HC Deb 04 April 1881 vol 260 cc568-650

WAYS AND MEANS—considered in Committee.

(In the Committee.)


Mr. Lyon Playfair—Addressing you, Sir, at a period when the Revenue is just beginning to recover from a serious depression, and when important fiscal changes have been recently introduced, I have, I am afraid, a good deal to say. I will, therefore, not waste any time of the House by prefatory remarks, but will at once proceed to the substantial facts of the case. The gross Revenue of the year which has just expired amounted to £84,041,000. Comparing that with the estimated Revenue I find that the latter was £82,696,000. There is, therefore, the appearance of a very considerable increase; but it is necessary to analyse that Statement; and that analysis, I am afraid, will give a somewhat less favourable result than was at first apparent. The Customs were estimated to produce £19,300,000; they have actually produced £19,184,000. The Excise was estimated to produce £25,151,000; it has actually produced £25,300,000. The Stamps were estimated to produce £11,800,000; and they have actually produced £11,940,000. The Land Tax and House Tax, estimated to produce £2,760,000, have actually produced £2,740,000; and the Property and Income Tax, estimated at £10,425,000, produced £10,650,000. The whole Revenue from taxes, which I have now stated, on the original Estimate of the late Chancellor of the Exchequer, and as estimated in the month of June last by myself, amounts to £69,436,000, while the actual yield is £69,814,000. The Revenue which is not derived from taxes stands as follows:—The Post Office, always faithful to its work of rapid growth, was estimated at £6,400,000; and it produced £6,700,000. The Telegraph Service, which was estimated at £1,420,000, actually produced £1,600,000. The Crown Lands were estimated at £390,000, and have produced that amount; the Interest on Advances and other moneys, estimated at £1,250,000, produced £1,248,000; and the Miscellaneous Receipts, estimated at £3,800,000, produced a sum largely in excess of the Estimate—namely, £4,289,000. The total Revenue, as I have stated, was estimated at £82,696,000; and it has actually produced £84,041,000—showing an increase upon the gross figures of £1,345,000, of which, however, very nearly £1,000,000 is due to those heads which do not represent the taxation of the country. The total increase from taxation is only £378,000. The House will be desirous to know what have been the proceeds of those particular revenues or charges which were made the subject of special reference last year. The Probate Duty was estimated to yield an increase of £700,000; and has actually yielded £510,000, or £640,000, after allowing for the accelerated receipt in March 1880, prior to the new scale taking effect. But, in truth, the Estimate of £700,000 was by no means in excess; but it was rather an under-estimate; and the reason that the comparative yield is not greater is that there was a considerable swelling after the Estimate was formed (which was prior to the expiration of the financial year) of the yield of the Probate Duty of 1879–80 during the remainder of the year. The Beer Duty was esti- mated to yield £3,690,000, and has only yielded £3,485,000, showing a deficiency of £205,000. On the other hand, the malt drawback, which was, I will not say estimated—for drawbacks cannot be estimated, they can only be conjectured—the malt drawback, which was estimated at £950,000, has cost us no less than £1,319,700. So much, Sir, for a comparison of the Estimates, which, I think, I have shown, upon the whole, to have been just and reasonable Estimates of Revenue. But the House will derive more information from comparing the Revenue, so far as it is derived from taxes, with the Revenue of the preceding year. The state of the case, then, is as follows:—I will not give the House again the details of the several branches; but I will say that the Revenue produced from taxes in 1879–80 was £67,826,000; and in 1880–1 it was £69,814,000. That is a gross increase of £1,988,000, or nearly £2,000,000. But of that sum of nearly £2,000,000, £510,000 is the amount due to the increase on Probate Duty; and £509,000 is due to the fiscal changes which were sanctioned by the House in a later period of the year. The new taxes, therefore, account for £1,019,000 out of the whole increment apparent on the Revenue of the last year, compared with that of the preceding year; and the real increment of the Revenue is £969,000. Now, Sir, that increment cannot well be estimated without reference to the source from which it comes; and upon that I have only to say that, with substantial accuracy, it may be set down to the credit of the Excise. But the year 1879–80, with which we make the comparison, was a year in which the Excise had fallen short of its estimate by no less than £2,000,000. £1,000,000, therefore—and £1,000,000 only—may be said to have been recovered by the Excise upon the loss which was shown by the year 1879–80. The House will perceive, from the statement of figures I have made, that the impressions current in some quarters regarding the degree in which the Revenue has revived are more sanguine than the facts have justified. There is, upon the whole, a beginning of recovery; but I do not think it would be judicious to describe it as more than a beginning. Now, Sir, the most important single financial change which I have ever been concerned in recommending to the House was the change made last year—with hopeful expectation, but still, no doubt, with some uncertainty, and many difficulties of detail hanging around it—from a Malt Tax to a Beer Duty; and the House will expect to know, as far as experience has gone, what has been the result of that very important and large experiment. I have already stated that the revenue from beer has fallen short by £205,000 of the anticipations winch were formed of it; but I do not think—and here I shall be borne out by higher authorities than myself, practical authorities who sit in this House and elsewhere—that that deficit in the actual yield for the five months during which the duty has been in course of receipt shows anything unfavourable with regard to the ultimate operation of the tax from a fiscal point of view. I understand that, in the first place, great difficulties, owing to the prolongation of the frost, in obtaining water—and, particularly, greater difficulties still in pursuing the brewing trade, from the length and severity of the winter—have materially acted upon this particular item. There was, Sir, a controversy, carried on, I must say, in a most becoming manner on the part of those connected with this great industry—there was a controversy between the brewers and myself—with regard to the nature of the commutation we had made. It was contended by them that we had fixed the new standard in a manner unfavourable to their interests, and tending largely to impose upon them serious additional taxation; but we stoutly maintained the contrary. As far as figures go, of course, they might be supposed to tell in support of our contention in that controversy; but I do not quote them for that purpose. I think it only right to say that the controversy must stand over to be decided after longer experience. We still contend that, as far as our knowledge goes, the proceedings taken were just and reasonable; they will contend that the result, after a fair year's trial such as it may be hoped we are about to enter upon, will be that the Revenue will be considerably in excess of what we anticipated, and considerably in excess of my computation of the accumulated duty. There is also a great change of the whole conditions of this important tax. The change which has been made bears dif- ferently upon different classes; and especially it has told with some strictness, if not severity, upon the smaller and less skilful class of brewers. I do not believe it will be to their injury; but it has had this effect—that they are now obliged, in their own interest, to calculate how much they get from the barley which they consume. Formerly they made no such calculation. They proceeded rather by rule of thumb; and they were not aware of the fact that they got less from their barley than by the use of good processes they ought to get. I do not believe, as far as I can learn, that dissatisfaction generally prevails among them; and I must admit that the method of taxing, which is now more systematic—I might almost say, more scientific, from an economic point of view—will cause them to look more closely to their processes than was the case under the old Malt Tax, which was a tax levied in a manner, I am bound to confess, that was extremely crude. I must refer to another case—to the case of those who are known as the Burton brewers—to whom we are all indebted for providing us with one of the best drinks which has ever been produced since nectar went out of fashion. But the Burton brewers undoubtedly have lost an advantage which they enjoyed under the old Malt Tax. Nor can I restore to them that advantage. It appears to me that traders, to a certain extent, must take the chances of war. As long as the Malt Tax endured, that class of brewers, as compared with other classes of brewers, enjoyed a perfectly fair advantage. At the same time, it was an accidental advantage, on the permanence of which they could not rely. The reason was this—that the Malt Tax was, as the trade always contended, in its essence, a tax upon barley. It was a primary charge raised upon barley; and it could only be checked afterwards, to a certain degree, by certain tests in the course of that manufacture which gave to it the form of a Malt Tax. As it was essentially a tax upon barley, and as the duty was uniform, it is manifest that those who bought and used exclusively the best barleys obtained from them more valuable results, and only paid upon them the same duty as those who used inferior barleys. We have now passed away from that comparatively crude method of taxation to a system which is far more just, under which the tax is laid upon the actual yield of the materials, be they what they may, which are employed in the process of brewing. I regret that those who have such great claims upon us as individuals should in any degree suffer from the operation even of a fiscal improvement; but I do not see how it is possible to restore to them that particular kind of advantage which they formerly enjoyed, but which I am firmly persuaded, from the great vigour and constant expansion of their industry, they will be perfectly well able to dispense with. When I spoke last year of the substitution of a Beer Duty for the Malt Tax, I endeavoured to recommend it to the House as, in the main, a measure for the liberation of trade, and I contended that that measure for the liberation of trade must operate in a manner most advantageous to those who supplied the raw materials of the trade, who must, in the main, be the agriculturists of this country. Of course, any evidence that we may have as yet with regard to the operation of this change in liberating trade must necessarily be partial and initiatory. I have no doubt that it will accumulate by a longer experience; but yet, I think, I can state to the House some facts that are not uninteresting in themselves, and that will convey an idea of the mode in which we are entitled to anticipate great benefits from recent legislation. I will take first the case of barley, and I will mention the proceedings of a house well known in the trade, and engaged in large brewing operations. That house has wisely addressed itself—and, no doubt, many others have done so also—to meeting the change in the law by resorting to purchases of barley lighter in weight and yielding a smaller product for the purposes of their trade. The result of this operation is this—they gained in the price of their barleys 10s. per quarter, and they lost in the qualities of their beer—I am not quite sure whether it was 4s. or 6s.; but, to be on the safe side, I will say 6s. a quarter, and the result was a net profit to them from the operation of the change of the law—for before that change they could not afford to use those light barleys—of 4s. on the quarter of barley. Oats have begun to be used by the brewers; rice, too, has begun to be used; and maize has begun to be used for brewing. These I look upon as a beginning only, and I speak of them only as such. Besides this, a very important relief has been given to those who use sugar for brewing. Formerly, it was necessary, with a view to the imposition of the tax, that any saccharine material—syrup for instance—must be reduced to a dry state in order that the duty might be taken. Since the Beer Duty was established, the manufacturer of beer takes his choice. The duty can be levied on the material syrup, and the material syrup can be used just as well as sugar; and syrup has accordingly been brought into use. I should like to give a little detail I think the House would like to hear about the case of maize, because it is an interesting illustration of the mode whereby, when freedom is given to an industry, the principle of private enterprize applied to the facts discovers profitable methods of working. Maize was considered somewhat hard for the purposes of brewing. It was also found, when a series of experiments were made, that it contained too much oil, which was a very grave objection. Then a further discovery was made that the excess of oil was not diffused through the general body of the grain, but lay entirely in that which was called the germ of the grain. Consequently, the wit of man, thus provoked and stimulated, extracted the germ from the grain, and turned it to its proper account—that of making oil, which we can burn in our lamps. The maize, relieved of the excess of oil and now made suitable for brewing, was applied to that purpose, and I understand that the result is not only satisfactory as regards the beer which proceeds from it, but likewise that it is satisfactory on this point—that the residue, after the extract has been taken, is found to be decidedly more available and profitable for the feeding of cattle than the residue formerly obtained from barley. These are details, and interesting details, as to the mode in which private enterprize goes to work always with an ultimate benefit which is sure to reach the public when changes that tend in the direction of commercial freedom are made. I must not pass from the subject without saying a few words about the condition of the private brewers, in whom so many persons are interested. First, I will give the statistics of private brewing. There are no less than 60,000 private brewers in this country, as ascertained by the licences taken out. Of these 60,000, 45,000 pay 6s. for their licences, and are not taxed upon their materials. The 15,000 remaining are under duty, and in the whole year these 15,000, it is computed, will yield us about £50,000. It is very unlikely that the materials consumed by the other 45,000 represent nearly so much as £50,000 of duty; consequently these 60,000 brewers, carrying on their trade in their private houses, do not consume, as far as we are able to judge, one-hundredth part of the whole of the material applied to the production of beer in this country. The House may, therefore, judge that the time has arrived when it would be no longer right that the difficulty of dealing with the private brewers should stand in the way of an important legislative change and a great public benefit. I shall have next to propose certain changes in the law with regard to the case of these private brewers. First, with regard to the private brewers who are under duty, we think that there is something in their complaint that their case is, in some respects, less favourable than it was under the former system, and we therefore propose to make them an allowance of 6 per cent on their materials—the same allowance as is made to the public brewer. There are other changes in detail, which will be much better understood when the House will have them in the form of a Bill in their hands than they can be now. We find that there are great inequalities in the operation of the law as it now stands. In the first place, it is absolutely necessary that, together with the farm-house, offices, yards, and gardens should be included, and that the power to value them should now be secured. At present there are a great many cases where it is declared that a farm-house apart from the farm buildings has no value at all, and we have no means of putting a value upon it. That is not just. We must look at equality between classes, and it is quite necessary that we should have the power of getting at the value of the farm-house in the only form in which we can get it, by taking together the value of the farmhouse and its buildings as one common lot; and we propose, therefore, to make that change in the law. Besides that, we propose a change which I hope will be convenient to farmers and others in various parts of the country—namely, to introduce an intermediate class between £10 and £15 of valuation, and to provide that persons living in houses so valued, and brewing only for domestic use, should be allowed freedom from taxation on their materials, paying a 9s. licence, instead of 6s., to keep them in just proportion to houses valued at £10. It will be necessary, Sir, as a complement to, rather than alteration of, the legislation of last year, to deal with the duty on foreign beer, which has not yet been modified. As compared with the 6s. 3d. which we levy upon British beer, the duty upon foreign beer is now fixed at such a standard as to make it 7s. 1d. upon the same quantity and strength of beer. That is evidently in the nature of a differential duty, which I am quite sure the brewers of this country have no disposition to maintain. Our proposal is to make a fair allowance for the effect of Excise restrictions, and to fix the tax at 6s. 6d. There is another small change which we propose in the duty on the article called "mum," or spruce. I trust that no Member of this House will be so injudicious as to ask me what is the article called "mum," or spruce, for I should be bound to confess my ignorance and say—"I do not know." I shall endeavour to defend myself, however, by stating that this ignorance of mine is shared by the whole of the Revenue Department, none of whom can throw the smallest light upon the point. A similar case has occurred in the course of my experience. I remember that when 40 years ago we began to deal with the Customs Duties of this country, we were confronted with the word "inkle," and no human being of that day entertained—or, I believe, at this day does entertain—the slightest notion what "inkle" is; although, perhaps, we may yet have some information about it. There must be an adaptation of the duty with regard to the importation of this kind of beer; and as it is imported in much stronger form than formerly used to be the case, our duty will be in this instance to propose an augmentation of the duty on spruce beer when it comes from abroad. That is all I will trouble the House with in regard to the operation of the Beer Duty. I may say that since the month of June last, when I urged on the House the adoption of this change, I have not seen any reason to recede in any respect from the propositions I then made, or to abate the hopes I then held out. On the contrary, I am bound to say that, owing in a great degree to the courtesy, diligence, and great sagacity of the officers of the Board of Inland Revenue, this very difficult change has been carried into effect all through the country with an amount of friction very much less than on a reasonable estimate we might have been entitled to expect. So much for the Revenue of the past year. Now a few words upon the Expenditure, which will be very short. If we compare the Expenditure with the Estimate, we find that the Estimate was £83,840,000, and that the actual Expenditure was £83,108,000; so that the Expenditure was less than the Estimate by £732,000. If I compare it with the Expenditure of the former year, I find that the Expenditure for the year 1879–80 was £84,105,000, and for the year 1880–81 £83,108,000, showing a diminution of £997,000, or, in round numbers, of £1,000,000. If I compare it with the Revenue of the year, I find that the Receipts of the year are £84,041,000, and the Expenditure £83,108,000, so that the surplus of Revenue over Expenditure is £933,000. I will not pass from this subject without saying a few words upon the condition of the Public Debt. The Funded Debt was, in round numbers, £710,500,000 on the 31st of March, 1880, and it has been diminished by about £1,400,000. The Unfunded Debt has been much more largely diminished—namely, from £27,345,000 to £22,078,000—by the conversion which was made by the right hon. Gentleman the late Chancellor of the Exchequer, and which he fully described at the time he brought it before the House. The Terminable Annuities, instead of showing a large diminution, as they would have shown in case that conversion had not taken place, on the contrary, show an increase of about £1,330,000. The whole of that increase has been taken up, and this additional charge has been incurred, in order to meet the outlay occasioned by the conversion to which I have referred. The total, Sir, stands thus. The Debt on the 31st of March, 1880, was £774,044,000, and on the 31st of March, 1881, it was £768,719,000, which shows a reduction of £5,325,000. But, besides that reduction, the Balances in the Exchequer, which were in 1880 £3,273,000, at the end of the present year were £5,928,400, showing an increase of £2,650,000. Putting these two sums together—for an increase of the Balances is virtually the same as a diminution of the Debt—there has been ostensibly a reduction in the Debt during the year of £7,975,000. But from that there are to be deducted certain excesses in the repayment to the public of loans formerly outstanding—a diminution of these assets which used to be described by my right hon. Friend opposite as part of the property of the public. Happily, more than one great town—exercising the principle and exhibiting the virtue of selfgovernment—has gone into the market for itself, and, instead of coming as a petitioner to Downing Street, has ascertained what its own credit would do. So satisfactory has been the result, that £1,000,000 has been repaid to us in excess of our advances during the year which has just expired, and has caused this diminution to which I have referred in the amount of our outstanding loans. In tracing the reduction of Debt, the Committee will see that I am very near the mark when I put that sum at £7,000,000, of which £2,500,000, in round numbers, constitute the increased Balances, and £4,500,000 reduction of Debt. I do not mention this as a matter of boast—I very much wish it had been more. A small part of it has proceeded from the Sinking Fund established by the right hon. Gentleman the late Chancellor of the Exchequer. I was not among the original approvers of that Sinking Fund, nor do I recede from the objections I took to it as compared with other methods of meeting Debt; but this I must say, we have got it, and having got it—it being embodied in our law and having operated to the extent of £350,000 during the year which has just expired—I am not at all disposed to push my objections to the point of asking the House to repeal it. The reduction of the National Debt is a matter in which I have always felt a great degree of interest, and a great desire to see carried out. I have never thought that our operations in that direction have been as large as they ought to have been. The House, however, having refused to deal with it in what I think the best way, I accept the second best way, and take it as effecting, at all events, a reduction of Debt, and am thankful for it. But I may say here, though it is no part of the proposition I am going to place before the House for its practical judgment tonight, that it appears to me the time has come when we may properly make a further provision for the reduction of Debt by a change which I will describe—by the conversion of a portion of the short Annuities, that will expire in 1885, into longer Annuities that will not expire until 1906. The effect of that conversion, of course, is to liberate a very considerable annual sum. I should regard it as a wholly illegitimate proceeding to apply any portion of the sum, so liberated, in favour of the Ways and Means of the year. I propose to use it to the last farthing in the re-conversion of Stock, into those longer Annuities, expiring in 1906. If I state the figures to the House it will be seen that, at the present time, the total amount of Terminable Annuities which we pay is £7,102,000, of which £6,000,000, in round numbers, expire in 1885. Of these, it is proposed to convert £2,000,000 from four-year Annuities into twenty-five-year Annuities, terminating in 1906. By so converting them, after paying the interest on the Stock into which they are converted, we shall have a sum of £1,550,000 at our disposal. That will enable us to convert £60,000,000 of Stock, and we take that £60,000,000 of Stock as follows:—£20,000,000 of Government Stock held by Savings' Banks, which will leave a sum in the hands of the National Debt Commissioners more than ample for all demands, and £40,000,000 of Government Stock held by the Court of Chancery. With regard to the Chancery Stock, of course, in a matter of that kind, I have not acted without consulting those whose business it is to watch over the interests of Chancery Suitors. I am only illustrating the case when I state to the House how that matter stands. That £40,000,000 will leave a very large amount of Government Stock in the hands of the Court; this is all backed up by a guarantee upon the Consolidated Fund. The increment of Government Stock held by the Court of Chancery from year to year is about £500,000; and it is scarcely possible, unless some fundamental change takes place in the condition and movements of the country, that it should cease to increase. But what is material to be understood, even from the first mention of a subject of this kind, is that in respect of this Chancery Stock the position of the Suitor will remain precisely what it was, both as to his claim and as to the manner of dealing with it. Everything to be paid to him will be paid in Stock or in money, just as heretofore. Of course, these Terminable Annuities are things with which he has nothing to do, and which it would never be dreamed of placing in his hands in lieu of more convertible property. I think it is impossible for me to state too strongly and broadly that there will be no change whatever in the position of the Chancery Suitor. The operation is simply a financial operation, and has been considered in the light of a question of expediency only for the conversion of a certain sum of short Annuities into long Annuities. There is another point on which I think it is necessary to say a few words, because in my estimation we have reached a period at which I think the attention of the Committee ought to be addressed to it. I think this is one of those junctures which undoubtedly renders it, if not obligatory, at least expedient, that this should be done. I wish to present to the House, in a very succinct and general form, a few figures which, I think, illustrate in a striking manner the present movement of public wealth as compared with population and expenditure. This is a subject which does not annually come under the consideration of the Committee; but, undoubtedly, it is a subject that periodically it is desirable should be brought into view, and especially so when a change has been taking place with respect to which the Minister may happen to believe, as I believe, that neither the public nor Parliament are fully aware of it. We make ground at such a rate, and for such a long time, that people begin to believe we shall never cease to make ground; but I wish Parliament to understand that we are not making ground at present. I speak of the last few years, and without reference to Party differences, and I say we are rather losing than making ground. In the calculations of Expenditure I shall present, care has been taken to exclude everything that can be called occasional; all Votes for special purposes have been shut out, and if they had not been shut out, the result would have been, perhaps, more striking than that which I now present. For example, the £6,000,000 taken by the late Government at one period of their existence does not enter into the figures I shall present; nor does the £3,200,000 paid by a former Liberal Government in respect of the Alabama Award. As far as possible, the whole of the results are given in round numbers and approximately, and they do not include anything but the normal Expenditure. I have said there are three elements in the calculation—Population, Revenue, and Expenditure. I begin with the year 1842; there are four different periods, and I compare the first year of each period with the last. The Revenue referred to is derived exclusively from Customs, Excise, Stamps, and Taxes. I shall say a word or two upon the Income Tax afterwards, because I think to include it now would be to introduce an element that would be rather bewildering; but the points I have stated the Committee will see, on the whole, form a fair measure of progress, or the reverse. The Expenditure is, of course, that which we sometimes call optional—that which is in the main Supply Expenditure, excluding Expenditure upon the Debt of the country. The first period is from 1842 to 1858, the latter year being taken because it is the first year of normal Expenditure after the Crimean War. During that period, which included the Famine in Ireland, the Population increased only ⅓ per cent per annum. The Revenue increased at the rate of 1¾ per cent per annum; but the Expenditure increased per annum 2½ per cent—somewhat faster than the Revenue. The next period is from 1859 to 1873. The population increased 1 per cent per annum; the Revenue increased 3 per cent per annum; and the Expenditure 1⅓ per cent per annum. The next period is from 1874 to 1877; and it represents what may be called the setting sun of our prosperity—the last years of rather fading brilliancy, as compared with the economical results of former periods. From 1874 to 1877, the Population still increasing at 1 per cent per annum, the Revenue increased 1½ per cent per annum; but the Expenditure increased at the rate of 3¼ per cent per annum. Taking the two last years, 1878 and 1879—that is, down to March 1880—the Population still increasing at 1 per cent per annum, the Revenue went back at the rate of ½ per cent per annum; but the Expenditure continued to increase at the rate of 2⅙ per annum. So that not only during three of those periods has our optional Expenditure increased a great deal faster than our Revenue, but, in the fourth of those periods—that is, during the last two years—our Revenue has actually gone back, while our Expenditure has increased 2⅙ per cent per annum; and I am sorry to say that when I come to make provision for 1881–2, I shall be obliged to ask for a further augmentation. I will now present the subject in words which show these results in a simpler form. The readiest and simplest of all methods of illustrating the growth of wealth in this country is by a reference to the Income Tax. But, then, we are met by this—that 1d. in the Income Tax does not mean the same thing in different years. In the year 1853 the area of the Income Tax was extended. In subsequent years it has been considerably diminished; and it is necessary to make very careful allowance for all these successive changes, and to balance them one against the other, or else the comparison of the 1d. of Income Tax in one year with the 1d. of Income Tax in another year tends only to mislead. I will not go into the details of these changes. They would be wearisome, and they are, besides, unnecessary; but great care has been taken in preparing the very simple statement I am now about to submit to the Committee, and I can confidently state that it may be, as a whole, safely relied upon. The 1d. of Income Tax in 1842–3, when the tax was first laid on, was worth £772,000. No changes took place in the area or circuit within which the tax was applied in the first 10 years of its existence. In the year 1852–3 the £772,000 had only grown to £810,000—a moderate growth; but many great changes have been since brought into operation. Between the years 1852 and 1877–8 the 1d. in the Income Tax, after allowing justly for all changes in the way of allowances and remissions, so as to make the comparison approximately precise, had grown from £810,000 to £1,990,000. [Sir STAFFORD NORTHCOTE: Is Ireland included?] That includes Ireland, and it includes all additions and remissions. What you must take into account is this—that the figures I am now giving for 1877–8, and those which I will give directly for 1881–2, are upon the supposition that the basis of the tax remains the same as in 1852–3, and, therefore, all changes are taken together. Well, having grown to £1,990,000 in 1877–8, in 1881–2 the 1d. of Income Tax, which does not strictly represent the general condition of the people, but the condition of the wealthier classes of the people, has gone back for the first time since it was imposed. No such period can be found, as far as I am aware, since the year 1842. The 1d. of Income Tax being, as I have said,£1,990,000 in 1877–8, is now estimated, on the basis of last year, at £1,943,000 for 1881–2. If the Committee will look at the Revenue Returns, they will find that the 1d. of Income Tax is not worth so much. I have been obliged to debit and credit the 1d. with every change made in the Income Tax since 1852, and, unfortunately, I have had to debit it a larger sum than I can credit it, and, therefore, for the purpose of comparison, the 1d. shows a larger yield than the actual 1d. of the Income Tax. Having detained the Committee thus long upon a matter which is more or less retrospective, I come now to the year which has been entered upon in the last four days—the year 1881–2. I have now prepared the Committee for a very brilliant and exhilarating state of things. For the year 1881–2 the permanent charge of the Debt will be £28,920,000. It was, I think, £28,800,000 in the last year, and I may as well explain the mode in which the difference arises. There is a Loan of £2,000,000, which has been made to India, and which is now merged in our general Debt, and is no longer standing as to be repaid by India. That being so, I propose to provide for it by an Annuity, expiring in 1906. That will raise the annual charge by about £60,000 for interest on the £2,000,000. There is, therefore, £28,920,000 permanent charge for the Debt; £500,000, Interest on local loans; £200,000, Charge for the Suez Loan; and £1,650,000 for the Consolidated Fund Charges; making, in all, £31,270,000. There is nothing in this to which I need, for our present purpose, ask more particular attention on the part of the Committee. I now come to those charges which fall under the head of Optional Expenditure. The Charge for the Army, according to the Estimate, will be £16,509,000; the Home Charges for Forces in India, are £1,100,000; the Charge for the Navy, £10,846,000; the grant which we propose for India, if the Committee should vote it, will be £500,000; the Civil Service Estimates come to £16,087,000; then come the Charges for the Revenue Departments—Customs and Inland Revenue, £2,851,000; Post Office, £3,540,000; Telegraph Service, £1,294,000; and Packet Service, £708,000; making, in all, a total of £84,705,000. In presenting this Expenditure to the Committee, I must point out that it shows unfavourably, as compared with the Expenditure of the year which has just gone by, to the extent of £1,597,000; but hon. Gentlemen will bear in mind that upon the whole, and under favourable circumstances, a saving is made upon the Estimates as compared with the actual results. Upon the whole, when the Estimate of the coming year is compared with the Expenditure of the past year, the comparison is somewhat unfair to the coming year. The actual Expenditure of 1880–1 was £83,108,000. The estimated Expenditure of 1881–2 is, as I have just stated, £84,705,000, and the increase is £1,597,000. The Committee will naturally, at this point, wish to have a little more particular information as to the forms in which that augmentation arises. First, I look to the Army, and I find that the charge, which was £15,588,000 in 1880–1, is £16,509,000 for 1881–2, showing an apparent increase of nearly £1,000,000. I ought to say that this increase is not really so great, and that, apart from the special charges developed within the last two or three months, the Army Estimates will not show any increase whatever. The Navy expenditure for 1880–1 was £10,703,000. It is now estimated at £10,845,000, showing an increase of £142,000. On the Miscellaneous Estimates there is an increase of £308,000, the charge in 1880–1 being £15,579,000, and that in 1881–2 being £16,087,000. I may as well state how this increase is made up. When I have stated certain items, I think, Sir, the Committee will perceive that the augmentation is not owing to any carelessness on the part of the Government in checking the increase of Expenditure as far as they can, and in effecting any reductions that appear to be necessary. I have said that the total increase on the Miscellaneous Estimates is £308,000, and I will now point to a few items. The Census stands for £144,000—that, of course, is a charge which will not recur until after the expiration of another decade. For the Ordnance Survey there is an increase of £46,000. I might throw the responsibility for that increase upon the House of Commons, inasmuch as everyone urged it to be done; but I am not at all disposed to do so. In this particular instance, my opinion was that the House of Commons was perfectly in the right, and I willingly and cheerfully become responsible for this augmentation. At a time when we have before us the consideration of so many and such important questions relating to land, I think this matter should be carried through with all practicable speed; and if it be found that we are able further to accelerate the work commenced in former years, I should not shrink from asking the House of Commons to enable that to be done. The next augmentation in the Miscellaneous Estimates is that of £160,000, which represents the normal growth of the Education Vote. Another important increase, and one to which I cannot refer with the same satisfaction, is that of £55,000 in the cost of the Irish Constabulary, rendered necessary by the recent disturbances. I have already shown grounds for an increase of £400,000, and the Committee will, therefore, perceive that we have been able to effect some retrenchments in the Miscellaneous Estimates, inasmuch as the items I have named go beyond the increase of £308,000. There is, also, the normal increase in the Estimates of the Revenue Department, especially in the Post Office Department, where it almost always returns to us, in the form of improving Revenue, with vast extension of public accommodation. I told the Committee that there was an increase in the Estimates of the present year compared with the Expenditure last year, of £1,597,000; and the items I have just specified to the Committee account for £1,589,000, substantially the whole sum. I need not say that a very large part of this increase is due to the measures which the Government have thought it their duty to take, or pro- posals which they have thought it their duty to make, in connection with India and the Transvaal. I will state to the House very briefly, but quite exactly, how these figures stand. In 1880–1 the Vote for India, quite apart from any Army question, came to £561,000, or £61,000 for the interest on the £2,000,000, and £500,000 given in Committee of Ways and Means, a short time ago, in aid of Indian Revenue; and for the Transvaal in the same year the figures are as follows:—Army, £446,000; Navy, £210,000; or, together, £656,000; so that the total cost for the year of these two descriptions of Services was £1,217,000. If that charge had dissappeared this year, I should have been in a condition to come to the House in a very good humour, to submit my Financial Statement, and possibly might have done something towards putting the Committee in a good humour also. But, instead of that, the charges stand as follows:—For India, £620,000, assuming, of course, that the House votes the sum of £500,000 in Ways and Means, for which we ask; and the Charge for the Transvaal will be, Army, £984,000, and Navy, £200,000, together making £1,184,000; or a total for the two Services of India and the Transvaal of £1,804,000. That is the sum which would have been available as net Revenue without these two Services; and if I take the two years together for the purpose of giving a general result, India, for the two years, stands at a cost of £1,171,000, and the Transvaal at £1,840,000, or, together, considerably over £3,000,000. So much for the Expenditure of the year which has just begun. I now come to the Revenue of the year, and that—of course, the Estimate of the Revenue for the year—stands as follows:—The Customs Department does not venture to estimate its revenue at higher than £19,000,000. The Estimate for the Customs last year was £19,300,000; the Excise is estimated at £27,440,000; Stamps, £11,900,000; Taxes, £2,760,000; Income Tax, £11,000,000; total Revenue from Taxes, £72,100,000; Post Office, £6,800,000; Telegraph, £1,600,000; Crown Lands, £390,000; Interest on Advances, £1,200,000; Miscellaneous Revenue, £3,900,000; or a total of £85,990,000. The estimated Expenditure, as I have already stated, is £84,705,000, making an apparent Surplus of £1,285,000.


That is taking the Income Tax as it is at present—at 6d.?


Yes; taking the Income Tax at 6d. I can assure the Committee that this is not the first time the subject has presented itself to my mind. The apparent Surplus is £1,285,000; but there is a small addition to the Public Expenditure, which, unless some strong reason the other way should present itself, we propose to make, and that is, a charge for barracks of £100,000. Those who are familiar with the finance of the country are, no doubt, aware that some eight or ten years ago, not during the time of the late Government, but before it came into Office, the charge for barracks was laid upon Annuities. The bulk of the operation, has been effected, and only a sum of about £300,000 remains to be expended. The Fortification Annuities are at an end. No more will be created, and, that being so, I am very desirous to put an end also to the creation of Annuities for these barracks. The charge for the year will only be £100,000, and unless, for some reason which I do not at present foresee, it should appear to be inconvenient to do so, I propose to provide for that in Ways and Means, so that we shall have no more Barrack Annuities. This will reduce our apparent Surplus to £1,185,000. Then comes the question of the sixth 1d. upon the Income Tax. That, undoubtedly, was not a grant of a permanent addition to our taxation. It was a loan, or a cadeau, or whatever you like to call it, made to the Chancellor of the Exchequer of the day in order that, by means of it, he might be enabled to carry through, what was deemed by Parliament, a beneficial change. tinder these circumstances, I cannot regard it as my property—vix ea nostra coca—I think if I were to ask the House to vote this sixth 1d. of the Income Tax, it would be said, and said with perfect justice, that it was not a continuance of taxation, but an addition to taxation. Therefore, to establish our starting point, I take away that 1d. from the Income Tax. That costs £1,460,000, and leaves me, therefore, with a deficiency in the figures which I have presented of £275,000. Well, that is not a very favourable description of my starting point, and I am afraid it will convey strong emotions of dissatisfaction to the minds of some who have, as instructors of others, already been disposing in advance of an enormous Surplus supposed to be in possession of the Government. Before I proceed to the means by which we intend to ask the House to provide for that deficit, I will mention two subjects tending to its augmentation, if they are entertained. The first is the question connected with the new Tobacco Duty imposed in the time of the late Government. That imposition was in the nature of an experiment. It is no reproach to a Financial Minister if experiments of this kind occasionally fail, because the materials with which they deal do not admit of an exact computation. There is a great deal of doubt and discussion about these experiments, and it has been pressed upon me by molly that if the state of the Revenue will admit it, we ought to propose the removal of that small portion of the Tobacco Duty which, for practical purposes, we may call 4d. in the pound. I have examined the matter as fairly and impartially as I can, and, in my opinion, the time has not yet come when the House can be in the position to pronounce with adequate certainty on the success or failure of this experiment. The times have been very unfavourable to it, because it came in on a declining state of Revenue, and a declining condition of consumption, and such periods are extremely unfavourable. All who recollect the Budget of the first Lord Northbrook in 1840, will know how extremely unfavourable are such circumstances for the augmentation of indirect taxation. But in endeavouring, as well as I can, to sever the different elements of a somewhat complex case, I find this. In the first place, it must be borne in mind that even a relief of a trade like the tobacco trade is in the nature of a disturbance of the trade, and particularly when what we take off is a fraction, only constituting a small portion of the entire duty. Therefore, it is a thing not to be done without serious consideration. Then the sentiment of the trade is divided on the subject, and I am assured that, although not rapidly, yet the consumption is somewhat advancing. The measure of the right hon. Gentleman the late Chan- cellor of the Exchequer, which was prejudiced by the general state of the Revenue, has been favoured by the state of the tobacco supply. The tobacco supply has been so abundant that the price of leaf tobacco has very materially fallen, and that great fall has tended in a great degree to cover the augmentation of the duty, and to assist the trade, at least in part, to meet that augmentation. I have referred to the Revenue Department, and I am assured that they, on their responsibility, cannot look for a smaller loss, if that 4d. in duty were removed, than £600,000, and, therefore, what I say to the Committee is this—We must postpone the examination of this question. It may be one very fit to examine, should the evidence obtained accumulate upon us a year or a couple of years hence; but at present, the time has not come when, in the opinion of Her Majesty's Government, the subject ought to be dealt with. The next subject is one of very small consequence and dimensions indeed; but it is one which presents very considerable difficulty as well as inducement. I mean the subject of the duty on silver plate. The Revenue which it produces is no more than £48,000 a-year; but there are two reasons why, if we could, we ought to get rid of it. The first, is the general advantage which has never failed to attend the removal of the Excise Duty upon a product of British industry. That is one; but there is another special reason, which is, that there is every reason to believe that India is well qualified to supply us with silver wares in a manner advantageous to herself and the trade and the people of this country, were it not for the operation of this tax. Now, these are the reasons for the removal of that duty; but, unfortunately, there are two reasons against the removal of the duty in the ordinary manner, which, I believe the Committee may consider as weighty or weightier still. When I say "the ordinary manner," I mean the immediate removal of the duty. In the first place, to get rid of this £48,000 a-year, you must not only give up the £48,000—which you might be willing enough to do—but, if you remove this duty immediately, which undoubtedly would be the best way of doing it, you must be prepared to meet a claim for drawbacks which, in the first place, is enormous in relation to the amount of duty, and totally transcends all the dimensions of our ideas in relation to drawbacks on taxable commodities, but which is open to a still greater objection, in my judgment, at least—namely, that it would be impossible to shut the door against fraud. When I come to make inquiries as to these drawbacks, gentlemen of the greatest intelligence and respectability in the trade say that a drawback would be due to them of—and they are, certainly, not desirous of overstating the drawback and thereby frightening us from giving it the relief, for they would like to see the tax removed, and consequently do not wish to shake our nerves—a drawback, I say, of £170,000, or three and a-half years' revenue. To that I have got to add, that I have not the smallest doubt of the perfect good faith of that estimate, that I have not the smallest doubt of the perfect good faith of the leading members of the trade, in whose hands we are perfectly safe, as to all their own operations; but it is not in their power, nor in the power of anyone, to assure us that we should not be subjected to a demand, perhaps as great, in respect of fraudulent claims. I cannot say what that would be; but, under all the circumstances, we do not see our way to proceed to the removal by the ordinary form—that is, of an immediate removal. I am sorry to say that the problem puzzles me, and I can suggest nothing better than that which is, as a rule, not to be resorted to—namely, in the difficulties of this case, a very gradual removal—to provide for such an annual reduction of the duty as will not sensibly disturb the course of trade; and I will submit to the House a Resolution proposing that, instead of 1s. 6d. an ounce, which is the amount now chargeable, the duty shall be reduced annually by 3d. per ounce until it expires. The gold duty we do not propose to touch. That is a duty so peculiar, that I really do not know how one could deal with it without entertaining large drawbacks and largely interfering with the trade. I do not think there is any reason for touching the duty on gold, as there is for touching the duty on silver. I leave this proposal to the judgment of the Committee—I make it, not as the best thing conceivable, but as being, probably, the best thing that can be done under present circumstances. I do not take this small amount into account in fixing the balance of the account, for it is not worth our notice one way or the other. So I stand thus: I have £275,000 to deal with, and must ask the House to place in our hands one of those small but reasonable Surpluses, without which the vicissitudes of the year cannot be encountered. The first proposal I have to make to the House is an adjustment, not an alteration, of the duty on spirits—an adjustment of what is called the surtax. That surtax is at present 5d. per gallon upon what is commonly called foreign spirits, and 2d. per gallon on rum. We cannot confute the charge which is sometimes made against us by some foreign Governments that this 5d. is, as regards unrectified spirits brought from abroad, really in the nature of a differential duty, and that the 5d. ought certainly not to be more than 4d. On the other hand, we cannot justify the difference between the duty on rum and the duty upon other descriptions of spirits. Rum is introduced principally from our Colonies, and we should not make a distinction for their accommodation which we do not enforce or observe in relation to other countries. As regards rum and spirits generally, the case stands thus: Heretofore in the Customs Department we have been obliged to be content with very imperfect methods of testing. The only instrument in use has been the hydrometer, and it has been with reference to the use of the hydrometer that our present duties have been fixed; but we are now going to apply the same method that has long been successfully used in the case of wine—namely, the method of distillation. By that method of distillation, we shall be enabled—whether the spirit is rectified or not, whether it is coloured or not—to ascertain the exact amount of alcohol in each gallon, and to make the duty perfectly just. So that this operation, although it will yield us a certain sum of money, is not proposed by me as a new tax. It is an adjustment in the differential duty, which, although it may involve an increase in the figure, invariably operates in the nature of a reduction to the consumer. Our proposal is that henceforward, instead of 5d. and 2d. surtax, there shall be a uniform surtax of 4d. upon a gallon of standard strength. The drawback will also be altered. It will be 4d. on rectified spirits, instead of being as it is now, and will be 2d. on unrectified spirits, which is the same as under the present law. The effect of this operation—which, in its details, is, probably, not of great interest to many hon. Members—will be, by a more correct method of measurement and the establishment of a more perfect equality between the different kinds of spirit, to yield to the Exchequer—so large are the sums involved in even the smallest modification of the Spirit Duty—no less than £180,000. Now, that does not fill up the deficiency, and, in order to supply what is wanting, our attention has been turned to a much larger subject—namely, the subject of the Death Duty. I do not wonder that the Death Duty excites some interest and feeling in the House, because, undoubtedly, it is the largest and most difficult subject still remaining to be effectually dealt with by Parliament. I will confess, at the outset, that I am not about to propose any complete plan for dealing with that duty. In the first place, I am quite convinced that when such a plan is proposed it ought to be proposed by a Government to a Parliament which has plenty of what I may call elbow room—plenty of free, unoccupied available space for its discussion—because its complication is such, and the nicety and largeness of the interests involved are such, that it never could be got through except with a liberal allowance of the time of Parliament for its consideration. Sir, there are three great, I may say gross, anomalies in our present system of Death Duties—none of which will I attempt to deal with on the present occasion, though I wish always to designate them and keep them in the mind of Parliament. I may say that my hon. Friend behind me, the Member for Stockton (Mr. Dodds), has done right good service to the public in the elucidation of this question; but even he did not feel himself in a position, in the very bold proposal he made—and I think he was right—to deal with the anomalies to which I refer. These anomalies, I say, are three. The first of them is the total exemption of property in mortmain from Death Duty, and Life Duty, and every duty. I do not know how long the Parliament of this country, which is supposed to have some self-governing energy, will be inclined to bear this intolerable anomaly. I, myself, have had the honour of once failing in an attempt to deal with it. No serious—no extended—attempt has been made since that time to deal with it; but the time must come when it must be dealt with. It will be dealt with, and dealt with boldly, at the time when the other anomalies of the Death Duty are taken in hand and reduced to a condition of justice and equality. As to the other anomalies, there is—first of all, the question between settled and unsettled personalty; and it is impossible to conceive anything more irrational—and I speak advisedly when I use this almost hyperbolical term—as regards pure personalty than that utter inequality. It seems as though it were the deliberate policy of the country to drive all property into settlement, instead of leaving it free to be dealt with by the energy and skill of an enterprizing nation—for that is the true policy of the country. But, instead of that, what do we do? We say to those who leave property free—"A heavy Probate Duty shall be levied upon your unsettled property. Put it into settlement, and you will pass by the Probate Duty, paying nothing but a 5s. stamp, and you enjoy an advantage for which there is not a shred of reason." I have looked very carefully into the question, and I am bound to say that the conclusion of myself and my Colleagues is, that we find that the subject is so much mixed up with the consideration of settlement, either of realty or arising out of realty, that it is impossible to deal with it except as a separate matter. We are obliged, therefore, to leave it for future consideration. Perhaps it may be said—"Why not grapple with the whole of these anomalies at once?" The reason for not doing so will, I think, carry conviction to the mind of the House. It is not the difficulty of doing so; it is not the pressure of Business during this Session, though that might of itself form a conclusive reason; it is, that Parliament will, as I hope, take into consideration and decide, in one way or the other, the main question connected with the devolution of inheritance in real property. That is a very great question on which I, for one, have a very strong opinion; but I hold that it is indisputable that inasmuch as our whole scheme of taxation by Succession Duty upon realty, is based on these life-interests, it is absolutely impossible to deal with the matter at present. I am obliged to pass by these large subjects, and confine myself within comparatively narrow limits; but I cannot approach the matter without saying a word on the plan of my hon. Friend behind me (Mr. Dodds). The ability with which that plan was brought forward, and the strong reasons that may be urged in its favour, would render it intolerable for me to pass it by altogether. I think I may, with substantial correctness, describe that plan as being a plan for abolishing our Legacy Duties, and replacing them by an equivalent addition to the Probate Duties. That is, in very few Words, a summary description of the plan. I must say, all the principles of economical science, if they have anything to do with it, and all the principles of fiscal convenience, are so strongly in favour of the plan of my hon. Friend, that they will not bear a moment's counter argument. But the plan of my hon. Friend abolishes what is called the "consanguinity scale." Under the consanguinity scale, as is well known, the law takes very practical cognizance of the relation in which the party inheriting stands to the party bequeathing; and if he be what the law calls a lineal—that is, generally speaking, a child, but it is applied on the one side sometimes to a grandchild or a great grandchild, and on the other side to grandfather or a great grandfather—he pays 1 per cent on the legacy; but if he be more remote through various gradations, he is charged various rates, reaching a maximum of 10 per cent. There is a very strong argument both ways with regard to consanguineous cases. It is not at all unnatural to hold that children, and those who are analagous to children, have a natural expectancy, and that, having that expectancy, they are not fit subjects for taxation to the same extent on inheritance as strangers. And, singularly enough, I find that the able gentleman who has the superintendence of the Legacy and Probate Duties at the Board of Inland Revenue says that almost all his difficulties are with the people who pay 1 per cent; while the people who are subject to the higher rates pay them with comparative cheerfulness. I remember that my late noble Friend Earl Russell—whose name can never be repeated in this House without respect and gratitude for his public services—was once talking of a legacy of £5,000 which had been bequeathed to him, when someone said it was very hard that he should have to pay 10 per cent duty. "On the contrary," he said, "I have much satisfaction in paying £500, as it leaves me £4,500 in pocket." He seemed to think himself well off. There is a strong argument as regards realty; but it may be answered in this way. It is very true that people ought to bequeath their property to their descendants, and not in a fanciful manner to persons a great distance from them, or to institutions for the purpose of being glorified as benefactors after they are dead; and you may say it is the business of the testator and not of the State, to distinguish between what shall go to his children, and what to his more distant relations, or to strangers or institutions. I think that is a matter that might be argued; but I am not prepared to make so great a change, even if I were convinced—and I will not say I am convinced—of its propriety. At any rate, I am not prepared to make so great a change to operate upon wills which for more than one generation have been made in expectation of duties arranged according to the present law. I will illustrate the matter in this way. Of the property subject to Legacy Duty about seven-twelfths pay only 1 per cent, and five-twelfths pay a higher rate. Were you to say that the duty ought to be made uniform in the shape of a really equivalent sum added to the Probate Duty, the effect would be, generally speaking, that the lineals who now pay 1 per cent would then pay 2½ per cent, and would pay that in a great degree to the relief of those distantly related. Under those circumstances, I am not prepared to assent to a system which should compulsorily introduce this system of payment. I am very sensible of the great advantages which would be attained provided testators would take the matter into their own hands, and, instead of leaving the State to draw these distinctions, were to adjust their wills for themselves with a view to an equal tax. If they did that, the lineal, I take it, would get quite as much as now, and perhaps less would go to fanciful and comparatively needless objects. But to my hon. Friend I propose to offer one very small instalment, which will, however, tend to clear the ground, because it will tend after a few years to test public feeling. What I propose is this: To introduce an optional law, and to provide that where all the parties are agreed—the residuary legatees, the executors, and the Board of Inland Revenue—each of them having their own separate interests to defend, the amount of this duty would be a matter for agreement, so as not to lose revenue, at some average rate—say, 5 per cent; and the parties may then go scot free, and make their own arrangements, without ever again darkening the doors of Somerset House. As an optional law, I cannot see that there can be any objection to a scheme of that kind. My intention is to allow, by the consent of all the parties, that the whole sum may be taken at once in the shape of an augmented Probate Duty, and all further payments of duty may be dispensed with. But, Sir, that is not a proposition from which I can expect to derive any sensible amount of Ways and Means. I only mention it as a modification of the law which it appears to me might be tried, and which might, at the worst, work harmlessly, and, at the best, beneficially perhaps. We should still be where we were, and at least we should have an argument in favour of consanguinity. But within the narrow circuit I have traced, without pretending to offer to the House any complete reform of the Death Duties, there still remains, in my opinion, room for a limited, but an extremely useful and in no respect burdensome, and, at the same time, profitable change. The essence of it would be to abolish the 1 per cent Legacy Duty, and, in respect to that 1 per cent, to add ½ per cent to the Probate Duty. As the Legacy Duty touches rather more than half the property that pays duty, that would seem to be in the nature of a slight remission, rather than an augmentation; but, I take it, there is virtually an equivalent. Of Course, I base this on the assumption, which I believe to be beyond question, that as this is a commutation of duty, the duty I part with and the duty I impose will fall, usually, on the same parties; and the foundation for that is this—the residuary legatees who pay an additional 1 per cent are usually the children. In an accidental case, a stranger might be the residuary legatee; in a very few cases the widow is the residuary legatee, or, in cases perhaps still fewer, she takes the whole estate; but these cases are so few, that it appears to me they ought not to materially influence the judgment of Parliament. In the main, if you abolish the 1 per cent of Legacy Duty and add ½ per cent to the Probate Duty, you take off 1 per cent from the Legacy Duty and put it on again in the shape of Probate Duty. But by paying Probate Duty, all that description of reversion, which amounts to two-thirds of the whole reversion, and which involves, therefore, two-thirds of the complications my hon. Friend tried to get rid of, would completely disappear. Of course, there would be a certain change in this respect—that the Legacy and Probate Duties would not affect exactly the same subjects. The Legacy Duty is more a personal duty, while the Probate Duty is more a duty on property; but the change, so viewed, is a change completely in conformity with the whole spirit and movement of modern legislation which has been to get rid of taxation on personal property. That is the object we have in view. Now, Sir, in doing this, the first advantage I gain is to get rid of an immense amount of complication, and of the necessity of keeping alive accounts in the Revenue Department of a vast number of wills, by taking the payments all at once. But there is another advantage, which, though it will be rather a heavy cost at first, I estimate even more highly, and that is, that part of the measure will get rid entirely of that singularly cumbrous and inequitable plan under which we first compel the payment of Probate Duty on the debts of a deceased person, and, subsequently, repay the duty through a cumbrous process, at some distant time, instead of allowing the whole of those debts to be deducted at once, as we now propose. That proposal I do commend to the Committee; but it will not add to the Revenue, because this year we shall have to make a double amount of deduction—we shall have the deductions that belong to last year in the repayment of duty, and we shall have the deductions of the present year. I propose to make some other changes, all of which appear to me to be in the right direction. It is quite practicable to have a close adjustment of the scale of duties; but it is not quite practicable to charge the duty at so much per cent up to the very last farthing—at least, so I am informed. It is represented to me by an hon. Friend, who is a better judge on the subject than I am, that if we calculate the duty it must be in round sums, and that if we ceased to do that it would cause great inconvenience to parties all over the country in obtaining the necessary legal instruments. However, we come very near to an equality, because what I propose is that between £100, which is the absolute limit of exemption on the net value of estates, and £1,000, the duty shall be charged at intervals of £50; and above £1,000, at intervals of £100. That will bring us near an exact percentage. I propose, also, to abolish the exemption which exists in regard to legacies of £20. If the richest man in this country dies to-morrow, and bequeaths to the next richest man in this country £20 to purchase a snuff-box in recollection of him, that £20 pays no duty. [Several hon. MEMBERS: £19 19s.] Yes; but he never does leave £20. The lawyers take care to steer clear of the fatal £20. But there is another change I propose which will have a very small fiscal effect, but which I regard as of the greatest importance to the mass of the community. What is the great grievance, after all, of these Legacy and Probate Duties? It is the burden they entail—not in the shape of payment to the Exchequer, but in the shape of personal cost and trouble, and the employment of intermediate persons who are necessary, and which falls on the smallest people who inherit anything. There are multitudes of people in this country, I am happy to say, who now hold small sums in the Post Office Savings Banks—amounting to about £70,000,000—held in sums of £25, £50, £100, or £200 at the outside; and all these, if inherited, are subject to Probate and Legacy Duty, and they will entail upon people who are perfectly bewildered as to what they have to do and to pay, vexation, trouble, loss of time—which to them is money—and, finally, charges which constitute a formidable percentage upon the sum they have inherited. The proposal I have to make is this—and it is not a modification of any of the proposals I have yet made. It is completely beside them, and the effect is this. Wherever an affidavit can be made that the gross effects—for with such people to allow a deduction of debts would be wrong—do not exceed £300, the person inheriting shall not be compelled, but shall have the opportunity of applying to the nearest Revenue officer, and under his eye making an affidavit that the gross effects do not exceed £300, specifying what they are—doing before him what would have to be done in the Probate Court; and that, upon doing this, the Revenue officer shall charge two sums of money. The first will be a sum of 15s., which will represent the reduced fee which is now payable in the Probate Court. The second sum will be one of 30s., in respect of the duty and the measures the officer must take on behalf of the person. Upon the payment of that sum of £2 5s., the person can go scot free of all further payments, and trouble, and exertion of every kind. The Revenue officer will then send the affidavit to the Probate Court, and obtain from the Probate Court the necessary authority to place it in the hands of the person inheriting, and he would hear no more about it. That, I think, will be an immense relief to the small persons I am referring to. Together with the deduction of debts it has been customary to make an allowance for funeral expenses; but that can only be made at the time of settling the accounts for Legacy Duty. Both these allowances will now be made at the time of taking out probate, and the confident expectation of the Department is that when they take the first account of the debts and the funeral expenses, and the probate is granted, that will be the final settlement. It will, of course, be necessary to retain power in cases of complication, to require a final account in order to ensure an accurate adjustment. Well, Sir, the essence of this measure, as I hope I may describe it in three short phrases, is this—The duty is not to be taken up; a certain outstanding credit is taken up and out of the funds, and in connection with the funds obtained; and by taking up that outstanding credit practical reforms and improvements in the administration of the law, especially as regards the humbler classes of the community, are to be effected. The financial effect may be very simply stated, and I have now nearly arrived at the conclusion of this lengthy statement. The addition to the Probate Duty for the entire year would be £1,046,000 by the adoption of this plan. Against that, there will be a loss of £151,000 on the Legacy Duty, and £428,000 on account of debts. That sum of £428,000 will be reduced in future years; but the loss on the Legacy Duty will be far heavier. There will never be any loss to the Revenue, but perhaps some small gain ultimately; and with this there will remain the large advantages I have endeavoured to show to the taxpaying community. I propose to fix the 1st of June for the commencement of the operation. That would give us 10 months. The net gain for the first year will be £467,000, and the gain for 10 months, £390,000. Now, Sir, my final figures are of a very simple character. My apparent Surplus was £1,185,000, and my Deficit, after deducting the 1d. off the Income Tax, was £275,000. Against this, I place a gain by the adjustment of the surtax on foreign spirits of £180,000, and a gain by the net result of the operations in respect of the Probate Duty of £390,000. That gives a total gain of £570,000, from which I have to deduct the debt of £275,000, leaving as the estimated and very modest Surplus for the year, £295,000, or, in round numbers, £300,000. Now, with regard to the procedure upon these proposals. There is only one Resolution which it will be necessary to take to-night in the usual manner. I hope the Committee will hear what I have to say on the subject of procedure, because our position is rather peculiar. There are not many more—in fact, there are only four working days—before the Easter Recess. One Resolution, that concerning the adjustment of the surtax on spirits, it will be necessary to take to-night; but with regard to the other Resolutions I am in the hands of the Committee. I do not think I am proposing any plan involving principles of great difficulty; but I think it would be very advantageous if the consideration of the Resolutions were postponed until after their publication in the Paper. I am not inclined to ask that at all; I give it simply as my opinion, and I am not aware anyone will be prejudiced by it. If I am not allowed to go on with the Resolutions to-night and bring in the Bill, the consequence will be to entail a greater delay than is desirable in getting the judgment of the House; and with regard to the subsequent stages of the Bill, there will be a much longer postponement than is desirable. I, therefore, respectfully make that proposition to the Committee, believing, as I do, that it will be a very great advantage to take the Resolutions to-night, so that they may be reported to-morrow, and the Bill brought in to admit of its being amply considered both by hon. Members and the country during the Recess. In that case, I should propose that the practical time for the consideration of the Bill should be taken immediately after the second reading of the Irish Land Bill. In conclusion I have yet one duty to perform, which is to thank the Committee for the great attention it has given me. It is not the first time I have made this Statement; it is the 11th time—and probably the last time—on which it has been my duty to place before the House the annual arrangements of our Finance. I do not wish to colour too highly the public prospects. I fully admit I have had no brilliant picture to present to the Committee. I have had no dazzling or bewitching proposals to make. I have spoken on former occasions, sometimes under worse circumstances, and sometimes under better circumstances; but, at any rate, I have done an act of restitution in faithfully and gratefully giving back to the Committee that 1d. of Income Tax which they kindly and generously gave me for a temporary purpose, and thereby, at least, I am not open to the charge of breaking faith. As respects the rest of the arrangements by which we propose to meet the small debts and create the necessary Surplus, I do not think I need say anything. It is something to say that we can meet the demand of the enormous Expenditure of this country without adding, as I trust and believe we do not add in any degree, great or small, to the burdens of the country.

Motion made, and Question proposed, (1.) That, towards raising the Supply granted to Her Majesty, the Duties of Customs now charged on Tea shall continue to be levied and charged on and after the first day of August, one thousand eight hundred and eighty-one, until the first day of August, one thousand eight hundred and eighty-two, on importation into Great Britain or Ireland (that is say): on

£ s. d.
Tea the lb. 0 0 6."—

(Mr. Gladstone.)


Mr. Playfair, I do not rise for the purpose of entering into any disussion upon the Budget which has just been submitted to us. I wish only to say that, so far as I am concerned, and so far as I believe those who sit near me are concerned, we think the proposal which has been made by the Chancellor of the Exchequer, as to the mode of procedure, is a reasonable and convenient one. The principles which are involved in the Resolutions that we shall be asked to pass, except so far as they may touch the Death Duty, are principles upon which, I presume, there will be very little or no discussion; and the proposals are obviously of a character that would be better understood, and more conveniently discussed, when we have them before us in the shape of a Bill. I take notice of the promise that is made us that we shall have an early and convenient opportunity, when we meet after Easter, for fully discussing those proposals which are complicated at the first blush and examination. I confess that, clear as the Statement of my right hon. Friend was, there are one or two points in connection with his scheme which I should like to examine further before I express an opinion upon them. I will venture to ask whether we can be favoured with somewhat fuller information, in the form of a Return, of that interesting comparison of Population, Revenue, and Expenditure which was given us in brief? It is rather difficult to understand some of the results unless we have the figures before us. There is another question I should like to ask. It will be remembered that one of the main reasons which were given for the additional 1d. on the Income Tax last year was the necessity of making some provision for the probable or expected reduction of the duties on foreign wines. I am not sure that we have had information given us on that subject. I think it is desirable we should know how the matter stands, and whether there is a probability of reduction, and what the negotiations with France generally are? I will not detain the Committee now. I think that the course which has been proposed is a course which it will be desirable to adopt, for we shall be acting wisely by waiting to see the Resolutions before us in a definite shape.


said, that he had listened with much interest to that part of the Financial Statement which related to the duties on tobacco, although he regretted that the right hon. Gentleman had not found himself able to grant the small remission which the trade had so long and so anxiously desired. Still, he felt satisfaction that attention had been drawn to the subject, for the tone of the Chancellor of the Exchequer convinced him that he was open to conviction after a little longer experience, and he fully believed that next year, if the state of the finances of the country permitted, their demand would be conceded. The Tobacco Duty was not unimportant; it produced over £8,000,000 sterling every year, and thus formed one-tenth of the entire Revenue of the Kingdom. He desired to point out that during the seven years, 1871–1877, immediately preceding the imposition of the extra 4d. by the right hon. Gentleman the Member for North Devon (Sir Stafford Northcote), there had been a steady increase in the home consumption of raw tobacco of over 1,000,000 lbs. weight every year. This growth in consumption yielded a money increase of nearly £200,000 every year. Well, the addition which the late Chancellor of the Exchequer made was only 4d. per lb., equal to a farthing on each ounce, and that, at first sight, did not seem a very serious amount; but it had disorganized the whole trade, and proved a great hindrance to business. The House must bear in mind that more than three-fourths of the duty—more than £6,000,000 sterling—was every year contributed by working-men, who bought their tobacco not by the pound, but by the ounce or half-ounce; and now for more than 30 years past the uniform price they had always paid was 3d. an ounce. The new price was 3¼d., which was obviously an impracticable one. The first result in the retail trade was to add another ¼d., thus making the price 3½d. for one ounce; but this course was so opposed by the consumers that it was soon abandoned, and the manufacturers were compelled to supply the trade with an article which could still be sold at 3d. When corn was dear the 1d. loaf became smaller, and when flour fell the loaf was again larger; but there was no such opportunity for dealing with tobacco. It was sold by the ounce, and must be of full weight. Under the conditions of the new duty it became necessary for manufacturers partially to abandon the superior growths of Kentucky and Virginia, and seek in other countries for less known tobaccos of poorer flavour—more absorbent in their character, but far inferior in quality. The result of the change in the duty had been that, whereas up to the end of 1877 there had been an increase in the consumption of the home trade, as he had already shown, of over 1,000,000 lbs. weight every year, there was, in 1878, a falling off of 1,250,000 lbs. as compared with 1877; in 1879, as compared with 1877, a falling off of 2,000,000 lbs.; and in 1880, as compared with 1877, a continued falling off of another 1,000,000 lbs. So that, in three years, not only had all increase disappeared, but there was an absolute decline in consumption of 4,250,000 lbs. weight. The Chancellor of the Exchequer was perfectly correct in saying that the low prices recently ruling in the leaf tobacco market had tended to compensate for the additional duty. That was certainly true; but if there had been only one bad season, one failure of a crop in the United States, it would have been impossible to have found a supply for the artizan classes of anything at all palatable at 3d. the ounce. As it was, the use of inferior growths and poor condition had had a marked effect upon consumption. It was not all due, as the Customs suggested, to the depression of the times, for it was well known that during the worst period of the Cotton Famine there was no perceptible decline in the consumption of manufactured tobacco. He was quite willing, however, to wait the 12 months of which the right hon. Gentleman had spoken. He believed that the Chancellor of the Exchequer had satisfied himself that a return to the old duty would speedily lead to an expansion of the trade, and he was therefore content not to press the matter at the present time. He believed the right hon. Gentleman would assist them as soon as he felt himself at liberty to do so. He was confidant that when that time did arrive, and the 4d. was taken off, there would be not only a great increase of business, but satisfaction to every consumer of tobacco, with a very appreciable benefit to the Revenue of the country.


wished to express his thanks to the right hon. Gentleman the Chancellor of the Exchequer for the very kind and complimentary manner in which he had been pleased to refer to his (Mr. Dodds') action in respect to the Probate and Legacy Duties. It was a subject in which he had long taken a deep interest, and one with which, front his professional experience, he was intimately acquainted. He came down to the House to-day in the full expectation of finding the right hon. Gentleman prepared to adopt the scheme he propounded in the House two years ago. He thought his scheme was so plain and comprehensive, that the Chancellor of the Exchequer would have seen his way to adopt it upon the present occasion; and, indeed, he had now to thank the right hon. Gentleman for having, in effect, adopted the principle for which he had been contending. He only regretted that the right hon. Gentleman had not viewed, what he had very fittingly called the Death Duties, from the point they ought to be viewed—namely, as duties attaching upon the capital left by the testator. From such a point of view there ought to be a uniform rate charged upon the property left by the deceased person. The Probate Duty might be paid by a stranger; the Income Tax might be paid in exactly the same way; and, in short, everything was against the Death Duty, which ought not to be a charge upon the recipient, but a charge upon the capital fund itself. The right hon. Gentleman had given reasons why he could not, on the present occasion, deal more comprehensively with his (Mr. Dodds') scheme. He admitted that, during the present Session of Parliament, they had had, and would continue to have, very many important subjects engrossing their attention, and that the House was not likely to have at its disposal this year sufficient time to inquire into the anomalies of the duties he was now discussing; but he contended, and he thought if the right hon. Gentleman had had the opportunity of thoroughly investigating the matter, he would have been satisfied that his proposals might have been dealt with without touching in any way the future consideration of those great subjects to which reference had been made. He was quite persuaded that the right hon. Gentleman might have adopted his scheme, and have left the questions referring to land in mortmain and to settled and unsettled property, to be dealt with at a more con- venient season. The right hon. Gentleman had said he was unprepared to-night to make so great a change as he (Mr. Dodds) proposed. He hoped, however, that when the Bill came before them, one step would be taken which would pave the way for that great and comprehensive scheme of reform which he was sure would, before many years had passed, be adopted, and adopted not merely with advantage to the Revenue, but to the persons who had to pay the duty throughout the country. The right hon. Gentleman made a suggestion which he (Mr. Dodds) feared he scarcely comprehended. The right hon. Gentleman proposed to adopt an optional clause, and to allow the parties where all were agreed—namely, the officers of Inland Revenue, the residuary legatees, and other interested parties—to combine and to pay one duty of 5 per cent, and so get rid of the matter altogether. When the Bill was brought in, they would see how such a proposal was likely to work. If it be a step in the direction he had indicated, he would be more than satisfied with it. He was glad to see that the complications arising from deaths were to be got rid of; and he did not share the apprehensions of the right hon. Gentleman as to the difficulty of paying duty down to the last farthing. The Chancellor of the Exchequer had referred to the personal cost and trouble in all these matters. He (Mr. Dodds) went fully into the point on a former occasion, and he would not trouble the Committee by going into it now. He would, however, recommend to hon. Members the perusal of a book written by a gentleman who bore a name which was well known and highly respected in the House, and who was amongst the many very excellent and intelligent officials of the Inland Revenue Department at Somerset House—he referred to Mr. Gossett. This gentleman had devoted 80 folio pages to instructions on the art of making a will; and he very completely showed all the complications in the matter. There were other subjects to which the right hon. Gentleman had referred, all going in the direction he desired. He would conclude, as he began, by expressing his extreme regret that the Chancellor of the Exchequer had not soon his way to go further, and by thanking him for the step in the right direction he had taken.


said, there was one bright feature in the Statement of the Chancellor of the Exchequer, and that was the promised revision of the Probate, Legacy, and Succession Duties. Nothing more harassing and more distressing to those concerned, and more troublesome to the officials than the levying of these duties could be imagined; and any simplification of the levying of those duties would be regarded as a very great improvement. He would like the Chancellor of the Exchequer to consider whether there was not an effective means of dealing with the very large amount of corporate property which paid nothing at all in the shape of Legacy Duty; in fact, from century to century it escaped Legacy, Succession, or Probate Duty. This property could escape Legacy Duty, but it could not escape the Income Tax. The Income Tax was practically the most useful, most searching, and most indispensable of all taxes. He could not conceal his regret that the Chancellor of the Exchequer did not at once take upon himself the great work of adjusting the Income Tax. This tax then might be so far increased and applied to every species of property that the Probate and Succession and Legacy Duties might be greatly reduced. Many reasons had been given why the Income Tax could not be adjusted, which had been successively answered by the march of events. One great reason, however, remained, and that was that an adjustment could not be made without diminishing the productiveness of the tax. At this moment the Chancellor of the Exchequer had an Income Tax which produced all he wanted, and he might with advantage, and without suffering any loss of Revenue, have retained the 6d. rate, and have made the adjustment required to make the tax an equitable one. With regard to the Terminable Annuities, he thought some action necessary; but the plan sketched out by the Chancellor of the Exchequer needed explanation. He was quite at a loss to understand why it was proposed to take off the duty on silver. Plate was only held by wealthy people, and he doubted whether that class of society would altogether thank the right hon. Gentleman for this change, because their property would lose in value, and they would find themselves so much the poorer. He had never heard of any agitation for the abolition of the duty, except on the part of one or two silversmiths. The subject, however, was hardly worth discussion. His object in rising was to express his opinion that the proposals of the right hon. Gentleman were calculated to keep the finances of the country in a sound and healthy condition.


said, he congratulated the Committee upon the satisfactory Budget which had been laid before them, and which, he believed, would be agreeable to the general community. As to the Legacy Duty, he did not go so far as the hon. Member for Stockton; but as regarded the alterations which would afford facilities for the payment of duty on small legacies, thereby doing away with the expense connected with them, he considered the proposal of the Chancellor of the Exchequer as very satisfactory. There were originally no duties with regard to the descent of property to children until the year 1815, when they were first imposed; and ever since that time he believed they had been kept at a lower rate than those upon property descending to others. He believed that although the collection of Legacy and Succession Duties had been, to a certain extent, burdensome, there were no duties paid more readily and cheerfully. He pointed out that there was an enormous amount of property in this country which was protected by the State, but which made no return whatever by way of taxation. If property in mortmain were subjected to a fair and equal charge, a very large amount would flow into the Exchequer. Assuming that the persons who held the property in mortmain had the duty which they now paid upon its devolution every fifteen and a-half years commuted to an annual payment, the sum produced would amount to very nearly £5,000,000. The question was, of course, a very large one; but he was exceedingly glad that it was to be a matter of consideration.


said, he had no reason to complain of the reference made by the Chancellor of the Exchequer to the effect of the repeal of the Malt Duty. The Committee would remember what was the main subject of controversy between the brewers and the Chancellor of the Exchequer last year. The right hon. Gentleman stated that he desired to find a fair equivalent in the Beer Duty for the tax upon malt. On the other hand, the brewers, while admitting the advantage to be gained by the absolute freedom allowed them in the choice of materials, contended that the substitution of the Beer Duty was something more onerous to them than a fair equivalent of the Malt Duty. The Chancellor of the Exchequer could not be persuaded that the figures put forward in support of this contention were correct; but it had since been found that the brewers did pay, and were now paying, largely in excess of what they used to pay upon the quarter of malt. The figures employed last year were substantially accurate as applied to the present time. It was asked why this increase was not shown in the Returns; but that was accounted for by the cold winter and spring having been adverse to the trade. That was the reason why the Revenue had not shown under the head of Beer Duty what was expected from that source. The brewers had always contended that this change would impose a new burden upon them, and that the fact would be proved by figures at the end of the year; and they were met by the statement that they must not say that because the revenue from the Beer Duty was largely in excess of that derived from the Malt Duty they were more heavily taxed, inasmuch as this might arise from increase of trade. It would, therefore, be unjust now to say that the deficiency in the Revenue anticipated from the Beer Duty was a proof that they were more lightly taxed than formerly. Those with whom he acted last year determined that it was better to submit to the increase of charge, rather than, at the time, to attempt to prove a case which was immature. Sufficient time had not now elapsed to prove their case as distinctly as they desired to do. This would require the getting together of a large amount of evidence; and the short space of time during which the tax had come into operation did not, in their opinion, justify them in making their complaint heard at that moment. Therefore, they asked that their position should not be considered to be weakened because their complaint had not been put forward that year. They desired that the question might be left open, and that they might be considered to be in the same position with regard to it as they stood in last year—namely, that if they could show that the Beer Tax was a new impost upon them it should be held to be entitled to re-consideration. He thought that was the meaning of the words which had been addressed to the Committee that evening by the Chancellor of the Exchequer. He did not think the right hon. Gentleman would, for a moment, claim that, because they had not yet made out their case, they should not come to him at a later moment. When the time arrived, he felt sure that the substantial accuracy of their figures would be shown. He concurred with the opinion that the absence of friction, which had marked the introduction of the new scheme of taxation, was largely due to the good sense and temper of the Executive by whom it had been carried out.


thanked the Chancellor of the Exchequer for the very great attention he had given to the subject of the Beer Duty. He was still of the same opinion as he held last July, that the Beer Tax would impose a charge upon the brewers of 2s. a quarter more than they paid before. His own experience, and that of others engaged in the trade, had proved this to be the case. Last year an attempt had been made to arrive at the average strength contained in a quarter of malt, and the difference between the calculation of the Chancellor of the Exchequer and that of the trade was three degrees. The brewers still believed they would be able to prove their case, and he thought the Chancellor of the Exchequer would have no difficulty in checking their calculations, because at Somerset House a very accurate account had been taken of the strength contained in a quarter of malt, for the purpose of the duty. He ventured to give his explanation with regard to the statement that 4s. or 5s. per quarter had been saved by one firm in the price of barley per quarter. Last year was an exceptional year so far as barley was concerned, and he suggested that the brewers alluded to had been able, in consequence, to use inferior qualities. It would be found, however, that those brewers who were anxious to keep up the character of their beer would find themselves compelled to go back to barley of the first quality. He felt bound to protest against the exemption extended by the Chancellor of the Exchequer to houses of £15 value brewing for domestic purposes, while the trade were paying additional taxation. When the proper time arrived, he had confidence that the brewers would be able to prove their case to the satisfaction of the right hon. Gentleman.


pointed out that the Chancellor of the Exchequer, although marking the great increase which had taken place in the Expenditure of the country, had not indicated that this expenditure would in any way be reduced. He (Mr. Fowler) thought that even the masterly Statement which had been made that night by the right hon. Gentleman should not be allowed to pass without some protests being entered against the country spending £85,000,000 per annum in time of peace, and in a time, also, of unexampled depression in trade and agriculture. When the right hon. Gentleman left Office in 1874, the gross Expenditure in that year was £76,000,000, and that included £3,000,000 for the "Alabama" Claim, and £800,000 on account of the Ashantee War; the normal Expenditure of that year was, therefore, only £72,000,000. Last year, in Scotland, when the Chancellor of the Exchequer reviewed the Expenditure of the late Government, after giving them credit for expenditure arising from the subsidy to local taxation, and allowing for a proper increase on account of the Education Vote, he showed that the difference of annual expenditure as against the late Government was something like £8,000,000. The amount proposed to be raised by taxation during the year 1881–2 being £73,000,000, if the sum of £30,000,000 levied by local taxation were added to this, it would be seen that the enormous sum of £100,000,000 sterling was being expended in carrying on the Government of the country. Therefore, he thought the time had arrived when independent Members ought to fight the Estimates. The right hon. Gentleman, when in Opposition, had encouraged hon. Members to challenge the Expenditure of the Government, even down to thousands—he believed his remark was that a Chancellor of the Exchequer was not worth his salt who was not prepared to welcome a saving even of £2,000. For his own part, he felt prepared to give the noble Lord the Secretary to the Treasury a good deal of trouble by opposing the Estimates this Session, and he trusted the Government would be always able to show specific reasons for the various items. The only chance independent Members would have of effectually urging reduction of expenditure upon the Government would be by challenging Vote after Vote, and endeavouring to carry a considerable reduction upon each. We had a Military and Naval expenditure which he believed had never been reached before—namely, £31,000,000. The Civil Service Estimates were also steadily increasing all round. On the whole, he was satisfied there was a margin for a great deal of economy. Unless the House made a determined stand at once, they would find a prospect of continual increase of taxation, as well as an increasing Expenditure. He sincerely hoped the right hon. Gentleman would not allow the present conversation to close without holding out some hope that the Government would look into the question of expenditure, as well as that of taxation, and give those who were pledged to reduce expenditure, and who had contrasted the Conservative and Liberal Administration in that respect, an opportunity of showing that a Liberal Government really meant economy, as well as peace and reform.


was understood to say there was no greater subject for consideration than the relation of the Expenditure and taxation of the country, touched upon by his hon. Friend who had just sat down. It was hardly possible to deal comprehensively with it on that occasion; and he had not been able to refer to it, except in a very succinct manner, in the course of his Statement. The proposition raised was a most pregnant one, and required the most earnest consideration. In answer to the isolated points raised, he wished to recognize the thorough fairness and justice of the speech of the hon. Member for Bedford, and of what was said by the hon. Member for East Surrey on the subject of brewing beer. He considered it a case of "As you were," and that the Government and the brewers stood, as in July last year, in an attitude of friendly conflict. The right hon. Gentleman the Leader of the Opposition had made several observations upon his Statement that were very kindly conceived. Amongst other matters, he had mentioned the subject of the Wine Duties. Upon that subject he (Mr. Gladstone) had omitted to state that, whereas that House last year had given an intimation of its willingness to consider the question, nothing practical had resulted on the other side. Under these circumstances, he could not ask the House to take any further steps until other Governments had shown a disposition to meet us. In response to the wish that he would lay upon the Table the figures from which he had quoted, as to the proportion of wealth and population, he had to state that when the matter had been fully considered the information asked for should be laid in a convenient form before the House. If there were any other points on which hon. Gentlemen required an explanation, he should be most happy to hear them, and to answer any questions put to him; and he very thankfully accepted the suggestion of the right hon. Gentleman opposite (Sir Stafford Northcote)—namely, that they should take the discussion on the first convenient day after Easter. As far as they were concerned, the course of Business, in his (Mr. Gladstone's) opinion, should be this—that they should proceed with the second reading of the Land Bill immediately after the Easter Recess, and, directly after that, the consideration of the Finance Bill.


hoped he might be allowed to say a word on behalf of those who represented the agricultural population of the country. No doubt, on the whole, the result of the financial operation of substituting a beer for a Malt Duty had been to the advantage of the great brewers from whichever point it was looked at. As the right hon. Gentleman the Chancellor of the Exchequer had himself observed, considerable hardship had been inflicted upon the small brewers—that was perfectly certain. He wished to remind the right hon. Gentleman that when he introduced the measure he did it ostensibly in the interest of those "who" he had said— Are labouring under a most unparalleled depression, the like of which has not existed within the memory of man, and the consequences of which are not yet fully known. The right hon. Gentleman further added— We are standing still in all departments of trade, and this fact may be traced, in a great measure, to the agricultural depression; and trade will never return to its pristine state as long as that agricultural depression remains, because it must have an effect upon the whole home market. He wished to point out to the right hon. Gentleman that he was going to impose an additional burden upon the farming class—upon that depressed industry. It was proposed to treat farm-houses—which really had nothing to do with the agricultural industry—as they dealt with shops—namely, as trade buildings, and that was a most unjust thing. He was sorry the right hon. Gentleman was not present to hear the very forcible observation he was about to make—namely, that the agricultural labourers—in whose well-being the Liberal Party had declared themselves especially interested at the last Election—to a man condemned the tax imposed upon them in respect of brewing. They were compelled to pay a 6s. licence for liberty to brew, and, by so doing, they were paying more than their home brewing used to cost them under the Malt Tax, for they were only accustomed to brew two or three times in the course of the year. He had been in hopes that the right hon. Gentleman would alter the arrangement this year; but there was no proposal to give relief to the agricultural labourer in the Financial Statement they had listened to.


said, that half per cent addition to the Probate Duty was to be made, after deducting from the estate all debts and liabilities. The difficulty in the way of this tax which occurred to him was this—that in order to make the charge as described all the debts would have to be ascertained, or, at any rate, some near estimate, presumably by declaration, would have to be given. The right hon. Gentleman was probably aware of this—that the probate or letters of administration were necessary immediately after a person's decease, for the reason that no one could deal with a balance at the banker's, with a stock or a share, and no one could draw a dividend without the protection of that probate. It generally happened that they could not ascertain what the liabilities were until some months after the decease, so that he saw great difficulties in the way of carrying out the right hon. Gentleman's scheme of paying an immediate duty on the net residue of the testator. At any rate, they could not get rid of the probability of having to submit two sets of accounts. He merely threw out these suggestions for the consideration of the right hon. Gentleman. It might be that the right hon. Gentleman might be able to overcome the difficulty in his Bill; therefore he (Mr. Gregory) mentioned it now in order that the right hon. Gentleman might have it before him.


said, one of the points made by the right hon. Gentleman was where he foreshadowed the simplification of these matters in the case of persons to whom small legacies were left—in regard to their being able to inherit without trouble. He (Mr. Richardson) had had some experiences in his own neighbourhood of legacies of from £20 to £300; and he could assure the Committee that the annoyance and mortification that occurred—especially where ignorant people were concerned—in having to take out probate had not been at all exaggerated by the right hon. Gentleman. The present system was costly, and it was not fair that any money that a person had worked hard to accumulate during his life should be unnecessarily squandered after his death. The measure would be received as a boon, especially by the people of Ireland, who, as a rule, were only able to save small sums of money.


congratulated the Committee and the country that they had the great master hand of all financiers at the head of affairs. The remarkable figures illustrating the contraction of the Revenue as contrasted with the Expenditure of the country during the past few years showed a most serious state of things; and the great reduction in the value of an additional 1d. on the Income Tax, as stated by the Prime Minister, proved, beyond doubt, that the financial state of the country was one of great anxiety. He could have wished to have heard from the right hon. Gentleman some scheme for the permanent annual reduction of the National Debt. The right hon. Gentleman seemed to be the only person able to carry out a reduction of the Debt, which had been, and was still, a great burden upon the country. The present Prime Minister had brought about a reduction of the Debt. Whereas, in 1857, it amounted to £835,000,000, it now amounted to £776,000,000, and a considerable part of that reduction was owing to the exertions of the right hon. Gentleman. During his term of Office, previous to 1874, he had reduced it by £26,000,000 or £27,000,000; but since that time not only had there been no reduction of the Debt, but he believed, if anything, it had been slightly added to. When they considered the great charge the National Debt was every year upon the Revenue, they must all admit that some effort should be made to reduce it more extensively and regularly. He would only venture to make one other suggestion to the right hon. Gentleman, and that was as to whether the Stamp Duties had been properly estimated for the coming year. As one connected with the commerce of the country, he had been struck by the remarkable diminution which had occurred in the number of bills of exchange during the past few years. The number of bills of exchange transactions, and the amount of money that passed, had become seriously reduced of late; and he could not help thinking that in this way a great effect must be produced on the Stamp Duty.


said, that whilst he, with the rest of the Committee, had listened to the speech of the Prime Minister, so remarkable as an effort of memory and for the elegance of its diction, he could not help thinking that the country might have been spared the deficit in the Budget caused by the deplorable war in the Transvaal had that eloquence been more prudently exercised in the past. He could not forget the disastrous struggle which had been provoked by reckless electioneering addresses, and the dishonourable peace which had just been concluded. But, apart from that question, the Budget could not be described as successful, for it appeared that the great feat of finance, from which they were promised such great results last Session, had not turned out by any means a complete success. The operation of turning the Malt Tax into a Beer Duty had turned out a failure, producing less than the Malt Duty had produced, and less than the Chancellor of the Exchequer had calculated; and he could not think that the advantages described by the right hon. Gentleman with regard to the development of the ingenuity of the brewers in the selection of material for the manufacture of beer were likely to be favourably viewed by the farming interest of the country. The right hon. Gentleman had grown eloquent upon the fact that rice, maize, sugar and syrup were now used in the manufacture of beer in place of English barley; and he had also become eloquent upon the fact that cheap barley was used—and he (Mr. Ashmead-Bartlett) was sorry to say that not only the rice, sugar, maize and syrup came from foreign countries, but also this cheap barley—so that the exultation of the right hon. Gentleman was at the expense of that long-suffering and most neglected class, the British farmer. When the Prime Minister boasted of the "ingenuity of men" in this novel manufacture, he (Mr. Ashmead-Bartlett) could not help thinking of those noxious compounds of foreign importation—suine and soapstone—which the President of the Board of Trade (Mr. Chamberlain) had the other night insisted upon forcing, under a false name, into the stomachs of the labouring classes of this country. With regard to the Sinking Fund, the right hon. Gentleman had said that as we now hold it we had better keep it; but he wished the Government had applied the same principle to our connection with Candahar. As for the decreased production of the Income Tax, that was a very serious question indeed, showing, as it did, that England was, for the first time, living on her capital, and giving rise to some doubts as to the success of our present commercial policy, and it would suggest a question which was more and more coming to the front—namely, that of the re-consideration of our relations with foreign States. He did not wish to directly attack what was called Free Trade; but he could not help feeling that, under present arrangements, it was not Free Trade for England, but for every other country at her expense. He was not going to say that he was not a Freetrader himself; but he thought it altogether ridiculous and preposterous for the right hon. Gentleman the Prime Minister, who had had a long and distinguished connection with that movement, to assume, as the right hon. Gentleman the Chancellor of the Duchy of Lancaster did, that there was nothing whatever to be said on the other side. He would say to this latter right hon. Gentleman that there was a great deal to be said for reciprocity of trade. The subject was ripe for discussion, and should be fairly argued out in the House of Commons. In a short time a demand for the re-consideration of foreign tariffs would come from the very classes and constituencies that he had so successfully represented. It was the manufacturing towns that were demanding, he would not say Protection, but Reciprocity. It was absurd to say that we—in the true sense of the phrase—were now in the enjoyment of Free Trade. It was not Free Trade; it was Free Trade for the rest of the world, but not for England. He was in favour of a great commercial Zollverein for Great Britain and the Colonies—that was, absolute Free Trade within the limits of the Empire; and outside of those limits Free Trade with those nations who gave them Free Trade in return. Such a union throughout the British Empire would increase and develop the old Imperial spirit of the English race, the spirit to which he was net ashamed to refer with pride, which had carried the British flag into every quarter of the globe, which had won for England the commerce and markets of the world. That spirit alone could maintain England prosperous, respected, and great.


said, the Irish brewers were quite as dissatisfied with the present state of the law with regard to beer as their English brethren. He would be able to show that they were subjected to the payment of an additional duty of more than 12 per cent in consequence of the change; but, as it was understood that they would be placed in the same position as the English brewers, and not precluded hereafter by any allegation of acquiescence from showing that by the working of the Act they were paying a considerably larger duty than formerly, he should say nothing further at present, as he did not think that a sufficient time had elapsed for a satisfactory conclusion to be arrived at.


did not rise for the purpose of entering into a lengthy criticism of the right hon. Gentleman's Statement, but merely for the purpose of saying a few words. He regretted very much to see 1d. taken off the Income Tax, instead of a reduction being made in the duty on the articles of consumption. Tea, beer, and tobacco were the articles comsumed by the poorer classes, and a reduction might very well have been made in the duty on one or all of those instead of in the Income Tax, which only affected the well-to-do. It seemed to be forgotten that of the indirect taxation of the country more than half was contributed by the poor classes, and that these people would in no way benefit by the reduction of the Income Tax. The unfortunate man, with £1 a-week to live on, paid 10 per cent of his entire income in taxation; whereas the man with £50 did not pay 5 per cent. He was glad to see the change the right hon. Gentleman proposed in the Probate and Legacy Duty, because the law in this respect would be simplified and rendered much more fair than it had been for a considerable time; and he hoped that, at some future time, the right hon. Gentleman would be able to extend the advantage he proposed. As to the amount it was proposed to take off the foreign spirits—namely, 1d. per gallon—he failed to see how the operation could be performed at a gain of £180,000 to the Exchequer. ["No, no!"] He understood that it was proposed to take off 1d. from the 5d., leaving the rum at 2d. as at present. [An hon. MEMBER: The duty on rum is to be raised.] If the duty on rum was to be raised to 10s. 4d. it would be hardly fair to the Colonies. An hon. Member on the Ministerial side of the House had complained of the increasing Expenditure of the country; and he (Mr. O' Sullivan) thought the hon. Gentleman was quite justified in making that complaint. The expenses were increasing in the country rather than lessening. Economy might be practised in several ways; for instance, there were two Departments—the Customs and Inland Revenue—with two sets of Commissioners, solicitors, and other head officials; and it was well known that the work of both could be done by one. The Inland Revenue Department was competent to do all the work; and if all the work were handed over to it a large amount would be saved to the country. He trusted the Government would before long bring forward a scheme for amalgamating both these offices. As to the general tendency of the Budget, he thought it was very fair, and such as the House would approve of unanimously; but he must say he regretted that the right hon. Gentleman, before he took off 1d. from the Income Tax, did not reduce the taxation on the food of the people.


said, he had no desire to interpose unduly between the Budget and its most appropriate sequel, a Bankruptcy Bill. But there was one remark in the Statement which had been made by the right hon. Gentleman the First Minister of the Crown which struck him more forcibly than any other, and it was the observation that the country had not been making ground. He had beside him certain agricultural and manufacturing Returns, in which, he ventured to think, would be found the true explanation of the reason why the country had not been making ground of late years. The true reason why the condition of the agricultural and mercantile interests of the country was not more favourable was to be found in the competition we had in the imports from abroad. Taking an average of three years, he found that in the three years from 1869 the annual importation of foreign farm produce amounted to £60,678,352; in the next three years to £80,870,757; in the next three years to £94,192,625; and in the last three years to £106,350,902. When we came to contrast this with the diminishing exports of our manufactured articles, we should be able to see at once the reason why we had experienced a lack of prosperity. The right hon. Gentleman the President of the Board of Trade told them in the early part of the evening that our annual imports of manufactures had increased 45 per cent. The right hon. Gentleman excluded the case of wool. In regard to wool, however, it was perfectly true that imports were diminishing and exports increasing; but that referred only to the raw material, and was evidence only of increasing foreign competition as concerned the finished article. Now, he (Mr. Mac Iver) found that in 1869 our exportation of woollen manufactured goods amounted to £20,664,747, and our imports of similar articles to no more than £3,456,675. He agreed with the President of the Board of Trade that it would be misleading to take the basis of any one year; but he had taken the average of three, and found that, as time went on, our exports steadily diminished, while our imports of the same goods steadily increased until last year we found ourselves in this startling position—that our imports of woollen goods amounted to £6,484,397, while our exports had de- creased to £13,576,956. These figures certainly confirmed the statement of the right hon. Gentleman the Prime Minister that the country had not been making ground, and formed some justification for the course he (Mr. Mac Iver) intended to pursue at a later stage in asking the House to approve the principle that Customs Duties should be replaced upon foreign importations when they came into unfair competition with our own industries. The question was not a Party one, nor were his proposals such as the Leader of the Opposition would be likely to accept; but the views which he would endeavour to express were those of many business men besides himself. He thought the time had arrived when it was reasonable to raise once more and re-discuss those old questions of controversy which were supposed to have been settled by Sir Robert Peel and Mr. Cobden. It was idle to describe ourselves as a Free Trade nation. How could we be a Free Trade nation when we continued to get as much as £44,484,000 a-year out of Customs and Excise? No one could to-day reasonably maintain that the world at large was showing any signs of conversion to our insular system of political economy; and it was, unfortunately, only too true that any prosperity which Great Britain enjoyed under so-called Free Trade was surpassed by the much greater prosperity of the United States of America, and even of France, notwithstanding the manifest abuses of a system of Protection. There was a midde course. Sometimes Free Trade was right, sometimes Protection was right; it depended upon the circumstances in which a country might be placed; and instead of accepting the proposals of the Chancellor of the Exchequer we were in a position where it might now be well to get increased revenues through the Custom House in reduction of other taxation. As he had said, it was idle to call ourselves Freetraders. That was part of the general imposture, for it so happened that more than half the Revenue of the country was still derived from Customs and Excise on principles entirely at variance with Free Trade principles, and in the worst possible way. When we, in virtuous indignation, complained that the Colonies taxed our manufactures, it should be remembered that the productions of the Colonies continued to be largely taxed by ourselves. The very first remissions of taxation should be those which, in defiance of Free Trade principles, we levied upon the tea, coffee, cocoa, dry fruits, and tobacco, which were the productions of our own lands. It was wrong, he thought, to be so dependent as we were on foreign nations for our food supply, when our own Colonies could so easily furnish a larger proportion of those articles which we required to get from abroad. It was also an unwise thing and a mistake to rely so largely upon an excessive consumption of intoxicating drinks for our Revenue; and upon that point also, at some future period, he should feel bound to take the opinion of the House. He had always thought that the case with which this large sum of £44,000,000 was raised from Excise and Customs Duties, and mainly from intoxicating beverages, was a temptation to the Chancellor of the Exchequer, whoever he might be, not to legislate in the direction of repressing the too great consumption of alcoholic drinks. The proposals for taxing these drinks were always made in a contrary direction—for purposes of revenue, and not for purposes of restriction—and were, consequently, a double wrong. What was it that the right hon. Gentleman proposed to do now in regard to the Spirit Duties? All that it amounted to was to give the Exchequer a little more money out of our own pockets for the benefit of foreigners; and that object was to be effected by reducing the surtax on foreign spirits, and doubling the tax on spirits from our own Colonies. Under the pretext of Free Trade we had destroyed many of the industries of the country. Where was the woollen trade? Although it was not yet entirely gone, he would ask hon. Members who knew anything of that trade if his assertion that it was in the most depressed condition was not fully borne out? And where was the silk trade? What had our Free Trade policy done for that trade? We could not fight the battle of Free Trade single-handed against the world, and our endeavours to do so had resulted in hopeless failure. It was idle to talk about cheap food when our policy was one which deprived the working man of the means of earning a cheap loaf. What was the general condition of the country? Our trade had entirely changed its character, and our exports to-day were, to a large extent, the exports of raw material and of skilled artizans. We were paying for our food, and importing foreign manufactures out of our own material wealth. He thought the time had arrived for a thorough reconsideration of the whole of our financial system. He was quite aware that these remarks would not be accepted by the right hon. Gentleman opposite; but, representing, as he did, an important trading constituency, and believing that the views he was endeavouring to urge were largely held in the country, he thought he was justified in raising the question. He believed that ere long a loud cry would come from the working classes of the country for the reversal of our present policy. No one could honestly look at the position of the country, as compared with other nations, and say that he really believed the fiscal policy inaugurated by Sir Robert Peel and Mr. Cobden had in any way been successful. Whatever prosperity this country had enjoyed from a Free Trade policy had been entirely overshadowed by the prosperity of the United States and of France. Personally, he did not believe that Free Trade or Protection had much to do with the matter. The abuse of either was an evil; and what he would recommend was that they should take the course they ought to take, as business men, of managing their own affairs, with due regard to the circumstances of the nation. He repeated again that it was not a sound position that we should be dependent upon foreign nations for more than one-half of our food supply; and he thought the day was not far distant when the working men of the country would themselves demand what he had long been asking of the Chancellor of the Exchequer in their name. So far as cheap food was concerned, cheapness was a matter of good wages rather than of nominal price; and our working men, in too many instances, were thrown out of work by unfair foreign competition, and had no money to buy this cheap food of which we heard so much. But even in regard to food production we were not going the right way to get cheap home-grown food. We wore protecting the foreigner against ourselves, for British and Irish agriculture paid taxes from which he was exempt. John Stuart Mill never thought taxation was necessarily borne by the consumer, or he would not have said that— The only mode in which any country can save itself from being a loser by the revenue duties imposed by any other countries on its commodities is to place corresponding revenue duties upon theirs. The course recommended by Mill was that which he (Mr. Mac Iver) respectfully urged upon the Chancellor of the Exchequer. Put no taxes upon the food of the people; but relieve British and Irish agriculture from existing taxation, and tax the foreigner whenever you can. Under the system which we miscalled Free Trade, the luxuries of the rich were admitted free, and our own labour was displaced. The untaxed importation of foreign manufactures was much larger than was commonly supposed. The financial proposals of the Chancellor of the Exchequer, notwithstanding the eloquence with which they bad been introduced, were contrary to common sense, and led only towards ruin; but he had still hope in the working men of this land. These, at least, valued our home industries; these valued our Colonies, and they valued our trade with those Colonies, and before long they would send up a mighty cry for justice. It was not justice to receive the production of other lands here duty free unless we obtained similar privileges in return; and when the proper time came to move an Amendment to the Budget Resolutions, he would prove in detail the allegation which tonight he had briefly stated.


said, the hon. Member who had just sat down had made some allusion to the state of trade in Bradford. It was undoubtedly true that of late years there had been a serious depression hanging over one branch of the woollen trade; but the hon. Member was mistaken in supposing that his observations would apply to the woollen trade generally. They applied principally to one branch of it—the worsted trade—of which the town he had the honour to represent was the centre. He believed the explanation was not that the trade was suffering from the disastrous effects of competition with France, but that within the last half-dozen years there had been a great change in the fashions. One important branch of the worsted industry of Bradford was based on home-grown wool—the long fibre wool, known as "lustre" wool. But there had been for some years a demand for a softer material. As was well known, fashion constantly changed, and the main explanation of the special depression in the Bradford worsted trade was that there had been an entire change in the fashion of ladies' dresses. It was only fair to say that the Bradford trade had, to a large extent, accommodated itself to the change of fashion, and that to a very considerable degree the goods of Bradford were also competing in the foreign market with the goods of France. The hon. Member for Birkenhead (Mr. Mac Iver) had gone a step further, and imagined that our Free Trade policy had been mischievous to the country at large, basing his case on the statistics as they affected Bradford. He was afraid the hon. Member, in that conception of the case, had raised a superstructure which it was by no means capable of bearing. The hon. Member prophesied that before long there would be a great outcry on the part of the working classes against Free Trade. That attempt had already been made in Bradford, as a centre of industrial labour, to raise the cry of Protection to native industry, and the result had been an utter collapse. He could assure the House that, although there had been depression of trade, the working classes in that great centre of labour never went through such a period of depression with so little suffering and so little privation as they had in the present instance. In the first place, whatever it was necessary they should purchase and consume had been at a moderate price. Again, would the hon. Member for Birkenhead pretend to say that if there had been in any form Protection to native industry, and the food consumed by the working classes had been made 50 per cent dearer in consequence of artificial restrictions at our ports, the consumers in Bradford in the crisis they had been passing through would have been in any way helped? How could it have assisted them to call upon them to pay more for their food? Would it not have rendered it more difficult for the productions of Bradford to enter into the various outside markets of the world? He believed, if the whole body of the industrial classes of the country, and those who were at the head of the large industrial establishments, were canvassed, they would state that the depression the country had been passing through during the last few years arose from two causes. So far as the home trade was concerned, it was largely due to a succession of bad harvests. We had suffered from them in this country before, and bad harvests had been attended by even worse consequences than those which had followed from the present depression. There was also another cause. It was likewise due to indulging in a spirited foreign policy, which had materially increased the burdens thrown upon the backs of the people. Further, the wars in which we had indulged, and the rumours of war in the East of Europe, had kept the commercial classes of the country in a state of continual alarm during the last three or four years. He ventured to say that when the country returned to the old lines of peace abroad and economy at home, the hon. Gentleman would see, not very long afterwards, a return of manufacturing and commercial activity in this country. If, in addition, we had a succession of good harvests, we might look forward to a return of prosperity in our home trade. The state of things in the agricultural districts would then be what it had been in former years, and the consequence would be great improvement both in our home trade and in our manufacturing industries for exportation. The hon. Member hinted that possibly there might be a re-arrangement of our fiscal system, whereby some advantages might be given to the Colonies. He would point out to the hon. Member that it was within the power of every one of our Colonies to adopt Free Trade with the Mother Country in harmony with our tariffs, and by that means enter into the best of all relations for the exchange of commodities. Canada and some other Colonies had adopted a protective system almost as bad as that of the United States, and without the same excuse. America had the excuse of an enormous war and a prodigious Debt, and she consequently did what all other countries had to do in the case of war—she was obliged to extract money from the taxpayers in both a direct and indirect form. He ventured to think that we should never make much further advance in this country until a Chancellor of the Exchequer, such as the present Prime Minister, grappled with the whole question of the incidence of taxation.


Before the debate proceeds further, I must draw the attention of the Committee to the fact that this is not a proper time for raising a discussion on Free Trade and Protection.


desired to confirm the remarks of his hon. Friend with regard to Canada and Free Trade; but after the caution of the the Chairman he would not pursue that subject. The part of the speech of the Prime Minister which pleased him most was that referring to mortmain. With regard to the fact that all property that passed to a Corporation escaped for ever the incidence of the Succession Duty, he thought that was a great iniquity. It was a subject he had brought before the House on several occasions in past years; and he was of opinion that all property coming to corporations ought to pay Succession Duty at certain intervals. In Scotland there was a systolic of feu duties, which meant a lease of the ground in perpetuity, with a fixed feu-duty every year as rent. There was a duplicand payment on the entry of every fresh successor to the land, which meant that, when a superior of the land died, his heir was entitled to go to the feuar and make him pay double duty for that particular year. In most cases now-a-days that had been commuted into a payment once in every 19 years, and the practice had become very general in Scotland. That system he would suggest as a fit basis for making mortmain and corporation property pay Succession Duty; and he would suggest that they should pay tax once in every 19 years, as the Scotch system was founded on the experience that, on the average, property changed hands about once in 19 years. The Scotch system would serve, he thought, as a fit basis for the settlement of this question; and he hoped that, if we were not to see any change in that direction now, before many years something would be done to carry out the suggestion. There was another subject which he was sorry to see the right hon. Gentleman had not touched upon, and that was the Inhabited House Duty, which was in an extremely unsatisfactory state. The interpretation of the Inhabited House Duty was arbitrary and absurd. Some years ago, there was a slight modification made by which the whole premises of a large mercantile firm were not charged Inhabited House Duty in respect of a caretaker, and the wording of the statute giving them exemption was so peculiar that it depended on the premises being used for profit or not. It appeared to him that great public buildings which were not used for purposes of profit were, à fortiori, entitled to exemption in respect of caretakers living in them. It was altogether unjust that a large municipal institution should be charged Inhabited House Duty for its whole value merely because a caretaker lived in it; and he thought it was high time this injustice was removed. Then there was another injustice, which had come before him a few days ago, in connection with the Spirit Duties which he should like to see removed. Spirits on which duty had been paid occasionally met with accidents, and were lost. The duty was remitted in certain circumstances, and in certain other circumstances where justice would equally require a remission it was not allowed. For instance, if, in conveying a hogshead of spirits from a bonded warehouse into a cart, to be transferred to a ship, the hogshead dropped from the chain and broke, and the spirit was lost, the duty was remitted; if it was being put into a ship at the dock and the chain or rope broke, so that the spirit was lost, again the duty was remitted; but if the hogshead, on the way between the bonded warehouse and the ship, came to grief, the duty was not remitted. He did not think that system could be justified, and it was an injustice which ought to be done away with; and when the Bill came before the House he should propose to introduce an Amendment for that purpose.


wished to impress on the Chancellor of the Exchequer the importance of the Amendment to the present system of Probate Duties. It was a scandal that corporate bodies should escape the payment of a share of their contributions to the taxes of the country. In the North of Ireland the London Companies had large estates from which they received a considerable revenue, and escaped the payment of what had been termed the Death Duties. He hoped another year the right hon. Gentleman would take care that these Companies, and all other corporate bodies, no longer escaped their share of taxation. He thanked the hon. Member for Wolverhampton for referring to a subject which he had intended to mention—namely, the large amount of National Expenditure. He remembered, during the Elections of 1868, that he quoted in one of his speeches from a speech of the Chancellor of the Duchy of Lancaster (Mr. John Bright), in which he had said, no Government was worthy of the confidence of the country who could not rule without an Expenditure of more than £70,000,000. We had now got far beyond that—£85,000,000; and unless the House and the country made some protest we should soon get up to £100,000,000.


thought the propositions made by the Chancellor of the Exchequer would be well received by the country, especially by that section of the country which was not rich. The proposals in reference to the death taxes were a great advance on the existing law; and he highly approved of the scheme by which any person inheriting less than £300 could go to a Revenue officer, and by making an affidavit, and paying him £2 5s., avoid all the expense of employing a solicitor or other agent to pass the accounts. It sometimes happened, in the case of a small estate, that after the debts were paid there was not sufficient to pay those heavy charges, and he thought the scheme would prove a great boon to the country. He also approved of the arrangements by which persons administering an estate would be saved the trouble of having to go at one time to pay the Legacy Duty, and at another time to pay the Probate Duty, and so have the process hanging over them for a year. He would like, however, to suggest to the right hon. Gentleman the consideration of what really was an estate. In the eyes of the gentleman fixing the duties, an estate was the gross amount bequeathed; but he would venture to say that the assets were really the amount that was left after all the debts and the expenses of realization had been deducted. With regard to the Income Tax, he approved of the proposal of the right hon. Gentleman; but he did not look upon it in the light of a reduction, but as the remission of a tax imposed last year to tide over the deficiency of the previous Budget. The penny was, he considered, wisely taken off; but he thought the Income Tax was very improperly levied; objecting to the way in which one sum was charged on real property, one on money-making businesses, and one on money left after death. He would tax a person who had inherited money at a higher rate than the person whose income was derived from the work of his brain; and he urged the right hon. Gentleman to consider whether this tax could not be levied in a more equitable manner than at present. Then, with respect to the National Expenditure. True statesmanship was the statesmanship which reduced National Expenditure to the lowest possible limits. He urged the Chancellor of the Exchequer and the House to look to this question of our National Debt, which he considered a standing disgrace to such an intelligent and commercial country as this, and to endeavour to do what younger countries had done—to systematically reduce the National Debt. He hoped that every future Budget would provide a Sinking Fund for the extinction, by degrees, of the National Debt.


said, the hon. Member for Donegal (Mr. Lea) seemed to allude to the property held by the City of London in the North of Ireland, and to speak of the City Companies as though they were great delinquents, because they had not paid Legacy, Succession, or Probate Duty. But that was not their fault; it was not likely they would pay duty which was not levied upon them; and when the hon. Member spoke of the Irish Society, he must know that there was no property in Ireland which was better managed, and on which the tenants were so well satisfied, as that of the Irish Society. The Irish Society spent all the rents they received on the property back again in Ireland, with the exception of a very small sum for the cost of management in England. He thought the Chancellor of the Exchequer was to be congratulated upon having brought forward two Budgets within a year, the first of which had been eminently successful. His scheme for abolishing the Hop and Malt Duties, and putting a tax upon beer, had been carried out with the greatest success. With regard to the present Budget, he had looked forward to some great change in the Probate Duties; but he entirely disagreed with the hon. Member for Stockton-on-Tees (Mr. Dodds) with respect to those duties. But the right hon. Gentleman the Chancellor of the Exchequer had not touched upon the great evil of the Probate Duty, which was that it was levied upon only one class of property—namely, personal property. By increasing the Probate Duty that evil was aggravated; and the Chancellor of the Exchequer had not gone into the whole question of freehold and leasehold property. A man, having both freehold and leasehold property, paid Probate and Succession Duty on the leasehold, but only Succession Duty on the freehold. In the neighbourhood of the Metropolis there were large estates, the leaseholds on which were more valuable than the freehold; but, as time went on, the freehold became more valuable than the leaseholds; and when the leases ran out and the whole property fell into the hands of the freeholder, there would be no Probate Duty to be paid whatever; the whole estate passed as freehold property. That was unjust; and he contended that whenever the Probate Duty was dealt with, it ought to be levied on freehold property as well as on leasehold, or it ought to be taken off leasehold property. There was no reason why only leasehold property should pay Probate Duty; and he was disappointed that the Chancellor of the Exchequer, when he touched the Probate Duties, had not extended them so as to apply to freehold property. A Probate Duty on freehold property would bring in a large amount of money, and it would be a very fair proceeding, because, in many cases, large estates escaped paying their fair share of taxation. Then, with regard to the House Duties, they were most unequally assessed; and, in the country, the larger a man's house was the less he paid in proportion. The argument was that the duty should be estimated upon such a sum as the house would let from year to year. He would take the case of the mansion of a Duke, with an immense estate. Such a house might not let at all, and it might be argued that such a house ought not to be assessed. The system was a great injustice, and he considered that either the House Duty ought to be abolished, or the rateable value must be estimated upon a different basis than that of the letting value of a house from year to year. Then, with regard to the Probate Duty, it seemed to him that the Chancellor of the Exchequer stated in the event of any estate being left to certain parties they might go to Somerset House and pay 5 per cent, and then would net be charged Probate Duty, and would not be troubled for Legacy and Succession Duties. No one would go and pay that 5 per cent unless he would be likely to obtain a profit. In the case of a man leaving a great sum to a charity, as Mr. Peabody had done, for instance, the charity would be very glad to pay 5 per cent; but under the present system they would pay 10 per cent. He regretted, also, that the Chancellor of the Exchequer proposed to increase the Probate Duty by half per cent, and not charge a Legacy Duty of 1 per cent. He was so jealous of the Probate Duty not being increased until it was placed on a just and equal basis that he felt the duty ought not to be touched except in a broad spirit, so that it should embrace the whole property of the country. Whether it was 2 or 1 per cent it ought to include freehold, leasehold, and personal property. In that way a large amount of money would be obtained, and the system would be just. He further wished that the Chancellor of the Exchequer had stated something with respect to the Land Tax. The Land Tax was not, perhaps, generally understood. Very few people knew what they had to pay to redeem the Land Tax. The calculation was as follows:—To the sum necessary to purchase Consols to produce the amount of the Land Tax, 10 per cent was added, and then 17½ per cent was deducted. It would be better to adopt a system of a certain number of years' purchase for the redemption of the Land Tax, as in the redemption of tithes. There were other duties which he should like to see abolished; for instance, the Railway Duties. The sooner they were abolished the better, as he was of opinion that, in order to promote the prosperity of the country, all taxes on locomotion ought to be removed. Then there were the light dues. With the exception of Turkey, England was the only country throughout the world that levied light dues. In other countries those dues were thrown on the Public Revenue and not upon the ships; but here they were levied upon ships, and yet not upon all ships; the whole of the ships of Her Majesty's Navy and private yachts paid no light dues. There was considerable expense in collecting these dues, and he thought these were duties which ought to be abolished. Then, again, he wished it were possible, in the interest of the working classes and of temperance, to abolish the duties on coffee, chicory, and cocoa; but he presumed that, as they produced £300,000, it would not be easy to dispense with them. He trusted that when the Chancellor of the Exchequer came to the Revenue question of the Probate Duty he would be able to see his way to exempt legacies of £20 from duty. It was too much to expect a servant or dependent to pay £2 in case he happened to be left £20. No benefit would be derived, and he did not see the advisability of disturbing the present arrangement. He hoped the whole subject of the Probate Duties would some day be more thoroughly reviewed by the Chancellor of the Exchequer.


did not think that in the case of a private brewer the farm buildings should be included in the house; and he trusted the right hon. Gentleman would re-consider that part of his Budget. A slight difference had been made in the Import Duty. He would have thought that might have been left alone; but it was evident the right hon. Gentleman did not wish to favour the home produce in any way whatever. He approved of some amendment of the Probate Duty; but was afraid that the reduction in the intervals of the scale, as proposed by the right hon. Gentleman, would lead to a great deal of delay, as valuations would have, in the first instance, to be made more minutely before probate could be obtained.


said, he would like to call attention to a remark made at a time when very few Members of the Committee were present. An hon. Member (Mr. Lea), who spoke from the opposite Benches, complained of the action of the Chancellor of the Duchy of Lancaster having led him, in the days of his innocence, to make observations upon the extraordinary extravagance of a certain Government to which they were both opposed. He said the Chancellor of the Duchy of Lancaster stated that no Administration ought to command the confidence of the country which could not carry on the Government of the country for a sum not exceeding £70,000,000 a-year; and the hon. Member asked what they were to think of the Government which now came, not for £70,000,000, but for £84,000,000, to carry on the business of the country? Now, that remark showed the extreme inconvenience of hon. Gentlemen, who aimed at being statesmen and great in the councils of the country, making speeches when in Opposition which they could not substantiate when they were in Office. ["Question!"] An hon. Member opposite called "Question." What he was saying might not be palatable to the hon. Gentleman; but he maintained he was speaking of the Expenditure of the country, which was the question now before the Committee. He was remarking upon the inconvenience of hon. Gentlemen in the position of the Chancellor of the Duchy of Lancaster leading on less experienced Members to make statements in the country which were really not borne out by the facts. The same thing went on now, for he was reading only to-day that a candidate for a seat in Cornwall, addressing his intended constituents, enlarged upon the great extravagance of the Conservative Government, and claimed the support of the electors by holding up to them the great economy of the present Government. He wondered whether the gentleman would tell the intelligent electors of St. Ives when he addressed them to-morrow that this economical Government had actually proposed in the present year an increased expenditure of £1,600,000. He (Mr. Gorst) must allude to what happened in 1877, when an increased expenditure was recommended by the then Government of only £600,000. The increase was just £1,000,000 less than that proposed to-night. On that occasion the right hon. Gentleman the Member for Montrose (Mr. Baxter), who spoke with great weight, having been recently the Financial Secretary to the Treasury, after observing that the increased expenditure was, as far as he could make out, £668,000 more than in the past year— From his place in Parliament he wished to protest against this continual increase in the expenditure of the country. Where was the right hon. Gentleman the Member for Montrose to-night? Why was he not in his place in Parliament now to protest against this continued increase in the Expenditure of the country? The right hon. Gentleman said— Year by year, especially when the Gentlemen on the opposite side were in power, the expenditure went on increasing, and his belief was that before many years passed it would be found absolutely necessary to reduce the expenditure."—[3 Hansard, ccxxxiii. 1020.] Why was the right hon. Gentleman not present to-night to recommend a reduction of the Expenditure? Then the right hon. Gentleman went on to advocate a great reduction in the expenses of the Army and Navy. He said, "The vast Expenditure was indefensible;" and he went on to make an attack on the Ministry of that day for the increase of Expenditure. Now he (Mr. Gorst) did not want tonight to imitate at all the example of the right hon. Member for Montrose; he did not say one single word against the Government because the normal Expenditure of the country was increasing. He believed the reasons for that increase were perfectly and satisfactorily explained a short time ago by the Chancellor of the Exchequer; but what he did want to say was, that when Gentlemen opposite were themselves in Opposition they should show some forbearance to their political opponents; they should show more candour and truthfulness in their financial criticisms, and they should not take exception to an increase in the Expenditure of the country which they found themselves utterly powerless to prevent when they got into Office. There were, of course, occasions when an increase of expenditure was a proper subject of criticism. Extraordinary expenditure was always a fit subject for criticism on the part of an Opposition, and no one would have found any fault with the criticism upon the £6,000,000 loan during the Russo-Turkish War, and the Government could not raise any objection if hon. Members on this side of the House, at a convenient time, and upon a convenient occasion, asked whether the expenditure of £2,000,000, which the Chancellor of the Exchequer told them was incurred upon the war in the Transvaal, was an economical expenditure of money; whether the suzerainty of the Transvaal, which was all that appeared to be left for us, was really worth an expenditure of £2,000,000, or, in other words, whether if the Government, at the outset, had limited their demands upon the Boers to a more question of suzerainty, they could not have obtained that without an expenditure of £2,000,000, which they now asked the House to provide? Those were topics which no Government could object to the Opposition being curious about; but he did think that hon. Gentlemen who had been Secretaries to the Treasury themselves, and who had been Chancellors of the Exchequer themselves, should, when they happened to be in Opposition, retain what he might call their financial candour, and when they knew that in a country like this, with the mode of keeping the accounts such as had been adopted, the apparent expenditure must naturally increase year by year, they should not try to make political capital, they should not try to impose upon an innocent candidate for Parliamentary honours like the hon. Member opposite. ["Order, order!"] If he were out of Order he would withdraw; but he only applied to the hon. Member an epithet which he himself almost invited the House to apply to him. He repeated that experienced Gentlemen ought not to impose upon innocent candidates for seats in Parliament by making such monstrous assertions as that of the Chancellor of the Duchy of Lancaster—namely, that no Government deserved to conduct the affairs of the country which could not carry on the business of the country for £70,000,000 a-year, and then to come down to the House of Commons and ask for £84,000,000. There was one further observation he wished to make before they went to a division, and that was he hardly thought the Chancellor of the Exchequer did full justice to the financial arrangements for the reduction of the National Debt, which were made by the right hon. Gentleman the Member for North Devon (Sir Stafford Northcote). He was sure he did not, because his right hon. Friend (Mr. Hubbard), who was not now in the House, was evidently of opinion that there were no arrangements now made for the gradual and steady reduction of the National Debt; and he was sure if the Chancellor of the Exchequer had explained in the lucid way in which he could explain the arrangements now actually in force for the reduction of the National Debt, no hon. Member would have made a statement that there was no such arrangement in force. As far as he understood the Chancellor of the Exchequer, £6,000,000 of Terminable Annuities would fall in in 1885—that was to say, that by the year 1885 we should have discharged our obligations to the Commissioners of the Savings Banks, who were the holders of the Annuities, and that from 1885, if no further legislation took place to prevent it, we might pride ourselves upon the payment of £6,000,000 a-year towards the extinction of the Debt. But the Chancellor of the Exchequer forgot to tell the Committee that by the operation of the Sinking Fund Scheme of the right hon. Gentleman the Member for North Devon that £6,000,000 of Terminable Annuities which would fall in in 1885 would become immediately and directly applicable to the reduction of the National Debt, because the scheme of the right hon. Gentleman the Member for North Devon was this—that the charge for the Debt should always be £28,000,000 a-year, and inasmuch as the £6,000,000 would no longer be required to pay Terminable Annuities it would become immediately applicable to the direct reduction of the National Debt. The Chancellor of the Exchequer ought to have told the Committee that without the operation of the new scheme for the conversion of the Terminable Annuities that £6,000,000 would have become applicable to the reduction of the Debt under the existing scheme. He understood the right hon. Gentleman to spend £1,550,000 of the £6,000,000 in the conversion of fresh Annuities, which were not to expire until 1906; and, therefore, there would remain £4,450,000 applicable to the direct extinction of the Debt. He was right in saying there was no virtue in the new scheme, and that, so far as the payment of the National Debt was concerned, the whole of the £6,000,000 would have been just as applicable to the extinction of the National Debt under the scheme of the right hon. Gentleman the Member for North Devon as under that of the present Chancellor of the Exchequer, and that the effect of the change now introduced was not to hasten or in any way to facilitate the payment of the Debt, but merely to insure that it should not be paid under the scheme of the right hon. Gentleman the Member for North Devon, but under that of the Chancellor of the Exchequer. There was another point in which the right hon. Gentleman was hardly just to the right hon. Gentleman the Member for North Devon. A year ago, if his memory was right, a complaint was made against the late Chancellor of the Exchequer that in his last Budget he tampered with the Probate Duties without introducing any comprehensive scheme to deal with them. There, again, was an example how, when people were in Office, they found themselves constrained to do the very thing they found fault with when out of Office. [Mr. GLADSTONE: That is not so.] He (Mr. Gorst) begged the right hon. Gentleman's pardon if he was wrong. It appeared to him they had witnessed to-night an alteration of the Probate Duties unaccompanied by any comprehensive scheme for their final settlement, which he certainly understood to be the effect of the charge made against his right hon. Friend. He only made these observations because he was very zealous for the candour of statesmen dealing with the finance of the country; and he could not resist the opportunity offered by the hon. Member who spoke opposite (Mr. Lea) of pointing out what a pity it was that people in Opposition were not as candid financiers as they were when in Office.


said, no one could have looked forward to the Financial Statement of the right hon. Gentleman without very considerable anxiety. It was impossible to observe the foreign policy of the last few years without having felt that the day of reckoning must come, and that the Expenditure of the country would be very largely increased in consequence of the pursuance of that policy against which many of them protested from the time it was inaugurated. Allow him to congratulate the right hon. Gentleman upon the most beneficial change he proposed in regard to the Probate Duties, or what he had called the Death Duties. The arrangements the Chancellor of the Exchequer proposed in regard to property that could be declared under £300 would be of very great benefit to the working classes and less wealthy of the country. It had been his lot, as he had no doubt it had been the lot of many an hon. Gentleman, to help, from time to time, his poorer neighbours when they had probate to take out, and he had seen how they had been encumbered by their duties and the largo lawyers' bills. The admirable plan laid down by the Chancellor of the Exchequer would have the effect of materially facilitating and casing the working classes—especially the poorer classes of society—when passing through this very troublesome ordeal. The right hon. Gentleman had also dealt with the Spirit Duties. The duty imposed on spirits was a most legitimate way of raising money, and many Members of the House thought spirits would bear a still further duty. In the present instance, the surtax would go towards making up the deficiency produced by the taking off of 1d. of the income Tax. His principal object, however, in rising was to speak of the enormous Naval and Military expenditure. It had fallen to his lot, from time to time, to call attention to that expenditure; but upon the last occasion when these Estimates were before the House he had felt that he had no public duty to perform. He felt that the Government which he had the honour to support had been saddled by the expenses incurred by those who preceded them in pursuing a policy which necessitated the keeping up those Services, at any rate, during the present year. If the right hon. Gentleman brought in another Budget, which he sincerely hoped he would have the strength to do, he trusted it would be one which would show a very marked diminution in those two great spending branches of the country. But it could only be done by adhering strictly to that line of foreign policy which had been inaugurated already. [An hon. MEMBER: The Transvaal!] With regard to the Transvaal, he was one of those who thought the late Administration failed in not giving to the Boers that Constitution which, by the agreement made with them at the time of the annexation, they were entitled to have. It was the want of that Constitution which occasioned the war. The course of foreign policy on which they had entered was one which would tend to economy at home in the two large branches of Expenditure, to the honour of England, and to the comfort of the working classes of the country, who were so largely taxed to keep up an Expenditure with which they had no sympathy.


said, he viewed with alarm the enormous Military and Naval expenditure of the country; but he firmly believed that if the present Government had been in Office for the last six or seven years the expenditure would not have been by any means so large as it was at present. He thought he might avail himself of the present opportunity of addressing himself to the right hon. Gentleman the Secretary of State for War, and also to the noble Earl the First Lord of the Admiralty, who sat in "another place," and of expressing the alarm which he and others felt at the enormous Military and Naval expenditure of the country. He protested strongly against it; and if he had not the fullest confidence in the Prime Minister and his Colleagues, he should be much more alarmed than he was. He hoped the Government would take the matter to heart, and would seriously consider the propriety of reducing these particular heads of Expenditure before another Budget was brought in next year. He sincerely hoped that the Ministry would turn their best efforts in that direction.


said, he should not have risen to say a word on the question, because he should have been prepared to confide in the superior experience of the right hon. Gentleman the Chancellor of the Exchequer, the Leader of the House and Prime Minister of the country, with regard to the Budget he had brought forward, if it had not been for the remark of his hon. Friend the Member for South Durham (Mr. Pease), that it was the late Government which had created the Expenditure. ["Hear, hear!"] Of course, hon. Gentlemen below the Gangway began to cheer immediately; but he should like them to answer distinctly one question he wished to put to them. Why was it that the right hon. Gentleman the Prime Minister, when he came into power, did not carry out the Constitution which the Prime Minister as well as the hon. Member for South Durham said ought to have been given to the Boers? In his Mid Lothian campaign, the right hon. Gentleman said the annexation of the Transvaal was a disgrace to this country, and ought never to have been carried out. The right hon. Gentleman had an ample opportunity for reversing the policy of annexation; but, instead of doing that, he entered upon a war with the Boers, and put into the mouth of Her Gracious Majesty a declaration that the dignity of the country was at stake, and ought to be maintained. He wished to know how it was that the Government had not carried out the policy they ad- vocated when out of Office, and why the right hon. Gentleman the Prime Minister had not given to the Boers the free Constitution which he said they ought to have, and which, whether it was just and right to do so, would have secured peace without firing a shot? The right hon. Gentleman had committed himself in the eyes of the country upon both points, because he had not given the Boers a Constitution, and he had gone to war with them. It was only after having entered upon a war, and having suffered defeat, that he consented to a peace that was based upon terms of humiliation and disgrace.


I must point out to the Committee that the Transvaal War is not the question before it.


said, his remarks had reference to the Army expenditure and the increase of the Army Estimates which the House was asked to Vote this year; and he simply raised the question in answer to the observations of his hon. Friend the Member for South Durham, who placed the responsibility of the Transvaal War upon the shoulders of the late Government. He, for one, so long as he had a seat in that House, and so long as he could make his voice heard, would maintain that it was upon the present Government that the whole responsibility of the Transvaal War rested. They had the power to prevent the war if they had been so disposed, but they deliberately created it, especially by the promises held out and the speeches they had made; and it was not until they had been defeated that they thought of making peace. The peace which had been entered into was, he maintained, a peace without dignity or credit to the country, and without honour—nay, more, with dishonour—to the British flag. [Cries of "Oh!" and "Question!"] And, although hon. Members below the Ministerial Gangway might holloa "Question!" and evidently did not relish the remarks he was making, he put it to their honesty and candour to say if it was not the present, and not the late, Government who had committed the series of grievous mistakes which had placed the country in its present humiliated position?


shared the indignation of his hon. and gallant Friend the Member for West Sussex (Sir Walter B. Barttelot), and trusted that hon. Members below the Gangway opposite who approved of the policy of the present Government, and delighted to hear that of their Predecessors abused, would listen with patience to the views of an honest Conservative like his hon. Friend. Like his hon. and gallant Friend the Member for West Sussex, he could scarcely find words to express the feeling of indignation with which he, in common with all Englishmen, had viewed the action of Her Majesty's Government in South Africa. He indignantly protested against the course which had been pursued. The policy of the late Government was to give peace with honour to Europe. The present Government had already given the country peace with dishonour in Africa, and they had retired with dishonour from Afghanistan. In every quarter of the world in which it was possible for the influence of the Government to be used for mischief it had been used. He objected to the principle of measuring the policy of the country upon economical grounds, and gauging the results of that policy upon such a miserably low standard as that of pounds, shillings, and pence. But, even if they took that standard, they would find that at a cost of £6,000,000 the late Government succeeded in staving off a European war, while the policy of the Liberal Party, when there was a similar Eastern complication 25 years ago, brought on the Crimean War, and cost, at least, £100,000,000. It would be thus seen that a spiritless policy was not always the most economical, and that those who paid the least regard to the preservation of the honour of the country did not, even when when judged by a money standard, gain by such a policy. He believed that the path of honour was that of true economy. We should always be ready to fight, and then we should be rarely attacked; but if we were frightened, and were never prepared to fight, we might expect to be constantly attacked. It was the Mid Lothian speeches of the right hon. Gentleman the Premier which made the people of the Transvaal believe that they had been unjustly treated, and that stirred them into rebellion. They could not understand why, after the right hon. Gentleman came into Office, there was any necessity for further delay, and why the right hon. Gentleman should require a few months to enable him to make up his mind. They took the right hon. Gentleman at his word, and they went to war at once.


I must very humbly, mildly, and modestly, beg the House to suspend its judgment upon the frank assertions and interesting sketches of history which the two hon. Members who have last addressed us, under the denomination of honest Conservatives, have offered to the House. If I do not at present reply to the statements which have been made, I hope it will not be understood that the Government, by their silence, subscribe either to the whole or any part or portion, jot or tittle, of the statements which have been made. I trust, therefore, that this matter may be allowed peacefully and quietly to stand over until the time comes for the discussion which the House has already been promised, and that we may be allowed to continue tranquilly the consideration of the more prosaic questions contained in the Budget Resolutions now before the House.

Resolution agreed to. (2.) Resolved, That on the first day of June, one thousand eight hundred and eighty-one, the Duties imposed by "The Customs and Inland Revenue Act, 1880," upon Probates of Wills and Letters of Administration in England and Ireland, and upon Inventories in Scotland, shall cease to be payable; and on and after that day there shall be charged and paid on the affidavit to be required and received from the person applying for the Probate or Letters of Administration in England or Ireland, or on the Inventory to be exhibited and recorded in Scotland, the Stamp Duties hereinafter specified (that is to say):

Where the estate and effects for or in respect of which the Probate of Letters of Administration is or are to be granted, or whereof the Inventory is to be exhibited and recorded, exclusive of what the deceased shall have been possessed of or entitled to as trustee, and not beneficially, shall be of the value of £100, and under Duty.
?300 At the rate of One Pound for every full sum of?50, and for any fractional part of?50 over any multiple of?50;

Motion made, and Question proposed, (3.) That, on and after the first day of June, one thousand eight hundred and eighty-one, in the case of a person dying domiciled in any part of the United Kingdom, it shall be lawful for the person applying for the Probate or Letters of Administration in England or Ireland, or exhibiting the Inventory in Scotland, to state in his Affidavit the fact of such domicile, and to deliver therewith or annex thereto a Schedule of the Debts due from the deceased to persons resident in the United Kingdom, And the funeral expenses; and, in that case, for the purpose of the charge of Duty on the Affidavit or Inventory, the aggregate amount of the debts and funeral expenses appearing in the Schedule shall be deducted from the value of the estate and effects, as specified in the account delivered with or annexed to the Affidavit, or whereof the Inventory shall be exhibited.


asked the noble Lord the Secretary to the Treasary, how soon the duty would have to be paid? Of course, under the present system, probate had to be taken out immediately. Was it intended to allow any length of time for payment in this case?


said, the Probate Duty would be paid when probate was taken out. This was not an additional sum to be paid.


It is to be deducted from the value of the estate and effects?


Yes, when probate is taken out.


asked if an opportunity would be afforded for discussing the Budget Resolutions? If the Resolutions were all passed to-night, they would be reported to-morrow, and the Budget Bill would be brought in. Was he right in understanding that there was no intention to take the Budget Bill until after Easter?


said, the second reading of the Budget Bill would not be taken until after Easter. It would be taken as soon after the second reading of the Land Bill as possible.

Resolution agreed to. (4.) Resolved, That Stamp Duties at the like rates as are to be charged and paid on Affidavits and Inventories shall be charged and paid on accounts delivered of the personal or moveable property to be included therein according to the value thereof: The personal or moveable property to be included in an account shall be property of the following descriptions, viz.:—

  1. (a.) Any donation mortis causâ made by any person dying on or after the first day of June one thousand eight hundred and eighty-one;
  2. (b.) Any property which a person dying on or after such day having been absolutely entited thereto has voluntarily caused, or may voluntarily cause, to be transferred to or vested in himself and any other person jointly, whether by disposition or otherwise, so that the beneficial interest therein or in some part thereof passes or accrues by survivorship on his death to such other person;
  3. (c.) Any property passing under any past or future voluntary settlement made by any person dying on or after such day by deed or any other instrument not taking effect as a will whereby an interest for life or any other period determinable by reference to death is either expressly or implicitiy reserved to the Settlor, or whereby the Settlor may have reserved to himself the right by the exercise of any power to restore to himself or to reclaim the absolute interest in such property.
(5.) Resolved, That, in respect of any Legacy, Residue, or Share of Residue payable out of or consisting of any Estate or Effects according to the value whereof Duty shall have been paid on the Affidavit or Inventory or Account, in conformity with the terms of the foregoing Resolutions, the Duty at the rate of One Pound per centum imposed by the Act of the Fifty-fifth year of King George the Third, chapter one hundred and eighty-four, shall not be payable: And that, in respect of any Succession to Leaseholds or to other Property upon the value whereof Duty shall have been paid on the Affidavit or Inventory or Account, in conformity with the terms of the foregoing Resolutions, the Duty at the rate of One Pound per centum imposed by "The Succession Duty Act, 1853," shall not be payable. (6.) Resolved, That, subject to the relief from Legacy Duty given by section thirteen of "The Customs and Inland Revenue Act, 1880," every Legacy residue or share of residue, although not of an amount or value of Twenty Pounds, shall be chargeable to the Duties imposed by the said Act of the fifty-fifth year of King George the Third, chapter one hundred and eighty-four, as modified in conformity with the terms of the preceding Resolution.

Motion made, and Question proposed, (7.) That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for one year, commencing on the sixth day of April, one thousand eight hundred and eighty-one, in respect of all Property, Profits, and Gains mentioned or described as chargeable in the Act of the sixteenth and seventeenth years of Her Majesty's reign, chapter thirty-four, the following Duties of Income Tax (that is to say): For every Twenty Shillings of the annual value or amount of Property, Profits, and Gains chargeable under Schedules (A), (C), (D), or (E) of the said Act, the Duty of Five Pence; And For every Twenty Shillings of the annual value of the occupation of Lands, Tenements, Hereditaments, and Heritages chargeable under Schedule (B) of the said Act,— In England, the Duty of Two Pence Halfpenny; In Scotland and Ireland respectively, the Duty of One Penny Three Farthings; Subject to the provisions contained in section one hundred and sixty-three of the Act of the fifth and sixth years of Her Majesty's reign, chapter thirty-five, for the exemption of persons whose income is less than One Hundred and Fifty Pounds, and in section eight of "The Customs and Inland Revenue Act, 1876," for the relief of persons whose income is less than Four Hundred Pounds.


wished to say a word, although he had no doubt he should be somewhat singular in doing so, in order to express the regret he felt at the proposal made by the right hon. Gentleman the First Lord of the Treasury to reduce the Income Tax. The 6d. at which it stood now was a good round sum, much better calculable than 5d. In addition to that, for other reasons he regretted, although he had no greater fondness for paying taxes than other people, that it had been reduced. He thought they ought to be just before they were generous, and that they should pay their debts before they took steps for diminishing taxation. He made these observations more especially in reference to the cost of the Afghan War. A few days ago he had expressed his regret that the £3,000,000 which were to be paid by this country towards the cost of that war were not paid right off. Instead of spreading the payment over six years, it would be more befitting the dignity of the nation to pay off the whole sum at once. He certainly hoped that the other part of the payment—the £2,000,000—would be more seemingly provided for. He was very much astonished to find, and he had heard it with great regret, that the payment of this sum of £2,000,000 was to be extended, by some arrangement which he understood to have been made, over a period of 27 years, of which 25 years had still to come, so that the final instalment would not be paid until the year 1906. He thought that was an arrangement very much to be deprecated. We were owing the money to a comparatively poor country—India—and if it was right that we should pay it at all, we ought to put our hands in our pockets and pay the whole of it at once. The noble Lord the Secretary to the Treasury shook his head. He (Sir George Campbell) should be glad to find that he was mistaken; but he had certainly understood the statement to be that the money was to be paid by an Annuity extending to the year 1906.


said, the sum of £2,000,000 referred to by his hon. Friend was advanced to the Indian Government two years ago upon Consols, and it was proposed to pay off those Consols by Terminable Annuities extending over 25 years.


said, he quite understood that; but if the money was to be paid off in a shape that would spread it over 27 years, his argument was just the same. Hon. Members seemed to suppose the other day that he was only speaking in a jocular manner when he said he was sorry that the cost of the war in Afghanistan had not been laid on the country in a lump sum. He certainly was joking when he said that he thought the Conservatives, who had brought about the war, should bear the whole of the burden of payment. It was, however, a joke that was suggested by an hon. Member in reference to another part of his argument; but he was never more serious in his life than when he said that it would be better for the country that the expense of any war should be paid on the nail out of Income, and not borrowed or spread over a series of years. According to the explanation of the noble Lord the Secretary to the Treasury, it appeared to be quite true that the payment of the £2,000,000 ad- vanced to India two years ago was to be spread over 27 years, instead of being paid by the present generation. It seemed to him that the people who made wars—not only small wars, but even large wars—should pay for them. Above all, the people who should be called upon to pay for them were those who paid the Income Tax. He would like it to be made part of the Constitution of the country that when a war was entered into the funds raised for the purpose of carrying it on should be paid for, and mostly, out of the Property and Income of the country by the class who made the wars, and who, in most cases, if they were so disposed, could prevent them. An arrangement for raising loans, and spreading them over a long series of years, had a tendency to make wars rather popular than otherwise. The people of the country who embarked in these wars were not made to feel the burden properly, and to wince under it; while there was a considerable class of persons, especially in the City of London—financiers, contractors, shipowners, and others—who profited, and profited largely, by the expense of a war. Therefore, it seemed to him that when the payment of the cost of a war was made easy, and the profit was made large to the financiers, there was a certain inducement and temptation held out to the country to indulge in wars; whereas, if the whole cost was paid on the nail, out of the taxes on the income and property of the country, people would be very chary of entering into them. Under these circumstances, he had certainly thought that the penny which it was proposed to take off the Income Tax might, at least, have been rendered available for the expenses of the war in Afghanistan. A sum of £1,400,000 or £1,500,000, added to the £600,000 already provided, would have made a good round sum of £2,000,000, and by next year, at farthest, we might have paid off the cost of the Afghan War, without adding to the taxation of the country or reducing it. We might then have been able to sit down with comparatively easy consciences—which would certainly not be the case with him—so long as the payment of the money was to be spread over so many years.

Resolution agreed to. (8.) Resolved, That, in lieu of the Duties of Customs on Beer and Ale, there shall be charged and paid the Duties following (that is to say): Upon every thirty-six gallons of beer of the descriptions called Mum, Spruce, or Black Beer—

Where the Worts thereof were before fermentation of a specific gravity, £ s. d.
Not exceeding one thousand two hundred and fifteen degrees 1 6 0
Exceeding one thousand two hundred and fifteen degrees 1 10 6
Upon every thirty-six gallons of Beer of any other description—Where the Worts thereof were before fermentation of a specific gravity of one thousand and fifty-seven degrees 0 6 6

And so in proportion for any difference in gravity.

And there shall be allowed and paid in respect of all Beer imported into and subsequently exported from Great Britian or Ireland as merchandise, or shipped for use as ship's stores, or brought into Great Britian or Ireland and subsequently removed to the Isle of Man, the Drawback allowed under Section Thirty-six of "The Inland Revenue Act, 1886," upon the exportation of Beer brewed in the United Kingdom.

(9.) Resolved, That, on and after the first day of October, one thousand eight hundred and eighty-one, there shall be granted and paid to the use of Her Majesty, on a Licence to be taken out annually by a Brewer other than a Brewer for sale, who shall be the occupier of a house of an annual value exceeding £10, and not exceeding £15, £ s. d.
the Duty of 0 9 0

(10.) Resolved, That, in lieu of the Duties of Customs on Spirits or Strong Waters, and of the Duties of Excise on Spirits manufactured or distilled, in the Islands of Guernsey, Jersey, Alderney, and Sark respectively, and imported into the United Kingdom, there shall be charged and paid the Duties of Customs follows (that is to say):

Upon every gallon computed at proof of Spirits of any description (except Perfumed Spirits), including Naphtha or Methylated Alcohol, purified so as to be potable, and mixtures and £ s. d.
preparations containing Spirits 0 10 4
Upon every gallon of Perfumed Spirits 0 16 6

And so in proportion for any less quantity.

That where a person importing Liqueurs, Cordials, or other preparations containing Spirits in bottle, may have entered the same in such a manner as to indicate that the strength is not to be tested, Duty shall be charged and paid at the rates following (that is to say):

£ s. d.
Upon every gallon thereof 0 14 0

And so in proportion for any less quantity. And that the allowance of Three Pence per Gallon payable to any Licensed Rectifier or Compounder under section four of the Act of the twenty-third and twenty-fourth years of Her Majesty's reign, chapter one hundred and twenty-nine, or section twelve of the Act of the twenty-eighth and twenty-ninth years of Her Majesty's reign, chapter ninety-eight, shall be increased to Four Pence per Gallon. (11.) Resolved, That, on and after the first day of June, one thousand eight hundred and eighty-one, in lieu of the Duty now payable in Great Britain on Plate of Silver made or wrought in Great Britain which shall or ought to be touched, assayed, or marked in Great Britain, and in Ireland on Plate of Silver made or wrought in Ireland, there shall be charged and paid for every Ounce of such Plate, and so in proportion for any greater or less quantity, the Duty of 1s. 3d. And, on and after the first day of June, one thousand eight hundred and eighty-two, and the first day of June in each of the four succeeding years, the Duty shall be reduced by the amount of Three Pence, until the whole Duty is at an end. (12.) Resolved, That, on and after the first day of June, one thousand eight hundred and eighty-one, in lieu of the Duty of Customs on Plate of Silver, Gilt or Ungilt, there shall be charged the Duty following (that is to say): Plate, viz.: Of Silver, Gilt or Ungilt, the ounce troy 1s. 3d. And on and after the first day of June, one thousand eight hundred and eighty-two, and the first day of June in each of the four succeeding years, the Duty shall be reduced by the amount of Three Pence until the whole Duty is at an end. (13.) Resolved, That it is expedient to amend the Law relating to the Inland Revenue and the Customs.

Resolutions to be reported To-morrow;

Committee to sit again upon Wednesday.