[BILL 104.] SECOND READING.

HC Deb 15 March 1880 vol 251 cc1018-70

Order for Second Reading read.

THE CHANCELLOR OF THE EXCHEQUER,

in moving that the Bill be now read a second time, said, as it was late in the night, or early in the morning, when he asked leave to introduce this measure, his statement was necessarily brief. He would, therefore, ask the House to let him make a few remarks upon the second reading. The arguments for an alteration in the scale of probate duties rested upon two main grounds. He was aware that the hon. Member for Stockton (Mr. Dodds), who brought forward the subject last year, introduced it on another ground; but the two motives which influenced the Government were—first, the unfairness of charging a higher probate on small estates than on large; and, secondly, the unfairness of charging intestate estates higher than those received by will. Hon. Gentlemen would see from the Schedule in their hands that an intestate estate under £1,500 paid as much as 3.6 per cent; and, on the other hand, that a testate estate under the large sum of £500,000 paid only 1.33 per cent. The difference was, therefore, enormous, and pressed very heavily upon the lower as compared with the higher grades of estates. They had, therefore, adopted in the present Bill a new code, which abolished the distinction between testate and intestate estates; and, at the same time, they made the percentage charged on the different classes of estates more nearly equal. They made it on the average 2£ per cent. That amount was taken because it was the mean between the two extremes—between 3.6 and 1.33 per cent. They had not found it possible, however, to do what the hon. Member for Stockton desired—namely, to substitute an exact percentage upon all the different values of estates. It had been found on examination that such a course would cause very great inconvenience, and that it would be impossible under it to maintain the principle of paying the duties by stamps. It would be impossible, without enormous inconvenience and waste, to have a sufficient supply of stamps available, and, moreover, there would be a considerable amount of inconvenience to administrators if they were obliged to put forward the exact amount of the estate at the time they obtained probate. It would be said that this would be a heavy burden upon the property of the country, and undoubtedly, as it would yield a considerable addition to the Revenue, it followed that there must be a larger amount of income derived from personal property passing under will. But then they ought to take into account the remissions on the one hand, as well as the additional burdens on the other. In comparing the scale under this Bill with that which existed before, there were two points to which attention must be directed. In all testate estates of £2,000 and upwards the scale became sensibly heavier, and that was the case also with intestate estates of £18,000 and upwards. Keeping these two sums in mind as the points where the new scale operated in increasing the charge, and taking the year 1878–9, they found that the number of wills under £2,000 in that year was 23,744, whereas the number over £2,000 was only 8,296. An enormous number, therefore, would not be affected or would obtain relief. In the case of testate estates the difference was more remarkable. There were 10,310 under £18,000, and 53 only over £18,000. The result of the alteration, therefore, was that while in 1878–9 some 44,000 estates would have obtained relief, there were only 8,349 on which the scale would have been raised. Then he would point out that the small properties would obtain relief, while the large properties would be more heavily charged; that was to say, they reversed the weights which now pressed against the small properties and made them press against large properties. Small estates under £500, which were charged less than 2–50 per cent, and of which there were in the year referred to 13,238 testate and 6,878 intestate, making a total of 20,000, would receive relief by this measure. Another clause in the Bill relieved from legacy duty small sums under £100. That exemption was given now in the case of succession, but had not been applied to legacy duty. The measure was, in his opinion, a reasonable one, and rectified an evil long complained of, and which it was not easy to defend. But it had been said—"If you are dealing with personal property, you ought to deal with landed property also." That might or might not be right; but he did not see that it necessarily followed. The right hon. Member for Greenwich (Mr. Gladstone) took occasion to make some rather sharp remarks on that subject the other night at Marylebone, and very amiably endeavoured to set the farmers and landlords at issue, for purposes which were tolerably evident, by contrasting the position of the one with the other. But the right hon. Gentleman omitted to say that the scale as proposed did not bear very unfairly on the farmer. The question really was, were they to wait until the time came for dealing with landed property before doing an act of justice? If they were to take the right hon. Gentleman's view, they would have to wait a longtime. Why was it that the right hon. Gentleman himself never made that change in the succession duties while he was in Office? As he understood the argument, it was that a change of the probate duty might in itself be quite right, but it ought to be accompanied by a corresponding change in the succession duties. He thought a proposal made in that direction some years ago had been withdrawn by the Government which made it, although in a Parliament under their own guidance, because it was found impossible to proceed with such an alteration. Whether it was intended to bring it forward again, or whether it was one of the "judicious re-adjustments" of existing taxation they were told to expect as the work of the next Liberal Government, he could not say; but this he knew—that the scheme had been recently under consideration, and it had not been found possible to recommend it with any success to Parliament. It would, therefore, be unwise and altogether futile to wait to see how they could deal with that question before dealing with probate. Indeed, there was an obvious difference between the charge in the one case and the other. Probate duty was on personal property; it could be levied and paid with only the effect of diminishing, to a certain extent, the corpus of the property; but to levy the succession duty on land was a more complicated transaction, because the land ordinarily could not be sold, and was subject to several charges to which personal property was not subject. He would say but a word or two about the financial effect of these proposals. The hon. Member for Stockton (Mr. Dodds) told the House the other day that they would add £1,500,000 to the Revenue. He would be curious to know how the hon. Member made that calculation, and if it were correct, he would be exceedingly pleased at it, but he could not bring himself to expect it. He had made a very fair estimate himself—£700,000—and he did that with reference to certain peculiarities of the future. The manner in which the calculations were made was that the averages of 1877–8 and 1878–9 were taken as an estimate. If, next year, the amount was in the same proportion, there would be an increased income of considerably more than £700,000—in fact, it would come to about £900,000; but then they had to consider, in the first place, that they were dealing with a class of taxable material which was very uncertain. There might be only a small number of large estates, and when dealing with large estates there might be, and there had been, great disappointment as to what they were expected to yield. It should also be borne in mind that, the announcement of the new scale having been made, it was uncertain as to the number of wills that might be proved in the financial year. He therefore thought it better that he should make a very cautious statement, and £700,000 appeared to be a fair calculation—it might be £100,000 more; it did not materially affect the question. He could not help remembering the great disappointment which occurred in the productiveness of the succession duty in 1853, when it was first imposed, and he was anxious to avoid a similar disappointment by making his calculations moderate. He begged to move the second reading of the Bill.

Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Chancellor of the Exchequer.)

MR. GLADSTONE

said, he would avail himself of this opportunity of making some remarks on the Chancellor of the Exchequer's Financial Statement. He understood the right hon. Gentleman to say that he had created £20,000,000 of assets in the nature of the reduction, of Debt—it was not material whether the amount was £18,000,000 or £20,000,000. Under the régime of the present Government there had been a great number of novelties introduced, among other things in the manner of reckoning the National Debt. The old-fashioned way was for the Government to charge themselves with whatever liability they incurred, but they now credited themselves with assets that they created; those assets, of course, being open to a great deal of question, the obligation undertaken by the State to the creditors being of the highest order, while it was a matter of a great deal of question whether the counter obligations on the part of the creditors were likely to prove of equal value. He admitted at once that there were some important considerations which tended to recommend the introduction of that new system, one of them being the large augmentation of the amount that was asked. They had become lenders to so great an extent, and it was certainly quite right that the assets should be kept in public view; but whether it was quite right that they should be reckoned as they had been by the Chancellor of the Exchequer was a different question. He would give an instance. They had borrowed £4,000,000 to purchase Suez Canal shares, and that was in the nature of a loan to the Khedive of Egypt. The immediate security was the Khedive's estate—the £4,000,000 rested on his liability; but the credit of the Khedive was not equal to that of the Chancellor of the Exchequer; consequently, the two things did not correspond, and, therefore, it was doubtful policy to place the two in the same scale, or to say that the £4,000,000 of assets in the hands of the Khedive went against the loan, and the country stood in the same way as before the transaction. Not only was this a novel principle, but it was not quite consistently carried through. The Chancellor of the Exchequer received everything under the head of Miscellaneous Revenue—assets of that kind he put down as Revenue, and he spent them as Revenue. He would give an illustration. In the time of the Crimean War, it was his (Mr. Gladstone's) duty to borrow £2,000,000 and lend it to the Sardinian Government. That stood against him; but he was not allowed to credit himself with the assets created in the form of obligations of the Sardinian Government, although in respect of that loan there had been regularly paid every year not only interest at 3 per cent, but 1 per cent by which the capital was extinguished. The Chancellor of the Exchequer, however, absorbed what he put into Revenue, and claimed to be allowed to reckon assets when he created them. They should not be allowed to class as Revenue, and to spend as Revenue, assets of the country which they had destroyed. The old and vulgar method was to estimate the Surplus by the annual balance-sheet of the country. Now, he admitted that it was so far right, in stating the condition of the National Debt, to point out the reduction that had been effected in the value of Terminable Annuities, and through the medium of the payments on their account; but it was when they came to see the difference between the two methods of paying off Debt in this country that the comparison was most apparent. The system by Terminable Annuities was what was called automatic. The Chancellor of the Exchequer could not help paying the debts, for he was as far bound to them as he was to pay the salaries of the Civil servants; and, therefore, it was somewhat surprising to find a claim made by the Government to take credit for their involuntary action in doing what the law required when payment was to be made by Terminable Annuities. The manes of defunct Chancellors of the Exchequer, if they were conscious of the debates, would wonder that this ingenious method of reckoning had never occurred to them. He was old enough to recollect the time—although none of the right hon. Gentlemen opposite were—when the public judgment and inclination of the country passed over from one political Party to the other on financial grounds, because in the time of the Melbourne Government, when Mr. Spring Rice (Lord Monteagle) was Chancellor of the Exchequer, and Mr. Baring was Chancellor of the Exchequer, there were several deficiencies of the Revenue nearly as great as that which signalized the reign of the present Government. But those Chancellors of the Exchequer had not the wit to fall back on the Terminable Annuities, or they might have shown that every year of the existence of the Melbourne Government they had been paying off the National Debt. But they had not that ingenuity which had at length been extracted from the secrets of finance, and proclaimed to the country as proof of the diligence and economy of the Government in dealing with the National Debt. The right hon. Gentleman had referred to what he (Mr. Gladstone) had stated in Marylebone on Friday night. He was ready to repeat what he had stated. He would certainly repeat it elsewhere. Particularly as the present Government were supposed to be eminently the farmers' friends, it would be his duty—and he hoped to succeed in the attempt—to make the matter tolerably clear to the country. He would say no more about the National Debt; and he came, in the next place, to the probate duties. With respect to the plan of his right hon. Friend in regard to those duties, anything, of course, which he might say in that House would be simply in the way of protest and manifesto. It was not in his power to check the career of the Government. He and his Friends were entirely at their mercy. They might pass whatever measure they pleased, unless the majority were prepared to resist it; and as to the chance of any such resistance, those who had watched the progress of affairs for the last six years were quite as competent as he was to form a judgment. He had not the slightest intention, therefore, to try to stop the progress of the Bill or to alter its provisions; but he must confess that when so important a measure, imposing a tax of £750,000, was introduced without a word of explanation from the Minister of Finance, he had not the smallest notion of what its effect would be, and it was only on Friday last that he had been enabled to make himself acquainted with its provisions. He was not prepared to deny that the probate duties required to be altered, or that some of the elements of the proposed alterations were not good. It was, however, in his opinion, an alteration which the House ought not to be asked to sanction at the present time. He entered his protest against it under the circumstances in which it was proposed. He was glad the Chancellor of the Exchequer had at last given some explanation of the reasons upon which the Bill was founded; but the broad and fundamental objection to passing such a Bill was that it was impossible it could have due consideration under the present circumstances. It was evident, from his right hon. Friend's speech, that it had been very partially considered by himself. He made that no matter of blame, because his duties in the House had been so severe and so assiduously performed, that he was not surprised if he had found it difficult to descend into all the minute particulars of a subject like this. The right hon. Gentleman had stated two reasons why it was necessary to alter the probate duties, the one being that they were so unjust as regarded intestate estates, the other because they bore hardly on very small estates. But the injustice in cases of intestacy might have been removed by striking out the column of intestate estates; while it would not have been at all difficult to obtain even a greater Revenue, without altering the general amount of the scale of those duties, and it would have been perfectly possible to approximate with indefinite nearness to a uniform scale. His right hon. Friend said it was impossible to have the requisite number of stamps, but such an answer was, on the face of it, futile, and one which ought not to proceed from the mouth of a Finance Minister. It must be one which had been supplied, and it was quite evident that with stamps for £1,000, £500, and £100, the account could be kept as indicated by the smallness of the stamps. There was another point also, with respect to which his reading was totally different from that of his right hon. Friend, who had treated testacy and intestacy as if they were of something like equal importance, while he, in the second place, took credit for relieving all testate estates of upwards of £2,000, and all intestate estates of upwards of £18,000. Now, he found that between £1,000 and £1,500 the old testate duty was £30, and the new duty was to be £31. Going lower, he found that between £500 and £600 the present testate duty was £11, while the new was to be £13. If, therefore, he had heard his right hon. Friend aright, his own description of his measure was perfectly inaccurate, for he did not give uniform relief up to £500, and at £500 he aggravated the testate duty. His right hon. Friend, he might add, had not mentioned at all a consideration which had a most important bearing on the reform of the probate duties. The subject was one which was not new to the minds of Chancellors of the Exchequer. He himself had often and often to consider those duties; but he could not have found a Parliament so destitute of reforming spirit as to assent to such a measure as that before the House. His right hon. Friend had not presented to the House that which was the most salient feature in their system of probate duties—that a person taking out probate or letters of administration was compelled to pay duty on the assets of the estate without deducting the debts. If, for instance, there were £10,000 of assets and £9,000 of debts, he had to pay duty on the £10,000. His right hon. Friend said he had to pay it out of the estate, but he was not legally entitled to touch the estate until he had paid the duty; and he must pay it subject to whatever hope he might have that, after two or three or four years, during which he remained out of his money, he might go before the Board of Inland Revenue and prove the debt, and then obtain the return of the duty which he had paid, without interest, even though he might have been obliged to borrow the money to pay it. If the Chancellor of the Exchequer had been in communication with Mr. J. Wood, Mr. Stephenson, or Mr. Herries on the subject, he would have found that the3rall felt that, in attempting to reform the probate duties, it was necessary to abolish that monstrous system of the payment of duty upon debts. The right hon. Gentleman spoke of the reform of the probate duty with regard to small estates; but he not only maintained the system in full vigour, but he was going to augment the whole amount of the duty so paid on people's debts, and he had got a Parliament which was likely to agree to the act. Parliament would in that, as in other things, distinguish itself from any of the 11 he (Mr. Gladstone) had had the honour of a seat in. He had not the least expectation that anything he could say would have any influence on the judgment of the House. He was, however, making those remarks, as he had said before, merely by way of protest and manifesto, and the whole responsibility of passing the measure must rest on the House. These duties, in their way, were relatively good as a means of raising money; and if levied at all, they ought to be levied by considerable rates; for this reason, that the main charge upon them was the legal or professional charge, which remained the same, whether the rate was high or low. His hon. Friend had taunted him with wishing to increase the succession duty. When it occurred to him that if they had endeavoured to augment the succession duty, they would not have been able to carry it, he did what his right hon. Friend had done with his Water Bill, only he did not dissolve Parliament on it. The whole subject of these duties was one fairly admitting of consideration; but he could only describe as barbarous the proceeding of the Chancellor of the Exchequer in compelling people to pay aggravated duties upon that which did not belong to them. Now, one word, in passing, about intestacies. He was of opinion, certainly, that the present irregular scale of duties upon intestacies was excessive; but he hesitated to adopt in its breadth and simplicity what seemed to be the opinion of the Chancellor of the Exchequer—namely, that the rate on intestacies ought to be exactly the same as probates taken out under will. To that proposition he demurred. It seemed to him that a moderate and reasonable sum—they could call it if they pleased a fine—was a notion which had always been embodied in their laws; and he could not for the life of him see why it should be struck out. His right hon. Friend gave no reason. He could give no reason, except that intestacies were usually of very small estates; but he should deal with that by making the rate very small, and not, as his right hon. Friend was going to do, by raising the rate on estates of £500. Now, what he had said out-of-doors, and what he now said in-doors, was that it was a most serious matter, in this hasty way, without a word of explanation, in the dying days of Parliament, when the matter could not be deliberately entertained, to add £750,000 to the duty levied upon personalty, when the duty upon personalty was already three or four times as great as on realty. [Opposition cheers.] That did not draw a single cheer from hon. Gentlemen opposite. What they were thinking about was the rates. But houses as well as land paid rates. Let them take the case of the farmer and his landlord. The value of the farmer's stock would usually be a quarter of the value of the landlord's interest in the farm. The farmer died and the landlord died, and were both succeeded by their sons. What was the result? The farmer paid a great deal more duty upon his stock than the landlord had to pay upon the farm, which was four times the value of the stock. Now, that was what the farmers ought to understand, and what, to the best of his power, he would endeavour to make them understand during the next few weeks. So far from redressing the inequality between the landlord and the farmer, the Chancellor of the Exchequer, the friend of the farmer, came down and proposed to add heavily to that inequality. Did not the farmer's stock bear the chief incidence of the rates? And yet he was to be made the victim of a fresh burden, while the inequality as between him and the landlord remained unredressed. These were serious matters for the digestion of the House; and they might depend upon it, they would be heard of within the next few weeks, as they ought to be. If hon. Members opposite were well advised, they would, even now, force the Government to abstain from that most unwise act. The Members of the Opposition had no choice; but their tongues were not yet tied, and they would be used to expose the truth to the world. There was one more point which he must notice. It was felt—he did not say it was unnaturally felt—that there was something to be said, much to be said, as to the manner in which personalty and realty respectively were burdened in respect to rates. The Chancellor of the Exchequer was going to aggravate the rates upon all personalty, except the personalty of estates of a few hundred pounds. Now, his contention was, that whatever inequality prevailed between personalty and realty as regarded the payment of rates was almost entirely confined to the possessors of very large personal estates. Incases of large estates the duties were comparatively insignificant, and they could easily show great masses of personalty which had been unduly favoured under the probate scale, and which were exempt in a great degree and were not represented in the payment of rates; but when they came down to small estates, estates of from £10,000 or even £20,000, the estates of farmers and traders and people of moderate means, the case was different. He would not deny that they did pay rates; but what he did say was, that those were the estates of people who paid rates in a very peculiar degree. The farmers of England had had to bear the whole brunt of the increase of rates in the counties, and in towns the traders had to bear the whole burden of increased rates. It was all these shopkeepers in towns—the men of moderate means constituting the middle classes of the country—whose case they were going to aggravate by this species of legislation. If the scale was to be reformed at all, why, he would ask, not reform it effectually? No doubt it was to be made better at the upper end, and also, he would not say at the lower, but at the very lowest part of the lower end. But did the right hon. Gentleman augment the duties on estates of £500 or not?

THE CHANCELLOR OF THE EXCHEQUER

It is rather inconvenient for me to undergo a catechetical examination at the present moment. There is no doubt that the new scale, in one respect, does increase the rate. At present the scale from £300 to £450 is £8, and from £450 to £600, £11. Instead of that, it is proposed that from £300 to £600 there should be three grades. From £300 to £400 pays £6, £7, and £8 respectively; from £400 to £500 pays £9, instead of £11; and from £500 to £600, £13 instead of £11.

MR. GLADSTONE

Well, catechetical or not, it was easy to answer the question by a plain "yes" or "no." Upon estates exceeding £500 there was to be, it appeared, an increase. But while they were making a new scale, why not make it with some care? For what reason was an estate of £1,000 or £2,000 personalty to pay £3 2s., while an estate of £10,000 paid £2 15s., and an estate of £350,000 only £2 13s. 6d? He did not believe there was any answer to that question. It was a proposal which ought never to have been made without a most careful explanation of all its details: the explanation given utterly failed to convey an idea of its details. On the majority of the House rested the whole responsibility in this matter. If his right hon. Friend had not thought fit to compliment him by an allusion to what he said the other night elsewhere, he would not have detained the House so long. He had now made a clean breast of the matter, and he thought he had shown there were solid objections to all hasty proceedings in this matter, and to passing such a measure as the present one without a great deal of careful consideration. He thought he had laid before the House solid and good reasons to that effect; but he confessed he was not sanguine enough to believe that they had a chance of producing the smallest effect.

MR. GREGORY

thought, that if a man did not choose to make a will, it was not unreasonable to make some difference in the rate of duty which had to be be paid by his representatives. As regarded the general question that had been raised of the exemption of real estate from probate duty, it must be remembered that landed property was subject to many stamp duties and taxes from which personalty was exempt, and, moreover, it bore the largest amount of the burden of the rates. The Resolution he proposed last year was to the effect that there were inequalities in the scale of probate duties, and that, so to speak, the steps in the ladder were too large. He thought it would have been better to levy a duty of 2½ per cent all round instead of the differential rate now proposed. He quite concurred, however, in the proposal with reference to the deduction of debts. He ventured to lay these considerations before the House, and hoped that in another Parliament the whole question might be re-opened.

MR. J. W. BARCLAY,

as one of those who had requested the Chancellor of the Exchequer some time ago to initiate a reform in this matter, wished to say that this Bill appeared to him altogether inadequate to the requirements of the case, and he could not see what reasonable excuse there was for not making land pay the same succession duty as personal property. He thought the Chancellor of the Exchequer had been much misled as to the changes he proposed to make by the new adjustment. According to the statement which he had before him, the duty, instead of beginning at a small amount and increasing as it went on to large estates, was very much the reverse in its operation. No doubt, with estates of £500 and under, there was a certain amount of saving; but on £500 and upwards the charge advanced extremely irregularly. Large estates, there could be no question, ought to pay a larger percentage than small ones, and he thought it would have been better if the Chancellor of the Exchequer had excepted altogether estates under £200. He found from a Return made to that House two years ago that the sum levied on estates under £300 was only £8,350 altogether; so that the sacrifice of Revenue by exempting estates under £200 would not be very great, whilst the gain to the legatees would be a great boon, inasmuch as the legal expenses involved in the payment of these duties were generally as much as the duties themselves. The right hon. Member for Greenwich (Mr. Gladstone) had called attention to the great hardship of the charge being imposed upon the gross value of the estates, without allowing any reduction for the debts that might have to be paid out of them. He could not see why there should be any difficulty in carrying out the suggestion which had been made to allow the debts to be paid before any part of the sum was distributed to the legatees. The Chancellor of the Exchequer's excuse for not having a fixed duty did not recommend itself to his (Mr. J. W. Barclay's) mind. It would be quite easy to make the probate duty payable in the form of stamps, and on a fixed amount throughout, instead of by the anomalous system which, it appeared, was still to be continued. He did not think hon. Members realized what anomalies existed in the Schedule proposed by the Chancellor of the Exchequer. Taking an estate of £400,000, the probate charge was put at £1,250. Now, an estate of £499,500 would not, according to this scale, pay any more, although if the duty was levied at the same percentage, it would pay £2,800 more. That was surely so great an anomaly that some attempt should be made to remedy it. The present Bill did make some improvements on the present system; but it appeared to him that the changes proposed were altogether so inconsiderable as compared with what they ought to be, or might be, if the system was to be dealt with at all, that he thought the House should refuse to accept this measure at the hands of the Government, and leave the new House of Commons to see if it had not sufficient reforming force to carry forward the scheme sketched by the right hon. Gentleman the Member for Greenwich.

SIR GEORGE BOWYER

observed, that the right hon. Gentleman the Member for Greenwich had taunted the Government, as the farmer's friends, with injustice to the farmer in their dealings with him and his landlord, and had said that the landlord paid no probate duty on succeeding to land, while the farmer had to pay probate on his stock, implements, and all on his farm. The answer, however, on that point was that no farmer ever took out probate on stock &c.—a fact that rendered the anomaly very trifling. With regard to the anomalies of the Bill, he admitted that they existed, but it was to be remembered that no kind of taxation was wholly without them. On the whole, however he had no objection to the Bill, and believed it advisable to tax succession rather than income. He only hoped that the change would be more profitable than the Chancellor of the Exchequer expected it to be. He approved the prudent course followed by the Chancellor of the Exchequer in not adding to the Income Tax or laying on new Customs or Excise taxes, the effect of which would be to retard the improvement in trade, now on the increase. The right hon. Gentleman had also acted wisely in dealing with the Sinking Fund. Do what you would, you could not get anything more out of a Sinking Fund than you put into it. If they could afford to pay off Debt, let them do so; but there was no use in borrowing with one hand to pay off Debt with the other.

MR. CHILDERS

recommended to the consideration of the Chancellor of the Exchequer the remark of the hon. and learned Baronet as to the evasion of the payment of the probate duty. Perhaps the hon. and learned Baronet was speaking from knowledge of the acts of some of his constituents.

SIR GEORGE BOWYER

said, his remark had no such application, nor did he speak with reference to particular cases.

MR. CHILDERS

said, it struck him as an inconvenience, though, perhaps, now it was unavoidable, that they were obliged to discuss the Budget and the details of the probate duty at the same time. In respect to the new scale of probate duty, he believed the Chancellor of the Exchequer had been misinstructed to a much larger extent than the right hon. Gentleman (Mr. Gladstone) had pointed out, if he thought relief was given under the new duties up to the limit of £2,000. So far from this, it was undeniable that the testate duties would be increased in the case of every estate exceeding £500, with the single exception of an estate between £800 and £1,000, where they would remain as now. Again, it would be admitted by all who knew anything of the incidence of the probate duty that it was very capable of being corrected; but this Bill did not correct it fully or satisfactorily. He thought the argument of his right hon. Friend unanswerable, that if they were dealing with the probate duties as a whole they should allow the debts to be deducted before probate was paid, and that also was the view of hon. Gentlemen on the other side. He had no doubt that the Commissioners of the Inland Revenue had pointed out this great blot in the system; but, as it would affect the Revenue of the fiscal year, and the Chancellor of the Exchequer could not afford to do without the money, he omitted the necessary reform. He would give one or two figures in corroboration of some of the remarks of his right hon. Friend the Member for Greenwich. If a landowner died possessed of real estate of the value of £100,000, the maximum amount his son or sons were likely to have to pay in respect of succession duty was £600—in all probability it would be only £450. But if 10 farmers possessed of £10,000 a-piece were to die, and their estates were to come to their sons, they would have to pay £100 each, or £1,000 in all, for succession duty; and in respect of probate duty—under the scale hitherto in force—they would have to pay £2,000. That was £3,000, as compared with £450. The additional probate duty under the Bill would be £750; so that while £100,000 real property paid at the maximum £600, and might only pay £450, £100,000 personal property would pay under the Bill £3,750. Now, was it reasonable, when the incidence of death duties on personal as compared with real property was already the subject of so much complaint, to add to the grievance at such a time and to such a serious extent? It did not follow, however, because this proposed scale was open to objection, that there could not be a fair and proper re-adjustment of the present probate duties. He came now to the Budget. The Chancellor of the Exchequer had said the Budget was one of extreme simplicity; and so, no doubt, it was. It was a simple matter enough to abandon all former promises to add six years to the three over which the deficit since 1878 was to be spread; to give up, practically, the Sinking Fund; and to force a new tax through Parliament after the announcement of a Dissolution made opposition futile. But with what a retrospect was the finance of the present Parliament now to be regarded? The Chancellor of the Exchequer, when he took over the finances in 1874, held a clear surplus of £5,500,000 or £6,000,000 a-year. Out of this he gave away £2,000,000 to the owners of lands and houses, and remitted between £3,000,000 and £4,000,000 of taxes. But what followed? A succession of sanguine Budgets, over-estimating Revenue and under-estimating expenditure; heavy deficits, increased taxation, and a final deficiency of £8,000,000. He would prove this in a few words. In three out of six Budgets he had overestimated the receipts from Customs, in five out of six those from Excise, and in three out of six those from Stamps. On the other hand, in each of the six Budgets he had under-estimated the expenditure; in almost every year irrespectively of the Votes of Credit. Between 1876 and 1880, £7,000,000 a-year was proposed to be raised by additional taxes; and from this they were now told that no relief could be expected until 1886. And so with regard to the Debt. Even taking credit for the capital value on paper of the Annuities, it had increased; and on the basis of the actual capitals of the Funded and Unfunded Debts, the only criterion dreamt of in former days, the increase was about £13,000,000. And as to the Sinking Fund, to which the Chancellor of the Exchequer had succeeded in obtaining approval from some Gentlemen on this side of the House, where was it? It had to a very limited extent taken effect for two years; during the three next it virtually ceased to operate, as the deficit on each year exceeded its balance; and for the remainder of its term of 10 years to 1886—after which, on the falling in of the Terminable Annuities, it would have to be entirely reviewed—it was practically abandoned. These were plain facts, which he left for the consideration of the House and the country.

SIR HENRY SELWIN-IBBETSON

said, he was not surprised at the attempt which had been made on this occasion to make electioneering Addresses founded on the statement of his right hon. Friend the Chancellor of the Exchequer; but the House should remember the circumstances in which they had been called upon to deal with the probate duties. It would be in the recollection of the House that the right hon. Gentleman the Member for Greenwich (Mr. Gladstone) some time ago proposed to alter the sucession duty, and no one could forget the debate which took place, and the points which had been raised on that occasion with reference to the different duties charged on testate and on intestate estates, and again with respect to the disproportion between those charged on large properties and those charged upon small ones. The question had also been brought under discussion last year. The present Bill, however, did not propose to deal with the whole question of the succession duties on real property, but only with the duties on personal property. It ought not, he thought, to be forgotten that so far as personalty was concerned, it was not subject to the same amount of taxation as real property. All those local charges which fell upon real property added so much to the burdens which it had to bear, that it could not be justly said to be so unfair as had been suggested to raise the scale of duties on personalty. The right hon. Gentleman the Member for Greenwich (Mr. Gladstone), had dwelt on the way in which the farmers of the country would be affected under the Bill, as compared with the landlords; but the comparison was not a fair one, and there were, he might add, practical difficulties in the way of the adoption of such a percentage scale of duties as had been advocated. There would be such an enormous quantity of stamps required throughout the country as would render it impossible to carry out such a plan, and in those cases in which the amount of large properties had to be immediately declared there would be great difficulty in arriving at the exact amount. With, regard to the question of debts, why did not the right hon. Gentleman (Mr. Gladstone) deal with that question in 1871, when he dealt with the probate duty? No doubt, the right hon. Gentleman experienced the same difficulties with which the present Government had to contend, and which seemed insuperable. As to the whole scheme of the Budget, although there were, no doubt, some hon. Gentlemen who would prefer to see taxation increased by the Government, the majority of the House would, he thought, be of opinion that, after a long period of depression, the moment at which trade was showing signs of revival was not exactly the time in which to impose fresh taxes on commodities, or to make an addition to the Income Tax. It had been made a complaint against the Government that they had added largely to the taxation of the country; but it was wrong to say that the addition of 3d. to the Income Tax was entirely due to their action. The fact was that the real addition which they had made to it was not more than 2d. But, on the other hand, how great had been the relief to local taxation effected by the Government! What wars and difficulties had they not to contend with, and that, too, during a period when the Revenue, instead of increasing by bounds and leaps, had been suffering under a depression of trade and commerce which was almost without parallel in modern times! When those circumstances were borne in mind, and when it was recollected that the taxation per head at present was below the point which it had reached when the Government succeeded to Office, the amount of Debt which had to be met could scarcely with justice be spoken of, particularly as his right hon. Friend the Chancellor of the Exchequer proposed to meet it as constituting an enormous charge on the public. The scheme of his right hon. Friend, was, lie thought, the best way of raising the sum required, and he looked with confidence to the approval by the country of the Budget as a statesmanlike mode of dealing with the finances of the country in the present position of affairs.

MR. DODSON

said, he did not think the Secretary to the Treasury had done much to remove the criticisms of the right hon. Gentleman the Member for Greenwich (Mr. Gladstone) and the right hon. Gentleman the Member for Pontefract (Mr. Childers). His argument really amounted to this—if the farmer were the landlord and the landlord the farmer, their respective positions would be reversed. Both he and the Chancellor of the Exchequer spoke of the large burdens which land had to bear compared with personalty. But the principal complaint made was that they disturbed the existing apportionment of charges, because, while increasing the charge upon personalty, they in no way added to the burden upon real property, and that complaint remained entirely unaffected by what the Chancellor of the Exchequer and the Secretary to the Treasury had said. The scale again was heaviest in its incidence between £600 and £4,000, and he failed to see the justice of that. Why should they not have a minutely-graduated scale? It would work much more fairly than the one proposed, with its great leaps here and there. As regarded the question of testate and intestate estates, he thought the latter might fairly be called upon to pay more than the former. It was advisable that people in all cases should make wills. If they left the distribution of their property to the law, he thought the law was fairly entitled to inflict upon them something in the nature of a fine. Speaking about the increase of the country's liabilities under the present Government, the Secretary to the Treasury forgot that since 1876—a period during which the taxation of the country had increased by £7,000,000 a-year—there had been no relief to local rates, except some £300,000 or £400,000 a-year under the Prisons Act. The Chancellor of the Exchequer claimed to have reduced the NationalDebtby£18,000,000. But, while taking off £18,000,000 with one hand, he put on an equal amount with the other. But, said he, the added millions were repayable Debt, and, therefore, ought not to count as Debt at all. Well, all he (Mr. Dodson) could say was, that if that principle was to obtain in private life, there would be much less private embarrassment in financial matters than there was. The security which the Chancellor of the Exchequer obtained for his investments was, it was to be hoped, good; but the right hon. Gentleman was not entitled to say that such investments were not Debt as regarded himself and his creditors. Let them take the case of the Suez Canal, the shares in which were acquired for political purposes. The right hon. Gentleman would hardly say that the security he had in these Suez Canal shares was equal to the security which he offered to the creditors, while for the interest they depended entirely on the solvency of the Khedive. The difficulties of their position were, in fact, rather increased since the acquisition of those shares, for, instead of having in Egypt that ascendency which the Prime Minister said was so desirable everywhere for England, they were the joint protector of Egypt with one nation, and, perhaps, with several other nations. He pointed out, when the light hon. Gentleman first projected the new Sinking Fund, that notwithstanding all the arguments advanced in its favour, it had the weakness inherent in all Sinking Funds, however much their conditions might be varied. Such a fund was a standing temptation to every Minister in need to put his hand upon it. A Sinking Fund of a large amount, which could be depended upon for a long series of years, would be an excellent thing for the reduction of Debt, and would strengthen the credit of the country. On the other hand, a Sinking Fund of a small amount, which was liable to be seized upon at the first moment when a Chancellor of the Exchequer was in straits, was a fund which, instead of tending to strengthen the credit of the country, was really calculated to impair it. This Sinking Fund was a virtuous resolution to provide every year a surplus of an uncertain amount for the reduction of Debt; but since the establishment of the Fund, five years ago, the Debt had increased by £1,000,000. Consequently, the Sinking Fund had only paid off a portion of the Debt by means of borrowed money. He pointed out, at the time when this Fund was proposed, that the only way of permanently paying off Debt was by means of Terminable Annuities. The Chancellor of the Exchequer then sneered at such Annuities, and spoke of his Sinking Fund as something which was highly superior to them. Now, by a most strange Nemesis, it had come to pass that the right hon. Gentleman not only determined to sacrifice the greater part of his Sinking Fund to his financial necessities; but the mode in which he proposed to sacrifice it was by creating Terminable Annuities. Reverting to the subject of the new probate duty, he might remark that very great discrepancies existed as to the amount of money it might be expected to yield. The Chancellor of the Exchequer had spoken of £700,000 a-year, but other persons had put the amount as high as £1,500,000 a-year. Perhaps some Member of the Government would state whether any increase of the duty was expected in future years.

MR. J. G. HUBBARD

thought the right hon. Member for Greenwich (Mr. Gladstone) and the right hon. Member for Pontefract (Mr. Childers) had made a great mistake by constantly arguing on the present conduct of the finances in regard to deficits and surpluses, as if no step had ever been taken by the present Chancellor of the Exchequer, who fixed on £28,000,000 to be provided, under all circumstances, as the charge for the Public Debt. This was an excessively unfair way of comparing the present management of their finances with that which preceded it, and of making a contrast between the present deficit and the past surplus. That surplus was obtained by a very crude and coarse expedient—namely, by under-estimating the Revenue and over-rating the expenditure. His right hon. Friend had spoken of the Terminable Annuity system, and he believed that by that plan there would be a much greater diminution of Debt than by any other. He was quite ready to accept the figures given by the Chancellor of the Exchequer; but as, according to that computation, the Debt had been reduced by £18,000,000 within the last six years, he could not justly describe the finances of the country as being in an unsatisfactory position. Passing next to the Probate Bill that was before the House, he re- garded it as unfortunate, because it proposed to destroy the present distinction between testate and intestate property. He could not see why that should be done, and thought it cruel that those who had been careful with their property should be punished in order that the estate of the careless might be relieved. Yet such, he believed, would be the effect of the Bill, by throwing them both into the same Schedule. He objected also to the very large steps by which the duty was now regulated. They were told of administrative difficulties in the way of an ad valorem charge, but he saw none of those difficulties, and did not believe in them. Our whole fiscal system was very unscientific and unjust; and he trusted the Government would not press the Bill forward in its present form, but would find some means of leaving so important a subject open for further consideration by another Parliament.

GENERAL SIR GEORGE BALFOUR

remarked, that in May, 1878, there was an important debate on the probate, legacy, and succession duties, and several hon. Gentlemen expressed a strong opinion with regard to the injustice and inequality of the incidence of these duties, particularly in respect to the unequal tax raised from personal profits in relation to the much smaller rates levied on real properties under the succession scale. He expected that something would be done to remedy that unfair state of things; but now they had only a partial attempt to do so, and only in respect to one of the three duties—namely, the probate; and the changes proposed were far from satisfactory, even in respect thereto.

Notice taken, that 40 Members were not present; House counted, and 40 Members being found present,

GENERAL SIR GEORGE BALFOUR

resumed. He thought the change which had been made in abolishing the distinction between testate and intestate property was a right course, and, in doing so, it practically lowered the scale of duties in the case of small estates, and was not only unobjectionable, but, as affecting the poorer classes especially, most just and proper, because in such estates the property was left without a will; and as the new scale was less than the old intestate scales, the incidence of taxation was lowered. The one scale was consequently framed on a much more simple plan than the double scale of the old one. But there was one great defect still left, that of levying the probate duty on the gross value, leaving to the parties interested to recover the tax charged on the debts, a costly action to the poor estates, because the lawyers' fees often amounted to the full sum sought to be recovered. This evil was not felt by the large, only by the small estates. The question of the succession duties, he hoped, would be dealt with by the Chancellor of the Exchequer next Session; for he should have no objection to see the Chancellor of the Exchequer in his place next Session, provided he dealt with these unjust taxes. There was no earthly reason why both probate and legacy duties should not be combined, and the same rate of duty paid, all objectionable features in the scale being also removed.

MR. WADDY

observed, that the debate, by some means or other, turned from being simply a discussion on the probate question into a kind of Budget debate. For his own part, he did not mean to deal with the probate question as such, but with the general financial question, which appeared to him to be of far more importance. The position in which the House was now placed was that, while they were considering the Budget of 1881, it was impossible to forget that they were called on to review more or less the general financial policy of the Government during the time it remained in power. The initial difficulty they had to contend with, was that with regard to this year, at all events, in consequence of the precipitancy or haste in which Parliament was dissolved, comparatively in consequence of that, they had not the accounts made up to to the 31st of March, the end of the financial year, before them. Therefore, the materials on which any calculations were to be based, were, to some extent, vague and uncertain. "When they were called on to come to a conclusion there was this difficulty—that the Estimates were by no means in accordance with the actual facts. Documents had recently been constantly published, and one had been published either on Saturday last or that morning, giving an estimate of the charges on the Consolidated Fund for the year. By this document a comparison was enabled to be made between what was called the Estimate for the year and the actual results. Of course, the Estimate made in the first instance was not the real Estimate for the year, but only one of an approximate character. He found that the Estimates of the Government, if not looked into a little more closely, were likely to deceive. For instance, he found that the Estimate for 1879–80 was stated as being £85,999,871, and, no I doubt whatever, when the Supplementary Estimates were taken into consideration, those figures would probably be correct. But what was the fact? That I which was stated to be the Estimate for 1879–80—namely, in round numbers, £86,000,000, was given to the House a; year ago, not as £86,000,000, but as £81,000,000. That was not only true with regard to last year, but with regard to the year before. He would take one or two years, and show the House what the facts really were. The Estimate in 1878, by which, of course, he meant the financial year ending in that year, was £79,500,000, but the total actually spent was £82,500,000. Next year the Estimate was £81,000,000, but the expenditure was £85,000,000. What it would turn out this year, it was impossible to say. When they got the total, he feared it would bear a very close resemblance to former Estimates. Well, the question they had to consider very much was, what had been the net result the financial policy of the Government during the time it had been in power. Something had been said that night by the Secretary to the Treasury on that point, and the subject had been alluded to by the Chancellor of the Exchequer and the First Lord of the Admiralty, and by other Members of the Government, at meetings held in the country. Certain reasons—he might call them excuses—were given for the increased expenditure of the Government. Some of those reasons might have had good force, but others of them he was surprised to find proceeding from the Treasury Bench. The Secretary to the Treasury (Sir Henry Selwin-Ibbetson) told them that the increasing expenditure was to be accounted for by relief to local taxation, the expenses of the war which had occurred, and the difficulties of the Revenue, which had not come in as formerly by leaps and bounds. And that hon. Gentleman would apply the curious remark that, after all, what they had to consider was, what was the taxation per head of the United Kingdom? But one thing which the hon. Gentleman sometimes pleaded as an excuse was not pleaded by him that night, and that was—the additional expenses in consequence of the increase of education in the country. Now, the amount spent on education, and on the relief of local taxation, was not drawn out and given in anything like connected form in the pages. It was not a fair way to calculate these, to take, as had been done persistently, the last year of the last Government and then put against it the last year of this Government. They knew perfectly well that the increase in these various charges during the last year of the present Government was out of proportion to the sums spent in the earlier years of their Office. The fair way was to consider what had been the expenditure under these two heads during the five years in which the late Government had been in Office, and the five years in which this Government had been in Office; but it was impossible to carry out the comparison, because they had not got the account before them. Nevertheless, they knew the Estimate fairly tolerably for the purpose of comparison. In making this comparison, he had to confine himself to those things actually printed. In the reference which the Chancellor of the Exchequer made to him (Mr. Waddy), two or three weeks ago, the right hon. Gentleman fell into the mistake of supposing that he had forgotten to take into account "the extraordinary expenditure," as it was called, of the present Government. He could assure him he was not going to leave that out of his calculation. If anybody would take the trouble to find out what was the difference between the ordinary and the extraordinary expenditure of this Government and of their Predecessors during the whole period of Office down to the time when the accounts were submitted to the House, they would find that the result was what he would shortly state. It was difficult, he knew, to distinguish between ordinary and extraordinary expenditure. No doubt, it might be said, and with some show of justice, by the Ministry—"When there has been anything unusual, you ought not to make us account for that, as though it had been a part of the regular outflow of our expenditure." The only way, therefore, as far as any person could make a comparison, who desired to be fair and conscientious in the matter, was to take all those items which, in the opinion of the Government themselves had been considered of sufficient importance, and of so extraordinary an expenditure as to be dignified under a separate head. The only rule which could be applied, and the rule which was fair to both sides, was the rule to which he had referred. If that were done, the I result would be thus—That if the ordinary expenditure of the Government so calculated, and putting out of question the Suez Canal and everything in their Vote of Credit by way of confidence, and not to be spent, and all accounts of that kind, the result would be that, coupling the ordinary expenditure of this Government with the last, the present Government had actually spent £38,750,000 more than their Predecessors. Now, he would endeavour to see what deductions he could make out of that; and he believed, if those deductions were fairly made, the case would stand thus—Take the question of local charges transferred to Imperial Revenue, prisons, police, and lunatics; and take, on the other hand, the extra expenses for education. Take the Education Vote, and add together, and the difference would be, that this Government had spent, during their tenure of Office, £5,290,000 in round numbers more than the last Government did. Then, with regard to the local charges, they would amount to more than £4,820,000; consequently, there was a total of £10,112,000. But it had been said—"You must take into account that we have met re-payable loans; we have been advancing money to local bodies, and that will involve further expenditure." That was perfectly true. Those loans did not come into the account at all, for in the balance sheet the principal was not included, although the interest was included. But if all the deductions claimed by the Government were admitted, they would amount only to £11,500,000, which, if deducted from the £38,750,000, left, practically, £27,250,000 of extra expenditure. for that amount of money, which had nothing to do with the National Debt, and which did not include the Vote of Credit for the Maltese troops, or the Zulu War, not one single penny was on account of the "extraordinary expenditure" he had mentioned. If that were so, what was the excuse for the £27,250,000 of extra expenditure in which the country had been involved, and which amounted to nearly £5,500,000 per annum ever since the present Government came into power? But it was sometimes said that there had been war expenditure which had not come out as a separate item, and more money had been spent on the Army and Navy than was anticipated. The Government were entitled to take credit for that in their calculations; but the excuse cut both ways. Another excuse was, that we should consider the difficulties of the Government in regard to the Revenue. The deficiency of Revenue, not coming in by bounds and leaps, had nothing to do with the question, for the House were talking, not about Revenue, but expenditure. Then came the amazingly foolish excuse, "But you should consider what has been the taxation per head." But the taxation of the country was not a test of expenditure or extravagance. He protested against the cry—"Oh, see what a much better Government this is for the country, for we have actually taxed you less than the last one did."

Notice taken, that 40 Members were not present; House counted, and 40 Members being found present,

MR. WADDY,

continuing, said, the argument as to the amount of taxation per head was about as fallacious as anything could be. The question for consideration was, what amount of money had been paid. The other night, the Chancellor of the Exchequer reduced the nominal amount of the Floating Debt by referring to the loans for public works which had been carried out more extensively by the present Government than the last; and by the courtesy of the Secretary to the Treasury, he held in his hand an account of the amounts so spent, which account he should propose to be printed for the use of the House. There was no account for 1879–80, because it was not yet made up; but the sums borrowed by the Government during the preceding five years amounted to £12,460,000; but of that they had repaid to them £4,781,000, exclusive of interest. That made their real outlay under this head £7,678,904. But what was the amount of the total increase of the Floating Debt in the same five years to which he referred? The Floating Debt had increased to £21,390,000. Therefore, allowing the deductions which the Chancellor of the Exchequer thought should be made, there was still an increase to the Floating Debt of £13,711,596. The Government could not point to any reduction of the National Debt that was originated by them apart from their Sinking Fund, which they had now slaughtered. The present Government had increased the Floating Debt by £13,711,000; the late Government decreased it by £4,415,000; there being thus a difference of about £18,000,000 on the whole, after the deductions had been made which were claimed by the right hon. Gentleman the Chancellor of the Exchequer. The right hon. Gentleman the Member for the City of London (Mr. Hubbard) had asserted that the surpluses of the late Government were made by wild Estimates, and by their asking for too much. This statement was inaccurate. The late Government steadily diminished the Income Tax, but the present Government had steadily increased it; and the result of five years' Administration showed that, whereas the late Government decreased taxation by £12,500,000, the present Government had increased it by £1,250,000, without taking into account the diminution of taxation which was consequent on the surplus left to them when they came into Office. Then, again, it had been said that there was a large diminution in the National Debt in the years 1876 and 1879; but the fact was, that there was an increase in the former year of £521,000, and in 1879 of £297,000. In five years the late Government decreased the National Debt by £26,000,000; but the present Government, after giving them credit for everything, had decreased it only to the extent of £1,000,000. According to the statement of the Chancellor of the Exchequer, the Government were entitled to an additional decrease of £7,750,000; but still the result was only £9,000,000, as against £26,000,000. Matters would be worse still if other figures were taken into account; but, unfortunately, the House could not obtain the figures, and they would be unable to get them during the life of the present Government. They were told the other night that the expense of the Zulu War was £5,100,000; but it should be remembered that the accounts of the Abyssinian War were not yet closed. Therefore, it was only reasonable to suppose that during the next two or three years accounts would come in which would raise the expense of the Zulu War to a very serious amount. Then, again, did anyone know what the expense of the Afghan War would be? Was it to be £10,000,000 or £20,000,000? If so, he did not believe there was a Member of Her Majesty's Government who thought the people of India could or would bear it; and this he knew, that it would be an unjust and iniquitous thing to seek to impose it on them. On all these grounds, and because the financial course of the Government had led to deficits instead of surpluses, to the great increase, instead of the great diminution of Debt, he charged them with extravagance in the face of the country.

MR. CHADWICK

said, he would not follow the last speaker in charging Her Majesty's Government at random with extravagance. When the present Chancellor of the Exchequer proposed, many years ago, to put aside a sum of £800,000 a-year for the reduction of the National Debt, he regarded the proposal as a wise and proper one, and he hoped that whoever held that high office would set it before him to make provision for a permanent, settled, annual reduction of Debt. He was auditor of several companies having a capital of £50,000,000, and if the managers of those institutions did not allow for depreciation in bad times he should not certify their accounts as correct. He looked on the Chancellor of the Exchequer as the auditor of the nation. After 12 years' Parliamentary experience, and having looked over the Budgets of the last 25 years, he was bound to say that no Chancellor of the Exchequer, with the exception of the right hon. Gentleman the Member for Greenwich (Mr. Gladstone), had ever placed before the House and the country clearer and more complete statements as to their financial affairs and position than the present Chancellor of the Exchequer had. Therefore, it was the policy of the Government, and not with the exposition of its financial results, that he quarrelled. He hoped the Government would take warning by the great expenditure of the last four years, and that, if they continued to hold Office, they would come back with "peace, retrenchment, and reform" upon their lips. With respect to the probate duties, the scale of differential duties proposed constituted a perfect labyrinth of figures. He would venture to make a practical suggestion to the right hon. Gentleman which, if adopted, would reduce the scale to five lines, and would have the further advantages of securing an increased Revenue. He would suggest a charge of 1 per cent on any amount of personalty not exceeding £500, 1½ per cent, on the next scale up to £1,500, 2 per cent up to £10,000, 2½ per cent up to £20,000, and 3 per cent on all sums above that amount. These scales would be felt to be unjust to no one, and would be readily understood by every one. For his part, however, he believed that the probate duty should be incorporated with the legacy duty, and be paid by the person who received a gift from a deceased party. Who was there so capable of bearing the taxation as such a person? For he received property for which he had never worked, or money which he had never earned. He would support the Bill, because it was a step in the right direction—a step in the way of simplifying that which was at present extremely complicated.

THE CHANCELLOR OF THE EXCHEQUER

said, he was aware that he had no right to address the House again, although he might take advantage of one of the following Orders to say a few words in reply. It would, however, be more convenient if, by the favour of the House, he were allowed to say what he thought was necessary to lay before them. He would not enter in detail into a great deal of the discussion they had listened to, and partly for this reason, that many of those who had taken a leading part in it, after firing their shot, had left the House. He must remark, however, in regard to one charge which the right hon. Member for Greenwich (Mr. Gladstone), who was now absent, had made against him, that, so far from having introduced a new practice in estimating the reduction of the Debt by the action of the Terminable Annuities, he was only following a practice of which the right hon. Gentleman himself set a notable example in 1865, when he arrived at exactly the same amount of reduction thus effected as himself (the Chancellor of the Exchequer) upon the present occasion. The hon. and learned Member for Sheffield (Mr. Waddy) said—" You have no right to claim any credit for these Terminable Annuities; the credit belongs to your Predecessors." Well, that was perfectly true; to a great extent Terminable Annuities were commenced by their Predecessors; but the present Government provided some also. Besides, it must be borne in mind that that was nothing in itself, unless they provided something to meet the charge. All he could say was, that they had endeavoured to provide means for carrying on the operation. The right Iron. Gentleman the Member for Chester (Mr. Dodson) laughed at the fate of the new Sinking Fund. He did not altogether admit the justice of the remarks of the right hon. Member for Chester, and he was anxious that the House should not misunderstand what had really been done. He did not propose to extinguish the Fund. Not at all; he proposed to make use of a portion of it for a particular purpose for a certain number of years. He quite admitted that that was so far in derogation of what was done in 1875; but, at that time, he did not expect that any new Debt would be added on which this Fund was to operate. He entirely demurred to the idea that he had departed from his original intention, which was to set apart a fixed sum to pay interest and relieve a portion of the principal of the Debt. Besides the reduction which had been made since 1875, they had provided a Fund which, he was thankful to be able to say, could be made of use at a critical moment like the present. The whole thing turned upon this—Was it justifiable to add £6,000,000 to the capital of the Debt? Under the old system that would have been added at once to the Debt, and it would have been thought a proper arrangement. He had endeavoured, as far as he could, to treat it by renewing Exchequer Bonds, and by paying them off—or hoping to pay them off—as surpluses arose. He had been twitted with maintaining this inconvenient arrangement, by which the deficiencies were dangled before the country, and the Government felt there was some force in that, more because so much was made of it, than because it was inconvenient to anyone. The Government, however, felt that it would be better some arrangement should be made for the Debt, and the arrangement had been made by which it took precedence of all other obligations. They would be bound to provide in five years for the sum of £28,800,000, which would extinguish the Debt of £6,000,000, and perform such other services as it was possible for it to perform. He did not for a moment extinguish the new Sinking Fund by this arrangement. Supposing there was the surplus which they hoped for, that surplus would, in the first place, be applied to the payment of Annuities, and the Sinking Fund might be as large or larger than in former years. The Sinking Fund would go on all the while. It was only fixed at a higher sum in consideration of the Debt to be redeemed by it being increased by these £6,000,000. He, again, entirely disputed the idea that he put an end to the arrangement made at the creation of the new Sinking Fund. He admitted it was put to a use somewhat beyond that which was contemplated when the Fund was created. He was satisfied the arrangement was one of the most reasonable that could be submitted, unless they increased taxation. That was the alternative, and he did not think they would be at all justified, in the present state of affairs, in increasing taxation. They were only just beginning to recover from a period of depression and suffering in trade, and they could hardly say that they were sure the country had recovered from corresponding depression in agriculture. At such a moment as that it was not desirable that they should increase the burdens of the country. They were told to recollect what Sir Robert Peel did in 1842. Sir Robert Peel put on the Income Tax; but, on the other hand, he took off a great number of duties, relieving what were called the springs of industry. But the country was blessed with a good harvest when those springs took place; and if they were to attempt now to increase the Revenue by putting on heavier burdens, they would accomplish, not what Sir Robert Peel accomplished, but something else. Now, with regard to expenditure, the hon. and learned Member for Sheffield (Mr. Waddy) took great pains in giving them an ingenious calculation; but he hoped the hon. and learned Member would not be affronted when he said that this calculation reminded him very much of the equally extraordinary calculations made with reference to the Liverpool election—calculations which showed that if the figures were properly analyzed, the side which had not won the seat was the side which had really gained. It was hopeless to follow step by step calculations of that kind. That there had been an increase of expenditure under the present Government was a matter which nobody would deny. That there had been a failure of the Revenue was a fact which, alas! he was unable to dispute. There was no doubt, for some reason or other, which he need not now inquire into, the sources of Revenue had not been so fertile as in former years, and that, with the increase of expenditure, had naturally led to an unfortunate result, and to a greater amount of deficits than in former years. All that was perfectly clear; but what had been the cause? That was the great question—had the increased expenditure been incurred for purposes worth incurring it for or not? The hon. and learned Member excluded all the expenditure that related to extraordinary services—war services, and matters of that class; and the hon. and learned Member had certainly treated a good deal as ordinary expenditure which was in reality extraordinary expenditure. No doubt, the Government had incurred extraordinary expenditure for purposes which they believed the country would approve, and those purposes could not have been attained at smaller cost. It was very unfair to take such an item as Education, and to compare five years of the expenditure of this Government with five years of their Predecessors'. The measure which involved the addition was the measure of their Predecessors, and they were, therefore, responsible for a system the very success of which must lead to increased expenditure. It was admittedly a good object, and it was worth while that the expenditure should be incurred; but having claimed the credit of the measure, they had no right to turn round and complain of the increasing expenditure, which was the effect of their policy, to which the present Government was obliged to give effect. The unfairness of the comparison made was still further evident when it was remembered that the measure was passed in the second year of the last Parliament, and only came into operation in the third, and was gradually developed; while in the five years of this Government, the measure had been in fully-developed operation. There were many other things that ought to be explained in the same way. By far the greater part of the increase in local loans arose from measures taken by their Predecessors. They instituted these loans for education and for sanitary purposes, and these loans had gradually assumed almost gigantic proportions. It was rather hard that the Government should be charged with extravagance under these circumstances. There were other sources of expenditure the increase of which was inevitable. For instance, it was necessary to raise the pay of the soldier; with increasing wages it was impossible to obtain the men they formerly did. "Were not the Government compelled to make that addition to their expenditure? These were only specimens of the charges that had been thrown upon them, and which must have been thrown on any Government. It was altogether unfair to draw the sort of comparison which had been instituted. The principles of the Bill had not been injured by the discussion. He quite admitted that there was a good deal to be said against large jumps on a scale of this kind. On the other hand, it was difficult to do that which the hon. Member for Macclesfield (Mr. Chadwick) wished them to do—to have a percentage scale. The arguments as to the great advantage of collecting Revenue by stamps were arguments it was impossible to ignore, and that involved the difficulty of keeping large stocks of all sorts and sizes in many parts of the country. Still, the matter was one which might very well be kept under consideration, and, if it should be found possible to get over the difficulties about the stamps, there would be no objection in principle to the adoption of the system advocated. That matter had been carefully considered by gentlemen of experience, without prejudice, and the conclusion at which they arrived was embodied in the Bill. He did not say it was impossible to make an improvement; but he did not at present see any reason why they should not adopt this scale. He did not at all commit himself in the answer he gave with reference to testate and intestate estates; he distinctly said he did not wish to pledge himself until he had given the matter further consideration, and it showed that hon. Gentlemen were hard pressed when they tortured such an innocent answer into an argument against him. He was surprised at the arguments coming from the Colleagues of the right hon. Member for the University of London (Mr. Lowe), who, when he brought forward his scale, made a great point of doing away with the difference between testate and intestate estates; but, of course, hon. Gentlemen were not bound to be consistent in Opposition. He could not admit that there was any reason in what was called the obligation of persons to make a will, to give those who made one an exemption from the duty that was charged upon them if they did not make a will. The amount of the additions on small estates had been very much overrated. Taking the whole scale, the additions were infinitesimal up to £2,000. Intestacies generally occurred with small estates, and in these there was a very considerable reduction. There was a great reduction on the intestacies and upon the small estates. It was just the persons with small estates who did not like to incur the expense and trouble of making wills. By far the larger number of the wills that were relieved were those of very small amount. The discussion had been to him very satisfactory. He had almost expected a terrible, pelting storm, when the whole finance of the Government was brought under review: but it was a satisfaction and relief to find that the proposals of the Government had been made the subject of ordinary criticism, and that the thunderbolts launched by gentlemen of great authority in distant parts of the country were reduced to very diminutive proportions in the House, where answers might have been given. Looking at the finances of the Government as a whole, he believed the country would not say they were liable to the charges that had been brought against them. It would undoubtedly be said that they had fallen upon evil times in regard to the Revenue they had received and the elasticity of the sources of Revenue. Undoubtedly, they had had cast upon them the necessity of making provision for a large expenditure, some of it of an entirely exceptional character, and much of it of a character which was perfectly inevitable. They had endeavoured to meet that expenditure fairly, and to meet it by casting the smallest possible burden upon the people of the country. They had been fortunate enough to succeed in carrying on their years of administration in such a way as to leave the country not poorer at the end than at the beginning, not more heavily taxed at the end than at the beginning, and with an amount of Debt not more, but less, than at the beginning, and had accomplished, as they believed, services which would be of material and permanent value to the country.

MR. ANDERSON

believed that there were several very serious objections from a legal point of view to the Bill, and in particular to the 2nd and 3rd clauses. If, as he had been told, the legal Profession regarded the measure as unworkable, as it certainly seemed to be in the case of persons dying abroad, their doubts deserved every possible consideration. He himself had a great dislike to some of the main provisions of the Bill, and most of all to the method of raising money by means of stamps. It seemed to him absolutely unfair that while the stamp for sums varying between £l,0C0 and £1,600 should be £31, no less than £44 should be payable as soon as the £1,500 limit was exceeded. In like manner an equally unjust increase was imposed at every step. At some future time he hoped it might be possible to give up that system, and to raise the necessary money by a proportionate percentage. "With regard to the Sinking Fund, the right hon. Gentleman the Chancellor of the Exchequer attempted to defend his policy by saying that he had not extinguished, but reduced the Fund. Now, he recollected the year 1875, in which that Fund was instituted, and in the debate on that occasion he had told the Chancellor of the Exchequer that a Fund so constituted would not last, but would be used by the first Finance Minister who found himself in a difficulty; but he had certainly not foreseen that the Chancellor of the Exchequer would himself, like Saturn, have to devour his own offspring. He had thought failure evident and unavoidable from the first; but he did not think it was equally clear that the Fund would some day be made up again. No doubt, the right hon. Gentleman had been reduced to great straits, of which he would only give one instance—the fact, namely, that in 1876, power had been taken to raise certain taxes, which, however, had never been raised till the year 1880, when, by virtue of a Treasury Minute, a Customs duty of 3d. per pound had been put on transparent soap. By such and similar means, by postponing taxation, and by Terminable Annuities, to which, however, he had no objection in a general way, the right hon. Gentleman had succeeded in slightly raising the Revenue. He fully understood the difficulty in which the right hon. Gentleman had been placed, and the shifts to which he had had recourse, and he found in them an explanation of the fact that the cost of the Afghan War had not been mentioned in the Budget. The state of the case was abundantly clear—the Government, knowing that the time was most inopportune for the imposition of new taxes, had been compelled to argue that India could, by herself, pay the whole expense of the war, although many Members of the Cabinet had, on one occasion or another, expressed the opinion that the war was an Imperial one.

SIR GEORGE CAMPBELL

thought it unfortunate that the question of the alteration of the probate duties should have been merged in a general discussion on the Budget. In dealing with the proposed change, the House had before it a topic of such great importance that it might very well have devoted an evening exclusively to its consideration. With regard to the change introduced by this Bill, there were two questions to be considered—first, the readjustment of the rate; and, secondly, the increase of taxation. He entirely approved the re-adjustment of the rate. It was a great improvement, and would go far to remedy a great inequality which had been allowed too long to exist. The first part of the proposal of Government gave him the greatest satisfaction. It would give very considerable relief, in the case of small estates under £500. It was wrong to tax the prudence and the small savings of the poorer classes. Entire relief was to be given where the property was under £100, and he thought the Chancellor of the Exchequer would have done well to extend the exemption to £200. The re-adjustment of the rate did not necessarily involve the increase of taxation; but if taxation must be increased, it was just to tax property. The question, however, arose whether one species of property alone should be taxed. The fact was, that while the tax upon real property amounted to 1 per cent of the annual income, or 2½d. in the pound, the amount falling upon personal property under the Bill would be 3½ per cent, or from 9d. to 9½d. in the pound. It was said that, on the other hand, rates fell upon real rather than personal property. The rates upon houses were very heavy; but the real answer to the objection was that the rates falling upon landed property were but a substitute, and a small one, for the feudal burdens which fell formerly upon land. Of late years, too, under the administration of the present Government, land had been considerably relieved from rates. It appeared to him that financial reasons had great weight with Her Majesty's Advisers in inducing them to dissolve Parliament in so sudden a manner. In the Budget there was no provision whatever for the expenses which must necessarily be incurred in South Africa in the coming year. They had occupied the Transvaal against the will of the inhabitants, and must keep troops there. They were about to try the effect of a new Administration in Zulu-land, and there also troops must be kept. Griqualand and Secocoeni's country, with the whole great region behind it, would be additional sources of expense. Then, there was Afghanistan, there was the great and glorious Treaty they had made with Turkey; and it was not unlikely they would have to guarantee the independence of Persia. No provision had been made for meeting the expenses under these heads, and he could not but think that a future Administration would have to pay a heavy supplementary Bill for the spirited foreign policy of Her Majesty's present Government.

MR. E. JENKINS

said, that the Chancellor of the Exchequer had that night proved himself to be an optimist, and that some of the right hon. Gentleman's Estimates were such as the country ought not to believe or rely upon. If the right hon. Gentleman was unprepared to answer the charges brought by the hon. and learned Member for Sheffield (Mr. Waddy), it must be clear that the discussion that night was a mere delusion and farce. He did not suppose that there ever had been such a misuse of Majesty, as when the Queen was asked to open Parliament at the commencement of this Session. He thought it was very wrong that the Session should have been opened with such parade, and that the Queen should herself have opened a Parliament with such pomp which was so soon to be dissolved. The country had been assured that this was to be a real working Parliament, that obstruction was overcome, and that Parliament was going to buckle to and get through a great mass of work. But they had just had an incomplete Budget. The fact was that the Chancellor of the Exchequer was afraid to go to the country with a complete Budget. As to the Anglo-Turkish Convention, it had brought us nothing but expense. The Government had placed the House, the country, and itself in a ridiculous position. The country would see through the hollow pretensions of the Government. Instead of substance, they had offered nothing but a miserable sham. When they asked whether what they had achieved was not worth the money that had been expended on it, the answer from that side of the House was, "No;" and that, he believed, would prove to be also the answer of the majority of the country. The hon. Gentleman was proceeding to comment upon Lord Beaconsfield's letter to the Duke of Marlborough, when——

MR. SPEAKER

observed, that the hon. Member was wandering beyond the legitimate limits of discussion on the Question before the House.

MR. E. JENKINS

said, he would refer to the Army Estimates. In 1878–9 the Estimates had been £15,595,800; but the Expenditure, excluding the South African War and the Afghan War, was £17,653,000, showing a deficit of more than £2,000,000. In 1879–80 the Estimate was £15,645,700, and they had not yet ascertained the Expenditure up to the end of March. But, from the analogy of the preceding years, they might expect a great increase. And the expenses of the South African War might have been £1,000,000 or£1,500,000 less, if the Government had withdrawn the General who was in command. They had very little to gratify them as the results of this large expenditure, which had put the Budget into so complicated a state.

MR. RAMSAY

said, the Chancellor of the Exchequer had endeavoured to change the incidence of taxation in a manner which would prove most detrimental to large classes in the country. While professing to be solicitous for the welfare of the agricultural classes, the right hon. Gentleman was taxing the savings of the farmers. In his (Mr. Ramsay's) opinion, the probate duty on personal property should not be increased without a corresponding increase of duty in the case of real property.

MR. MORGAN LLOYD

said, it was impossible, owing to the time when the Budget had been introduced—namely, after the announcement of an intended Dissolution of Parliament—to have the proposals of the Government discussed in a full House. The Probate Bill ought to have been brought forward at a time when its provisions could be carefully considered; but now it was placed on the Table in the last days of the Parliament, when the Government were in a position to force it through the House. He regarded the Bill as a mere makeshift and attempt to raise a sum of money on no principle whatever. Probate duty, in his opinion, ought to be altogether abolished, and an equal duty placed upon all estates of testate and intestate persons. There was no real reason for the wide distinction which now existed between real and personal property; and any change in the law should be in the direction of equalizing the succession, legacy, and probate duties. This Bill aggravated the inequality, and imposed an additional burden upon those least able to bear it.

MR. SHAW LEFEVRE

wished to say a few words by way of protest against the principles of the Bill. It appeared to him that it would aggravate the already great difference between the way of treating real and personal property on the death of the owner. Before dealing with the special point which he wished to bring under the notice of the Chancellor of the Exchequer, he would observe that he thought the right hon. Gentleman had greatly under-estimated the amount of increased Revenue which the proposed change would produce. Instead of £750,000, supposing the amount of property assessed to be the same as during the last two years, the increase of duty wouldbe£l,000,000. The last year for which they had any definite information was 1876, and in that year the amount assessed for probate was £131,000,000, and the duty paid was £2,280,000, which was about 1¾ per cent. The present Bill was apparently framed on the basis of charging, as far as possible, an uniform duty of 2½per cent, with some little deduction in the case of estates under £500, which did not materially affect the calculation; 2£ per cent upon £131,000,000 would produce as nearly as possible £950,000 in addition to what was actually paid in 1876. Therefore, there was every prospect that in future years the Chancellor of the Exchequer would receive an extra £900,000 or £1,000,000 in respect of this tax. If the amount fell in one year it might rise in another, and this was not to be a temporary but a permanent tax; and, therefore, they might look forward to a constantly increasing amount of receipt. What he wished especially to point out was the injustice of this tax upon one class of property—namely, leasehold houses. He thought the Chancellor of the Exchequer could hardly have appreciated the importance of the tax upon that class of property, and could hardly have considered how very large a proportion of the property of the country was invested in houses. In the assessment to Income Tax, the value of the houses in this country was considerably more than the value of the land. The houses were valued at £90,000,000 a-year, and the landed property at £60,000,000 a year; so that the houses were valued at half as much again as the land. He wanted to point out the difference in the treatment of leasehold houses as compared with freehold houses. What the actual proportion of value of each class of houses was he could not accurately state; but his impression was that about half the total value of the houses in this country was represented by leasehold houses, and, looking at the enormous amount of leasehold property in London and other parts of the country, he thought that was a reasonable estimate. Now, leasehold house property paid both succession and probate duty; but freehold house property only paid succession duty. A case came under his own notice recently, in administering an estate, which was not a bad example of the effect of this difference. There were two houses, one leasehold and the other freehold, and each was valued at about £5,000. On the leasehold house there were payable £70 probate and £50 legacy duty, or £120 altogether. The freehold house paid only a succession duty of £27. There was a difference, therefore, of between £120 and £27 in the two cases. This Bill would aggravate the matter considerably, because it would increase the probate duty to £90, and the total would be £140 in the case of the leasehold house, and £27 in respect of the freehold house of the same value. That appeared to him to be a very grave inequality in the treatment of the two classes of property. The Chancellor of the Exchequer gave as a reason for the different treatment of land that the land paid local taxes; but leasehold houses paid local taxes just as much as land, and, in fact, considerably more, because local taxes were higher in towns than in the country. That was certainly the case in the borough he represented, where the rates amounted to something like 8s. in the pound, and he did not think there was any rural parish where they reached anything like that amount. But he though the might, at any rate, take this as a general rule—that leasehold houses paid as much local rates, if not more, than land. [Sir HENRY SELWIN-IBBETSON dissented.] He saw that the Secretary to the Treasury shook his head; but that was his experience. At all events, there was this argument—that they did pay local rates; and, therefore, if land was to be exempted on that ground, houses ought also to be exempted. He would venture to quote another case which recently occurred. A very large owner of house property in London died not many weeks ago, and his rental was stated by the papers to be no less than £120,000 a-year. Nearly the whole of that property was freehold ground rents, which might be valued at 30 years' purchase, or no less than £3,600,000. It was left to three ladies, all of whom were over 70 years old; and the House would, perhaps, be surprised to hear how small the succession duty on that enormous property would be. Of course, the amount of duty depended very much upon the age of the parties, and he had taken them at 70 years in his calculation. He found the duty would be no more than £8,040. Moreover, payment was spread over four years, and discount was allowed at 4 per cent, so that the amount would be reduced to £7,200. If the property had been leasehold, under the present law there would have been payable £54,000 probate and £36,000 legacy duty, or a total of £90,000; and under the Bill now before the House the probate would be £90,000 and the total payment £126,000, as compared with £7,200 which was now payable on the property as freehold. It should also be remembered that in this case the property did not pay local rates at all, because, by the custom of all these leasehold properties in London, the taxes were paid by the tenants, and not by the ground landlords. Here, then, they had the grossest inequality that could possibly exist, and which clearly could not be allowed to continue. Looking at the matter from the landowner's point of view, he should have thought it would be most dangerous to increase that inequality. The Chancellor of the Exchequer might, perhaps, think he knew better what were the interests of the landowners; but he now proposed to increase that inequality by at least 40 per cent. On what possible ground could the distinction be justified? He had shown that the one class of property had to pay eight or ten times as much as the other. He would put one other case. Let them suppose a property of £1,000 a-year invested in land, the value of which he took to be £120,000, and let them suppose that it came into the possession of a person aged 40. The total amount of succession duty payable by the new owner would be only £540. But if that £120,000 were invested in leasehold house property or in Consols, under this Bill it would pay, in the shape of probate duty, £3,750, and legacy duty £1,420, making a total of £5,170 as compared with £540, or almost ten times as much in the one case as in the other. Many other objections had already been offered to the measure which he need not repeat; but this special inequality between the treatment of freehold and leasehold houses he earnestly commended to the attention of the Chancellor of the Exchequer, hoping that the right hon. Gentleman would give some reason and explanation on the subject.

MR. W. HOLMS

called attention to the very great falling-off in the Customs and Excise during the past year, amounting to between £2,000,000 and £3,000,000. Looking at the Customs and Excise as the best barometer of the condition of the great mass of the people, that decrease seemed to indicate a great depression, from which they could not reasonably expect the country speedily to recover. In certain manufactures great progress was being made, and there were indications of returning prosperity; but it must be a somewhat slow process. The duty of the Chancellor of the Exchequer was to keep down his Expenditure as much as possible; but he found that, whilst in 1878–9 the Exchequer issues amounted to £84,200,000, in the ensuing year the Chancellor of the Exchequer proposed to expend the enormous sum of £86,000,000. The amount of £1,400,000, which was required to meet the new charge for paying off the £6,000,000 of deficit was proposed to be raised in two ways, both of which were extremely objectionable. The new scale of probate duties was, to some extent, an improvement so far as regarded proportionate charge in large estates; but it should have been accompanied by an increase of the succession duties, as all the proposed increase of taxation was upon personal estate. He understood, from an actuarial calculation, that the succession duty on real estate was only about a third of the probate duty on personal estate; so that whilst the probate upon £10,000 of personal estate would be £240, the succession duty upon real estate of that value would be only £80. And, under the new arrangement, the difference would be increased from three to one to four to one. He protested against this distinction, and could not understand why real property should pay less duty than money, or bank shares, or manufactured goods. Property of all kinds should be placed in the same position. There were some peculiarities in the scale of probate duties. For instance, if £10,000 paid £240, one would imagine that £30,000 would pay £720, but it would only pay £690; and there were other like inconsistencies. He objected also to the Chancellor of the Exchequer appropriating the new Sinking Fund. When it was established the Chancellor of the Exchequer remarked that it would be to the interest of future Chancellors of the Exchequer to keep it for the purpose for which it was intended; and it was surprising to find that right hon. Gentleman, who was usually cautious and prudent, now seizing that very Fund. Having done so, he could scarcely expect that it would be left untouched by future Chancellors of the Exchequer. He thought it was right to state these objections; and it was to be hoped the inequality of the treatment of real and personal estate would not be allowed to drop.

MR. O'DONNELL

had not intended to take part in the debate; but, as he understood there was hardly any other important Business before the House, except, perhaps, the Government Bill for the promotion of corrupt practices in borough elections, he would contribute his small share to the discussion of the Budget. Inequality was a very mild word for the different treatment of leasehold and freehold and real and personal property; but as the electoral contest was likely to bring hard words he would content himself with that term for the present. There was no justification for the system of heavily taxing wealth that was earned and lightly taxing wealth that was naturally inherited; and he questioned whether it was to the advantage of the landlords themselves that scandalous inequalities of that kind should be perpetuated and aggravated. He was afraid, however, the maxim of the landlords would be to keep all they had and get all they could; but that would hardly entitle them to be dignified by the title of pillars of the Constitution. The proposal of the Chancellor of the Exchequer was scandalous and notoriously unjust, and was perpetrated under such peculiar circumstances, just on the eve of a General Election, that the attention of the country would be called to it, and all the more, because the Government had prevented the attention of the House from being properly directed to it. The little move of the Government on behalf of their friends the landlords would result in the present arrangement between the landed and other interests of the country being carefully scrutinized, and in a re-adjustment upon a very different principle to the want of principle which the Government proposal displayed. The Budget was characterized by an enormous deficit, and no honest attempt had been made to pay the War Debt out of current Expenditure and taxation. If India had not been grossly burdened, and if Ireland had not been grossly overtaxed, the results presented by the Chancellor of the Exchequer would have been still worse. Glancing over a book, entitled Twenty Years of Financial Policy, written by the Chancellor of the Exchequer, he found in it a passage which he thought fully explained why the war expenses incurred by the present Government were not to be paid out of taxation. At page 247 he found an extract from a speech by the right hon. Gentleman the Member for Greenwich (Mr. Gladstone), who, in 1854, laid down this proposition— The expenses of war are a moral check imposed on those who are slaves to a desire for conquest. Among many nations this excitement about war is an important element. Notwithstanding the miseries which it entails, it is invested with charms in the eyes of the community which tend to blind men to its evils. They have, therefore, the disagreeable necessity of defraying from year to year the expenditure which it entails. This is a salutary and wholesome check making them feel what they are about. It is by these means that they may he led to consider a war policy carefully; and it may be, perhaps, that they will keep their eyes well fixed upon the necessity of the war in which they are about to enter, and will entertain a full determination to look carefully for the first prospect of concluding an honourable peace. That quotation contains an explicit explanation why the Government, having entered upon wars that were not necessary ones, and which were in no way to be justified, preferred to take that measure of meeting them which is as near as possible calculated to address itself to rational intelligent beings. He need not then go into the details of the discussion with reference to two of the points; but there could be no question that India had been treated with the grossest unfairness, and that whatever might be the decision of this country, unless he was very much mistaken, that course of injustice to India would result in a new crop of evils which would carry with it a larger expenditure than that to which he had already referred. So close on the discussion of the hon. Member for Youghal (Sir Joseph M'Kenna) on the over taxation of Ireland, it was unnecessary to refer to the third point at the present stage of voting the Budget. Ireland was over-taxed; and if she had been taxed in due proportion there would be an additional item towards swelling the deficit in which the general mal-administration of the finances had placed the Budget Statement of the right hon. Gentleman the Chancellor of the Exchequer.

MR. SULLIVAN

said, he should only make a few remarks. He should ask permission of the House, before the Question was put from the Chair, to detain them for a moment. He thought he should be perfectly in Order in making reference to the cost entailed upon them by the Afghan and South African Wars. He had an idea that the country would not be willing to approve this Budget, and to ratify the expenditure of the millions of money which had been squandered on African and Asiatic Wars. The country, too, would be taxed considerably to defray the expenses of the unnecessary prosecution of a most unjust war in South Africa; and he thought that, before the expiration of the coming 12 months, the rich as well as the poor would feel the strain of paying the aggregate of millions of money expended in the redemption of military honour, or rather, he was sorry to have to say it, what would be more properly characterized as an unholy thirst for vengeance. It was his lot to rise in that House at the earliest moment when the House was voting the money for the Zulu War, and place on record his protest against it. He was told then that the money should be voted quietly, and he was asked to say nothing whatever with reference to the purposes of the war, as the proper time of taking objection to the expenditure would be when the country was required to pay the money or the House to vote it. He wished that night, in one or two sentences, to perform a like duty, which for a long time he had owed to his own conscience, which he had, in fact, owed ever since the occasion he had just referred to, by protesting against the first step in that House in connection with the taxation for that war; and as that was the last opportunity that he should have of doing so, he would ask the recollection of the country to a series of questions which had been put by so humble a Member of that House as himself, from time to time, last summer, with a view to relieving the expenditure and terminating the effusion of blood. He had asked the right hon. Baronet the Secretary of State for the Colonies on one of those occasions, whether it was the intention of Her Majesty's Government to make peace with the Zulu King? He should be in the recollection of that House when he stated in how cool a manner, and how evasively and delusively he was answered. Again and again he strove to press upon Members of the Government to let the country know whether they really intended to give that Zulu King the chance of acceding to reasonable terms, which, no doubt, it was the right of this country to demand, more especially because the Government were engaged in prosecuting a war which was unjust; and they knew from the papers that they themselves did not believe that the course they had pursued was necessary or just in carrying sword and flame into that country. The position the Cabinet maintained upon that occasion was delusive and intended to deceive the country. When Sir Garnet Wolseley was being sent out they were told that he was to be a messenger of peace; and he asked the right hon. Baronet the Secretary of State for the Colonies, for the third time, whether the Government would state to the House what were the proposals of peace which that General was charged to take with him, in order that they might have an opportunity of saying whether they considered them satisfactory? What was the answer to that request of his? That answer was successful for the moment; but he did not envy the emotion of that Minister of the Crown when he reflected upon it, and when he came to ask himself whether it was worthy in candour, straightforwardness, and truthfulness, and whether it was characteristic of the responsibility necessarily attaching to a Minister of the Crown? The answer he received was that, for certain reasons, the question must not be replied to. The Zulu King might, forsooth, have had a special wire. He might, forsooth, get a telegraphic hint beforehand what the terms were to be, and, therefore, to give an answer might be prejudicial to the magnificent results which were to be expected strategically, politically, and diplomatically in that quarter, and would probably destroy the settlement that might otherwise be arrived at. There were sitting at that time Gentlemen, on the other side of the House, who had stood to their guns and followed their Leaders like men; but even those Party men would have their moments of reflection—and Conservative Gentlemen had consciences as quick to the sense of honour as other hon. Members—and he would put it to them whether the answers that were then given, in reply to his questions, were true? From that hour to the time when that war had been prosecuted to its conclusion, he had charged the Government with a waste of money and a waste of blood. That was his reason for speaking then on the Motion before the House. In imposing these taxes the country were paying the penalty on account of carrying out that unholy war. On one occasion, the right hon. Baronet the Secretary of State for the Colonies had even gone so far as to let fall an expression which was received with murmurs from the Conservative Benches. That expression had been then quickly withdrawn. He would not say that the phrase then used by the right hon. Baronet expressed his sentiments correctly. He did not, then or now, think that the right hon. Baronet the Secretary of State for the Colonies was personally accountable for those proceedings, because the Government were aware that they had been precipitated into that course of conduct by the action of Sir Bartle Frere against, as he believed, their own sentiments and convictions; and he believed that the right hon. Baronet, as well as some other Members of the Government, personally condemned the precipitancy of that conduct, and would most gladly have avoided it altogether. But the war was continued, taxation was heaped upon Africa and us, in order to wipe out the disgrace which was supposed to have befallen the arms of this country at Isandlana. The Zulu nation was a Pagan nation, and we were Christians; and that was the true Christian spirit of warfare we were to show the Zulu people and King that we practised general morality and did to others as we would be done by. He would say that night, and remind the right hon. Baronet the Member for Tamworth (Sir Robert Peel) that, in every instance, he was not deterred by those evasive answers, but returned again and again to that subject in the House, thereby following out his conviction. The Government had determined not to make peace, but to crush, exterminate, and wipe out that Zulu nation. It made no matter whether the elephant tusks were or were not sent into the British camp. It was of no avail that we had an able Christian Prelate who would willingly have been the ambassador of peace—who would gladly have borne the Gospels in one hand and the olive branch of peace in the other. He referred to Dr. Colenso, who had again and again testified to the fact that, at any stage of the war, it was perfectly practicable to avert any further expenditure or shedding of blood by simply being just to this Pagan race. Her Majesty's Government were determined to carry out their dark purpose. They had long before determined to accept no terms whatever of peace, and to give the King no chance. His doom and ruin wore already settled in Downing Street, London, and there was nothing before him but exile. But a day would come when the passions of that hour would have subsided, and there yet would come a time when the English people would read the story of the war with the Zulu nation and of the capture of their King, and blush for the statesmen who had accomplished it. Wherever they went, in whatever quarter of the globe they looked, civilization was pushing its frontiers, and everywhere they saw White races in close proximity to savage ones. In the United States of America they saw them face to face with the Bed Indian, and in Zululand and Afghanistan a similar state of things between our own countrymen and the Natives of those parts; and he would merely ask the question what justification there was for any outlay in that direction? He did not deny but that he had opposed the Resolutions that night for the same reasons that he opposed the justice, policy, wisdom, and necessity, as it was called, of that outlay in the very earliest stages of that struggle. But all was over now. They had seen traced for them by journalists the ruin of the Zulu nation; but it might turn out—as in the case of the annexation of the Transvaal, which that House had approved and had withstood any opposition with such intolerance—that the fracture of Zululand into five or six chieftainries would not effect its purpose, but, on the other hand, that there would be a continual expenditure upon future Budgets, and charges for future generations to de fray. In those matters, the conduct pursued by the Government was not credit able to this country. The Zulu King had been chased and hunted down——

MR. SPEAKER

The hon. and learned Member seems to me to be speaking on the question of the Zulu War; and, no doubt, that has some bearing on the matter before the House. At the same time, I must remind the hon. and learned Member that he appears to be rather trying the patience of the House.

MR. SULLIVAN

said, that he bowed to the ruling of the Chair, which was, no doubt, perfectly correct. A speaker was not always aware when he was travelling from the subject under discussion. But he desired now simply to conclude by saying that, so far as the discussion was concerned, he did not feel inclined to proceed any further with the argument; but that being the last stage in that Parliament when he should have the opportunity of discussing it, he had thought it his duty to protest against the imposition of taxes to defray expenses that had been incurred in war that was revolting to his heart and conscience.

SIR MICHAEL HICKS-BEACH

said, that the spirit, if not the letter, of the speech of the hon. and learned Member for Louth (Mr. Sullivan) seemed to be utterly irrelevant to the Question before the House; and there was not a sentence of that speech which appeared to him to affect the discussion of that evening. But if anyone would examine the promises which had been made by him and other Members of the Government as to the course that had been pursued, from the time of the commencement of the Zulu War to its end, he would see that those promises were that every means should be taken to obtain a secure peace as soon as it could safely be done, and that they had been adequately and honourably fulfilled. He would further say, with reference to the speech of the hon. and learned Member, that lie thought it very culpable that anyone should come down to the House and make charges against him or anyone else of want of truth, straightforwardness, and of giving evasive answers to Questions, without Notice first being given, in order that a full and particular reply might be made to any charges of the kind. If the hon. and learned Member really believed the charges which he had made, either against the Government or himself (Sir Michael Hicks-Beach), the proper way to bring such a matter forward was in the shape of a Motion, when he would have been prepared to meet him, and to give satisfactory proof to the House and the country that the charges which had been brought against him were entirely without foundation.

MR. SULLIVAN

said, he had not the remotest idea that he had made personal charges against the right hon. Baronet, and he thought a reference to what he had said would show that to be so; and, further, he had no idea that the right hon. Baronet was not in his place when he had commenced his speech. He intended to bring no actual charge against the right hon. Baronet.

SIR MICHAEL HICKS-BEACH

Why did you say so, then?

Question put, and agreed to.

Bill read a second time, and committed for To-morrow.