HC Deb 24 April 1882 vol 268 cc1273-327

WAYS AND MEANS—considered in Committee.

(In the Committee.)


Mr. Lyon Playfair—I think that my first duty on this occasion is to tender my acknowledgments to hon. Gentlemen opposite, and especially to the hon. Member for Queen's County (Mr. A. O'Connor), for the courteous announcement which he has just made to the House. I believe, however, that I may say, without offence, that the Motion of the hon. Member for Queen's County would have been an innovation, and that it would have been in my power to have counteracted it by another innovation quite within the limits of the Orders of this House—namely, by making the Financial Statement with the Speaker in the Chair. I think, however, that the Committee will feel that it is much better that these two innovations should pass into the usual place of unfulfilled resolutions, and that the Financial Statement should be made in the usual manner, by which perfect freedom of remark is allowed to all hon. Members who may see occasion to enter into the subject. With respect to the general financial condition of the country, I will only say that essentially the position of the Expenditure is that it is a somewhat growing Expenditure, and that with respect to the Revenue, that it is a sluggish Revenue. It is much as it has been during the last two years—this being the third occasion during the existence of the present Government on which I have had cast upon me the duty of making the Financial Statement to the House. It is very remarkable that although employment is generally active, and although the condition of trade cannot be said to be generally unsatisfactory, yet the recovery of the country from the point of extreme depression has been a slow and a languid recovery, especially as far as regards the action of that recovery upon the Revenue of the country. No doubt, there is a natural explanation of the circumstance in the extreme excitement—the unnatural and the unhealthy excitement—of prices which existed during the period of prosperity which preceded the time of depression; and it is to that cause that we must look for the slackness of the recovery to which I have referred, and not to any diminution whatsoever in the resources of the country, or any deterioration of its industrial prospects. I go at once now to lay before the Committee the particulars which it is customary for them to receive on this occasion. I shall have to deal in the first instance with the financial year 1881–2, which reached its close on the 31st of March. The Expenditure of that year was estimated at£86,190,000; the actual Expenditure was£85,472,000, showing that the Expenditure fell short of the Estimate by£718,000. The comparison of the Expenditure with the Expenditure of the preceding year is a more serious matter. Of course, it is well within the Estimate; but the topic to which I next pass—namely, the comparison with the preceding year—re-quires a little closer investigation. The Expenditure of 1880–1 was£83,180,000; the Expenditure of 1881–2 was£85,472,000, showing an augmentation of£2,365,000. But, in order that the House may understand the position of these two years relatively to other years, and of the second year relatively to the first, it is right that I should mention to them what was the amount of special War Charges connected with various subjects of policy which have been repeatedly before the House, and which came upon both of these years. I will give the particulars for the two years—first, for the year 1880–1; and, secondly, for the year 1881–2. In 1880–1 the Charge on account of the Transvaal was£656,000 in connection with warlike operations in that country;£446,000 of that sum was on account of the Army, and£210,000 on account of the Navy. The Charge imposed upon that year in re- spect of the debt created by an arrangement shortly before we came into Office, for the purpose of getting rid in a small number of years of the debt of£6,000,000, contracted a few years ago for purposes connected with the War between Russia andTurkey—that Charge—namely, the charge of the Annuity by which the debt is to be extinguished—was in 1880–1£1,129,000. There was also a Loan of£2,000,000 contracted by my Predecessor in Office, and advanced without interest to India. The Charge in respect of that Loan in 1880–1 was£62,000. Besides, there was a Vote of£500,000 asked by the present Government from the House in aid of Indian Finance, and voted before the expiration of the financial year to which I am referring. The whole of these special Charges for the year 1880–1 was£2,347,000. In the year 1881–2 those Charges underwent a considerable increase. The Transvaal Army Charge was£1,066,000; the Transvaal Navy Charge was£303,000; and the Transvaal Civil Charge, for expenses which it was necessary to contract in connection with the re-transfer of the Civil Government, was£400,000; or in all, on account of the Transvaal,£1,769,000. The Charge in respect of the£6,000,000 Vote of 1878 was, for the year 1881–2,£1,350,000. The Charge for the Indian Loan was£88,000; and the Charge for the Grant in Aid of Indian Finance on account of the Afghan War, was, as before,£500,000. There was also a small special Vote for the Zulu War, to liquidate the account of£135,000; making the total amount of the special War Charges for the year 1881–2,£3,842,000, instead of£2,347,000. There was thus an excess of the War Charges for that year over those of 1880–1 of£1,495,000. That, however, still leaves an increase of Expenditure of between£800,000 and£900,000. I will not attempt minutely to explain that excess. The House is aware that some classes of increase in our Expenditure may be called normal, and that some classes of increase even represent a corresponding profit. Among what are commonly called normal augmentations are such augmentations as those in the Education Vote, and among those which are usually connected with a corresponding increase of profit are the very heavy and large augmentations of expenditure for the cost of establishments and buildings in connection with the Postal and Telegraph Services. In the particular case I refer to, the increase in the Postal and Telegraph Services for 1881–2 over the former year was£317,000. The cost of the Census was£140,000; the cost of the increased Education Estimates was£140,000; and the special Expenditure connected with the state of Ireland, partly for the increase of Constabulary and partly otherwise, was£190,000. These sums account for nearly£800,000 of the augmentation which I have pointed out to the House. It is not necessary to pursue the matter into more detail. Well, then, Sir, having compared the Expenditure with the Estimate, and having compared it with the Expenditure of the previous year, I have next to compare it with the Revenue of the year. That account will not be found to offer a very brilliant result; but, at the same time, it is so far a satisfactory result that the balance is on the right side. The Income for the year was£85,822,000, and the Expenditure£85,472,000; so that there is a small Surplus of Income over Expenditure amounting to£350,000. It is a matter of interest to compare the Revenue of the year with the Estimate of what that Revenue will be, because it tends to throw light on a subject to which I have referred—namely, the languid manner in which the Revenue is at present recovering from a state of depression. The subject, however, in one of its branches leads into discussions of very great moral and social interest, although they are discussions impossible at the present moment to lead to anything like a demonstrative result. Comparing the Revenue with the Estimates of the year, I find that the Customs, which were estimated to yield£19,180,000, yielded£19,287,000; the Excise, estimated to yield£27,444,000, yielded£27,240,000; Stamps, estimatedat£12,290,000, yielded£12,260,000; the Taxes, estimated at£2,760,000, yielded£2,725,000; and the Income Tax, estimated at£9,540,000, yielded the unexpectedly large amount of£9,945,000. I take all these items together, adhering to the practice—the convenient practice which has now been established for some years—of distinguishing between the Tax Revenue of the country and the non-Tax Revenue— between that which is derived directly and that which is derived indirectly from taxes. I find that the Tax Revenue, estimated at£71,210,000, yielded£71,457,000; an excess, although a very small excess, which I wish to bring under the notice of the House in connection with the present state of our relations between trade and industry on the one hand and the Exchequer on the other. Coming to those portions of the Revenue not derived from taxes, they stand more favourably on the whole. The Post Office, estimated to yield£6,800,000, yielded£7,000,000; Telegraphs, estimated to yield£1,600,000, yielded£1,630,000; the Crown Lands, estimated at£390,000, owing to difficulties connected with agricultural depression on a limited scale, yielded£380,000; the interest on Advances and other moneys included under the same head, estimated at£1.200,000, yielded£1,219,000; and the Miscellaneous Items, estimated at£3,900,000, yielded£4,136,000. Upon the whole, the non-Tax Revenue, estimated at£13,890,000, yielded£14,365,000; and the total Revenue of the country, estimated at£85,100,000, yielded£85,822,000; or an excess of£722,000 over the amount at which it had been taken at the commencement of the financial year. It has been my practice for a good many years to give the House what is necessarily a rough Estimate, but still an Estimate, on a matter of great importance—namely, an Estimate of the real increase, or the real augmentation, of the Revenue, because the accounts of the Revenue, as published, are not sufficiently clear, and those who are conversant with the subject are well aware that they are not always a safe guide to the rapid conclusions which some writers and observers are apt to arrive at from a rough inspection of them. I want, then, but not at any great length, to compare the Tax Revenue of 1880–1 with the Tax Revenue of 1881–2; but, of course, in order to make that comparison just, I must introduce certain rectifications to insure that I am dealing with exactly the same elements. The Tax Revenue of 1880–1 stood at£69,814,000. But then there was a sum of no less than£1,320,000, which was arrested on its way to the Exchequer, being part of the receipt of the Malt Tax Duty, which in due and regular course was employed to dis- charge the claim of the malsters for drawback. Therefore, adding that sum, which I suppose to have been arrested, for the purpose of comparison, to the Revenue of 1881, the addition gives a total of£71,134,000. But now I have to make an addition on the other side; and I have to make a deduction, for the purposes of comparison, because in that year we received a very large sum from the imposition of an additional 1d. on the Income Tax, a sum estimated at£1,460,000. I do not, however, take the whole of that sum, because about£400,000 of the produce of that 1d. may be considered to have been also enjoyed by the year just expired. I, therefore, deduct£1,060,000, which leaves the Revenue for 1880–1, for the purposes of comparison, at£70,074,000. The Tax Revenue of 1881–2standsat£71,457,000; but then it was augmented by two sums, one connected with the change in the Spirit Duties, and another connected with the change in the Probate and Legacy Duties, which were estimated to add to the Revenue£575,000, although they did not add quite so much. Therefore, deducting that sum for the purpose of comparison, it leaves the Tax Revenue of 1881–2 at£70,887,000. Deducting there from the Tax Revenue of 1880–1—£70,074,000—I have a residue of£813,000, which, as nearly as I am able to estimate, indicates to the House the true increase in the Revenue of the country from the same sources in the two years respectively. It is rather remarkable how closely that increase corresponds with the increase of population. The increase of the population is something over 1 per cent. This augmentation in the Tax Revenue is also something over 1 per cent. This is not the representation of a very bad year, neither is it the representation of a very good year, because in a fat year we ought to be able to do something more than merely keep pace with the increase of population, in order to make up for the deficit of the lean years in former times. The sum of£813,000 may be said to exhibit the true increase of the Revenue from the same sources and under the same supposed conditions of law. But I must not pass from this portion of the subject without adverting to those points in which changes have been introduced into the law, although there is only one of them upon which I shall have occasion to dwell. The first I shall mention is a subject on which no change has been introduced into the law, although I have been exceedingly desirous to introduce a change. That is the Duty on Silver Plate. There are two reasons that would recommend the abolition of that duty. The first and the special reason is the very great anxiety entertained by the Indian Government that that duty should, if possible, be removed, they believing it to be a very serious hindrance to the introduction of silver goods from India, and being under the belief admitted by all the authorities of this country, who, of course, speak with considerable weight, that a large trade would probably take place in the introduction of silver goods from India if the duty were abolished. But a more general reason, undoubtedly, recommends the abolition of this duty—namely, that it perplexes the market, and places transactions in new and in old plate on an embarrassed footing relatively, and inflicts much greater mischief in the limitation of industry, and possibly tends to lower the standard of our manufactured silver goods, while obstructing the progress of taste in design; these being objections which cannot at all correspond with any benefit derived from that source by the Revenue. Then, when it is said, "Why not abolish the duty? "—the abolition of the duty raises the formidable question of drawback; and the question of drawback is far more formidable, and far more difficult, and I will even Bay, in my opinion, far more questionable than it is in regard to any other Excise commodity whatever. Whenever this duty is abolished, if no drawback is given, at least the producers of silver goods in this country must be heard and their arguments considered. I am not prepared to make any proposal in this direction at the present time. As the House is aware, I have no Revenue to give away. The sum is not large enough, and, therefore, is not worth considering in that way. But I am not prepared to propose a drawback on silver goods; and, on the other hand, I doubt whether the trade is sufficiently lively and progressive to enable it to meet the change, or, at any rate, to make it content to meet the change without a drawback. The House will understand that, in this case, the draw- back is extreme; I conceive it in principle to be disputable. Our rule is this. We give drawbacks upon Excisable commodities, but not on every commodity that has not yet reached the hands of the consumer, and only upon Excisable commodities, so far as we can get at them, in the hands of the wholesale dealer, where we have distinct cognizance of those commodities, and where we can know what we are about. But there is no such cognizance in the case of silver goods. When the duties are once paid on the goods they are distributed over the whole country, and the claim to drawback is a claim which, in this instance alone, is made on behalf of the retail dealer. The amount of that drawback would not be a large sum in itself; but still it is extremely large with reference to the revenue in question—from£50,000 to£60,000 a-year—and the drawback, if it were given, would not be less than three or four times that revenue. That forms a very awkward combination of circumstances on which to give it consideration. I do not myself, upon the whole, incline to believe that the consideration of drawback is applicable to the subject at all. It may be necessary to wait for a more favourable opinion before a change can be made; but it cannot be made now. I do not in the least degree grudge parting with the revenue, and I have adverted to the question now in order that it may be well understood in India that we are really desirous of making progress. But I am not prepared, as at present advised, to face the question of drawback, beset as it is with difficulty formidable relatively to the Revenue; while, in my opinion, there is no sound reason for making an exception in this case. Another subject of change last year, on which I need not dwell, was a rectification of a small differential charge made upon foreign spirits. It was demonstrated that that charge was in excess, and would operate as a protective duty. It required re-adjustment, and the re-adjustment was made. It was estimated to produce about£180,000 a-year, and it has produced, as far as I can judge, about that amount. A more important change was made in relation to the Legacy and Probate Duty. It did not dispose of the whole of the Legacy and Probate Duty, but it circumscribed and simplified that subject. It got rid of most of the collateral points relating to it; but it left for the consideration of the House the very grave and serious question which, no doubt, will some day come under consideration—namely, what is known as the "consanguinity scale," which makes the State distribute the tax upon succession and legacies according to the degree of proximity to the testator—whether that system of differentia is a sound system, or whether it is the business of the State to take an equal tax and leave it to the testators themselves to regulate their own proceedings under their own wills, and distribute their property with the full knowledge of what the law requires of them? But the change made last year failed to produce the whole revenue that was expected from it. It was estimated to produce£390,000; it has produced only£305,000. The Committee is aware that these duties are extremely variable; and, although it seems paradoxical to say it, they are greatly affected by the accident of seasons. One year there may be enormous fortunes falling in, and in another year there may be comparatively small sums. Indeed, the Revenue Department, when I called upon them to explain why we had not got the whole return that we expected, gave me a variety of causes, among them being the extremely mild character of the season, in consequence of which the grim monster, Death, had had but an indifferent harvest, and the Probate and Legacy Duty suffered in proportion. There was another cause—namely, this, that there was some rush to pay Probate Duty last year before the change came into effect. With regard to the changes introduced into the law, I can report very favourably indeed. According to the old practice, as the Committee knows, estates were admitted to probate without any deduction for debts. The duty was levied at once without that deduction. After the debts had all been paid and settled by a difficult process, which, no doubt, yielded abundant pickings to the Legal Profession, the duty, as far as regarded the debts, was returned. That system was a bad one, and is now entirely got rid of. The debts are deducted at once, without introducing any confusion into the operation of the law. I can give a curious instance of the effect of this. Not long ago a gentleman died, with an estate of£900,000; but he was not so rich as he seemed, because his debts were£900,000. Under the old law,£21,250 would have been paid and held for a certain time by an ingenious title in respect of that estate. As it was, nothing was paid whatever, and the parties were saved from a great deal of expense, as well as from the burden of a large and heavy payment. Another important change, which I endeavoured to explain fully at the time, was the change by which we not only imposed a low duty upon small estates, but undertook to manage the whole transaction by the officers of the Revenue, upon the payment of 30s. Every person having to deal with an estate under£300 in value may now put the matter in the hands of a Revenue officer, and receive the whole proceeds of the estate without any further charge whatever. It was a very common thing for persons in that predicament to have to pay£10,£20,£30, and even more, for the necessary expenses connected with the settlement of the estate; and I think I am justified in saying that the change we have introduced has been found to be a very great boon indeed. There is another small matter which tells the other way, in as much as I am afraid the gains will be insignificant; but they will be undoubtedly just. We abolish absolutely the absurdity of the law in exempting legacies under£20, from which there has grown up a practice of making a multitude of bequests of 19 guineas. These bequests, be it known to all and sundry whom it may concern, will not pass in future without paying duty. One of these bequests was left by a man whose estate reached several hundred thousand pounds to one of the wealthiest men in the country. There was no reason why that man should not be called upon to submit to the ordinary deduction without making a wry face. There is another point in regard to which some apprehension was not unnaturally felt. The Committee will remember there was some fear that by lightening the Legacy Duty, by taking off 1 per cent in case of direct descent, and making a corresponding increase in the Probate Duty, embarrassment would be caused to executors owing to the earlier payment of the Probate Duty. I am assured that no difficulty whatever has been experienced upon that subject, and that the working of the measure has been in all respects satisfactory. But a larger question, and one which deserves consideration, partly as being of much importance to a very extended trade, and partly as of great social and moral interest, was the change in the Beer Duty. I will first state how the proceeds of that change stand, only premising that, as regards all the difficulties which at one time used to be considered insuperable with respect to the levying of a Beer Duty, they have entirely vanished. Great credit, in my opinion, is due to the skilful Department which conducts the business on the part of the State; but the very highest credit is also due to the members of the trade, who, so far from opposing themselves through a blind adherence to past traditions to an exceedingly important and drastic change, entered into the spirit of it, and gave every assistance to the officers of the Revenue. The consequence is that the Beer Duty is universally levied with certainty and with facility, and, I believe, with general satisfaction to the trade, so far as the mere levying of the duty is concerned. Let me say a word on the subject of the amount. The Estimate which I gave last year for the Beer Duty was £8,800,000, and the Committee will be good enough to bear in mind that this is the first complete year in which we have had to deal with the Beer Duty. The year 1880–1 was a mixed year, and, therefore, is not available for purposes of comparison, because it consisted of half Malt Tax and half Beer Duty. This is a year of Beer Duty, and of nothing but Beer Duty. I mentioned that the levying of the tax had been perfectly satisfactory. I ought to have said, also—for it is a matter which may, undoubtedly, be looked at from different points of view—that the change has worked favourably and well in regard to the practice of private brewing. It has not extinguished the practice. The number of licences taken out is very large; no less than £46,000 has been received from those licences, the enormous majority of which are taken at only 6s. a-piece, so that the Committee will see what a large number of persons avail themselves of the facilities afforded for private brewing. I was certainly wrong in estimating the Revenue which I anticipated would be derived from the change. We estimated, as I have said, the total produce of the Beer Duty for the year at £8,800,000. That Estimate was taken rather high, in partial deference to the estimates made by gentlemen connected with the trade. They felt so great a confidence in the view they presented as to the mode in which we had tried to extend the law for the benefit of the Exchequer, and the weight due to their knowledge and experience was so considerable, that a small addition was made to the Estimate merely out of deference to them, there being some uncertainty as to the results of the change. The Estimate had been taken at £8,800,000; the actual yield has been £8,580,000.


Does that include the licence?


Yes; the licence, which amounted to £4 6,000, is included, and the actual yield is £220,000 short of the Estimate. The Estimate of the Revenue Department would have been very close indeed, but for the circumstances which I have mentioned. The Committee will be anxious to compare the proceeds of the Beer Duty with those of the old Malt Duty. If we compare the yield of the Beer Duty of the year just expired with the Malt Duty, then, indeed, we appear to have made marked progress, because the last complete year of the Malt Duty, and the last year of the finance of the late Administration, was the year 1879–80, when the product of brewing, in all its forms, malt, sugar, and licences, yielded £7,737,000, so that we appear to have gained £843,000. But that is entirely fallacious, because the barley harvest in 1879 was so bad, and the depression of trade was so great, that there is no fair standard of comparison. I have taken, therefore, for the purpose of comparison, the six preceding years of the Malt Duty; and I find that the average revenue from the Malt Duty, together with the sugar used in brewing, and the licences for the average of the six preceding years, from 1873 to 1879, was £8,672,000—that is, that the Malt Duty, upon an average of years, produced £92,000 a-year more than we have got out of the Beer Duty on the first full year of the duty. Effectively there is, in point of fact, for the time, a small diminution. Now, we do not allege that that diminution is in any degree due to having pitched the Beer Duty too low, in comparison with what the Malt Duty had been; but I will advert to that question in a moment or two. We look for an explanation to other circumstances, some of them circumstances of great interest. But I must meet the allegation which is made on the other side. It is still stated with confidence by the other side—namely, by the great brewers of the country, who represent and speak for the entire trade—that we have pitched the Beer Duty too high, and that we have received fully 2s. a-quarter more in the shape of Beer Duty upon the quarter of barley used in brewing than we received formerly from the Malt Duty. Happily it is always a very great advantage when there is no serious dispute upon the fact. Upon the whole, we do not deny that statement. We plead guilty to the soft impeachment so far—that, to an amount, at any rate, closely approaching to 2s., we received that profit; but we contend that we are entitled to that profit, and upon that subject there is a friendly argument being carried on in the best possible humour between the members of the trade and ourselves. We point out, what is a known fact, that, under the Malt Duty, the peculiar method in which the duty was levied—and this is an allegation admitted on both sides—gave the brewer a certain advantage, and enabled him to contract his debt with perfect honour, and without the slightest reproach to him, but simply from the mode in which the law had been worked; and it enabled him to pay a duty somewhat less than the duty was, on the face of it, intended to be—that is to say, in consequence of the quantity of malt which he made out of a given quantity of barley, and of the mode in which the duty was levied, which was mainly on the barley, and not on the malt. I take it that the advantage which he got in that way was about 8d. in a quarter, and that is a moderate estimate of the advantage which he gained, and which we contend—although it is no reproach to him that he has enjoyed it—Parliament was entitled, and even bound in duty, to withdraw. Of course, as long as the Malt Duty existed, the maltster, who had to pay the duty, was compelled to take a profit upon the duty, just as he was compelled to take a profit on the short price that he paid for malt. The abolition of the Malt Duty relieved the trade of the charge of 10d. a-quarter, and that accounts for 1s. 6d. out of the 2s. that are in contest between us. Besides that, we always say that as we were relieving the trade from the compulsory regulations of the old law, which instructed every maltster, and which compelled every maltster, to build his malt kilns, and to shape the details of his premises in a particular way—not allowing him to choose what was best for his trade, but compelling him to raise his buildings according to what was deemed necessary for our security in levying the duty—we say that an advantage is derived from the abolition of these restrictions, and of other restrictions which were imposed by the law for the purpose of Excise. Those restrictions, now that they are gone, are estimated very lightly; but it is a matter of historical interest to go back to the period when the maltsters had to make good their case, not for a protective duty, but for an equivalent duty, and a compensating duty against foreign malt; and in those days, now perhaps forgotten, they steadily maintained, and were supposed to have proved to the satisfaction of the Government, that the tax imposed by these restrictions of Excise was a burden upon them to the extent of 1s.d. a-quarter. That 1s.d. has now almost wholly—I believe I might say has wholly—disappeared. One of the differences to which I have previously referred has been a gain, which we distinctly say we are entitled to. I do not know what effect time may have had in disposing our friends—if I may be permitted to call them so, and I do not know why they should not be our friends—to recede from the claim which they made to this difference of nearly 2s. a-quarter in the Beer Duty, as compared with the Malt Duty. The other subject is a subject of a very wide and general interest, and the detail of it is, I should say, really a very curious detail. Obviously, as I have admitted, we get nearly 2s. a-quarter in the Beer Duty, as compared with the old Malt Duty; and as I have also shown that, notwithstanding the increase of population, our receipt from Beer Duty is less by £90,000 than the average receipt from the old Malt Duty in the years between l873 and 1879, I represent the state of facts in which there is some collapse somewhere. Is that collapse due to any alteration in the habits and practices of the people? According to the Board of Inland Revenue and their officers, whom I consider to be good authorities on the subject, they do not exclude that supposition; but they do not look to it as the main cause. They say that although employment in the country is general, yet wages have not yet reached, the full average level, and, undoubtedly, have not reached anything like the level which they reached in the years of prosperity between 1873 and 1879, although they fell at the close of that period. They also observe—and I have no doubt there is something in this—that last year in the cider counties there was a very great abundance of fruit, and a very large consumption of cider. Then comes another fact—the great increase of coffee-houses and clubs, which lead to the supposition that the more temperate habits of the people are the cause of this deficiency in the Revenue. I think the House will deem it quite worth their while to spend a few minutes in endeavouring to get as accurate information as we can upon this subject, and to put ourselves in a position to estimate fairly the influences which are at work. We have a group of simultaneous facts which, taken together, are curious, and which do not all run quite in the same direction. In the first place, there is a very decided decline of the drink revenues proper. I hope my hon. Friend the Member for Carlisle (Sir Wilfrid Lawson) approves of that term "drink revenues." It is something disparaging, and that, I am sure, will be agreeable to his feelings. I have got here a statement of the revenue derived from spirits, wine, malt, and beer, with the attendant Licence Duties and so forth, at three separate periods. I have taken 1867–8, which was before the great rise of prices; 1874–5, when that rise of prices and wages was still, on the whole, in operation; and 1881–2, the last financial year. The entire revenue from these sources in 1867–8 was £23,001,000. In 1874–5 the revenue had sprung to £31,029,000. In 1881–2 it had gone back to £28,444,000. The most curious circumstance in this is the history of the Wine Duties. The wine revenue advanced from the time of the important change in the duties in 1860 in a very steady manner for a great number of years, and in 1874–5 it was £1,719,000; so that with our duties on wine, varying from 1s. to 1s. 6d. a-gallon, we were deriving about the same revenue as we had been accustomed to receive with a uniform duty of 5s. l0d. a-gallon. But ever since that time the duty upon wine has been receding in a much greater proportion than other revenues from alcoholic liquors. The total of these revenues fell from £31,029,000 to about £28,500,000, or, roundly, they fell by about one-eighth; but the duty on wine fell from £1,719,000 to £1,366,000, or by more than one-fifth. However, there is the fact that there is a great diminution, notwithstanding the large increase of population between 1867 and 1881—an increase in the population which could not be less than 4,000,000 people. The gross revenue from these sources, which had risen to £31,029,000 in 1874, fell by more than £2,500,000, with an increase of population between 1874–5 and 1881–2 of considerably over 2,000,000 people. It is also rather curious to take the proportion in which we have been dependent on this source of the Revenue of the country; and I have compared the liquor taxation of the country, as I would call it, with the non-liquor taxation—meaning by the non-liquor taxation all the Tax Revenue of the country except the Income Tax, which I do not include on account of its frequent variation; but I put on one side the taxation derived from alcoholic liquors, and on the other side the taxes derived from all other sources except the Income Tax. Taking the percentage on that basis, they stand as follows. In the six years from 1859 to 1865 we levied 37½ per cent of our taxation from alcoholic drinks, and 62 per cent from nonalcoholic drinks. In the three years from 1866 to 1868 we levied 42 per cent from alcoholic drinks, and 57½ per cent from all other sources. In the five years from 1869 to 1873 we levied 46£ per cent from alcoholic drinks—the Committee will, perhaps, observe that the percentage is continually mounting—and 53J per cent from all other sources. Prom 1874–5 to 1879–80 we levied 51 per cent of our whole taxation, except Income Tax, from alcoholic drinks, and 49 per cent from all other sources. That is a very curious state of facts. Since the last period I have named there has been some re-action. I have carried the comparison up to 1879–80; but during the last three years re-action has begun, and the alcoholic revenue has gone down to 46½ per cent, and the non-alcoholic revenue has risen to 53½ per cent, showing a real and serious diminution in the consumption of alcohol. Then you will say—"If that diminution is going on, which you have shown to be so considerable, and if the main cause of it is to be found in those useful and valuable institutions "—to be met with, I believe, in most of our great towns and in many country places, and known all over the country as coffee and cocoa houses—"we ought to see a large increase of Revenue from the other sources." But, Sir, that increase we do not find. It is a very curious fact, and therefore I mention it to the Committee. The Committee will perceive the effect of this upon tea; but I will not include that now, because tea is not much used in these public institutions. The revenue derived in 1867–8, jointly—I will not give all the details—from chicory, cocoa, and coffee, was £523,000. The revenue derived from the same sources in 1874–5 had fallen to £310,000 But, in the first place, the movement adverse to alcoholic liquors had not then commenced; and, in the second place, a large reduction had been made in the Coffee Duty, which, in 1867, yielded £390,000—it was reduced in 1872 from 3d. to l½d. per lb.—and which, in 1874, only yielded £207,000. It is worthy of remark that, whereas this great movement, adverse to alcohol and so eminently favourable to coffee and cocoa, has been at work since 1874–5, it has not produced the slightest rally in the revenue from coffee; but, on the contrary, during the last seven years, there has been a further diminution in the coffee revenue. In 1874 the Coffee Duty was £207,000; in 1881 it was only £189,000; and although the Chicory Duty slightly increased, it only increased by £8,000, and did not make up the whole difference. The Cocoa Duty increased from£40,000to£46,000; but the joint yield of these three articles, which in 1874 was £310,000, was only £306,000 in 1881. When we turn to tea the case is indeed different. My own opinion is that not a very great deal of tea is consumed in the tea houses; yet its domestic use is advancing at such a rate that there undoubtedly is a powerful champion able to encounter alcoholic drink in a fair field, and contest the ground in fair fight. The revenue from tea, which in 1867 was £3,350,000, had risen in 1874 to £3,878,000, and in 1881 to £4,280,000. The increase of the population during that period of 14 years was no less than £4,900,000; but there is no corresponding augmentation in the revenue from coffee and. chicory. I am bound to say that there is a peculiar state of the law to which, I think, we ought to ask the House to apply a remedy, and I shall lay a Resolution on the Table of the House this very evening with that view. At present, every description of admixture with coffee is permitted; and we have long proceeded on the principle that the admixture of chicory with coffee was not adulteration—that it was an admixture so rooted in the estimation of many countries, that many people—those of France and Belgium for instance—would not drink their coffee without it. But of late a practice has grown up of producing all kinds of substitutes, under the name of coffee—roots and berries—and that I cannot but think must account for the strange and singular state of the figures I have laid before the Committee. We shall not attempt to interfere with the admixture of chicory with coffee; but we propose that it should not be allowed to introduce other miscellaneous admixtures with coffee. There is one other circumstance in connection with this state of facts and this great diminution in alcoholic drinks which I am anxious to lay before the Committee; for certainly I do not hesitate to say that I think the Committee will agree with me that we can trace the operation of this diminution in the use of alcoholic drinks precisely where we should wish to trace it—that is, in the augmented savings of the people. Now, Sir, I will show what those savings are so far as they come under the cognizance of Her Majesty's Government. Of course, what does come under the direct cognizance of the Government is, I hope, a very small portion of those savings; but, at the same time, for the purpose of comparison, that small portion is perfectly effective. I look first to the Old Savings Banks, and I find these have fluctuated a good deal. In 1846 the deposits amounted to £31,750,000; in 1861 they had risen to £41,500,000; in 1867, perhaps owing to the competition of the Post Office Savings Banks, which paid a considerably lower rate of interest, they had fallen to £36,500,000. Since that time they have been advancing not rapidly, but to this extent. In 1S74 the deposits were £41,500,000; and in 1881 they were £44,175,000, showing an annual increment of about £350,000. The Post Office Savings Banks, as the Committee is aware, were founded in 1861. They have advanced, on the whole, with very great regularity. Even the most unfavourable state of circumstances amongst the labouring classes has never done more than reduce—not inconsiderably, but still not vitally—not the amount of deposits, but the increment upon the yearly amount of deposits. The ordinary increment in the Post Office Savings Banks' deposits has been from £1,600,000 to £1,800,000. The lowest amount for any year in the first decade of their existence was £1,533,000, and the highest was £1,926,000. The lowest year in the second decade was 1879, when there was great distress and want of employment, and even in that year the deposits amounted to £1,600,000. In the highest of the prosperity years—1872—the savings rose to £2,293,000; but there is no doubt that the wages of the labouring classes are much lower at this moment than they were in that year. And yet, although wages are now lower than in 1872, the deposits made in the Post Office Savings Banks have risen even higher than they were then, and I take them thus. The deposits made there, and remaining there, are now £2,449,000, or nearly £2,500,000. Besides that, we have invested for depositors £750,000; so that the whole sum placed in our hands by the depositors—although a portion has passed into the Funds—in the year 1881–2, with a great diminution of means on the part of the labouring population, has risen to £3,189,000. I think this shows that, whatever other effects this diminution of the duty on spirits is producing, it is clearly associated with the gradual extension of more saving habits amongst the people. I pass now from these subjects altogether; and I have only to state, in a very few words, what it has now become customary to lay before the Committee—namely, the aggregate operations upon the National Debt in the course of the year; and I do so now, because if they look at the figures that should be presented in a Parliamentary Return they might possibly fail to grasp the exact state of the case. The Debt was returned on the 31st of March, 1881, at £768,703,000. But there was an item existing at that time which had never been valued or reduced to figures—that was the deficiency in the funds of the Savings Banks, which we are bound, notwithstanding, to make good. Since the 31st of March, 1881, that deficiency has been ascertained, and an Annuity adequate to gradually diminishing it has been created. We now, therefore, value that Annuity as part of the Debt, just like any other Annuity; and, of course, we must add it to the Debt existing on the 31st of March, 1881, for the purpose of comparison with the amount of the Debt on the 31st of March, 1882. The value of that Annuity is £1,622,000. Adding that sum to the Debt as it stood in March, 1881, the total effective Debt was £770,325,000. The total on the 31st of March, 1882, was £763,166,000, so that the reduction of Debt in the year when the liquidation took place is £7,159,000. [Sir STAFFORD NORTHCOTE: Is that Debt of all kinds?] That is Debt of all kinds. There still remains a small subject which has not been dealt with, but which will have to be dealt with this year or next—namely, the small deficiency on the Friendly Societies' Account. I need not, however, refer to that in detail. I may say, also, that last year I proposed to make a conversion of Capital Debt into Annuities for the purpose of preparing for the year 1885, when a large portion of Annuities would lapse. I intend again to bring in that Bill during the present Session, if the state of Public Business should be favourable to it. But it is not a matter of extreme urgency, and it might be introduced next year without any essential difference. Therefore, I shall proceed with it this Session only if the state of affairs renders it advisable to introduce the Bill. I come now to the year 1882–3, which is no longer retrospective, but prospective, and relates to the practical portion of the subject with which we have to deal. The Committee will not, I think, expect me to offer them any very brilliant or alluring prospect, after what I have already said. I am now going, as is usual, to estimate the Expenditure for the year 1882–3. The total Charge of the Debt, including Interest on Local Loans and Charges on the Consolidated Fund, will be £31,415,000. The Charge for the Army is £15,458,000; Indian Home Charges amount to £1,100,000; and the Charges on account of the Navy to £10,484,000. We shall again ask the House to vote a Grant to India, as last year, which will entail a further Charge of £500,000. The expenses of the Civil Service will be £16,503,000—I am now going on the Estimates which are already in the possession of the House—the Customs and Inland Revenue charges of collection will be £2,901,000; which, with £5,889,000 for the Post Office, Telegraph, and Packet Services, makes a total of £84,258,000. But I am sorry to say that does not entirely close the account, because there are three or four items remaining, of which I must mention three of a serious character. The Committee will understand that in Ireland, owing to the circumstances of the last two or three years, the extra duties cast upon the Irish Constabulary have been extremely heavy. I cannot refer to this subject without stating my belief that the experience of that period has tended to raise even the high character of that Force. I am aware there are opinions entertained by some on the subject of having another description of Constabulary Force in Ireland; but into those opinions I do not now enter. As to the conduct of that Force, its fidelity and efficiency upon the footing of its present organization, I believe it is impossible to commend it too highly. However, Sir, it is a fact, according to the examination which we have made, that with the great amount of extra duty entailed upon them, the extra allowances have been decidedly insufficient; and it will, therefore, be an obligation on us to ask Parliament, besides the sum named in the Constabulary Estimates, which are already on the Table of the House, to vote a further sum in order to make good the deficiencies in those allowances. I do not now say in what form that will be voted; but the amount has been pretty closely investigated by the representatives of the Irish Government, together with able representatives of the Treasury, and they have agreed that it must be a sum of about £180,000. This Bum it will be necessary to ask Parlia- ment to accord. Then, Sir, we have, unfortunately, to ask for a Tote of £100,000 in connection with the Prisons Act of a few years ago. I believe that when this Act was passed it was intended that the cost of conveying prisoners should be charged upon the counties; but, unhappily, it appears, according to the view of the Courts of Justice, that the Act does not give effect to that intention; and the consequence is we are called upon to pay the sum of arrears for the three years which have elapsed since the Act came into operation. Of course, there may be a question, which I do not enter into, whether the original intention of Parliament ought not to be fulfilled? Still, we have these arrears to deal with, and it will be our duty to ask Parliament, in the course of the present year, for the sum I have specified, representing the three years' arrears for the conveyance of prisoners. Well, Sir, the third subject of serious difficulty to which I have referred is one that will not sound over-musically in the ears of the Committee. It is the Vote for the Civil Government of Cyprus. The Civil Government of Cyprus has never been settled. A large sum was taken for this purpose last year—I think more than £90,000—but the season has been an extremely bad one, and the Committee will be aware that in Cyprus, just as it used to be in Corfu, if there comes a bad olive year, the Revenue of the year was ruined. Consequently, the deficiency of this year in Cyprus is even greater than usual. We have thought it our duty to have the matter carefully examined, and to provide for squaring the account, more especially as my noble Friend the Secretary of State for the Colonies has been engaged in organizing a scheme of government for Cyprus, which will introduce local influences into the Government, and give it something like regularity and efficiency. We shall be obliged to ask the House to vote, during the present Session, £90,000 for that purpose. Out of that sum £12,000 is due to the former year; but between £70,000 and £80,000 is the charge which we find actually existing. I think about £30,000 of that sum is due to the circumstance I have named—that is to say, the peculiarly unfavourable character of the season. The Committee will naturally ask whether they are to be called upon for a correspond- ing sum year after year. Well, Sir, my noble Friend has made the closest investigation of this subject in his power, and has ordered what, so far as he can judge, is a most stringent system of economy and retrenchment in the administration of affairs in Cyprus, and what he hopes to do—I am not going beyond our real expectation of the effect—is next year to get the Vote down to £40,000. That may not be pleasant; but it is my duty to tell an unvarnished tale, and let the Committee know how the case stands. Therefore, together with minor charges, this makes an increase of £380,000, and raises the total estimated Expenditure to £84,630,000. I think it is an essential part of my duty briefly to compare this, as well as I can, with the Expenditure of last year. As I have said, £84,630,000 is the total Charge before us. The Expenditure of last year, according to the Estimates, was £86,190,000; so there is an apparent reduction of charge to the extent of £1,560,000. But a large proportion of that reduction is only apparent, because the Military and Naval Estimates of this year are presented in a form in which credit is at once taken for extra receipts, instead of having them presented without that reduction, and bringing the extra receipts to account on the other side. The disturbance which is thus introduced into the Account represents a sum of £809,000, and the real reduction in the Estimates is, in consequence, reduced to £750,000. But the relief from War Charges has been much larger than that. The War Charges are still very considerable. We have still £1,460,000 on account of the five years' Annuity for the Vote of £6,000,000. We have £500,000 for the Afghan Vote, and I think about £120,000 this year on account of the Indian Loan. Still, the year is relieved in respect of War Charges, upon the whole, to the extent of £2,250,000, or, more exactly, £2,276,000. against which I am only able to state a reduction upon the Estimates of £751,000; and, therefore, I must tell the Committee what becomes of the difference of £1,500,000 between these two sums. Some part of that represents permanent increase, some part of it represents normal increase; but undoubtedly there are portions of it which I am not able to place under one description or the other. I could not give the Committee a minutely accurate statement; it would be idle to attempt it; but I think I can, with general clearness and accuracy, state the main facts. The augmentation as connected with the Government of Ireland this year will be no less than £430,000. The Constabulary Estimate is £139,000; the Constabulary further Estimate, £ 180,000; and Resident Magistrates, £12,000. The Land Court, established in Ireland, which we have offered to landlords and tenants, not free of all expense—for I am afraid that legal expense in connection with it cannot be annihilated—but almost entirely free of expense, so far as the Exchequer is concerned, imposes on the taxpayers of the Three Countries the heavy charge for the year of £93,000, which brings up the total of the Irish Votes for this year to the sum 1 have already stated of £4 30,000. There is an increase of about £90,000 on the Non-Effective Votes for the Army and Navy, which may be contemplated by the Committee without great dissatisfaction, because, as they are aware, it belongs essentially to the transition period between the old system of general pensions in the Service and the new system based on Reserves. We are, at present, in the unfortunate position of having to pay all the charges connected with the New Reserve system, and of having also approached the maximum connected with the old system of pensions for long service. I believe, in the course of two years, that process will be reversed, and a very considerable although gradual relief will be experienced. The Charge for the Postal and Telegraph Services has largely increased. I will not enter into the causes of that increase; but I think I ought to state, injustice to all parties, that great care appears to have been taken by the late Government in restraining the extension of the Establishment. The pressure since we came into Office has reached a point which is nearly irresistible; and although, I hope, the Post Office will go on increasing, yet the percentage of cost for collection of revenue, I am afraid, will show some increase also. There is an increase of £207,000 in the Post Office Charge for this year; there is the sum to which I have referred for the conveyance of prisoners; and there is a Charge, which may be contemplated with unmixed satisfaction, of £85,000 in the increased payments for the liquidation of the National Debt, of which you have had the fruit in the statement I have made of a reduction of nearly £7,000,000 of Debt in the course of two years. That accounts for £900,000 out of a sum of £1,500,000, which I have represented as the increase to be accounted for. Effectively, the great bulk of the remainder of that increase is Navy Charge, and is repersented by demands with which the Committee is familiar. There are the changes of armament, which cause an augmentation of £250,000 in the Vote for Guns. There is another sum of £100,000 in the Vote for Shipbuilding; and, whatever the amount for shipbuilding may be, I must say that we look forward with considerable confidence to economy in matters connected with building, and to the securing of greater results for our money, in consequence of the arrangements which have been sanctioned by the First Lord of the Admiralty for placing a gentleman of the highest skill and character, and well acquainted with the practical details of the Service, on the Board of Admiralty. I will not enter into the remainder of the augmentations; but they amount to £500,000. I hope I have laid clearly before the Committee the reasons why this £1,500,000 is required. If I am asked whether the Expenditure is deemed satisfactory, I am afraid my notions are too old-fashioned to allow me to view it with as much complacency as that with which it is viewed by others. I wish, however, to state the case impartially, and to point out that a considerable portion of the increase will not, I hope, be permanent. It is not connected with Offices of a permanent character, and more than half of it is either in itself good and normal, or of a character purely temporary; but I do not see in the country that great desire for the restriction of expenditure which characterized this country and all Parties 40 or 50 years ago. It is an evil, I think, that public vigilance on this subject should be diminished, and that the attitude of the House of Commons should have been so sensibly changed. I confess I have great doubts—I have not arrived at any conclusion on the subject—as to whether the system under which our Estimates are now framed upon the exclusive responsibility of the Government, and without any responsibility on the part of the House, is a good system. It is a very important subject for consideration. For my own part, although I have not arrived at any absolute conclusion, I am very dissatisfied with the working of the system, especially during the last 20 or 30 years. Sir, there are three principles, greater than all others, on which, in my opinion, all good finance should be based. The first of them is that there should always be a certainty that whatever the charge may be it can be paid. That, I believe, is of vital importance. The second is that, in times of peace and prosperity, the people of the country should reduce their Debt; and the third point is that they should reduce their Expenditure. With regard to the first point, we are at present fulfilling that condition; with regard to the second, we ought to do more in the direction indicated than we have actually done; but at the same time we are doing a good deal more than was usually done in a long series of years. I do not refer to recent years in particular, but to what has been done on the average during the last 25 years. With regard to the diminution of Expenditure, I sorrowfully admit that the contagion and sympathy of foreign countries necessarily affects us; and I should arrive at very different conclusions indeed, according to the standard of comparison which I might take. If I am to look to American ideas and institutions, and the extraordinary vigour, determination, and forethought, which the people of America show as a Democracy in providing for the future by reducing their Debt, and in resolutely enduring the most painful taxation—I do not speak now of Protective Duties—in order to set free their hands and relieve those who come after them, I say it is impossible to praise them too highly, and that a comparison with them would not redound greatly to our credit. Perhaps, having said that, and not wishing to take a too saturnine view of the matter, instead of looking westward we may look eastward, and consider what has happened in other countries of Europe. Even though we may somewhat bend to the storm, and may, to a certain extent, follow this fashion of large Expenditure, yet certainly we may derive the materials of comparative congratulation when we see the course which other great countries follow. There is one country in particular which cannot be named in this House without great respect and sympathy; first, on account of its eminence; and, secondly, on account of the close friendship and associations in which she stands with us. I allude to France. I do not believe that country will ever involve itself in any great financial difficulties, because such is the skill, industry, and thrift of her people, that the moment she becomes clearly aware of her difficulty she will surmount it. At the same time, if I take a sketch of the history of France and England during the last half century, we may see that the causes which have brought about a large increase in our own Expenditure have been causes that have not exclusively operated in this country. We have not doubled our gross Expenditure; but it has nearly doubled since the Peace of 1815. Our Tax Expenditure has also largely increased, although I am happy to say it has not nearly doubled. But the increase in the Expenditure of France has been greater and more rapid than our own; and I will put this before the Committee in very few and simple figures. Between 1814 and 1829 the Expenditure of France was £40,000,000 a-year, and she made no addition to her Debt. Between 1830 and 1847 the Expenditure of France rose to £51,000,000 a-year, and there was an average annual deficit of £2,250,000. I do not take the years from 1848 to 1851, because of the then unsatisfactory state of the country; but from 1852 to 1870, under the Empire, the average annual deficit had diminished, and I believe it was something between £2,000,000 and £1,500,000. But the Expenditure had enormously increased; and it is only fair to say that, in my judgment, it was the enlightened policy of au approach to Free Trade that enabled France to bear with willingness the enormous increase of Expenditure then imposed on her. The average Expenditure of France, which under the previous régime was £51,000,000, under the Empire reached £83,000,000. But a Budget has been presented to the French Chamber for the year 1883—as the Committee is aware, the French Budgets are presented in anticipation—which, I believe, shows an Expenditure of £120,000,000 sterling. Our Expenditure, therefore, becomes insignificant when we compare it with the portentous scale it has reached in a neighbouring country which is not more wealthy than our own. Now I pass to the Revenue of the year, and my task will be completed. The Tax Revenue of the year amounts to £69,850,000, and the non-Tax Revenue to £14,595,000, or a total of £84,445,000. The Tax Revenue is made up as follows:—Customs, £19,300,000; Excise, £27,230,000; Stamps, £11,145; LandTax,£l,035,000; Income Tax, £9,400,000. The non-Tax Revenue is made up of the Receipts from Post Office, Telegraphs, Crown Lands, Interest on Advances, and Miscellaneous, and amounts altogether to £14,595,000, making the total Revenue £84,445,000. But as there are certain items of Expenditure which are not yet before the House, so there are some items of Revenue which it has not been in our power to bring to account, but which are so closely in prospect and which stand on such a footing that it is my duty to state them to the House, and to take credit for them, as I have already done, in setting out the general finances of the year. There are two payments from South Africa, both of which I have already reckoned, although I did not mention them to the House when I spoke of the comparative relief from War Charges which the coming year will enjoy. There is a sum of £150,000, which the responsible Government of the Cape will propose on the Estimates for Cape Colony in liquidation of their liability in respect to the cost of the Transvaal War—undoubtedly a small and most moderate Estimate, but an Estimate which will readily be voted by the Cape Parliament. Then there is a sum of £250,000 which has been virtually raised in Natal on account of the Zulu War; and there is a sum of £90,000 which will come to the Exchequer in connection with Cyprus, but with regard to which, lest I should obtain, upon false pretences, cheers from some quarters in which there has recently been some dissatisfaction, I must state that it does not seem to be anything in the nature of a Cyprus receipt. We hold certain sums of money on account of Cyprus for the Porte. The Porte owes us and the French the payment of the dividends on the Guaranteed Turkish Loan of 1855. It has not been in the power of the Porte to supply all the money from her own resources; and, consequently, it falls to her to pay that money in the shape of deductions or stoppages from the Revenues of Cyprus. We are collectors on behalf of our friends across the Channel not less than for ourselves; and of this £90,000 one-half will pass through the British Exchequer and go across to the Exchequer of France. However there is a sum of £490,000 available for the balances of the year, which makes the grand total of Revenue for the year£84,935,000 as against a grand total of Expenditure of £84,630,000. There is, therefore, a surplus of £305,000. That is a very small and modest surplus; but it is a surplus with which, under the circumstances, we might be content to move onwards, provided only that it would be subjected to no deductions. But the House will recollect—and the hon. Member for the County of Oxford (Mr. Harcourt) will see that I have not forgotten him, and that I have not been unmindful of the pledge given at the commencement of the Session. The hon. Member then proposed to move a Resolution, in guarded and qualified terms, that some relief should be given to the rate papers of this country in respect to the charge which has been transferred to them through the abolition of turnpikes and the consequent augmentation of the highway rate. I then engaged on the part of the Government, but without pledging myself as to details, to propose something in conformity with the spirit of his Resolution. The hon. Gentleman will have seen that I have not yet presented any proposal in redemption of that pledge. The surplus of £305,000 is a surplus that will not bear diminution. At the time when I gave that pledge undoubtedly it was in my hope—perhaps it was too sanguine a hope—that we should be able to deal with the matter in a distinctive way and as part of a considerable settlement. I no longer am able to cherish that expectation. The prospect which we then thought was good of being able to carry through the House a Bill for the establishment of County Boards, and appending to it an important financial re-adjustment, has become quite hopeless, and we no longer expect to be able to introduce that measure. But I engaged myself to the hon. Member to endeavour, if possible, to detach this subject from any general scheme of legislation, and there remained open to us as a mode of honourably redeeming that pledge—and at the same time doing nothing to perplex future operations—it remained open to us to resort to some plan which, while partial in itself, and provisional in its general character, would be such as to fit in with any more enlarged scheme which might be considered hereafter when local government and financial re-adjustment should come to receive the definitive consideration of the House. Therefore, what we have thought is, not that this is an occasion on which to enter on the Motion of the hon. Gentleman, or to contract any new engagement, but we have felt it to be our duty to ask the House to place us in funds so far that we may, at the proper time, when my right hon. Friend the President of the Local Government Board (Mr. Dodson) can deal with the subject, be enabled to give a fair interpretation to the promise which was then passed across the Table of the House. We think it necessary for that purpose, for this year, to ask the House to give us a sum of £250,000 to go in relief of the rates in reference to highways; and after considering the various modes in which that money may be raised, we think that, on the whole, considering what is the nature of the grievance, and how it has arisen, and how, in the main, it turns on the very large use of the roads by those who do not contribute to their cost, the best course we can take is to ask the House to authorize a moderate addition to the duty upon carriages. The Licence Duty on carriages is a matter which has been dealt with very tenderly by Parliament. I do not now speak of hired carriages; but, after all, it is a grievance—and there can be no doubt about the facts—that the roads are used and worn by carriages. I am proposing this as a temporary operation. If it were a settlement of the entire question, it might be right to make a larger proposal; it might be right to consider the present total exemption of all wheeled vehicles, except what are called carriages, from taxes of any kind. I do not at all exclude that from prospective consideration, although it is not free from difficulty; but for the present we feel certain that when that question comes to be considered, it will have to be considered in conjunction with some augmentation of the present very moderate Licence Duty on carriages. The rates of Carriage Duties down to 1854, when I had the honour of proposing a change, were these:—Every four-wheeled carriage paid a minimum duty of £6; and in proportion as persons owned more than one carriage, the charge rose till it reached the case of a person with nine carriages, and he was liable to pay £9 1s. 6d. upon each carriage. It is true that that was qualified, to a considerable extent, by a composition; but the basis of that composition was an augmentation of 10 per cent on the minimum duty. The Committee will therefore see how very high the duty was; yet, at the same time, when in 1839 Lord Northbrook, then Mr. Baring, as Chancellor of the Exchequer, made an addition all round to the Assessed Taxes, it was found that there was hardly any perceptible effect produced so far as the Assessed Taxes were concerned. An addition of 5 per cent on consumable commodities was then made, but of 10 per cent on the Assessed Taxes, and that had no perceptible effect. So stood the duty till 1854, and then, on my proposal, the rates were reduced as follows:—Every four-wheeled carriage with two horses paid £3 10s.; every four-wheeled carriage with one horse paid £2; and carriages with two wheels and two horses paid £2, or if they had only one horse they paid 15s. and 10s. The system was rather anomalous, and when Lord Sher-brooke, then Mr. Lowe, was Chancellor of the Exchequer, in 1869, he further reduced the duties. He reduced them to £2 for four-wheeled carriages, unless they were extremely light, and to 15s. for two-wheeled carriages. Perhaps I ought here to say a word as to hired carriages. Hired carriages in that year, or shortly afterwards, were relieved from the very heavy Licence Duty they had formerly paid. I will not say that it is desirable that on hired carriages, such as omnibuses, there should be any duty; but, at the same time, the duty I shall propose is very trifling as regards a trade of that description, and the great relief to them has not been the reduction of the rate they now pay in common with private carriages, but in the abolition of the old Licence and Mileage Duty. What we propose is that the £2 2s. now paid by four-wheeled carriages shall be raised to £3 3s., and that the 15s. paid on the two-wheeled carriages, or light four-wheeled carriages, shall be raised to 21s. The computation made is that 150,000 carriages with four wheels, and over 4 cwt., paying £3 3s., will bring in £157,500; and 300,000 carriages with two wheels or four wheels, if under 4 cwt., paying 21s., will bring in £90,000, or a total increase of £247,500, for which the House is asked in order to give effect to the sentiment contained in the Motion of the hon. Gentleman opposite, and accepted by the Government. The House will at once see that the account now before us is a very simple one. We have a surplus of £305,000, which we regard as the minimum with which we ought to enter on the operations of the year. The £247,000 which we propose to raise will bring that up to £552,000, which places us in funds to consider, when the proper time comes, any proposal which my right hon. Friend may be able to make, and which it will be his duty to make for the purpose of fulfilling the engagement into which we entered at the beginning of the Session. I have now only to refer in one word to a very easy and simple question of detail. The House will see that this humble Financial Statement raises but a single point of novelty. The usual Resolution for the renewal of the Income Tax and the Tea Duty will be moved, and there will be, as I have said, a Resolution relating to the adulteration and spurious representations of coffee. The Carriage Duty will also require a Resolution; but the House is aware that these Resolutions for licences are not like the old Resolutions on Customs and Excise, which took effect immediately on being voted. They do not take effect until the Act of Parliament of which they form a part shall have become the law of the land. I would, therefore, submit to the House what I think will be the most convenient course to pursue—namely, that we should be allowed to proceed with the Resolutions and with the preliminary stages of the Bill at once, or from day to day, and that such a day as shall be convenient shall be fixed for the discussion, either on the second reading or on the Motion to go into Committee. That is a matter upon which I shall be very happy to know what will best suit the convenience of the House; but I think there should be no difficulty in bringing the measure before the House in a de- finite shape, because it is advantageous, especially as to the Income Tax, that there should be no longer delay than is absolutely necessary. I hope I have made clear to the House, without any attempt at varnishing, or keeping in the shade, or suppressing anything in the Statement it has been my duty to make. I, for my part, am certainly most grateful for the kind and unbroken attention of the House; and I am sure the House will deal with the subject in that spirit of gravity and considerateness which all the important considerations, political, social, and moral, connected with it, and branching out of it, undoubtedly demand.

Motion made, and Question proposed,

"(1.) That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for the year which commenced on the sixth day of April, one thousand eight hundred and eighty-two, 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."—(Mr. Gladstone.)


I may mention two particulars which may be of interest to those persons whom they affect. We do not propose that this increase in the Carriage Duty shall affect any vehicle for hire of which the fares are fixed under the authority of any Imperial or Local Act; and, further, we do not propose that the increase shall affect any carriages habitually and solely used by coach makers to be lent to their customers during repairs; and the mode in which that provision will take effect will he that they will have to claim a repayment of duty.


I think it has not been useful, certainly not in late years, to enter upon any serious discussion of the Budget at the moment of its being presented, and although there are one or two points in connection with, and arising from, the speech of the right hon. Gentleman, upon which I shall be glad, at the proper time, to offer some observations, I do not think there would be any advantage in departing from the usual course. I cannot help feeling that the right hon. Gentleman the Chancellor of the Exchequer has made his interesting Statement at, I fear, some personal inconvenience to himself, though we must feel much pleased at seeing that he has been able to resume his place and go through the interesting speech to which we have been listening, and I hope without any serious injury. I only rise, therefore, to say that the course he proposes for the discussion of the measure appears to me, and to my friends around me, to be the most convenient for the House.


said, the right hon. Gentleman the Chancellor of the Exchequer had intimated, some two months ago, that no alteration was, on this occasion, to be looked for in the duties affecting tobacco, and, therefore, he had not to-night expected any statement upon that subject; but the decision at which the right hon. Gentleman had arrived had been received with so much disappointment throughout the United Kingdom, especially by the working classes—and the subject was one of such vast fiscal importance, affecting, as it did, about one-ninth of the total Revenue of the country—that he ventured to ask the indulgence of the House while he made a few observations in reference to the duties on that article. Between the years 1840 and 1877—during all the vicissitudes of bad harvests and bad trade—there were only five years in which the duties on tobacco exhibited anything like a decline. Throughout the whole of that period the manufactured tobacco supplied to the public was exceedingly good. In 1878 the financial embarrassments of the late Government compelled the right hon. Gentleman the Member for North Devon (Sir Stafford North cote) to look about for some means of increasing his Revenue, and in that year he added the sum of 4d. on the pound, thus raising the duty from 3s. 2d. to 3s. 6d. The right hon. Gentleman stated at the time that his necessity was but a temporary one; but the House knew how easy it was to put on an additional tax on the plea of temporary necessity, and how long a period frequently elapsed before it was possible to repeal that addition. Fourpence on the pound of tobacco seemed to be an exceedingly simple arrangement, and only meant ¼d. on the ounce; but that was quite enough to disorganize the trade, which produced a Revenue last year of something like £8,750,000. He desired to show the House briefly how it affected the consumer and the Revenue. Of the entire amount received from the duty on tobacco, £6,500,000 were contributed by the working classes of the country, who purchased their tobacco by the ounce, or even by the half-ounce. During 30 years the uniform price had been 3d. per ounce. A farthing was theoretically a current coin of the Realm; but it was not a very practical coin, and, therefore, the question had been between making the price 3½d. the ounce, or adhering to the old price of 3d. It was obvious that when an advance in the duty took place it was utterly impossible to supply to the consumer the same quality as heretofore; in fact, the value of the article supplied was reduced to the extent of 4d. a pound. Allowing for variations in the price of the raw material, with a duty of 3s. 2d., there was never any difficulty in supplying tobacco suitable for the public taste. The years 1878, 1879, and 1880 were noted for their very large imports, and for the very low prices, which proved, in many cases, almost ruinous to the planters in the United States; but which enabled the English manufacturers partially to meet the additional duty imposed upon thorn by the right hon. Gentleman the Member for North Devon (Sir Stafford North cote). But those who looked ahead and understood the subject were well aware that one bad crop would make the trade almost impossible under the new duty. They had witnessed the effects of the bad crop of 1880. Stocks were reduced, prices were forced up—in many cases from 10 to even 20 per cent—and manufacturers whose capital was not large were failing; and, in his opinion, with the prospect of a bad crop during the present year, a still larger number would have to succumb to the difficulty. The result of poor crops would be that, in a very short time, when stocks where exhausted, it would not be possible for the British consumer to buy for 3d. an ounce an article which was at all smokable; he would have to pay a higher price, and, as a consequence, the consumption would decrease. As to the effect upon the Revenue, for many years before 1878 the yearly increase in the consumption was 1,250,000 lbs. weight, resulting in an increase of the Revenue of £180,000. From the experience of former years they would very naturally have expected that this increase would have continued; but immediately the late Chancellor of the Exchequer proposed the additional duty the increase disappeared altogether, and during the two years 1878–9 the consumption was nearly 1,000,000 lbs. weight less in the two years than that of 1877 for the same period. The present scarcity was acting in other ways. He had the opportunity of pointing out, the other day, to the Chairman of Inland Revenue that the number of persons who took out licences to retail tobacco had very largely decreased. The Returns made up to the 31st of March showed that 1,137 fewer licences had been issued this year than in the preceding year, representing a loss to the Revenue, on this head alone, of £409. The probability was that the quality supplied under the present duty would become worse and worse. In any case, the Revenue must suffer, and should another short crop be reaped, the loss would be reckoned, not by thousands, but by millions. He desired to place before the Committee two or three simple figures, which were furnished by the Returns of the United States Government. In 1879 the United States Government reduced the tax from 24 cents to 16 cents, or, in other words, 4d. per pound weight. Up to the 30th of June, 1879, their Revenue from tobacco was $40,000,000, and in 1881, notwithstanding the reduction of duty, the Revenue from the same source amounted to $50,000,000. In 1879 the quantity of tobacco used in the United States amounted to 206,000,000 lbs. weight; but in 1880 it had risen to 233,000,000 lbs. weight, showing an increase of 27,000,000 lbs. weight. These were important facts; they were too important to be overlooked or disregarded. For Revenue purposes no article could be more fairly or more properly taxed than tobacco; but the limit of taxation should be one calculated to expand, and not to contract, either the trade or the Revenue. He asked the Committee whether, in its opinion, the facts which he had been permitted to place before them did not show that the limits he had defined had been already considerably overstepped?


said, the right hon. Gentleman had, in the course of his observations, reminded the Committee that this was the first complete year in which they could experience the effects of the repeal of the Malt Duty. He (Mr. Chaplin) would take the opportunity of observing that it enabled them also to consider what had been the effects other than those of a purely fiscal character. The House would remember that in the year 1880 the repeal of the Malt Tax was proposed by the right hon. Gentleman as a great boon to the farmers. He remembered that the right hon. Gentleman stated at the time that such was the condition of the agricultural interest that it was the special duty of any Government, no matter the Party to which it belonged, to consider the case of the farmers of the country. He (Mr. Chaplin) was not in the least ashamed to acknowledge that he cordially approved of the proposal of the right hon. Gentleman, and that he accepted it with gratitude, and in the full belief that it would confer the benefit on the agricultural community that he had no doubt was intended. He had always held it was an unjust restriction upon the cultivators of the soil, especially upon those in the great barley-growing districts, that they should not be allowed to use or dispose of the produce of their farms in the way most profitable to them. The right hon. Gentleman, in 1880, expressed some doubt as to whether the repeal of the tax would have any considerable effect in inducing a larger consumption of malt as food for cattle. From the information he possessed he had reason to believe that in that respect the right hon. Gentleman was mistaken. There was no doubt that since the repeal of the Malt Tax malt had in all parts of the country come rapidly into use as food for stock, and on that ground he had no doubt the expectations of the most sanguine Gentleman had been greatly exceeded. He was afraid, however, the benefits received in that direction had not by any means compensated for the injuries the farmers had received from the repeal of the tax on other grounds. The repeal of the tax benefited the farmer in so much as it enabled them to use malt freely as food for cattle. It had, however, another effect, and that was that, by the admission of a great variety of substitutes for malt in the manufacture of beer, the price of barley had been very considerably depreciated. Under ordinary circumstances, a depreciation of the price of barley would probably have been treated by right hon. Gentlemen on the Treasury Bench as a matter of comparatively small importance; but he could not believe the Government would regard with indifference this result of a measure which was introduced by themselves with the special object, as the House understood, and as he believed the Government acknowledged, of conferring a benefit upon the agricultural interest of England. What he ventured to propose was this, and he was sanguine enough to believe the right hon. Gentleman would be disposed to entertain the proposition which it was intended to make on behalf of the agricultural class—what he would propose would be this—that in future they should not prohibit the use of rice or maize, or other substitutes for malt, in the manufacture of beer; but it should be made obligatory upon the persons using such substitutes to declare and publish the fact. He had been reliably informed that the beer manufactured out of such articles was of an inferior and unwholesome quality; an injury was inflicted upon the public at large; and, therefore, if beer was made from such articles, let it be stated. If the public chose to drink beer made from rice and maize, and the like, it was their business, and not his; but he was confident that if it was generally known that beer was made from articles of this description, the British public would soon exhibit a preference for beer made from malt and hops. If the Committee adopted his suggestion, they would discourage the public from making use of a beverage of an inferior and unwholesome character, and they would create a larger demand for barley, and in that way they would convert the repeal of the tax, which was intended to be a boon to the farmers, from an injury into a real benefit to the agricultural interest. He hoped the right hon. Gentleman would take the question into his consideration, and that he would see his way to introduce into his Bill some clause which would have the effect he had described. While the adoption of his proposition could inflict no injustice upon anyone, it would confer a considerable boon upon the distressed agriculturists; and if the Government would not take the matter in hand he should be obliged to do so himself.


agreed with the speech of the Chancellor of the Exchequer that the whole brewing trade were paying 2s. per quarter more under the Beer Duty than under the old Malt Tax and Brewing Licence Duty; but, while that was the case, many of the larger brewers were paying 3s. a-quarter more than they had previously done; and he wished to call the attention of the Committee to the fact that, when the question was under discussion in 1880, the Chancellor of the Exchequer, in asking the House to adopt his Beer Duty, stated that he only wanted something like a fair equivalent with a turn of the scale in favour of the Government. The Chancellor of the Exchequer said he had given brewers relief from vexatious restrictions which existed under the Malt Tax; but those vexatious restrictions might have been removed without doing away with the Malt Tax. Still, for removing these restrictions, the Chancellor of the Exchequer, in 1880, said the trade must pay 1s. per quarter; and, as the Government agreed they were now getting 2s. extra per quarter, he hoped that at some future time the right hon. Gentleman would give the brewers back the extra 1s. a-quarter he had exacted from them. The right hon. Gentleman had said the revenue from the Beer Duty did not come up to his anticipations. He (Mr. Watney) did not know whether he ought to be glad or not; but that was in consequence of the depression of trade. The beer trade, in times of depression, suffered like all other trades. Within the last four years the total consumption of malt had decreased 10 per cent. It must not, however, be supposed that the brewers did not pay as much per quarter. The truth was that brewing had been depressed just as had been the case with the general trade of the country. He hoped that at no distant date the Chancellor of the Exchequer would take a more liberal view of the trade, and remit the extra 1s. he was now receiving from them.


said, the Chancellor of the Exchequer had reviewed, in a very interesting manner, the general policy of his Budgets of the last two years; but there was one subject which formed part of the Budget of 1880 to which the right hon. Gentleman had not alluded, and with regard to which he would like to address a few observations to the Committee—he meant the increase in the spirit licences which the right hon. Gentleman then proposed. The Chancellor of the Exchequer had said that evening he had no revenue to give away. He was not about to ask the right hon. Gentleman for any remission of taxation; but he did wish to draw his attention for a minute or two to the subject of that increase, and to the results of it. When the increase of taxation upon spirit licences was introduced in 1880, he ventured to call the attention of the Chancellor of the Exchequer to the pressure, and, as it seemed to him, under the circumstances, the unjust pressure, which that taxation caused, especially about the middle of the scale. At the present time, if a man occupied a house rated at £50 a-year, he paid for his licence 50 per cent; if his house was rated at £100, he paid 30 per cent; if his house was rated at £400, he paid 10 per cent; and if his house was rated at £1,000 a-year, he paid 6 per cent. Now, the Committee would see that was not a very just scale of charge. In 1880 there was a feeling that the sum which the Chancellor of the Exchequer estimated to obtain from such a source should be so obtained. The Chancellor of the Exchequer, in 1880, estimated to get £305,000 from that change of taxation. Now, in the year 1880–1 he received £432,730 from the increase on spirit licences; and in the year 1881–2 he received within £12,000 of the same amount; so that during these two years the Chancellor of the Exchequer had obtained from spirit licences as much as £120,000 a-year more than the estimate he made in 1880. What was the reason why the Chancellor of the Exchequer proposed that increased charge upon spirit licences? He justified himself by calling attention to the Report of the Lords' Committee upon Intemperance, which had recommended an increase in the charge for spirit licences. It was, however, notorious that that Committee left out of consideration one circumstance, which was well known to every Member of the House of Commons, and especially to those who, like himself, represented a large town. It was true there had virtually been no increase of licensed houses in the United Kingdom. In the year 1880–1 the increase of spirit licences in England and Wales was under 220; therefore, there had been pratically no increase, and the monopoly of existing licences had been for a long series of years preserved. It was on the ground that the present houses possessed that monopoly, and that there was practically no increase in the number of licensed houses, that the right hon. Gentleman proposed the additional charge. But it must be known to hon. Members that licensed houses were subject to the competition of clubs, especially in the large boroughs. In the borough of Salford, which he had the honour to represent, there was a considerable number of political and other clubs. He looked with favour upon many of those institutions, because he believed they had been, and were, doing for the working classes what clubs for the higher classes of the community had done for the more wealthy and favoured classes. Just as the clubs in Pall Mall destroyed the trade of many public-houses of the olden time, so the political clubs which existed for the advantage of the working men, and which were doing good work in the way of social improvement, had largely diminished the trade of licensed houses. That was one reason, and, to his mind, a very strong reason, which he submitted, in 1880, against the heavy increase in spirit licences, especially upon houses rated at from £50 to £150 a-year. To-night the right hon. Gentleman, in what in this part of the House would be considered the most satisfactory portion of his Statement, told them that owing to the altered habits of the people there had been a great decline in the drink revenue, and that, in the right hon. Gentleman's own words, "there has been a real and serious decrease in the consumption of intoxicating drink." That statement was exactly in accordance with his (Mr. Arnold's) own observation amongst the large population from which he came. He believed it was perfectly true, and to him it was a matter of great satisfaction, that there was a sensible decrease in the consumption of intoxicating drink. The fact, however, to which the Chancellor of the Exchequer had borne testimony strengthened very considerably the claim of the holders of spirit licences. No society or body of persons had asked him to make the observations he now offered to the Committee; he was simply moved to make them from his own observation of what he considered to be the improvement that was going on amongst the large populations of the towns and the difficulties under which the smaller classes of licensed houses were suffering from the increase of taxation. And considering that the Chancellor of the Exchequer had received, and was receiving, at least £120,000 a-year more than the sum he calculated upon from this source, he (Mr. Arnold) did hope that, not on this occasion perhaps, but on another occasion when he had Revenue to give away, he would bear in mind the claims which this class of people—especially those in houses rated at from £50 to £150 a-year—had on his consideration. There was only one other subject upon which he desired to say a word, and that was the largely-increased Vote to be asked from Parliament in aid of Cyprus. As he intended to oppose that Vote—and he now gave Notice of that intention—he would not offer many remarks on this occasion. He would only say that last year, when the Colonial Office presented a prosperity Budget, and seemed particularly satisfied in regard to their policy concerning Cyprus, he had ventured to say—of course, making allowance for the fact that the present Under Secretary for the Colonies was at that time extremely new to his Office, and for the fact that the Government was not responsible for our present connection with the Island—that the figures would not turn out to realize the expectations placed before the House. He should be failing in his duty if, in regard to the Charge for Cyprus, he did not oppose the Vote. They were told it was Lord Kimberley's hope that he might be able to reduce the Vote by £40,000 a-year; but what did that mean? He had no doubt it was that the Chancellor of the Exchequer anticipated that in future years he might obtain the assent of the Porte to the deduction from the tribute which we were liable to pay in respect of Cyprus of the amount which was due under the Guarantee of this country in regard to the Loan of 1855. But that would not be reducing the cost of Cyprus to this country by £40,000 a-year, because this country was entitled to receive from the Porte the payment of the guaranteed interest. The whole condition and management of the Island of Cyprus seemed to him to be highly unsatisfactory, and he hoped that when he fulfilled his promise to move the rejection of the Vote he should receive the support of the House.


was understood to say he rose for the purpose of putting a Question to the right hon. Gentleman the Prime Minister, but, in his absence, the President of the Local Government Board, no doubt, would answer. On that (the Opposition) side of the House the point of the grant in aid of Highway rates was not quite clear. They understood that a sum of about £250,000 was to be applied to this purpose, and he was not going now to criticize the amount nor the mode of raising it. As he understood it, it was a provisional Vote of small amount, and, in the mode of collecting, it did not fall upon the traffic which caused the wear and tear. But in what way was it proposed to dispense it—according to mileage of turnpike road, or of main road, or of cost, or how? Would not the simplest way of applying it be to hand it over to the county authorities, saying, "There, that is the sum we give you as a mileage grant?" He did not know whether that was the way in which the Government proposed to do it. There were two or three other subjects in which he was interested, which would, no doubt, be amply discussed when they were reached. He greatly regretted that the Chancellor of the Exchequer had not seen his way to extending the limit of house assessment in respect of private-house licences, Particularly in the case of farm-houses. If he had done so the advantages would have been greatly appreciated, whilst the loss to the Exchequer would have been infinitesimal. These people paid more under the Beer Tax than they did under the Malt Tax, and he hoped that when the Committee came to this subject they would fully discuss it. He did not know the right hon. Gentleman would be able to see his way to making the change he proposed this year; but probably some other year he would be in a position to propose it. There were, no doubt, many other subjects about which they would hear more, and about which questions would be asked. For instance, they were told that a large amount was required for Post Office and Telegraph Office buildings, and he must say it seemed hard that this charge should be paid in one year. It seemed to him that it should rather have been a debt spread over three or four years, especially as the increased revenue from this source was £200,000 this last year. If the Postmaster General had been present he might have explained the matter.


said, the right hon. Gentleman the Chancellor of the Exchequer had referred to the very important changes introduced by him last year in relation to the Probate and Legacy Duties, and had given the Committee particulars of some of those changes. Having, on several previous occasions, brought the whole of those changes under the consideration of the House, it was extremely gratifying to him (Mr. Dodds) personally to find that the right hon. Gentleman reported so very favourably as to the whole of them. He would, however, remind the Committee that a year had not elapsed since those changes were adopted, and that for only a short period had they been in active operation in Somerset House; and it was, therefore, all the more satisfactory to receive so favourable a report as to their operation. When these changes were better understood throughout the country they would, he had no doubt, be still more favourably received, and prove satisfactory alike to the Government and to the public. He (Mr. Dodds) had looked forward very anxiously for that Financial Statement, and had indulged the earnest hope that the right hon. Gentleman would see his way to take a further step very much in advance of that taken last year in the direction of reforming the death duties. The right hon. Gentleman had himself stated last year that he was only able to deal with the fringe of the subject on that occasion, and that considerable elbow-room would be required to enable the House to deal comprehensively with the remaining anomalies. The right hon. Gentleman had last year referred especially to three anomalies—three gross anomalies he termed them—in connection with these death duties. The first was the total exemption of property held in mortmain; secondly, the great difference in the charges upon settled and unsettled personalty; and, thirdly, the mode of charging the devolution of inheritance upon real property. He (Mr. Dodds) had indulged the sanguine hope that some one at least of these gross anomalies would have been dealt with on the present occasion. He contended that the death duty was strictly a charge upon the capital left by a deceased person, and that it should be charged at a uniform rate upon all persons, irrespective of consanguinity, and upon every description of property. Consanguinity, he contended, should for that purpose be disregarded, and, as the right hon. Gentleman had stated, the question would have to be considered and disposed of by the House. In connection with this matter, he wished to remind the Committee of one or two gross anomalies in connection with the charge upon real property. It was alleged that real property was unduly burdened, and that relief from local taxation was urgently required; but he (Mr. Dodds) begged to point out that real property was entirely free from any tax of an analogous character to the Probate Duty charged upon personalty; whilst the Succession Duties charged upon real property, which he had always understood were intended to be about equivalent in amount to the charge imposed upon personalty in the form of Legacy Duty, was very much smaller in proportion to the value of the real estate charged than the Legacy Duty as now levied upon personalty. In a recent case which had come under his (Mr. Dodds's) own cognizance, a small reversionary interest in personalty had been, from circumstances, no doubt, of an exceptional and peculiar character, charged in the form of Probate and Legacy Duties very many times in excess of the amount that would have been charged upon a similar amount of real property. Had the right hon. Gentleman seen his way to assimilate the death duties on real property to similar duties now charged upon personal property, he would have been in a position to afford adequate relief to the local taxpayer by contributions from the Consolidated Fund for a variety of purposes; and he ventured to think that had that course been adopted, the right hon. Gentleman would have been able to redeem his promise to the hon. Gentleman the Member for Oxford shire (Mr. E. W. Harcourt), by making his proposed contribution of £250,000 per annum towards the repairing of main roads and highways, without resorting to any other taxation, or increasing the duty charged upon carriages. However much he (Mr. Dodds) regretted that the right hon. Gentleman had not been able to deal with the subject on the present occasion, he most earnestly indulged the hope that the right hon. Gentleman might continue to hold the Office of Chancellor of the Exchequer until the state of Business in that House enabled him to deal exhaustively with these death duties. He felt sure, if such was the case, he would sweep away the remaining anomalies, and especially the gross anomalies to which he himself adverted last year.


was sure the brewers would be glad to hear the high compliment the right hon. Gentleman had paid them, and, in their name, he thanked the Chancellor of the Exchequer for what he had said. He had expressed his acknowledgments to them for the manner in which they had assisted the officers of the Government in the collection of the Beer Tax, and he (Mr. Moss) would, on their part, take this opportunity of thanking the officers of the Excise for the able and courteous manner in which they had performed their part of the duty. The Chancellor of the Exchequer had said that the Beer Tax had not realized the amount he had anticipated. Well, one could scarcely be surprised at that, because, up to this moment, they had not been told how much of the duty had been thrown away by permitting private persons to brew without taking note of the quantity they consumed. It could be shown, he thought, that the private licences, amounting to £46,000, represented from 150,000 to 200,000 quarters of malt. The gain to the Exchequer, through substituting a Beer for a Malt Duty, had been som.ethinglike£800,000, but that had not come from the pockets of the brewers. The brewers were merely the collectors of the tax—they collected it from those who consumed the beer. The consumers of the beer were the wage-earning class, and it was from their pockets that this £800,000 came. This sum took the place of an Income Tax of 1d. in the pound on the wage-earning class. The Chancellor of the Exchequer, in introducing his Bill for the change of the Malt Duty into a Beer Duty, said that the result of the change would leave a simple balance—just a turn—in favour of the Exchequer. He now said that he had obtained an additional duty of 2s. per quarter. He (Mr. Moss) said that he held in his hand a statement of the actual duty paid by a large maltster, showing that, during a period of five years, he had actually paid 20s. 5d. per quarter, so that, as the duty now charged was equal to 24s. 2d. per quarter, that was an increase of 3s. 9d. per quarter. It had been said that taking the duty off malt would bring about a change which had been very much sought after by the agricultural interests of the country. Well, it was true the agriculturists were always anxious for relief in this matter, not that they wished the change to be from the Malt to the Beer Duty, but they desired that the burden on their trade should be lightened and placed somewhere else, to give them an opportunity of conducting their business successfully. The agriculturists had been deceived into the belief that the effect of the change would be to lead to the consumption of a greater amount of home-grown barley, of a superior and medium quality, whereas it had simply led to a larger consumption of low-class foreign-grown barley. It was a matter of no consequence to the brewer what he used. He might as well use foreign barley, or a worse class of barley, as he now paid on the result of the operation, and not on the quality of the material. Of course, the pale ale brewers used the best barley; but the lower class was used in enormous quantities by ordinary brewers who now paid duty on result. And foreign barleys had not yet been introduced into the country quite to the extent he believed they would be. There could be no doubt that, in the future, very large quantities would be imported. The Chancellor of the Exchequer had congratulated the country upon the advance of temperance. If they would turn to the Blue Book con-containing the result of the labours of the Committee which sat in that House, to consider the subject of Temperance, some time ago, they would see it stated in evidence by one of the principal London brewers, that so far from the London brewers desiring the spread of intemperance, it was the greatest obstacle to the increase of their trade; and that there were no greater advocates of temperance than the brewers of the United Kingdom. He (Mr. Moss) fully endorsed the view of this gentleman, and congratulated the country on the spread of temperance. He trusted the Chancellor of the Exchequer would do all that lay in his power to cause it to spread further. It benefited the country, and he was sure the brewers would be found as strong advocates of that which advanced the interests of the country as anyone outside their particular trade. It was not to be expected that the Chancellor of the Exchequer would have been able to make a change in the Beer Duty this year, looking at the state of the Revenue; still he thought the duty had been heavier than the right hon. Gentleman could have anticipated. As time went on, and we had good seasons, and the quality of the barley improved, it would be found that the charge of duty per quarter would be much larger than when seasons and the quality of the barley were bad. In conclusion, as he had said before, the increased taxation, in consequence of the change which had been made in the duty, fell not upon the brewers, but upon the consumers.


said, he would not detain the Committee more than two or three moments, his object being to support, as far as possible, the contention of the hon. Member for Coventry (Mr. Wills) in regard to the Tobacco Duties. He had more than once endeavoured to bring this subject before the House, but had not been successful; and now that he had an opportunity he would remind the Chancellor of the Exchequer how hardly these duties pressed on the working classes, and how desirable it was that they should be lightened. The first step towards lightening them, he thought, ought to be the abolition of the additional duty imposed on tobacco in 1878 by the right hon. Baronet the Member for North Devon (Sir Stafford North cote). The result of the addition to the tax in that year was very slightly to increase the Revenue, but to cause a much more inferior article to be supplied to the working classes. It was perfectly plain that the article must be worse considering that the duty had been raised, although not to a very large extent, without the price to the consumer having been enhanced. Up to the year 1878 the Revenue had increased by large jumps. In 1871 it increased £174,000 over the preceding year, in 1872 the increase was £209,000, in 1873 £223,000, and so on, until in 1877 the increase was £243,000 over the preceding year. The increase in the duty was £388,000 in 1878, owing to the additional ½d. imposed by the Chancellor of the Exchequer. The actual importation of tobacco diminished. In the following year the duty increased slightly, and there was a similar decrease of imports; so that at present, whilst we have an advance of £47,000 in the duty on last year, the consumption of tobacco was about 500,000lbs. less than it was in 1877, the year before the new duty was imposed. It was not generally known how far the working classes suffered from these enormous duties on tobacco. For every 3d. the working man spent in tobacco about 2d. went to the Revenue. When the Tobacco Duty was increased in 1878, it was the custom of the tobacconists to sell tobacco to the working classes at the rate of 3d. an oz., which made 48 pence, or 4s. per lb. How did the tobacconists obtain their profit? They had to pay 3s. 2d. to the Revenue, they paid about 6d. for the tobacco, and their profit was 4d., that being increased 10 per cent by moisture added to the tobacco. After 1878 it was found that the working classes would not stand an advance on the price of their tobacco, and a simple process had to be resorted to. Ten per cent of water was added to the tobacco, thus enabling the increased duty to be paid, and keeping the price of the tobacco at its original amount. He hoped that the noble Lord (Lord Frederick Cavendish), who was listening for the Chancellor of the Exchequer, would reflect on the great hardship to the working classes of this extra 4d. on tobacco, which, while it did not add much to the Revenue, deteriorated so seriously that which was almost the only luxury of these people. On another point he wished to ask Her Majesty's Government whether they had come to any arrangement with the Turkish Government for the remission of the Revenue of Cyprus, which we had impounded on behalf of France? Unless Turkey agreed to it the transaction was one of doubtful character, and scarcely consistent with the undertaking upon which we took over the government of Cyprus. We took it on the understanding that we were to pay over to the Porte so much a year; but we did not take power to impound money belonging to Turkey. We might have a right to impound revenues on account of what was owing to ourselves; but it was rather remarkable that we should act as the assignees of France, unless Turkey had agreed that we should do so.


said, he was sure the Committee had listened with great interest to the very lucid statement of the right hon. Gentleman the Chancellor of the Exchequer. He had taken his Estimates very judiciously, and the Committee must feel that he had acted wisely. At the same time, he (Mr. Fowler) was anxious to say this—and in 12 months' time hon. Members would know whether he was right or not—that he believed, and hoped, that the right hon. Gentleman's Estimate of the Revenue of the country would be very much exceeded by the actual receipts. It was a remarkable thing that during the period to which reference had been made—say, from 1872 to 1878 or 1879—while it was notorious that the trade of the country was not in a prosperous condition, the Revenue kept up much better than could have been expected. Well, now everyone was agreed that the trade of the country was reviving; nevertheless, they did not see those evidences of it in the Revenue of the country which they might have expected. His explanation of it was this—that either when trade declined or revived the last thing to be affected was the Revenue. They knew that one great item of Revenue was Excise, and particularly those duties which the right hon. Gentleman had called "Drink duties." The circumstances, he took it, were these. When the working classes got good wages a good deal of it went in drink. It was unfortunate; but it was, nevertheless, the fact. They might all lament it; but it was a fact which the Chancellor of the Exchequer and the Members of the House had to bear in mind. On the other hand, when times were bad the working classes became economical, and retrenched their consumption of drink. They did not begin again to drink largely when times improved and their wages increased. Therefore, the right hon. Gentleman might possibly find his Estimates exceeded during the coming year. He threw this out, because he thought it well that it should be remembered that this question of Revenue and Revenue facilities was guided by given laws. He thought the Prime Minister would come down next year and tell the House that the Estimates of Revenue had been very much exceeded. He thought the right hon. Gentleman was perfectly right in taking cautious Estimates; but neither he nor the noble Lord could claim next year that it was owing to their good management that the Estimates had been exceeded, because he thought it was a thing the House might legitimately look forward to. He thoroughly agreed with the remarks of the right hon. Gentleman as to the great importance, under all circumstances, of having a Surplus. He only wished they could do more in the way of making a Surplus for the purpose of reducing the National Debt. The right hon. Gentleman had drawn a picture of what had been done in America and in the different countries of Europe, particularly France; and it was gratifying to see that he adhered to the policy of always having a Surplus; and it was to be hoped that the Estimates—barring accidents, such as wars and famines, and events which were not anticipated—would produce more than the right hon. Gentleman expected. He should like to make a remark with regard to the Wine Duties. It was true they were not going to deal with them this year; but they had been referred to by the right hon. Gentleman in his speech. During a visit he had recently made to the Cape, he had found a very strong feeling existing there to the effect that the manner in which the Wine Duties were levied was very unfair towards the wine-growers of the Colony. It was declared that the alcoholic test was such that it prevented them from sending their wines to Europe. He made this remark and called the attention of the noble Lord to the subject because, whenever the Government determined upon dealing with the question of the Wine Duties—and there was reason to suppose that it was under their consideration—and there was a great change in the taxation of the country, the views of the Cape Colonists must not be lost sight of. He hoped something would be done to enable this important Colony to send their wines into this country. The only change introduced by the Budget—and it was an important one—was with regard to the duty on carriages. For his own part, he would rather see a duty on wheels than on carriages. He did not represent an agricultural constituency, therefore he must apologize to the House for alluding to the subject; but it certainly seemed to him that the roads in the country districts were cut up, not by carriages, but by waggons. In the parish in which he lived in the country the roads were very much cut up by the passage of heavy, powerful stone-waggons. He and others like him had to pay for this—had to pay for the damage done to the roads by those who were carrying on an important business in the conveyance of stone. No doubt, the Government could not this Session devote attention to more subjects than they had dealt with—the right hon. Gentleman was unable, in consequence of having only a small Surplus, to make more change than that which was necessary in consequence of the promise he had held out to the hon. Member for Oxfordshire. He (Mr. R. N. Fowler) trusted the Government would elaborate the idea thrown out by the right hon. Gentleman, and that in the future they would be able to see their way to setting a duty upon wheels rather than upon carriages. No one could deny that the statement in which the right hon. Gentleman had introduced his Budget was a most lucid one. It was, of course, natural for Gentlemen whose interests had been referred to by the right hon. Gentleman in his speech, but not dealt with in his Budget, to take this opportunity of speaking of them; but the only new proposal in the Budget—that with regard to carriages—was one which he did not expect would lead to much discussion. The Budget was not a very ambitious one, and, no doubt, it would receive the general support of the House.


said, that when the present Government came into Office the country was led to expect great relief from local taxation; but he could not say at present that their expectations had been realized. Although they gratefully accepted the instalments they had received, they looked forward to a great deal more—although he, of course, admitted that the state of the Revenue did not allow of their having more at present. As to the right hon. Gentleman's proposal affecting coffee, no doubt it was a very good thing to protect the public from the adulteration of that article; but he failed to see why the same consideration should not be extended to the public in regard to beer. They had always thought that genuine beer should be made of malt and hops. They found it made of all manner of things, as there was no protection against adulteration. The Government, in protecting coffee, had given them good reason to hope that the protection of beer would follow. The arguments of the hon. Member for Mid Lincolnshire (Mr. Chaplin) on that point were strong. It was hard on the brewer who sold the genuine article made of malt and hops, that other brewers who manufactured a spurious article should not be compelled to declare its true character to the purchaser. As to the relief given in the case of highways, he did not think the right hon. Gentleman had altogether understood the complaints of the farming community. If highways were opened, those who used to pay hundreds and thousands a-year in passing the turnpikes—brewers and the like—would pay nothing. People of this kind had a great deal of very heavy traffic on the roads. It was not the light traffic that wore the roads, but the heavy traffic—such as brewers' drays, which were constantly on the road heavily laden. He should have liked to have seen some scheme prepared which would compel traffic of this sort to contribute to the maintenance of the roads. There was a point he had noticed the other day in a Question he had put to the Chancellor of the Exchequer, which he hoped the right hon. Gentleman would take this opportunity of explaining. He had pointed out—and the right hon. Gentleman had admitted the accuracy of his figures—that the farming constituency in Mid Lothian paid less income tax than people similarly situated in England. Some explanation should be given of the inequality. He failed to see that anything could be said in defence of the existing principle, and he should look to the Chancellor of the Exchequer for the necessary relief in the matter. The Scotch farmers were quite as well able to pay the income tax as the English farmers. The latter had, during recent years, been paying on an income they had never received; and it was only fair that the people of both countries should be treated alike.

Motion made, and Question proposed,

"(2.) That, on and after the first day of January, one thousand eight hundred and eighty-three, in lieu of the Duties imposed upon Carriages by the Act of the thirty-second and thirty-third years of Her Majesty's reign, chapter fourteen, save as hereinafter provided with respect to Hackney Carriages, there shall be granted and paid to Her Majesty, Her heirs and successors, in and throughout Great Britain, the Duties following (that is to say):

For every Carriage—

£ s. d.
If such Carriage shall have four or more wheels, and shall be of the weight of four hundred weight and upwards. 3 3 0
If such Carriage shall have less than four wheels, or, having four or more wheels, shall be of a less weight than four hundred weight. 1 1 0
Provided, That Excise Licences for a Carriage deemed to be a Hackney Carriage, by virtue of 'The Town Police Clauses Act, 1847' or 'The General Police and Improvement (Scotland) Act, 1862,' and a Hackney Carriage, as defined by 'The Metropolitan Stage Carriage Act, 1869,' shall continue to be charged with the existing Duties."


I wish to have this matter made quite clear. The Resolution will only apply to carriage licences taken out after the 1st of January next?


The right hon. Gentleman has quite correctly understood the intention of the Resolution.

Resolution agreed to.

(3.) Resolved, That the Duty of Excise on vegetable matter grown in the United Kingdom applicable to the uses of Chicory or Coffee (other than Chicory) shall cease to be payable, and the sale or exposure for sale of any such vegetable matter in imitation of, or mixed with, Chicory or Coffee shall be rendered illegal.

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

£ s. d.
Tea the lb. 0 0 6

(5.) Resolved, That the Duties of Customs on Vegetable Matter applicable to the uses of Chicory or Coffee (other than Chicory) shall cease to he payable, and the Importation as Merchandise of any such Vegetable Matter mixed with Coffee or Chicory shall he prohibited.

(6.) Resolved, That it is expedient to amend the Law relating to the Inland Revenue and the Customs.

Resolutions to be reported To-morrow, at Two of the clock;

Committee to sit again upon Wednesday.