§ MR. H. H. FOWLERsaid, he rose to call attention to the expenditure of the country. The expenditure of the current year would be between £84,000,000 and £85,000,000, showing a slight decrease on the preceding year. There were two questions to consider—first, how the present expenditure contrasted with that of the late Government, of which the Liberal Party were always complaining, and on the faith of which they attacked the late Administration; and, next, how much of the present heavy expenditure was necessary for the efficient government of the country? Nothing, in his opinion, contributed so largely to the success of the Liberal cause at the last General Election as the extravagance of the Conservative Government and the constant preaching of economy by the Liberals. They were, therefore, bound in fairness to their opponents and to themselves to justify their posi- 55 tion, and they were also bound to ask whether, irrespective of all contrasts with the previous or other Governments, an expenditure of between £84,000,000 and £85,000,000 was absolutely necessary in order to carry on efficiently the Public Business of the State. With reference to the expenditure of the late Government, since the present Session opened, the late Chancellor of the Exchequer (Sir Stafford Northcote), at a meeting at Liverpool, stated that the expenditure of the year 1882 was higher than the highest sum which had ever been reached by the previous Administration, which was in 1879. He (Mr. H. H. Fowler) ventured shortly afterwards to express some doubts as to the substantial accuracy of the contrast, and the right hon. Gentleman wrote a letter in which he very severely censured the remarks he (Mr. H. H. Fowler) made. That letter having been published in his constituency, he felt it his duty to justify the remarks he made. The statement on which they joined issue was this. The expenditure of 1882 was£85,472,000, and that of 1879 was £85,407,000; therefore, there was an absolute increase of £65,000 for 1882. But a mere statement of these figures was not a statement of the whole case. They had to look into the points which made up the figures, and, in contrasting them, see whether there was or was not a real increase. The expenditure of the country was divided into three branches—expenditure for the Debt, expenditure for carrying on the Public Services, and expenditure for certain Departments of Public Business carried on by the State for the advantage of the State. In 1879, the amount appropriated for Debt was £28,000,000, and in 1882 the amount was £28,900,000. Three weeks before the late Government left Office in 1880, the right hon. Gentleman proposed, and the House adopted, a means for paying off the deficit which had been accumulated during previous years, and which amounted to something like £6,000,000, by the creation of Terminable Annuities, which were to expire in 1885. Therefore the expenditure for Debt in 1879 was£28,000,000, and the expenditure of 1882 included£800,000 additional expenditure for Debt incurred during the Administration of the right hon. Gentleman, and for which the present Administration was in no way 56 responsible. In addition to the£800,000, there was a grant to India of a loan of £2,000,000, which was afterwards made a gift. This made up a total of £990,000 charged as against 1882, but which was not expenditure in 1882, and for which the Administration of that year was in no way responsible. The next item of expenditure of 1882 contained £500,000 voted for the Afghan War. There might be a question whether it was right to put that burden upon the British taxpayers; but there could be no doubt that the extra charge was a direct consequence of the policy of the late Government. This made an extra expenditure in 1882 of £1,500,000, which was chargeable to the Conservative Administration. If the postal and telegraph business carried on by the Government for the benefit of the public was bringing in a larger revenue to the State, it was obvious that there must be a larger cost incurred in the administration of those Departments. Between the years 1879 and 1882 the difference in the cost in the administration of those two Departments was nearly£600,000. His argument was that in the year 1882 there was an expenditure in the aggregate of £2,100,000, for which the present Government were in no way responsible, and on which it was not just to charge them with the increasing expenditure of the country, one portion of it representing expenditure previously incurred, and the other representing business which was a substantial benefit to the country. The result was entirely to refute the assertion made by the right hon. and learned Gentleman the Member for the University of Dublin (Mr. Gibson) in his usual epigrammatic rhetoric, that the economy of the Liberal Government was more extravagant than the extravagance of the Conservative. Then, with regard to military expenditure, he found that in 1879 the amount was £32,300,000, and in 1882 £28,700,000, being a decrease of £3,500,000. [An hon. MEMBER: That was in time of war.] Yes; but in 1882 the Government had considerable expenditure on account of the Transvaal War. Whether they were right or wrong in the present expenditure they were incurring, he maintained that the Government had done their utmost to reduce the expenditure since they acceded to power, and that there had 57 been a substantial and effective reduction. If they took the gross total irrespective of the Post Office and Telegraphs, it would be found that the gross total was £77,500,000 in 1879, and between £76,000,000 and £77,000,000 in 1882. Coming to the real expenditure of the country, he maintained that the right hon. Gentleman at the head of the Government had carried out his principle of making the Revenue of the year defray the expenditure of the year. If they contrasted the finance of this country with that of America, which was the popular comparison among the people, he believed we were doing, proportionately, quite as much to decrease Debt in Great Britain as the Americans were in their own country, for though the Americans were raising no less than £13,000,000 yearly, they were raising it by heavy protective duties, which were a present charge on the future productiveness of the industries of the country. Since 1857, the reduction of Debt in this country amounted to £70,000,000, and during the last six years we had paid off £33,000,000 by Terminable Annuities—a large and substantial reduction of Debt, which, having regard to the generally depressed state of trade, he thought that was a result which they were entitled to regard as particularly satisfactory. To be able to make a reduction of between £6,000,000 and£7,000,000 showed undoubtedly a substantial improvement in the financial state of the country. With regard to the general subject of the reduction of expenditure, he wished to point out that it was a thing that was not in the hands of the House, but in those of the Executive Government. Whenever a Member raised a question having in view the reduction of expenditure, it was always seen that the matter was in the hands of the Government; for it ended by being taken to a division, in which it was settled by Government voting. He felt confident of this—that if they were to hope for any considerable reduction of the National Expenditure proposals for the purpose must come from the Executive of the day, who alone could master the Departments, instead of allowing the Departments to master them.
§ SIR STAFFORD NORTHCOTEI wish to assure the hon. Member that nothing was further from my intention than to cast any reflection upon him in the expressions which I used, and which 58 I cannot withdraw. The statement which the hon. Member addressed to his constituents appeared to me to he most misleading and inaccurate. I do not intend to impute to him that he intentionally misled; but I do maintain that it was the case with him, as with others, that they have imperfectly examined the facts. The point which I brought forward in my speech at Liverpool I do not apologize for referring to here; because it is part of a great question which has been, and which is, at issue between the two Parties in the country, and which is raised as a burning question—I mean the comparison between the expenditure of the late Government and the expenditure of the present Government. I wish to distinguish, in the first place, between the two different charges made against the late Government in regard to what is called their extravagant expenditure. No doubt, their policy involved a considerable expenditure for certain military services which were undertaken for what were considered adequate objects. It is a question always open for discussion whether those objects were or were not worth the cost incurred. But there is a further charge made against the late Government and one that is made an entirely separate charge; that is, that not only have they involved the country in considerable expenditure by the outlay they made for the purpose of carrying out a particular policy, but that they were an extravagant Government, per se, and that in the management of all the expenditure of the country, for which they were responsible, they were extravagant, and spent a great deal more than they need have expended or than a Liberal Government would. That is entirely an inaccurate and a misleading statement. No doubt we had to make provision for very heavy war expenditure in certain quarters. In 1878–9, for instance, we had very large calls upon us in consequence of the preparations we thought it right to make for strengthening the Military and Naval Forces of the Crown; and, of course, when that was at an end, and when you compare a year of peace with a year which was one of great disturbance, and which involved not only those preparations, but involved war in South Africa, of course the comparison must be unfavourable to the year in which the heavier expenditure 59 took place. What I wish to point out is, if you deduct, as the hon. Gentleman proposes to do, from the year 1881–2 all the expenditure which belongs to the policy of the late Administration and all the war charges which devolve upon the present Administration in consequence of the action of their Predecessors, you must, in order to get a fair comparison, make a similar deduction from the year you compare with it, the year 1878–9. If you do that, you will arrive at these results:—The total expenditure of 1877–8 was £82,400,000, of which £3,500,000 was for the Vote of Credit, leaving £78,900,000 as representing the ordinary expenditure of that year. In 1878–9 the expenditure was a little over £85,400,000, of that £4,770,000 was stated at the time to be extraordinary expenditure, which belonged to the war service of the year. Of course, we did not provide for the whole war service of that year, because we threw a part upon Exchequer Bonds, which ultimately were converted into the Annuities to which the hon. Gentleman referred. If you deduct that sum, you will find that the ordinary expenditure for 1878–9 was only £80,630,000. Now, let me compare that with 1881–2. Then the total expenditure was £85,472,000, and of that we were informed, the other day, by the Chancellor of the Exchequer that the sum for war charges, including the Annuities, the charges for the Transvaal War, and everything of that sort was £3,842,000. If you deduct that from the actual expenditure you find that the ordinary expenditure of 1881–2 was£81,630,000, as against £80,630,000 in 1878–9, showing that the ordinary expenditure, irrespective of the special war charges, had increased by the sum of £1,000,000. If that is the case it disposes of the charge that we were, irrespective of special policy, a more extravagant Government than our Successors have been. I am not now desirous of making any charge against the present Government for the increase of expenditure—there may be a great deal to be said as to the causes for it—but I say it is utterly unfair and misleading to put them forward as though they were a rebuke and a reproach to us, when, in fact, their ordinary expenditure has increased to the extent it has done. I will illustrate this by going a little more into detail. Take the Civil Services, in 60 which we keep clear of war expenditure. The Appropriation Accounts show that in 1878–9 the Civil Services cost £14,886,000; in 1879–80, £15,148,000; and in 1880–1, £15,436,000. These were the three years for which we were responsible. In 1881–2 they spring to £16,087,000; and in the present year, I think, they are estimated at £ 16,502,000, and a Supplementary Estimate is already announced of £500,000. All this, irrespective of the expenditure which will be caused by the Egyptian troubles, or anything else of that sort. Take the Revenue Services. In 1878–9 the charge was £8,000,000; in 1879–80 it was £8,116,000; in 1880–1 it was £8,158,000. In 1881–2, the first year of our Successors, it was £8,392,000; and in the present year it is £8,790,000. But it is said by the hon. Gentleman that this increase is incurred by the process of carrying on a profitable business, and that if you increase the business you carry on by the Postal and Telegraph Services, you must expect an increase of expenditure to carry them on. But I meet the hon. Gentleman even on that point. It is quite correct that there has been an increase of Revenue, and that that may be, to a certain extent, set-off against an increase of expenditure; but the fact is that the excess of Revenue from the Postal and Telegraph Services over the expenditure upon the Services has not been increasing, but has been falling off of late. While the Government have had an increasing expenditure, they have been receiving a less proportionate income from those sources. In 1880–1, the charge for the Post Office and Packet Services was £4,130,000, and the receipts were £6,700,000. In 1881–2, the charge was £4,247,000, and the receipts were only £7,000,000. The surplus in the first of these years was £2,570,000; in the next £2,753,000; and now it is but £2,697,000. In respect of the Telegraph Service the surplus of receipts over expenditure was in 1880–1 £390,000; in 1881–2 £344,000; and this year it will be £215,000. Therefore, if we take the trouble to look at the figures, it is seen to be fallacious to regard the increase of expenditure as accounted for by the growth of Departments and accompanied by increase of Revenue. There was a glimpse of the truth in the Budget speech of the Chancellor of the Exchequer when he re- 61 marked upon the increasing expenditure upon the Revenue Departments. He said, with a sigh, that his Predecessors did contrive somehow to keep down these charges upon the Post Office and other Services, and that the present Government did not find the means of doing the same thing. It is a very difficult thing, no doubt; and my right hon. Friend who sits near me (Mr. W. H. Smith), as Secretary to the Treasury, and others who followed him in that Office, have the credit of what was done; and I will appeal to the Chancellor of the Exchequer to say whether their administration of those Departments was not as sound and economical as, and even more successful than, his own? I have gone into these particulars because I think it is not right that the country should be under an extremely false impression with regard to the relative economy of the two Governments, when you are dealing with matters that are in pari materiâ, and the country should be made aware that, to a great extent, increase of expenditure is unavoidable, and is the natural growth of circumstances. The present Government is ready to call attention to circumstances which cause increase of expenditure, like the taking of the Census; but when we are in a similar position, we are always told that if there is an increase in one direction, we ought to cut down in another. I do not know how far it is always possible; but it is not what is done by the present Government. I have shown that the ordinary expenditure, which in 1878–9 was £80,630,000, had grown last year to £81,630,000; but what is it to be this year? The hon. Gentleman opposite, in his answer to me, said he would wait for the Budget speech. I do not know how far he is satisfied with what he heard. By the same method of computation I have pursued, the ordinary expenditure of this year will be £83,869,000, which is an enormous increase, demanding the attention of the House and of the country. I am sorry to have to go into details of this kind; but it is necessary we should endeavour to make Gentlemen look a little more closely into the figures they use. One would expect the hon. Member for Wolverhampton (Mr. H. H. Fowler) to be particularly careful and accurate; but it seems as if he thought the first stick he could seize was good 62 enough to beat me with. I will give an instance of one of his errors; it was this—In the statement I made as to the expenditure of the year 1880–1, I said that I left the expenditure at an estimated amount of so much; that my right hon. Successor had added to that to the amount of about £1,300,000, and that subsequently the expenditure had risen in the way I described. The hon. Gentleman takes up my allusion to the addition of about £1,000,000 of further charges in 1880–1, which I had not challenged, and says I omitted to say that those further charges represented the cost of the repeal of the Malt Tax. Of course I omitted to say that, because they did nothing of the sort. The repeal of the Malt Tax had no more to do with them than the repeal of the Corn Laws. The hon. Gentleman said the repeal of the Malt Tax cost £1,319,000, and I daresay it did; indeed, I know that was the cost of the operation; but that came out of the Excise revenue in the shape of drawback. It meant so much less Revenue received, not so much for expenditure incurred; and that is an admirable illustration of the way in which these amateur financiers, not intentionally, mislead the people. Now, I hope there will be no particular feeling on the part of the hon. Gentleman towards myself, because we are perfectly prepared to discuss any questions of this sort, and it is to the interest of the truth that this discussion should take place. The right hon. Gentleman the Chancellor of the Exchequer, in the beginning of his Budget Statement, made an observation germane to the matter about which we have been talking, when he said that this is a time of growing expenditure and sluggish Revenue. I am afraid that is true. It is one of the difficulties with which we have had to contend for some years past. No doubt for the last seven or eight years the Revenue has been sluggish, and it is a fact that we can lament over, but which we are powerless to check. Now, the Chancellor of the Exchequer made one observation on the expenditure of last year, which I think requires to be noticed and corrected. He said that the estimated expenditure for the year 1881–2 being £86,191,000, and the actual expenditure £85,472,000, the latter fell short of the Estimate by £719,000. That is the sort of statement which sounds extremely well if it is 63 really a comparison of the expenditure of the year with the Estimates the Chancellor of the Exchequer formed at the beginning of the year; but that is not the case in the present instance. The Budget Estimate of expenditure for the year 1881–2 was only £84,805,000; and, therefore, as the actual expenditure of the year was £85,471,000, we find that it exceeds the Budget Estimates by £666,000. The other Estimates, which brought the total for the year to £86,191,000, were Estimates presented later in the year. I was always very severely taken to task, and told that I must not compare the actual expenditure with the Estimates of the whole year, including Supplementary Estimates, but must compare the Budget Estimates, and if we do that we obtain much less satisfactory results than we otherwise should in this case. This is important, because it shows that we are not yet sure how far we are out of the wood in the present year; and that when we are told in the present year that we are to provide for an estimated expenditure of £84,630,000, or, if certain allowances are made, of £85,430,000, it is by no means sure that this will be the total amount, to be provided for—of course, without reference to the extraordinary circumstances that have occurred and rendered necessary an alteration of the Income Tax. I should like to make one remark on the alteration of the principle of bringing in the Miscellaneous Receipts in order to reduce the amount of the Estimate. The hon. Member for Wolverhampton told us just now that we had to provide for an expenditure of between £84,000,000 and £85,000,000. The amount is, in point of fact, now put at £84,630,000, and the result mentioned by the hon. Member is obtained by placing the sum of £809,000, which would have been expenditure under the old system of accounting, as a deduction from the expenditure. Consequently, if we add to the Estimate the amount of the difference in the old way the Estimate would be £85,439,000, or between £85,000,000 and £86,000,000. The new method may be a very convenient way of keeping accounts; but it tends to relax the vigilance of Parliament when you have this system of receipts in aid being brought into the Budget. I should like to know the reason for this change, and whether it presents any counterbalancing advan- 64 tages for what appears to be a decided disadvantage. Of course, there are various points that I noticed for comment at the time when the Budget was before us. But in the circumstances of the year we have gone so far from that time that I should hardly feel justified in troubling the Committee at any length upon them. I wish now to know what is the prospect we have before us with respect to the year as we now find it? We used to hear of the inconvenience of having more than one Financial Statement in the year, and it was said that such things ought never to happen. [Mr. GLADSTONE: Who said that?] If the right hon. Gentleman does not know, I will not attempt to tell him. But I remember expressions, which I do not mean at all to borrow, as to the inconvenience of having more Budget Statements than one in the same year. Well, we have a second Budget brought forward, and I do not for a moment complain of it; but I sometimes think the same measures might have been meted out to us as the Government now receives. We are really anxious to know what the calculations of the Government are with regard to this alteration of the Income Tax; and I hope we shall be told also how far, according to the progress of the year, they are able to estimate their ordinary expenditure, and especially how far it is likely to be kept within the limit fixed in the Budget in April. We feel that the circumstances in which we stand are peculiar, and we shall listen with gratitude to any explanations.
§ MR. MONKsaid, he had refrained from placing any Motion on the Paper, partly in deference to what he believed to be the wish of the Prime Minister, and partly because he did not propose to call in question any of the financial arrangements for the present year; but he was under the necessity of trespassing for a few minutes upon the attention of the House, in order to call attention to a subject intimately connected with the Budget, and which was of the deepest interest to the commercial community. He must remind the House that although there was no question of a reduction of the Wine Duties at present, yet that subject had occupied the attention of the Chancellor of the Exchequer on many occasions; while the recent failure of Treaty 65 negotiations with Spain had brought the subject prominently before the country. At the same time, he had no desire to force the hand of the Prime Minister, or to take any step which might tend to fetter his discretion, when the proper time for action arrived. He wished, therefore, to ask the Chancellor of the Exchequer whether he would take that opportunity of replying to the Memorial placed in his hands about a month ago by himself and other Members of Parliament with respect to our commercial relations with Spain? The result of the failure of the negotiations for a Treaty of Commerce with that country had been to place this country under the General Tariff, which was absolutely prohibitive. Spain for many years had a feeling that this country had not behaved in as liberal a manner towards her as it had towards other countries. When his right hon. Friend was in Office in 1869 there was a Free Trade Ministry in Spain, which made great efforts to introduce Free Trade doctrines. Their object was to reduce all the duties to a maximum of 15 per cent. Unfortunately, that policy was suspended, but it had never been abandoned. Under the Act passed by the Cortes in the present Session steps had been taken to reduce the duties to that maximum. But we were absolutely precluded from the benefit of such a reduction, until we had entered into a Treaty with that country. It was believed in Spain that a very small reduction in our wine duties would cause an enormous increase in the import of Spanish wine into this country, and he thought that was true. There was a very strong conviction among many that our trade with Spain must come to an end unless a Treaty was made with that country. A very favourable Treaty had been negotiated between France and Spain; but it was no longer possible for us to send our products into Spain through any other country, because it was necessary to state whence the products originally came. The latest Returns relating to the export trade of Spain showed that no less than 60 per cent of all the exports from that country came to Great Britain in spite of all difficulties. He hoped his right hon. Friend would give some assurance that negotiations would be opened with Spain as soon as an opportunity arose, because, as he had already said, unless this coun- 66 try had a Treaty with Spain, it must remain under the General Tariff, which was prohibitive, and would not receive any benefit from the law recently passed "for the removal of the Suspension of the Fifth Base," so called in reference to the fifth section of the law of 1869, which contained the fifth basis of the proposed reforms and reductions, the first of which was about to come into force on the 1st of August, 1882, and the last on the 1st of July, 1892.
THE CHANCELLOR OF THE EXCHEQUER (Mr. GLADSTONE)Sir, I am anxious to follow the speech of the hon. Gentleman who has just sat down without any delay, because I confess I have very great doubts as to the effect which a speech of such a kind will produce upon our commercial relations with Spain. As I understand my hon. Friend, he recommends when another country chooses to adopt the most exceptionally unfriendly measures towards the trade of this country that it is to be almost encouraged to persevere in those measures by showing that, in consequence of them, we must make haste to alter our fiscal arrangements, or else the full effect of those unfriendly measures will fail. Before I accede to that doctrine, I must ask myself what would be its effect upon all the countries of the world. It would be to hold out to them a premium for treating us in an unfriendly manner, and saying to them—"You have only to make your tariff sufficiently hostile to British goods, and you can produce any effect you please upon the internal fiscal arrangements of the United Kingdom." My hon. Friend invites me to enter on a question which is to me a most painful one, painful because I believe the trade of England is likely to suffer in that particular from the conduct of Spain; but painful on still higher grounds. It has been my duty in Office and out of Office, for the last 40 years of my life, to watch the proceedings of foreign countries in their commercial relations to this country, and I have never known any proceedings approaching the character of those recently taken by Spain. I am very loth to censure them. Spain has a perfect right to do what she pleases; but I hope speeches will not be made in this House which will appear to imply on the part of Gentlemen sitting here, and connected with the trade and commerce 67 of the country, that these things are viewed by us as matters of course—as matters of which we have no right to complain, and that the only question is how soon we are to meet them by endeavouring to buy them off. I must place upon record my conviction that this is a year marked by proceedings in a foreign country, and that foreign country, Spain, for which I know no precedent in its bearings upon the commercial interests of this country. [Mr. MONK: Hear, hear!] I am glad that my hon. Friend agrees with me in that. It would be quite a mistake, therefore, if anybody supposed from his speech that he would give any encouragement to such proceedings. With respect to the question of the wine duties, and the complaint the Representatives of Spain make against this country, their complaint comes to this—they do not think that our scale of wine duties is sufficiently favourable to Spain. But, at any rate, it is favourable enough for this—that under the operation of that scale the imports of wine from Spain have enormously increased, and for that increase it is proposed to repay us by enacting a tariff against us which my hon. Friend says is likely to extinguish the British export trade to Spain. That is the encouraging state of relations in which we are to show some readiness to alter our wine duties to meet the wishes of that country. I am very sorry, Sir, to say this; but as the question has been introduced I really do not think I could say less in justice to the interests of my country and to the principles which I hope will always inspire its legislation. Having said that I will say also that I entirely adhere to the opinions I expressed in 1880, and that I should be extremely glad when, not for the purpose of compensating a country for its unfriendly proceedings, I should find myself in a position, if I should be Finance Minister, or when my Successor should find himself in a position, to deal further with the wine duties of this country in the way of reduction. I regard that as a question which has serious claims upon the attention of the Government; and if we can get our expenditure a little more within bounds, and our revenue less sluggish, I hope that our wishes may be realized in that important matter. I will now, Sir, come to the statements, as far as I am 68 concerned, of the right hon. Gentleman the Leader of the Opposition, and notice the points raised in them. The right hon. Gentleman opposite asked whether I considered that the ordinary receipts and expenditure of this country would balance themselves in comparison with the Estimates which have been submitted. I should have answered that question with great confidence had it not been for the constant emerging of new and rather important civil expenditure in connection with the state of Ireland. It has been the view of the Government that considerable sacrifice ought to be made for the purpose of facilitating the working of the recent measures, and that the expenditure of £100,000 or £200,000 in the year ought not to be allowed to influence us in such a way as to place serious barriers against the access of the people to the Land Court. One imperative and urgent consideration has been that connected with the state of the country, and with the monstrous amount to which the charge for police in Ireland is now raised—one of the most grievous burdens, taken in all its particulars, that I have ever known imposed upon the people of this country. I estimated at £500,000 the extra civil charge imposed upon the people of this country by the recent condition of Ireland; but that is possibly a low estimate, and the matter is one of those which have disturbed my view of the possible relations of the ultimate ordinary Expenditure of the year to the Estimate submitted at the time of the Budget. With respect to the general balance of the year, as the right hon. Gentleman has very fairly admitted, we have passed into a state of things that is exceptional. The right hon. Gentleman appears to think that I have in former times indulged in the practice of objecting, irrespectively of circumstances, to a re-adjustment of the amount presented at the ordinary period of the Financial Statement of the year. If I have done so—which I do not believe has been the case—I have done what is extremely wrong. When circumstances of war arise, or other very great circumstances of disturbance not due to the arbitrary action of the Executive, it is most absurd to suppose that the accounts submitted to Parliament at one period of the year are to be considered as binding the Government and binding 69 Parliament for the whole year. What I do object to is that the statements made to Parliament at the period of the Financial Statement should be wantonly or unnecessarily disturbed, and if I have ever tat en an objection it has been when I thought they were thus wantonly or unnecessarily disturbed. But what I wish to do is this—to impress deeply upon the minds of those who listen to me that the entire efficiency of Parliamentary control depends upon a steady maintenance of the principle that once a-year our accounts are to be adjusted. If accounts are to be adjusted at irregular times and with uncertain balances, Parliamentary control will be at an end. This is one of the great misfortunes of a series of war expenditure. A new set of considerations is introduced into the financial position of the year, and the year becomes an exceptional year. What is to be feared is that these exceptional years should by degrees become the general rule, and I wish to record my conviction that the House ought to be carefully upon its guard against any tendency in that direction. With respect to the actual balance of the coming year, I believe I have already stated as much as I can now state at the time when I made my Financial Statement. We arrived at a Budget Surplus of£305,000, to which I now have to add £2,262,000 for the Income Tax, making £2,567,000 in all. Of course, that is not a normal expenditure, nor can I prepare a normal account in the present uncertainty of the matters before us; but I should not have thought I was justified, when asking the House to make so large a provision towards the military charge in Egypt, in asking it likewise to disturb the trade with carriages in this country for the purpose of obtaining £250,000 that the new rate would probably have been found to yield. I have taken, of course, this into view, that the provision we are now about to make of £2,262,000 from Income Tax is not the entire provision which our measure will bring into the Exchequer; but that there will be a further sum of £565,000, taken, I think, at a very moderate estimate, which will, in virtue of the present law, come into the Exchequer, although not until after the 31st day of March. I think, with regard to war charges of this kind, the reasonable proposal is that we should 70 provide for them as far as we can, and invite Parliament to make a large immediate effort for the purpose. There is nothing more dangerous than to bring forward heavy war charges and asking the House to postpone providing for them. I do not say everything should be provided at the moment, and we shall be fortunate if this provision covers all that the operations in Egypt may involve; but, at all events, we ask you to make a large and immediate effort to cover, so far as we are able to judge, the expense that we are about to incur. The right hon. Gentleman asks for an explanation of the change in the method of account for receipts in aid. He has pointed out an objection to the change which I am not inclined to question. On the other hand, I think he is familiar with the argument for the change. The argument for the change is a practical argument connected with the actual amount of expenditure. The argument against the change is in one sense a practical argument, as it relates to the supervision of finance by this House; but in another sense it is rather a speculative argument. The practical argument for the change is merely this—that the exertions made for economy in public Departments are greater when the Department itself is allowed to take credit for its economies than when those economies are carried to another head of account. It is for the House to judge whether that is a sufficient argument. I am inclined to think that it is so, and the Committee on Public Accounts have also inclined to approve the change which has been made. I now come to the controversial portion of this subject, which the right hon. Gentleman has treated in a spirit as little polemical as possible. The right hon. Gentleman has done two things, with regard to one of which I am inclined to accede to the claim which he makes, while, with regard to the other, I am inclined most resolutely to dispute it. The right hon. Gentleman distinguishes between the extraordinary charges entailed by our policy and the ordinary expenditure of the country; and he proceeds to complain that their opponents nave not always observed this distinction, and have complained that throughout the Departments a lax administration prevailed. I must say that if that has been the case, the opponents of the late Government have been far from being 71 justified in making that charge. I have myself, when in Opposition, tried to do credit to particular Departments and persons for their endeavours, and particularly to the right hon. Gentleman the late First Lord of the Admiralty, for his endeavours to carry economy in detail into the ordinary public administration; and this is a matter of great consequence, because, unquestionably, much of what is to be realized in the way of public economy depends upon attention in detail to secondary and minor charges as well as to greater questions. I believe the right hon. Gentleman is perfectly justified in referring to the Post Office as a Department in which great care was taken by the late Government in economical administration. He has pointed out a great diminution in the present quarter in the estimated net increase from telegraphs; but he is, no doubt, aware that it is mainly owing to the excessive, the quite irresistible pressure of the persons employed in that Department for an improvement in the emolument that they receive. However, no accusation is actually made, and it is not necessary for me to defend what has been done further than to say that I regard the financial administration of the Post Office under the late Government as an example which the present Government ought to be very glad to follow; and I am not aware, as far as I am concerned myself, of ever having adduced a charge of universal laxity or extravagance against the late Government. If we come to compare these things it is a comparison of detail, in which probably no satisfying result can be attained except it be made very searching and complete. There are some things in connection with which we might, perhaps, compare favourably with the acts and intentions of our Predecessors. For example, I think we have wisely and judiciously adopted plans which will result in a large saving in connection with the Mint. In regard to the matter referred to by the hon. Member for Chelsea (Mr. Firth), whom I do not now see in his place, we have been able to effect a saving to the public of from £250,000 to £500,000. But I do not wish to stand on this or on that point in these matters, which do not contain any just result, except by the most searching examination, which it is not possible now to make. I agree with the 72 right hon. Gentleman that it would be very unfair to say that in all branches of the public expenditure a system of laxity pervaded the actions of the late Government. Therefore, I admit there is a distinction to begin with between the ordinary and extraordinary expenditure of the late Government. When we come to the latter expenditure, then I am sorry that I am obliged to join issue with the right hon. Gentleman, who seems to think that because that expenditure was connected with policy he is in no way specially responsible for it. [Sir STAFFORD NORTHCOTE: I never said so.] No; perhaps not; but that was the amount of his claim. I am ready to make this admission—that the late Parliament were ready to spend more than the Government required. Whatever they asked for was granted, and they might have had double if they had liked. The right hon. Gentleman, by his gesture, implies that we are in the same position. I will show him that he is in the wrong. There are on record in every Session most important cases in which in this House, we, although enjoying the confidence of the large majority, yet have been beaten in this House on questions of great importance and difficulty; one case occurred even in the last three weeks. Is there any parallel for that in the late Parliament? No, Sir; not from the beginning to the end was there a single instance where that faithful majority rebelled or refused to obey those instruments of government by which they were kept in such admirable order and discipline. Therefore, I entirely dispute and repudiate the parallel which, the right hon. Gentleman by his gesture suggests. But the country took the matter into its own hands, and pronounced its opinion; and now, while I quite admitted, and always urged in those Mid Lothian speeches, which are so frequently the subject of reference in this House by hon. Gentlemen who never read them—who are far too wise to read them—I said that the responsibility which rested in the first instance on the Government has been taken by Parliament. It is right that the majority, and the Members of that majority, collectively and individually, should look into these questions. But, then, the claim of the right hon. Gentleman which surprises me is this—that it was Lord Beaconsfield, in this House, in one of his many 73 sententious declarations—a class of declarations for which he had an innate faculty—who laid it down that expenditure depends on policy. In the main, I believe that is true. We have no longer men of the calibre and policy of Joseph Hume who go through their work without reward and probably without gratitude as he did. But in the main, no doubt, it is policy which governs expenditure. But the right hon. Gentleman makes this extraordinary claim. He says—"I quite agree that in the estimate of expenditure of the present year you may be justified in deducting that portion of the year which is due to the acts of a former Administration"—such, for example, as the £1,200,000 or £1,300,000 which we have to pay on account of the £6,000,000 Vote of Credit. So far, all is well. But what does he append to that? He says he is also justified in deducting them from his total of expenditure for his own years. I really can hardly express the astonishment with which I view that proposition. He has injured our years and laid on them a very heavy burden, and yet he says that he is entitled to deduct the amount from his own years. It is like this. Supposing that I am a gross and irreclaimable spendthrift and I get heavily indebted to a tradesman. The tradesman says he has suffered a heavy loss from my having had dealings with him. According to the comparison of the right hon. Gentleman, I should have a perfectly good answer to the tradesman if I were to say—"My dear Sir, it is quite true that you have been heavily injured by me, but I have injured myself just as much. Therefore, we are entitled to set off the one against the other." A more portentous or extraordinary claim was never advanced by the right hon. Gentleman. Sir, with regard to the finance of the country, I am very far from being satisfied with the economy with which expenditure is being conducted. I am very far from presenting myself in this place to claim any credit from Parliament for what I have been able to do in this respect. I think, for one thing, I am bound to say it requires a younger man than I am, and one with greater force, to withstand the pressure that comes in from every side, in order to face the task of such a difficulty. But I have the greatest doubts whether any Executive Government will be able to 74 produce the changes which I think ought to be proposed in the public expenditure. There was one thing which was referred to by my hon. Friend the Member for Wolverhampton (Mr. H. H. Fowler). He spoke of the Departments as being the cause of serious extravagance in expenditure. But it is not the Civil or Permanent Departments which are open to that charge. I myself must bear my testimony to this. As a general rule, they have laboured manfully, honestly, and perseveringly to maintain economy in the Services which they govern. I would remind the hon. Gentleman that hardly a week passes without Questions being put in this House directly tending to weaken their hands and to increase public charges in every branch of the Public Service. And if it were possible for this House to adopt a Rule which forbade Questions of that kind, as regards the emoluments of public officers, I do not hesitate to say that it would have a most beneficial effect in point of economy in the future administration of the country. I do not wish to introduce polemical matters into this debate. I have made the admission that expenditure is, to a certain extent, dependent on policy, and that I am not satisfied with the Liberal finance of the country. As to our relative finance, I think we show pretty well. I am bound to say it was a happy time for the country when there was no polemical relation between Parties in relation to public economy. For the first 20 years of my life that was so. But those days have gone by. In those days the Tory Party was undoubtedly the more strict of the two in relation to sound financial economy. As regards the question of maintaining a due relation between public income and charge, the Conservative Government of Sir Robert Peel undoubtedly excelled the Liberal Government of Lord Melbourne. In regard to that item of sound financial administration—namely, the keeping down of the public charge, the two Parties vied with each other in that most zealous and honourable service to the country. As regards these questions, I do not know whether I ought to enter upon them; probably it is better not to do so. I am prepared to contend that a just balance has been maintained between public charge and expenditure by the Liberal Party of late years, and that they have come nearer the true standard 75 than the Conservative Party. I refrain from details in this matter. I have endeavoured to make the right hon. Gentleman see clearly my position in regard to his argument. For my part, I am very glad, even in the present pressure of Business, that these challenges should be passing backward and forward between the two sides of the House, for they keep alive the public mind on that subject, which otherwise would be likely to fall away from it. I hope that we may more zealously vie with one another in endeavouring to keep down public charges. There were Conservative Governments, those of 1852 and 1858, for instance, which showed no disposition whatever to augment the public charge by a great extension of establishments, or by a policy which tended only to lay heavy burdens on the country. In 1866 the change first became evident. Since that time those who carefully examine the figures of the case will find that though there has been a steady tendency to increase in the Expenditure of the country, yet that tendency on the average of years has been comparatively slight when Liberal Governments have been in Office, and has been multiplied many-fold when Governments have been in Office from the Party opposite. Again, with respect to the action as to the public Debt, which I, for one, hold to be a vital part of sound financial policy, I will not say that that action has been what it ought to have been under any Administration. Yet it has been less unsatisfactory when Liberal Governments have been in Office. When I say this it is not for the sake of getting credit, because I admit that I do not claim credit for the present state of the finances of the country. But I do wish to inspire hon. Gentlemen opposite—I hope they do not think it impertinent—with a sense of the great importance of a return to the old state of their Party with regard to economy in the Public Service, and I am sure in making that recommendation I am consulting their own interests—though I am not doing it on that account—butit will greatly tend to their own interests as a Party, and to the welfare of the whole community, if they will emulate the Conservatives of 30 or 40 years ago, both in their care for minute economy—in which I fully admit they retain their desire to serve the public—and likewise in their disposition to 76 shun those ambitious and needless acts of public policy by which they have recently added so much to the burdens of the country.
§ MR. SCLATER-BOOTHsaid, that that was the first occasion on which the right hon. Gentleman had made anything like an appeal to the House on the subject of economy, or proposed to proceed in the direction which they had a right to expect him to follow. The right hon. Gentleman had treated the Conservative Party with great injustice on the charge of extravagance. The Conservative Party were quite as anxious for economy as those who sat on the opposite side of the House. He rose to ask for some explanation as to the sums of £250,000 and £150,000 which were to be received from Natal and the Cape respectively. The latter amount was to be received, by monthly instalments of£50,000 each in June, July, and August of this year. He wished to know whether those payments were being or would be made? With respect to Natal, he believed the original claim was for about £1,000,000; but it had been "whittled" away to £250,000, which the Natal Government had managed by means of a loan to discharge. He had been greatly alarmed by the excessive expenditure of the present Government. The policy of despatching troops from India was in flagrant contradiction of the former conduct of the Ministry. He could only suppose that the charge imposed on this country on account of the expenses of the Afghan War was intended by way of punishment to the country for having sanctioned that war. He would add a word with respect to the new system of accounts under the head of Extra Receipts, which the present Government had introduced, and which almost amounted to a system of cooking the accounts. The Chancellor of the Exchequer had admitted that he had failed properly to control the expenditure of the Admiralty and the War Office; and the new system was introduced, he supposed, to effect an apparent economy. It might be good banking, but, as it struck him, from a Treasury point of view, it was very bad finance.
§ SIR HENRY HOLLANDsaid, he ventured, as a Member of the Public Accounts Committee, to trouble the House with a very few remarks upon 77 the question, referred to by previous speakers, of the expenditure by the Naval and Military Departments of sums formerly paid into the Exchequer as Extra Receipts. He was afraid that neither the right hon. Gentleman the Member for North Devon (Sir Stafford Northcote) nor the right hon. Gentleman the Member for North Hants (Mr. Sclater-Booth) had read the Third Report of the Public Accounts' Committee of 1881, which approved of a scheme prepared by the Treasury for giving effect to this change. In truth, this important subject had been for a long time under the consideration of the Treasury and of the Departments, and had been brought under the notice of Public Accounts Committees for several years. Those Committees had constantly pressed the Treasury to frame and introduce some scheme of reform in a system which was admittedly imperfect. Last year a scheme was brought before the Public Accounts Committee, which had received the general approval of the present Secretary of State for War (Mr. Childers), and of the late First Lord of the Admiralty (Mr. W. H. Smith), and of other persons most competent to form an opinion upon the vexed question. The Committee took further evidence, including that of the Comptroller and Auditor General, who was, as the House would remember, the officer appointed by the Exchequer and Audit Act to examine, on behalf of Parliament, the accounts of the different Departments. That officer also reported generally in favour of the scheme, with a certain modification, which the Committee adopted, and embodied in their Report. The Committee, after full and careful inquiry, approved of the Treasury plan, which had now been put in force. The right hon. Gentleman who last spoke was, therefore, not justified in treating this change as one made by the present Government for the purpose of diminishing their Estimates, nor, as he seemed to think it, as a cooking of the accounts. The change was made after an exhaustive examination extending over many years. He (Sir Henry Holland) would point out that Parliament would have as full means as before of controlling the accounts and checking any errors. The Appropriation Accounts would afford a comparison between—(1) The gross estimated expenditure with 78 the actual gross expenditure; (2) the estimated receipts with the actual receipts; and (3) the net estimated expenditure with the net actual expenditure. Thus the whole expenditure of the two Departments, and the whole receipts, would be before them. The limitation or modification of the original scheme, to which he (Sir Henry Holland) had before referred as accepted by the Committee, secured that, should there be an excess of receipts beyond the aggregate amount estimated, such excess should be paid into the Exchequer. Whether this change of system would work well it was impossible as yet to say; but in a few years this point would be decided, and the scheme could then, if necessary, be given up or modified. But the Public Accounts Committee believed that the change would really effect an improvement; and he (Sir Henry Holland) saw no reason to doubt the correctness of that view.
§ MR. ECROYD,who had given Notice of the following Amendment:—
That Customs Duties ought to lie imposed upon manufactured articles of a luxurious character imported from Foreign Countries, in order to render possible a reduction of the Duties now levied upon tea, coffee, cocoa, and dried fruits, which are articles of necessity for all classes,said, it was not his intention to propose the Resolution; but he would offer a few words to show that the importance of the questions raised by it became greater every day. They were becoming more and more dependent upon the Income Tax for the large sums required to be raised from time to time for extraordinary charges which came upon the country unexpectedly. He was not at all disposed to interfere with the Income Tax as applied to incomes derived from property; but there was a large class enjoying precarious incomes, dependent upon the continuance of their health and strength, who would severely feel the pressure of the extra 3d. in the pound to be charged in the next half-year. A great fine was imposed on the breakfast table of all ranks by the imposition of taxes on such articles as tea and coffee, which were, moreover, to a considerable extent, produced in India. If these taxes were abolished, and taxes imposed instead on such articles of luxury as furs, feathers, and Parisian finery, a great act of justice would be done, not only to the poorer classes of this country, but also to the inhabitants 79 of our great Indian Dependency. Under the extraordinary circumstances which had entirely changed the fiscal aspect of the present year, this question could not be taken up now; but he hoped that it would be raised and effectively dealt with another year.
§ GENERAL SIR GEORGE BALFOURsaid, a more vicious system never existed than the mode in which Extra Receipts had been dealt with. These Extra Receipts were derived from the sale of stores belonging to the Department which had paid for the stores, and almost entirely realized from the sale of stores of the Army and Navy; and, instead of being allowed to the Department where the money accrued, the Civil Departments took possession of the money, and actually credited the sums as if derived from the Civil Services, thus destroying all inducements to the Admiralty and War Office to practise economy in the sale of old stores. He could state several instances where the Treasury had interfered with the War Office in utilizing old stores, by insisting on these sales in order to obtain the funds by which to swell the receipts of the Civil Votes. Under the new arrangements, he hoped strict economy and watchfulness would be observed in dealing with stores; and he thought it would be wise to provide for an audit of the expenditure and receipts in respect of stores. Now that the values of old stores are to be credited to the Army and Naval Services, it would be seen that the Civil Service expenditure had increased far more in proportion than the Naval and Military expenditure. The Treasury had no useful control over the accounts in this Department; and he urged that it was desirable that there should be a check placed on the accounts, and that an improvement in them should be effected.
§ MR. HICKSsaid, one expression of opinion had fallen from the right hon. Gentleman the Chancellor of the Exchequer in which he could not agree, and on which he begged to offer a few remarks. The right hon. Gentleman, in announcing the withdrawal of the increased duty on carriages, claimed credit for the soundness of his policy, and said that, if carried out, it would have realized the estimated sum. The right hon. Gentleman had been spoken of as a great Finance Minister; if so, it was the more 80 surprising that he should have made such an assertion, which was in opposition to the experience of former years. In 1840 the Whigs, being then in Office and short of money, put on an additional 10 per cent on the assessed taxes. At that time the assessed taxes, instead of being paid in the middle of the year, were not paid till about eight months after the expiration of the year during which the articles had been kept, and so the first year there was no escape, and the taxes produced £305,000 increase, or £30,000 more than the Estimate; the second year they only produced about 5 per cent increase, instead of 10 per cent; and the third year only £38,000, or less than the natural increase from growth of population. Now, during this time the right hon. Gentleman was in Office, and must have known this. Then, at the time of the Crimean War, being again in Office, with a different Party, he carried a large increase of the Malt Tax; and the result was that the quantity malted fell from about 6,000,000 quarters to 5,500,000 the first year, and to 5,000,000 in the second, or, at least, 16 percent. How, then, the right hon. Gentleman could make such a statement certainly was a surprise to him. If the additional tax had been tried, he had a strong impression that in two years, instead of producing 50 per cent, it would not produce 1 per cent.
§ MR. RITCHIEsaid, it was satisfactory to have learned from the best possible authority—namely, the Chancellor of the Exchequer—that he did not agree either in the criticism or the charge that the late Conservative Government had been guilty of extravagance in either the normal or abnormal expenditure of the country. He contended that the Leader of the Opposition was justified in making the deductions he did in order to compare the normal expenditure of different years. The expenditure of this year promised to exceed that of 1880 by£3,600,000. Of this, nearly £500,000 was for the Army, and £300,000 for the Navy; but the largest expense was in the Civil Service, which would show an increase of £1,178,000. The Conservatives bad no reason to be ashamed of the ordinary Estimates of 1880 as compared with those of the present Government. He feared that at the end of this year there would be a deficit instead of a surplus.
§ MR. COURTNEYsaid, no doubt there was constant danger in the increase of the Civil Service Estimates; and he hoped the Government would always have the assistance of the hon. Member for the Tower Hamlets (Mr. Ritchie) in keeping them down. As to the suggestion of the hon. Member for Preston (Mr. Ecroyd), that we should revert to the system of raising a large sum by import duties upon luxuries, the true answer to all suggestions of that sort was that they defeated their own end, and you could not raise a large revenue by such imposts. The only argument he had heard for a reversal of the financial policy of the Government was the contention that it was unjust to lay the whole burden of the new charge on the Income Taxpayers. Perhaps some would think there was force in the criticism; but the answer to the objection was that, taking the financial system of the country as a whole, the Income Taxpayers were not more hardly dealt with than the other classes of the community. The right hon. Gentleman (Mr. Sclater-Booth) had asked whether the war contribution of£150,000 promised by the Government of the Cape had yet been received? He had to say, in reply, that the first two instalments of this sum had been paid, and the third was not yet due. They had as yet received no sum from Natal; but the Government there must raise a loan very soon, out of which they should make the repayment in question. There was no intention to give a Government guarantee upon that loan.
§ MR. R. N. FOWLERsaid, he hoped that before his next Budget the Chancellor of the Exchequer would give his attention to the mode in which the foreign wine duties in this country were imposed, as the alcoholic test operated unfairly on our Colonies, particularly the Cape, which was a wine-producing country.
§ SIR BALDWYN LEIGHTONthought that the Government had not made out a very clear case for their intention of charging the Income Taxpayers with the whole of the additional fund to be raised. He was aware of the desirability of defraying the annual expenses from the annual income; but it was possible to push that principle to an extreme and inconvenient length.
§ MR. NEWDEGATEsaid, that what the hon. Gentleman opposite had said 82 of the results of the taxation of luxuries was not consistent with the fact that up to the year 1861 the taxes on articles of luxury brought in an annual sum of £16,000,000.
§ MR. W. H. LEATHAMsaid, he would not detain the House more than two minutes; but he wanted to draw the attention of the House to the way the Expenditure of the country had increased since 1869. He felt much obliged to the hon. Member for Wolverhampton (Mr. H. H. Fowler) for drawing the attention of the House to this subject earlier in the debate. He found that the Expenditure of the country, in round figures, in 1869 was £68,000,000—this increased gradually to £71,000,000 in 1873. Now, in 1874, the Expenditure was £72,000,000,andthisgraduallyincreased to £81,000,000 in 1879. Now, the right hon. Gentleman the Premier made the Expenditure of 1880, £81,000,000, and that of 1882 had risen to £84,000,000; to this they had to add the War Tax. Now, that sum seemed very large to people in the country; but he was very glad to hear that the right hon. Gentleman would take it into his serious consideration. He was aware that it was permanently increasing by certain taxes which were added by the late Government, and taken from local taxation about £2,000,000; and he did not object to those taxes being so added as charges upon the Treasury. And then there was a large increase in the educational grant annually made; but the amount was now so large altogether, that he hoped, before the next Budget was brought in, some mode of reducing it might be devised. It was in the hands of the right hon. Gentleman, and could not be in better hands.
§ MR. BIGGARsaid, that the taxation of luxuries could not be supposed to be absolutely unproductive or wholly wrong in principle. As long as the French imposed an import duty on British manufactures there could be no reason why French produce, such as silk, should be treated by us more generously. He thought the Income Tax was the best mode of raising money for the military proceedings in Egypt; and that Irish spirits were unfairly taxed as compared with beer and wine.
§ Question, "That Mr. Speaker do now leave the Chair," put, and agreed to.
83§ Bill considered in Committee.
§ (In the Committee.)
§ Clause 1 agreed to.
§ Clause 2 (Import duties on tea).
§ MR. MACFARLANEsaid, he wished to raise a question as to the levying of the tea duty, and it appeared to him that the proper place to raise it was upon this clause. He had had a Motion upon the Paper in regard to the matter for some time; but he had had no opportunity of bringing it forward. He, therefore, proposed to discuss it now. Its object was to call upon the Government to take into consideration the propriety of effecting a reduction of the tea duties. He had heard the right hon. Gentleman the Prime Minister state that day that he hoped in a short time some Chancellor of the Exchequer, if not himself (Mr. Gladstone), would find himself in a condition to reduce the import duties upon wine. Now, he (Mr. Macfarlane) trusted that no Chancellor of the Exchequer would think of reducing the duties upon wine until something had been done to diminish the tea duties. On the contrary, he should be glad even to see the wine duties increased for the purpose of supplying any deficiency which might be occasioned in the Revenue by the reduction of the duties upon tea and other articles which entered into more general consumption.
§ It being ten minutes before Seven of the clock, the Chairman left the Chair to report Progress; Committee to sit again this day.