RESOLUTION. (Hansard, 9 April 1883)

§ MR. J. G. HUBBARD
said, he wished to call attention to the method proposed to be adopted by the Chancellor of the Exchequer for the redemption of the Nationl Debt. In the year 1885, when some £6,000,000 sterling of Terminable Annuities would expire, the amount of the Debt would, as closely as he could calculate, amount to £700,000,000. A reasonable rate of reduction would be 1 per cent, or £7,000,000 annually; and that would be about one-third of the interest on the amount of the Debt unredeemed, or the whole expenditure under the head of charge for Debt. By the scheme now proposed by the Chancellor of the Exchequer, it was estimated that in the course of 20 years the Debt would be reduced by £172,000,000 sterling, though he personally could not clearly see how those figures were arrived at. Short Annuities he regarded as a more effective mode of redeeming Debt than long Annuities; and his proposal was that a group of Annuities should be formed of £720,000, to run for periods of from one to ten years, and averaging about five years, the capital value of which would be £35,280,000. His scheme would provide £7,000,000 a-year for the redemption of the Debt; would pay off £140,000,000 in 20 years, and in 100 years redeem the National Debt. The proposals of the Chancellor of the Exchequer would involve, at no distant period, the application of £14,000,000 to the redemption of the Debt, and £15,000,000 to the interest on the remainder, and the country would not endure a state of taxation in which £28,000,000 or £29,000,000 was raised for what was called the charge on the National Debt, and one-half was applicable to redemption, and the residue to the interest and the management charges. He felt bound to state the taxpayer's objections to the proposal of the Govern- 1866 ment, agreeable as the figures no doubt seemed from the right hon. Gentleman's point of view. In the plan of the right hon. Gentleman there was not only the scheme of treating the National Debt by virtue of Terminable Annuities, but another and a different scheme which had been combined with it. Following the idea of the right hon. Gentleman the Member for North Devon (Sir Stafford Northcote), the Chancellor of the Exchequer had fixed at a particular amount the annual charge of the National Debt. That charge, he believed, would not be endured for any length of time. It discharged Debt, certainly; but it withheld from the taxpayer his just satisfaction in the mitigation of his burdens. The two courses proposed were almost incompatible, or, at any rate, were undesirable in combination. If the Terminable Annuities fell short of the £28,000,000, they would be absolutely useless; while if they exceeded that sum the £28,000,000 would in turn be useless. Their financial system could not be based on two distinct principles, and the House should take its choice. The inferior system was that of fixing an annual charge for the Debt while the Debt itself was diminishing, and against that proposal he was anxious to enter a strong protest. With respect to the Terminable Annuities, the House was told that the plan had the assent of the Lord Chancellor; but what had Terminable Annuities to do with the funds in Chancery? According to a State Paper, which he had read with much amusement, the Lord Chancellor had concurred in the arrangement by which £60,000,000 was to be handed over for use as the Chancellor of the Exchequer might think fit, and had expressed his satisfaction at the consummation of the transaction. To this plan, as to the proposal to fix the annual charge for the Debt at £28,000,000, he strenuously objected, and he moved— That it is inexpedient that the accounts of the Court of Chancery should be complicated through the employment of its funds in the operations of the Finance Minister upon the Public Debt, or that its fixed investments should be converted into Terminable Annuities wholly alien to the objects, the convenience, or the advantage of the Funds in Chancery.

§ MR. GREGORY
, in seconding the Amendment, said, that the Chancellor of the Exchequer, by taking, as he proposed to do, £40,000,000 out of the 1867 Chancery Fund, changed the position of the suitors. The right how. Gentleman carried the matter to the enormous extent of two-thirds of the funds to which the suitors wore entitled, and dealt with the interests of persons who had no opportunity of expressing their objection, nor could be consulted on the matter. He did not think that the right hon. Gentleman was making sufficient provision for the security of the suitors. While sympathizing with the desire to reduce the National Debt by all legitimate means, he held that it was inexpedient to try to do so by the proposed method. On that subject he had a very strong feeling.

§ SIR GABRIEL GOLDNEY
said, he was sorry to differ very materially from his hon. Friend (Mr. Gregory), who had entirely forgotten that the funds belonging to the Chancery suitors were already invested in the funds of the country. If the National Debt was considerably reduced by the operations so ably explained by the Chancellor of the Exchequer, the Suitors' Fund must become, from time to time, of greater value just in proportion as the Debt diminished. As the wealth of the country increased litigation would increase, that would bring more money into the possession of the Court, and there was no likelihood whatever that the £40,000,000 would be called for. If the Chancellor of the Exchequer dealt not with Consols, but with the Two and a-half Stock, now at 88, there would be a gain to the State of £2,500,000. He expressed his hearty concurrence with the proposals of the Chancellor of the Exchequer, and hoped the House would not fail to endorse them.

§ SIR STAFFORD NORTHCOTE
remarked, that the well-known ability of 1868 his right hon. Friend (Mr. Hubbard), and the interest he took in the question, entitled what he said to careful consideration. He did not think it convenient at the moment to enter into the subject; but he hoped his right hon. Friend would not doom it necessary to divide the House. He wished to know in what form and at what time they were likely to have the Chancellor of the Exchequer's proposal with regard to the National Debt, so that the House might consider seriously the proposals he had made? He also desired to ask in what respect the scheme differed from the proposals made by the First Lord of the Treasury a year or two ago?

§ MR. W. H. LEATHAM
said, he would only intervene for a moment between the House and the reply of the right hon. Gentleman. He congratulated the right hon. Gentleman the Chancellor of the Exchequer on his masterly Budget. In can-dour he (Mr. Leatham) ought, however, to take some exception to the gigantic proportions of his scheme for the reduction of the National Debt, ultimately, by £172,000,000 by means of Terminable Annuities. He did not object to the scheme on the grounds named by the right hon. Gentleman the Mover of the Amendment—for he thought the suitors in the Court of Chancery must take their chance—but on account of the great size of the measure Considering the large amount of their present Expenditure, it seemed to him that an annual charge of £3,370,000 was a great addition to it, and a smaller scheme of reduction of the Debt would be more suitable. That he respectfully suggested for the further consideration of the Chancellor of the Exchequer and of the House.

§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)
said, the proposals of the Government with regard to the National Debt would not be included in the Customs and Inland Revenue Bill, but would be embodied in a separate Bill, which, at the present moment, was being prepared. It could not be done in a few days, but they had not the least wish for delay; on the contrary, they would proceed as rapidly as possible. Then, as to the difference between his proposal and that of the Prime Minister, he must say that his plan differed in this respect. The proposal of the Prime Minister two years ago was to set up an Annuity for 25 years; the present plan 1869 with regard to the Chancery Funds was to set up two Annuities for 20 years; and with regard to the Savings Bank funds, to set up Annuities for five, 10, and 15 years, so that as soon as we ran out a fresh one would be constituted. According to his proposals, the charge would be kept at its present rate. He did not think it would be well to disturb the fixed charge of £28,000,000 a-year, which was established by the late First Lord of the Treasury. He was bound to say that, while differing slightly as to the mechanism establishing that charge, he had always agreed with the principle. He thought that the charge of £28,000,000, which was established by the right hon. Gentleman the Member for North Devon, was a fair and reasonable amount, and he did not wish to see it diminished at present. If the new plan was allowed to work, at the end of 20 years the then Chancellor of the Exchequer would be able to deal with £3,374,000 a-year; and if he found that he could give any advantage out of that sum to the taxpayer, it would be in his power to do so. His proposal was a mean between two extreme proposals, and was consistent with the objection which he took a few years ago to that being made a hard-and-fast rule for more than a certain term. With reference to the objections that had been raised to employing the Chancery Funds, every possible security was given under the arrangement. The question was carefully considered by the Chancellor of the Exchequer some time ago, and every imaginable difficulty reviewed; and he did not think it possible to add to the satisfactory character of the security which would be given under the Act. He hoped the right hon. Gentleman would withdraw his Amendment.