§ COMMITTEE. [Progress, 20th July.]
§ [FORTY-THIRD NIGHT.]
§ Bill considered in Committee.
§ (In the Committee.)
MR. J. MORLEY
I beg to move the Motion which stands in my name: that the Postponed Clauses 14, 15, and 16 be further postponed till after the new clauses. I think it would be more convenient that the general discussion should take place on the new clauses.
§ Motion made, and Question proposed, "That the Postponed Clauses be further postponed until after the New Clauses."—(Mr. J. Morley.)
§ Question put, and agreed to.
MR. GIBSON BOWLES
I now rise to a point of Order. The Rule 243 deals with postponed clauses. All I will ask is, is it in Order for the Committee to act counter to a Rule made for its guidance? This Rule has been invariably acted upon.
§ New Clause (Financial arrangements as between United Kingdom and Ireland,)—(Mr. W. E. Gladstone,)—brought up, and read the first time.
§ Motion made, and Question proposed, "That, the Clause be read a second time."
§ MR. J. CHAMBERLAIN () Birmingham, W.
It will be in the recollection of the Committee that at an earlier period of our Debates I asked the Prime Minister to be good enough to say when, in his opinion, it would be convenient to take a Second Reading discussion on the new financial proposals of the Government; and now, in accordance with a suggestion made by the right hon. Gentleman, I propose to review as far as I can, not with reference to any particular detail, but as a whole, the new scheme of the Government. I think the Committee will agree with me that I have undertaken a very arduous task in proposing to deal with a vast mass of figures, for nothing is more difficult than to present them in sufficient detail to carry conviction, and at the same time with sufficient clearness and simplicity to leave an intelligent impression on the audience. It is one thing to study figures on paper and quite another to appreciate them when they are presented vivâ voca. I must say that my task, arduous under any circumstances, is rendered more difficult by two circumstances. The first is that we are called upon, by way of illustration at all events, to deal not with one, but with three schemes, which have at different times been placed before the Committee; and in considering these three schemes and the figures included in them, we have to regard a largo number of Returns as to which I am bound to say that not a single one, as far as I know, agrees with any other. The Returns apply to different times, have been taken under different conditions, and apply to different sets of circumstances, and it is, therefore, most difficult to extract from them anything like a consistent result. The second difficulty is made for me by the way in which the Government presented their various schemes; and, although I should be very sorry to impute any intention in the matter, I am compelled to say that if the object had been to conceal the facts they could not have taken a better course than 214 they have done. By way of illustration, take the first plan introduced in the Bill of 1886. A definite principle was laid down which had guided the Government and was to guide the House in dealing with the matter of the proper contribution from Ireland. The principle was that Ireland should pay according to her taxable capacity—that is, according to her wealth, and this, tested by the property assessed to Death Duties, worked out at 1–14th of the total contribution of the United Kingdom. If the Prime Minister had stopped there, we should have had a perfectly intelligible principle to go upon, and we should all have been able easily to work out the results. But he went on, and without rhyme or reason he proposed to make a gratuitous gift to Ireland of a sum which he estimated then at £1,400,000, but which has since turned out to be £1,750,000, being the difference on the balance of duties collected in one country but paid upon goods consumed in the other; and by introducing this new feature, which is not in the slightest degree connected with the general principle of payment according to taxable capacity, the net result was that Ireland would still pay not the 1–15th as he might have been supposed to have suggested was really paid, but only 1–25th. In the plan of February, 1893, a totally new principle was presented, and we were told that the method to be adopted by the Government was the appropriation of a particular tax which most conveniently represented 1–26th part of the Imperial contribution. There, again, if the right hon. Gentleman had stopped there, everybody would have seen at once what Ireland was going to pay and been able to compare it with any notion he might have formed as to what she ought to pay. But, after stating that this tax was to be appropriated to the purpose, he proceeded to make Ireland a present of £500,000 towards the expense of the Constabulary Force; and the result was that, while in his speech reference was made to a quota of 1–26th, the real quota became 1–30th. Now let us go to the scheme at present before the Committee. The two principles previously laid down have been abandoned, and the principle now laid down has no reference whatever to the other two principles. The principle now is that Ireland should pay the same as 215 she does at present. Here again, mark, there is no connection between the method and the principle, but the method is a purely arbitrary method. We are to take one-third of the Irish Revenue, because at the present moment one-third of the Irish Revenue is said by the Government to represent what is the present payment of Ireland. Of course, what it represents now is no criterion of what it may represent six mouths after the Bill, if it passes, comes into force. But the method is to take one-third of the Irish Revenue, and we are told it works out at a quota of 1–27th or 1–28th of the Imperial contribution. Again I say, when we are dealing with these quotas, we are dealing with simple things which anyone can appreciate; and if the Government would stick to a quota, we should have no difficulty whatever in understanding the character of their proposals. But after they have told us that Ireland is to pay what she has to pay now, that she is to pay one-third of her general Revenue, which is also an arbitrary proportion, involving a distinction between general and special Revenue never made before, then the Government stultify their own proposals by deducting from that, in the first place, one-third of the cost of the Constabulary and the collection of the Irish Revenue, and the result of that is that a quota which was to be 1–27th or 1–28th becomes actually 1–40th. So we have this curious result as a summary of these three plans of the Government: Whereas any ordinary observer would suppose the first scheme was to have charged Ireland with a quota of 1–15th, it would really have taken 1–25th; whereas the second scheme recommended was to give 1–26th, it gave only 1–30th; and the third scheme recommended 1–28th and gave only 1–40th. A more confusing succession of statements was never presented. But, whilst the facts and method are different in each case, there is one thing that is constant, and that is that somehow the Irish Legislature is to have a surplus of about£500,000. In the first case it is £400,000; in the second £500,000; in the third £512,000. The similarity of all these results suggests that in all the schemes the one commanding object of the Government was to provide a surplus of £500,000 for the now Irish Legislature. If a similar beneficent 216 arrangement could be made for British finance we should have a surplus of £7,000,000 a year. Why on earth, in making this arrangement to give Ireland practical independence, should we provide her with a surplus? What have we to do with her surplus Why should we give Ireland these advantages to our own risk and disadvantage, and at the same time provide her with pocket-money? What precedent is there for such a course? When the United States won their independence did the British taxpayer provide the Federal Government with a surplus? [Laughter.] No-doubt it appears humorous to Irish Members opposite that Englishmen should object to giving money in this way to Irishmen. When the independence of Greece was acknowledged the Sultan was not compelled by the Powers to set Greece up in business. She was left to make the best of her own resources, and hitherto has not done it very successfully. The retrocession of the Transvaal is a very strong case. We had deprived it of its independence under a, misapprehension, and it was said we had governed the Boers against their will and contrary to justice. But we had them in our power, and it would have been only in accord with what we believed to be the honour of this country that we should have given them an indemnity for our malpractices. Did we start them with a surplus? I cannot, understand what difference can be established between the case of Ireland and that of the Transvaal. Ireland has not suffered at the hands of this country such injury as the Transvaal had. ["Oh, oh!"] Certainly not; in the case of the Transvaal the grievance was greater and it was fresher. On both these grounds the case of the Transvaal was infinitely stronger. In all these cases the countries have been satisfied to gain their independence, and they have been left to find a surplus for themselves by economies and wise administration. It seems to me to be a distinctive feature of Irish patriotism that it is a plant of such sickly growth that it requires to be watered by British gold. The objections to the plan of the Government divide themselves into two classes: first, objections to the method, which are independent of the results; and, secondly, objections to the proportion Ireland will be called upon to pay, 217 whether it he too little, as we say, or too much, as hon. Members opposite will say. Dealing with objections to the method, I will point out that every figure laid before the Committee is confessedly an estimate. No one will he bold enough to guarantee that that estimate is accurate. It is as nearly accurate as the officials can go. We have good reason to know that their knowledge of this matter does not go very far. It is an estimate that varies from day to day, so that what may be true to-day may he untrue to-morrow, and changing circumstances may affect the quota which under this plan the Irish Government will he called upon to pay. There is not the slightest reason to expect that the plan of the Government will continue to give the same quota during the six years of the transitional period. The Committee will recollect that a mistake has been made in regard to Customs and Excise of £350,000—a mistake which would not have been corrected if the Closure had come into operation a little earlier, which would have vitiated the scheme of the Government, and would have left the Irish Legislature with a surplus much less than it is supposed they will have now. Can the Government assert with anything like positive assurance that their present figures are correct, and that they will be accurate to-morrow? They have based their balance-sheet upon the Estimates of a single year. Would not any Chancellor of the Exchequer, in making an arrangement which was to last for many years, take an average of the Returns of Revenue and Expenditure for several years? In the present year Irish Customs are returned at £21,000 less than last year, Excise at £58,000 less, and Stamps at £48,000 less. These three items show a diminution in the course of a single year of £127,000. May there not be similar fluctuations in the future? At this moment there is a great depression of trade; already the Returns of I he Revenue are exceedingly unsatisfactory, and, although I agree with the Chancellor of the Exchequer that it would be wrong to base any final calculation on the Returns of the first quarter, at all events there is a suggestion of a probability that British Revenue and Irish Revenue will be very con- 218 siderably reduced next year. If this plan were adopted your quota, is altered, your surplus is altered, and every condition to which you attach importance is frail, and would he shaken by any change likely to occur. Take another point. Let us consider what the effect would be in Ireland of the establishing of this new Government. Remember that the Prime Minister has told us that those who are hostile to the new form of government are mainly the wealthy people in Ireland; and if the wealthy classes are strenuously hostile, do you not think that that would have some effect on your Revenue Returns—that there might be transfers of business? Are hon. Members quite certain that there would be no such transfers? I am not certain. My own conviction is that there would be such transfers—transfers of business and of account, which would materially affect the amount of Irish Revenue. I am not standing up to defend any Irish position; I am speaking entirely as an Englishman on behalf of the English taxpayer. My only concern is the result on the Irish contribution to the Exchequer. Any reduction of the Revenue will be felt by a reduction of (he Irish contribution. Take another point. Is it perfectly certain that the Revenue of Ireland would be as well collected under a local as under the Imperial Government? Are you perfectly certain that the Irish Executive could collect you Customs as you collect them now? When you substitute a local police for the Constabulary, do you think they will be as keen in dealing with illicit distillation? I believe there is very little illicit distillation now, and that the Revenue is fairly collected. Would it be possible, if on every hill-side there was a still, for the local police to collect the Revenue? One of two things must happen—You will have to create a new force of gangers or supervisors to protect the Revenue, or else the Revenue will fall, and the British Exchequer will lose as the Trish Revenue is reduced. Take the Imperial Expenditure. Can von say it will not increase? It has increased continually in the last 30 years. Are you certain it will not continue to increase? In that case what arrangement have you made for the proper Irish quota? I am not content that the 219 British taxpayer should lose because the Irish people forswear whisky. Perhaps, in that event, the English people would have to drink more beer. The calculation put before us by the Government shows that in connection with Ireland there is a loss of £50,000 on the Post Office. I asked for a Return, but it is not of much value, for those who made it said they had no basis to go upon; that there were no records kept which would enable them to distinguish between Irish and Imperial matters. As it seems to me, the calculation is altogether in favour of Ireland, and I believe when properly worked out the amount would be a great deal more than £50,000. I do not attach great importance to this point, because the quota will go on the same. Then there is the cost of collection. I moved for a Return, and I rind that the cost of collecting the Inland Revenue is £162,000, and Customs £65,000. I do not understand whether this includes the cost of collecting the Income Tax and Stamps. [Mr. W. E. GLADSTONE assented.] At all events, no account is taken of the cost of stationery, which is a very considerable item, nor for the expenses of the head office, nor for repairs and maintenance of buildings; therefore I say it is quite unreliable, and the figures totally untrustworthy, as a basis for anything like continuous calculation. The Irish Revenue is necessarily uncertain, and the Imperial Expenditure is uncertain; but there is this difference: that while the one is likely to decline the other is likely to increase. I have said you cannot get a stable basis out of two factors, each of which continually fluctuates. The second point is the objection to the effect on Imperial finance. It will alter our Imperial Budget—our Imperial system of taxation. The product of Irish Excise is about 1–10th of the total for the United Kingdom, Customs one-eighth of the total, Income Tax and Death Duties 1–24th of the total. For every £100 reduction in Imperial taxation this will be the result:—On Excise Irish Revenue will lose £10; Imperial contribution will lose £3 and a third. On Customs Irish Revenue will lose £12 10s., and the Imperial contribution will lose £1; and on Income Tax and Death Duties the Irish Revenue will lose £4, and the Imperial 220 contribution will lose £1 and one-third. Let us assume that the British Chancellor of the Exchequer wanted to reduce the Tea Duties and substitute direct taxation for it. If they were abolished, the total Revenue of the United Kingdom would lose £3,400,000. The Irish loss would be one-eighth—£425,000, and our loss would be £142,000 in the contribution to the Imperial Exchequer. If the loss were replaced by additional Income Tax, Ireland would pay 1–24th—£142,000. Her Imperial contribution on this would be £47,000, and we should lose and Ireland would gain nearly £100,000 a year by the transaction. We could not change our taxation in the least without affecting Ireland's quota. So that instead of the Chancellor of the Exchequer being able to deal with questions as to taxation on their merits, and as to their immediate effects in regard to Great Britain, he would also have to take into account the question how it would affect Ireland's contribution. Then there is a delegation of 80 Irish Members, and naturally they would take quite a different view. Their object would be to insist that any reduction in taxation should be made on the Excise, and not upon direct taxation. Our interests would be to make the reduction on direct, and not upon indirect, taxation. The result of this would be that no doubt the delegation from Ireland would be instructed to vote against proposals of the Chancellor of the Exchequer. We should then be under this continual pressure, and we should lose control over it. I would consider, in the third place, the effect of this scheme on Irish finance. It would be wholly at the mercy of the Chancellor of the Exchequer. The whole system will be periodically changed in accordance with British finance. That follows, as a matter of course. Take the instance that I have already supposed. Take the abolition of the Tea Duty. What would be the effect of that? It would reduce the Revenue of Ireland by £420,000. Away would go their surplus? Consider what would be the position of the Irish Chancellor of the Exchequer under these conditions. I will suppose he is a patriotic statesman, and that, having this largo surplus, he determines he would not fritter it away in the payment of Members or the creation of fat 221 offices, but would spend it for the real benefit of the country, in, for instance, establishing a great scheme of main drainage or works of communication to last over a considerable period, and he feels he can do it without imposing fresh taxation on any people because he has a surplus. Then comes the surplus to the British Exchequer. The British Chancellor of the Exchequer reduces taxation, and by so doing sweeps away the Irish surplus and leaves the Irish Chancellor of the Exchequer to find in the best way be can from the only taxes open to him—which are all in the nature of direct taxation on property—the sum he wants for his patriotic undertakings. I do not know how a system of that kind is likely to work; but it appears to me the Irish Exchequer and the Irish Government will, under this system, he perpetually waiting upon the British Exchequer and the British Government, and if that, by any alternative plan, could be avoided it would clearly simplify the relations between the two countries. Look at it from another point of view. I have spoken of a reduction of taxation, but suppose that the Imperial Chancellor of the Exchequer had to levy new taxes on account of increases in the Imperial Expenditure or even of British Expenditure. As I have already pointed out if he levies this taxation by way of Excise, Ireland's increase of Revenue will be at the rate of 1–10th, if by Customs one-eighth. The effect of the action of the Chancellor of the Exchequer depends entirely upon which tax he selects for the purpose. Is it not probable, is it not certain, is it not necessary under these circumstances that the Irish Members will have a good deal to say as to your British finance? Can they allow their own finance to be disorganised and upset purely at the will and for the convenience of the British Chancellor of the Exchequer? What would happen would be this: It would be almost impossible, in my opinion, for the British Chancellor of the Exchequer so to arrange his taxation that the quota which be received from Ireland would be exactly the same as the quota settled by this Bill. Let us suppose under this Bill the quota Ireland has to pay is 1–40th. Then, of course, Ireland would contend that if the Imperial Expenditure increased and she had to pay 222 more, she was only to pay 1–40th of that Imperial Expenditure. That would be perfectly fair and reasonable from the Irish point of view. But how is the Chancellor of the Exchequer so to arrange his increased taxation that it shall give us as a result exactly 1–40th as the contribution of Ireland? If be takes Excise it will be 1–10th. How is he to get the exact quota, seeing that every tax would give a different quota? He could only get the result desired by a number of taxes that would have to be worked together in a complicated method that I think even the brains of the present Chancellor of the Exchequer would be unequal to tackle. I sum up the objections which I take, and which I cannot help thinking the Government themselves will share, because they cannot be ignorant of the difficulties in the way of the particular plan which they have proposed. In the first place, I say that the proportion under this scheme is even now an uncertain one, and that it will constantly vary with the fluctuations in the Irish Revenue, with fluctuations in the Imperial Expenditure, and with every change in our taxation. In the second place, I say it will destroy the full liberty of the British people over their own taxation. In the third place, it will take away all freedom of action in regard to finance from the Irish Government; and, in the fourth place, this will necessarily lead to constant conflict between the Governments, and, above till, between the British Government and the Irish delegation. I say these objections tire independent of the result which will he worked out even if the quota which was attained by this method were satisfactory to gentlemen opposite, and were satisfactory to every Representative of Great Britain. Still, these objections which I put first would remain in full force. They would interfere with and be fatal to harmony between the two Governments; they would be fatal to good financial administration, and constantly liable to very serious fluctuations. Now, Sir, I go on to consider three important differences between the present scheme and the scheme of 1886, and I should be very glad to have some explanation from the Government with regard to the changes which they have made in their own original scheme. In the first place, 223 I refer to the contribution towards the Constabulary. I am not speaking now of the morality of that contribution or its necessity, but of its amount. In the Bill of 1886 the proposal was that the Irish should pay towards the Constabulary a fixed sum of £1,000,000, and the balance was to be paid by this country. All the savings in the Constabulary, as it was gradually reduced, went, therefore, to reduce the contribution of Great Britain; and it was not until the contribution of Great Britain had been entirely wiped out that any saving accrued to the Irish Exchequer upon this head of the Constabulary. Of course, that was a much more favourable scheme for the British Exchequer than the present plan, which proposes that we are only to have one-third of the savings; and I venture to say it was, even according to the view of the Government and their statements to the House, a fairer scheme, because what is the view of the Government? The view of the Government is that it is necessary to start this Irish Government with a surplus, but that hereafter they will not require it; they will make such savings that they will have a surplus of their own, only as they cannot make their savings all at once it is necessary to begin with an eleemosynary grant. But surely if that is the case this grant ought to be reduced in proportion as they make savings. It is fair to assume that in the course of six years, at any rate, if they are as good administrators as the Government suppose them to be, they will make very large savings indeed. Under these circumstances, the surplus we have created for them might just as well come back into the pockets of the British taxpayers. At all events, my question is, why did you think it right and fair in 1886 that we should have all the savings until our contribution was wiped out, and why do you think now we ought to be satisfied with only one-third? Now I come to a most important change. ["Oh, oh!"] I suppose hon. Members think it is an impertinence to criticise the finance at all. I was going to say that, although hitherto my comments have been in the nature of unfavourable criticism, I am able to give my full approval to the change which I will now point out. Of all the difficulties we who oppose Home Rule have had, I should say, by far and away the 224 most influential, in our mind, has been the fear that under Home Rule our Imperial strength would be weakened. We thought it would be weakened in many ways; amongst others, by the fact that we should no longer have full control over the resources of Ireland. In the event of a great war coming upon us we should not be able to draw upon Ireland for her fair share of contribution, and it will he remembered that I put some questions on this point to my right hon. Friend in previous discussions, and that he expressed himself as fully aware of the issue. In the Bill of 1886 the case of a now war in which we might be engaged was most insufficiently dealt with. We were dependent upon the charity of the Irish Legislature. The Irish Legislature was given power to make a grant if they pleased. What the amount of the grant was to be, or whether there was to be any grant at all, was dependent absolutely upon the Irish Legislature. Under these circumstances, I confess, I thought our chance of getting anything was extremely little. In the new proposals of February, 1893, we were given control over the Excise and Customs; and my right hon. Friend proposed, in a way I thought unsatisfactory and inadequate, to give us some control also over the Income Tax, and in that way we were to levy contributions upon Ireland for her share of Imperial Expenditure in the case of a war. But no reference was made, as far as I am aware, in any speech of my right hon. Friend to the quota which Ireland had to pay under these circumstances. But now, in the present Bill, that has all been changed, and very much for the better. In the present Bill the Government suggest that any tax which the Imperial Parliament makes specially towards exceptional military expenditure, or the cost of a war, shall be levied in Ireland, and the whole of it shall come back to this country. The proportion which Ireland pays at the present time towards the general Revenue of the country is 1–12th But as we give her by far the larger part of that back for her local expenditure, her real contribution to Imperial Expenditure is only 1–25th or 1–26th. As, however, in the case of war, we shall give her nothing back, the proportion we shall receive in case of war is the proportion we shall receive 225 now, and, as the Chancellor of the Exchequer explained in his statement, that will be 1–12th. Well, if Ireland is to pay 1–12th in a new war in which we may be engaged, or for any exceptional expenditure for military purposes, such as fortifications or extra naval armaments, or anything of that kind, undoubtedly she will pay her full proportion, and certainly I am not here to criticise that proposal. There is only one remark I will make about it, and that is that it is a curiously anomalous proposal. The Government think it right that Ireland should pay 1–12th of the expenditure of a new war; but when it comes to old wars and to current military expenditure which is going on, I suppose, as a preventative against war, then they are satisfied with 1–40th. Now, Sir, if 1–12th is right in the case of a new war, why should not 1–12th be right when you are trying to prevent a war? I cannot understand on what principle the Government have adopted 1–40th as the contribution towards the expenditure upon old wars, whilst they suggest 1–12th as a proper contribution towards a new war. The third point in which there is a change between the different schemes is in regard to the dealing with the cost of collection. There is rather a curious incident in the later scheme. In the two earlier schemes the cost of collection was charged to the local expenditure, and it was only the net contribution which was taken into account. But for some reason or other the Government in the present scheme have added to the whole cost of collection, even of Irish Revenue—of Revenue specially devoted to Irish purposes, and with which the Imperial Parliament have nothing whatever to do—even that they carry to Imperial Expenditure. It is to be part of the Imperial Expenditure to pay the cost of the collection of the Irish taxes to be used for Irish purposes. What is the reason for that? I puzzled over it a long time, but I think I have found the solution at last. It is part of a scheme of the Government to balance the mistake of £350,000 which they discovered in their original calculations. The Government make a proposal upon the assumption that the Excise will return a certain amount; they afterwards find it returns £350,000 less. Does it not follow, if the same surplus is to be 226 given to the Irish Legislature, that somebody must find that £350,000? And, of course, I need not say that the view of the Government is that the British taxpayer has to find it. But in their accounts they only show that the British taxpayer finds £140,000. Where is the £210,000—the difference? Why, that is fobbed away in this manipulation of the cost of collection, and I must say it is a most extraordinary result that this cost of collection should be dodged in the way I have explained. Let me tell the Committee what is the result of that upon the quota. The result is this. According to the Government calculations the gross contribution from Ireland is £2,280,000—that is, 1–28th of the gross Imperial Expenditure. If you deduct from both the cost of collection then the net contribution from Ireland, according to the Government figures, would be £2,050,000, and the quota would be 1–30th of the net Expenditure, so that they have apparently increased the quota from 1–28th to 1–30th by making a present to the Irish Legislature of the whole cost of collecting its own Revenue. The last section of the argument I wish to lay before the Committee is in regard to the results. Do the results of this plan give us a fair contribution from Ireland towards Imperial Expenditure? We have to ask what would be a fair contribution? The present principle of the Government is this. The fair contribution from Ireland is what Ireland pays now. Even assuming that—even taking the matter upon that principle—I say we shall not get what Ireland pays nows, nor nearly what Ireland pays now. We shall get a gross contribution of £2,280,000, less £486,000 for the Constabulary, and £227,000 collection of Irish Revenue. That will give us, net, £1,560,000. Now, the contribution of Ireland, as shown by the Government figures in the Paper No. 334 last year, was £2,103,000; consequently the net contribution which we shall receive is £543,000 less than the actual net amount contributed by Ireland last year. I have taken that from the Government Returns, but I will say at once that I believe they are incorrect. I believe the difference is much greater; possibly it is £700,000, but I cannot follow it on the Government Returns. I must again refer to the extraordinary character of these 227 Returns. Here are two, Nos. 234 and 237, presented on the same day moved for by the right hon. Gentleman the Secretary to the Treasury; and I defy anyone, without more knowledge than an outsider can possess, to make one agree with the other. Here is a curious fact. In one of them the cost of collection is, as it ought to be, deducted from the Revenue before it is counted. In the other it is added to the Imperial Expenditure. What is the reason for this difference in two Papers both presented on the same day, and on which the Government found their scheme? I cannot help thinking that whoever made up the first of these Papers—the one in which the contribution is properly charged—did not think of the effect which that would have on the argument of the Government, or on the desire of the Government, to exclude it from their calculations. Here is another discrepancy. The total amount of the Imperial Expenditure in one of these Returns is given as £62,900,000, with the cost of collection. In the other Return it is given as something over £60,000,000—that is, without the cost of collection. Adding the cost of collection to it the result is this: that the gross Imperial Expenditure in one of these Returns comes out at £63,100,000 odd, and in the other at £62,900,000, and there is an error or discrepancy of £200,000 in these two Papers presented only the other day by the Government. So much as to the effect on the principle taken by the Government. Assuming their own principle, I have endeavoured to show that they do not get the result which they ought to get by this plan. I deny altogether that their principle will hold water, and here I expect hon. Members from Ireland will agree with me. They surely are not prepared to accept the past contribution as the basis for the future contribution. As I understand their contention as shown by their own papers and speeches, it is that Ireland is paying a great deal too much now. Our contention is that she is paying a great deal too little; but, whichever contention is right, it is perfectly clear that anyone who makes either of these contentions cannot be prepared to accept the principle of the Government that what has happened in the past is to govern us in the future. Our contention in regard to the Irish 228 contribution is that while they have paid, if you like, more than their share in the shape of the gross Revenue, the returns which have been made to them have been so large and so much greater in proportion than the returns made to England and Scotland, that their net contribution to the common Imperial Expenditure is much less than their fair proportion. We say that while that is perfectly defensible so long as this is a United Kingdom, it is not defensible at all in the event of a separate arrangement being made by which each Kingdom is to look after itself. I think I can show it fairly by taking this extreme supposition. Suppose, owing to famine in Ireland, or owing to a desire to carry through rapidly some great system of public improvement, Great Britain made to Ireland a contribution which was equal to the whole of its Revenue, is there anybody who will say that because that was done this year, next year we should base our Irish finance upon the principle that Ireland being a separate country was not to contribute a single farthing to our common defence? Take an extreme supposition like that, or the supposition that Ireland is either now contributing too much or too little, in none of these cases is it fair or right that past contributions and arrangements—which however reasonable and right as long as the countries were closely united—should continue after separation takes place? Therefore, I say, the principle to which I believe we shall all agree is the principle that Ireland should pay what is fair considering all the circumstances, without reference to what she has paid. I would like to say a word or two as to what I think ought to be the theory of a fair contribution. I fancy it will be found, when you come to look into it, that there are only two theories which are really practical alternatives. You must choose either the one or the other. The one is that a receiving country—that is, a country which receives the benefit—should pay for the cost of what it receives—should pay according to the cost. The other is that it should pay according to its taxable capacity or ability to pay. There are only, in my opinion, these two principles that can reasonably be adopted, and I must say for myself that the principle of cost in 229 theory is the fairest principle, and I treat, that, in this way. Suppose you are dealing not with Ireland, but with a separate country. Suppose one of the smaller countries came and said—"We should like to join a defensive Union, and we will contract with you to undertake our military and naval defence." What should we do when we came to consider the price? Surely we should look at the cost to ourselves. We might, perhaps, look at what would be the cost to the country making the application, and that would probably be more than the cost to us. But, at any rate, the lowest sum we should take for conferring that benefit on a separate country would be the actual amount, of cost out of pocket, in addition to our taxation, which this additional obligation imposed. I confess I cannot see but that that would also be fair in the case of Ireland, and I think it would be extremely difficult—and this is, perhaps, a fatal objection—to make up the cost. Although it was subject to no end of consideration, it might be impossible to say really what the additional cost of the defence of Ireland, as compared with the defence of Great Britain, would be. Still we may say that, any calculation based upon that principle would give a quota not slightly but enormously greater than anything we are likely to ask Ireland to pay. I would give one fact which I think will show why I suggest that result. At the present moment the cost per head to the United Kingdom of the Army and Navy, taking these two Services alone, is 17s. 6d. Applying that test to the population of Ireland, the cost to Ireland, if she were a, separate country and had her own Army and Navy in the same proportions, would be £4,000,000sterling. That is to say, if she were a separate country and thought it necessary to have, as I suppose she would wish, a Fleet and an Army of her own, it would cost her twice as much as the total contribution which the Government are now asking from her for these two Services. Of course, I do not want to press that too far. I said when I commenced I did not rely upon it. It is a suggestion which goes to indicate that the calculation made on the cost, of these Services would give a much larger result than any calculation made upon a basis of taxable capacity. But for my own part, although I say I 230 want the Committee to agree with me that the cost is the fairest test, still, considering the difficulties in the way and considering the absolute inability of Ireland to pay upon that assumption, I agree that if there is to be Home Rule we must be liberal to Ireland; and we must, therefore, deal with Ireland on some other principle—on the alternative principle of ability to pay. Under this principle of ability to pay, on what ought Ireland to pay? What is the test of the capacity of a country? Surely it is its realised wealth. What is the best test of realised wealth? My right hon. Friend has said that it is property assessable to the Death Duties. That, however, does not, mean really the amount of the Death Duties, because property in Ireland largely consists of real property, and realty pays less than personalty, and the product is less in Ireland in proportion than in England. The test proposed by my right hon. Friend himself was the property assessable to the Death. Duties, and in 1886 it was 1–14th. That illustrates what I have said about the error of taking a single year for calculation. If my right, hon. Friend had based his whole scheme on the Death Duties as they stood in 1886 he would, undoubtedly, have made the contribution of Ireland much too high, because the average of the last three years shows that the proportion has fallen off, and that at the present moment the figure is 1–18th. I take that, then, as a test of the wealth of Ireland, and I say that she ought to pay in proportion to her wealth—that she ought, therefore, to pay 1–18th. Now, the net Imperial Expenditure is £60,500,000, and 1–18th of that would be £3,350,000. The actual contribution which we are to get under this scheme is £1,560,000, or about £1,800,000 loss than Ireland ought to pay. Therefore, according to my examination, Ireland under this scheme will pay in round numbers £550,000 less than she does now, and £1,800,000 less than she ought to pay according to her taxable capacity as measured by the Death Duties. This is the price which the British taxpayer is asked to pay for making hon. Members of the Nationalist Party opposite omnipotent in Ireland, and for giving them a controlling voice in British legislation. This fact was not placed before the electors at the last 231 Election; it was not known; it was not even suspected. None of us alluded to it, for the simple reason that in the absence of the figures it was impossible to do so. I do not believe that any hon. Member told his constituents that when he was going to vote for Home Rule he was also going to vote to make them pay for it. The impression in the country was that by granting Home Rule we should get rid of Irish affairs in Parliament; but certainly there was no idea that the British taxpayer would be burdened with continual payment in order that Irishmen might manage their own business. Great as was the hostility of the electorate of Great Britain to this scheme when it was proposed last year, that hostility became much more intense when it was known on what principles the scheme was to be carried out. We were then told that it is only a temporary arrangement; that it is to last only six years, and that then, in the light of our experience, the whole matter can be revised. That will not bring much consolation to the British taxpayer, unless he can see that better terms might be made at the end of the six years. I believe the result will be exactly the reverse. I observe that The Daily Chronicle, which is one of the organs of the Government, has described the Bill as the "first bite at Home Rule." That is a pretty prospect for those hon. Members who were ingenuous and credulous enough to believe the assurances which were given them that this Bill was going to be a final settlement of the Irish Question. Why, Sir, everything is left unsettled. The judiciary, the police, the land, the question of the retention of the Irish Members, and now the whole scheme of finance—all these matters, each of which we know the Government must face, have been evaded and postponed, and are dealt with only in regard to a transitional period. What will be the result of this on Irish finance? We know that the Irish Members do not accept the scheme of the Government. Further, I say that their duty will be to use that interval in the effort to secure better terms. By this proposal of a transitional period all motive for economy on the part of he Irish Legislature will be prevented, because, if practised, it may only lead to England making a demand for a larger 232 contribution, and the object of the Irish Parliament will be to show that the country is so poor that it cannot pay the amount we shall be extracting from it. In the meantime, all the efforts of the Irish Members, all their known tactics, will be employed to put pressure on the Government and to make themselves as disagreeable as they can, and we know to what infinite possibilities that points. We know some British Governments which are very amenable to Irish pressure. The only person whose interests are ignored in this business is the British taxpayer. We have had three plans put forward by the Government in a descending scale of badness, and the last is the worst of all—the most intolerable to the British taxpayer. What the Irish think of it we all know. What the British people think of it we shall know at the next Election. As an Englishman, I protest against this proposal to impose a new burden upon the British taxpayer in order to create a hostile Parliament in Ireland and to keep it running afterwards at our expense.
§ * THE PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. H. H. Fowler, Wolverhampton, E.)
The right hon. Gentleman argues this question—he has done so throughout the greater portion of his speech—as if there were no existing financial relations between this country and Ireland, as if Ireland had not contributed to our Revenue nor shared in our Expenditure, and as if the Irish Members take no part in the deliberations of this House when taxation is imposed or when expenditure is increased or diminished. In short, the right hon. Gentleman argues the matter as if we were setting up an entirely new system of Government. As parallel cases he refers to Greece, to the Transvaal, and to the United States. But there is no analogy between either of those cases and that of Ireland. The Transvaal is an independent Power and has ceased to form part of the Empire; the United States have also ceased to be a part of the Empire, and Greece is an independent nation, set up as such by the Great Powers. But here we are dealing with a state of things that to a large extent will continue. The right hon. Gentleman is very liberal in his imputation of motives to the Government. He has charged us with all sorts of 233 trickery, and also with what is a very grave offence—namely, dodging Financial Returns for presentation to the House; but if lie wishes to know what the principle of the scheme is I will tell him. It is the same principle as that laid down in the scheme of 1886, and as that laid down in February, 1893; but the Government contention is that by the present scheme the principle is better carried out than it was before. The object is to bring, as nearly as possible, Ireland's normal contribution under the new system of a Home Rule Government to the amount which she at present pays. The first question is—what does Ireland pay at present, and what does Ireland cost at present? The difference between those two sums is the contribution which Ireland at present makes to Imperial Expenditure. No doubt calculations based upon the figures of one year are likely to be misleading; but the figures of 1892–3, upon which the figures are worked out, was a normal year, and there has been no excessive outlay on the one side, nor any fluctuations of the Revenue on the other. The figures work out, however, with marvellous accuracy, whatever test is applied. I will take the last four years, ending March, 1890; March, 1891; March, 1892; and March, 1893—and the right hon. Gentleman will, no doubt, admit this to be a fair average. The gross income in round numbers paid into the Imperial Exchequer in 1890 was £94,500,000; in 1891 a little over £96,250,000; in 1892 practically £99,000,000; and in 1893 £97,250,000. The contribution of Ireland in regard to the first two years has been subjected to the criticism of the right hon. Gentleman on account of errors made in the Excise Returns; but those errors have been discovered and set right. The figures for 1891 and 1892 are correct, and there is a system proposed in this Bill by which the figures for the future may be ascertained with accuracy.
§ MR. GOSCHEN (St. George's, Hanover Square)
asked whether the right hon. Gentleman put the error which had been discovered at £300,000 or £350,000?
§ MR. H. H. FOWLER
For 1889–90 and 1890–1 I put it at the larger 234 figure; but that is really immaterial in a question of this kind. As to 1892–3 we have the actual figures. The contribution of Ireland to the Imperial Revenue in 1899 was in round figures £7,500,000; in 1891 it was £7,300,000; in 1892 £7,800,000; in 1893 £7,600,000. The percentage of these payments to the Imperial Revenue in 1890 was 8.03; iii 1891 it was 7.99, or you may say 8; in 1892 it was 7.90; in 1893 it was 7.85. Therefore Ireland is contributing at the present time 1–12th of the whole Revenue. That is, I think, a sound and safe figure on which we may proceed to work. But there is another test. The late Chancellor of the Exchequer (Mr. Goschen) knows that there is a Return associated with my name which shows the net Revenue after all deductions have been made on both sides the account. Treating the Imperial Revenue and the Irish contribution on that basis, the percentage paid by Ireland was 8.32 last year, and this year it is 8.31. That is a confirmation of what I have stated, and we may safely regard the contribution of Ireland as within that figure. The present Tax Revenue of Ireland is £6,936,000, or, practically, £7,000,000, and the cost of the Government of Ireland last year, including the deficit on the Post Office account, was £4,634,000. That leaves the present contribution, exclusive of the cost of collection, at, say, £2,302,000, which covers the contribution to the Army and Navy, and the various items mentioned by my right hon. Friend. My right hon. Friend seems to think Ireland should pay mere. It would he a very strong demand for this country—a wealthy country—to make upon a poor country that it should be called upon to pay more than it pays at present. Its contribution at present is, as I have said, in round numbers, £2,300,000—
§ MR. H. H. FOWLER
I exclude the cost of collection. We include the cost of collection in the gross Imperial charge, to which Ireland contributes, We credit Ireland with one-third of her Revenue, that is to say, with one-third of her Customs, one-thud of her Excise, one-third of her Stamps, one-third of 235 her Income Tax, Crown Lands, and Miscellaneous Receipts. These sums give a total of £4,660,000. This leaves the contribution to the Imperial Exchequer at £2,262,000, to which should be added a very small amount of taxation collected in Great Britain, which is really collected on transactions of persons living in Ireland—partly Income Tax and partly Stamps. That amount the Inland Revenue puts at £14,000. This makes the total contribution in respect of Imperial charge £2,276,000, as against the present, contribution of £2,302,000. The difference is, in fact, only somewhere about £25,000. I challenge my right hon. Friend to dispute that.
§ MR. J. CHAMBERLAIN
The calculation is incomplete. You have not said a word about the Constabulary.
§ MR. H. H. FOWLER
I am taking the Constabulary at its full charge of £1,500,000. I will deal with the grant in respect of the Constabulary subsequently, and repeat that the difference between the present system and the new system is not more than £25,000. I believe that to be absolutely undeniable. What proportion does that bear to our Imperial Expenditure? The cost of the collection is an Imperial cost, for we retain the whole collection in our own bauds. Excise, Customs, Stamps, and Income Tax will be collected as they are now.
§ MR. H. H. FOWLER
There will be no change whatever. During six years there is no change whatever. The Irish Revenue remains part of the Imperial Revenue, Ireland receiving two-thirds of what she raises and the Imperial Government one-third. We collect a total Revenue in Ireland of £8,512,000. The Treasury calculate the cost of this collection to be £235,000, but as nearly one-half of this Revenue is payable to 236 the Imperial Exchequer, it would be unfair to charge Ireland with the whole of the £235,000. The amounts payable to the Imperial Exchequer are one-third of Ireland's Tax Revenue—namely, £2,240,000, and the amount of Customs and Excise Duties which represents duties collected in Ireland on articles consumed in Great Britain after allowing for duties collected in Great Britain on articles consumed in Ireland. This sum is £1,793,000, so that after deducting these two items from the total Revenue collected in Ireland the balance, which represents the amount payable to the Irish Exchequer, is £4,479,000, and the proportionate cost of collecting this sum is £120,000.
§ MR. GOSCHEN
Ireland is paid for its share of the contribution as England and Scotland are paid for their share.
§ MR. H. H. FOWLER
Which way would the right hon. Gentleman have it? We take £2,616,000 as the whole charge for collecting the entire Revenue in England, Scotland, and Ireland, and then add that to the Imperial Expenditure to which Ireland is to pay its share. That is what we have done. Instead of taking the Imperial Expenditure at a little over £60,000,000 we take it at £63,000,000, adding the cost of collecting the Revenue—and we think Ireland should pay its full share of that. The contribution of £2,276,000 from Ireland to the Imperial charges, which amount to £63,000,000—which is including the cost of collection—would represent a proportion of 3.62 per cent., or between 1–27th and 1–28th, a result which is a result that hardly differs from the estimate my right hon. Friend gave in 1886, when he mentioned not 1–25th but 1–26th. That is the view the Government take—that the difference under the new system will not be more than £25,000 less than it was under the old system; and the contribution under the new system would be, as I have said, between 1–27th and 1–28th of the Imperial charge.
§ MR. H. H. FOWLER
We take the Imperial charges at £64,114,000; and then we deduct the receipts estimated to be contributed to Imperial 237 sources, such as the profit on the Mint, receipts from the Suez Canal shares, amounting to £1,216,000—Ireland is entitled to her share of that—we think it better to make that gross deduction on the one hand and gross addition on the other in order to arrive at the true Imperial charge, which is £63,000,000, and under the Bill as it stands Ireland will contribute £2,276,000, or 1–28th.
§ MR. SEXTON (Kerry, N.)
What I would suggest would be that Ireland's share of the £1,250,000, which is £48,000, should be added to the contribution, which would be, therefore, over £2,300,000.
§ MR. H. H. FOWLER
When the proper times comes my hon. Friend will be able to put the Irish case in the way he thinks host for Ireland. At present, I am putting the case of the British taxpayer. I am showing that he, at all events, is not going to be any worse off. Coming to the contribution to the police, my right hon. Friend says we are going to give to the Irish Government for the police £480,000, and that that reduces the Irish contribution. Well, Sir, the Irish contribution has been reduced again and again by grants from the Imperial Exchequer. The right hon. Member for St. George's was rather critical upon the Chancellor of the Exchequer because lie took the Imperial contribution from Ireland in 1892 as £1,833,000–1892 being the year in which there were large contributions to light railways and other purposes. I admit at once this is a distinct bonus by the Imperial Government to the Irish Government, and it is to be justified as such on grounds of policy and on grounds of finance. In the first place, you are going to retain in your own hands the Constabulary. The Constabulary, we venture to think, is an unnecessarily expensive Force. It is a Force on account of which Ireland has to pay a far heavier charge for the maintenance of the peace than England and Scotland ever have had to pay, and we think Ireland has an equitable claim in this matter. Then it is a diminishing charge. At au earlier period of the Debates this charge was regarded as a permanent gift of so many thousands a year—and I am not sure that it was not capitalised at so many years' 238 purchase. So the right hon. Gentleman the Member for Birmingham deals with this as a permanent reduction of the Irish contribution. The right hon. Member argues his figures on that basis. Have we made no contributions to Ireland in times past? Have we made no I deductions in respect, say, of Irish loans? When we come to deal with subsequent sections, it will be found that provision is made for dealing with loans which have been made to Ireland; but in one of the Papers presented to Parliament in the time of the right hon. Gentleman opposite it appears that the amount which has been remitted to Ireland out of public funds has been £10,000,000. I have never found fault with the policy of the right hon. Gentleman the Loader of the Opposition; on the contrary, it was one in which I cordially concurred, the using of Imperial resources for the purpose of benefiting Irish trade and promoting Irish industries. There is a debt of obligation between Great Britain and Ireland so far as finance is concerned; therefore we have in times past made large contributions to Ireland for certain purposes. We are now going to make a contribution to Ireland, and the only sin in that respect that I can detect in the right hon. Gentleman's speech is this—that by means of this contribution for Irish Constabulary we shall be giving Ireland a surplus—and that he regards as an unspeakable offence in British finance. Well, let us deal with this as practical men. How are you going to establish the Irish Government without a surplus? Will they have no claims in the future? Have they no duties to I discharge? The right hon. Gentleman said Imperial Expenditure was likely to increase. I think that probable, but Irish Expenditure will increase also.
§ An hon. Member: A "plethora of money"!
§ MR. H. H. FOWLER
That is a stale quotation, and the souse in which my right hon. Friend used those words has no bearing upon this question. The Irish Exchequer will have to embark, if it is to be successful and make Ireland a contented country, in the same class of expenditure that you are entering upon here. Someone said the age of economy is past—and I think it is, 239 in this House. I do not think there are many economists left, and expenditure out of public money now is looked upon as necessary which our forefathers would not have looked upon as possible. Ireland is essentially a poor country. What will happen if we continue to govern Ireland ourselves? If this scheme is defeated right hon. Gentlemen opposite will have to find English money for the purpose of developing Irish industries, just as has been done for the Colonies and for India. Therefore, I wholly justify this contribution—which is, after all, a by no means excessively liberal contribution—on public and financial grounds. The right hon. Gentleman the Member for Birmingham says—"You tell us they are going to reduce their expenditure—why should they not do so?" Well, it is not, a very easy thing to reduce expenditure when it is once incurred. I hold the doctrine very strongly that the Irish Expenditure is on a much higher scale than it ought to be. No doubt, ultimately, it will be possible for the Irish Government to reduce the Expenditure; but I shall be glad to find that, at any rate for some time, they are able to carry on the Government without adding to the Expenditure. I see no reason for living in a fool's paradise on this question, and I think it would not be possible for a number of years for the Irish Government to make any large reduction. My right hon. Friend objects to our mode of procedure. He objects to a quota because it varies. It seems, however, to be of the very essence of a quota that it will vary. They vary just now. He forecasts a variation if there is a reduction in the consumption of whisky. Well, the Irish contribution would now go down, because a large proportion of it is in respect of taxes put on consumable articles. In times of depression of trade the objection as to variation in Revenue would apply under the present system, and the existing contribution would be subject to the same fluctuations. My right hon. Friend raised the very broad question of what Ireland ought to pay. He gave us very few figures with reference to that question, and I am going to trouble the Committee with two or three figures which I consider of vital importance as to the resources of Ireland as an indication of her taxable capacity, 240 because the right hon. Gentleman's argument, if it means anything, comes to this: that Ireland is paying too little. His argument, is, that she should pay on her taxable capacity, and I want to see what that is. I find that, taking the average of five years, Ireland has paid something between 1–18th and 1–22nd of the Income Tax and Death Unties. The sum given in the right hon. Gentleman's own Return is £114,500,000, and of that Ireland paid only £5,000,000.
§ MR. H. H. FOWLER
I think it, is; but I will give the other figure. The population of Ireland is one-eighth of the population of the United Kingdom; and the net value of the property assessed to Probate and Succession Duty, taking the average of three years, is between 1–17th and 1–18th of the total value of the property so assessed. In regard to Income Tax, there is an extraordinary difference in the taxation of Ireland. It is true Ireland pays a large proportion under Schedule A, which represents the ownership of laud, and under Schedule B, which represents the occupation of agricultural land; but when you come to Schedule D, which, after all, is the test of a country's prosperity as representing that from which it derives the bulk of its income, you find that the contribution of Ireland falls miserably short. The average assessment of the United Kingdom under Schedule D is £300,000,000, but in Ireland it is something under £9,000,000. That is a strong argument as to the taxable capacity of Ireland. Stamps and Income Tax, by common consent, represent taxes upon property and dealings with property; but Customs and Excise represent taxes on consumable articles which are paid by the masses of the people. In England the proportion of Revenue raised from Customs and Excise is three-fifths, compared with two-fifths from the other sources; in Ireland the proportions are four-fifths to one fifth—that is, that four-fifths of the Revenue are paid upon con- 241 sumable articles by the vast bulk of the people. That is a totally different state of things from that in this country. Under Schedule A Ireland is assessed at £13,000,000 out of £178,000,000; under Schedule B at£2,400,000 on £25,000,000; and under Schedule 0 the total assessment of the United Kingdom is £41,500,000, and that of Ireland only £780,000. Under Schedule E we have a total assessment of £36,500,000, of which the Irish share is £1,750,000. Taking the total assessments, the contribution of Ireland is 1–22nd. But observe the enormous discrepancies between the various Schedules. Lot us take another test. Savings banks deposits are a fair test of the wealth of a country; and Ireland has 1–19th of the total deposits of the United Kingdom. The right hon. Member for West Birmingham, in dealing with taxable capacity, which he did not define, churned that Ireland could pay a very much larger sum than she pays at present. I am speaking under correction, but I say that taxable income is the income remaining after allowance for the minimum necessary to maintain a population upon a given standard of living; and political economists generally allow £12 a, head as being the minimum necessary to keep body and soul together. Let us apply that test to Ireland. Taking the figures of Mr. Giffen in 1886, the gross income of Great Britain is £1,200,000,000; and that of Ireland is £70,000,000. Take £12 a head, or, say, £400,000,000, off £1,200,000,000, and that leaves £800,000,000 as the taxable income of Great Britain. In Ireland 60 per cent. of the people depend upon agriculture, and taking the Statistical Returns of agricultural produce they give an income of £14 per head. Multiply the population of Ireland by £12 per head as the minimum necessary, and, making the deduction, the taxable income of Ireland is left at about £15,000,000. I ask the House to remember that Ireland has a diminishing population. When the Act of Union was passed, and it was agreed that Ireland's contribution should be 2–17ths, the population of Ireland was one-third of that of the United Kingdom; now the population is one-eighth of that of the United Kingdom. To sum up; in the first place, we do not propose that Ireland shall make a less contribution than she makes now. Secondly, we do make, 242 and we justify ourselves in making, a temporary contribution towards exceptional expenditure in Ireland, which we hope to see diminish, while we think it fair that Ireland should share in the benefit of that reduction as well as ourselves. Thirdly, we do not raise all those questions with reference to payments of Customs and Excise, direct and indirect taxation, and the interference of Irish Members in general finance; all these are existing now, and are very likely to be aggravated if the present system is continued. Lastly, I submit to the House that Ireland is taxed about as much as she can bear; she is taxed far higher than Great Britain or than Scotland taken separately. The right hon. Member for West Birmingham is always anticipating the appeal to the constituencies. The constituencies had the financial proposals of 1886 before them at the last General Election. I believe the English people want to deal with Ireland not shabbily, but generously. They may reject our scheme of Home Rule on grounds of Imperial policy; they may think it bad for Great Britain or bad for Ireland; but they will never reject it on a miserable pounds, shillings, and pence objection. If they think the people of Ireland ought to have a separate Government, managing their own affairs and working out their own destinies, I know enough of the people of England to assert that they will deal with the people of Ireland in a generous and a liberal spirit.
§ * MR. J. E. REDMOND () Waterford
I would ask to be allowed at this early stage of the discussion to intervene, in order to explain the considerations that are weighing on my mind with regard to this financial scheme of the Government. I would say, in commencing, that I agree entirely with the concluding words of the right hon. Gentleman the President of the Local Government Board. For my part, I do not believe that the English people, still less that the Liberal Party, desire to deal shabbily or meanly with Ireland in these financial arrangements; and I am strongly convinced, as the right hon. Gentleman is, that if the scheme otherwise presents itself properly to the minds of the electors, it will not be rejected by them on any mere consideration of pounds, shillings, and pence. 243 That being my view, I regret extremely that the scheme the Government have propounded has not been a more generous and a more just one. The right hon. Gentleman the Member for West Birmingham has made this afternoon a long and able speech. With a great deal of that speech I have no concern. It is no part of my duty to defend the new financial scheme of the Government. The right hon. Gentleman attacked that scheme, and I have risen also to criticise it, but to criticise it from an entirely different point of view. I would only desire to say two things in criticism of the speech of the right hon. Gentleman the Member for West Birmingham, and the first is this: I do think it is a pity, even upon a dry question of finance such as this, that he cannot address himself to this Irish question without hurling across the House and across the Channel to Ireland the most offensive insults and aspersions upon the Irish people. The right hon. Gentleman cast his sneer at Irish patriotism as a plant of so sickly a growth that it must be watered by English gold. I want to know how his case or the case of his Party is advanced by introducing into a discussion of this kind insults of this character directed against the whole Irish people? I resent such an insinuation on his part. I will define the position, so far as I am able to do so, which Ireland desires to take up on this financial question. We do not desire to obtain one single farthing more than our just rights—more than we are able to show to be our just rights. The comparison the right hon. Gentleman made between this country and the Transvaal is absurd in the extreme. We remain a portion of the Empire. If you are to treat us as you treated the Transvaal, then put an end to all connection with Ireland, and put an end to all control over Ireland and Irish finance. But it is absurd to say that under the conditions proposed in this Bill there is the smallest analogy between the case of the Transvaal and that of Ireland. All we desire is that this financial scheme should be drawn on such lines that Ireland will not be in the future, as we believe we can show she has been in the past, robbed by her connection with this country. That is the 244 first criticism I make on the speech of the right hon. Gentleman. The second is this—the whole of his arguments which went to show that the figures of the Government were not to be implicitly trusted—that estimates had been wrong and might be wrong again, and that there could be no absolute certainty in these matters at the present moment—go, in my mind, conclusively in the direction of supporting so much of this scheme as makes it a temporary arrangement subject to revision after proper investigation at the end of a limited period. When the right hon. Gentleman the Prime Minister announced the substance of his new financial scheme in this House it will be remembered that I at once rose and stated that that portion of it, at any rate, which proposed to take from Ireland control for six years over the disposition and management of taxation would be opposed by me as unjust and humiliating to that country. I desire to explain very shortly to the Committee the view that I take on this matter. It will be necessary for me to deal in some limited degree with figures, but I confess—and I am not ashamed to confess it—that I am utterly unqualified to deal, under these circumstances, with these matters. There are Irish Members here—notably the hon. Gentleman the Member for North Kerry—who have qualifications that I cannot pretend to in this matter. No doubt the hon. Member for North Kerry will deal closely with this question of figures. But I take up this broad position: I say no one, whether he has the qualifications of the hon. Member or of anyone else skilled in finance in this House, is in a position to deal with any certainty or accuracy with these financial questions at this moment. The considerations which I will put before the House are considerations not merely financial, but to some extent I may say—to some large extent—political also. The Bill as introduced last February I gave to Ireland immediate control over the collection of all taxes, except the Customs, and the power to fix all taxes, except Customs, Excise, and, I think, the Post Office. The new scheme proposes to deprive Ireland for six years of all power over the collection, the imposition, or the management of all existing taxes in the country. Now, I ask myself what is the 245 object, what is the motive, which has inspired this change? To the 1st subsection of this clause, which deals with the matter of the six years' control of Irish taxes, I have put down an Amendment to leave out Sub-section 1—and I am dealing with these matters now because I think this a most convenient opportunity to do so, and because it will be unnecessary for me afterwards, in moving my Amendment, to do more than say one sentence. This change is a grave and fundamental change in the Bill as it was originally proposed. It is not merely a financial change, but a political change; and I assert here again that that change is one which is unjust to Ireland and in the last degree humiliating. For my part, I cannot conceive a more humiliating position than will be occupied by the Irish Government when they will be deprived of all control, not only over the imposition of taxes, but over the collection of every single tax in the country. I cannot conceive from what quarter the pressure could have come to induce the Government to make this change. Certainly it has not come from the Irish quarter of the House, because I make bold to say that no Irish Nationalist in this House, on its merits, would prefer that Ireland should be deprived of the control of taxes for six years. It has not come also, I am convinced, from the great bulk of the Liberal Party. I am quite convinced that the President of the Local Government Board was quite correct when he said that the Liberal Party and the country would deal fairly and even generously with this question. As far as I have been able to observe the attitude of the Liberal Party in these Debates, it has led me to believe that the restrictions in this Bill were, on their merits, distasteful to the Liberal Party. Therefore, I am convinced that the pressure which has induced this extreme political change of front on this matter on the part of the Government has not come from the Members of the Liberal Party. I am constrained, therefore, to believe that the change has been brought about in the vain hope of conciliating the opponents of this Bill in one quarter of the House or the other. The right hon. Gentleman said the scheme of the Government was one of temporary financial arrange- 246 ment. So far I am in entire sympathy with it, but I fail altogether to understand that there is any necessary or even reasonable connection between a temporary financial arrangement and the deprivation of Ireland of the control of taxes for six years. On its merits I am opposed to this now change, on political as well as financial grounds; and, therefore, it will lie necessary for me to propose the Amendment which I have given notice of. I can quite conceive circumstances under which even this proposal of the right hon. Gentleman to take control of the taxes for six years might be made tolerable, and I shall state four conditions under which, to my mind, it might be possible for us to agree to such a proposal. They are conditions that I or my friends have placed on the Paper in the shape of Amendments, and they are considerations which I wish to impress upon the Government. The first condition is this: that it is impossible for you now to come to a correct idea as to what Ireland's annual contribution ought to be. In order to arrive at that conclusion it is essential that you should make a far-reaching and searching inquiry into the whole question of Irish finance; and I took it upon myself to urge upon Members of the Government and upon the Prime Minister the necessity of appointing in connection with this now financial scheme a Royal Commission to investigate this subject. At present we are plainly in the dark. No man can judge what are the equities of the case if things are left as they are now without proper investigation. Even at the cud of the six years we will be in as bad a position as we are in at this moment if an investigation by a competent tribunal does not take place. I notice that the hon. Member for North Kerry has an Amendment on the Paper suggesting that the Joint Committee provided for in the Bill to investigate certain matters of finance ought to have its powers enlarged and ought to occupy itself with the great investigation into the financial relations of the two countries. To my mind there are many reasons why that proposal is not a good one. But I will only mention one which is conclusive, and it is this: that this Bill is likely to meet with a disastrous fate in another House. 247 We know that this Bill is not going to pass this year. If the suggestion of the hon. Member for North Kerry were carried out the inquiry would fall to the ground with the defeat of the Bill. The investigation I desire is one which should be entered upon at once and carried on by a tribunal specially appointed for the purpose. I heard with the greatest gratification the announcement made by the Prime Minister the other night that the Government had made up their mind—first, that this investigation should take place; and, secondly, that the best tribunal was a Royal Commission, and that they should charge themselves with the responsibility of issuing such a Royal Commission. The only other thing I desire to say on this first matter is that I would impress on the Government the advisability of not allowing too long a period to elapse before the issue of the Commission. Of course, it is not for me to dictate to them the precise moment, but I would point out to them that the investigation must be of a, far-reaching character, and must extend over a considerable time. When this Bill is defeated in another place, surely it will be something for Home Riders to congratulate themselves upon, that out of the wreck of this Session they have obtained an investigation of a subject which must be investigated before Home Rule can be put on a permanent basis. The second condition is that at the end of six years we should get control of the collection of all taxes. The clause provides that at the end of the six years we should have the control of the collection of all taxes except the Customs. I say that at the end of the six years we of the collection of the Customs as well. Such control is taken from us for a special reason. The Customs Fund was seized upon bodily in satisfaction of our contribution; and, therefore, it was natural perhaps that the collection of that Fund should be retained by the Imperial Authority. But the provision for taking the Fund bodily in satisfaction of our contribution has disappeared, and I say that under the new scheme there is no reason whatever why we should not at the end of the six years obtain the control of the collection of the Customs. On this question there has been a good deal of misrepresentation of 248 the attitude that was taken up by Mr. Parnell. In the Debate of 1886, Mr. Parnell, speaking on the question of Customs, said—In giving up the Customs we should practically give to you the whole control of six-eighths or three-fourths of the Revenues of Ireland. It would be absolutely as much within your power as it is now, both as regards the original assessment of the taxes, and the receiving of the money. The right hon. Gentleman has explained to us that if we were to insist on separate Custom Houses, England by collecting the duties on whisky and tobacco in her own Custom Houses, gives £1,400,000 a year. This, of course, is a very serious consideration, and it may be very fairly balanced against the cession of the control of the Customs and Excise.The right hon. Gentleman the Member for West Birmingham (Mr. J. Chamberlain), in his speech, twitted Mr. Parnell with having said previously that he would insist on having the control of the collection of taxes. The right hon. Gentleman said—The hon. Member for Cork has again and again in his public speeches stated in the most emphatic way that he would not be satisfied with any Parliament which did not have the Customs and the Excise, and the right, if necessary, to put a protective duty on Irish industries, with the Irish Authorities.MR. Parnell thereupon interrupted and said—I have said frequently that I should claim that right for the Irish people, but the right hon. Gentleman the Prime Minister has certainly in his speech yesterday been enabled to show us that we are getting a very good quid pro quo in exchange for giving up this right of collecting the Customs in the shape of £1,400,000 a year.I say that we are getting no quid pro quo under this Bill in exchange for giving up the Customs. Therefore, I say that the second condition for making tolerable the proposal to take the control of our taxes from us for six years is that we should, at the end of the six years, get control of the collection of our taxes, including the Customs. The third condition, which I think essential to make any such scheme as the present tolerable, is that Ireland's contribution during the transitional period should be calculated upon the most moderate and most generous basis. You start with the proposition that you cannot fix her contribution permanently and with any degree of certainty or accuracy, and you agree that during the six years a tribunal 249 is to be appointed to investigate the matter and to decide upon the proper contribution. Well, we say that during the years in which the investigation is going on Ireland, at any rate, ought to get the benefit of the doubt which you yourselves admit exists. The right hon. Gentleman the President of the Local Government Board (Mr. H. H. Fowler) has endeavoured to show that the contribution Ireland will be called upon to pay under the present scheme will be the net profit which England is obtaining from Ireland at this time. I have serious doubts upon that point. On this question of contribution there are two most vital matters which wore only partly discussed when the clauses were passed. They are the questions of the pensions and gratuities to be given to the members of the Civil Service and the cost and pensions of the police. The President of the Local Government Board has admitted that if it were necessary for the Irish Government to pension off wholesale the Irish Civil Service the surplus that would be loft at the disposal of the Irish Government, even under this scheme, might be very seriously diminished. But the Government, by their scheme of Civil Service pensions, have made it absolutely certain that a very large number of Civil servants will retire. Instead of holding out inducements to these men to continue their service to the English Government, they have held out a series of bribes to them to induce them to retire, and the result will be to burden the Irish Exchequer with a largo sum for pensions for them. We moved an Amendment in favour of Ireland paying only half the pensions. The Irish Civil Service is twice as costly as the Civil Service of England. That has been directly the result of the system of government introduced into Ireland by this country; and We say it is only fair, therefore, that Ireland should be asked to pay only one-half these gratuities and pensions. The Committee decided against us on the point; but I allude to it now because the fact that Ireland has to pay the whole of the pensions must be taken into account when we consider what is fair and reasonable with regard to the contribution you exact from Ireland. The second vital question affecting the 250 contribution is the question of the Police. I resent altogether the phrase used by the President of the Local Government Board in dealing with the £500,000 a year towards the cost of the Police. He spoke of this as a free gift or contribution to Ireland. What is the history of this Police Force? This Police Force has been almost from its inception a purely Imperial Force. Thirty years ago the cost of the Police was less than half what it is now. Do hon. Members recollect these facts? In the year 1860 the cost of the Irish Constabulary was only £700,000, while now it is £1,500,000. It has been converted into a regular standing army. It has been kept up in Ireland for purely political and Imperial purposes. Crime in Ireland, such as it has been, is not what has necessitated the existence of this Police Force. I assert that the crime of Ireland for the last 30 years has not been greater than the average crime of England and Scotland, and yet you have to maintain police in Ireland more than three times as expensive, and probably three times as large in proportion to the population as you maintain in this country. To say now, when you are establishing self-government in Ireland, and when in that transaction you pay one third of your liability instead of the whole—to say that you are giving a bonus to Ireland, and making a free gift or contribution, seems to me not only senseless, but absolutely offensive. I have on the Paper an Amendment on this subject of the most moderate character. It will be in the recollection of hon. Members that the Prime Minister, in 1886, specifically stated that if the Police Force in Ireland were maintained on the same conditions and upon the same basis as the Police Force in this country and in Scotland, the cost of the Police would be under £600,000 a year, instead of £1,500,000. I think that estimate was an excessive one. I have made some inquiries, and I find that in Scotland the whole cost of the Police, including the police of the great cities, is only about £400,000 a year. Now, the population of Scotland may be said to be less than that of Ireland, but the need for police arising from the number of large cities is greater by far in Scotland than it is in Ireland. £400,000 a year is sufficient to pay the entire cost of the Police in Scotland, 251 and in Ireland the cost of the Royal Irish Constabulary is £1,500,000. Now, under these circumstances, I deduce from the Prime Minister's own statements the fact that it is only just that Ireland should be called upon to pay such a proportion of the cost of the Police in Ireland as would have been borne by her if she were governed upon the same terms as England and Scotland are governed. Therefore, in winding up the Royal Irish Constabulary, Ireland should pay one-third of the amount instead of two-thirds. I think it is an extraordinary thing for any Englishman to suppose that the contribution of one-third to the Police is anything whatever in the nature of a favour—or a generosity—by England. On the contrary, it is a means of getting out of two-thirds of her just liability. These are the considerations which must guide the Committee when they are judging what is the true contribution. We say that the contribution ought not to be more than a fourth of our income during these six years, instead of a third. I come to the fourth condition, which I say is essential. I agree with almost everything said by the right hon. Gentleman (Mr. Chamberlain) as to the possibility of mistakes in the Revenue. I cannot form any satisfactory idea whatever as to the correctness of the estimates given to us. I know that in 1886 the figures were wrong. I know that in February, 1893, the figures were wrong. I have no assurance that the figures produced now are not wrong. Although you make out in your balance-sheet that, under this scheme, Ireland will have a surplus of £500,000, still a mistake may be discovered which will destroy that surplus altogether. And if that happens, consider for a moment the position in which the Irish Government will be placed. If a deficit arises, we cannot remedy it by dealing with our taxes. Surely it is reasonable that we should have some guarantee that we shall have such a surplus as will enable the country to be governed, mean by that? I take the position of the Government. The Government themselves, by their various proposals, admit that, in future, a surplus of £500,000 a year is essential to enable Ireland to start under fair conditions. During these six years the control of 252 the imposition and collection of taxes is to be in your hands. Admitting, as you do, that you cannot trust the figures, that you cannot decide with accuracy the true state of the case, you should give us a guarantee during these years that that surplus will be forthcoming, as suggested by the Amendment which stands in the name of my hon. Friend (Mr. Clancy)—Whenever the surplus available for the Irish Government amounts to not less than £500,000;then in the words of the clause—One-third part of the general Revenue of Ireland shall be paid into the Exchequer of the United Kingdom as the contribution of Ireland to Imperial liabilities and Expenditure.We believe that, as things stand at present, under this clause the financial position of Ireland will be a most dangerous and hazardous one. We believe that owing to mistakes which may occur in these estimates, owing to the new Government charges that will be necessary after the passing of the Bill, owing to the Civil Service bonuses, and to the undue proportion of the Constabulary charges which we have to pay, as we stand at present our surplus is likely to disappear, and that we have no certainty that we will be able to carry on the government of the country. It may be said we have power to impose new taxes. Surely, no reasonable man will say that it is a satisfaction to us to know that if our surplus entirely disappears for the reasons I have mentioned we can commence our career of governing Ireland by inventing and imposing a series of new taxes. Every man must know that the Government of Ireland cannot be safely undertaken unless the credit with which it starts is well-founded. The Prime Minister said in 1886—When Ireland gets the management of her own affairs I venture to prophesy that she will want for useful purposes to borrow money. But the difficulty of that operation will be enormously higher or lower, according to the condition of her public credit. Her public credit is not yet born. It has yet to lie like an infant in the cradle, and it may require a great deal of nursing; but no nursing would be effectual unless it were plain and palpable to the eye of the whole world that Ireland had 253 provision in actual working order for discharging her old obligations so as to make it safe for her to contract new obligations.We say that the new scheme of the Government is only tolerable if this fourth condition is added—namely, that during these six years of pupilage we shall have a sufficient guarantee wherewith to govern our country. To sum up, I have to say that I object in toto to this proposal of taking control from us for six years. I object to it as unjust and as humiliating in the lowest degree to Ireland; I say that even that may be tolerable if four conditions were fulfilled; if, firstly, there were issued—as I am glad to know there will be issued—a Royal Commission to investigate what are our proportions. Secondly, we ought, at the end of six years, to have the power to collect all taxes, and not all taxes except Customs. Thirdly, our contribution should be reduced in respect of matters I have mentioned to one-fourth instead of one-third. Lastly, the surplus which the right hon. Gentleman and the Government have admitted is necessary for the government of Ireland should be guaranteed. These are considerations which weigh in my mind in connection with the new scheme of the Government. I trust that they will commend themselves to the judgment of the Government. At any rate, my course is perfectly plain. What I propose to do is, of course, not on this Motion to raise any objection; but if the clause is read a second time, I certainly intend to move my Amendment to omit Sub-section l, and if that Amendment is not accepted, to move any further Amendment as far as time will allow me. I trust that this financial question will be dealt with in a comprehensive and generous way by the Government and the House, and I would urge strongly on the supporters of the Government and the Kill on the other side of the House to remove from the mind of the Government any idea that may be still lurking there, that upon this financial question there is any disposition on the part of English Radicals to act in a niggardly or unjust fashion towards Ireland.
§ * SIR J. LUBBOCK () London University
I entirely agree with the lion. Member for Waterford that we should deal with this question of the financial 254 relations between Ireland and Great Britain under the Home Rule scheme in a fair and reasonable spirit; and that we ought to discuss the matter in a businesslike manner in order that the conclusion at which we may arrive shall be just and fair to both countries. The hon. Gentleman seems assured that the result of the inquiry into the financial relations between the countries which has been promised by the Government will be satisfactory to Ireland. I confess I look forward to that inquiry in a somewhat different manner, for I believe the result will not justify the anticipations of the hon. Member. The thorough discussion and elaborate Returns of English, Scotch, and Irish contributions to, and grants out of, the Imperial Exchequer, recently issued by Her Majesty's Government, will have had at least one effect very satisfactory to Englishmen and Scotchmen. We have been continually told that Ireland has been treated with unfairness; that her national interests have been sacrificed, and that she has been greatly overtaxed. It now appears from the Returns issued by the Government, by the Prime Minister himself, that while Ireland has 103 Members out of 670, or more than 15 per cent., her taxation is under 8 per cent., we paying over 92 per cent.; and, on the other hand, our grants to the Sister Island have been so large that her net contribution is only 3 per cent. to our 97 per cent. No one, I think, can deny that a contribution of 3 per cent. is a very small fraction for Ireland to pay. Again, if we look at the grants for public works, while Scotland has received £9,400,000 and England £50,000,000, Ireland has actually had £52,000,000, or more than we have; and while the amounts remitted have been only £365,000 for Scotland and £474,000 for England, in Ireland the amount has been £10,400,000. I do not allude to this as any charge against Ireland. The main part arose out of the famine, and we were glad to assist Ireland in that terrible time of suffering. I only allude to it to show that we have come forward liberally. I believe, therefore, that the intelligent foreigner will feel, that the civilised world, of which we hear so much, will admit, that there has been no sufficient ground for the attacks made on us, and that we have not only 255 dealt justly but liberally with the Sister Island. So much for the past. As regards the proposals of the Government, we must remember that they do not come to us with any prestige. Two plans of the right hon. Gentleman have already been abandoned. The plan of 1886 was destroyed by the criticism of that year. Then came the scheme originally contained in the present Bill. The discussion on the Second Reading disposed of that so effectually that it has crumbled to pieces and been withdrawn. The present plan is an afterthought, a mere pis aller, and, I believe, as impracticable as its predecessors. I do not blame the Government, except, indeed, for attempting the impossible. If any man could have devised a workable system it would have been my right hon. Friend the Prime Minister. But "it passes the wit of man," and even his great ability cannot accomplish it. The first difficulty in the Government's proposals is to determine and distinguish the general from the special Revenue of Ireland. We have already seen that the mistake of a clerk led to an error of £365,000 a year, which was not detected for years. I must confess that I have very little confidence even now in the Returns submitted to us, though I do not question the care which is taken in preparing them. Again, take the Income Tax. How is this separated? Englishmen and Scotchmen have investments in Irish Railways and vice versâ. How it is possible to distinguish them? But even suppose the respective amounts are correct, differences of opinion are certain to arise as to certain items, and it is proposed to have a Committee appointed jointly by the Treasury and the Irish Government. But who is to have the casting vote? And what is to happen if the Committee cannot agree? As at present advised the plan seems to mo quite unworkable. Passing on from the question of machinery to that of amount, I think we have much reason to complain of the Return issued yesterday by the Secretary to the Treasury, which states the contribution of Ireland to joint expenses as £2,276,000. This is explained away in the foot-note, and is, in fact, quite erroneous and misleading, the real amount being £2,276,000, minus £710,000, or net £1,560,000. However, I may say at 256 once that I am dealing with the figures as they strike me, and with every desire to consider fairly any arguments brought forward by the Government and by hon. Gentlemen opposite. The importance of having an arrangement which will be felt to be just would much outweigh any pecuniary advantage. As far as amounts are concerned, there are three ways in which we may look at the question. We cannot take as a test the number of Members sent to the House of Commons, because it is admitted on all hands that Ireland is greatly over-represented. Out of 670 Members Ireland has 103, or over one-seventh of the whole. Under the Bill she will still return one-eighth of the Members. It would, however, be unreasonable to expect that Ireland should bear one-eighth of the Expenditure of the country; although when her fair share has been determined, it would be only reasonable to require that the number of her Representatives in the Imperial Parliament should depend on the amount of her contribution to the Imperial Expenditure. In the Debate on the Bill of 1886 the Prime Minister estimated the proportion which Ireland ought to pay, taking the Income Tax as a basis, at 1 to 19. But he went on to say—There are two other tests which I consider far superior to the Income Tax. One is the test afforded us by the Death Duties; not by the amount levied, because the amounts levied vary capriciously according to the consanguinity scale, but by the property passing under the Death Duties. The amount of property on which, on an average of three years, the Death Duties fell was in Great Britain £170,000,000, and in Ireland £12,908,000, or 1 to 13. When we come to the valuation," Mr. Gladstone proceeded, "although Ireland is valued much lower in proportion to the real value than England or Scotland, the valuation in the latest year for which we have Returns is in Great Britain £166,000,000, and for Ireland £13,833,000, giving a proportion of 1 to 12, or 1–13th.It would seem that if we take 1–17th as the just proportion of Imperial Expenditure which Ireland ought to pay, we are dealing fairly, even liberally, by the Sister Island. The amount of Imperial Expenditure for 1891–2 was £62,400,000; and 1–17th of this sum, which on this basis would be Ireland's just contribution, is £3,700,000. What, then, does the Government propose? The Bill provides that Ireland should coutri- 257 bute one-third of the Revenue of the Island towards Imperial Expenditure. For the year 1891–2 the Revenue of Ireland was £6,780,000. One-third of this is £2,260,000, and this, therefore, we should receive. But out of it we have to pay £210,000, the cost of collection, and £500,000 for the Irish Police. Our not receipt, therefore, would be £2,260,000, minus £710,000, £1,550,000. We ought, as is shown above, to receive at least £3,700,000. We shall receive £1,550,000. The difference is £2,150,000. This balance represents the amount which British taxpayers will have to pay more than their fair share. But this is not all, because our Expenditure has a tendency to increase, while Ireland's contribution will remain stationary. Again, the Imperial Expenditure is £72,400,000. Of this Great Britain is to pay £60,900,000 and Ireland £1,500,000. The population of Ireland is in round numbers 4,700,000, and that of Great Britain 33,000,000; it follows, therefore, that Irishmen will pay 6s. 6d. only per head, while Englishmen and Scotchmen will have to pay £1 15s. In his speech on the introduction of the Home Rule Bill of 1886 the right hon. Gentleman the Prime Minister said—The respective contribution per capital will be for Great Britain £1 10s. 11d. and for Ireland 13s. 5d., and I do not think that that is an inequitable arrangement.Yet now he proposes to raise ours to 35s. and to lower that of Ireland to 6s. 6d. Or we may look at the matter from a third point of view. Under the arrangement proposed by the Government, Ireland will contribute one-third of her Revenue for our joint purposes, and keep two-thirds for herself. Our joint expenses as stated in the Return of July 3 amount to £63,000,000, of which Ireland will contribute £1,500,000, and we shall find the other £61,500,000. The Revenue of Great Britain is given in the same Return as £83,000,000, out of which we shall have to pay £61,500,000—over two-thirds, or nearly three-fourths—for joint purposes. This is no question of relative wealth. That determines the respective Revenues of the two Islands, but this is a question of the proportion of the Revenue. Ireland is to contribute 258 one-third, and keep two-thirds for her own purposes. We are to contribute over two-thirds, and only keep one-third for ourselves. Where is the justice or equity of such an arrangement as between the Sister Islands? I asked the Chancellor of the Exchequer on Friday, but in vain. He professed not to understand it. But, I believe the country understands it, and will insist on an answer. It is not their own money which the Government are so prodigally throwing away. It is the money of the taxpayers of England and Scotland, and to Englishmen and Scotchmen they will have to answer. We are sometimes told that under the Bill Ireland will contribute as much as she does now. But that is not so. There was some £500,000 sterling paid on account of Ireland last year—mainly for Light Railways—which was quite exceptional, and ought not to be included. Even, however, if the amount were the same, the circumstances will be quite different. At present we are wedded to Ireland, and have not cared to look too closely into our financial relations. But if Ireland elects to manage her own affairs, she must take the rough with the smooth; she cannot reasonably expect us to find her the funds for doing so. She must raise her own taxation. Hon. Members opposite and Her Majesty's Government seem to think it is our business to provide Ireland with a surplus. Surely that is her affair, not ours. If she elects Home Rule she must look to her Homo purse. Home Rule will, of course, mean extra taxation for Ireland, unless, indeed, with the help of the Government, they make England and Scotland pay. The settlement in the Bill should be a just settlement, and we have no right to be lavish with the money of English and Scotch taxpayers. If we are to be generous this should come subsequently; it should be so recognised, and be voted by English and Scotch Representatives. So far as this Bill is concerned, our duty is to be strictly just as between the Sister Islands. I maintain that the arrangement in the Bill is most unjust to the taxpayers of Great Britain: that if 1–17th be the fair proportion, as it seems to me at present, though I am quite ready to consider any arguments to show that it is too much; but if it be fair, then under the 259 Bill Ireland will pay £2,000,000 too little, which we shall have to pay. That while every Englishman and Scotchman will have to pay 35s. for common purposes, the Irish will only contribute 6s. 6d.; and that while Ireland will contribute one-third and keep two-thirds of her Revenue for her own purposes, Great Britain will have to contribute more than two-thirds, and is allowed to keep less than one-third for herself. It is all very well to sneer at this as a matter of pounds, shillings, and pence; but these pounds, shillings, and pence are only mere counters, and represent so much human labour. I say that this arrangement is most unjust to Englishmen and Scotchmen, and I feel satisfied that they will never consent to it.
§ * MR. E. J. C. MORTON () Devonport
said, that the right hon. Gentleman the Member for West Birmingham had asked, in a more or less rhetorical manner, the question why we should provide the Irish Exchequer with a surplus at all. The inquiry of the right hon. Gentleman was received with some cheers from Members who seemed to think it a good point. Further, the right hon. Baronet had asked why, taking the incomes of Ireland and Great Britain as they are, we wore to pay a larger proportion of our income towards Imperial charges than the Irish Exchequer was to pay towards the same Imperial charges. He only desired to answer on grounds of fairness and on historical grounds these two questions. The right hon. Baronet made the astonishing statement that during the present century we had been financially generous to Ireland. He (Mr. Morton) denied this. He would take only one particular point. He would refer the right hon. Baronet and the right hon. Member for West Birmingham to the first 16years of the Union and to the financial juggle—nay, the fraud—that was perpetrated on Ireland by the arrangement made in the Act of Union itself and by the method in which those arrangements were carried out. In the Act of Union it was laid down that at first the Exchequer of Ireland should remain separate from the Exchequer of Great Britain, and it was further laid 260 down that the proportion to be paid towards the taxation of the United Kingdom by Ireland so long as the Exchequers remained separate was to be 2–15ths of that paid by Great Britain. It was further provided that if, and when, the Debt of Ireland came to be in the proportion of 2 to 15 of the Debt of Great Britain, the two Exchequers were to be amalgamated. What happened? At the time of the Union the Debt of Ireland was £21,000,000, and that of Great Britain £460,000,000. During the 16 years that followed the Act of Union the Debt of Great Britain rose and rose; but during that time, while there was a uniform taxation imposed by Parliament on the United Kingdom of Great Britain and Ireland, the Irish Exchequer never received out of that the proportion of 2 to 15 which had been agreed upon. The result was, that the Irish Exchequer had to borrow and borrow to pay the proportion of 2–15ths laid down in the Act of Union as the contribution of Ireland to Imperial Expenditure. At last by the operation of this process, the Debt of Ireland was brought up to the proportion of 2 to 15 of the Debt of Great Britain, which was the proportion which had been fixed to determine the time when the Exchequers should be amalgamated in the manner he described. At the time the Debt of Ireland, from having been £21,000,000, bad risen to £118,000,000. By that fraudulent arrangement in the Act of Union we deliberately increased the Debt of Ireland. He held that now, if we were to do justice between the two countries, Ave owed to Ireland what we in this way robbed her of. The right hon. Baronet said that it was unfair that we should give to Ireland £500,000 surplus. But when this statement was made he pointed to the proceeding which he had just described, which would be admitted to have been one of the grossest pieces of swindling ever perpetrated. The financial basis of Unionism, as represented by those who had spoken for it that day, was based upon the perpetuation of that same swindling, for he could call it nothing else. The Member for West Birmingham had made a statement such as was fond of making, as to what they of the majority had pledged themselves to do when before their constituents. He 261 could speak for himself. He knew what he told his constituents. He told them that Ireland ought to pay her fair proportion of Imperial taxation, and he fixed that proportion at l–53rd. [Laughter.] Yes, it was on that basis he was elected to that House. He based his calculations upon the figures that had been alluded to that afternoon by the President of the Local Government Board, as contained in an article by Mr. Giffen. The right hon. Member for West Birmingham, to judge from his speech in reference to this matter, apparently thought that no person was ever actuated in politics by any but selfish and materialistic motives. But lie believed with the President of the Local Government Board that the people of England were above all a just people, and he was perfectly content that the Member for West Birmingham should, when the time came, stake the success of his cause on his appeal to the cupidity of the people. He would be confident in basing the success of his cause upon an appeal to their sense of justice.
§ SIR J. GORST () Cambridge University
There was one thing said by the hon. Member who has just sat down with which all will agree, that in any scheme for establishing Home Rule Ireland should be asked to pay only her fair proportion. I was, however, extremely astonished by the hon. Member's idea of that proportion. The hon. Member told his constituents that that proportion was l–53rd, but the hon. Member is going to vote for the Bill in which the fair proportion is put down at l–27th or l–28th. As regards the other argument the hon. Member advanced—the historical argument—I confess that it has never had any effect on my mind; and I am surprised at the effect it has on the Prime Minister. I could never understand upon what principle an excessive amount of money should be exacted from the taxpayers of this country in favour of the taxpayers of Ireland, because at the beginning of this century an injustice was inflicted by some people who are dead upon others in Ireland who are dead also. The finances of this country have for a long period of this century been 262 directed by the Prime Minister, and I believe that during all that period, at all events, Ireland has been treated not only with justice, but with generosity; and I think we may proceed to consider, if partnership between the two countries is to be dissolved, what financial relations should be established between them, just both to Ireland and the British taxpayer, in a calm and philosophic spirit, and even with some amount of coldness in the arguments we may address to each other. We have all listened with great interest and instruction to the able speech of the President of the Local Government Board; but we have listened to it, too, with disappointment, because he did not, as we expected, declare the principles upon which the Government have proceeded in fixing the contribution of Ireland to the Imperial Expenditure. It is generally admitted that Ireland ought to contribute something to the Imperial charges by which she will, to some extent, benefit, and the first thing we should address ourselves to is not the figures, hut the principle, on which we are going to determine what is a fair thing for the Irish people to be asked to pay. We have had in the course of this Home Rule controversy three distinct and even antagonistic plans before us, of which, I must say, the present is the worst. By the Bill of 1886 Ireland was to pay a definite sum, which was not to be altered for 30 years, but was to be liable to reduction upon certain contingencies. That was a perfectly intelligible principle. It was the only possible principle, because under the Bill of 1886 the Irish Members were to be excluded from the House, and therefore you could not expect from them a varying contribution. But I will not dwell upon that scheme, for it has passed into the realm of ancient history. In February of this year there was propounded a new and very extraordinary scheme. It was that the Imperial Government should possess itself of the Customs Duties of Ireland, and that Ireland should pay as its contribution to the Imperial Exchequer the varying produce, be it less or more, of these Customs Duties. I was never able to see any principle in that proposal. It is quite true that the present amount of the Customs comes very nearly to the net sum which Ireland for the last year or 263 two has contributed to the Imperial Revenue. But to say that for better or for worse the proceeds of a particular tax is to be Ireland's contribution to the Imperial Revenue is a principle which I have never been able to understand. The principle of the new clause, which is the third scheme, is equally unintelligible. It is based on the principle that the contribution of Ireland to the Imperial Expenditure should be a fraction of her Revenue. But why should the contribution of Ireland to the Imperial Exchequer be a certain fraction of her Revenue? If the Imperial Expenditure burdens this country, why should it not burden Ireland as well? If the Imperial Expenditure is to be increased, why should not the contribution of Ireland be increased also? The President of the Local Government Board, than whom nobody could be more clear and explicit when he pleased, passed over unnoticed and unanswered the argument of the right hon. Member for West Birmingham as to the practical inconvenience of the working of the scheme. I will not attempt to go over again the ground which the right hon. Gentleman the Member for West Birmingham so excellently traversed; but the argument of the right hon. Gentleman amounted to this: that if this principle is to be carried out it does not matter—it makes no difference—what the fraction is; that there will have to be two Budgets, an Irish Budget and a British Budget—and that there will be the greatest possible confusion in dealing with the finances of both countries. Whenever there is a change in taxation—and changes must constantly be made in the taxes, unless we are to stereotype the present Imperial taxation for the six years during which this scheme is to last—there will inevitably be controversies between the Irish Government and the British Government, and between the Irish Members sitting in the Imperial Parliament and the British Members. The President of the Local Government Board did not condescend to take any notice whatever of that argument. We are now at the present moment as ignorant as when the clause was put on the Paper of the principle which has induced the Government to make the contribution of Ireland to 264 Imperial charges a fraction of her whole Revenue. Now comes the question, what would be a fair contribution for Ireland to pay? The answer to that is that Ireland ought to contribute the same proportion of the amount of her Revenue which Great Britain contributes to Imperial charges. The only fair and just principle on which you can act is that Ireland must contribute some fraction or other of the Imperial Expenditure, and that contribution must rise and fall proportionately with the rise and fall of Imperial Expenditure. Such a proposal in connection with the Bill of 1886 would be monstrously unfair, because the Irish Members were excluded from the Imperial Parliament; but under the present Bill Ireland will have as potent a voice in this House as the Representatives of England, Scotland, and Wales; and, therefore, they ought to contribute an equal share towards the Expenditure, which is for the common benefit of all and is equally directed by all. If I were an Irishman and a Home Ruler I should be ashamed to ask that Ireland should stand on a lower pedestal than Great Britain. I would insist on being put in an equal position as regards Imperial contributions, and if I thought I had any claim for past injustice I would demand a definite subsidy from Great Britain on that account. Then comes the question, what is a fair quota for Ireland to pay? We have had a good many suggestions in the course of this discussion. There was the suggestion of the right hon. Gentleman the Member for West Birmingham, which was the suggestion made by the Prime Minister in 1886. It was substantially agreed to by the President of the Local Government Board, for the right hon. Gentleman admitted in his speech that the proportion of the amount of property assessed for Death Duties in Ireland to the amount of property assessed in Great Britain was 1–18th, and as, according to the Prime Minister, that is the best test of the tax-paying powers of a country, l–18th would be the proper quota for Ireland to pay to Imperial charges. Another good test is the savings banks' profits, and the profits in Ireland are l–19th of the profits in Great Britain, which is nearly the same proportion. The President of the 265 Local Government Board quoted Mr. Giffen's arguments. I believe that calculations made from the data employed by Mr. Giffen are extremely fallacious. You can make anything you like out of them. The right hon. Gentleman went on to suppose that the cost of living in Ireland was equivalent to the cost of living in England. I do not pretend to know much about Ireland, but I see an hon. Member from Ireland present who knows that I once endeavoured to learn something in Ireland of the condition of the people of Ireland; and though I should not wish to dogmatise, I say that the cost of living in Ireland is very much less than the cost of living in England. [Cries of "No!" from Nationalist Members.] House rents are much cheaper in Ireland. The working man in Ireland spends less than the working man in England on house rent. [Cries of "No!"] But I am not competent to enter into a controversy on these figures with hon. Members representing Irish constituencies. I will only say that you can prove anything by these figures, and the arguments as to the tax-paying capacity of the country derived from such sources are perfectly worthless. A very fair test of the tax-paying capacity of the country is the actual taxes raised when the taxation of the two countries is governed by precisely identical laws. Taxation in this country does not greatly oppress the poor man, because the only taxes which the working man pays in the United Kingdom are those upon alcohol, tobacco, and tea. In fact, the only tax which is a really oppressive tax on the poor, and one which everybody would like to see remitted, is the tax on tea. The late Lord Derby once said that a working man who did not drink or smoke paid little taxation. With a uniform system of taxation the Revenue which is raised in Ireland is about l–12th of the whole Revenue of the United Kingdom, and I should, therefore, hesitate to place the taxable capacity of Ireland so low as the President of the Local Government Board does. I understand the Government to say the present contribution of Ireland to Imperial purposes ought to be stereotyped for six years. But why do they not state a proportion which would rise and fall with the Im- 266 perial charges instead of a fixed sum? The Imperial charges fluctuate, and before the end of the six years there may be an excess or a deficit. But even their own principle is not fairly applied by the Government. With great ingenuity the Government have given twice over to the Irish Exchequer the benefit of the £500,000 contribution to the cost of the Police. They first reckon it as Irish instead of Imperial Expenditure, and then they use it over again for the purpose of reducing the contribution of Ireland in the future to Imperial charges. I believe that all Members are animated by the desire that strict justice should be done, if a scheme can be devised that will do justice between the two countries in the event of partnership being dissolved. But I cannot say that a financial scheme of this sort, and which is based on no principle whatever, and which has nothing but these assumptions and mistaken calculations of figures to recommend it to the Committee, will satisfy the House or the people of either Great Britain or Ireland.
§ * MR. LOUGH (Islington, W.)
said, that there was one remark of the right hon. Gentleman who had just sat down with which he entirely agreed, and that was that persons should not dogmatise about Ireland, who knew nothing of the country, and who were not acquainted with the details of Irish life. He only regretted that the right hon. Gentleman did not observe that rule throughout his speech. The right hon. Gentleman had said that living was cheaper in Ireland than in England, and he mentioned house rents as an illustration. He (Mr. Lough) said that the same houses were not cheaper in Ireland than in England. The reason rents were lower in Ireland was that a great many of the people had to live in hovels in which the English people would not keep their dogs, and yet the right hon. Gentleman taunted the country—
§ MR. LOUGH
said, the right hon. Gentleman went on to say that as the same laws of taxation applied in Great 267 Britain and Ireland they must work with equal fairness in both countries. He denied that statement altogether. A law which might be fair and just when it was applied in Loudon or Manchester, or over the whole of Great Britain, might be perfectly unjust when applied to the peasants of Connemara, and it was that fact which gave so much force to the arguments of the Irish Members against the financial proposals of the Government. The right hon. Gentleman also declared that the share which Ireland must contribute to the Imperial expenses must not be a fixed sum, but must rise and fall with Imperial Expenditure. That would be a fair argument enough if Ireland derived the same advantages as Great Britain from the Imperial Expenditure. But Ireland was a part of the United Kingdom in which very little advantage accrued from the Imperial Expenditure, and, therefore, it was absurd to say that its contribution should go up and down with that Expenditure. The right hon. Gentleman said he did not agree with Mr. Giffen. That was a very bold remark for the right hon. Gentleman to make, for Mr. Giffen was the best authority on this question, and his figures had been before the country since 1886, and no attempt had been made to controvert them. Then the right hon. Baronet the Member for London University had said that it was a satisfaction to Englishmen and Scotchmen to know that Ireland had had in proportion a larger representation in the House than any other part of the United Kingdom. But an unjust system of taxation in Ireland was not balanced by allowing 70 or 80 Irish Members to sit in the House, when no attention was paid to what they said and when they were subjected to insults every day—[Opposition cries of "No!"] Well, he had been in the House only a year, and he did not think a single day had passed during the Sittings of the House on which the Irish Members had not been insulted. He saw opposite the hon. and gallant Member for Armagh (Colonel Saunderson), who was one of the greatest offenders in that way, and he was sure the hon. and gallant Gentleman would bear out the truth of what he said. However, his point was that an unjust system of taxation was not balanced by 268 extra representation in the House of Commons. The right hon. Baronet also said that the remission of amounts due by Ireland proved the fairness and liberality of England towards Ireland in the past.
§ * SIR J. LUBBOCK
I referred to the representation of Ireland in this House, and distinctly said that we could not expect Ireland to contribute in the same proportion.
§ SIR J. LUBBOCK
I merely used it as an illustration of the fact that we had dealt fairly and liberally with Ireland in the past.
§ MR. LOUGH
said, his point was that the remissions of those sums in times of famine proved nothing of the kind. A fair and liberal way of treating Ireland would be by taking all the circumstances of Ireland into account, and trying to devise a fiscal system which the people could bear and not a fiscal system which constantly led to famine, and then when the famine arose to give large remissions. Another argument of the right hon. Baronet was that, whilst England contributed two-thirds of her Revenue to Imperial resources, Ireland contributed only one-third of her Revenue. The answer to that was simple. It was because there was such an extravagant 269 administration in Ireland—a matter for which the people were not at all to blame—that all the taxes were used up in the country, and that only this very small portion remained for Imperial purposes. Of the £10,000,000 of taxation contributed by Scotland only £3,250,000 went in local expenditure, and the remainder towards Imperial charges, while of the £7,600,000 raised in Ireland over £5,000,000 were devoted to local expenditure. One other remark fell from the right hon. Baronet. He said they were going to alter the whole relations of Ireland to Great Britain, and that, therefore, though they had been liberal to Ireland in the past, they could not be liberal to her under Home Rule. He begged leave to disclaim that argument in toto. The Government were trying to unite the Empire more strongly together; and therefore, instead of being less liberal to Ireland, as the right hon. Baronet suggested, they ought to be more liberal towards her. He considered that the discussion in which the Committee was engaged went to the very root of the situation; and unless they managed to arrive at a good solution of these questions, the great policy which the Government had in hand would not be a success, but a failure.
§ It being ten minutes to Seven of the clock, the Chairman left the Chair to make his report to the House.
§ Committee report Progress; to sit again upon Monday next.