may, in asking you to renew the Income Tax at 2d. in the pound, do so with the hope and belief that it may be regarded as a tax useful in point of amount, but as held in abeyance—ready only for some great emergency, and not to be called upon for trivial occasions.
That being the state of the finances generally, there is one subject to which I should like to invite the attention of the Committee. The total amount of the National Debt on the 31st of March, 1874, was £779,283,245. On the 31st of March, 1875, it was £775,553,577, showing a diminution of £3,729,668 in the course of a year. But not only has there been this alteration in the total figures of the Debt; there has also been another alteration to which I wish to call attention—that is, as to the form in which the Debt now exists. On the 31st of March, 1874, the Debt was thus composed:—The Funded Debt was £723,514,005; the Terminable Annuities valued in Three per Cent Stock were £51,289,640; and the Unfunded Debt was £4,479,600. On the 31st of March, 1875, that Debt was diminished from £723,514,000 to £714,000,000, or nearly £715,000,000; while the Terminable Annuities valued in Three per Cent Stock had risen from £51,289,640 to £55,358,722. The Unfunded Debt had also risen to £5,239,300. It is obvious that that change involves a reduction of the Funded Debt, and the increase as represented by Terminable Annuities is due mainly, if not entirely—is due in great part at least—to the new Annuities which we set up last year, and by which we cancelled £7,000,000 Stock on account of the Post Office Savings Banks, and created Annuities of between £400,000 and £500,000. The operations on the Debt during the year were as follows:—We have in the course of the year 1037 increased the Funded Debt by the creation of Terminable Annuities by an amount equivalent in Stock to £7,000,000. We Lave increased it by Terminable Annuities on account of Fortifications and Local Barracks, equivalent in Stock to £750,000, and in Exchequer Bonds, issued for local loans, by £1,000,000. I can hardly pass by the subject of Terminable Annuities for Fortifications without saying that the expenditure on that head is practically closed. I am not sure that it is quite closed; but it is very much to the credit of General Sir William Jervois, whose original estimate was rather more than £7,000,000, to state that the amount required has been within that estimate. So much for the increase of the Debt. On the other hand, the Debt was diminished—1, by Stock cancelled by means of Sinking Fund, £831,000; 2, by Stock cancelled in exchange for Savings Banks, amounting to £7,000,000; 3, by Stock cancelled on account of Life, &c, Annuities, £767,000; 4, by equivalent in Stock of capital paid off by Terminable Annuities, about £3,640,000; and 5, by Exchequer Bills paid off, £240,600. The condition of the National Debt is a subject to which the Chancellor of the Exchequer has very frequently addressed the attention of the House of Commons, and it is one upon which I myself made some remarks last year. I am no enthusiast on the subject. I do not take either the extreme view of those who think that everything ought to be sacrificed to the diminution of the Debt, nor of those who represent it as merely a question of buying Consols at 92. I think we ought to make continuous and steady efforts for the reduction of the National Debt, and that our efforts ought not to be violent and spasmodic. They ought to have reference to the general condition of the country and of its taxation. If you are in a state of circumstances in which taxation bears very heavily indeed upon the interests of the country, no doubt it would be a great deal better to devote your energies to reducing taxation instead of devoting them to reducing Debt. But where, on the other hand, our taxation is in a tolerably fair condition, we certainly ought to be doing something in the other direction. I am bound to say that I do not think that this House or that Parliament has any great reason to be proud 1038 of the amount we have expended in the past year in the payment and reduction of Debt. We are doing a good deal, but we are far from doing all that we might do. I take the Estimate for the Debt. We are paying this year £27,200,000 for the Debt; but let us remember that up to the year 1860, our ancestors from the time of the Peace, and ourselves in our earlier days, never paid less than £28,000,000, and often very much more, per annum as a charge for the Debt.
Now, let me turn to a comparison between what we were doing in 1859 and at the present time. In 1859 we were paying £28,673,381 interest on the Debt, while in the year 1874 we paid only £27,094,480, being less by £1,578,000 than we were paying in 1859. But what has happened since 1859? I do not much like the system on which calculations are made as to the net amount of taxes imposed and repealed. There is a good deal of fallacy in that mode of stating the question. But it may be well to remember the remissions in taxation made since that time. The duties have been entirely remitted on the following articles:—Paper, sugar, corn, butter, cheese, eggs, leather, tallow, silk manufactures, rice, wood and timber, and various other articles of less importance. Besides these, the duties have been reduced on various articles. The duty on tea has been reduced from 1s. 5d. to 6d.; on wine from 5s. 5d. to 2s., and a considerable reduction has been made on the duties on coffee, currants, raisins, and so forth. We must remember that this was when we were paying 5d. in the pound on the Income Tax, while we are now only paying 2d. If you look at the comparison of the wealth of the country as tested by the yield of the Income Tax, I find that a penny Income Tax in 1859 gave only £1,150,000; whereas in 1874 it gave £1,900,000, or an increase of 65 per cent. There has thus been a decrease of 5 per cent in what we are paying for the reduction of the Debt, and an increase of 65 per cent in the wealth of the country, as measured by the produce of the Income Tax. Well, now, I admit we are doing and have done a good deal in the way of paying off Debt; but I will ask the Committee to recollect what are the different forms in which we have been dealing with the Debt. In the early years after the war 1039 there was a system of Sinking Fund which was established on false principles, and which, although it showed very considerable energy and patriotism on the part of those who bore it, yet, being conducted and supported by loans, it was impossible for us economically to approve. Since 1829 we have acted upon the Debt partly by the present system of Sinking Fund and the application of casual surpluses, and partly by the system of Terminable Annuities and the creation of new Terminable Annuities, which has reduced the Debt at the rate of £800,000 a-year. Now, what has been the effect of the Sinking Fund? It has redeemed about £40,000,000 of Stock, but in the course of years we have added to our Debt for the Irish Famine Loan £8,000,000; for the Crimean War about £35,000,000; for the Slave Compensation £20,000,000; and for the purchase of the Telegraphs £10,000,000; making a total of £73,000,000. against which the Sinking Fund has only provided us with a reduction of £40,000,000. If, therefore, we only had the Sinking Fund and the casual surpluses to trust to we should not have been very successful in our operation upon the Debt. But we have in the same period paid off by the action of Terminable Annuities about £120,000,000, showing the superiority of a regular system of proceeding. Now, I have heard it said that we ought to maintain the principle of the Sinking Fund of 1821, and that anything we may do which differs from the Sinking Fund of 1829 is false in principle. We are continually told, and it is quite true—indeed, an axiom in finance—that the only way of relief is by the surplus of Revenue over Expenditure. Nobody since the Finance Committee of 1828, at all events, or for several years before, has doubted the absolute truth of that axiom that we can only redeem Debt by the surplus of Revenue over Expenditure. But it does not follow that you can do that only by those casual surpluses. Well, Terminable Annuities are, no doubt, very useful and very advantageous; but there are drawbacks to that system. In the first place, we know quite well that if you went into the open market and attempted to redeem any considerable amount of Debt by creating Terminable Annuities, you would not find them taken up, or, at all events, not 1040 upon terms which would satisfactorily carry through the operation. You are therefore obliged to have recourse to money which is under your own control—money which comes from the Savings Banks, and to invest that in Terminable Annuities, and so cancel your Stock. Well, primâ facie, one would say that you are making use of money which is national money, entrusted to you for the purpose of making a proper use of it and of paying the depositors interest for it—at first sight one would say you are not as a Government making the best possible use of those deposits, for you invest them largely in what would be in the open market an unprofitable security. There is, of course, no doubt Terminable Annuities are a less disadvantageous investment for those Savings Bank monies than if they were offered in the open market. But I have another objection and a more serious one to the operation of Terminable Annuities, and it is, that they produce a kind of spasmodic action. You are paying a large sum in the shape of Annuities which in 10 years hence will suddenly fall in, and you will be relieved of the payment of about £5,000,000 a-year, which will come into the hands of the Chancellor of the Exchequer of the day, who must consider what he will do with it. Well, now, Sir, we have had experience on this subject. I refer, first of all, to the Long Annuities which fell in in 1860, and which amounted to £2,000,000 a-year. On that occasion my right hon. Friend the Member for Greenwich (Mr. Gladstone) brought forward a new Budget, with an entirely new plan of finance, involving very large remissions of taxation, against which I do not wish to say a word. They were large remissions—boons to the taxpayer which my right hon. Friend was able to give to a great extent by the reduction of the interest charged upon the Debt from above £28,000,000 to a little more than £26,000,000, and it has taken us all this time to get the charge up again to £27,000,000. Well, the same thing, but on a larger scale, will happen in 1885, and not only will there be a great temptation to make use of the windfall, as I may call it, in the same way; but you will find, if you attempt to set up a large amount of fresh Annuities, a great difficulty in obtaining stock enough to cancel at once by means of the creation 1041 of such Annuities. Therefore, I wish the Committee to consider whether it is not possible to devise some plan which might put us upon a way of securing a more regular, more constant, and more stable action upon the National Debt. Sir, the proposal I have to make is this—I propose that we should set before us an object to be accomplished. It cannot be done this year; but it may be done by two steps that we should arrive at a point of making the charge for our Debt the same amount which it was before 1860—that is to say, bringing it up to £28,000,000 a-year—I say what I propose is that, instead of applying our surplus simply to redeem the Debt, and giving ourselves the advantage of the saving of interest on the Debt so redeemed, we should keep the charge at the fixed amount of £28,000,000 a-year permanently, by Act of Parliament; that we should pay £28,000,000 a-year to the Commissioners for the Reduction of the National Debt, and that they should apply the balance above what was required for payment of the Debt in the year to the redemption of stock. The rate at which I should propose to proceed would be this—I should propose to fix the amount that we should charge for the present year at £27,400,000: I think our finances will bear that. For the next year, 1876–7, I propose to fix it at £27,700,000, and for the year 1877–8 at £28,000,000. I have no doubt, under ordinary circumstances and with the ordinary growth of Revenue, we shall be very easily able, without any distress to the country, to bring up the charge for Debt to that amount. Well, I shall be asked what would be the operation of that plan, and I may say that though I use these figures with some little hesitation, yet they are figures which I think the Committee will accept with the understanding that they must not be taken as being absolutely certain, for the reason that if you were to continue to operate largely upon your Debt for a considerable number of years, you would probably affect the rate of interest and the operations in the Funds; and these calculations are made upon the assumption that the price of Funds shall continue stationary throughout the operation. Well, assuming that, you would, taking the price of Funds at the average of the last 30 years, have reduced by the end of the year 1885 £6,800,000 of Stock, and in 30 years 1042 you would have reduced£162,000,000 of Stock. But, assuming besides that, as I think we fairly may, the surplus Revenue would keep at the average of £500,000, assuming also that Stock cancelled by Life Annuities and Land Tax redemption continue at their present rate, about £770,000 a-year, the following amounts of Stock will be cancelled:—By 1885 you will have cancelled £21,000,000, and in 30 years from this time you will have cancelled no less than£213,000,000. Well, Sir, these are large figures, which appeal a good deal to the imagination, and which, I fear, although they might in former times have had an effect favourable to my proposal, may, at the present time, have a somewhat contrary bearing. I am quite aware, when I make a proposal which involves something which looks like the principle of the old Sinking Fund, although under very different circumstances, that I shall waken up old prejudices which have prevailed for many years against that principle. But, Sir, I wish most distinctly to remind the Committee that the proposal which I make is one wholly and entirely free from the evils which attach to the Sinking Fund of Dr. Price. I will take the liberty of reading a very short extract from one of Dr. Price's works, which will show the absurdity of the calculations on which his scheme was founded. He said—Let a State be supposed to run in debt £2,000,000 annually, for which it pays per cent interest, in 70 years a debt of £140,000,000 would be incurred, but an appropriation of £400,000 per annum, employed in manner of a Sinking Fund, at compound interest, would, at the end of this term, leave the nation beforehand £6,000,000.So that, while the nation was supposed to be borrowing £2,000,000 a-year, it would, in fact, at the end of 70 years, have £6,000,000 in place of this liability by the operation of this marvellous Sinking Fund. But when that was submitted to a proper arithmetical test, it broke down at once. I will now quote from a very different authority. One of the last and heaviest blows which was struck at the old Sinking Fund was struck by Lord Grenville, in a pamphlet written in 1826 or 1827. Disagreeing as he did with the views of Dr. Price, he made this important admission, that—Possessing an effective and permanent surplus, a State may maintain a Sinking Fund even 1043 at compound interest without resorting to still further taxation. The fixed allowance and the successively redeemed Annuities which compose the Fund will severally continue to he defrayed from the same revenues as before, and by the progressive addition of those Annuities to the fund itself, it may ultimately be carried to any extent not exceeding their amount.That is a description of a Sinking Fund such as I propose to establish. Lord Grenville did not advocate its establishment at the time he was speaking, because he considered that the pressure of taxation was then so great that he desired to devote the first energies of the Government and of Parliament to the reduction of taxation, with the view of setting free our various industries. Our position at the present moment is very different. We hope that we have attained such a position where we may consider that we have an effective and permanent surplus, which we may fairly ask the House to devote in the manner I have proposed to the reduction of our Debt. I may, of course, be met by a different kind of objection. I may be told—" Do this, if you please; but you will never be able to bind future Parliaments, and the very first time that a Chancellor of the Exchequer wants to raise an additional Revenue without increasing taxation he will put an end to your Sinking Fund, and will shatter all your dreams of reducing the National Debt by some hundreds of millions." That may be perfectly true; and I say that, under circumstances different from the present, it would be a very reasonable thing for a Chancellor of the Exchequer to do. If the circumstances of the country should materially alter, it would only be right that we should take steps to take off that which we now propose to put on, in view of the present and the probable immediate future of the, country. One thing is quite clear—that if we do not put it on, it will certainly come to nothing, and that we shall be in the position of the gentleman who would never wind up his watch because if he did not wind it up it would never stop. Notwithstanding all the objections to the scheme, however, I still think that the experiment is worth making; because few Chancellors of the Exchequer would like to come down to this House and propose the repeal of an Act of Parliament establishing a Sinking Fund of this character, on the plea that they did 1044 not like to increase the taxation of the country, unless they had very good reasons for making such a proposition. But we do not argue a priori only; we have experience to guide us. What I am asking you to do is not to do a new thing, but to continue that of which we have experience. We have the Terminable Annuities, and if there are Gentlemen who say that these Terminable Annuities are excellent things, and that it would be a pity to disturb them, my reply is that we do not wish to disturb them. Within the limit of our £28,000,000 a-year we shall be able to create as many Terminable Annuities as we please, by means of turning so much Stock into them. On the whole, therefore, I submit that there are really no practical objections to our undertaking these good and benecial operations in the present state of our finances. I must, however, further explain that there are two classes of Debt which I wish to keep outside of this fixed sum of £28,000,000. The first of those two classes of Debt comprises our temporary loans. For instance, in the event of the House being disposed to go further in the course that they followed in the case of the building of our fortifications and of our local barracks, and to borrow the sum required for such works for a short period upon Annuities, I propose that such a transaction shall be outside the £28,000,000 in question, so that the operation may be marked, and the House and the country may know what we were doing; for if you did not adopt that course I admit there would be danger, and that you might be disposed to throw the services at large upon this fund, in order to get the money and avoid increasing the taxation. Thus, assuming that the amount of interest payable upon the Debt and upon the Sinking Fund is £28,000,000 a-year, and that the interest payable upon the temporary loan is £50,000, we should put the charge for interest for the year at £28,050,000. Another class of loans which I propose to keep outside of this arrangement are those which we contract for the purpose of lending again to the various local authorities. To some extent such loans involve a mere book-keeping account, because while, on the one hand, we have to pay interest upon them out of the National Exchequer, on the other we receive interest on them, which goes 1045 into the Exchequer again under the head of Miscellaneous Revenue, according to the arrangement of last year. I should, therefore, propose that under the heading of Debt we should bring separately to account the interest upon these local loans. Thus, for the present year, our charge for Debt will stand thus—for Debt, £27,400,000, and for local loans £70,000. I must say a word or two respecting these local loans. For the last two years we have advanced somewhere about £3,000,000 for these purposes, £2,000,000 of which we have paid out of the balances, and £1,000,000 we have raised by means of Exchequer Bonds. Now, we pay 3½ per cent interest upon these Exchequer Bonds, and as we only receive the same interest for the money we so lend, on the whole we are, at all events, not gainers by the transactions. Large and increasing demands under this head are being constantly made upon us, and we shall have in the future to meet the demands for local loans for the purposes of the school boards and under the Artizans Dwellings Bill of my right hon. Friend the Home Secretary. We must, therefore, be prepared to meet demands of this character to the extent of £2,000,000 or £3,000,000 a-year for the next two or three years. I need scarcely say that this is a very unsatisfactory arrangement for the Exchequer, because we only get 3½ per cent. and have to pay 3½ per cent. These, however, are not the only contracts which press hardly upon the Exchequer. In the course of the present Session, and at other times, a remark has been made as to the growing Savings Banks deficiency, and that is, no doubt, a matter which ought to receive consideration. The state of the case with regard to the Savings Banks is this. In November of last year, when the accounts were made up, the amount due to the Trustees of the old Savings Banks was £41,826,000, as against £38,463,000 in hand. You will find, therefore, that there was a deficiency of £3,363,000. I have not got the Returns for the Post Office Savings Banks, because they are not yet made up; but, generally speaking, they do not show any deficiency; on the contrary, they show a considerable surplus. The deficiency on the old Savings Banks account arose from our paying those banks a higher rate of interest than we were 1046 earning, and that deficiency has accumulated until it has reached its present proportions. At present we do not pay the Savings Banks a larger rate of interest than we are earning, and if we could once get rid of the deficiency we should be able to pay our way. But, as it is, the interest on the old deficiency goes on accumulating, and the result is that that deficiency increases year by year. It might be got rid of either by issuing Stock equal to its amount, or by placing it upon the Consolidated Fund; or we might reduce the rate of interest to depositors in the Savings Banks. I should, however, be very sorry to reduce the amount of interest paid to the depositors in such banks. Two other courses, however, may be taken which would materially aid us in getting rid of the deficiency in question. One would be to amalgamate the accounts of the old Savings Banks with those of the Post Office Savings Banks, and the other, to give greater facilities for investment. Such facilities for better investments may, I think, easily be found, in connection with local loans. Returning from this digression to the subject of the local loans, I wish to say that, without reference to the question of the interests of the Exchequer in the matter, the system under which the local authorities are borrowing money requires to be very carefully looked into. The total amount of local indebtedness in England at the present time is about £80,000,000; in fact, taking the School Board loans into consideration, it amounts to somewhere about £84,000,000, and it is rapidly increasing, with very little check or control. This is an unsatisfactory state of affairs, and some check ought to be placed upon the further extension of the system. No doubt, Parliament has given authority to these local bodies to borrow money up to a certain extent, and has laid down regulations under which before they are permitted to borrow, they must obtain the sanction of the Treasury, or of the Home Office, or of the Local Government Board, by whom the amount of the loans and the period of repayment are fixed. But, in point of fact, these regulations are most unsatisfactory; and, although a great deal of trouble is given to the local bodies when they wish to borrow, yet when they have once succeeded in borrowing the money nobody looks after 1047 what they are doing in the matter. But not only is the present system objectionable as regards the local bodies, it is still, more so as regards those who lend their money to such bodies. The lenders of the money have obligations placed upon them which it is scarcely possible they can fulfil; and therefore they are often in peril of losing their money in consequence of some noncompliance with statutory regulations on the part of the borrowers. The hon. Member for Westminster (Mr. W. H. Smith) has taken a great deal of pains in obtaining for the information of the House a very interesting Return, showing the amounts which have been borrowed by these local bodies and the rate of interest which they pay. Taking the Returns together, we find that out of a sum of £93,000,000 which has been borrowed, and which is represented in those two sets of Rturns, only £18,500,000 have been raised at and under 4 per cent; and more than £12,000,000 at above 5 per cent and running up to 6½ per cent. That is a considerable burden upon those localities. I will just state what the proposal is that we have to make with regard to this matter. It is intended to simplify the system under which these local debts are contracted. We propose to introduce a Bill which will have the effect of providing in future that all debt which may be contracted by local authorities shall be in the form of debentures. We propose that those debentures—for which we have the precedent of the Debenture Act passed a few years ago, though not much use has been made of it, and several local Acts—shall be registered at a Government office and authenticated by a stamp, proving that the borrowing power has not been exceeded and that the statutory provisions have been complied with. This will secure a registration of loans that may be contracted hereafter. We desire to bring about a complete system of registration, also, of past indebtedness; but that cannot be done at once. We hope by-and-by to effect that, and ultimately to put the local debt of the country into a state in which it will be freed from many of the inconveniences and complications by which it is now surrounded. There will thus be a simpler mode of borrowing, and the debentures will be of such a character as will make them more popular than the pre- 1048 sent form of mortgage. You cannot now lend money to a Corporation without having a cumbrous mortgage, which involves considerable legal expenditure, difficulty of transfer from hand to hand, and additional cost on every fresh loan. Then we have an interesting and important element in the Local Budgets, which we hope in future years to bring in. I will say only one word before I conclude on that question of Local Budgets. In the present year, of course, we are not in a position to give anything in the nature of an elaborate Local Budget; but I may state that the rates in England and Wales, exclusive of tolls, dues, and duties, amounted in 1870–71 to £17,817,000; in 1871–2 they advanced to £18,035,000; in 1872–3 they advanced further to £18,572,000. The Rturns for 1873–4 are not yet complete; but we have every reason to suppose there has been a still further advance; and we may assume without much doubt that if no further subvention had been given from Imperial funds, the present amount of rates, exclusive of tolls and dues, would not be less than £19,000,000. But the additional grants in aid, which come to something like £1,000,000, bring down the amount for the present year to £18,000,000. The grants in England are £2,250,000; the amount raised by rates and dues is £22,000,000, making together a total of £24,250,000. That is exclusive of Scotland and Ireland. We think that the whole system requires more care and attention than it has hitherto received. We desire to extend the annual Rturns that are required, so as to make them include loans; we propose to have them sent in before the 25th of March, so as to be in time for the Budget; and we shall also require them to show—what they do not show now—the distribution of the grants in aid. Another point that we aim at is that it is only fair and reasonable, considering the assistance which is now directly given by the Government, and which will be given by the system of registered debentures, that we should insist on introducing an efficient system of audit. We have been accused of doing nothing in the manner of Local Taxation. No doubt we are still a little short of the magnificent promises held out by the noble Lord opposite (the Marquess of Hartington), who promised a relief of £1,200,000: but we have given 1049 £1,154,000, and that is something better than talking about doing so. And although we are not proceeding by leaps and bounds, we are still advancing steadily and safely, and are not losing sight of the question. Last year we introduced the principle of an Imperial subvention for purposes fairly requiring it. We also extended the area of rating by abolishing certain classes of exemptions. This year we are taking a step towards improving the system on which local loans are contracted, giving greater security and greater advantages to the investor; and we are endeavouring to bring about a system which shall be the foundation of a Local Budget. Next year, if not this year, I hope we may be able to take a step further, and that the promise given earlier in the evening by my right hon. Friend the President of the Local Government Board may be redeemed by the introduction of a Valuation Bill that will improve the system of assessment and remove some of the anomalies that now exist. We cannot do more than we have done; but we are honest in our attempts, and we have endeavoured to deal with the subject in the best way we can. If we have not made strides sufficient to satisfy the impatience sometimes manifested on the other side of the House, I hope our friends will believe that we are doing what in us lies, and that what we have done is only an earnest of what we hope in future to do. I must now thank the Committee for the kindness with which they have listened to my rather wearisome statement. I have endeavoured to make our proposals clear. I can only say that if we have aimed at no ambitious re-construction of our fiscal policy, our object has been to consolidate and add stability to our financial system; and we trust that the proposals we have made after careful deliberation will be received with candour and consideration by Parliament and by the country. The right hon. Gentleman concluded by moving the first Resolution.
(1.) Motion made, and Question proposed,
That, towards raising the Supply granted to Her Majesty, the Duties of Customs now charged on Tea shall continue to be levied and charged on and after the first day of August, one thousand eight hundred and seventy-five, until the first day of August, one thousand
eight hundred and seventy-six, on importation into Great Britain or Ireland (that is to say): on
|Tea.||the lb.||0 6|
§ MR. CHILDERS
I am quite sure that the concluding words of the statement of the Chancellor of the Exchequer will be re-echoed through all parts of the House—that is to say, that his very interesting statement to-night, which was not more long than interesting, will receive the most candid consideration from every part of the House. Of that statement I hardly know which part was the more interesting. My right hon. Fiend gave us very tersely the figures which have appeared in different places, by no means so clearly, as to the progressive advance of the country and the condition of the people, particularly as illustrated by their powers of consumption, so far as those powers can be tested by the Rturns of the Customs Department. And that statement must be very re-assuring to many hon. Members and persons outside of this House, who some time ago had doubts whether, in this respect, the condition of the people was so improving as it evidently is. My right hon. Friend, in the latter part of his speech, gave us very clear information as to local taxation, pointing out in what respects the old and cumbrous arrangements for raising money have imposed serious burdens on the people, and showing, I think, to the House excellent remedies—namely, first, that of granting to local bodies those powers of raising money on debenture which are now employed by all bodies requiring loans; and, secondly, that of requiring that the accounts of these bodies should be submitted first of all to public audit and then to public notice, in a manner which will certainly have the effect of greatly improving the financial condition of those bodies and bringing them under the view of Parliament. In all these respects, I do not think any one can have heard my right hon. Friend without receiving very great instruction, and feeling that if this is not a very magnificent Budget, at least it is one which will be of value to all who take a general interest in financial affairs. Now, after stating very candidly—to use my right hon. Friend's words—what appear to me to be the great merits of his statement, I will venture to speak in detail on one or two of the pro- 1051 positions which he has stated to the Committee. I will point out in which respects I think the proposals of my right hon. Friend should receive that deliberate consideration which proposals of that kind deserve at our hands. And I have risen immediately after my right hon. Friend because I ventured late in the past Session to doubt whether, unless there was a greater improvement in the state of the finances, especially in the state of trade then exhibited in the country, the proposals which my right hon. Friend made last Session could be accepted as perfectly safe. In the criticism I made on the proposals of my right hon. Friend, I specially guarded myself by the remark that if the country enjoyed, what then was doubtful, a good harvest, I thought the Estimates of my right hon. Friend would come up to the mark which he had given to the House. Now, having stated that, let me first call the attention of the House to the results of the finances of the last year, 1874–5, as stated by my right hon. Friend, and as they appear by the accounts which were given to us a few days ago. My right hon. Friend has said, and said correctly, that the Revenue has exceeded the Estimate which he placed before the House by £496,000; that the Expenditure has exceeded the Expenditure which he proposed by a small amount, an amount less than the excess of the Revenue; and he has stated that the result has been a surplus of £594,000. My right hon. Friend said he thought that, at any rate, was a satisfactory result. Now, I do not think that it can be deemed altogether a satisfactory result, and I will give one or two qualifications of the statement of my right hon. Friend. In the first place, he has been satisfied by an increase of receipt over his estimated receipt. It is perfectly true that the increase is £496,000; but when we come to look more narrowly into it, we find that three items of receipts which it has always been the practice to watch, and which indicate, above all, the progress of the prosperity of the country, and are tests of its financial advance—I mean Customs, Excise, and Stamps—for the first time since the year 1868 show £ deficit when compared with the amount; estimated by the Chancellor of the Exchequer. The deficit is, indeed, small—only £6,000—still it is a deficit. That, 1052 I think, is not altogether satisfactory. Again, I do not think you can find an instance during a long series of years—except in times of war, or apprehension of war—in which the Treasury has allowed the ordinary expenditure of the country to exceed the Budget Estimates of expenditure, unless in a year when the receipts have very greatly exceeded the Budget Estimates of receipts. Such a year was 1863–4, when the Revenue Estimates were some millions below the result. But what is the case as to the present year. I find that my right hon. Friend estimated the payments for the year charged on Supply Votes—not including payments in relief of local taxation—at £44,223,000. The actual expenditure has been £45,649,000, of which sum he just now told us that £512,000 had been paid in relief of local taxation. This leaves the expenditure of the year out of Supply Votes at £45,137,000. It thus appears that my right hon. Friend has expended during the year on the Army, Navy, and Civil Services £914,000 more than he estimated at this time last year. I can hardly regard this as a satisfactory state of finance in a year in which the Customs, Excise, and Stamps produced not more but less than the original Estimate. Let me carry the matter of surplus a little further with reference to the reduction of the National Debt. My right hon. Friend stated that the surplus of last year was £593,000, but as the amount necessary to be paid on account of Fortifications and Army Localization for the year was £600,000, and as this has to be taken into account before the final balance is struck, instead of their remaining a surplus to be paid to the National Debt Commissioners in reduction of the Debt, there was, in fact, a deficiency of over £6,000. This, again, can scarcely be regarded as a satisfactory state of things. But this is not all. In the miscellaneous receipts of last year there is a very remarkable and unusual item of £300,000, which arises in the following way:—The Treasury, in addition to its other functions, carries on a very large business as managers of an exchange bank, having transactions with all quarters of the globe. The name of that bank is the Treasury Chest, and up to two years ago the working capital assigned to it was £1,300,000. Two years ago it was found unnecessary, 1053 owing to the improved means of communication with foreign countries, and the reduction of our Army in the Colonies, to employ so large a capital; and an Act was passed reducing the amount of the capital of the Treasury Chest to £1,000,000. This sum of £300,000 which, strictly speaking, formed part of the capital of the country, and should, therefore, have contributed to the reduction of the Debt, has been actually treated as if it were ordinary revenue, so that, in fact, adding this amount to the £6,000 already mentioned by me, the actual deficit on the operations of last year was £306,000. My right hon. Friend has stated that there were £300,000 of miscellaneous revenue which might have been paid in just before the end of the last; but the receipt of which he postponed until the beginning of the present, financial year. My right hon. Friend took credit to himself for having done this, on the ground that the reductions of taxation agreed to in the last Session affected not only 1874–5, but also 1875–6. This is true; but I am not quite sure that it is desirable that such a licence as to the time of paying in Revenue should remain in the hands of the Chancellor of the Exchequer. On the other hand, my right hon. Friend admits that he has received a sum of about £300,000 from the Post Office Department beyond the nominal Revenue of the year, this being due, no doubt, to the better arrangements which have been made in the Department in question. These two sums balance each other, so that the real result on the basis established by the Act of George IV. is, as I said before, £300,000 on the wrong side. I now proceed to the Estimate for 1875–6. My right hon. Friend anticipates that, including the £300,000, payment of which was postponed from 1874–5, the receipts for the year will be £75,685,000, and the expenditure £75,268,000, which leave a balance on the credit side of £417,000. In stating the details of estimated expenditure to the House, my right hon. Friend did full justice, which I am very anxious to endorse, to the Secretary of the Treasury, who has exercised his powers with great skill and success in keeping down the expenditure. In some respects he has been fortunate—for instance, during this year some 12 great public buildings, the erection of which had been 1054 carried on at a great expense for four or five previous years, will have been completed, and the commencement of other new buildings has been stopped. What I wish, however, to impress upon my right hon. Friend and the Committee is that, taking everything into consideration, the estimated expenditure of the coming year is £1,330,000 in excess of that which, this time last year, was estimated to be necessary for the year which has just closed. But it will be said, "You have not included the Supplementary Estimates." My answer is they cannot be included now; the only comparison you can make with the Budget Estimate of one year is the Budget Estimate of the preceding year. Now, let us see what the result of my right hon. Friend's proposals will be in actual figures with reference to the surplus of the year. I may say, in passing, that I doubt whether, on the Revenue side, he has not over estimated the Miscellaneous receipts and those of the Post Office. [The CHATTCELLOR of the EXCHEQUER: The Post Office is under estimated.] Well, I will accept the statement. First of all, the Estimates omit a large item in the Vote for Irish education, which was stated last year at £118,000. We are told on high authority that it will be more this year, but I leave it at that, though I am sure in that respect I am doing my right hon. Friend more than justice. Then there is the loss of £60,000 on brewers' licences; there is to be an additional charge of £185,000 in connection with the National Debt, and this is not to include £70,000 a-year for interest on advances for local purposes. Now, the four sums added together make £433,000, and the surplus estimated is £417,000, so that my right hon. Friend deliberately proposes to Parliament that this year shall end with a deficit of £16,000. In my Parliamentary experience of 16 years I have known the same thing to be done only once, and in such a humdrum year as the present, it seems to me quite unjustifiable. I have no particular remarks to make at present on the modification of the Brewers' licences, or the alteration of the fee on appointments, though these questions might, I think, have been dealt with in a bolder manner; but I confess I do not at all like the tendency of the National Debt plan. Careful as my right hon. Friend was to 1055 distinguish it from the Sinking Fund, in operation before 1829, it is, I think, open to the objections which led them to the abolition of that fund. My right hon. Friend has changed his mind since last year as to the great merits of Terminable Annuities; but I think he has underrated—at any rate, he has not alluded to one great advantage which that system possesses. His remarks were to the effect that if you left the Savings Banks Commissioners in possession of large securities in the shape of Terminable Annuities, a time might come when you might want money, and they would not be very convertible. Now, under the Terminable Annuity system there is paid to the Savings Banks Commissioners every year a much larger sum out of the Revenue than they require, and a constant purchase of Consols and other stock goes on out of the difference between what 3 per cent upon their capital would have been, and what Terminable Annuities bring. That very process keeps passing into your hands every year a large amount of precisely the same securities which would have had to be sold or converged in case of pressure under the former system. I gather from what has fallen from my right hon. Friend that he does not propose to dispense with the system of Terminable Annuities altogether; but he proposes a new scheme by which the interest on the Public Debt is to be fixed at £28,000,000, besides whatever sum may be necessary in the way of interest on special loans, or loans raised for the purpose of advancing money to a public body. Now, whatever the merits of this plan may be—and I do not intend to enter into the discussion of them on the present occasion—it possesses, at all events, this great advantage to my right hon. Friend, that it enables him to propose a scheme, in a year when there is no surplus, for the reduction of the National Debt at, it may be considerable cost, to future Chancellors of the Exchequer. This plan requires, in my opinion, very deep and careful consideration. It is simply a plan to secure to my right hon. Friend credit for a very large reduction of the National Debt by applying for the next 10 years far less than the average sum applied by the late Government; and then 10 years hence and for the following 20 years nearly £10,000,000 a-year; averaging thus £7,000,000 a-year with 1056 next to nothing at first. These are the only observations which I now wish to make. I do not find fault with my right hon. Friend for having made so little change as he has done by his financial proposals. There is nothing, in my opinion, more objectionable than the constant shifting of taxation, and I think the most prudent course to pursue is that which was adopted by my right hon. Friend the Member for Greenwich (Mr. Gladstone)—to wait till the time arrives when a great blow can be struck. I will only say, in conclusion, that I am sure my right hon. Friend's statement will be received with all the consideration which it deserves.
§ MR. PELL
could not say that the statement of the Chancellor of the Exchequer was a very cheering one in regard to the subject which he and other hon. Members had at heart. He should like to know whether, when the right hon. Gentleman spoke of a system of audit in the case of the accounts of local authorities, he meant that the whole of those accounts were to be submitted to audit, or only those portions of them which happened to be connected with the loans which they received? Nothing, he was sure, would tend so much to the diminution of any waste of money there might be as a proper system of audit. It would also be desirable that they should know whether the financial supervision of local taxation was to be carried on by the Chancellor of the Exchequer or by the President of the Local Government Board? Since 1869 up to 1874–5, there had been a remission of Imperial taxation to the amount of £20,000,000, or, making allowance for the addition to taxation of some £3,000,000 in the time he had selected, a reduction of over £17,000,000. That was certainly a cheering state of things. In the course of eight years there had been an increase of local rates to the extent of £2,500,000, and he did not think this fact had been fully realized. The amount of in debtedness in respect of loans to local authorities was also a matter for very serious consideration. It was now £84,000,000, of which only £24,000,000 was under audit. If, however, audit was carried out to the extent he had been led to understand, his mind would be relieved of a great anxiety. Another cause of increase latterly was the establishment of school boards, which had 1057 swallowed up no less than £3,000,000 since the system came into operation. He was thankful most heartily for the splendid harvest they had had, to which so much of the financial success of the Government might be attributed, but he warned them not to rely too much upon such a precarious contingency. It was not often they had two good harvests in succession.
§ MR. LAING
said, unless in case of war, or some other extraordinary contingency, there should be no reasonable apprehension under a Budget that there would be a deficit. Can anyone say that of this Budget? When the Irish schools were provided for, and other expenses incurred in connection with the National Debt, what became of the right hon. Gentleman's surplus? No allowance was made for Supplementary Estimates, and there were other contingencies for which no provision had been made. What if they were to have a bad state of trade, an alarm as to European politics, or bad harvests? Could they then rely on these Estimates being realized? They could not, and the result would be they would be landed in a deficit. Could anyone say there would be no Supplementary Estimates of considerable magnitude in the course of the present financial year? There was the visit of the Prince of Wales to India. The information they had on that matter was not very explicit. They were told by the right hon. Gentleman that if the illustrious Prince went to India, the House of Commons would be the first to hear of it. But, seriously, if the visit was to be made, its political value would depend on the business being well done, and the bill being paid by the people of England. Considerable Supplementary Estimates must be the result. This was a Budget which did not show a surplus; on the contrary, it might show a deficit. What was the promise and performance with regard to the National Debt? They were promised a scheme by which, in the course of 30 years, they were to get rid of £200,000,000 of National Debt, and the performance was in two years of peace and prosperity they had no surplus at all. Previous to last year the practice had been to keep the Estimates always on the safe side. They were sure of having a surplus. Now they were reduced to the critical condition of depending on a good harvest. This 1058 state of uncertainty inflicted a great deal of mischief on trade, and if last year the right hon. Gentleman had maintained the income tax at 3d., and not reduced it to 2d. in the pound, there would have been no danger of a deficit. If, again, the right hon. Gentleman, instead of taking off a penny from the income tax, had taken off only a halfpenny, he (Mr. Laing) would have felt greater confidence in the soundness of his finance. He concurred with the right hon. Gentleman the Member for Pontefract (Mr. Childers) that the plan of the present Budget was open to the suspicion of a seeking for popularity at the expense of future Chancellors of the Exchequer.
regretted that no attempt was made to reduce our National Debt. As long as we had a National Debt, no matter how large our surplus might be, we should have no embarras de richesses. If we did not reduce the Debt now how could we expect to reduce it in times of difficulty? He would like to see an attempt made to put local taxation which at present fell on one description of property, on the same footing as Imperial taxation. In Liverpool 1d. in the pound on the property and income schedules would produce as much as 6d. on assessable property, and the right hon. Member for Halifax (Mr. Stansfeld) had stated that id. in the pound on the poor rate assessment would yield a sum equal to 1d. in the pound on the property and Income Tax schedules. The whole expense of education fell upon local taxation, and there was a growing feeling in the country that local burdens had been most unfairly increased, and were likely to be increased still further.
§ MR. TILLETT
thanked Her Majesty's Government, as representative of a great commercial community (Norwich), for the Financial Statement made that evening by the right hon. Gentleman the Chancellor of the Exchequer. He also thanked the right hon. Gentleman for the promise he had given to do all in his power to diminish taxation. He might, however, state that he concurred with the hon. Member (Mr. Scourfield) that there was a feeling of great dissatisfaction arising out of the manner in which local taxation was increasing. With regard to the heavy and disastrous taxation which the industrious classes suffered owing to the absence of reliable 1059 security, he submitted that it was desirable to adopt some measure that would give them confidence, and his impression was that if the right hon. Gentleman were to issue bonds and debentures, the effect would be that they might be saleable and accessible as security for their money, which they were now afraid to deposit. With regard to the local burdens upon one description of property, they now amounted to the enormous sum of £20,000,000.
said, he had listened with great attention to the important statement of the right hon. Gentleman the Chancellor of the Exchequer, and he congratulated him and Her Majesty's Government on that statement. If the right hon. Gentleman opposite (Mr. Childers) had any complaint to make, it was that the Chancellor of the Exchequer had spoiled the future surplus of the Gentleman who might take his place. He never ceased to regret one tax which had been taken off in a former Budget, and that was the 1s. duty on corn. That 1s. duty would enable a Chancellor of the Exchequer to do a great deal of good; but when taken off it was done as a sop to sentiment. He appreciated the right hon. Gentleman's idea of establishing an efficient system of audit, which, if adopted, could not fail to prove of great importance and give great satisfaction. With regard to the claims upon the Chancellor of the Exchequer, they were very large, and the expenditure, it should be borne in mind, was very large. He hoped the right hon. Gentleman would meet with a strong hand the demands which were made upon him, and in this respect he was to be congratulated upon not having a large surplus, as the effect of that was that there was no encouragement to every particular interest to put in its claim for exemption. He hoped his right hon. Friend would be Chancellor of the Exchequer till 1885, in order that he might realize all the anticipations he had formed of that happy era.
§ MR. HANKEY
said, he thought it would be absolutely necessary that some Supplementary Estimates should be presented. It would be much better that the Prince of Wales should not visit India at all if he went there as a private individual. He felt satisfied there would be considerable expenses attending that 1060 visit, and he believed there would be a strong feeling throughout this country against that expenditure being treated as if it were merely an expenditure to be properly paid out of the revenues of India. He understood the determination of the Government was to throw the expenses as far as Suez on England, and the remainder on the revenues of India.
§ MR. WHALLEY
protested against Imperial taxation being applied to local purposes by way of loans, because it tended to destroy the principle of local government by which people were enabled to tax themselves. He also objected to the continuance of the Income Tax. All fixed property depended for its value upon muscle, brain, and energy; and therefore it was for the interest of that property that Schedule D should be abolished, and that the revenue derived under that Schedule should be levied upon real property.
§ MR. MUNDELLA
objected to the country losing £60,000 a-year from the sale of intoxicating drinks, particularly as the vexatious interference with trade, which was so much complained of—namely, private brewing—was to be left untouched, and very small beer would pay the same duty as the strongest and the best. The £60,000 might have been saved by raising the malt tax from 21s. 8d. to 22s. 6d., and in that way every glass of beer would have been dealt with in proportion to its strength. The time had probably come when spirits would again bear an increase of duty. With respect to the Income Tax, he believed that if all incomes under £300 had been exempted, it would have been very acceptable to the country. The Chancellor of the Exchequer had adduced the funds deposited in savings banks as a criterion of the condition of the working classes; but that was no safe criterion, because they now found more profitable modes of investment for their savings in the shape of building societies and co-operative industries.
§ SIR HENRY PEEK
observed, that if the Excise, and Customs Departments were fused the saving would, he believed, be sufficient to enable the Chancellor of the Exchequer to remit the smaller duties now levied.
§ MR. FAWCETT
remarked that the Budget had been brought before the House at an unusually late hour that 1061 evening; and he should like to ask the Chancellor of the Exchequer when a general discussion of the financial policy of the Government could take place, as it was then too late to enter into anything like a discussion on such a subject.
§ THE CHANCELLOR OF THE EXCHEQUER
, in reply, said, he quite recognized the importance of the suggestion to set apart some convenient time for the discussion now raised by the Budget proposals. He was not able at that moment to name a day, but would take care in conference with his Colleagues that a convenient time should be fixed for that purpose. He did not think that much had been said upon which he need now trouble the Committee. The principal criticisms which had been made were criticisms for which he was not altogether unprepared. His right hon. Friend the Member for Pontefract (Mr. Childers) and the hon. Member for Wick (Mr. Laing) had taken very much the same line with regard to the proposals he had submitted. They certainly pointed out that the Budget could hardly be said to show a surplus Estimate for the year, taking into account the probable Supplementary Estimates. At the present moment, there was a very small surplus left; but, in the first place, he believed that the Estimates had been taken at a very moderate and reasonable figure; and, in the second place, he was not proposing to sacrifice the surplus by the remission of taxation, but by appropriating a larger amount to the payment of Debt. It was not therefore a case in which there was so much imprudence in running rather close to the wind as it would be if he were proposing to give away £200,000 or £300,000 in remission of taxation. His right hon. Friend had called attention to the Post Office, and spoke as if he thought they were making an imprudent Estimate; but he did not seem quite to understand the figures. In 1872–3 the net receipts for the year were £5,212,000, and the Exchequer receipts for the following year were £5,792,000; more than £500,000 over the net receipts of the year before. In 1873–4 the net receipts were £5,481,000, and the Exchequer receipts of the following year were £5,670,000, or nearly £200,000 in excess of the former year, Last year the net receipts, so far as they had at present been made up, were estimated 1062 to produce £5,750,000, so that, according to the law which prevailed, he might take the Exchequer payments next year at a much higher sum; but instead of doing that he had made no advance whatever upon the Post Office receipts. There would be some small sum required for Supplementary Estimates, as, for example, in the Irish Estimates. The Committee must not take the Supplementary Estimates of last year as a guide for the present year. The present Government did not hold themselves responsible for the Supplementary Estimates of last year, since they did not prepare the original Estimates. Immediately after the Budget, his right hon. Friend (Mr. Hunt) found he must have a Supplementary Estimate for the Navy. The Government accordingly were called upon to provide £240,000 for the Navy, and another sum of £150,000 for the Telegraph Service. Last year was altogether an exceptional year. This year the present Government were responsible for the Estimates, and he hoped that the Supplementary Estimates would not be on the same scale as those which were necessary last year. He had been told that he was rather strange in the field of prospective finance, and that he was binding future Parliaments. His proposal, on the contrary, was one which any Chancellor of the Exchequer would be in a position to set aside. It was remarkable that while the right hon. Gentleman disapproved his proposal, he approved the creation of Terminable Annuities. If, however, his proposal bound future Chancellors of the Exchequer, they would be still more bound by the creation of Terminable Annuities. There had been one omission in his Statement which, in justice to his right hon. Friend at the head of the Local Government Board, he wished to supply. There would be in this year's Estimates a sum voted towards the expenses of the Registration Bill. The Government promised last year to pay a portion of these expenses, and they had determined to pay a fourth.
Resolution agreed to.
Resolved, That, towards raising the Supply granted to Her Majesty, the Duties of Customs now charged on Tea shall continue to he levied and charged on and after the first day of August, one thousand eight hundred and seventy-five, until the first day of August, one
thousand eight hundred and seventy-six, on importation into Great Britain or Ireland (that is to say): on
|Tea.||the lb.||0 6|
Motion made, and Question proposed,
That in lieu of the Duties payable on Licences to Brewers of Beer for Sale (other than Brewers of Spruce or Black Beer) there shall be charged, collected, and paid on such Licences to be taken out on and after the first day of October, one thousand eight hundred and seventy-five, the following Duties (that is to say):
|For and upon every Licence to be taken out yearly by any Brewer of Beer for Sale,—|
|If the quantity of Beer brewed within the year ending the thirtieth day of September next preceding shall not exceed fifty barrels, the Duty of||0||12||6|
|If the same shall exceed fifty barrels, then for every fifty barrels and for any fractional part or number of an entire quantity of fifty barrels, the Duty of||0||12||6|
|And for and upon every Licence to be taken out by any person who shall first become a Brewer of Beer for Sale the Duty of||0||12||6|
|And there shall also be charged upon and paid by the last mentioned person in respect of his Licence, such further sum as with the said Duty of Twelve Shillings and Sixpence shall amount to the Duty which would be chargeable on a Licence for a quantity of Beer equal to the quantity brewed by him during the existence of his Licence, and such further sum shall be paid within ten days next after the expiration of the Licence."|
Motion, by leave, withdrawn.
(2.) Resolved, That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for the year, commencing on the sixth day of April, one thousand eight hundred and seventy-five, in respect of all Property, Profits, and Gains mentioned or described as chargeable in the Act of the sixteenth and seventeenth years of Her Majesty's reign, chapter thirty-four, the following Duties of Income Tax (that is to say):
§ For every Twenty Shillings of the annual value or amount of Property, Profits, and Gains chargeable under Schedules (A) (C) (D) or (E) of the said Act, the Duty of Two Pence;
§ And for every Twenty Shillings of the annual value of the occupation of Lands, Tenements, Hereditaments, and Heritages chargeable under Schedule (B) of the said Act:—1064
§ In England, the Duty of One Penny;
§ In Scotland and Ireland respectively,
§ the Duty of Three Farthings;
§ Subject to the provisions contained in section twelve of "The Customs and Inland Revenue Act, 1872," for the exemption of Persons whose whole Income from every source is under One Hundred Pounds a-year, and relief of those whose Income is under Three Hundred Pounds a-year.
§ Resolutions to be reported To-morrow;
§ Committee to sit again To-morrow.