§ (1) The Irish Parliament shall have power to vary (either by way of addition, reduction, or discontinuance) any Imperial tax so far as respects the levy of that tax in Ireland, and to impose in Ireland any independent tax not being in the opinion of the Joint Exchequer Board substantially the same in character as an Imperial tax, subject to the following limitations:—
- (a) The Irish Parliament shall not have power to impose or charge a Customs Duty, whether an import or an export duty, on any article unless that article is for the time being liable to a Customs Duty levied as an Imperial tax; and
- (b) The benefit to accrue to the Irish Exchequer from any addition to any Customs Duty levied as an Imperial tax (other than a Customs Duty on beer or spirits), or to any duty of Income Tax so levied, or to any Death Duty so levied, shall be limited as in this Act provided; and
- (c) The power of the Irish Parliament to vary an Imperial tax shall not be exercised with respect to the Stamp Duties mentioned in the Second Schedule to this Act; and
- (d) The Irish Parliament shall not, in the exercise of their powers of taxation under this provision, make any variation of Customs or Excise Duties the effect of which will be to
858 cause the Customs Duty on an article of a class produced, prepared, or manufactured in Ireland, to exceed the Excise Duty by more than an amount reasonably sufficient to cover any expenses due to Excise restrictions;
§ (2) For the purposes of this Act—
- (a) The expression "Imperial tax" means any tax charged for the time being in Ireland under the authority of the Parliament of the United Kingdom, and includes a tax which has been discontinued under the powers given by this Section to the Irish Parliament, but which would have been so charged but for the discontinuance;
- (b) The expression "Irish tax" means any tax charged under the authority of the Irish Parliament either by way of an addition to an Imperial tax or as an independent tax.
§ Mr. AUSTEN CHAMBERLAIN
I think we have now reached a stage of the Bill at which you may take the point of Order which I raised some time ago. It was to the effect that this Clause of the Bill is not governed by the Resolution of the House in Committee and requires a Resolution for its foundation. Since I raised the question before a different Resolution has been submitted and passed in Committee and approved by the House, but substantially, I think, it leaves my point untouched, and I need not further refer to it at this stage. The point, shortly, which I wish to submit to you is this: This House cannot transfer to another body any power which it is not in a position to exercise itself. This Clause purports to transfer to the Irish Parliament certain powers of increasing existing Imperial taxes or raising new taxes in Ireland. Neither of those things can be done by this Committee or House until a Resolution on which to found a power of that character has been passed in Committee and approved of by the House, and as we ourselves have not at the present time any power to do either of these things, we cannot have the power to give such authority to another body. I conceive that two possible defences might be raised to my point of Order: One is the precedent of the Bill of 1893. The Bill of 1886, of course, never reached the 859 Committee stage. The Bill of 1893 had a Clause in it which might perhaps have been open to the same objection, but no such objection was taken at the time for the very best of reasons, that the Clause was guillotined and that there was no opportunity for discussion upon it, and I submit that a precedent cannot be created by silence, and especially where there was no opportunity of raising the point. I think that Mr. Speaker has often ruled that the fact that he himself or his predecessor did not rule a particular course out of Order when their attention was not called to the question of Order at all, is not to be taken as showing that the course was in order, or necessarily to be regarded as a precedent.
The second defence that I conceive might be raised is the defence that a similar power has from time to time been conferred upon the Dominion Parliaments and Parliaments of the self-governing portions of the Empire across the seas. On that I venture to suggest that the ease is not parallel,and that, whether in the case of South Africa or Australia or any other of the Dominions or Colonies, there was a previously existing inherent right of taxation in the then Government of the Colony, whatever it was, and that all that we did was to authorise the transfer of that right from the then existing local body to a new body to be created. Therefore, for those reasons, I submit that neither the Bill of 1893 nor the Commonwealth Act of Australia, nor the Union Act of South Africa, is a parallel or precedent for what is being done. But there is a precedent on the other side which, although not exactly similar, is sufficiently analogous to make me think it right to call attention to it, namely, the Poor Law (Ireland) Rate-in-Aid Act, 1819. It was proposed to give the Poor Law Commissioners in Ireland power to levy a rate over the whole of Ireland. If they decided to exercise the power, the rate was to be collected by the guardians, but paid into the Imperial Treasury for the Consolidated Fund, as would be the case under this Bill, with all the taxes raised under the Clause which I challenge. The question was raised whether this rating power—not a taxing power, but a rating power so general as to apply to the whole of Ireland—could be conferred by this House without a preliminary Resolution, and Lord John Russell, who, I think, was the Leader of the House, conceded that the Resolution was necessary, and a Resolution was passed to 860 found the Bill upon. I think that that is a sufficiently analogous case to show that, as far as there is any precedent for doing what is done under this Bill, it supports my contention that there ought to be Resolutions to found this Clause upon, as the Resolution which we have passed does not cover the terms of this Clause. Therefore I submit that this Clause is not in order, and cannot be proceeded with without another Resolution.
§ 4.0 P.M.
§ Mr. CASSEL
In support of the contention of my right hon. Friend, may I call attention to the fact that the taxes which the Irish Parliament is authorised to impose are to be paid into the Consolidated Fund, and will form part of that fund absolutely indistinguishable from the rest of the taxes of the United Kingdom. They will be imposed automatically by virtue of the Imperial Parliament, and collected by Imperial officers; and all that the Irish Parliament will have to say in future is that the Income Tax shall be at the rate of 1s. 3d. in the pound instead of 1s. 2d. The result of that will be operative, not merely in Ireland, but over the whole of the United Kingdom. That is to say, every coporation, every trustee, every bank, every mortgagor throughout the United Kingdom will have to take notice of that Irish Act, and will have to make deductions which are provided for, and those deductions will have to be collected in England, not in Ireland, and in the case of the Death Duties, if a person domiciled and resident in England dies in England, but has property in Ireland the executors in England will have to pay to the revenue authorities in England, not in Ireland. They will have to collect and pay in to the Consolidated Fund as part of the general revenue of the country the additional Death Duties imposed by the Irish Parliament in the same way as they collect the general Death Duties for the Imperial Parliament. The way I would like to put it is this: If it were possible to do that without a Financial Resolution, it would be equally possible for Parliament in future instead of passing each year an Act that the Income Tax for the coming year should be at the rate of 1s. 2d. in the £., to pass an Act that the Income Tax shall be at such a rate as is imposed in Council, or which the Income Tax Commissioners may declare, not exceeding a certain rate. Could anyone logically or reasonably contend that while a Resolution was necessary for 861 directly imposing an Income Tax of 1s. 2d. in the £, it was unnecessary for the purpose of authorising somebody else such as the Income Tax Commissioners or His Majesty in Council to impose it. [HON. MEMBERS: "Order, order."] I think it is a point of very great constitutional importance, and that I am entitled to state my view upon it, especially in face of the fact that the decision may affect our future proceedings. The other analogy I have to put to you is this: Supposing instead of increasing directly by Act of Parliament the Petrol Duty, this House were to say in future the Petrol Duty should be at such a rate as the Road Hoard confirms. Would anyone contend that an Act of that kind would not require a Financial Resolution in Parliament? In this respect the present Bill differs entirely from the Home Rule Bill of 1893.
The Home Rule Bill of 1893 proposed that such independent taxes as the Irish Parliament was prepared to impose were to be imposed by an Irish Act and not by an Imperial Act; they were to be collected by Irish officers and not by Imperial officers, and that Act could have had no effect outside the area of Ireland itself; that is to say, no one in England could have been charged by reason of duties imposed under such an Act as was dealt with by the Home Rule Bill of 1893. The same thing also applies in this instance. This power of increasing Income Tax, or Death Duties, is simply giving somebody else the power to impose a tax affecting the whole of the United Kingdom, for it does affect the whole of the United Kingdom. The tax is collected over the whole of the United Kingdom, in the case of a person domiciled and resident in England if he has property in Ireland, and it is one of which every Court in the United Kingdom will have to take notice. If it were merely an Irish Act of Parliament, no English Court would have to take notice of it; but if they were to increase the Stamp Duty on Irish transfers or sales, these taxes, being collected by the Imperial officers, and becoming operative by virtue of Imperial Acts, would have to be taken notice of by the English Courts, and I submit that under these circumstances it is impossible for this House under its own Rules, which have been observed over so long a period, to do this.
§ The CHAIRMAN
I understand the point that has been raised, and perhaps I can best deal with it by taking the broad 862 aspect of it first, and then dealing with I the minor points which have been put before me in support of the case. The right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) referred to this point some time ago, and the hon. and learned Gentleman (Mr. Cassel) was good enough to send me a note dealing with some points by which he supported the case; so that I Rave been enabled to give a good deal of care to the matter before coming to a decision. On the broad points of the case it appears to me that the Colonial analogies are the nearest analogies that we have. What is proposed in this Bill is to delegate to another body the power to tax. I cannot say that the giving of that power in the Act requires cither a Ways and Means or a Money Resolution in this House. What does require a Resolution of Ways and Means or a Money Resolution is the actual imposition of a charge upon the public, and, in case the powers under this Bill are used in Ireland, they can only be used on an originating Message from the Crown in the same way as procedure here is governed.
The right hon. Gentleman referred to the case of 1893. In the Bill of 1893 there was a power proposed to be given to levy taxes; in that case there was no Money Resolution or Ways and Means Resolution for the purpose. The right hon. Gentleman suggests that the point was not raised because the particular Clause was passed without Debate under the Closure. I do not press that foundation for my ruling, because I agree with what he says, although, in my view, it would have been the duty of the Chairman, although the point was not raised, if he himself was aware that the Clause contravened the Rules of the House, to-decline to put that Clause to the Committee. I now will deal with the further points that were raised. The first one was that the Poor Law (Ireland) Bill, passed in 1849, was an analogy for the present case. I have looked both to the Statute and proceedings in this House, preliminary to the passing of the Bill, and I do not think that that can be said to be the case. That was a Bill for which there was a Resolution empowering any charge not exceeding sixpence in the pound, to be levied over the whole of Ireland, and the amount might be diminished by the Poor Law Commissioners if the whole of it was not required. That was the imposition of a tax or rate 863 by this Parliament on His Majesty's subjects in Ireland, and, therefore, it does not seem to be analogous to the case of delegating power to another Parliament to impose taxation upon His Majesty's subjects in Ireland. The hon. and learned Member for St. Pancras (Mr. Cassel) has raised two further points, one that the taxes are to be collected by Imperial officers. That does not seem to me to apply to the case one way or the other. The thing that requires a Money Resolution is the imposition of a particular charge on His Majesty's subjects, and the matter of collection is one of machinery. The hon. and learned Gentleman's other point was that these taxes were to be paid into the Consolidated Fund, and then to be paid out of it again. That, again, does not touch the real matter; it does not touch the claim that the power to delegate the right of imposing taxation should be preceded by a Resolution in Committee.
§ Mr. CASSEL
On my point with reference to the Poor Law (Ireland) Bill, that Bill did no more than authorise the Poor (Law Commissioners to impose a charge not exceeding sixpence in the pound, and not directly to impose the charge, but merely saying that it should be lawful to declare a rate not exceeding sixpence in the pound.
Mr. AUSTEN CHAMBERALIN
It is more analogous at any rate to one portion of this Clause, because it authorises a body in Ireland to levy an addition to the local rate; it authorises the central body in Ireland to levy an additional sixpence on the local rates, and this Bill proposes that a body in Ireland may levy an addition in Ireland to the Imperial taxation. In both cases it is an authority given to a body in Ireland within certain limits fixed by the respective Bills to impose an addition to the charges on the subject in that part of the country. In both cases the money is to be paid into the Imperial Exchequer and the proceeds are to be issued out of the Consolidated Fund. If it is not analogous, therefore, to the power to impose new taxes, is it not directly analogous to the power to increase existing Imperial taxes by an amount not exceeding 10 per cent.?
§ The CHAIRMAN
I do not think so. That was a power given to the Commissioners under the authority of this House. This is a proposal to set up a Legislature in Ireland to which we delegate certain powers now residing in this House. I do not think the cases are analogous. I now come to the Amendments on the Paper. The first two Amendments I propose to take are those standing in the names o£ the hon. Member for Fulham (Mr. Hayes Fisher), and of the hon. Baronet the Member for Ayr Burghs to leave out certain words from the word "to," in line 27, to "impose," in line 30 ["vary (either by way of addition, reduction, or discontinuance) any Imperial Tax so far as respects the levy of the tax in Ireland, and to"]; and the second Amendment stands in the name of the hon. Member for South Birmingham in line 29, after the first "tax" ["tax in Ireland"] to insert the words "other than Customs or Excise Duties."
§ The CHAIRMAN
If the right hon. Gentleman will refer me to the particular Amendments which he has in mind I will endeavour to explain.
§ The CHAIRMAN
The first two of them are out of place, and the fourth is a negative of the Clause, and under our Rule it is not in Order. I understand that on the first one the hon. Member for Hereford (Mr. Hewins) desires to address me.
§ Mr. HEWINS
I should like respectfully to submit to you, Sir, with regard to the Amendment which stands in my name, that the powers conferred upon the Irish Parliament by the Clause we have to consider this afternoon, include powers which are generally recognised on the Continent of Europe and in our own history—powers under which bounties can be given, and which are in fact usually given, and those bounties are not confined in the modern sense of the term, and still less in the ancient sense of the term, by the meaning attached to that term by the Postmaster-General. The more common or usual way is of readjustment or modification of internal taxation, and by exemptions from or additions to Customs and Excise. It is properly a financial question, and I may say that there are innumerable cases in the Tariff Reform history of Great Britain, 865 and there are very important cases in the Tariff Reform history of Ireland in the eighteenth century, showing that the common method was for the Irish Government to give bounties for the encouragement of a particular trade. I do not wish to go into the question in detail at present, but there is scarcely a country in Europe in which bounties are not very usually given. It would be concluded by every Power in the world that a conferring of these powers in the Bill on the Irish Parliament was tantamount to conferring the power of giving bounties, unless we have a prohibition.
§ Sir E. CARSON
Before you rule upon this point, Sir, may I call your attention to the fact that you have already stated that this Amendment is out of place1? Will we be guaranteed some time at which we can raise this important question to Ireland? The time limit for discussing these financial Clauses is extremely short, having regard to the number of them and to the importance of the questions. If you rule this Amendment out of place, may I ask whether we will have any place to enable us to discuss these matters, and where we can raise these questions?
§ The CHAIRMAN
The Amendment of the hon. Member for Hereford that the Irish Parliament shall not have power to grant bounties in any case is out of order at the beginning of the Clause. In my view it ought to come under Clause 2 or as a new Clause. After hearing what he has said about the question of discrimination in taxation, he may be able to submit the Amendment in a new form to come within the scope of this Clause. If he submits it in another form dealing with that point alone, I will give it fresh consideration. With regard to what the right hon. and learned Gentleman has said, new Clauses on the Report stage of the Bill will come at the beginning, and in that way I have no doubt it will be possible that the matter should be discussed.
§ Mr. MITCHELL-THOMSON
On a point of Order. May I submit that this question of bounties is strictly a matter analogous to these Financial Clauses? If I understand your ruling right on the last point, you referred to the Commonwealth of Australia Act. If you look at Section 90, in that portion of the Act which is headed Chapter IV. and which expressly 866 deals with finance, you will see that it is in the following terms:—
"On the imposition of uniform duties of Customs the power of the Parliament to impose duties of Customs and of Excise, and to grant bounties on the production or export of goods, shall become exclusive,"
the grant of bounties under that Section being expressly coupled with the powers of Customs and Excise. I submit from that Colonial analogy that the question of bounties can properly be raised here.
§ Mr. ROBERT HARCOURT
For our information and convenience, as the first Amendment would really cover the second one, and as it might be a little inconvenient to hon. Members to redistribute their arguments, I would ask whether a general discussion might not be permitted on the whole power to vary?
§ The CHAIRMAN
In the selection of Amendments I do not give any preference to the Government over a private Member. With regard to the other point, I was about to say that the first Amendment proposes to leave out the power to vary Imperial taxes, and that covers both direct and indirect taxes, and therefore the second one of course is the smaller point. I thought the Committee was entitled to give a separate decision on the smaller point. I have no doubt that the Debate on the first Amendment will cover both points, and it would not be desirable to repeat the argument on the second Amendment.
§ Mr. LEIF JONES
In considering the larger point first, are we not reversing the usual procedure, since if we settle the larger point we impliedly settle the smaller one?
§ The CHAIRMAN
No. The Committee may decide that it will give power to vary some taxes, and then it may proceed to say which.
§ Mr. LOUGH
With regard to the point I raised, I do not put it on the ground of the Government being the author of the Amendment, but on the ground of the importance of the Amendment to the Clause. Having regard to the great importance of the Amendment, I would ask whether it might not be taken at an early stage?
Mr. MURRAY MACDONALD
May I ask whether it would be possible to discuss the Government Amendment on the first Amendment, as there are many of us who regret that the Government have brought forward this Amendment, and we shall find it extremely difficult to divide on the question unless we have the opportunity of explaining our views?
§ Sir E. CARSON
Instead of taking the Amendments out of order, having regard to this important question that has been put down, would it not be better if we adjourned this Clause?
§ The CHAIRMAN
I think the first Amendment cannot be discussed without having in mind the later Amendment which the Government have put down, because the first one deals with the words "power to vary." The Government Amendment says they shall not have power to vary except in certain particular cases.
§ The POSTMASTER-GENERAL (Mr. Herbert Samuel)
It would be quite convenient to the Government to take a discussion on the Government Amendment under the Amendment of the hon. Member for Fulham (Mr. Hayes Fisher). The Government would be glad to state their position in the Debate on that Amendment.
§ Mr. JOYNSON-HICKS
May I ask if you are going to allow the Government to open their very important Amendment, and if the Committee is going to debate it whether all the other Amendments put down before the Government Amendment are to be swept aside for want of time? If 868 they once get on to that Amendment we shall never get any more time to discuss the other. [An HON. Member: "That is what they want."]
§ The CHAIRMAN
The Amendment raises a large question in proposing to leave out power to vary altogether.
§ Mr. HAYES FISHER
I beg to move, in Sub-section (1), to leave out the words "vary (either by way of addition, reduction, or discontinuance) any Imperial tax so far as respects the levy of that tax in Ireland, and to."
We are at last about to enter upon a discussion for the first time of the whole powers of taxation to be given to this Irish Parliament. Those powers may be put under two heads. The first is the power to vary in any way, either by adding to or by altering in any way, or by reducing, or discontinuing any Imperial tax so far as the levying of that tax in Ireland is concerned. The second power is the power to impose in Ireland any independent tax not being, in the opinion of the Joint Exchequer Board, of substantially the same character as an Imperial tax. My Amendment seeks to limit those powers of the Irish Parliament to power number two. My Amendment does not touch the power that is given in the Bill to impose in Ireland an independent tax if that independent tax obeys the definition in the Bill that it is not substantially the same in character as an Imperial tax. I was very glad to hear from the right hon. Gentleman the Postmaster-General, that he had already appreciated the difficulty of settling what was substantially an Imperial tax, and that he does intend to put down an Amendment by which some Court may be set up to decide what is and what is not substantially an Imperial tax. My Amendment does not deal with that power. My Amendment seeks to take away the power given under the Bill from this Irish Parliament to in any way vary either by addition, reduction, or discontinuance any Imperial tax whatever. It seeks therefore to prevent the Irish Parliament from operating on the whole area of Imperial taxes, an area which in my opinion ought to be covered only by the Imperial Finance Minister.
I do not intend to occupy much time now with the question of Customs and Excise, but we hope to be allowed to have another discussion on that matter and to confine our arguments purely to the power given 869 under Customs and Excise. What I intend to deal with are the other powers which the Irish Parliament would have under this Bill to impose taxes other than Customs and Excise. I must make a passing reference to the subject of Customs and Excise, because we have endeavoured lo prove that this power of Customs and Excise given to the Irish Parliament, will be used and can be used for the purpose of protecting Irish industries against foreign industries, and even against British industries. We know that the Postmaster-General holds a very different view. I desire to call the attention of the Committee to a speech delivered by the great champion, the great Irish champion, in favour of giving Customs and Excise to Ireland. I allude to the right hon. Gentleman the Member for West Islington (Mr. Lough). The right hon. Gentleman made an exceedingly interesting speech the other day, most of which was devoted to proving that the real desire in his mind for giving power over Customs and Excise to Ireland was that the Irish Exchequer might be placed in a position to obtain a vast amount of information which otherwise they could not obtain. The right hon. Gentleman did not content himself with that. Although he dwelt on the value of the information that would be obtained by setting up a separate Customs, he went on to deal with the question of making use of the power of the Customs in order to protect Irish industry. He said:—The Custom House is put in the Bill because there was such an uprising of feeling in Ireland that no Bill would have been passed through the House without putting a Custom House into it. I have called attention already to a Clause in the Bill which speaks of Ireland not being allowed to interfere with foreign trade. I am promised an Amendment on that point, and I am glad to take the opportunity of reminding the right hon. Gentleman the Attorney-General that I look to him to fulfil his promise."—[OFFICIAL REPORT, 19th November, 1912, col. 191.]What was the promise to the Member for West Islington thus described? It was:—That Ireland will he allowed to do what every other nation does, to look after her trade with foreign countries.What is the meaning of that promise? What promise has been made by the Government, and made apparently by the Attorney-General? I have searched the various Amendments that have been put down to the Bill by the Postmaster-General, and I have been expecting to see some Amendment put down to carry out this promise by which it shall be within the power of the Irish Parliament to make use of the Custom House as all other 870 nations make use of the Custom House, for the protection of Irish industries. I do not see that Amendment down. I hope we shall have some explanation about it from the right hon. Gentleman and from the Attorney-General as to what that promise was, and why the right hon. Gentleman the Member for West Islington took all that trouble to emphasise the fact that he cared a very great deal for this Custom House because it would give them the power to protect Irish industries against foreign trade.
§ Mr. LOUGH
The right hon. Gentleman opposite is using the word "protect" in quite a different sense from that in which I used it in my speech. I was careful to guard against any infringement of Free Trade. I have done so in every speech that I have made. I used the word merely in the sense of looking after the necessities of their commerce in other ways.
§ Mr. HAYES FISHER
The right hon. Gentleman's words were:—I look to the Attorney-General to fulfil his promise, and that Ireland will be allowed to do what every other nation does, to look after her trade with foreign countries.
§ Mr. HAYES FISHER
The right hon. Gentleman says that he is very careful in all his speeches to show that he abhors the idea of Protection for Ireland, and that he is a most absolute Free Trader. He has not done that in his writings. I would draw his attention to one of the little books that he has written, "England's Wealth Ireland's Poverty":—As the famine receded the effects of the Free Trade policy began to operate, and the country (Ireland) bad not long to wait to discover in the movement which was carrying riches and prosperity to Great Britain the certain signs of further trial and disaster for her. …. The growing of wheat commenced to decay, the corn mills in every village, which had supplied the wants of the people from time immemorial, became idle and fell into ruins. … Every class of Irish producer saw its prosperity undermined and ruin staring it in the face. …. The nation collectively could have lived better, if not more cheaply, if it had continued to grow its own food and make its own clothes. But the trader with cheap foreign goods to offer appealed to the individual consumer, and thus the home market for each class of producers was gradually spoiled.I have an idea that when the right hon. Gentleman made his speech he was really 871 thinking of the old opinions which he put into print and has never repudiated, and which I do not believe he repudiates now.
§ Mr. HAYES FISHER
Then I leave the right hon. Gentleman to reconcile his speeches with his writings. For my own part I want to know what he meant, and what was the Amendment promised by the Attorney-General. Let us look at the other powers which the Irish Parliament will have under this particular Clause. I admit that the Amendment which the Postmaster-General has put down whittles away to a very large extent the powers given under Clause 15. As the Bill was drawn the Irish Parliament would have had power to vary the Income Tax to any extent in Ireland.
§ Mr. HAYES FISHER
That is all very well. The Irish Parliament could vary the tax to any extent, but they could not receive the benefit to a greater extent than 10 per cent, of the proceeds. That is a very different question. I maintain I am right in saying that under the Bill as drawn the Irish Parliament would have had power to vary the tax—to make it 20s. in the £, or to abolish the Income Tax altogether. The powers were there. The right hon. Gentleman discovered that they were there, and in consequence he has put down this Amendment:—
"That the power of the Irish Parliament to vary an Imperial tax so far as Income Tax (not including Super-tax) is concerned, shall only be exercised so as to alter the conditions under which any exemption, abatement or relief from the tax may be granted to persons resident in Ireland, without varying the rate of the tax."
That is a very large and important Amendment, but I submit that it does not shut the door against the Irish Parliament taking a course of action which would have the same effect as the varying of the rate of the tax. The Irish Parliament may not vary the rate of the Income Tax; that is to say, if the Income Tax in England and Scotland is 1s. 2d. in the £, the Irish Parliament may not make it a 1s. or 1s. 3d. in Ireland. But that does not apply to the Super-tax. What can they do as regards the Super-tax? At present the Super-tax is levied in England, 872 Scotland, and Ireland on all incomes above £5,000 a year, at the rate of 6d. in the £ from the £3,000 limit. Under this proposal the Irish Parliament will undoubtedly be able to alter the £5,000 limit and the £3,000 abatement. The right hon. Gentleman assents to that. They may vary the Super-tax to any extent; they may if they like graduate it from £500, or even from £100. They might under the Bill even with the Amendment, tax the income of a man or a trade beyond £5,000 until they had appropriated the whole of the income arising to the individual or industry. Therefore, while the right hon. Gentleman closes the door to the varying of the rate in one direction he opens it in another, so that the same effect can be secured by the Irish Parliament. May the Irish Parliament in dealing with the Super-tax distinguish between incomes derived from land and incomes derived from other forms of industry? May they distinguish between different forms of industry, such as breweries, distilleries, and various industries which are found in the North of Ireland? I see nothing whatever in the Bill to prevent their making such a distinction. In his Amendment the right hon. Gentleman has guarded the variation of the Customs Duties, because the Amendment goes on to say—
"And so far as any Customs Duty or any Death Duty is concerned the power shall only be exercised so as to vary the rate of the duty without otherwise altering the provisions with respect to the duty or discriminating in that variation between persons, articles, or property."
Therefore, as regards Customs Duties or Death Duties it will not be within the power of the Irish Parliament to discriminate between one form of income and another. As the Irish Parliament has the power to protect Irish industries by the giving of bounties on production and monopolies, so also it has the same valuable power of protection in the way that the Super-tax can be moved up or down. The Irish Parliament has only to sacrifice a small amount of revenue, if any at all, and it might absolve certain industries in Ireland that were competing with certain industries in Scotland and England from having to pay any Super-tax whatever. That would be a very valuable form of protection of those industries. In all these matters where a subordinate Parliament is allowed to invade the domains of the Imperial Exchequer there always must be great conflict between the Chancellor of 873 the Exchequer of the subordinate Parliament and the Chancellor of the Exchequer of the Imperial Parliament. One must interfere with the other. In case we had to raise a large amount of money in this country for a war, the Imperial Chancellor of the Exchequer might think of graduating the Super-tax as one means of raising revenue. There would be nothing contrary to sound principles of finance in such a course if money were wanted for any such exceptional purpose. But the Irish Chancellor of the Exchequer might say, "I must get in first. I intend to impose an extra Super-tax on Irish incomes." Who would get the benefit of the Super-tax in such a case? The British Exchequer is not protected, and the Irish Exchequer would be able to get the benefit of the whole of the Super-tax in Ireland.
I wish sometimes the Prime Minister were here. I want to address myself to the head of the Government, because the Prime Minister in his speech on the Second Reading of this Bill told us that we must always bear in mind the fact that this is only the beginning of a federal system, and that very soon the Government intended to bring other Parliaments into being, with powers of a kindred character. I know that he has more than once said that if we gave the Irish Parliament power over Customs and Excise there would be no necessity to give such a power to the Scottish or English Parliaments when such Parliaments were set up. I wish he would look back at the history of the Act of Union between Scotland and England. He would find that some of the most severe straining and the most bitter points arose over this very question of Customs and Excise. For my own part, I feel that when the Scottish race demand a Parliament of their own, if they see the Irish race in possession of a Parliament of control over Customs and Excise, power such as is given in this Clause to impose all kinds of new taxation, and power to alter and vary Imperial taxation, they also will demand similar powers for themselves, more especially when they see that those powers can be used, as undoubtedly they can and will be, for the purpose of protecting, at all events to some extent, home industries against industries in rival portions of what is now the United Kingdom. If we once, give to the Irish Parliament these powers to invade the domain of the Imperial Chancellor of the Exchequer, it will be extremely difficult to withhold similar powers from any other Parliament which 874 we may set up. Supposing all these Parliaments had similar powers over the Super-tax, the whole of the area might be drained of every single advantage that could possibly be obtained by the Imperial Chancellor of the Exchequer from imposing any Super-tax for the carrying on of a great war in which we might be engaged. I believe it is perfectly possible with the power given to the superior Parliament of imposing a Super-tax and the giving to the Irish subordinate Parliament of the power to impose a "super" Super-tax to bring about a perfect chaos in the whole region, both of Imperial anl local finance. I have only dealt with one question, the question of Income Tax, or, rather, with the Super-tax. The Irish Parliament is to have many other powers beside the power to deal with the Super-tax. There is power given to the Irish Parliament as referred to in the Amendment of the right hon. Gentleman, the Postmaster-General, to deal with exemptions and abatements in relation to Income Tax. What are these present exemptions and abatements? We all know what they are. Now the income on which total exemption is allowed is £160. There are various abatements on different sums, £400, £500, £600 and £700. I want to know from the right hon. Gentleman—for I think I am light in my reading of the Bill—whether it will not be perfectly possible for the Irish Parliament while varying the rate of Income Tax to fix the exemptions or abatements at any point which they choose to place them? The Postmaster-General signified his assent to that proposition. I think his answer will probably be: "Yes, if they do fix the exemption point so high over the whole area of Income Tax collection then they will lose; that sum will be deducted from the Transferred Sum." That probably will be his answer.
Yes, that might be so. At the same time, what I want to point out to the Postmaster-General is that while the Irish Government might by so fixing the exemption or abatements, lose, yet at the same time the result to individuals may be to penalise them; to confer a hardship upon them. It is quite true that the Irish Exchequer might lose, but it is quite true that it would be possible to arrange your exemptions and abatements in Ireland that the result would be that the Irish Exchequer would not lose, while at the same time you might do a very grave injustice to various classes of individuals who were heavily penalised in comparison with those 875 who had similar incomes, derived in a similar way, in England or Scotland. I think that is most undesirable. Just as the right hon. Gentleman himself admits that it is undesirable to reduce the Customs Duty in Ireland; that it would be undesirable from the general point of view that Irishmen should be able to get cheaper tea, sugar, or tobacco, or cheaper commodities of that kind, so I want him to admit that it would be equally undesirable that by the mere manipulation of the powers of exemption or abatement people with incomes in Ireland of the same or similar amounts to the people in Scotland and England should enjoy advantages in the way of taxation compared with their English or Scottish or Welsh brethren under the same Imperial rule. All that to my mind is most undesirable. Even if hon. and right hon. Gentlemen opposite are disposed to give to Irishmen a separate Parliament I do not think that these powers are necessary to it. I think it is a grave misfortune that this Committee should allow itself to be inveigled into this snare of giving the power to Ireland to invade the whole domain of the Imperial Exchequer and to have different rates of Income Tax and exemptions to those in Scotland, Wales, and England.
After all the future must not be forgotten in discussing this question. We must look ahead to see what taxes may be imposed in the future. There are, I am told, 170 hon. Members in this House who are quite determined that the Chancellor of the Exchequer, before he produces another Budget, shall put into that Budget some good swingeing duty on the capital value of land. [An HON. MEMBER: "Hear, hear."] I am not dealing now with the Single Tax, because some Gentlemen repudiate it directly it is mentioned, and no one person has been more active in repudiation than the present Chancellor of the Exchequer. But I believe there is a large body of opinion on the other side of the House which does favour a very heavy duty on the capital value of land. [An HON. MEMBER: "Hear, hear."] At all events there is one hon. Gentleman. I would like the Postmaster-General, as the Chancellor of the Exchequer is not here, to say whether his reading of the Bill would lead him to believe, or lead the Committee to believe, that the Imperial Chancellor of the Exchequer will be able to impose this new Land Duty on Ireland as well as on England and Scotland; that 876 when this separate form of Government has been given to Ireland the Chancellor of the Exchequer will be able to impose new taxation of that kind upon Ireland? So far as I can gather, the Chancellor of the Exchequer, speaking the other day, seemed to give a reply to that. He said he would be justified in imposing new taxation on Ireland if it were for Imperial purposes "or Imperial services." I think he said I do not know how we are going to differentiate Imperial from other services, or how we are going to start on a new era of earmarking our taxation in that way. For my part I believe it will be found quite impossible. Supposing that for some great national or Imperial purposes it was thought good by a Radical Chancellor of the Exchequer, supported by the Radical party, to levy a duty on the capital value of land; if the Chancellor of the Exchequer had power to put that duty on the capital value of land in Ireland as well as on land in England and Scotland, under this Bill, it would be perfectly possible for the Irish Chancellor of the Exchequer to discontinue altogether that tax. I invite the Postmaster-General's attention to that point. It would be perfectly possible for the Chancellor of the Exchequer of Ireland to say, "No, you may have this form of taxation in England and you may have it in Scotland, but we are not going to have it in Ireland."
§ Mr. HAYES FISHER
The effect of that must be of a heavy protective nature in favour of Irish industries. It would enable all farm and dairy produce to compete on more favourable terms than Scotland could compete with England, and on more favourable terms than England could compete with Ireland. These duties, if ever they are put on, must result in very I heavy taxation of all industries that use very much land. [An HON. MEMBER: "No."] That is my view. It is the view of very many exports on this question. Some other day when we are discussing the subject we may be able to work the sum out and show that all industries that occupy a large amount of land, such as docks, markets, railways, will pay very large sums indeed as extra taxation. There, again, you will have Glasgow and Belfast in opposite places. Supposing this new tax was not imposed on Belfast, but was imposed on Glasgow, undoubtedly the 877 shipbuilding yards in Belfast and other competing industries in Belfast, Dublin, and Irish towns, would compete on much more favourable terms than similar industries in Glasgow and other towns where these industries have been set up and where they are now flourishing. We have to look, not only at the present, but we have to look at the future when we are discussing this question. We are assuming for a moment that this Bill will pass and that Home Rule Parliament will be set up. We are assuming that there will be separate Irish and British Exchequers, an Irish Chancellor of the Exchequer and an Imperial Chancellor of the Exchequer. I say that if this Bill is passed in this form, and if this Clause is passed in this form, without the Amendment I have moved, it must lead to endless chaos and confusion, to grave injustice and inequity between different classes of His Majesty's subjects residing now in different portions of what is now the United Kingdom—must lead to constant and endless friction between the two Exchequers and the two countries. In the whole interest of the community, whether they reside in England, Scotland, or Wales, this Clause should not be allowed to pass into law.
§ Mr. JOHN REDMOND
The able speech which the right hon. Gentleman has just made I think sufficiently indicates to the House the extremely wide area of discussion that is opened by this Amendment. The Amendment is one, as I understand it, that proposes to take away from the new Irish Parliament the power to vary Imperial taxation. It was necessary for the right hon. Gentleman, in discussing that proposition, not to confine himself to his own Amendment, but to look at the Amendments which stand on the Paper in the name of the Government. I do not propose to wander over the whole field of the financial scheme of this Bill, although I might be strictly in order in doing so. From the first I have been one of those who consider the financial scheme of the Government as drafted in the Bill a good scheme. I do not say that, if it had rested with me, I would not have been a little more generous in my dealings with the English Treasury than the Government; but we must take the scheme as a whole. I have stated from the first—I stated it to the National Convention in Dublin, where my words were enthusiastically endorsed, and I have said it on a good many platforms since—that the financial scheme of 878 the Government as proposed in the Bill was a good scheme. That is the only general observation I would make. I propose to make some observations with reference to one particular matter. I confess that I regret that the Government have not stood to their scheme in its entirety. I know perfectly well the views which are entertained and have been expressed most powerfully by a large section of Members on the opposite side of the House.
They seem to have been able to conjure up in their minds a vision of the near future, in which Ireland is so prosperous that she will be able to take the tax off tea, sugar, and tobacco, while at the same time this country will be in such pangs of poverty that she will be obliged to continue all these taxes. That vision is an absolute absurdity. Let hon. Members consider for a moment how very remote such a prospect must be. It can only arise as the result of enormous economy in the government of Ireland. Everyone admits that Ireland is the most expensively governed country in the world—that the Departments there overlap and overrun each other. Everyone looks forward to the future when it will be possible to make economics in the various Irish public services. That cannot be done at once. It cannot be done for a considerable time. All the existing Civil servants and office holders in Ireland have had their interests most carefully guarded in this Bill. The Government have strengthened the provision for safeguarding their interests by a series of Amendments that have been put upon the Paper in the name of the Chief Secretary. Anyone who considers these Amendments and provisions in the Bill, and the facts of the case, must see that probably a generation will pass away before any very substantial economies can be made in the Government of Ireland. Until those economies are made no Irish Chancellor of the Exchequer will be in a position to take a tax off tea, sugar, or tobacco. Remember, further, that if the time should come when the Chancellor of the Exchequer can make a remission of some of these taxes it will be done entirely at the expense of Ireland, whereas if the taxes, which is a much more likely thing to happen, were taken off by the Imperial Parliament, for the whole of the United Kingdom, Ireland would not suffer, because the Transferred Sum would remain the same, and it seems to me, therefore, 879 that the Irish Chancellor of the Exchequer, first of all, would not have the power of making this deduction, and even if he had the power he would be a great fool to do so, because it would be far better for him to await the arrival of the inevitable day when public opinion in this country would insist upon reducing the cost of these things, and I am expressing my own individual opinion that the deficit of which we heard so much will then, in all probability be gone, and the financial situation will be revised in this House, under the terms of the Bill, long before any Chancellor of the Exchequer would dream of interfering with the taxes on tea, sugar, or tobacco.
But it may be asked that as the probability of using this power to reduce is so remote, is it worth while to put it into the Bill? What I would like to say about that is this. This new Amendment deprives us, if not in practice, at any rate not in theory, of a certain power over taxation which is given to us by the Bill, and it prevents, if it ever came into operation at all, any effort being made to redress the balance between direct and indirect taxation in Ireland. The Committee is well aware of how this matter stands. Progress in England has been in the direction of reducing indirect taxation—I do not know the exact figures at the moment, but I think the direct taxation is about half the taxation in England: it is more than two-thirds of the taxation in Ireland—and if this Amendment were put into the Bill as settling the matter once for all, we would never in the future have the power of relieving the burdens of the poorest of the poor by dealing with indirect taxation, which would be a most unfortunate thing for us. But I should like to look at it from another point of view. I said a moment ago that revision of the financial situation would probably occur under the Bill before there is any real question or opportunity of reducing these taxes. I am one of those who is very confident upon this matter. The revenue of Ireland from natural causes has been increasing in recent years, and if it increases at the same rate for the next ten years it is assumed that the deficit will have entirely disappeared, and if it disappears these financial realtions between the two countries will, under the Clauses of the Bill, come up for revision in this House, and there is the provision enabling Ireland to be represented in these 880 discussions, not only by her forty-two permanent Members in this House from Ireland, but by a number that will be in proportion to the population of the country. This concession that the Government has made is not, of course, vital to the Bill. I look at it from this point of view. I am well aware that a large body of opinion on the Ministerial side of the House takes a strong view upon this point. Seventy-two Members, I am informed—[HON. MEMBERS: "No, no," and other HON. MEMBERS: "More."] The exact number is not essential to my argument, but a large body of Members upon the other side of the House take this view.
§ Mr. JOHN REDMOND
Oh, no. The hon. Member is quite wrong. I know more about it than he does. A large body of Members take this view, and amongst them some of the very best supporters of the Government in this House, some of the very best friends of Ireland, and some of the most strenuous supporters of this Bill. I say, in these circumstances, it would be impossible for the Government and for the Irish party entirely to disregard the views of these Gentlemen, though I do not entertain the belief that seems to be entertained by some newspapers that if the Government had stood firm these men would have wrecked the Home Rule Bill; because, to have done so would be ridiculous and inconsistent. As I have said, this is not a vital matter to the Bill, and I was never influenced therefore by that consideration at all; but I do feel that when the views of a large body of friendly Members of this House, of men who proved in the past their friendliness to Ireland, are pressed upon us, that it is wise and proper of the Government to pay due heed to the remonstrance, and therefore, much as I regret that the scheme does not remain in its entirety, as proposed by the Government, at the same time I am bound to say that, in my opinion, they have taken the wise course in putting this Amendment on the Paper, and in this course the Irish party will acquiesce.
§ Sir EDWARD CARSON
I do not suppose that anybody for a moment expected that the Irish party would do anything but support the Amendment of the right hon. Gentleman the Postmaster-General, which appears upon the Paper to-day. They would support anything to get the Bill and they leave it to future operations in Ireland and to Irish Members in this 881 House to extract anything that is necessary to complete what they have already got if this Bill unfortunately should ever become law. What I complain of is that a revolution in the Bill such as this is should be put down to-day or within the last few days, having regard to the limit of Time there is at the disposal of this Committee for the consideration of these matters. Everybody will agree that this Amendment is absolutely in the teeth of everything the right hon. Gentleman opposite has said from the Second Beading Debate down to the present moment, and now he has put his Amendment upon the Paper at the very last moment when there is no power whatsoever to enlarge the time for the discussion. Of course, the whole of the discussion as regards finance is not only really a farce but it is impossible to discuss it in the time, and now at the last moment there is this revolution made in the Bill. The least we might expect is that the Government would come down and say to the House, "We are now changing the Bill in a vital principle that requires the whole reconsideration of our financial proposals, and we are going to act fairly by the House and we are going to give whatever time is necessary for discussing our Amendments in addition to the very brief time we have already given. Of course, they do nothing of the kind. They have the Bill and they are making satisfactory progress. At half-past ten every night Clause after Clause is passed without discussion and Amendments are closured wholesale by the hundred. We know perfectly well there is absolute unreality in the whole of these proceedings, because the Government say. "If we can pass any kind of a Bill at all, no matter how unworkable or unfair to either this country or Ireland and put it upon the Statute Book, then we will have paid our debts to hon. Members from Ireland below the Gangway and we can leave the future to take care of itself."
The hon. and learned Member for Waterford, who has just spoken, has declared that this Amendment of the Government is not a vital Amendment. That is not the way it is looked upon in Ireland. As a matter of fact the evolution of this question in Ireland is very remarkable. Before the Bill was introduced all the Nationaist experts in Ireland said they could not run Ireland unless they had complete fiscal autonomy, in fact a great many of them said it would be better to have no Bill at all than one without fiscal autonomy. I quoted some of them the 882 other day in a speech I made. That was the general feeling in every meeting held by people who took the trouble to go into the finances of this Bill at all. And everybody knows it was that question that delayed the introduction of the Bill for several months at the earlier part of the Session, and necessitated this Closure and guillotine at the present moment. Then came the proposals in the Bill, and everybody opposite was enamoured of these proposals. The Postmaster-General and the Prime Minister made a great point that this finance was required by the Report of the Committee founded upon evidence which they will not show us. They were all greatly enamoured of this finance, and it was described as the most ingenious finance ever introduced, for not only did it give fiscal autonomy to Ireland by giving at all events a method of regulating Customs or Imperial taxes whatever that might be, but at the same time it did not interfere with the Imperial Government because the Imperial Government still have the power of making the taxes while the Irish might only reduce or add to them, which was a very fantastical proposal in itself. We were told that was essential.
The view of the Postmaster-General was that Ireland would be getting nothing but the power of increasing taxation unless they had the power of reduction, and he pointed out what a monstrous thing it would be to Ireland if after all these years, all the power you gave her was to raise taxation, whereas in reality the very poorest of the poor were concerned in the reduction of taxation. The Government come down to-day and make that very proposal to Ireland. They say to Ireland. "You can go on and have your right to increase Imperial taxation, but you must, not take a farthing off tea or sugar," or those other matters which were always told ought to be abolished, especially in Ireland, where we know there is a greater combination of poorer people than in any other part of the United Kingdom. [An HON. Member: "No."] I do not know who says "No," but I expect he is a gentleman who knows nothing about Ireland.
What is the reasons of this change? Why is it that all of a sudden the Government come down and say, "We told you before that a certain thing was black, now we tell you it is white, and as regards our supporters behind us they are quite willing to vote whether it is black or white: it is all the same to them. The thing is to get the Bill through. Let it 883 be as rotten as you like, get it through." This is the policy of the Government, and it is the policy of the hon. Member for Waterford who got up a while ago as if lie had never been consulted upon this Amendment at all. The hon. and learned Gentleman is really a very good player. I give him all credit for it. Nobody admires the play-acting of the hon. and learned Member more than I do and probably that is because I understand it. I have known the hon. and learned Member for many years. I have watched his speeches in Ireland and I have compared them with his speeches elsewhere, and they are always excellent reading. I know perfectly well the hon. and learned Member came down to make his speech here having made his arrangements with the Government. It could not be done without him. You cannot really alter black into white without the consent of the hon. and learned Member. Now the hon. and learned Member says that this is not a vital question. I happened to have received a paper on Saturday from Dublin. It was the "Irish Independent," which is the chief Nationalist paper of Dublin. [HON. MEMBERS: "Oh, oh!"] I know it is not one subvented by the hon. and learned Member for Waterford, and it is not "The Freeman's Journal," to which the hon. and learned Member largely contributed out of party funds. It is another Nationalist paper, and it is not absolutely dependent on the pay of the hon. and learned Member for Waterford. [Laughter.] I suppose that is why hon. Members laugh. It is a paper with the largest circulation in Ireland, and it is one which can go on criticising these, matters without having any regard to the hon. and learned Member for Waterford and the arrangement to call black white which he makes with the Government. Passing from the first part of the article, which contains some abuse of myself, but which is not unnatural in the slightest degree, let us see what it says about this matter, which it is stated is not at all a vital Amendment in the Bill:—Yet the Government has tabled an Amendment, the effect of which is to withhold from the Irish Parliament the power to reduce Customs. In yielding thus to the objections of a score or so of its own followers, the Government have displayed lamentable weakness. From Ireland's point of view this is more than a mere abstract question; it is a vital feature of the Bill. Indirect taxation presses with undue severity upon the poorer classes of the country, and roughly three-quarters of the taxed revenue is derived from that source. If the Amendment is carried, a large portion of the community peculiarly onerated with indirect, taxation cannot be relieved to the extent of a single penny.884 Is that a satisfactory position for the Irish taxpayer? Is it a great fulfilment of the hopes and expectations which have been held out to them? What is the defence of the hon. and learned Member for Waterford in this House? I know it is not a real defence, because the real danger is that there might be a hostile vote. What is the defence put forward here? "Oh," he says, "under Home Rule the possibility of ever taking off anything in regard to the Customs, the Sugar Duty and the Tea Duty, and such things which affect the poor of Ireland is so remote that you need not consider it." That is a pleasant prospect to the people of Ireland, who think we are going to have great alleviation from the taxation of the brutal oppression of the Saxon. It must be a splendid message to send to the people of Ireland, saying that the possibility of taking off even a single, farthing or a halfpenny is so remote that it need not be taken into consideration. Then the hon. and learned Member says, "Even if we had the power it is better not to take it off in Ireland, because if we do we shall be relieving the burden of the deficit from England," or, in other words, you will be relieving the English taxpayer. You say to Ireland, "Let the English taxpayer take it off when he is taking off his own Customs, and then, notwithstanding Ireland taking it off and taking it off from us, he will have to go on, because you have fixed the sum in relation to the transferred services, and he will have to go on paying all the same." What is the prospect, therefore, for the English taxpayer in regard to the free breakfast table which we heard so much about during the election? It is that one of the considerations you have to keep in view before you take off a single halfpenny is that, if you take it off as regards England, you will have to go on paying it as regards Ireland, while Ireland will have it taken off. Was there ever a more ridiculous situation in finance than to put the relative taxpayers in that position as regards each other?
But it does not end there. The hon. and learned Member for Waterford says, "Really, the way to look at all this is to wait until we come to the time when Ireland has got rid of her deficit." Having regard to the remote possibility of taking off or reducing the Customs, I do not know-how the hon. and learned Member means to do that. He said, "Really, the way to look upon all this is before you touch tea, sugar, the Customs, or those other taxes that affect Ireland, to put it all off 885 to the time when there will be a revision." The revision arises when you have got rid of the necessity of paying £2,000,000 a year to Ireland. It arises when there is a certificate that Ireland has been so far paying its way, that they are going to grant a contribution to the Imperial Exchequer. I should like some time limit to be fixed for that millennium when the relations of Ireland and England will be in that position. The hon. and learned Member for Waterford says, "Really, as regards the whole of this question of reducing Customs in Ireland, or reducing the other taxation, you must wait for this revision." What does the revision mean? You must wait until you come back from Ireland, until you have some Irish Members in this House in addition to the forty-two, and you will have the whole of this controversy as regards Customs and finance in relation to Ireland all over again. What a prospect for the settlement of a question between two countries! This is the best defence the hon. and learned Gentleman can put forward at the suggestion of the Postmaster-General, and after his confabulations with the Government in coming to an arrangement on this question. The best suggestion he can put forward is to put it all off until we are here again under some new constitution after a lapse of time when the millennium has come about in Ireland. The thing is too absurd. What I protest against is that a vital change should be put in this Bill as if it were a kind of drafting Amendment when, as a matter of fact we are considering the whole financial relations between the two countries, and we are asked to come down to consider not the proposal which the Government said was necessary, but a fundamental change like this. The truth of the matter is they care nothing about the Bill, or the Opposition, or our arguments; they say anything one day and anything the next, and the only thing they regale themselves with, and the only consolation they have, is that when half-past Ten o'clock comes, there is an end to all their difficulties; and whether they put in one system of another, it all passes away from the purview of the House under the guillotine; and be the system proposed good or bad, it is what the country must take because the country will never be consulted.
§ Mr. HERBERT SAMUEL
In the Debates which have taken place on this portion of the Bill there is no argument 886 put forward more than the contention that we are giving to the Irish Parliament powers far too large. If there is one provision which has been more vehemently denounced by right hon. Gentlemen on the Opposition Bench than another it is the power conceded to the Irish Parliament to reduce the duties on Customs and Excise. The Leader of the Opposition hardly ever makes a speech on this Bill without indicating the grave objection he attached to the power conferred on the Irish Parliament to have lower Customs Duties than we have in Great Britain.
§ Mr. HERBERT SAMUEL
The right Gentleman was referring to the power of reduction, and he said the Irish Parliament would be able to reduce, and the British Parliament would do so at the same time, and that it would be a race between the two Chancellors of Exchequer. The right hon. Gentleman made that point again and again. The power of Protection and the various aspects of the fiscal policy to which he referred undoubtedly referred to the power of reduction, although I know the right hon. Gentleman objects to the power of increase as well. When we try to meet the expressed wishes of right hon. Gentleman opposite, and meet their case, the right hon. Gentleman the Member for Dublin University denounces us for another reason, which is that we are not allowing an extra day under the allocation of time Resolution in order that he and his Friends may have a full opportunity of condemning us for doing precisely what they have asked us to do.
§ Sir E. CARSON
The reason I said that was because the right hon. Gentleman purposely misrepresents what I said.
§ Mr. LEIF JONES
Is it in order for the right hon. Gentleman to say that any hon. Member of this House "purposely misrepresents" him?
§ Mr. HERBERT SAMUEL
Personally I attach no importance whatever to the right hon. Gentleman's interruption. The 887 right hon. Gentleman and his Friends have attacked us again and again for including this proposal in the Bill when we introduced it, and the only thanks we get when we try to meet them is that we are "doing it under the guillotine." A similar inconsistency is to be seen in the criticisms made against the Amendment standing in my name from certain quarters in Ireland. I see the hon. Member for North-East Cork in his place—
§ Mr. T. M. HEALY
We are not going to take any part in the discussion on this part of the Bill whatever. We condemn it, and we think your action in regard to it is absurd.
§ Mr. HERBERT SAMUEL
I do not think any criticism could be more emphatic than that to which the lion, and learned Member has just given utterance. Apparently he has forgotten that he and his Friends have frequently said that the inevitable result of the financial scheme of this Bill in Ireland must be an increase of taxation. The hon. and learned Member's colleague in the representation of Cork, and certainly the newspaper which support the party to which he belongs, have again and again declared that the keynote of our financial schema is increased taxation, and that so far from any question of reduction being possible it is entirely out of the question. It has been said that Home Rule under this Bill would mean more taxes to the Irish, and not less, and when we promise to omit from the Bill the power to reduce certain taxes, then, forsooth, they turn round and tell us that this reduction is vital, and that we are denying to the Irish people what is essentially the birthright of any free country. But let us get to the true proportions of the alterations we are now proposing to make. The Bill in itself does not, with or without this alteration, touch fiscal policy in any degree. There are powers, indeed, to modify in certain limited ways Customs and Excise Duties, but there are no powers conferred upon the Irish Parliament to control tariff policy, and that has not been asked for by those who are represented here by the hon. and learned Member for Waterford (Mr. John Redmond). The right hon. Gentleman who moved this Amendment quoted a remark of my right hon. Friend the Member for West Islington (Mr. Lough) that he had received a promise from one of the Law Officers to 888 the effect that an Amendment would be inserted to allow the Irish people to protect their own trade interests, and, reading in conjunction with that some writings of many years ago of my right hon. Friend, he deduced that there was some sinister plot to change this Bill, and after all to give a power of protection to the Irish Parliament. The right hon. Gentleman, if I may say so, has hit upon a mare's nest. My right hon. Friend was not referring, and the question in respect of which a promise, not of an Amendment, but of consideration was given, had nothing whatever to do with Protection, with Customs Duties, or tariffs, or anything of the kind. It related solely to the question whether, under Clause 2, the Irish Government ought not to be given the power of having officers in the nature of trade agents in the countries to which Ireland exports, so as to be able to secure that other commodities are not allowed to compete with Irish products unfairly by the use, for example, of the designation "Irish butter"—
§ Mr. HERBERT SAMUEL
It is to Clause 2, and cannot be put down at this stage. It must be put down for the Report stage if at all. My right hon. Friend the Solicitor-General did not give any pledge that there would be any Amendment. He said the matter was one for consideration as to whether it was desirable that an Amendment should be inserted in Clause 2 to enable the Irish Government to protect the interests of Irish, exporters in foreign countries in such a way; and it has no relation whatever, direct or indirect, close or remote, with the question of Customs Duties which we are now discussing. Respecting the Amendment which stands in my name, and which is naturally the subject of discussion this afternoon, although the Amendment before the House is a different one, the Government have realised front the outset that a proposal to allow a variation of Customs Duties within a single State like the United Kingdom is exceptional, and I have freely admitted on many occasions there is no federation in which such variation of Customs is allowed.
889 We have realised also from the outset that if this power were acted upon, and if the Customs were in fact varied, there would necessarily be some inconvenience thereby caused. There would be the necessity of Customs examination of persons and goods passing from one part of the United Kingdom to the other, and the question before us was whether on the whole the advantages of the course we proposed outweighed or did not outweigh the obvious disadvantages. With respect to the power of increasing Customs Duties, our view is clear. Although there might be some inconvenience caused by the necessity of examining passengers and goods crossing from Great Britain to Ireland if the Irish Parliament thought fit to raise the Customs Duties, nevertheless it was essential they should have that power, because otherwise their financial powers would be most unduly restricted. Therefore, although that inconvenience would exist, the balance of advantage was clearly in favour of giving them the power, because otherwise they would have no adequate means of raising increased revenue, supposing increased revenue were required. I gave my reasons for that on a previous occasion at very considerable length, and I do not want to weary the House by repeating what I said on that occasion.
With regard to the diminution of Customs Duties, I have always held, and the Government have always held, there were strong reasons for extending that power to the Irish Parliament. Supposing they were in a position to reduce taxation, it is a desirable thing in itself that they should be able to reduce taxation that falls through indirect taxes upon the poorer classes of the community. Here again it is a question of weighing and not a question of "black and white," as the right hon. and learned Gentleman the Member for Dublin University (Sir E. Carson) said. It is not a grave question of principle, but simply a question of weighing the advantages and disadvantages of the two courses, and the Government were of opinion that on the whole the inconveniences that attached to the varying of Customs Duties downwards, were less than those which would attach to denying the Irish people the right of reducing this form of tax. But, as the hon. and learned Gentleman the Member for Waterford has said, and as is well known to the House, there are not a dozen or a score, but a very large number of hon. Members on this side of the 890 House who are very friendly to the Bill and strongly in favour of the principle of Home Rule, who entertain a strong objection to this particular provision, and they have urged upon the Prime Minister and upon the Government, that in their view the Bill would be greatly improved if this particular provision were omitted.
I do not think the Government ought properly to treat as of no account representations of that character made in respect of a matter which is in no sense vital to the Bill, and which in no sense revolutionises the Bill as the right hon. and learned Gentleman has said, but which is merely an incidental provision of the financial arrangements of the Bill. We have for those reasons thought well to meet the wishes of our hon. Friends and to omit this provision from the Bill. The Irish people, as has been said by the hon. and learned Member for Waterford, can indeed have little hope of an immediate reduction of the taxes that press upon them. The economies which undoubtedly will be possible in the expensive administration of Irish affairs must take time to effect, and meantime, there are many matters which, on the contrary, call for increased expenditure; so as a practical matter it is not to be expected that in any case the Irish Parliament will be in a position to reduce these taxes, at all events, in the near future. Therefore, the question becomes, one not of vital, but of more or less academic importance.
I turn to the Amendment of the right hon. Gentleman which is now before the House. He suggests that we should forbid the Irish Parliament any power to vary in any way any Imperial tax; that is to say, if they wish to raise fresh revenue, they should have to invent new taxes of their own. I think the contention only needs stating, for those who are favourable to the principle of Home Rule and who approve the general idea of the Bill, to recognise how unacceptable it is. The Irish Parliament, in our view, must have adequate powers of finance, and to tell them they are to have nothing to say to Customs, nothing to say to Excise, nothing to say to Income Tax, to Death Duties, or to any of these Stamp Duties which are now levied, would be to confine them to a sphere so narrow that it would be impossible to expect them to conduct the administration of their own country with success. The alternative would be to give 891 up to them altogether some important sphere of Imperial taxation, to yield to them, for example, the whole sphere of direct taxation, while keeping to the Imperial Government the control of indirect taxation. On that I have spoken at considerable length on previous occasions and do not wish to repeat what I have already said, but on broad and general grounds that scheme is unacceptable. If that scheme is not accepted, the only alternative is to give certain limited powers of variation of Imperial taxes imposed by this House. The Amendment which stands in my name is by no means revolutionary, and touches only in a small degree the framework of the financial system of the Bill. The Amendment which is now before the House cuts at its root, and therefore I ask the Committee to reject it.
§ Mr. AUSTEN CHAMBERLAIN
I understood it was the intention of the Committee at this stage to discuss the bearing of this Amendment rather upon direct taxes than upon Customs and Excise Duties; but, as Customs and Excise Duties and the new proposals of the Government in relation thereto have played so large a part in the preceding Debate, I hope I may be permitted to spend a little time upon them.
§ Mr. AUSTEN CHAMBERLAIN
I make no sort of complaint, and I do not wish to appear to criticise anybody else's action. The right hon. Gentleman has attempted to minimise the alteration which the Government have made in the Bill. I confess it would have been more satisfactory to the Committee if he could have shown that in relation to this matter, or to any of the matters with which the present set of Clauses deal, the Government went on any principle, or were prepared to adhere to any principle. My right hon. Friend the Leader of the Opposition (Mr. Bonar Law) has once or twice of late tendered a piece of excellent advice to the Government. He suggested that if they would only study Mr. Gladstone's example they would find that, whilst Mr. Gladstone recognised in 1886 or 1893 that the Nationalist vote was a necessity to him, he never forgot that he was a necessity to the Nationalists, and that therefore for the purposes of striking a bargain they had equal powers, if indeed Mr. Gladstone had not the superior or better cards in his own hand. That is a point of view which hitherto the Govern- 892 ment have neglected. Some of my hon. Friends think that to-day they have showed signs of having appreciated it for the first time, and I see that view is held by hon. Gentlemen opposite. I wish I could compliment the Government on having at last taken their stand upon something, but the Postmaster-General makes it impossible for me to do that, because he explained the Government still think their own proposal best, and are still of the opinion, unlike the hon. and learned Member for Waterford (Mr. John Redmond), who thinks it is of no importance, that the Amendment is a disfigurement of the Bill. It is not the Government which have plucked up courage to withstand the hon. and learned Gentleman, because he and the Postmaster-General following him have, with equal candour, told us that a sufficient number of Liberal Members, counterbalancing the Irish Nationalist vote, have on this occasion threatened to revolt. The Government, feeling that it might be defeated, have made their appeal to the hon. and learned Gentleman, and he, seeing, as my right hon. Friend the Leader of the Opposition has clearly pointed out, that the Liberal vote is just as essential to him as he is to the Liberal vote, and the Government have gracefully given way to the minority of seventy Members on the opposite side of the House who differ from both of them. I hope the independent Members on that side of the House will pluck up a little more courage. They have shown what they can do. Let them complain further, and perhaps we may get rid of some objectionable features of the Bill.
The Postmaster-General complained that the course of action of my right hon. Friend was really unreasonable, because whilst he criticised the proposal when it appeared in the Bill he criticised the Bill when the proposal was going to be struck out. There was some kind of logic about the original Bill, though it led to a very foolish result, but there is no kind of logic about the present proposal, and it leads to an equally foolish result, if not quite as dangerous as the old one. In my opinion, if you determine, as the Government do, to establish a local Parliament in Ireland with an independent taxing authority you base your financial scheme on an entirely wrong plan. If we could do that we ought to have left the Irish Parliament a certain field of taxation in which it could do what it liked, 893 and we should have reserved to the Imperial Parliament another field for Imperial taxation, in which it could do what it liked. Instead of that, each authority is to tread over the same ground and levy the same taxes, and they will interfere with each other's proceedings. The Amendment of the Government does not relieve the Bill of that absurdity, nor does it exclude from the purview of the Irish Parliament the question of tariff policy. I think the right hon. Gentleman has wilfully blinded himself to that difficulty. He invented a definition of bounties which he would not find in any dictionary or treatise on fiscal questions, and now he attempts to make the House believe that if they provide against Protection by Customs no Protection is possible. But preference to particular industries can be given under the Bill as it stands. It is one of our difficulties that the Amendments are not consistent with the course that they are taking with regard to one-half of the services they are omitting. After the explanation given by the Postmaster-General on the subject and the explanation of an hon. and learned Gentleman opposite that it was not a promise to do, but a promise to consider whether something should be done, and the something which the Government are apparently considering is the option given to Ireland to establish trade agencies in any part of the world she likes. What is that but to establish a Consular system. When you establish a Consular system, how are you going to obtain exercise of control over the foreign relations of Ireland. We have seen the example of Sweden and Norway and of the Transvaal, under our own old system of supremacy. I can only say, if the Government are considering a proposal of that kind, they are driving one of the biggest holes in the few safeguards we have left for Imperial unity. The right hon. Gentleman said the difficult course which the Government propose to take in regard to Customs and Excise did not require justification. The justification for giving power to increase the Customs and Excise Duties is, I think, that they may be needed for revenue and his reason for allowing them to be reduced is that it would be an inducement which would make economies in administration which ought to be made. But inconvenience in British trade might be imposed by the Irish Parliament and the British trade had no redress. The Irish trader sending into Great 894 Britain was guaranteed against any such, inconvenience. During these Debates we have been repeatedly assured that the British administration in Ireland was so extravagant and so costly as to be beyond the needs and means of the people, and that was put forward in itself as a claim for Home Rule Government, and on that ground the Government justified the Bill. Now the Government justify this change in front by saying there is no ghost of a chance that Ireland will be able to reduce the extravagant taxation imposed in Britain for at least a generation, and even if she were more successful in this than Great Britain she would not be allowed to reduce these taxes. Could there be a more illogical defence of an absurd proposal?
I want to say one or two words on the power to vary direct proposals. I think we ought to have some explanation, and I think we are entitled to ask for it as to what the Government can conceive the powers of the Irish Parliament are going to be? On what principle are they going to act? In order to ascertain what are the intentions of the Government in this respect, and on what principle, if on any principle, they have limited the power of the Irish Parliament to deal with the Income Tax, did they not exclude the Super-tax? That might have been done on principle, but it might also have been a matter of convenience.
§ Mr. HERBERT SAMUEL
The difficulty with regard to the variation of the Income Tax is that it was collected at its source, whereas the Super-tax is not.
§ 6.0 P.M.
§ Mr. AUSTEN CHAMBERLAIN
But to collect the Super-tax from the individual we have to bring into force an inquisition and it is true that that inquisition makes the collection of the tax more costly. But if that was worth while in a rich country like Great Britain, it would be more so in Ireland, and there is no reason why the Chancellor of the Exchequer there should not put a Super-tax on incomes of £700 or even of £160. If you do not mean to enforce it, what is the use? If hon. Members will take the trouble to read the Amendment on this point they will be struck by the inconsistency. For instance, the Irish Parliament may vary the Income Tax only so as to vary the conditions under which any exemptions or abatements are granted. But they may not vary the rate! What is the meaning of that? All these exemptions 895 and abatements do vary the rate. I understand that the Government give them power to vary the rate and the abatements to any extent they like. There is nothing to prevent them making it 1s. 2d. in the £, and there is nothing to prevent them withdrawing the abatement. But as far as the Death Duties are concerned, there is no power to vary the rate. What is the principle underlying these separate provisions? The Government have thought it necessary in regard to the Death Duties to provide that the Irish Parliament shall not have power to discriminate between persons and property. Why is there not the same provision in regard to discrimination in this case? If there is reason to suspect or reason to fear that the Irish Parliament might discriminate unjustly in regard to the Death Duties if it were left full powers, and therefore you expressly provide that it shall not, why do you not make exactly the same provision in regard to Income Tax? Do you think that they cannot discriminate as between persons and property in regard to Income Tax? What is to prevent an Irish Parliament, which has full power over the Super-tax, putting a Super-tax on particular forms of income? What is to prevent it from giving relief to certain forms of industry mainly prevalent in Nationalist Ireland and super-taxing certain forms of industry on which the prosperity of the Unionist part of Ireland depends? There is nothing in this Bill, and yet by the provision you have put in with regard to the Death Duties you admit that such a danger might arise and that it ought to be guarded against, but on no principle, because you only act from expediency as one difficulty after another crops up, and you make the provision in the one case and not in the other. I do not wish to seem in any way to interrupt the discussion on the powers with regard to Customs and Excise, which, however, will come up at a later stage, but while these are being discussed I request that the Government will not forget these questions in regard to direct taxation, which are certainly raised by this Amendment, and which we may be unable to raise at a later stage. For my part, it seems to me that the more you look at these various provisions, whether you look at the Bill as originally drawn or the Amendments now standing in the name of the Government, the more you come to the conclusion that they have been guided by no principle in the framing 896 of their financial scheme, that they were driven by pressure from one quarter to alter their course to the left, and then by pressure from another quarter to alter their course to the right, and that these inconsistent and illogical provisions are the result of their having no course of their own, but being driven hither and thither by fluctuating public opinion in their own party.
§ Mr. LEWIS HASLAM
When I spoke in the Debate on the Committee stage of the first Financial Resolution, I gave reasons why I objected to power being given to alter Customs Duties. I said that I knew that seventy or eighty Liberal Members had stated that they were opposed to these powers of reduction and discontinuance. I also said, and I believe it is true, that a great majority of the Liberal Members were also opposed to them. [HON. MEMBERS: "No, no."] Now that the Government have, as I believe, in their wisdom, taken the point of view which I and ray Friends hold on this matter, I have withdrawn the Amendment I had on the Paper which was to carry it into effect. I still desire to place some further considerations before the Committee. I would, in the first place, call attention to the fact that the main reason for desiring to reduce the Customs Duty has been given in the "Manchester Guardian," which quotes the Press Association as follows:—Among Nationalists the Amendment is regarded, however, with different eyes, as it makes impossible a reduction of the Tea Duty, which would have, been popular in Ireland.Hon. Members will be surprised to hear that a reduction of 1d. per lb., or 20 per cent., in the Tea Duty would only amount to 6d. per head of the population of Ireland. Of course 2d. would be 1s. per head—that is to say, that if there were a reduction of 2d. per lb. it would only amount to one week's old age pension to the Irish people—that is 5s. per family—so that I think the objection to the powers of reduction entertained by the right hon. Gentleman the Member for Trinity College, Dublin (Sir E. Carson), and others, falls to the ground. Indeed, the objection is not a practical one; it is one of pure sentiment. On the other hand, if we take the case of tobacco, a 20 per cent, reduction of the Tobacco Duty would be a more important affair. That would amount to 1s. 9d. per head of the population of Ireland per annum. To smokers, who are perhaps in a majority, the tax might amount to 5s. or 6s. Even for that small 897 amount it is not worth while upsetting the whole of our fiscal system. It would indeed be folly to upset all the acknowledged principles of federal finance for such a small consideration. The "Times" Dublin correspondent writes, I think, in to-day's paper that:—its right to reduce Customs Duties was specially prized, because the burden of indirect taxation in Ireland is heavy on the poorer classes.That is the very point I am raising. I am showing that the reduction of the Tea and Tobacco Duties is so slight that it is ridiculous to say it would be a matter of vital importance to the poor people of Ireland. Again, why should the poorer classes in Ireland have different treatment from the poorer classes in this country1? It appears to me to be a most unfair proposition. I hold that the powers of finance with regard to Customs and Excise ought to be entirely controlled in this House, where English, Scotch, Irish, and Welsh Members can adjudicate upon the question in the interests of the whole of the United Kingdom. The "Manchester Guardian" and the "Times" correspondents emphatically point out the fact that Irish candidates would be worried to give pledges for the reduction of taxes. Naturally, if poor people think they are going to gain a great deal by the reduction of duties on tea and tobacco, they will worry their candidates to pledge themselves to reduce those taxes, and the time of the Irish Parliament will be wasted on this subject. I hold that the poor people in Ireland and, indeed, many of the candidates, would hardly understand the effect such reduction would have upon the Transferred Sum. Of course, we all in this House know that Ireland would not really gain by a reduction of those taxes, because if she wanted money she would have to raise other taxes in order to make up the balance. It would lead to chaotic finance between the two countries. If the Irish Parliament did reduce these taxes, and were obliged to raise money by other means, or if it could not get the money by other means, it would lead to a starving of the services, such as education. There is another very important consideration which leads me to believe that the power of reduction is one which ought not to be given, namely, that if the Irish Parliament reduced the duties considerably it might lead to a considerable amount of smuggling. We all object to smuggling on principle as well as on account of the loss of revenue. It is a 898 question of cheating, and if we can prevent the people of any country from cheating the revenue we do good to that country.
Another point is that the Government's Amendment prevents our treating Ireland as if she were a foreign country, and, avoids the necessity of searching passengers' luggage and the parcels post. If you have no trade advantages between the two countries you will more easily obtain the true revenue of Ireland, because traders will have no interest in giving false declarations. Anyone in this House used to foreign trade knows there are certain traders who endeavour to hide dutiable goods as much as possible, and to get goods duly free if they possibly can. We ought as far as possible to avoid that. It has been stated on all sides of the House that the money is required in Ireland. The Chancellor of the Exchequer said that he did not think there would be any necessity for the reduction of the duties of Customs and Excise. On the other hand, I believe most of us see no particular objection to the Irish Parliament having the power of raising the duties by 10 per cent. It is a power which could not be largely used on account of the unpopularity of increasing taxation. That is a point which ought to be understood. It is not likely to be used for the increase of taxation upon tea or tobacco. The power of increase will affect purely Irish affairs. The point which ought to have weight with the Opposition and hon. Gentlemen below the Gangway opposite is that this alteration in the Amendment will make the Bill much more popular with the British electorate. I do not know whether the Opposition will be quite so pleased with that effect as hon. Members below the Gangway opposite. I should like to refer to a leading article which appeared lately in the "Morning Post," in which there is more evidence of critical ability than good manners or respect for the Members of this House. This article states:—There are no Customs between the various German States or between the Canadian, Australian, or South African States, even where separate legislatures exist. We see that the Liberal Press is now suggesting 'commercial union' for the Balkans; that is to say, the relations between Servia and Bulgaria are to be closer than those between Ireland and England. The Union of Italy, which included a Customs Union, was the creed of bye-gone Liberals, but what is good for the Balkans and for Italy, is too good for our own country Little wonder if Liberals hesitate to accept so monstrous a doctrine.[An HON. MEMBER: "Good old Tory paper."] It is a good old Tory paper, but I cannot understand Liberals endorsing 899 the doctrine embodied in the Bill. Another very important point which hon. Members ought to consider is that the Bill as introduced was not in accordance with the views of Butt, Parnell, or of the hon. and learned Member for Waterford (Mr. J. Redmond). The hon. and learned Member has given a life-long consideration to Home Rule and the requirements of Ireland in regard to the measure. In 1910 he wrote for "McClure's Magazine" an article which was intended to represent the views of the Irish people and their desires in regard to a Home Rule Bill. He said:—We want an Irish Parliament with an Executive responsible to it, created by Act of the Imperial Parliament and charged with the management of purely Irish affairs (land, education, local government, transit labour, industries, taxation for local purposes, law and justice, police, etc.), leaving to the Imperial Parliament, in which Ireland would probably continue to be represented, but in smaller numbers, the management, just as at present, of all Imperial affairs; Army, Navy, foreign relations, Customs, Imperial taxation, matters pertaining to the Crown, the Colonies and all those questions which are Imperial and not local in their nature, the Imperial Parliament also retaining an overriding supreme authority over the new Irish Legislature, such as it possesses to-day over the various Legislatures in Canada, Australia, South Africa and other portions of the Empire.The hon. and learned Gentleman did not ask for or wish for the powers of varying Customs and Excise Duties provided for in the Bill. Then, again, another eminent Irishman, Lord McDonnell, at a meeting of the Royal Economic Society on 10th January last, said:—He could not conceive how they could have fiscal autonomy in Ireland without connoting the possibility of serious danger to the fiscal policy of Great Britain, and not interfere with the commercial success and progress of Great Britain.He went on later to say he was told that there would be no motive to Ireland to make economies in these circumstances. There would surely be sufficient motive for economies in the growing necessity for improving the condition of the country, of spending money on education, sanitation, and so forth. At all events, he trusted that in whatever manner it might be sought to gratify Irish hopes, and at the same time to render more efficient the Imperial Parliament, nothing would be done to break up the integrity of the United Kingdom, to remove from the great Council of the Empire a due number of Irish representatives, or take away from Ireland the glory she felt, in increasing measure at the present time, of being a member of the greatest Empire in the world. I consider the Amendment which the Government have placed on the Paper 900 should be carried by consent. Then, again, under Home Rule, in my opinion, Ireland will become more prosperous, and discontent will not be encouraged—that is to say, there will be content where there has previously been discontent. As Ireland increases in prosperity she will require more money for the payment of her various services, and therefore the money from the Customs and Excise itself will certainly be required. In this connection, in order to increase the prosperity of Ireland I wish to say how much I regret the opposition which has been given to the great National agricultural co-operative movement by a section of Nationalists in the past, and I only hope that opposition will now be withdrawn. The work carried out with such marvellous success by the Irish Agricultural Organisation Society is the finest educational movement that has ever been conducted by patriotic Irishmen. I am a Home Ruler, and I look forward to Irishmen all working together for the prosperity of the country. I believe the religious hatred and bigotry will soon be a relic of the past.
§ Mr. HASLAM
You will all be Nationalists. The Irish Parliament, with the eyes of our Empire on it, will be doubly determined to act justly to all. I am convinced that the Union Jack will cease to be looked upon by any section of the Irish people as a badge of inferiority and a sign of mis-government. It will become in Ireland as it now is in every other part of the King's freely-governing Dominions beyond the Seas, the emblem of loyalty and of even-handed justice.
§ Mr. CASSEL
I think the hon. Member's speech was addressed more to his own side and to hon. Gentlemen below the Gangway than to us. There was a great deal of what he said with which I am in hearty agreement, and I should like to congratulate him on the success which he has achieved in inducing the Government to give way where even the hon. and learned Gentleman (Mr. John Redmond) was unsuccessful. The Postmaster-General has put this to us as if it had been a balance of advantages which was being considered. It seems to me it was purely and simply a balance of votes. The right hon. Gentleman has not given us one single advantage, either pro or con. The only pros and cons are pros and cons in the Division Lobby, 901 and it is a pitiable thing for the Government, on so vital a point in the Bill, to have to admit that, although the balance of advantages for and against has not changed in any other sense at all, they are going to modify their policy simply because the balance of votes has changed in this House, and it is only because they thought there was a greater number of Members on the opposite side who had the courage of their opinions that they gave way upon this point. But, incidentally, it has given away the whole case for Home Rule. It has given away two-thirds of the arguments by which Home Rule was supported. What is the case which has been made for Home Rule? It was this. Here was Ireland, a poor country, excessively taxed by a rich country which applied its own standards of expenditure to Ireland in the same way as it applies them to itself, with an excessive number of boards and an excessive number of officials, all over-paid, and in all the Departments of administration of the State there was an excessive and extravagant expenditure. Now what is the position? When Home Rule is to be granted they are willing to abandon the power of reducing taxation, but the one thing which they will not give up is the power of increasing taxation over and above that existing and burdensome taxation which the Imperial Parliament imposes. We have always been told it was such a disadvantage for them to be associated with a millionaire partner and to be involved in the excessive expenditure of that millionaire partner, but what is the position now? We propose to pay them precisely what it costs under the millionaire partner, and £500,000 in addition, and that is not enough for them, but they must needs insist upon a power to super-Super-tax themselves. What did the hon. and learned Gentleman (Mr. John Redmand) say? Speaking in Dublin on 26th January, 1905, he said—There is no reason why the Government of Ireland should cost more than half the present expenditure. The whole scale of expenditure is excessive. Law and police charges are just three times as great as in Scotland, and Dublin Castle and all the Government boards are run upon ridiculously extravagant lines.And yet when Home Rule is to be given to them they are not satisfied with the actual amount which it costs the Imperial Parliament, and they are not satisfied with the £500,000 in addition, but they insist on fiddling with the Chancellor of the Exchequer's taxes here for the purpose of increasing them, although they are willing to give up any power to reduce them. Let me give another quotation. Speaking in 902 this House on 12th February, 1907, the hon. and learned Gentleman said: —The whole civil Government of Ireland per head of the population is more costly than the similar Government of any other nation in Europe.And yet they are willing to give up all powers of reducing, and they resist my right hon. Friend's Amendment because it is vital to them to super-Super Tax themselves. Let me give another quotation:Right down from the Lord Lieutenant to the policeman every department of the Irish Government is overmanned and extravagantly paid.Again on another occasion he says:—If Ireland were self-governed she could easily be governed as cheaply as Belgium or any of the small nations of Europe. She could easily be governed at one-half of the present expenditure.These are the statements which have been made throughout Ireland, and which have been made in this country and in this House in the past, and upon which the whole agitation for Home Rule has been based—that there was excessive taxation, extravagance, and costly government—and now, forsooth, they say we do not care one bit about reducing taxation; what we want is power to increase it over and above the precise sum which it costs the Imperial Parliament, which they are going to receive—they are going to receive the precise sum which at the time of the passing of the Act all these extravagant Boards, all these existing numbers of officials, all these excessive police and law charges cost and £500,000 over it, and that is not enough for them. I should like to hear how that can possibly be reconciled with the statements which were made before. Surely hon. Members from Ireland might be satisfied with the £500,000 over and above what it costs the Imperial Parliament.
§ Mr. CHIOZZA MONEY
On a point of Order. Is the Noble Lord entitled to refer to a Member on this side by his name?
§ Mr. CASSEL
I do not think the interruption of the hon. Member (Mr. Pringle) was really relevant. The point to which I was addressing myself was that when hon. 903 Members from Ireland assented to this Amendment they were giving up the most vital point upon which their whole case for Home Rule was based, which was the existing extravagance of British administration and the excessive taxation, particularly indirect taxation, which prevailed in Ireland. With reference to that, is it not absurd that of all the parts of the United Kingdom, the one which is poorest should be the one for which there is reserved, not the power to reduce general taxation, but to tax itself over and above the present scale. For that reason I am going to ask hon. Members below the Gangway to support the Amendment of my right hon. Friend which would prevent the Irish Parliament from varying Imperial taxation. Varying taxation must either lead to reduction or to increase. They have already given up any hope of reduction, so what they are really insisting upon, and are going to vote for as against us, is power to impose additional taxation and to increase taxation alone. Let us apply that now in detail to some particular taxes. Are hon. Gentlemen from Ireland particularly anxious to increase the Land Taxes? I notice that on the platform at Nottingham, the hon. and learned Gentleman (Mr. John Redmond) discovered a new-born love for these Land Taxes. What he said was:—There were no more enthusiastic supporters of the Land Taxes of the Budget than Irish Nationalist Members. They were amongst the pioneers on the question.I have been trying to discover what probably was the origin of this new-born zeal on the part of the hon. and learned Gentleman, and I think I have discovered it in the Report of the Inland Revenue Commission, because I find that for the last financial year the Land Taxes in Ireland produced the following results: The Increment Value Duty produced £34, the Reversion Duty produced £123, and the Undeveloped Land Duty produced nothing, so that the total produce of these taxes, of which the hon. and learned Gentleman became so enthusiastic an admirer, and of which he was the pioneer in Ireland last year, produced not enough to pay the salary of a single Member of Parliament. If it is desired to increase these particular taxes, I am not sure but that I would treat that as a matter of comparative indifference, because, if they were doubled, they would not produce enough to pay a single Member of Parliament. There is a remarkable fact in connection with 904 these taxes in Ireland. Last year in Great Britain provisional valuations were made of 1,500,000 hereditaments, and during the same period in Ireland, where they so love the Land Taxes, 5,740 provisional valuations were made. That is a matter which on some future occasion we shall have to inquire into, because some explanation is required of one of the grossest administrative scandals of recent times.
§ Mr. JOHN DILLON
It has been explained over and over again. It is more easy to make valuations in Ireland.
§ Mr. CASSEL
The hon. Member's explanation goes in the opposite direction, because, if it is so much easier to make valuations in Ireland, there ought to have been more than 5,740. The hon. Member says the valuations have been made already. I am afraid he is not familiar with the conditions of the Land Duties. Provisional Valuations have in the first instance to be sent in, but in Ireland, where it is so much easier to make the valuations, only 5,740 have been sent in, whereas in Great Britain there were 1,500,000. The other item of taxation to which reference has been made is the Income Tax. The Postmaster-General did not answer one of the points raised by my right hon. Friend (Mr. Austen Chamberlain) in regard to the Income Tax. I say you are under this proposal giving to the Irish Chancellor of the Exchequer the power of fiddling with Imperial taxes, which will do nobody any good except the Irish Bar. It will mean a busy time for the Irish Privy Council, a heavy cost for collection to the British Exchequer, and very little advantage to the Irish Exchequer. The right hon. Gentleman has abandoned the power of varying the tax because of the difficulty of collection at the source. But in regard to the Super-tax he has reserved it to himself. What does he think the Super-tax produces now? I should say that it is not likely to be more than £100,000. Under this Bill all that he can levy is 10 per cent, of the amount the tax produces—not 10 per cent, of what the whole Income Tax produces. It appears to me that under Clause 17 this clearly must be the result. Although the Super-tax is an additional tax, it is a separate tax, and on that ground, under Clause 17, I should think there would be a nice question indeed for the Irish Exchequer Board and the Privy Council to consider, namely, whether, it was 10 per cent, of the Super- 905 tax itself or 10 per cent, of the whole of the Income Tax? No one on the other side has dealt with the point as to the power of discriminating. Why should there be power to discriminate? In the case of the Death Duties you have withdrawn the power to discriminate, and thereby you have by implication given the power to discriminate in the Income Tax.
Take the question of varying relief under the Income Tax. Earned incomes are charged at a lower rate than unearned incomes. It is described in the Finance Act of 1907 as relief. It comes to this, that you could increase the rate upon earned incomes, but you could not increase it upon unearned incomes. That is one of the absurdities of this Clause, which, I think, must have been drafted with considerable haste. Moreover, I would ask the Committee to look at the difficulty which will arise in regard to the question of persons residing in Ireland. Suppose that one has the benefit of exemption from Income Tax in this country because his income is under £160, and that in Ireland you reduce the exemption limit to £100. In that case a person who has an income between £100 and £160 would have to pay. Assume that a person is sent over from this country who is exempt from Income Tax here, if his income is over £100—assuming that the limit is reduced—he would lose the benefit of the exemption to which under the law he is entitled in the United Kingdom. Surely that would be a ridiculous result. I say you would have constant friction and litigation as to what persons were or were not resident in Ireland. Take the case of the Death Duties. You will have there very difficult questions as to domicile—as to whether a person is domiciled in Ireland or in England. Moreover, you are giving the extraordinary power to the Irish Parliament that they can increase the Death Duties which are payable by a person domiciled in England in respect of property which he owns in Ireland. Supposing an Englishman owns property in Ireland and the Irish Parliament can increase the Death Duties, these duties have to be levied in England, or he could not pay probate in England.
As to the question of increasing the Customs Duties, the right hon. Gentleman has given no explanation whatever as to how he is going to deal with a case where an increase of a Customs Duty leads to an actual diminution in the revenue, or where the increase in the revenue is not 906 in proportion to the increase in the duty. That is a difficulty which will arise. I submit that these little powers of nibbling at the taxes of the Chancellor of the Exchequer will lead to more difficulty and confusion than they are worth. The Irish Members are willing to give up their power to reduce taxation. Then I say that their own statements and speeches in the past show that they should be willing to give up the power of increasing taxation, that they ought upon their own showing to be satisfied with the grossly extravagant expenditure of the United Kingdom, that these eleemosynary expenditures, as they are called—those bribes and doles which are showered upon them—together with the £500,000 on the top of them, should be quite satisfactory to them. If they want to spend more on any particular branch of government, they ought to be able to do it out of the economics on some of the so-called extravagant branches of expenditure. The police now cost £1,300,000. They say it should be done for less. If so, they would have a saving in six years of £500,000, out of which they could meet additional expenditure on other matters. I submit that this proposal for interfering with the taxation imposed by the Imperial Exchequer will lead to difficulty, friction, and litigation, and to no useful result to Ireland.
§ Mr. LEES SMITH
On the Report stage of the Financial Resolution I said I thought any such Amendment as that now before the Committee would be a blot upon the Bill. I am bound to say that I am of the same opinion still. I am not going to repeat what I said last week, but I will deal with one point which has been raised. The Postmaster-General argued that, after all this was only a question of academic importance, because the question of reducing taxation could only arise in Ireland in a very remote future. I am afraid this disadvantage to Ireland will be felt long before that. We have been continually told by Irish Members in the Debates in this House that one of the great evils from which Ireland suffers at present is that she is dragged in the wake of a system of taxation which is suited to Great Britain, but not suited to a poor agricultural country dependent upon indirect taxation. The Irish Chancellor of the Exchequer will naturally and rightly endeavour to modify the details of the Imperial Budget. He will, without reducing taxation as a whole, try to 907 adjust the conditions. What I mean is this: The Irish Chancellor of the Exchequer may not for many years have an opportunity of reducing taxation as a whole, but he may very well wish to reduce certain particular taxes, although he may not wish to reduce others. I take the case referred to by the hon. Member for South Birmingham (Mr. Amery) in his speech on the subject last week. Supposing a Tariff Reform Budget is ever carried through this House—and the Leader of the Opposition has, I think, made it very plain that any such Budget will be framed mainly with an eye to the British electorate, and give a very subordinate position indeed to the special interests of Ireland—I regard it as one of the great merits of this Clause in its original form that it would have enabled the Irish Chancellor of the Exchequer, without costing this country a halfpenny, to adjust that Budget, or at any rate the details of it, to Irish conditions. He would have been able to reduce to some extent duties unsuitable to Ireland, and he would have been able to make up the sum lost to the British Exchequer by taxes which he could have had a wider power of choosing for himself. This Amendment, of course, prevents them adopting any action of that sort, and to that extent I consider it a weakening of the Bill.
I do not propose to vote against the Amendment. I quite realise that if the Irish Parliament had reduced the Tobacco or Tea Duty below the British level, it would have given Members of the Opposition a platform argument, misleading indeed, but very valuable. The position which Irish Members have to adopt on this question is that this is one more of those restrictions which are compelled to be imposed upon the Irish Parliament because of the prejudices and anxieties in which this subject is involved. I wish to make a suggestion to the Government about one matter which is not of fundamental importance. Hon. Members opposite have pointed out that the Irish Parliament may levy taxation of which the yield would be very small while the cost of collection may be excessive, and they will have the yield and we shall bear the cost of collection. I do not think that that argument has very much point, but I think it has a little point. So far as the main range of Irish taxation is concerned, it has no point at all. The bulk of Irish taxation will of necessity consist of additions to Imperial taxation, 908 additions to Customs or Excise Duties and perhaps Death Duties and Stamp Duties, but these are Imperial taxes and the staff and machinery for collecting them already exist, whatever the Irish Parliament may do. The fact that they have to be levied at a slightly higher rate because they have been increased by the Irish Parliament, so far as I can see, involves practically no increase at all in the cost of collection. The difficulty would really arise if the Irish Parliament were levying a tax of quite a new character, new in type, and it might continually happen that the collection of that tax would cost a considerable sum to the Imperial Exchequer. It seems to me that it would be fair in that case to lay down that when the Joint Exchequer Board is determining by what amount the Transferred Sum is to be increased as the result of this new Irish tax, that it should deduct from that amount the cost which the collection of that tax has imposed upon the Imperial tax. I hope that the Government will at any rate take this point into consideration.
I only rise to ask the Government to reply to some questions that were put by my right hon. Friend (Mr. Hayes Fisher), who moved the Amendment, to which no response has yet been vouchsafed, although the Postmaster-General spoke immediately afterwards. Indeed, I am rather surprised at the course this Debate has taken, because my right hon. Friend deliberately put on one side the questions of the Customs Duty, with which there may be an opportunity of dealing at a later stage, but he was immediately followed by the Leader of the Irish party, who apparently took a different view as to the proprieties of the occasion, and left all the subjects raised by my right hon. Friend untouched, and went straight for a declaration of his own policy with regard to the new Amendment placed upon the Paper by the Postmaster-General. The Postmaster-General followed him next but one, and with that happy antiphonal arrangement to which we are accustomed, he charmingly reechoed the speech of the Leader of the Irish party, as the Leader of the Irish party often re-echoes his. In that happy concert my right hon. Friend's speech was altogether left on one side, and the Postmaster-General wholly omitted to deal with it. I may just remind him of one of the points which particularly require an answer from the Government. My right hon. Friend pointed out that while Income 909 Tax was nominally saved from interference by the Irish Government, the Irish Government are given full liberty of dealing with all the exemptions and to the whole question of Super-tax, and my right hon. Friend pointed out with a logic which seems to me perfectly unanswerable—at all events, which so far has not been answered—that if you leave to the Irish Government power to deal with all the exemptions and abatements on the ordinary Income Tax, and at the same time leave them the whole power of dealing with the Super-tax, with its varying aspects, the idea that you are keeping the Income Tax at the rate fixed by this House is altogether illusory and absurd. The Income Tax becomes absolutely a matter within the control of the Irish Government, and if you are giving it complete in substance, I am interested to know why the right hon. Gentleman thinks it ought to be kept away from them in form. There may be reasons which I do not understand.
The only suggestion made by the Postmaster-General which was at all revelant to the issue, was that the Super-tax had nothing to do with collection at the source, that Income Tax had to do with collection at the source, and that therefore one could be taken and the other could not be taken by the Irish Government. There may be something in that argument from certain points of view, but if what you wish to do is to leave this as an Imperial tax under the control of the British Parliament, it is perfectly absurd to leave to the Irish Parliament the whole manipulation of the exemptions which determines what Income Tax is to be at one end of the scale and leave them the whole manipulation of the Super-tax which determines what the Income Tax is to be at the other end of the scale. Indeed, if you carry your exemptions to a sufficient limit, you could abolish Income Tax altogether and pile on your Super-tax, leaving the total collection the same, so that the Irish Exchequer shall not lose anything from the Transferred Sum. You are really entirely altering the whole incidence of the tax. If you said that everybody with under £5,000 a year was to be completely exempt, and everybody with over £5,000 a year was to pay a sum sufficient to make the total yield of Income Tax equal to what it is now, there would be no penalties placed on the Irish Exchequer, and the whole character of the tax might alter. Of course, that is an extreme case, but I mention it to make the character of the 910 power in the hands of the Irish Government perfectly clear. And you may put the same problem in another way. When you leave the exemptions absolutely in the hands of the Irish Government, in those circumstances that power could be used quite easily so as to be favourable to particular people whom the Irish Government wished to help, and very unfavourable to districts of the country and traders who for some reason or other might fall under the ban of the powers that be. Perhaps it will be replied that there is no danger of an Irish Government misusing its powers of manipulation in a manner which suspicious Unionists are so fond of adducing. That argument is not open here because, as I understand the Amendment of the right hon. Gentleman, he himself has seen that there may be such a danger in connection with the Death Duties, and he proposes to guard against it by Statute. T wish to know, if there is a ground for suspicion, as indeed there well may be, that the Irish Government may set up with regard to the manipulation of these Death Duties particular classes or interests in the case of the Death Duties, can you suggest any possible ground for distinction which makes it perfectly absurd to suppose that similar abuse of power may not take place in regard to abatements, exemptions and Super-tax in the case of the Income Tax?
That question, in substance, was put by my right hon. Friend, and I hope the Government will make a reply as soon as they can. There is one other point upon which I wish to ask a question. It is in connection with the same topic of the Death Duties. As I read the Amendment of the right hon. Gentleman on the White Paper, the Death Duties leviable by the Irish Government to go to the Irish Government are for persons having property in Ireland. The Irish Government may, so long as they do not alter the proportion, alter the rates. The question I now wish to put is this. Take the case of a British subject who has property in Ireland and property in England. Let us say that the property in England is very large and the property in Ireland is relatively very small. The Irish Government alter the scale of the Death Duties. I ask them on what principle would the duty be collected with regard to the Irish property? The man has £1,000,000 in England and £50,000 in Ireland and dies. For the £1,000,000 in England, of course, he is taxed on the high scale. Is he going to pay the raised duty in Ireland on the highest scale or on the 911 £50,000 scale? Is he going to pay in Ireland on the whole amount or only on the £50,000? I do not profess to be able to interpret this Clause with a full assurance of its legal meaning without being given some opportunity for understanding it in detail, but I think if the right hon. Gentleman will admit that when you have a different scale in Ireland or a different amount raised in Ireland from what you have in England, and if a man has property in both, the most difficult and delicate questions seem most obviously to arise. I hope that the Law Officers will clear this up. I do not know that this is the occasion to put further questions with regard to taxation, though there is one which puzzles me. Supposing that there were some great national need which required an immense increase of taxation, and suppose that Imperial taxes for the purpose of meeting that were levied by the British Government, and suppose that the sum transferred to the Irish Government were not up to the Irish contributions. They evidently could not go beyond it; because the Irish have only got to vary the tax or abolish the tax in Ireland, and it would be found if they were to lose money by it they would simply not have to pay anything that could ever be raised in addition to the transferred amount. That is perhaps a rather wider question than is properly raised by this Amendment, and I do not press it. I am really more interested in the detailed questions which I have asked the right hon. Gentleman opposite to answer. Those questions have already been put on this side, and I think they deserve an answer which, I hope when it does come, will be given in a complete and satisfactory manner.
§ The SOLICITOR-GENERAL (Sir J. Simon)
The right hon. Gentleman in his concluding sentence said that the questions, some of which he has restated, had already been mentioned by the right hon. Gentleman who moved the Amendment, and that they were questions of detail. No doubt, in one sense, they are, and as such they require a detailed and precise answer so far as I am able to give it. The right hon. Gentleman I hope will not suspect me of endeavouring to avoid giving an answer of reasonable precision when I say that the key to the answer to these questions, and, it may be, to many other similar details, is to be found in a general consideration. The view which we have adopted and have 912 endeavoured to apply in drafting the Financial Clauses of the Bill, is that we should give to this Irish subordinate Parliament as wide powers of finance as appear to be consistent with Imperial convenience, the fair claims of Great Britain, and practical working. If you find that the Imperial convenience or interest requires that there should be some limitations put upon the financial powers of this Parliament, then, of course, they will be put on. If you consider that unrestricted liberty in some direction or other involves consequences which are more than fair to Great Britain, then you must restrict the generality of your principle. If you find in the practical working out of the financial scheme that you come to matter-of-fact obstacles which must be avoided or got round, to that extent again you must (trench upon your general principle. Be that general principle right or be it wrong, it is well we should all recognise that at the back of this financial scheme is the purpose that this Irish Parliament shall have the widest financial powers which are consistent with the considerations I have mentioned.
Far be it from me to say that in every single case we have precisely and exactly hit the point, the middle course, the true point which judgment would indicate to choose; we may be open to criticism or correction; I do not claim for the scheme any inspiration, but, for my part, at any rate, I could not hope to answer the questions if it were not that I bear in mind these general considerations, and endeavour to apply them to the particular matters which are raised. Let me take, from that point of view, two or three of the precise and detailed matters which the right hon. Gentleman has recalled to the recollection of the Committee. First of all, there was a question which was put by the right hon. Gentleman who moved the Amendment, and I respectfully differ from the right hon. Gentleman (Mr. Balfour) when he says that my right hon. Friend the Postmaster-General did not reply to the question which was put. Let me state the reply of my right hon. Friend again. It is asked why it is you impose certain limitations in the case of ordinary Income Tax which you do not impose, and apparently do not think it necessary to impose, in the case of Super-tax? The reason is that, as a matter of practical working, it would be, as it appears to us, very difficult and probably impossible to confer upon the 913 Irish Parliament that full liberty of choice and range which would perhaps be theoretically possible if it were not for the considerations I have mentioned. Something like four-fifths of the ordinary Income Tax of the country is collected at the source; that is to say, the banker, the company, or the person out of whose funds the income is being paid, deducts is. 2d. in the £ before the dividend warrants, or cheque, or interest, or whatever it may be, is sent out. The person who has deducted the Income Tax in this way is not able to tell you whether the person paying the Income Tax is resident in Ireland or in Great Britain.
§ Sir J. SIMON
It is not a very easy thing to find out, and that is one of the reasons why in a later Clause you see a provision to find it out with what accuracy we can. The point I am endeavouring to make is this. I say that you are dealing with the payment of ordinary Income Tax, four-fifths of which is Income Tax deducted at source, and there is no reference at all as to whether the person who receives it comes under the operation of the Income Tax law passed by the Irish Parliament or whether he is entirely free from that law. It is not really a practical thing to say that the Irish Parliament may have the power, as part of its general financial powers, to vary the amount of the Income Tax. If it did it would involve the greatest possible complication, and when that complication reaches the point which prevents the fair working of a business scheme, why then, of course, we have so far to give way in the principle we are endeavouring to apply. There is no difficulty as regards the ordinary Income Tax in saying that the Irish Parliament may vary, abate, or reduce, or the like, because abatement, reduction, or relief are matters which are the result of applications and claims made by individual taxpayers. Therefore it has nothing to do with principle to say, on the one hand, that it is not possible to give the Irish Parliament power to vary the amount of the Income Tax, but it is perfectly possible and perfectly right that they should have the opportunity of varying the abatements, or reductions, or relief in regard to that particular form of tax.
When we come to regard the Super-tax, that is a tax which is not paid at the source at all. There is no such thing as the sub- 914 traction of the Super-tax itself—indeed, Super-tax could not very well be paid from source, for reasons which I will not elaborate but which are perfectly well known to those who really understand the way in which the Super-tax is charged—therefore the special obstacle which arises in the case of ordinary Income Tax does not arise in the case of the Super-tax at all.
§ Mr. CASSEL
Will the hon. Gentleman, deal with the question of whether the 10 per cent, applies to the proceeds of the Super-tax or to the proceeds of the whole income?
§ Sir J. SIMON
The answer is it does apply to either of those two. The Income Tax is for this purpose separate from Super-tax, and the Super-tax is separate from Income Tax. The next point the right hon. Gentleman made was this. He said, "If you allow this latitude in the case of the Super-tax, why is it that you think it necessary rather more narrowly to draw your restrictions when you are dealing with the Death Duties?" He called attention to the fact, with respect to Customs Duties or Death Duties, that it is competent for the Irish Parliament to raise within limits the scale as a whole. The right hon. Gentleman used a musical metaphor in connection with the Postmaster-General's response to the hon. and learned Member the Leader of the Nationalist party, and let me use a musical metaphor by saying that the Irish Parliament may write the Death Duties in a different key, but still have to preserve a certain harmony. I wish to point out to the Committee quite fairly that the reason is not, as the right hon. Gentleman seems to think, that because we are giving them the Death Duties we felt ourselves obliged to provide against what I may call an outrageous abuse of financial power by the Irish party. It has really nothing to do with that at all.
I need not go over again the old dispute as to whether or not we should trust the Irish Parliament. We may be right or we-may be wrong in trusting them, but this provision has nothing to do with that; it has to do with nothing more than a plain, practical, matter-of-fact consideration. The rate of the Death Duties will differ according as a person happens to succeed near relations, distant relations, or no-relations at all. There are a great number of matters to arrange with reference to the scale, and if we were to allow the 915 Irish Parliament to pull the scale to pieces, it would make the matter extremely difficult in regard to the 10 per cent. limit. We may be right or we may be wrong, but the reason why we think it necessary to put this restriction in the case of the Death Duties or in the case of the Customs Duties is that, in case of those Duties, you are dealing with an elaborate scale, while in the case of Super-tax you may be doing that which is a pure matter of practical convenience in order to make the thing work. Therefore, we desire to apply our main principle, namely, that the Irish Parliament should have the fullest fiscal liberty we can give consistently with the considerations I have mentioned—those limitations which are necessary in its practical application. We have endeavoured to apply that general proposition. Whether or not we have applied it wisely or unwisely is another matter; at any rate, we apply it as best we can, and I think the right hon. Gentleman will find that these things are not meaningless, but that they really do proceed from a common principle. Then I think the right hon. Gentleman put this point. What is to happen supposing that a man dies and Death Duties come to be paid, with a portion of his property in Ireland and a portion of his property in Britain.
§ Sir J. SIMON
If there was not a different scale obviously no question arises so far as the total amount of the exaction is concerned. The only difficulty that then arises is the difficulty of allocation.
§ Mr. AUSTEN CHAMBERLAIN
What is the total amount of the exaction. Supposing there is a difference of scale on what total do you exact the 10 per cent?
§ Mr. AUSTEN CHAMBERLAIN
The case put by my right hon. Friend is this, that the Irish Parliament has used its powers to impose the 10 per cent, additional Death Duty and that a man dies with property partly in Ireland and partly in England. The question my right hon. Friend asked was on what total is the additional 10 per cent, levied, is it on the property in England, or the property in 916 Ireland, or on the whole of his property. Perhaps the hon. and learned Gentleman would tell us the exact Clause in the Bill which regulates this matter.
§ Sir J. SIMON
I am bound to say I did not quite appreciate what the point was when it was put. There are really two points, I think. I do not want to pretend that I am able to answer the two points, but let us answer the first one, and then we can see where we are. I rather understood that the point put was this: You may have a man who has got some property in Ireland, and some in Britain. He dies, and the question, as I followed it, is in that event, on what principle do you determine where does the Irish tax and where does the English tax apply? That, I understand, is not the only point, but it is one point. I think the principle is very well understood, though I quite agree there are occasions in which it is not always easy to apply it. The principle surely is, when you are dealing with real property, fixed property, such as land, the law that applies for the purposes of Death Duties is the law that applies where the land is. British law would apply to British land, and Irish law to Irish land. That is the first part. On the other hand, supposing you were dealing with movable property—with ordinary property that is not land, personal property, then, of course, the law that applies is the law of the place where the man resides, not temporarily resides, but where he permanently resides. On that question I do not think there is any difficulty. I understand now the right hon. Gentleman puts this further point, which, as I follow it, has to do with the corpus that has got to be dealt with.
§ Mr. AUSTEN CHAMBERLAIN
Before the hon. and learned Gentleman leaves that point, I understand him to say if a man died leaving real property, landed property, that that would be taxed according to the place where it was situated. If it was in Britain, it would pay the British tax, and if it was in Ireland it would pay the Irish tax.
§ Sir J. SIMON
I rather want to answer this question, and would rather not have any firing from behind. I only remind the right hon. Gentleman and nobody knows it better than he, that is, of course, the principle of the White Paper, the Treasury document which endeavours to work out the difficult problem of the true Irish revenue. Those are the principles to which I am referring, and I rather think you will find a reference to the subject in the Report of the Primrose Committee, which, I rather think, sets it out in detail. What I am referring to, successfully or unsuccessfully, is the method, and I do not think anybody will deny that that is the method which ought to continue to be applied. The right hon. Gentleman says: Are you going to make people pay twice over? That is not our intention. The right hon. Gentleman challenges me to say where that is to be found. I am not perfectly certain that I could put my finger on it at this moment, but it is not our intention as the result of creating a subordinate Legislature to make the total amount of the burden bigger, assuming the same rate of tax, than it was as long as you had single control. I think I have made plain what our intention in the matter is. We believe we have carried it out, at any rate to a very large extent, and that certainly is our intention. I repeat it is not our intention that the result of setting up a subordinate Parliament in Ireland should mean, assuming that the rates of the duty are the same, that the total amount to be paid will be bigger than if there was only one Parliament in the United Kingdom. Supposing the rates are different, then different considerations will arise. At all events, I think it goes some part of the way to answer that it is no part of our intention that the total amount should be greater in the case I have mentioned.
I necessarily have dealt with some matters in detail, and matters which really are technical and uninteresting, but really I cannot conclude without pointing out what a curious position we do stand in about this. I will tell the Committee why I say so. We were attacked from different quarters because of the generality and the liberality of the freedom which was conferred on the Irish Parliament to vary the taxes in that country. We pointed out we had put on them such limitation as appeared to be necessary in accordance with our principle, and it was urged against us that our principle ought to 918 carry us further. It was said by the right hon. Gentleman the Leader of the Opposition more than once, on the Second Reading Debates and last month some time, that if we left such wide powers as those to the Irish Parliament we should have what he called a donkey race with the two Chancellors of the Exchequer in the two countries, competing to see which of them could make the other get past the post first, to take off the duty, for instance, on such a thing as tea. We never thought that that criticism went quite the length which the right hon. Gentleman himself evidently thought it had, because he repeated the argument, and certainly would not have done so if he had not thought it was a very powerful weapon. It was, of course, a rather taking criticism, and it was one he used in the country as well as in the House of Commons. At any rate, we have now completely stopped that criticism by what we have done. There was another criticism that was made. It was said, "What an outrageous thing that, you should give to the Irish Parliament a power which means that at their will they can compel you in Britain to set up Custom Houses which you do not otherwise want to set up." That result only follows if you give the Irish Parliament power to reduce duties, because it is only if an Irish Parliament reduces a duty that you need have a Custom House to prevent the passing into the country of taxable commodities which have paid a lower rate of duty. We felt that there was some force in that argument which was very much urged by the hon. Member for Monmouth Boroughs (Mr. Lewis Haslam), and we have done our utmost to meet it.
Mow that we have, as we think, consistently with the scheme of our Bill, made those efforts to meet those criticisms and satisfy those critics, what we are told is this. Every Tariff Reformer in the House spends his time in trying to frighten Liberals by saying, "Your Irish financial, scheme is inconsistent with Free Trade." Every financial purist spends his time, as the hon. and learned Gentleman who spoke just now did, in saying, "I used to say you were giving the Irish Parliament too big powers; now I say you are merely letting it nibble with finance." Which is it? We take the view, and this is the view we commend to the Committee, that the right course for us is to confer on this Irish Parliament the maximum powers of dealing with finance which are consistent with the consideration I mentioned. We can- 919 not give them unlimited powers. That is why we put on this 10 per cent, limitation in order that we may be sure that they do not exhaust a reservoir on which we might have to draw in an hour of great national emergency. We do not allow them to set up a Customs Tariff in connection with articles which, under our existing system, are not taxed at all, because we think that it is not consistent with the interests of this country that anything of the sort should be done. We do not give them such a degree of freedom in managing their own taxes as would produce practical working inconvenience in calculating the amount and in adjusting the amount. But, subject to that, our view is that the more liberty they have got in this matter the better. It is on those grounds we now put before the Committee the proposals of this Bill, modified as we propose by the Government Amendment.
§ Mr. BONAR LAW
The hon and learned Gentleman has really done what I may pay him the compliment of saying he nearly always tries to do, and that is to state and to meet criticisms which have been directed against him. He did so this afternoon. I do not think the way in which he met them was entirely satisfactory. As far as I can make out it consisted of two different statements—the first that it must be met by the general consideration, which amounts to this, that "we mean to give the best Home Rule Bill we can." That was the first statement he made. His second statement was in regard to my right hon. Friend's suggestion as to Income Tax and Death Duty, as to which he used a musical metaphor which I did not quite understand. The hon. and learned Gentleman, as I understood him, said, "We are going to use a different key, but we are going to preserve harmony." I think that would be rather difficult under this Bill. Here is a point which he did not answer, and which I should like him to answer. He has laid down that with regard to Death Duties the scale is to be maintained, because that is necessary for harmony. I should like to know on what principle the retention of the same scale of Super-tax and abatement in regard to Income Tax is not also necessary if harmony is to be preserved?
§ Sir J. SIMON
I will answer that at once. The answer is that the Super-tax and the Income Tax are all one note.
§ Mr. BONAR LAW
That is beyond me, especially as the hon. and learned Gentleman just said in reply to an interruption of my right hon. Friend that the Super-tax and Income Tax were to be regarded as quite distinct from the point of view of the 10 per cent., while they are now all one note. I should like to point out that, as has been shown already, by the power to vary the abatement they will give, and by the power to put the Super-tax at £500 if they please instead of £5,000, the Irish Government will, if it chooses, have power absolutely to do away with your whole Income Tax. Surely, if it is necessary to keep harmony in the case of the Death Duties, it is equally necessary to put down some provision which will make sure that the whole Income Tax provisions are not upset from top to bottom by what is done by the Irish Parliament.
As the hon. Member for Waterford has already said, this Amendment raises the whole subject of the financial proposals of the Bill. I can assure the Committee at once that I am not going to attempt to cover the whole ground or anything like it, but there are two or three points of more general interest to which I wish to refer. The Postmaster-General repeated again to-day the statement that there is nothing protective in the Bill. I would like to remind the Committee of what the right hon. Gentleman said about Sir Thomas Pittar's remarks which I quoted in this House. The right hon. Gentleman rather complained of a want of courtesy on the part of my light hon. and learned Friend. This is the courtesy which he extends to a distinguished public servant who has recently retired. He said that Sir Thomas Pittar was "a broken reed," that he was "wrong in his facts," and "completely false in his conclusions." He told us also that he had consulted the Board of Customs. I have come to be very suspicious about any statement made from that bench in regard to the opinions of other people. We had great difficulty in getting the Primrose Committee. When we got it, the Prime Minister promised that if there was a general desire in the House to that effect, he would give us the evidence; yet although more than half the House asked for it, the evidence is not forthcoming. Now I think my suspicion is justified. I would like to know what the Board of Customs think of the statement made by the right hon. Gentleman in view of what has happened. He said that Sir Thomas Pittar was "all wrong," 921 that he was a broken reed, and yet the right hon. Gentleman immediately proceeds to put down Amendment after Amendment to meet the very criticism which Sir Thomas Pittar made. I am under the disadvantage that I really have not time to discuss these matters with experts, and therefore in a technical question of this kind one is apt to be wrong. But I think that to a considerable extent the latest version of the Amendment has stopped the Protection which was in the Bill when Sir Thomas Pittar wrote, and which the right hon. Gentleman said was not in it at all.
What is the position? As a matter of fact, no one who has given any consideration to the subject will deny that it is possible to have Protection of an extreme kind if the regulations in Ireland under which business in bond is carried on are different from the regulations in England. No one will deny either that under the Bill as it stood, when the Irish Parliament had the right to raise the duty on a manufactured article, and lower the duties on the raw materials which were used to make that manufactured article, they had power by that machinery to give Protection to any extent they pleased in regard to this industry in Ireland. The Government have tried to close that door, but how have they done it? It is still left to the Irish Government to make the duties what they please. The Amendment does not alter that. All that has happened is that after the Irish Parliament has done it, after the duties have been in force for may be weeks or months, the Exchequer Board will step in and say that that is not fair as between Excise and Customs revenue. What does that mean? It means that the Exchequer Board is to have the sole voice in deciding a subject than which nothing more important could be brought before any Parliament in any Kingdom in the world. The Postmaster-General said, in reply to one of my hon. Friends the other day, that if this Exchequer Board could affect policy it was an entirely improper tribunal. But it does. This Board decides by its sole authority, without any appeal, whether Protection is or is not to be given to industries in Ireland. The right hon. Gentleman said that that is not policy, or, if it is policy, the Exchequer Board is not a proper authority to deal with it.
I wish to come to the Government Amendment, on which to a large extent we have been talking. The Postmaster- 922 General says that this Amendment is only incidental. But what did he say on the First; Reading about this proposal which is "only incidental." The right hon. Gentleman then said:—I think it is essential, and this is a matter of great importance, that it the Irish Parliament are able to effect economy and to reduce taxation, they should he free to reduce whatever taxation they choose, and especially that they should be in a position to reduce those taxes which press most heavily on the poor,That is a matter which is "only incidental." My right hon. Friend has reminded the Committee of what I said the other day. I am very glad that my words have influenced hon. Gentlemen opposite. One of them told us that there was a large number who were opposed to these provisions, and I suggested that if they really were opposed to them they could, without forcing a Dissolution or losing their seats, get what they wanted. [An HON. MEMBER: "What about Bolton?"] That is hardly relevant; but if hon. Members opposite are pleased at having obtained the smallest majority that they have had for twenty-five years they are welcome to it. I pointed out that those hon. Members could, if they choose, without losing their seats, get what they wanted. They have done it. The error that my right hon. Friend made was in supposing that I suggested that the Government should do anything because they thought it was right. That never entered my mind. I suggested that those hon. Gentlemen who had some definite convictions about the matter should exercise their power. They have done it, and the result is that relation between the benches to which my right hon. Friend referred. The Postmaster-General said that we wore hard to please, and that he had given us what we wanted. He is entirely wrong. What I objected to was the restrictions between different parts of the same United Kingdom. They still remain, if the Irish Government has a right to vary Customs and Excise. It is quite true that there would not be smuggling from Ireland to England, but if they made the duty higher there would be smuggling from England to Ireland. The Solicitor-General said that that does not matter, as it does not interfere with English trade. He seems to forget that if there is a danger of that smuggling the cost of collecting the taxes must rise, the collection must cost a great deal more, and that concerns us because we have to pay the cost of collection. The Solicitor-General referred to my old illustration about the donkey race. Strange to say the hon. and learned Member for 923 Waterford put that very case. He said this afternoon that under the arrangements of this Bill no Irish Chancellor of Exchequer, unless he were a fool, would take off the duties so long as he had a fool as Chancellor of Exchequer in England who would take them off for him. That is what would happen.
I wish the Committee could have clearly in mind some of the fundamental features of these financial arrangements. I would give a great deal—I am afraid it is impossible—if the Government would send their proposals to a Primrose or other sane Commission, and ask them to give their opinion upon them. Their Report would be the most valuable document ever laid on the Table of the House. Just consider how the scheme will work. I think it is a very good thing in a way that you only give the Irish Parliament power to raise a tax, because it makes perfectly plain what we all know, but what the hon. Gentleman has concealed from the people in Ireland, that the effect of this Bill will inevitably be that Irishmen will have to pay double taxes; they will have to pay the British taxes, and also whatever taxes are put on to run the Irish Government. It is very desirable that it should be plainly seen that, from the Irish point of view this Bill means more taxes for every one in Ireland. I said that the donkey race was not concluded. By no means. My right hon. Friend the other day pointed out that one of the things which the Exchequer Board would have to do is to estimate the yield of an Irish tax. The Solicitor-General gave us his method of dealing with an Irish tax. Suppose a different Tea Duty were imposed in Ireland—sixpence instead of fivepence. The Solicitor-General says that what would be done is that the Exchequer Board would make a calculation as to what the duty would have been in Ireland at the old rate; they would not give the Irish Parliament the benefit of one-sixth of the total revenue. Suppose that is the method, can anyone imagine a calculation more difficult? The Exchequer Board may say that there has been a falling off in consumption on account of the increased tax. The Irish Government would say that the falling off had nothing whatever to do with the tax. How can you settle that question] It is to be settled by this Exchequer Board, and on the way in which "they settle it depends the finance both of Ireland and of England. Yet the Post- 924 master-General says that it is not to affect policy, or it would not be proper for the Board to have to do it. But that is not the method proposed in the Bill as I understand it. The method in the Bill is this. It is very difficult to follow, but I will read Clause 16 (4):—
"The proceeds of any Customs Duty charged under this Section in Ireland on any article shall, to the extent to which they exceed the proceeds of the Customs and Excise Duty which would have been charged on the article in Great Britain be deemed to be the proceeds of a Customs Duty levied as an Irish tax."
These words seem clearly to indicate—otherwise Great Britain would not be brought in—that what the Irish Parliament will get is their proportion of the total yield of the tax. If that is true the donkey race comes in again. It is a wonderful system of finance. When our Budget was going through the Chancellor of the Exchequer justified high spirit duties on the ground that they promoted temperance. Suppose the Irish Parliament desired to promote temperance. I think it is very unlikely, seeing that the backbone of the Nationalist party are the publicans in Ireland. But suppose it did happen; see what the provisions of the Bill are. If they were to put 50 per cent, additional on the present spirit duties in Ireland, the yield to-day being something like £2,000,000, and the effect was to reduce the yield to £1,500,000, the Irish Government would not lose a single penny; the Transferred Sum would remain precisely the same as it is now, the loss would all fall on the British Exchequer. That is not all. Under this interpretation by the Exchequer Board the Irish Government would get one-third of the £1,500,000, although the total revenue had fallen by half a million. Therefore in promoting temperance, they would have promoted it at the cost of £1,000,000 sterling to the revenue of the British Exchequer, and they would not be hurt by a single penny. That is your system of finance! I do wish somebody would explain why it is that the Government—or rather hon. Members below the Gangway, for the Government have nothing to do with it—insist upon maintaining this small interference with the Customs. Why do they want to do it? It is not to relieve the taxpayers in Ireland. They told us at first that was the main object. That has gone. It is to get revenue. Now I put to the Committee what 925 revenue can they get taking the Customs Duties? Except spirits and beer, they can only get 10 per cent. They could only get more revenue by increased duty on tea, sugar, or other articles. The uttermost they could get out of this would be £300,000 a year. They tell us they can get it from Excise. The Primrose Commission has shown that already, so far as Ireland is concerned, the higher scale of duty has stopped the yield of revenue. [An HON. Member: "No."] It has. If the hon. Member will look at the Report he will see that since 1896 the yield of the Spirit Duties is one million less than it ought to have been in proportion to the increase of taxation.
§ Mr. BONAR LAW
I am coming to that. It is perfectly true that you may raise more by raising your Beer Duty. If you do raise any considerable sum of money it can only be done by putting a duty on beer so high that there will be the irresistible temptation to smuggle. Everyone knows that that is a kind of thing that is easily smuggled. If the duty is high enough in the one country against the other, it will lead to smuggling. Anyone who knows what happened during Grattan's Parliament knows that there was an immense amount of smuggling between the two countries. I think it is obvious that you cannot get any large sums of money from this provision without a lot of trouble. Nothing more clearly points out that you have gone into a foreign country than when you land there to be subjected to the Customs House examination. That will remain in Ireland even under this arrangement. You will be doing all that for the sake of an additional revenue at the most of half a million sterling. I venture to say in the, field of taxation still left open to the Irish Government, especially when we have to pay the cost and they have to get the proceeds, it would not be easy to raise that money by methods which would not cost an enormous sum, and a considerable amount of friction between us.
There is only one other point. Since the speech of the Chancellor of the Exchequer and the Postmaster-General the other day, I really do not know where we stand in regard to this Bill. My idea, drawn from the speech of the Prime Minister in introducing the Bill, and in speeches on the First and Second Reading of the financial arrangements, was this: 926 That you were going to take the present financial arrangement between the two-countries, stereotype it, and that in the future Ireland was to live on her own resources, with two exceptions—the two millions, or a little more which she gets from us, and the liability to taxation in the event of a great emergency. It is what I understood. More than that, the Bill shows that that was the intention, because by Clause 26 the Government contemplate, if ever the revenue from Ireland reaches, the expenditure, that Ireland will then begin to contribute towards Imperial needs, but not till that period is reached! What did the Chancellor of the Exchequer and the Postmaster-General tell us? They told us that it is the intention of the Government if any further taxation is required for Imperial needs, to put it on Ireland as well as Great Britain. It is their intention to do so. What becomes of the deficit that is only to be wiped off after all these years? If the taxation is big enough, as it might be next year—if the First Lord of the Admirality were here-he would not deny that there was a possibility of increased taxation next year—the whole question of readjustment would again be raised. That is not all.
Under the Bill any taxation on any account imposed by this Parliament will automatically fall upon Ireland. The Government tell us that was the intention, but they say it would not be fair to impose on Ireland taxes for social reform affecting England only. I admit that. I do not think any Government, of whatever party, would try to do it. But suppose there was increased expenditure for armaments and social reform. No Chancellor of the Exchequer that ever lived could point to the taxes and say, "That is for armaments; this is for social reform." The thing is impossible. That is the position to which we have come. Under this Bill Ireland is not only to pay the taxes which are contemplated by our existing position; she is going to pay any new taxes which are imposed, and she has to pay them when her Members have been reduced by a third to what they are now, and when they will have that much less voice than they have to-day in determining whether the taxation which you propose is fair or not. Hon. Members below the Gangway think perhaps that I am raising a point that only affects England. The first time I spoke on this Bill I said that if there was to be Home Rule at all I would rather have I it on the Canadian model; that Ireland 927 should live on her own resources, and we on ours. We do not want that Home Rule by which you start Ireland in a condition which means immediate bankruptcy. That is what your Bill does. Why do hon. Members below the Gangway accept it? They do not state to the people of Ireland what the Bill means. If there was any possibility of reaching the ordinary Nationalist elector as we reach the English or Scottish electors, you would only have to explain what the Bill means to Irishmen to make it impossible that they should ever accept it under its conditions. Why do they accept it? The Nationalist leaders are like Gentlemen who sit on the benches opposite me. Their whole fate is bound up in getting some kind of Home Rule Bill, and if they cannot get the Bill they want—not from any hostility on the part of the Government, for they will always give them what they want—but from the attitude of hon. Members behind, the Irish Members come down and say, "It does not matter very much." They are willing to take the Bill for two reasons. The first is they must get a Bill to save their own reputations, and, secondly—and this is the main reason—because they know that if they have the leverage of an independent Irish Parliament in Dublin, that with that leverage, supported by the presence of forty Members here, they can get whatever they like.
§ Mr. HERBERT SAMUEL
I rise for the purpose of replying at once to what the right hon. Gentleman has said. He quoted Sir Thomas Pittar, and I propose to deal with that point to show that the illustration I made was not illegitimate in the course of a controversial debate. The right hon. Gentleman suggested that in declaring that the Board of Customs supported my view that there was no Protection in this Bill—that there was no loophole for Protection—and that Sir Thomas Pittar was wrong in his facts and his conclusions, I was not justified by anything that the Board of Customs could have supplied me with. He even went so far as to say that he was very suspicious of any Member of this Government, when he quoted from any authority, as to whether that authority really bore out what that Member of the Government declared to be borne out. The Memorandum which the Board of Customs supplied me with on this very point is dated 8th November, before I spoke. It followed a verbal communication which I had with 928 them. It contains a number of comments on other points, but it is in the form of a confidential Memorandum. Therefore I do not quote from it, because if I did so it would be necessary to lay it upon the Table of the House. Since, however, the right hon. Gentleman has not scrupled to throw doubt upon the Memorandum, I pass it across the floor of the House for him to see. I think when he has looked at it, especially when he has noted the marked passage, he may think it well to revise his previous remarks.
The reason why, in spite of the opinion held by the technical advisers of the Government, we have, nevertheless, put down further Amendments, is not because we have any doubt as to what will be the effect of the Bill as it stands. We have no doubt. We consider that there is no question but that Protection would be excluded, and that the Irish Parliament would not have the power it is suggested they might have. Since we want to make it clear to everyone that that is so, since the right hon. Gentleman opposite raised the point, and said that in their view it is so, and quoted the authority of Sir Thomas Pittar to support their views—we do not accept that opinion—nevertheless, in order to avoid any possibility of doubt, and for greater caution, we have put down an Amendment which must convince everyone that our interpretation of what the Bill will effect is the correct interpretation. I am glad to know that the right hon. Gentleman to-day has, in fact, said that the Amendment as it now stands will completely exclude—
§ Mr. HERBERT SAMUEL
That is quite sufficient for me. The Bill does now affect what we have always said is the purpose and effect of its wording. That is the main point which I rose to deal with. I do not propose to deal with or argue the extreme and impossible cases to which the right hon. Gentleman has referred. The suggestion that if Ireland put an increased duty on beer it would be easy to smuggle beer in large quantities into Ireland I think is misplaced. In view of the revenue restrictions upon the movement of alcoholic liquors, I think such illicit supply would very soon be detected and stopped. His suggestion that the Irish Parliament would seize the opportunity to increase enormously the Excise Duty upon spirits in order to 929 reduce the consumption, with consequent loss to the Imperial Exchequer, is not a contingency likely to occur. The right hon. Gentleman said that in any case by varying these Customs Duties the Irish Parliament would never be able to get revenue of more than £300,000, or possibly £500,000 in view of the restrictions imposed upon them. That would be so, no doubt, if the 10 per cent, limitation applied all round. But it does not apply to beer and spirits. If the Irish Parliament did increase the Beer Duty they might obtain a revenue very much larger than the sum quoted by the right hon. Gentleman. Lastly, he said that the scheme of the Bill was defective, because in case we impose new taxation upon the United Kingdom generally, it would fall automatically upon Ireland: whether the purposes for which the taxation was levied was a purpose common to the whole of the United Kingdom or limited to Great Britain.
I do not quite understand the right hon. Gentleman's use of the term "automatic." New taxation would be levied in the Budget by a Budget Resolution of this House, and by an Act of this House. But this House is not an automaton. It does not automatically impose any taxes upon any portion of the community. It would be entirely within the province of this House if it chose at any time to declare particular taxation or taxation for any purpose to apply to Great Britain and not to cover the whole of the United Kingdom. But suppose that was not found practicable, suppose it was the Income Tax that was increased and had to be levied throughout the whole of the United Kingdom, nothing would be easier than to give Ireland the benefit of the proportion due to her either by addition to the Transferred Sums or in some other form. There was one remark made by the right hon. Gentleman with which I am in entire agreement; there was one fact which he presented in a way which I do not dispute, and it is that if there is to be a choice of levying fresh taxation on Ireland over a series of years, that might have the effect of bringing closer the day when the deficit would be over and the financial scheme would be revised. That is so, and so far from that being an evil it appears to me, at all events from the point of view of the British taxpayer, that if that day can be accelerated when the deficit is over and the burden on the British taxpayer is re- 930 moved, so far from that being an objection, it is an added merit to our financial scheme.
§ Mr. AMERY
The hon. and learned Gentleman the Solicitor-General opened his remarks by saying that the key of the whole financial policy, in the general consideration was that we should give the Irish Parliament powers of finance consistent with Imperial convenience and practical work. I must confess the hon. Gentleman and his colleagues seem to have opened the wrong door with that key. That door opens a prospect of confusion and discord which I think is comparable to that which presented itself to the eyes of Fatima when she opened another door. The hon. and learned Gentleman seemed to think that we are taking up an inconsistent attitude on the ground that we are complaining of the extent to which the Irish Government is given powers to vary Imperial taxation, and that at the same moment we suggest that some of these powers are mere nibbling at revenue questions. Both these complaints are equally true and justified. These powers are big enough, applied as they are to Imperial taxation, to cause endless confusion; and at the same time, in view of the height at which Imperial taxation already stands, and such limitations as exist, they are not powers which are likely to produce substantial revenue. The whole thing comes back to the point we urged upon one Amendment after another, that you have never really faced the federal problem you profess to face. If you had but really faced that you would in some way or another have made up your minds as to what taxes should remain to Ireland and in future to England and other federal sub-divisions—what are to remain United Kingdom taxes and what amount of taxes are to be provincial. The experience of every federation in the world indicates that federal finance is only possible on the basis of a joint Customs Tariff for the central Government, and moderately low direct taxes by the central Government which would enable the local Governments to have further direct taxes for their own purposes. Even if you left that and try to use the present fiscal system of this country as a basis of a federal system, you must, make up your mind, if you want to have a sympathetic working, what kind of taxes are to be federated taxes and what kind are to be local taxes; and if you did that and believed that the evils were going to go on under Home Rule, your obvious 931 course is to give Ireland a temporary Grant-in-Aid on a scale and on whatever principle you feel justified. If Ireland cannot pay her way for ten years, have it on a scale down to ten years; and so if she cannot pay her way for twenty years, have it on a scale down to twenty years; but do not introduce a system entirely incompatible with the federal scheme and bound to give all the disadvantages of dual ownership of the same taxes.
One after another my hon. and right hon. Friends have shown that the moment you give the Irish Government power to vary taxes imposed by the Imperial Government, or the moment you give the Imperial Government power to impose taxes in Ireland which Ireland has imposed for her own purposes, you are bound to get endless occasions for friction and difficulty. If the division in the taxes is to be in accordance with the rate imposed, of course you get the difficulty that the Irish Government may add a very heavy surtax which may increase the cost of collection and reduce the total rate, when the disadvantage would fall upon the United Kingdom and not upon Ireland, because Ireland gets a proportional share of the total. In that way the Irish Chancellor of the Exchequer could inflict a direct loss upon the Imperial Chancellor and spoil his estimate. If, on the other hand, the solution is that the Irish tax is always a secondary tax, you always estimate what the British tax would have yielded if the Irish tax was not there, and subtract the one from the other, then you get the difficulty to which I ventured to draw attention on Thursday, that the British Chancellor of the Exchequer could come at any moment and destroy the value of the taxes of the Irish Chancellor of the Exchequer and compel him to abandon that tax and to try and find a new one. I do not wish to go into the details, referred to many times, but whatever way you take it you are bound to get cause of endless friction to be settled by the Joint Exchequer Board, with which certainly the Irish will not be content.
Then you have still further questions of various modifications introduced, but, as far as I can see, they only add to the complications without in any way clearing the matter. Let me take the question of Death Duties, to which the hon. and learned Gentleman referred. At present and for the future, automatically, if these new provisions are introduced, the Death Duties are imposed for the whole of the 932 United Kingdom upon the whole estate of deceased persons in the United Kingdom and upon a rate proportionate to the total of that sum. That will continue. Now the Irish Chancellor of the Exchequer has a right to reduce or to remit altogether the Death Duties. What would happen if a man's estate is half a million in Ireland and half a million in Great Britain? If the Irish Government abolish Death Duties in Ireland, are we to understand that the British Exchequer will raise Death Duties on a scale applicable to the whole million? Or, again, if the Irish Government reduced the Death Duties to a lower scale, does the British Government still exact its scale upon the whole and leave the heirs of the deceased person to get some sort of refund from the Irish Government? It seems to me that the only way to deal with it should be as a provincial matter, and that each province should only take Death Duties upon the total property in their care, but the Bill does not provide that. Then we come to the question raised the other day. If the Bill proceeded on the framework as laid down in the First and Second Reading speeches, then the argument advanced by the Postmaster-General does mean that all taxation imposed in this House automatically falls upon Ireland and that all savings made in this House are also savings for Ireland. As I venture to point out, if the saving is for purely British purposes, it is an injustice to Great Britain, and in the case of expenditure on British objects it would be an injustice to Ireland. How are we to deal with that? The Postmaster-General gave two answers. He said in certain cases you need not impose taxes upon Ireland. Then you get a fresh source of difficulty.
Suppose you impose a Customs Tax added to the Tea Duties in this country to cover new expenditure, let us say, on old age pensions, and do not add the same amount to the Tea Duty in Ireland, you at once defeat the effect of the concession with regard to Customs. You at once introduce a difference as regards Customs Duties between this country and Ireland, and you have a higher Customs Duty here than in Ireland. That is not merely theoretical, but practical, for it is practically certain, whatever fiscal system we have, we have come in this country pretty well up to the limit for the time being of our direct taxation. Any further expenditure for social reform or Imperial 933 defence is going to be got by the imposition of indirect taxes. If we do not extend that to Ireland, then in the whole range of our Customs Duties we will be forced here to put up taxes against Ireland, and if you do not do that, you would be driven to the right hon. Gentleman's other alternative. Presumably the Joint Exchequer Board would have to estimate how much taxation would be raised from Ireland by the additional taxation laid upon Ireland as rightly attributable to the particular purposes in this country, which is local, not Imperial. It would have to decide what is local and not Imperial, a matter of immense difficulty and matter of policy and opinion, and when that is done it has got to allocate an Irish equivalent Grant which Ireland would be given back, and Ireland would have that money to remit other taxes. I think the Chief Secretary for Ireland knows how much controversy has been created in the past in the allocation of equivalent Grants to Ireland, and here, under what we are told would be a comparatively simple system, you would be back at once, not only to the contract system and its vices, but to the further vices of the system of equivalent Grants. More than that, the assumption is made by Irishmen—the right hon. Gentleman, the Member for West Islington has made that assumption—that Ireland was consistently over-taxed and most specifically so in regard to indirect taxes. Under this system you are going to continue to over-tax Ireland, but you would give a considerable sum of money to Ireland in the way of equivalent Grants. Unless the Irish Government wants to plunge still further into greater and more extravagant expenditure far beyond what the Union has already committed the Irish Government to, she must proceed to reduce taxation, and by the Amendment introduced to-day she is not allowed to reduce her Customs taxes.
A number of new Customs taxes are to be imposed upon Ireland, but the Irish Government is not allowed to reduce taxes in order to get rid of the equivalent Grant, but must reduce her direct taxes. You are making it impossible for Ireland to get a system of taxation suitable for her needs, and if Ireland economises at all you are going to give her a system which aggravates the present case. Of course you are also left in this position, that you have no finality whatsoever. Instead of having the system which is to work more or less automatically, the question of what taxes Ireland is to pay depends at any 934 moment upon the opinion of the Chancellor of the Exchequer of the day in this country. One Chancellor of the Exchequer may think that Ireland is not to have new Imperial taxes, or he may take off existing Imperial taxes in Ireland when he takes them off in this country. Another Chancellor of the Exchequer may think the opposite. He may reduce the Tea Duty here and not in Ireland on the ground that the reduction has been made possible by British domestic expenditure. He may also put all the new British taxes upon Ireland, and give Ireland an equivalent Grant at a moment when the Irish Chancellor of the Exchequer may find it extremely inconvenient to have this large sum of money thrown at his head. The whole case for Home Rule is that you cannot efficiently and economically govern Ireland unless those who spend the money have control and are responsible for the difficulties and the unpopularity of raising the money. All that is now thrown to the winds, and you have a system under which the Irish Government gets one contract sum; it gets taxes imposed upon it for which it may get no equivalent whatever. It may or it may not have a tax imposed upon it when it does not want a fresh revenue, and yet have the fresh revenue thrown at its head, and be asked to modify its system. That cannot lead in any sense to economy, efficiency, or to harmony of working.
The Amendment proposed by the right hon. Gentleman seems to me to have done nothing to meet our objection to the right of Ireland to interfere with the Customs system of the United Kingdom, and if it has done away with the objection of seventy or eighty hon. Members opposite, they are easy to please. I thought their objection was to the breaking up of the fiscal unity of the United Kingdom, and the possibility of an Irish Parliament introducing protective measures into this country. I thought their objection was to smuggling across the Irish Channel, when now I find their only objection is smuggling one way across the Channel. I think the Liberal Free Trader is a very poor watch-dog of Free Trade. The right hon. Gentleman the Postmaster-General throws him his sop as easily and effectively as his prototype the no less impeccable Æneas threw the honeyed bun to Cerberus. It seems to me that very objection we have raised remains in substance, and the only argument for giving Ireland the power of modifying its taxes is the one which has been abandoned by this 935 Amendment. The hon. and learned Gentleman the Member for Waterford seemed to think that this was an immaterial matter, and the Postmaster-General agreed with him because there was no prospect of Ireland having any economies within any time we could contemplate, which would make it possible to reduce the deficit. The hon. and learned Member was answered most effectively by the hon. Member for Northampton who pointed out that there might be no possibility of reducing the total amount of the deficit. One of the first things to do would be to reduce the very high Customs Duties and introduce other taxes which would give the same rate. That one argument in favour of modifying the Customs system has been our objection, and it has not been met in the least, in fact automatically you have a new protection introduced. Nobody can deny, and in fact that they have all admitted it, that the mere examination of Customs is costly and inconvenient. It is costly to the State, it is an expense and inconvenience to the man who wants to send his goods across, and it means increased cost and delay. It is an inconvenience to have to send every parcel to the Post Office with a declaration. Under this system of traffic from England to Ireland, you have got this inconvenience and expense, and whether it is 1 per cent, or 2 or 5 per cent, in the case of parcels, it may be a very considerable expense. In the case of traffic from Ireland to England you have not that expense, but does the right hon. Gentleman not see that by virtue of that you have a protection in Ireland against British traffic, whereas you have not a protection in this country against goods coming from Ireland?
As regards the Parcels Post or small parcels, you have the essence of protection there already, and if the Irish Government likes to insist that bales of woollen goods are likely to contain saccharine, and to impose regulations which really makes the search troublesome, you will get a very effective protection against British woollen in the Irish market. Nobody has yet answered the point we have made on the question of bounties and monopolies, namely, that however operative or innocuous those powers of granting protection might be if they had to come within the ordinary revenue of the Irish Government, the moment you give them the power to raise Customs and Excise Duty you make it perfectly easy by a very little arrangement to raise the Customs Duty. 936 Supposing you raise the Customs and Excise on tobacco by Is., and arrange that the whole of the proceeds of that duty is at once to go back in the shape of Grants, or however you like, to the growers of tobacco in Ireland. What you do in effect is to make the Excise Duty on tobacco in Ireland even lower than it is to-day, and you make the Customs Duty not only 1s. higher but practically something like 2s. higher. Once a general tariff is introduced, you do give a power of protection against protecting every article which Ireland wishes to tax. That point has never been answered, and I do not think it is of vital importance to this country, and to the dissentient Liberal Members opposite to understand that the opportunity for protection still is there. My hon. Friend said he agreed that this Amendment withdrew opportunities of protection, but surely he meant opportunities of granting protection by differentiating drawbacks, and not the opportunity of granting protection which is still left by giving the Irish Government power to grant bounties or to establish a monopoly, in which case it might remit both Customs and Excise altogether, and buy the article at such prices as may suit it and the Irish producer best. Lastly, all these powers are in point of revenue unnecessary. They can only be given either to satisfy a sentiment which will at once be made a handle for demanding more or to deliberately invite attempts to circumscribe, to rig, and to complicate the fiscal system of the United Kingdom. In all these attempts you are bound to add to the cost of collection which falls upon us and not upon Ireland. By giving Ireland not a field of taxation of its own but the power to meddle and to interfere with the whole field practically of United Kingdom taxation, you are setting up a system which is bound to lead to friction, which is bound to break down on the first opportunity, and which I venture to say you would never have introduced but for one reason and one reason only. You have not had the courage to face the situation fairly, either as regards the people of this country or as regards the hon. Members below the Gangway. It is because you have not been prepared to state fairly to the people of this country what actual Grant-in-Aid they have got to give now and for fifteen, twenty or thirty years to come, and because you have not been prepared to state fairly and clearly to the Irish Members that their powers are going to be limited to such powers as will be 937 given to Scotland and Wales in the future, that any Grant-in-Aid Ireland's present position may require will also be strictly limited in quantity and in point of time, and that they will really be compelled to make those savings about which we have heard so much, but which apparently there is so little disposition really to attempt to carry out.
§ Mr. HUME-WILLIAMS
I desire first of all to offer my hearty congratulations to the Solicitor-General for his happy incursion into the domain of music to find the illustration which he used. He seems to find harmony in this Bill by one of those happy inspirations which occasionally flash across Members on the Front Bench opposite in a way which I hope will attract the respectful attention it certainly ought to attract. Dealing with the question of variation by the Irish Parliament of the Death Duties and the Super-tax, by which it is contemplated that Super-tax and Death Duties will be allowed to be imposed in Ireland at one rate at the same time that they are imposed in England at another rate, he said they were going to write these duties in different keys but so as to preserve harmony. I would suggest that when he gets a few moments' relaxation from his public duties he might conveniently take somebody, if he can find anybody willing to sacrifice himself, into a room where there are two pianos, and let them play upon the pianos at the same time the same, tune in different keys. He will then get the harmony he contemplates, and will, when he has carried out that operation, realise how thoroughly true was his illustration of the harmony likely to result from this Bill. Clause 15 contains one Sub-section which I really cannot help thinking the Postmaster-General must have overlooked, because the object of the whole of the Amendments we have been discussing this afternoon is to provide that in future, when dealing with Imperial taxation, the Irish Parliament shall only have the power of adding to them, and not of taking from them. That Sub-section, which, as far as I can see, is untouched by any of the Amendments discussed up to the present time, gives the Irish Parliament power, either by way of addition, reduction, or continuance, to deal with any Imperial tax in Ireland. What is the good of our solemnly discussing an Amendment that they are only to have the power to add to Customs Duties and not to reduce them if you leave them the power of discontinuing them alto- 938 gether? It sounds so foolish that I cannot help thinking my reading of the Bill must be wrong, but here are the words staring us in the face in the Sub-section:—
"The Irish Parliament shall have power to vary (either by way of addition, reduction, or discontinuance) any Imperial tax so far as respects the levy of that tax in Ireland."
§ Mr. HUME-WILLIAMS
That is exactly what I say. The Clause, with paragraph (a), provides that you are to deal with Customs Duties, and the Amendment limits the powers as to Customs Duties to additions.
§ Sir J. SIMON
I think if the hon. and learned Gentleman will just look again he will see that is not really so. If it were so we should no doubt wish to put it right. May I call his attention to the first words of Clause 15 and the Amendment combined:—The Irish Parliament shall have power to vary (either by way of addition, reduction, or discontinuance).Therefore, you vary Imperial taxes, whether you add to them, reduce thorn, or discontinue them. The Bill speaks of variation as a thing which may happen either by way of addition, reduction, or discontinuance. If the hon. and learned Gentleman will be now good enough to look at the Amendment of the Postmaster-General on the Paper, he will see that is a provision that the Irish Parliament shall not have power to vary except by way of addition. I think if you put those two things together it follows you have a general provision giving the Irish Parliament power to vary either by way of addition, reduction, or discontinuance, followed by a provision that in the case of Customs they shall not have any power to vary except by way of addition.
§ Mr. HUME-WILLIAMS
I do not in the least complain of the Solicitor-General's interpretation, but I disagree with it in toto. I am bound to suggest there is no court of the land which, reading this Section, will construe discontinuance as variation. If you have a Section in which you say, a tax being imposed, the 939 Irish Parliament is to have no power to vary, and if you leave in the words it is to have the power to discontinue, what is the result? Variation means put up or down. Discontinuance means to strike out altogether. The one contradicts the other. The suggestion of the Postmaster-General is to put in at the end of Sub-section (a), which deals with the Customs Duty words which will enable the Irish Parliament to discontinue or vary the tax. The provision is that there shall be power to vary, either by way of addition or reduction, or discontinuance. It seems to me that to leave, in the words "the Irish Parliament shall have power to vary either by way of addition, reduction, or discontinuance" is unwise. It would be better to provide that the Irish Parliament shall have power to vary Imperial taxation by discontinuance. I hope the Government will consider that point. Before I leave Section 15, let me point out once more the lamentable mistake made by the Postmaster-General in dealing with the Exchequer Board. He reiterated that the only function of the Joint Exchequer Board was to give a dignified countenance to the policy. You have in this Clause 15 what may be compared with the Star Chamber. It has to determine if the Irish Parliament is to have power to impose in Ireland any independent taxes which, in the opinion of the Joint Exchequer Board, are substantially of an important character. What is the responsibility you put upon this Joint Exchequer Board? It will have to decide whether this tax, which has been producing a revenue for the Imperial Parliament, is to produce something over and above for Ireland.
All we know is that the Joint Exchequer Board is to be enabled to give the Irish Parliament power to impose taxes. But surely the power of taxation should be in the legislature of the country which has to pay. It is suggested there should be a sort of Star Chamber to determine what taxation the Irish Parliament shall have power to impose. That is one of the many points which, in the opinion of hon. Members on this side, make this Bill utterly unworkable. Let us turn to the Amendment of the Postmaster-General which has been discussed, and let us see what powers are given there. They are not to alter the rate of the Income Tax. If it is 10d. in the £ while the Unionist Government are in power, or Is. 2d. in the £ under the Liberal Government, or vice versa, that rate is to be a fixed rate, and 940 the Irish Parliament is not to be in a position to alter it. Then we come to the question of how the Super-tax is to be imposed. Under the plan proposed it will relieve the South of Ireland at the expense of the industrial North. You are giving to the Irish Parliament power to impose tariffs which would relieve the Nationalist quarters of Ireland at the expense of the North. Is it wise to have such words in the Bill, and is it wise to leave the Clause in its present form? I suggest it is not.
§ Mr. HUME-WILLIAMS
I do not agree in the least. [Hon. Members: "Why?"] Because you have got here an Imperial Parliament, with representatives of the majority in this country, and they are not likely to tolerate an injustice of that kind, because the conditions are altogether different. You have not got in England an agricultural South and an industrial North.
§ Mr. HUME-WILLIAMS
Not at all. You have your agriculture spread over the whole country, and your industries spread all over the country. [HON. Members: "No."] It is all very well for the hon. Gentleman (Mr. Booth) to shake his head and say "No" at intervals like a Greek chorus; that does not help us very much. The only thing I have to add about the suggested Amendment to Clause 15 is that the last part of it is wholly unintelligible—not that that is anything new in connection with this Bill. It says that the power of the Irish Parliament to vary an Imperial Tax, so far as any Customs Duty or Death Duty is concernedshall only be exercised so as to vary the rate of the duty.I thought that in a former. Amendment moved by the Postmaster-General it was provided that the only way they could vary a Customs Duty was by way of addition. If that is so, why not say so in plain English? If what you mean is that the only power is to be the power of addition, you should say so, instead of constantly using the word "variation," which is open to all sorts of interpretations. The whole thing comes back to this that if you are to have Imperial taxation which is to be incident to Ireland, and if you are going to keep forty-two Irish Members in this House to vote upon the question of Imperial taxation, why not keep yourselves the control of the taxation you 941 yourselves impose. You should either give to the Irish Parliament a proper, ample, and common sense power to impose its own taxation, or keep the taxation in the hands of this Parliament, as an excuse, at any rate, for keeping forty-two Irish Members here. The bog into which you are falling, and the ridiculous contradictions that stick out all over these Clauses, which are emphasised by the Amendment moved from the Government Benches, all come to this, that you are trying to impose what is repugnant to common sense You have an Imperial Parliament, an Empire whose affairs it directs, which is still representative of all sections of the community. Why cannot you leave to the Imperial Parliament the power to impose and collect Imperial taxation? The moment you give to what you profess to be a subordinate Parliament in Ireland the power to interfere with the taxation imposed by this House, then you are likely to get the condition of harmony so ably outlined by the Solicitor-General in his simile of the tune being played in two different keys at the same time. The simile is perfectly apt. If we are to have Imperial taxation keep it in Imperial hands, and leave to the Irish Parliament the power to impose and collect their own taxes.
§ Mr. HEWINS
I have been waiting to hear from the Government Benches a reasoned defence, based upon practical experience, of the proposals adumbrated in their Amendment. we have had ingenious arithmetical speeches, but, so far as I remember, we have had no single reference to the trade and resources of Ireland and Great Britain, no reference to the people who have got to work the arrangements introduced by the Government's Amendment, and no trace that the Government has ever taken into consultation the business men and practical men interested in this great question. You have got to give Home Rule—that is the idea of the Government—and to provide some scheme which will enable the people upon the benches opposite to vote for this particular measure; but, so far as I can see, they produce no defence whatever of the scheme they have propounded, and apparently they do not propose to do so. The striking fact about the relations of Great Britain and Ireland is that they are relations of inter-dependence. Nearly all the trade of Ireland is with Great Britain. I think they have only some £10,000,000 of trade outside, and any scheme that is introduced must take that into account. I could understand bringing in a scheme 942 which said that Ireland was to be considered as a complete fiscal entity, organically different from this country, and then giving to Ireland power under such a scheme to make her own financial arrangements in regard to both internal taxation and to Customs and Excise. I could understand the Government making an argumentative case for a scheme of that kind. I think I could demolish that case with perfect ease, but it is a case one could understand. What I cannot understand is that the Government, with all the organisation they have under their control, and all the opportunities they have had of consulting the Irishmen, Englishmen, and Scotchmen interested in these matters, have never produced evidence that they have ever taken anybody into their confidence at all.
In these circumstances it is extraordinarily difficult to criticise the view of the Government. I listened to the speech of the Solicitor-General. I think he made out what might be called a Departmental case. It was exceedingly ingenious. It was a case similar to that Mr. Gladstone made out years ago for scrapping the ancient financial machinery of this country at the time of the introduction of Free Trade. That is looking at it from the crudest, narrowest, Departmental point of view. Obviously there is no possible advantage to be gained to the economic interests of Ireland or of this country by having separate Exchequers or the arrangements set up by the Government's Amendment. I really marvel at hon. Gentlemen opposite, who are committed to a particular line of policy, agreeing with proposals which fly in the face of all that has ever been said by great financial experts in the past as to what are the desirable relations between Great Britain and Ireland. If there is one thing that comes out of the early history of the nineteenth century or the latter history of the eighteenth century, it is that you have to aim at fiscal unity of the Exchequers of these two countries, and the sweeping away of external and internal differences. Hon. Gentlemen opposite are going right back upon the past; they are abandoning the advice of great financial authorities. No one seems to be more fully aware of the protective element—I use the word in its broadest, general sense—in introducing these differences into the internal taxing system of Great Britain, and especially the Customs, than the Postmaster-General himself. But he seems to me to despise his colleagues upon the bench opposite. 943 He knows perfectly well that he has to deal with the ordinary Radical, who is pledged to uphold the old orthodox views on financial arrangements, and he knows also perfectly well that this Bill, in Clauses 15 and 16, conflicts with all the old criteria, but he has to get their support. No one will be more ready to admit his ability, almost his genius, for dealing with these things, but he seems to me just to be content to fool his colleagues upon the Opposition bench. He invents a Departmental way, beautiful in its prim efficiency, of dealing with these questions, and he provides hon. Members opposite with an excuse, for that is what they want, to keep in office, for voting for measures which, if we had happened to be in office, and had introduced anything at all incorporating such principles in any proposals we had done, would have been denounced as being against all the principles of English finance. That is the situation.
Of course, we on this side are wholly against these proposals even in the modified form of the Government Amendment because they introduce the principle of disintegration into the United Kingdom. They are anti-Imperial. That is our case against them. The details are very interesting, and many fascinating statistical sums can be made out in defending or opposing these proposals, but we are content with the broad principle. For generation after generation, at great sacrifice, at the greatest possible inconvenience and with the utmost trouble, we introduced and carried through, by slow stages, the amalgamation of the two Exchequers and the assimilation of the systems of taxation of the two countries. It was an achievement for which no particular party could claim the credit. The statesmen who approved it were, some of them, Protectionists and some Free Traders. The approval of this movement is common to all the great financial experts of the past. It bear analogies with all the great constructive schemes which have been carried out on the Continent, and we say on this side that directly you introduce these differences you introduce a system which is going to drive you into further and further extremities. You cannot stop where you are. As your internal differences grow—I mean, in Ireland and in Great Britain—you will find that vested interests will be created which it will be very difficult to remove, and you will never achieve fiscal unity again, without the same diffi- 944 culties which we had in the past. We will not have that on any terms whatever. We are not opposed to the proper expression of national sentiment. There is no Irishman keener about Ireland than we are about our own country. We say that you can satisfy this national sentiment—this Home Rule sentiment—in a way which we have practised over and over again in the course of our history, and it certainly does not involve a breach in the fiscal unity of the United Kingdom.
I come now to the particular proposal of this Amendment. I should like to point out the extraordinary misconception that appears to lie in the mind of the Solicitor-General. I do not know how far it lies in the mind of the Postmaster-General—that he has done away pro tanto with the objections that have been raised on the ground that his proposals involve the setting up of Custom Houses between the two countries by confining the powers of the Irish Parliament to additions to Customs. That is not the point at all. The necessity for separate Custom Houses does not arise from the fact that you have a reduction of duties. The necessity for separate Custom Houses arises from the elaborate drawback system which is involved in this Bill, and any variation—it does not matter what it is—in duties as between the two countries, involves the setting up of Custom Houses, and you will find that it will bring something like £100,000,000 of trade subject to Customs to which it is not at present subject. But it is the variation up or down coupled with the drawback system which involves the setting up of Custom Houses, and from my point of view the Postmaster-General has done nothing whatever by the Amendment which he has introduced. I take another point—the extraordinary provisions which are introdued into the Amendment, and what I may call its correlative Amendments, by the Amendment of the Definition Clause 47. We understand that no variation upwards is permitted to the Irish Parliament on any item in the Schedule unless it covers all the correlative items in the Schedule. They have all to be proportionate. Then in the Amendment to Clause 47 we have this:—
"For the purposes of this Act duties on a raw material and on articles produced, prepared, or manufactured from that material, and any group of duties fixed in relation to some common basis, shall be deemed to be correlated duties."
945 What in the world does that mean? I am very much astonished to find the party opposite committing itself to the principle of calculating duties on the basis of raw material. It is the very worst form. There is no important tariff in the world which takes that as the basis of calculation. I am very much surprised that the Government propose to perpetuate and emphasise this particularly bad feature in the present tariff system of the United Kingdom. They propose to tax raw material, and to work out the duties all through a given Schedule upon the basis of raw material. The one thing which shall not escape from taxation, from the point of view of the other side, is raw material. I have only to read out this very interesting Amendment in any industrial constituency, let us say in Lancashire—[An HON. MEMBER: "Bolton."] Yes, Bolton. Unfortunately, this was not down in time for the Bolton election. It might have been worth any number of votes to our side. I might ask a question of the Government which is frequently put to me, and which I have answered over and over again. What is a raw material? Will the Postmaster-General kindly tell me? And what is the possible defence for this particular provision? I admit, indeed I complain that we tax raw material now but after all I suppose this Bill is intended to last for all time. It is not intended to be revised and altered in its fundamental provisions a few years hence.
§ Mr. HEWINS
I am on the Clause, which has been subject to debate for the whole afternoon, and this is merely a defining Clause, defining what are correlated duties, and I can only understand the interruption of the hon. Member opposite on this basis, that he does not like the idea of the Liberal party committing itself to taxation of raw material, which it is doing by this particular Amendment. But that is not the end. "And may group duties fixed in relation to some common basis."
946 What common basis I [An HON. MEMBER: "Alcohol."] I see. That is another common basis. Supposing we have great financial responsibilities to meet and suppose the opposite side—which, as a matter of fact, many Governments have examined into—propose to meet the necessary expenditure by duties on imported luxuries. Are they prepared to advance the proposition that they are going to tax these in proportion to the raw material involved? What is the situation? We know the line upon which we propose to tax imported articles upon this side. What is the line on the other side? Are we to understand that they propose in the future relations of Great Britain and Ireland to take raw material as the basis for the calculation of Customs Duties? I can only say that of all the principles I have ever heard of for regulating the financial relations between two countries, this is one of the worst. It will certainly lead, if it is ever adopted, to the greatest possible friction and difficulty between the two countries, and it will tend necessarily, if we at all change our system, to accentuate the difficulties and differences between the two countries. Looking at the matter quite impartially, I do sincerely hope that the Government will give a more general and more generous interpretation to the correlative duties than they have done in this particular Amendment. One of the results of the limitation of the Irish Parliament which the Government have adopted by this Amendment will be to drive them more and more to differences of internal taxation, which we all deplore on this side, and which I think every civilised country deplores. As a matter of fact, these differences of internal taxation are more serious than those connected with the variation of Customs Duties. I would like to see the Government adumbrate a scheme more fitted to the circumstances of Ireland, and which would show that it appeals to business experience and the evidence of practical men, so conspicuously lacking in all these proposals.
§ Mr. EDGAR JONES
The hon. Member opposite (Mr. Hewins) starts with the great psychological and economic fallacy which pervades the minds of hon. Members on that side. The fallacy is that all economic virtue resides in Englishmen, and that nobody else has any. That was the burden of the hon. Member's speech, and he gave point to that by an historical reference which was very interesting. The great thing that commended itself to him, historically, was the fact that after a great 947 deal of trouble an amalgamation was brought about of the Exchequers of Ireland, Scotland, and England. That is one of the points on which there is disagreement. The people of Ireland have always said that was bad for them, and I have known forcible criticism of the change on the part of Scotchmen. Englishmen brought that amalgamation about for their own purposes and nothing else. They should remember that while from the point of view of Englishmen it has been all right, it has always been regarded by Irishmen as bad for them. The hon. Member for Birmingham, who spoke earlier in the Debate, went upon the same fallacy of assuming that you never could expect any kind of spirit, or business common sense, or compromise, or general working arrangement from Irishmen.
§ Mr. HEWINS
I suggested that one of the conspicuous faults of the Government proposals was that they had not consulted Irishmen from the business point of view.
§ Mr. EDGAR JONES
If the hon. Member means consultation with some of the large manufacturers and merchants in the North of Ireland, those are the last people in the world who could safely be consulted upon taxation, for, in giving their advice they would take particular care to keep taxation off their own particular trade or industry. I do not think the hon. Member opposite gets rid of the difficulty by relying upon that point in his speech. There is the general pervading fallacy that you are going to have in Ireland people with no conception of the spirit of compromise, which is essential in any country, and in any kind of business whatever. The thing that interested me in listening to the speeches of hon. Members is that they make their arguments ridiculous by the accumulation of the destruction that is in them. Take what was said by the hon. Member for Birmingham. He started with the Income Tax, and worked through the Super-tax, the Death Duties, and the Customs Duties, and gradually proved to his own satisfaction all the way through that there was not a single tax you could allow Ireland to have any special revenue from at all. Of course, if you are going upon that line, you cannot set up any kind of federal system here, and do what was done for the German Empire. That, according to hon. Members, passes the wit of man. It is not very much use therefore putting these 948 fiscal posers. After all, the question is a very broad one. The Irish people need for education and local development certain resources of their own. Our pro posal is to give them the maximum liberty. The hon. Member for Birmingham kept on emphasising that you are giving them this power and the other power. I say more power to the elbow of the Irish Chancellor of the Exchequer. I am sorry the Government have seen fit to put as many restrictions as they have done upon the Irish Government. We should trust the Irish Chancellor of the Exchequer, just as the German Chancellor trusts the Chancellors of States which are subsidiary. Side by side with that there is the economic fallacy of assuming—the absolutely impossible assumption—that our fiscal system now, our system of taxation, is a logical one, and one to be commended as something that hangs together in a beautiful fashion, coherent and dovetailed. Everybody knows that Continental observers and others are absolutely baffled when they endeavour to understand the peculiar system we have here.
Our system of taxation would not work for a day were it not for the fact that the people of this country, without pedantry or folly, proceed on ordinary rough business lines. That is what is going to happen in relation to these two countries. There are details which have been referred to by hon. Members. One hon. Gentleman talks about the Super-tax limit coming down to £400, and the tax being specially allocated on Ulster. That is the same old assumption that you cannot look for a spark of virtue in an Irish Chancellor of the Exchequer, that there is nothing in him but original sin, and that he is going to look at these taxes with the view to taxing Ulster out of existence. Then there is the argument which has been mentioned several times to-day about bounties. Hon. Members seem to suppose that the Irish Chancellor of the Exchequer is going to reduce the duties on tea and sugar, and that on the top of that he is going to reduce the Income Tax, and add to the Super-tax. The main argument has been that, after reducing the taxes on tea and sugar, and increasing the Super-tax, the Irish Chancellor of the Exchequer is going to create bounties right and left in order to create a system of Protection in Ireland. I submit that hon. Members are discussing it a little too much. They are overdoing it, and the whole fabric of their criticism 949 is made up of things which are being said simply for the sake of criticism. I have yet to hear some kind of constructive suggestion as to what kind of finance hon. Members think would work better within a Home Rule scheme, because we assume that Home Rule is going to become law. I myself do not believe that Irish Chancellors will want to meddle with Imperial taxes very much at all. I believe that in many little ways Irish Chancellors can discover suitable methods of taxation. I am not sure that in this country we are taxed in the best way, without hurting the people. I have no doubt that the Irish Chancellor will rely on that rather than on conflicts with the Exchequer Board and with the Chancellor of the Exchequer dealing with Imperial taxes. As to the apparent inconsistency between the original declarations of the Government about the levying of the Imperial taxes over Great Britain and Ireland at the same time and the declaration of the Chancellor of the Exchequer since then, I do not see where the difficulty comes in. The whole thing seems to me to be admirably arranged. If you deal with a country in a spirit of pedantry, it is easy enough to imagine inconsistencies.
If you proceed on the assumption that the Irish Chancellor is going to seek friction at every opportunity, you can conjure up all kinds of difficulties; but, looking at it on broad lines, it is quite plain that if this Bill becomes law, starting to operate Irish local functions for which the Transferred Sum is provided, the Irish Chancellor will have to deal with his Irish taxes for that purpose. But the Bill provides that in case of war or a great calamity, or national emergency, we can put a tribute on the people of Ireland for that special emergency, and only so long as it lasts; and for Imperial purposes that is a thing very much to be desired, and will work quite simply. I put the point to the Postmaster-General—and he informed me that it is all in the Bill—that he should provide clearly that when the Joint Exchequer Board is going to calculate its three years' obliteration of the deficit it should not bring into the calculation this special extension of the special Imperial Tax for a war or period of emergency. I take it that that would not be so in practice, and that on neither side of the Channel would it be thought that the incidence of a special War Tax comes within the tax that has to deal with the deficit. Subject to that I am very 950 glad that the Government has stuck so well as it has to the Bill, and I only wish it had stuck to it as it was. I only trust that from this onwards, at any rate, it will proceed on the assumption that there will be a few sensible men in Ireland similar to the men who have built up businesses. The hon. Member was referring to business men, and I will ask any of such men, if they had proceeded in the pedantic manner in which he wishes Chancellors of the Exchequers to proceed, would they ever have built up any business in the North of Ireland or anywhere else? It is because these men have acted in a large manner, with a good deal of give and take, and refrained from being guided by punctilious details that they have been able to succeed. What applies to business men in their own business applies equally well to the Chancellor of Exchequer either in Ireland or in England.
I hope I shall be able to answer the hon. Member for Merthyr in what he described as a broad, intelligent manner. May I take his last remark firsts He said that if the business men in the North of Ireland accepted this Bill without picking holes in its details in the same way as they built up the great industries in the North of Ireland, he was sure they would be able to make a success of Home Rule. Several of the great business men to whom he refers have met together and have discussed the financial portion of the Home Rule Bill from A to Z, and I have here the result of their inquiries, and if the hon. Member cares to look through the volume he will see that there is not one single part of the financial proposals of the Government that will stand the criticism of really hard-headed business men. That is where the hon. Member's arguments fall to the ground. Not only that, but he said that we should not deny to an Irish Chancellor of the Exchequer such a small thing as the power to impose this little extra taxation. Does he for a moment remember when saying those light words that what is proposed by the Government and is striven to be avoided by the Amendment is that the great fiscal system of this country, Customs, revenue, and every form of taxation, which has been built up after centuries of arduous work, and reports by Committees and those best able to judge, is to be thrown aside for what he admits to be only a very trifling advantage of internal extra taxation in Ireland?
The lion. Member said that the Irish Members should certainly have the right to decide how that small amount of money should be raised in the first instance by varying the way in which taxation is raised and deciding how7 it should be spent in the second instance. Does not the hon. Member bear in mind that it is not as though you were turning all the Irish representatives out of this House. But you are still keeping them here for the very purpose of having their voices heard as to the system of levying taxation in this country, and therefore it is quite unnecessary to allow this Clause to go through without the Amendment proposed by the right hon. Gentleman. I will give the hon. Member one concrete instance of what I propose, illustrating the very thing proposed by the Government and supported by the hon. Member. Everyone knows that on the passage of the National Insurance Act through this House there was a differentiation insisted upon by the Nationalist Members that there should be no medical benefit in Ireland. The result is confusion most absolute and intolerable. Take the case of anybody who lives on this side of the water for perhaps three or four months, a servant or a labourer, or anyone who happens to have occasion to be in Great Britain, and comes under the Insurance Act in England or Scotland. Owing to this very differentiation which the hon. Member would perpetuate, the employer and employed over here have the right, under the National Insurance Act, to stick on a stamp, which carries with it to the person concerned full medical benefit; but the moment you cross the Channel, owing to a change in the machinery, no medical benefits at all are offered in Ireland. [An HON. MEMBER: "You get them."] Not under the Act. I know what the hon. Member suggests: that they can go to the local dispensary doctor, but that is quite a different thing from the medical benefits given under the National Insurance Act. In Ireland, owing to this differentiation, they pay a lesser rate, because the stamps obtained are minus medical benefit. When you come to this country, what happens? Because you have paid the proper rate you get the medical benefit. I only quote that 952 instance to show how, in a small way, the moment you begin to split up the taxation of the United Kingdom, or indeed the machinery—as in this instance of a big Act like the National Insurance Act—the whole thing becomes utter chaos.
What does it mean I It means that you are to have the same power of taxation, the same Income Tax, the same Death Duties, the same taxes which are levied by the Imperial Parliament, but, over and above that, there is to be machinery for drawbacks and rebates—a system under which a bounty can afterwards be given to a particular trade—and all these are to be kept in the hands of the Nationalist Parliament in Dublin. If one pictures the real facts of the case, which hon. Members opposite will never face, it amounts to this, that you will have in Ireland a very-large representation of agriculture in the Nationalist Parliament in Dublin—no one denies that for a moment—and that House will probably deal excellently with all the agricultural problems, but when it comes to the great industries, which, after all, are the making of the country, and which are exactly the industries which require to be represented under this Bill, they are almost unrepresented. The taxation, so far as agriculture is concerned, is very small, and where you tax great industries that is exactly where you want representation. Places like Galway, Cork, and other parts of Ireland, if you look at the present powers, do not compare in the slightest degree favourably with some of the places in the North. In Dublin and Cork the rates are 10s. 3d., as against 7s. in the North of Ireland and in Belfast. In every other direction the same thing is seen, proving beyond a shadow of a doubt that we on this side talk with the facts and figures before us, while hon. Members opposite, especially the Welsh Members who are so fluent, deal with the subject in a light and airy way, which we can well imagine, when they address their constituents.
We, here, are dealing with the real facts, and it is impossible for hon. Members to convince us who live on the spot, and who understand all these matters thoroughly, that the proposal of the Government is not a most meddlesome and vexatious interference with a system of taxation which hitherto has proved satisfactory for the whole of the United Kingdom—one Custom House, one centre for the receipt of taxation, and then an allocation afterwards to the various local 953 authorities throughout the country. This system which is proposed by the Government is quite different. First of all, it sets up two Chancellors of the Exchequer who may not always agree, it sets up also a Joint Board of Exchequer, about which everybody has a different view. Even the right hon. Gentleman himself said that it would be necessary to give an appeal from that Board. You set up a most intricate system in place of a system which has worked satisfactorily, and you elect as arbiters over business men throughout the whole of Ireland the Nationalist Parliament sitting in Dublin—a Parliament composed of men who never earn more than £400 a year, and that not through any great business capacity on their part. Ulster, of course, is more concerned in this matter than any other part of Ireland. We have always said that the danger of the Government proposal lies less' in legislation which may be attempted in the Nationalist Parliament of Dublin than in administration.
It would be easy to bring in a method of vexatious taxation in Ireland which might be used by the Nationalist Parliament in order to drive a certain class—I will not particularise further—out of the country, and to use that power in the same way as are used the powers now possessed by the United Irish League and the Ancient Order of Hibernians. This power of Vexatious taxation would be simply used as a lever to further those two associations, and would be used in the same way as the Nationalists use any little power they have in the North of Ireland. Take the Death Duties. They differ, because there they can alter the rate of the duty, although they must not alter the machinery by which it is worked. Could anything be more unfair than that? Taking the hon. Members in this House, I presume they would be the Nationalist Parliament in Dublin, or, at any rate, there would be the same class of representatives in the Nationalist Parliament as there are here, and I do not think Nationalist Members claim to be high financial experts. The consequence is that it would be as easy as possible, if there happened to be, as probably there would be, very strong feeling on any particular subject, to do exactly what the Chancellor of the Exchequer did in this House, when he said, "If you will not pass the Licensing Bill I will be able to attack you in a different manner and more successfully." The 954 same sort of weapon would be in the hands of the Chancellor of the Exchequer in the Nationalist Parliament in Ireland, and he would be able exactly in the same way to use as a threat that, if they would not take a particular measure, he, as Chancellor of the Exchequer, would have to arrange duties or drawbacks in such a way as would be worse for them than if they accepted his Bill.
Neither. I come to a matter which affects the position of this question. Several Members, including the hon. Member for Northampton, made a strong appeal to this House on account of the poverty of Ireland. That hon. Member said, "If Ireland was as rich a country as England, it would be quite as ready as England, and it could go ahead with their taxation and have her benefiting at the same time as you have the people in England, Scotland, and Wales," but, he said, you are dealing with a poor country. Those hon. Members kept on saying that entirely forgetful of the fact that Ireland was never more prosperous than she is today. Take the Returns and look at them as you will. I rather fancy that Belfast is the fourth greatest revenue paying city in the United Kingdom. It has the largest tobacco manufactory, and shipbuilding yard, and rope factory, and a great many other industries which are larger than any you have in this country. If you take the standard of wealth by the deposits in the Savings Bank and in the joint stock banks, and the great railway companies, and the amount of stock which is sold throughout Ireland, if you take all those statistics, I defy any hon. Member in this House to say that Ireland was ever as prosperous as she is at the present moment. Therefore I do hope that hon. Members when they are dealing with this subject will always face that argument, when they begin to say, poor Ireland, and that it is necessary for her to have some other form of taxation. One drawback of the proposal of the Government is that the alteration of the system of taxation proposed under this Clause may be carried out by the Nationalist Parliament in Dublin, but it has to be done through the machinery of the British tax collector. The probability will be that the Chancellor of the Exchequer and his advisers in Ireland would be able to so put forward a system of collecting the tax that the expense might, like 955 the Land Taxes of the Budget, be far more for the cost of collection than the tax itself produced.
The effect of that would be that this House would have no method whatever of interfering with the tax proposed by the Nationalist Parliament, although they could clearly see that the cost of collection was out of all proportion to any result they could ever hope to obtain. That of itself is a farce like a great many other things in the Bill. In fact, having heard the arguments used by every hon. Member tonight on the benches opposite, I cannot conceive why any person would dream for a moment of upsetting a system which has, at all events, worked smoothly through all parts of the country, and with the final arbitrament in the hands of the House here of all the interests concerned, for such a very petty result, as has been suggested by hon. Members, simply in order to say that the Nationalist party-have some power over taxation. They may have the power of taxation, but when they come to collect those taxes I may tell hon. and right hon. Gentlemen opposite not one penny piece will they ever get from Ulster. We have made up our minds about that long ago, and therefore the Nationalists will have to finance themselves from the other three provinces, and God help them. I am sure there will be a great deal of increased taxation on the land of Munster and Connaught and other parts. For goodness sake let them have that, let them raise, and rebate, or act in any way they like, but never forget that the determination of the business men remember, and of all concerned in Ulster, is that, however you dodge, they will never help you by paying taxes to carry through your nefarious Bill.
§ Mr. LOUGH
The hon. and gallant Gentleman who has just spoken told us that the system of finance we are discussing has been built up for centuries. There is no part of it even a century old. It was changed half a century ago, and it has been changed at almost every epoch of the connection between Great Britain and Ireland during the last hundred years. The hon. and gallant Gentleman said that it worked perfectly satisfactory to everyone. I give him self-credit, and I believe his hon. Friend who sits on his left, for being advocates of the existing financial system, but they are almost alone in that. All Irishmen agree that the financial system, at any rate, has worked very hardly to the 956 island. I heard as good a speech on that subject from the right hon. Member for Trinity College as ever I heard some years ago.
§ Sir E. CARSON
May I say I was one of the few Members who opposed the idea, the separatist idea, of taking separate accounts, and I refused to join with Colonel Saunderson and others who were in favour of going on that system.
§ Mr. LOUGH
I got a Whip signed by the hon. Member, and a Whip which we carried against his own Government, by which we got a full contribution under the Agricultural Rates Act. At all events, all I said was that Irishmen were not in favour of the present financial system. The hon. and gallant Member said that Ireland was enjoying the greatest prosperity at the present time. At the present moment the population is lower than ever before. It has dwindled down to the lowest point, and the taxation upon that unhappy people is far greater than ever it was in any other period.
May I ask the right hon. Gentleman why, if that be the case, does he support an Amendment which permits of such taxation to be increased?
§ Mr. LOUGH
I often voted against the Government. I think it is hardly fair of the hon. Member to interrupt me in that way. The hon. and gallant Gentleman knows the great suffering Ireland has got to endure with regard to the unfortunate treatment she received in connection with the outbreak of cattle disease. I believe there never was a period in which a greater blow was dealt to the industries of Ireland than within the last few months.
§ Mr. LOUGH
I am only pointing out the inconsistency and how little thought there appears to be in the speeches of hon. Gentleman opposite. One speech is just a repetition of the other, and a veiled attack on the Government. To come to the Amendment, we had a series of very 957 striking illustrations from right hon. Gentlemen on both Front Benches in the Debate this afternoon. We have had a series of very striking illustrations, and the Solicitor-General, following the same line, expressed the hope that he had made it clear that, if to-night he was speaking in a somewhat different key from before, he was at any rate playing the same tune. I must confess that in the new Amendment which the Government have put forward I cannot recognise a single bar or note of the same tune that we have had in the financial scheme presented to the House. We have had from the other side an Amendment depriving Ireland of that part of the Clause which would allow her to reduce taxation, and on that Amendment have been allowed, and the Government have taken full advantage of the permission, to discuss the Amendment which the Postmaster-General put on the Paper only on Friday last. I am placed in a most uncomfortable position by these two Amendments. The hon. and gallant Member opposite said that doubtless I was going to support the action of the Government. I regret that I find it absolutely impossible to do so. Either Amendment seems to strike at the very root not only of all the principles I have ever held in regard to Irish taxation, but also of the policy which the Government themselves up to this night have advocated and of every recommendation made by any Royal Commission that they have themselves appointed.
As this matter interests me profoundly, perhaps the Committee will bear with me while I try to make my position clear. I have always thought that the words which this Amendment proposes to omit—that the Irish Parliament should have power to vary either by way of addition or reduction or discontinuance—especially "reduction or discontinuance," were some of the very best words in the Bill, and that they opened up the possibility of Ireland's effecting great economies and relieving the heavy burdens of her people. It was for this reason that I so enthusiastically supported the financial scheme. Even so late as Tuesday last, I find on referring to my notes of a rather rough speech made under difficulties, that I exhausted my superlatives in praise of the Government. The whole scheme as then proposed I now find swept away. The present proposal is utterly contrary to the explanations of the Bill that we have had up to the present moment. In support of that statement I will go one step further. If any Member 958 looks at the White Paper circulated with the Bill explaining the financial proposals, he will find on page 4 these words:—
"The new Parliament may reduce any tax levied in Ireland with the exception of certain stamp duties."
That is how the Bill was introduced That is how simple persons like myself have been defending it for months up till yesterday evening. Now I am asked to say that there is to be no power to reduce any tax—or perhaps not quite that, but I will explain how far it goes. We had an Amendment preventing the Irish Government from dealing with the Income Tax. I think that that Amendment should not have been put down. It appears to me that all parties are united in agreeing that whatever difficulty may have been caused with regard to indirect taxes, as far as direct taxes are concerned full control might be left to the Irish Parliament. And so it was in the Bill, until apparently the Postmaster-General had a colloquy with the Inland Revenue Department, and finding there might be some difficulty he first took away the Income Tax, and now he has taken away the indirect taxes. It is contrary, not only to the Bill, but to every recommendation we have ever had in regard to this subject. But I must give the Postmaster-General all the credit I possibly can. He dropped a tear on the coffin of his original scheme. So did the hon. Member for Waterford. But I am not going to part with it so easily. I cannot help thinking that my right hon. Friend has been unduly influenced by a storm in a teacup on these back benches. If he had allowed one or two of us who* understand the Bill, or who think we understand it, to explain it, before he assumed that my hon. Friends would have done anything hostile, I believe we would have got the Government out of every difficulty. I hold in my hand the Report of the Scottish Members on the Bill. That report is supposed to be the origin of the opposition to these powers, and here id what it says:—Ireland, however, ought to have the right of adjusting her own burden of taxation to her own expenditure, and this is the origin of the right to vary as embodied in the provisions of the Irish Bill.The Report of these Scottish Members approved the Bill.
§ Mr. LOUGH
My hon. Friend questions the authority of a small Committee. The 959 smaller the Committee the more sensible it would be. On the next page I find these words: that the right given to the Irish Parliament to vary the rates of a tax—must also he conceded to Scotland, although it does not appear to us necessary that in her case it should extend to Customs and Excise.Even the liberty which the Scotsmen claim for themselves is not now left to Ireland. This is a matter of considerable interest. Possibly the Government have never seen this Report; they have been too busy, and they did not know that it is only one or two gentlemen who were not influenced by the solid arguments of the Committee, who managed to pretend they were a hundred strong, and have induced the Government to alter the powers. My own feeling is that not six would have gone into the Lobby against the Government.
§ Mr. LOUGH
I will take a third step—the Report of the Primrose Committee. This Primrose Committee is enveloped in mystery. We can never see the evidence, but we have been allowed to see the Report. That Report is in favour of—conferring on the Irish Government full powers over the raising of revenue as well as over expenditure in Ireland.That was a most important Committee; it was presided over by an Englishman; it sat for a long time; heard many official witnesses, and could come to no other conclusion than that embodied in those words. As to Customs, it reported:—It may he objected that the freedom of communication and in consequence the facilities for trade, between the two countries will be impaired. This too must be admitted for what it is worth. But does it really amount to much.And so it goes on. The Primrose Committee approve of the setting up of Customs and full powers being left to the Irish Parliament. I will go one step further. I have consulted every great authority on this question, and I come now to the greatest of all, the Report of the Royal Commission on the Financial Relations between Great Britain and Ireland. This is the greatest study ever presented to this House on these matters. It is a practically unanimous Report, signed by the hon. and learned Member for Waterford as well as by Gentlemen who sat above the Gangway opposite, and not one principle or conclusion of that Report has ever been shaken during the fourteen years it has been in existence. Let me recall to the memory of hon. Members some of the observations of this Commission, which re- 960 ported so long ago that the point—it was vital—may be forgotten. It reported, first—That Great Britain and Ireland must, for the purpose of this inquiry, be considered as separate entities.This Amendment treats them as one.(2) That the Act of Union imposed upon Ireland a burden which, as events show, she was unable to bear. (3) That the increase of taxation laid upon Ireland between 1858and 1860 was not justified by the then existing circumstances.I venture to add this remark, that if there had been an inquiry into the burdens imposed upon Ireland in the period of five years from 1905 that it would be found that much too heavy burdens had been imposed; also I think the conclusion urged with regard to the period of 1853–60 would be repeated in regard to the taxation of the second period.(4) That identity of rates of taxation does not necessarily involve equality of burden.I would draw the attention of my hon. Friend behind me to that point, for it appears to me he is still a little misguided on this point of the Customs. I draw the hon. Member's attention to point (4). These were the recommendations of the Committee. Let us look at the Report of Lord Fairer, Lord Welby, and Mr. Currie—the latter a great representative of finance in London. They dealt with this very matter and particularly with one question which has been raised by the hon. Member for Colchester in this Debate. They spoke of the taxation paid by England, by Scotland, and by Ireland, and said—Whereas taxation was not paid by geographical districts, but by individuals.That is the particular argument we heard restated here by the hon. Member for Colchester in an interesting speech, as if it had not been all disposed of fifteen years ago. These two Noble Lords and the banker go on to deal with it. They say that the whole case has been given away. Mr. Gladstone gave it away in 1S86, and Mr. Goschen gave it away in 1890, when he ordered his inquiry into the separate position of the two countries. He said that the Union gave it away and that there was no basis in history or reason for the contention that there ought to be equal taxes between the two Islands. It is on that principle, I think, that this Amendment is based. They conclude:—It is therefore abundantly clear that of the two conflicting theories, that is the one which regards Great Britain and Ireland as one country for the purpose of taxation and expenditure and the other 961 which regards Great Britain and Ireland as separate partners—the second is-the one upon which our instructions are founded, the one which has the greatest support in history and the one upon which all parties in Parliament have recently acted.10.0 P.M.
I venture to suggest that every authority that has examined into this matter has reported against the step which the Government have taken here to-night, or that the Government propose to take in their Amendment. I wanted to come a little closer to the Amendment. I do not understand where we are. There are two parts to this question. I will try to make them quite clear. The one part is the setting up of a Customs House. That is not inconsistent with the Amendment which the Government have put down. But do they intend to prevent a Customs barrier being set up? Are they going to deprive Ireland of a Customs House? I would like to ask the right hon. Gentleman the Postmaster-General if he can tell me that? He seemed to me this afternoon to use so many equivocal words upon the point. He said something about a Customs existing for the purpose of the increased taxation of 10 per cent. I do not know whether I am quoting aright or whether a Customs barrier is to be set up.
§ Mr. HERBERT SAMUEL
It depends what the hon. Gentleman means by a Customs barrier. If he means a Customs House for the purpose indicated, that certainly will exist whether the Irish Parliament alters the Customs or not. It would have to exist under the Bill if the Irish Parliament had the power to reduce the Customs, but not the Excise.
§ Mr. LOUGH
That is a most important statement, and I flatter myself at having got my right hon. Friend, who is always clear, to say that. What does it mean? It means that a Customs barrier is to be set up. If an old lady wants to bring over a trunk of tobacco instead of the trunk being filled with baby clothes—[An HON. MEMBER: "An old lady?"] Well, anybody. Mark what the result would be. Hon. Members behind me, I believe, have wondered on that point. I believe what they were really striking against was the Customs barrier. They have not got rid of that at all. A Customs House is still to be set up—
§ Mr. HERBERT SAMUEL
I do not wish to be misunderstood. Of course, the collection of statistics by a Customs House does not really involve any examination of passengers who come across. That is necessary for the prevention of smuggling. The Clause dealing with the collection of statistics is Clause 16, Sub-section (1). I would point out that supposing the Irish Parliament had the power to raise or to lower the Customs, and it did not exercise that power—and the hon. Member will agree that possibly for many years they might not exercise that power at all—still they would have power to obtain the information for statistical purposes, and in order to get the measure of Irish trade.
§ Mr. LOUGH
Yes, but there is another point. How about ascertaining the income between the two countries, and how about finding out what duty is paid in Ireland and what duty is paid in Great Britain? You must put up a barrier for that purpose. Absolutely that was forgotten in the debate this afternoon. My right hon. Friend says no barrier. I agree with him. I was only using the words in order to put my case plainly to my hon. Friend. It is not a barrier at all; it is a bridge over which Ireland will pass from ruin and decay to prosperity. Therefore, I withdraw the word "barrier" and say a "Customs bridge" is to be set up. I ask my hon. Friends from Scotland or England, or wherever they come from, what is left? We are not to have the first part taken from us—the Customs or registry of Irish trade, which would show us now, for example, how many cattle have been excluded and so on, in the last few tragic months. I attach great value to that.
I come to the other point of hon. Members behind me. I give the greatest weight here to the arguments particularly in the speeches of the hon. Member for Monmouth Boroughs who appears to be a leader in this foray. Perhaps my hon. Friend will excuse me if I say I did not find him very convincing. I give the case as it struck me. I have tried to understand my hon. Friend and everybody else who has spoken on these points. They say: Supposing we take a shilling off the Tobacco Duty, the Irish would have cheap tobacco. Of course, they would have that advantage! That makes my Scottish friends miserably unhappy. My hon. Friend, the Member for Monmouth Boroughs is also miserably unhappy over that. If the Irish have the advantage of 963 cheap tobacco or cheap food should we begrudge it? I would remind my hon. Friends that every country has got an advantage of some sort. In Monmouthshire they have the advantage of very cheap coal. What would you say to Irishmen if they got sore heads because the people in Monmouthshire got cheap coal? If they may have cheap coal in England why not cheap tobacco in Ireland? Against the single advantage of cheap tobacco there are many disadvantages. It is a very wet climate; it is a very poor country; wages are very low. The wages of the agricultural labourer are scarcely more than half what they are in Scotland. That is a disadvantage. Then, again, they have the disadvantage of having hardly any money, and if they are to have a certain advantage of cheap food, why should my hon. Friend seem miserable about it? I wonder whether my hon. Friend ever went to France. If he went there he would find wine very cheap. He would get a bottle thrown in perhaps with his lunch. Why should that make him miserable? Every country has got some advantage. In Great Britain we have the advantage of cheap coal; it is a great centre of commerce; it has splendid industries long established, and the people enjoy great wealth. Why should we grudge giving Ireland some hope of some small advantage. My hon. Friend got into some complicated argument. He said: If Ireland had cheap tobacco it might help her to get some of the tobacco trade in other parts of the world which she would not otherwise get.
§ Mr. LOUGH
I thought that was his argument. At any rate, I heard it from some hon. Friends here. I would point out that there is not a shred of foundation for that statement. Whatever the duties are, supposing it was only 2s. on tobacco, if tobacco was exported from Ireland, it would bring no harm to the Imperial Tobacco Company, that great monopoly which does 60 per cent, of the trade done in these islands. My hon. Friend took as his third argument that it might encourage smuggling. Would it encourage 964 smuggling? Ireland at present is the home of smuggling. Does my hon. Friend know that there is hardly a part of Ireland or, at any rate, that there used hardly to be a part of Ireland where you could not buy poteen that never saw a gauger. It is the cruel hardship of the conditions which this House has imposed upon Ireland that encouraged smuggling and that created poverty and other difficulties. The right lion. Gentleman the Member for Leith Burghs (Mr. Munro-Ferguson) went for the Irish Customs, which I am glad to say are not entirely to be destroyed. He said, "I want to make an offer," and here I am glad to say he got the ear of the right hon. Gentleman the Leader of the Opposition, who repeated the offer afterwards. Perhaps I will be corrected if I am wrong. At any rate the right hon. Gentleman the Member for Leith Burghs made an offer. "I am willing," he said, "that the Irish Government should get half a million more in consideration of not being allowed to set up Customs." Am I right in saying that the right hon. Gentleman the Leader of the Opposition lent his support to that offer?
§ Mr. BONAR LAW
The right hon. Gentleman is more nearly accurate than usual. I said I would prefer that to the arrangement then in the Bill.
§ Mr. LOUGH
Quite so, every little scrap tells and gives help. What I want hon. Members to notice is that once these Gentlemen suggested taking away the Customs House, they offered to give some compensation. To-day the Customs is taken away and no compensation is given. So I would say to my hon. Friends that whenever the Government tries to do some little good for Ireland, do not try to stop them. My right hon. Friends on the Front Bench have now destroyed the whole thing by their Amendments without giving any compensation whatever. I say that very grave questions are raised by this matter. The whole system of finance worked by this House never alters. It has been the same in the last three years as in 1853. The better the Chancellor we get—and I admit that the present Chancellor of the Exchequor is the best we ever had—but the better the Chancellor the harder it is for Ireland and the more taxes he applies to Ireland. If the right hon. Gentleman was here he would not mind me saying that Mr. Gladstone was a great Chancellor of the Exchequer. He was a great Chancellor, and he lived for years 965 upon the fame of the Budget of 1853, but that Budget struck the most cruel blow at Ireland of any Budget in the whole of the connection between the two countries. The better the Chancellor is here3 the more cruel is the system and the harder it always is for Ireland. The truth is that 'the same system is followed, and has been for one hundred years, in regard to this matter. A few articles are selected for taxation, and in choosing these articles care is taken, I might say almost devilish care. [Hon. Members: "Oh, oh."] Well, perhaps I should withdraw that.
§ The CHAIRMAN (Mr. Whitley)
The longer the right hon. Gentleman goes on the wider he goes. I must remind him if other hon. Members followed his line of argument, I do not know where it would end.
§ Mr. LOUGH
I had no intention of extending the scope of my argument at all. I find the Amendment is tremendously wide. I withdraw the expression I used with regard to the selection of articles for taxation, but this House picks out a few articles, and this Amendment deals with the question that the Irish shall not take off the taxes upon any article which the British Chancellor of the Exchequer selects as taxible in this country, and however high the tax is to be for the British the Irish shall not reduce it. The whole basis and principle of the Bill was, that if the Irish took off taxation they had to pay for the reduction made in the reduced yield of the taxes. Now they are to pay these taxes, and shall have no power to reduce them. This House has displayed immense ingenuity in selecting articles for taxation and in piling huge burdens upon Ireland. The Chancellor of the Exchequer has said that Irish revenue has been increasing lately. It never increases except in one way, and that is by increasing taxes. I do not quarrel with my right hon. Friend's figures, but I have had an opportunity of looking into the taxes of the last fifteen years, and I find that it is by increasing the rate of taxation levied that any increase is got out of Ireland. That is a very onerous system, and I think it has contributed to the decay of Irish finances and to keeping down commercial undertakings, and it lays a burden far greater on a poor country like Ireland than she can bear. What I see in this Amendment is this. I approve of this Bill, I accept it with the greatest enthusiasm, not because it gives Ireland anything 966 except very little, but because it gave to Ireland the power to reduce her burdens if she paid for it.
The right hon. Gentleman the Member for East Worcester, agreed in that principle with the Chancellor of the Exchequer. He said if Ireland can reduce her taxes, Ireland has a right to get the benefit of it. Lord St. Alwyn, when Chancellor of the Exchequer in this House, accepted the same principle, and said Ireland should get the benefit of her economies. That was the principle upon which the Bill was founded until to-night, and now we are told that whatever Ireland does she cannot reduce her taxes below the level fixed in this House. That seems to strike at the financial foundations of the whole of this Bill. The financial provisions were based upon four principles: first, that accounts shall be taken through the Customs; secondly, that a Custom House should be set up; thirdly, that Ireland might lower taxation at her own expense; and fourthly, that the provisions were transitional, and that Ireland should enjoy a greater measure of freedom after a little time. Those were the provisions, but what is left of them now? My hon. Friend says that three out of four are left. I attach vital importance to the power to be given to the Irish Parliament to lower any tax at her own expense. The only hope of Ireland is economy. What else have we been saying in all these financial Debates when attacking expenditure in this House, and now we are not to be allowed to reduce the expenditure? My hon. Friend said expenditure can only be reduced in some directions in order to spend it in others. My point is that the Irish wish, if they save anything, to put the money into their own pockets, and you will not allow them to do that. I do not think my hon. Friends have made out a case for the very grave change they have made in the Bill, and I appeal to the Government to modify their proposals in any way which would commend itself to a great many thoughtful supporters in this House, and at the same time make the Bill more acceptable to Ireland.
Sir GILBERT PARKER
The right hon. Gentleman the Member for Islington (Mr. Lough) is the only Member opposite who has not found a means for supporting the Government in the change which has been made in the Bill. I think the right hon. Gentleman is well justified in making his 967 protest. He believes that there ought to be complete financial independence for Ireland, and he accepted the proposals of the Bill, not because it satisfied his demands, but because it did something to satisfy his demands. He is now in grief and sorrow over the action which the Government have taken. To a man of simple mind like myself, who is not a financial authority, but who is not wholly unacquainted with fiscal systems, the action taken by the Government is very curious. I have been in this House a number of years, and I have never listened to a Debate on the Irish Estimates in which Members of the Irish party have not continually made complaint that the taxation upon Ireland was too heavy, and in its incidence unjust and unfair. The right hon. Gentleman the Member for Islington takes the ground that there should not be equality of taxation, and he is a defender of a federal system. My reply to him is that the whole essence of a federal system is that there should be equality of taxation. I do not suppose there is a federal system in the world, either upon the Continent of Europe or in our own Dominions, where the incidence of taxation does not fall as some sections of the community think, rather heavily upon them. For instance, take the farmers in the western portion of Canada, they all feel that the tariff taxation of Canada does hit them hardly in some particulars, but they take the ground that the members of every confederation have taken that out of the taxation as a whole and the tariff as a whole there comes a general advantage to the whole community at large, that as part of the federal system they are bound patriotically to have regard to and to support. We on this side of the House, and others, have pointed out that Ireland will get under this Bill and under the new conditions, a certain advantage, and the hon. Gentleman says Ireland ought to have this particular advantage in regard to tobacco, tea, or sugar, or whatever it may be. That is absolutely antagonistic to the Bill if the Bill is to be, as we were told at the beginning, and have been told ever since, the basis for a federal system. This afternoon we heard the hon. and learned Member f or Waterford (Mr. John Redmond) say it does not matter, because in any case Ireland did not expect to have any particular reduction in taxes for a good many years. I ask hon. Members if it has not been the case from the beginning of these Debates that the Chancellor of the Exchequer, the 968 Postmaster-General, and every Member on the Front Bench opposite, have said that one of the reasons for giving Ireland the rights of adjusting all these Customs Duties was to enable her to effect economies? To-day all that is thrown overboard, in the interests of what? The Government, with its usual pusillanimity, have yielded to a fear that about seventy Members in this House might go into the Lobby against them. I, for one, think the Government had no reason to fear. The hon. Members who protest and profess their Free Trade principles so loudly when it comes to a question of whether this Bill shall pass are quite willing to swallow their principles and to keep in power that Government which never two days alike knows its own mind. The right hon. Gentleman said he could not help but drop some tears over the new attitude of the Postmaster-General. I imagine there are a good many tears being shed, but it does not matter. The solid Liberal party, no matter how unsound the proposals, will come day after day to the support of the Government. I think my right hon. Friend who opened the Debate this afternoon had a right to some direct reply from the Members of the Government concerning points which he raised. My right hon. Friend, for instance, said that under the Bill as it now stands there could be dif-ferentation between the people of Ireland and of England who possessed the same income, and he asked whether the Government felt that was a fair thing to set up in a Bill which was to be the basis of a federal system. Should you have in Ireland one class of people income-taxed and people in the same position of life in England paying a differential Income Tax? Nothing like that has ever been known in any federal system, or, indeed, is likely to be known, because I do not think any federal system is likely to be set up in the United Kingdom if this Bill is ever passed, because England and Scotland would never accept the conditions which the Bill imposes in regard to Customs or Excise. My right hon. Friend said you might have heavy Land Taxes in Ireland, and right is given to the Irish Legislature to give a preference to certain industries in Ireland, thereby putting them in an inferior position to a similar individual industry in Glasgow. I have not heard a single word in reply to that contention, and I think my right hon. Friend is entitled to one. [An HON. MEMBER: "Subject to local rating."] This is the first time I ever heard that a 969 difference in local rating should be taken into consideration in imposing a general financial system. I think that that interruption is hardly to the point. The right hon. Gentleman who last spoke has a very strong supporter in the hon. Member for East Mayo (Mr. Dillon). The right hon. Gentleman has made a plea for the Government to return to the original conditions laid down by the Bill. But those original conditions did not satisfy the hon. Member for East Mayo. This afternoon we had the question of financial independence pooh-poohed. But on 24th April the hon. Member for East Mayo declared that they had in this Bill far more financial independence than was enjoyed by Canada, Bavaria, or Würtemberg, or by the State of New York, or any of the great Southern States of the Union. If it is the case that the Bill contains that financial independence, what becomes of the argument advanced by the Postmaster-General and by his colleagues, that there is being now given to Ireland, not financial independence of any kind, but a very slight power to increase the taxation which this Government makes Imperially through this Parliament? I have tried in vain to find either the logic, reason, or justice of the Amendment of the Government or of their original proposal. I find this in the speech of the Chancellor of the Exchequer a few days ago—he is speaking of the differentiation or varying of taxation:—Suppose it was beer. Suppose the Irish Parliament increase our Beer Duties. I cannot imagine what possible injury that would inflict upon the industries of Great Britain, except in regard to the quantity of beer that might be imported.Hon. Members on this side of the Committee have declared that the proposals of the Government would open the way to Protection. They have been met with scoffs, jeers, and arguments, and endeavours have been made to show them that there is no possibility of any protective incidence in the taxation which would be imposed under the power given to vary the taxation imposed by the Imperial Government. If it is the case that the effect of varying the taxation would be to decrease the quantity of beer that may be imported into Ireland under that taxation, may I ask this Committee how in the world any Member of the Government, or any Member on the other side, can possibly take the ground that there can be no protective incidence in the taxation imposed? If the Chancellor of the Exchequer is right, then the Postmaster-General and others are completely wrong. We on this side have taken the ground 970 that the proposals of the Government open a way to Ireland, by way of bounties, by way of monopolies, by way of varying the taxation, to introduce into Ireland that which they have long wanted—that is, something in the form of a protective system. We have not had any sufficient argument from the other side to show us that our contention was wrong. I, for one, am quite certain that the Government, in the weakness they have shown, in the change of front they have suddenly made under pressure from behind them from Members of their own party they do not think they can trust to support them, have to-day, quite shamelessly in the presence of their past statements, justified Members of the Unionist party in every criticism they have made in regard to this Bill.
Mr. MURRAY MACDONALD
I should like to say a word in regard to the justification brought forward by the Postmaster-General in regard to the Amendment which is down in his name. He said, in regard to that Amendment, that it was not vital to the finance scheme of the Bill. I agree, but I cannot help thinking that he very much underestimated its importance. The principle of the scheme, as it originally stood in the Bill, was that the Irish Parliament should have power to adjust its own revenue to its own expenditure. That principle is departed from to-day, and we are told it is departed from, because the Irish Parliament, till the revision of the financial arrangements takes place, is very unlikely to want to reduce the present expenditure. We are told that, though there are certain services in Ireland at present extravagently administered there are certain other services that need more money than they actually get, and that the economies effected on the one class can be applied to the other. I know that is true, and I daresay it is also true that so far as these services are concerned a balance between them can actually be made.
But I want to put a practical point that has not been put hitherto, which the Irish Parliament will almost certainly have to, face, and which I do not think was considered when this Amendment was proposed. I might perhaps have taken two-points. I might have taken the sum included in the Transferred Sum under the Grants-in-Aid of local taxation, but I take, in preference to that, the case of the Dublin Metropolitan Force and the Royal Irish Constabulary. The Dublin Metropolitan 971 Police force is to be handed over to the Irish Parliament as soon as this Bill comes into operation, and the Royal Irish Constabulary is to be handed over to the Irish Parliament six years after the Bill comes into operation. At the present moment the cost of both these forces comes out of tax revenue. We have always maintained that it would have been to the advantage of Ireland if the Government of Ireland had been conducted in a different way from the way it actually has been conducted hitherto under the Union, and to have had a local police instead of the central police, which has been in existence under the Union. But how can they substitute for the central police, as it is now, a local police unless they are to have the power of reducing the rates of their taxation? They go to the local authorities and say, "We propose to hand over to you the control of the police in your own district, and, of course, you must make yourselves responsible for the payment, at any rate, of a considerable portion of the cost of those police, and that cost must come out of local rates. It is true you are paying the whole cost now through taxes, and we must insist upon your paying a portion of that cost over again. through the rates. We are not allowed by the Imperial Parliament to reduce
§ taxation and all that we can promise to do is that we will make the best use of the £1,500,000 which you pay through taxation in other directions, than in the payment of police." It appears to me that that is putting the Irish Parliament into an absolutely impossible position. You are going to force it, until the financial revision takes place, whether it desires it or not, to maintain a central police force governed from Dublin and to prevent it from substituting for that a police force under local control. This Amendment unquestionably restricts the responsibilities of the Irish Parliament for the control of the interests submitted to its charge, and I think restricts it unduly. I profoundly regret that the Government has brought it forward. I have hesitated long as to how I should vote, but I have come to the conclusion, I confess with reluctance that it is my duty to vote for it, because greatly important as I recognise it to be I hold that the general issues involved in the passing of this Bill are still more important.
§ Question put, "That the words proposed to be left out stand part of the Clause."
§ The Committee divided: Ayes, 284; Noes, 167.975
|Division No. 324.]||AYES.||[10.40 p.m.|
|Abraham, William (Dublin Harbour)||Cawley, Harold T. (Heywood)||Esmonde, Dr. John (Tipperary, N.)|
|Acland, Francis Dyke||Chancellor, H. G.||Esmonde, Sir Thomas (Wexford, N.)|
|Adamson, William||Chapple, Dr. William Allen||Essex, Richard Walter|
|Addison, Dr. C.||Churchill, Rt Hon. Winston S.||Esslemont, George Birnie|
|Agnew, Sir George William||Clancy, John Joseph||Falconer, J.|
|Allen, Arthur Acland (Dumbartonshire)||Clough, William||Farrell, James Patrick|
|Allen, Rt. Hon. Charles P. (Stroud)||Clynes, John R.||Fenwick, Rt. Hon. Charles|
|Arnold, Sydney||Collins, Godfrey P. (Greenock)||Ferens, Rt. Hon. Thomas Robinson|
|Baker, Harold T. (Accrington)||Collins, Stephen (Lambeth)||Ffrench, Peter|
|Baker, Joseph Allen (Finsbury, E.)||Compton-Rickett, Rt. Hon. Sir J.||Field, William|
|Balfour, Sir Robert (Lanark)||Condon, Thomas Joseph||Fiennes, Hon. Eustace Edward|
|Baring, Sir Godfrey (Barnstaple)||Cornwall, Sir Edwin A.||Fitzgibbon, John|
|Barlow, Sir John Emmott (Somerset)||Cotton, William Francis||Flavin, Michael Joseph|
|Barnes, G. N.||Craig, Herbert J. (Tynemouth)||George, Rt. Hon. D. Lloyd|
|Barran, Sir John N. (Hawick)||Crawshay-Williams, Eliot||Gill, A. H.|
|Barton, W.||Crooks, William||Ginnell, L.|
|Beauchamp, Sir Edward||Crumley, Patrick||Gladstone, W. G. C.|
|Beck, Arthur Cecil||Cullman, John||Glanville, H. J.|
|Benn, W. W. (T. Hamlets, St. George)||Dalziel, Rt. Hon. Sir J. H. (Kirkcaldy)||Goddard, Sir Daniel Ford|
|Birrell, Rt. Hon. Augustine||Davies, E. William (Eiffon)||Greenwood, Granville G. (Peterborough)|
|Black, Arthur W.||Davies, Timothy (Lincs., Louth)||Greenwood, Hamar (Sunderland)|
|Boland, John Pius||Davies, Sir W. Howell (Bristol, S.)||Griffith, Ellis J.|
|Booth, Frederick Handel||Dawes, J. A.||Guest, Hon. Major C. H. C. (Pembroke)|
|Bowerman, C. W.||De Forest, Baron||Guest, Hon. Frederick E. (Dorset, E.)|
|Boyle, D. (Mayo, N.)||Delany, William||Gwynn, Stephen Lucius (Galway)|
|Brace, William||Denman, Hon. R. D.||Hackett, J.|
|Brady, P. J.||Devlin, Joseph||Hall, Frederick (Normanton)|
|Brocklehurst, W. B.||Dickinson, W. H.||Hancock, J. G.|
|Bryce, J. Annan||Dillon, John||Harcourt, Rt. Hon. Lewis (Rossendale)|
|Burke, E. Haviland-||Donelan, Captain A.||Harcourt, Robert V. (Montrose)|
|Burns, Rt. Hon. John||Doris, W.||Harmsworth, Cecil (Luton, Beds)|
|Burt, Rt. Hon. Thomas||Duffy, William J.||Harmsworth, R. L. (Caithness-shire)|
|Buxton, Rt. Hon. S. C. (Poplar)||Duncan, J. Hastings (Yorks, Otley)||Harvey, A. G. C. (Rochdale)|
|Byles, Sir William Pollard||Edwards, Clement (Glamorgan, E.)||Harvey, T. E. (Leeds, West)|
|Carr-Gomm, H. W.||Edwards, Sir Francis (Radnor)||Harvey, W. E. (Derbyshire, N. E.)|
|Cawley, Sir Frederick (Prestwich)||Edwards, John Hugh (Glamorgan, Mid)||Haslam, James (Derbyshire)|
|Haslam, Lewis (Monmouth)||Mason, David M. (Coventry)||Roberts, Sir J. H. (Denbighs)|
|Havelock-Allan, Sir Henry||Masterman, Rt. Hon. C. F. G.||Robertson, Sir G. Scott (Bradford)|
|Hayden, John Patrick||Meagher, Michael||Robertson, J. M. (Tyneside)|
|Hayward, Evan||Meehan, Francis E. (Leitrim, N.)||Robinson, Sidney|
|Hazleton, Richard||Menzies, Sir Walter||Roch, Walter F. (Pembroke)|
|Henderson, Arthur (Durham)||Millar, James Duncan||Roche, Augustine (Louth)|
|Henry, Sir Charles||Molloy, M.||Roche, John (Galway, E.)|
|Higham, John Sharp||Molteno, Percy Alport||Roe, Sir Thomas|
|Hinds, John||Money, L. G. Chlozza||Rowlands, James|
|Hobhonse, Rt. Hon. Charles E. H.||Mooney, J. J.||Russell, Rt. Hon. Thomas W.|
|Hodge, John||Morgan, George Hay||Samuel, Rt. Hon. H. L. (Cleveland)|
|Hogge, James Myles||Morrell, Philip||Samuel, J. (Stockton)|
|Holmes, Daniel Turner||Morison, Hector||Scanlan, Thomas|
|Hope, John Deans (Haddington)||Morton, Alpheus Cleophas||Schwann, Rt. Hon. Sir C. E.|
|Howard, Hon. Geoffrey||Muldoon, John||Scott, A. MacCallum (Glas., Bridgeton)|
|Hudson, Walter||Murray, Captain Hon. Arthur C.||Seely, Rt. Hon. Col. J. E. B.|
|Hughes, Spencer Leigh||Nannetti, Joseph P.||Sheehy, David|
|Isaacs, Rt. Hon. Sir Rufus||Nellson, Francis||Simon, Sir John Allsebrook|
|John, Edward Thomas||Nicholson, Sir Charles (Doncaster)||Smith, Albert (Lancs., Clitheroe)|
|Jones, Edgar (Merthyr Tydvil)||Nolan, Joseph||Smyth, Thomas F. (Leitrim, S.)|
|Jones, H. Haydn (Merioneth)||Norton, Captain Cecil W.||Snowden, Philip|
|Jones, J. Towyn (Carmarthen, East)||Nugent, Sir Walter Richard||Spicer, Rt. Hon. Sir Albert|
|Jones, Leif Stratten (Notts, Rushcliffe)||O'Brien, Patrick (Kilkenny)||Strauss, Edward A. (Southwark, West)|
|Jones, William (Carnarvonshire)||O'Connor, John (Kildare, N.)||Sutherland, J. E.|
|Jones, W. S. Glyn- (Stepney)||O'Connor, T. P. (Liverpool)||Sutton, John E.|
|Jowett, Frederick William||O'Doherty, Philip||Taylor, John W. (Durham)|
|Joyce, Michael||O'Donnell, Thomas||Taylor, Theodore C. (Radcliffe)|
|Keating, M.||O'Dowd, John||Tennant, Harold John|
|Kellaway, Frederick George||O'Grady, James||Thomas, J. H.|
|Kennedy, Vincent Paul||O'Kelly, Edward P. (Wicklow, W.)||Ure, Rt. Hon. Alexander|
|Kilbride, Denis||O'Kelly, James (Roscommon, N.)||Verney, Sir Harry|
|King, J.||O'Malley, William||Wadsworth, J.|
|Lambert, Rt. Hon. G. (Devon, S. Molton)||O'Neill, Dr. Charles (Armagh, S.)||Walsh, Stephen (Lancs., Ince)|
|Lambert, Richard (Wilts, Cricklade)||O'Shaughnessy, P. J.||Ward, John (Stoke-upon-Trent)|
|Lardner, James Carrige Rushe||O'Shee, James John||Wardle, George J.|
|Law, Hugh A. (Donegal, West)||O'Sullivan, Timothy||Waring, Walter|
|Lawson, Sir W. (Cumb'rld, Cockerm'th)||Parker, James (Halifax)||Wason, Rt. Hon. E. (Clackmannan)|
|Leach, Charles||Pearce, Robert (Staffs, Leek)||Wason, John Cathcart (Orkney)|
|Levy, Sir Maurice||Pearce, William (Limehouse)||Webb, Henry|
|Lewis, John Herbert||Pease, Rt. Hon. Joseph A. (Rotherham)||White, J. Dundas (Glas., Tradeston)|
|Lough, Rt. Hon. Thomas||Phillips, John (Longford, S.)||White, Patrick (Meath, North)|
|Low, Sir F. (Norwich)||Pointer, Joseph||Whitehouse, John Howard|
|Lundon, Thomas||Pollard, Sir George H.||Whittaker, Rt. Hon. Sir Thomas P.|
|Lyell, Charles Henry||Ponsonby, Arthur A. W. H.||Whyte, Alexander F.|
|Lynch, A. A.||Power, Patrick Joseph||Wiles, Thomas|
|Macdonald, J. Ramsay (Leicester)||Price, Sir Robert J. (Norfolk, E.)||Wilkie, Alexander|
|Macdonald, J. M. (Falkirk Burghs||Pringle, William M. R.||Williams, J. (Glamorgan)|
|McGhee, Richard||Radford, G. H.||Williams, Llewelyn (Carmarthen)|
|Macnamara, Rt. Hon. Dr. T. J.||Raffan, Peter Wilson||Williamson, Sir A.|
|MacNeill, J. G. Swift (Donegal, South)||Raphael, Sir Herbert H.||Wilson, Hon. G. G. (Hull, W.)|
|Macpherson, James Ian||Rea, Rt. Hon. Russell (South Shields)||Wilson, W. T. (Westhoughton)|
|MacVeagh, Jeremiah||Rea, Walter Russell (Scarborough)||Winfrey, Richard|
|M'Callum, Sir John M.||Reddy, Michael||Wood, Rt. Hon. T. McKinnon (Glas.)|
|M'Kean, John||Redmond, John E. (Waterford)||Young, Samuel (Cavan, E.)|
|McKenna, Rt. Hon. Reginald||Redmond, William (Clare, E.)||Young, W. (Perthshire, E.)|
|M'Laren, Hon. H. D. (Leics.)||Redmond, William Archer (Tyrone, E.)||Yoxall, Sir James Henry|
|Manfield, Harry||Rendall, Athelstan|
|Marks, Sir George Croydon||Richardson, Albion (Peckham)||TELLERS FOR THE AYES.—Mr.|
|Marshall, Arthur Harold||Richardson, Thomas (Whitehaven)||Illingworth and Mr. Gulland.|
|Martin, J.||Roberts, Charles H. (Lincoln)|
|Agar-Robartes, Hon. T. C. R.||Boyle, William (Norfolk, Mid)||Craig, Charles Curtis (Antrim, S.)|
|Agg-Gardner, James Tynte||Boyton, J.||Craig, Ernest (Cheshire, Crewe)|
|Aitken, Sir William Max||Bridgeman, William Clive||Craig, Captain James (Down, E.)|
|Amery, L. C. M. S.||Burdett-Coutts, W.||Craig, Norman (Kent, Thanet)|
|Anson, Rt. Hon. Sir William R.||Burgoyne, A. H.||Craik, Sir Henry|
|Astor, Waldort||Burn, Colonel C. R.||Cripps, Sir C. A.|
|Baird, J. L.||Butcher, J. G.||Croft, H. P.|
|Balcarres, Lord||Campbell, Rt. Hon. J. (Dublin Univ.)||Denniss, E. R. B.|
|Baldwin, Stanley||Campion, W. R.||Dickson, Rt. Hon. C. Scott|
|Banbury, Sir Frederick George||Carson, Rt. Hon. Sir Edward H.||Dixon, C. H.|
|Barlow, Montague (Salford, South)||Cassel, Felix||Doughty, Sir George|
|Barrie, H. T. (Londonderry, N.)||Cave, George||Duke, Henry Edward|
|Bathurst, C. (Wilts, Wilton)||Cecil, Evelyn (Aston Manor)||Eyres-Monsell, Bolton M.|
|Beach, Hon. Michael Hugh Hick's||Cecil, Lord R. (Herts, Hitchin)||Fell, Arthur|
|Beckett, Hon. Gervase||Chaloner, Col. R. G. W.||Fetherstonhaugh, Godfrey|
|Benn, Arthur Shirley (Plymouth)||Chamberlain, Rt. Hon. J. A. (Worc'r.)||Fisher, Rt. Hon. W. Hayes|
|Bentinck, Lord H. Cavendish-||Chaplin, Rt. Hon. Henry||Fitzroy, Hon. E. A.|
|Beresford, Lord C.||Clive, Captain Percy Archer||Fleming, Valentine|
|Bird, A.||Coates, Major Sir Edward Feetham||Forster, Henry William|
|Boles, Lieut.-Col. Dennis Fortescue||Cooper, Richard Ashmole||Gastrell, Major W. Houghton|
|Boscawen, Sir Arthur S. T. Griffith-||Courthope, George Loyd||Gibbs, G. A.|
|Goldman, C. S.||Locker-Lampson, O. (Ramsey)||Sanderson, Lancelot|
|Gordon, Hon. Johfn Edward (Brighton)||Lockwood, Rt. Hon. Lt.-Col. A. R.||Sassoon, Sir Philip|
|Greene, W. R.||Long, Rt. Hon. Walter||Scott, Leslie (Liverpool, Exchange)|
|Gretton, John||Lonsdale, Sir John Brownlee||Scott, Sir S. (Marylebone, W.)|
|Guinness, Hon. Rupert (Essex, S.E.)||Lowe, Sir F. W. (Birm., Edgbaston)||Smith, Harold (Warrington)|
|Guinness, Hon. W.E. (Bury S. Edmunds)||Lyttelton, Rt. Hon. A. (S. Geo. Han. S.)||Spear, Sir John Ward|
|Gwynne, R. S. (Sussex, Eastbourne)||McCaw, William J. MacGeagh||Stanier, Beville|
|Haddock, George Bahr||Mackinder, H. J.||Stanley, Hon. G. F. (Preston)|
|Hall, D. B. (Isle of Wight)||M'Neill, Ronald (Kent, St. Augustine's)||Steel-Maitland, A. D.|
|Hall, Fred (Dulwich)||Magnus, Sir Philip||Stewart, Gershom|
|Hamilton, Lord C. J. (Kensington, S.)||Malcolm, Ian||Sykes, Alan John (Ches., Knutsford)|
|Hamilton, Marquess of (Londonderry)||Mildmay, Francis Bingham||Sykes, Mark (Hull, Central)|
|Hardy, Rt. Hon. Laurence||Mills, Hon. Charles Thomas||Talbot, Lord E.|
|Harris, Henry Percy||Moore, William||Thomson, W. Mitchell- (Down, N.)|
|Harrison-Broadley, H. B.||Morrison-Bell, Capt. E. F. (Ashburton)||Tobin, Alfred Aspinall|
|Herbert, Hon. A. (Somerset, S.)||Mount, William Arthur||Touche, Gerge Alexander|
|Hewins, William Albert Samuel||Munro-Ferguson, Rt. Hon. R. C.||Tyron, Captain George Clement|
|Hickman, Col. Thomas E.||Neville, Reginald J. N.||Valentia, Viscount|
|Hill, Sir Clement L.||Newdegate, F. A.||Ward, Arnold S. (Herts, Watford)|
|Hills, J. W.||Nicholson, William G. (Petersfield)||Warde, Col. C. E. (Kent, Mid)|
|Hill-Wood, Samuel||O'Neill, Hon. A. E. B. (Antrim, Mid)||Wheler, Granville C. H.|
|Hoare, S. J. G.||Ormsby-Gore, Hon. William||White, Major G. D. (Lancs., Southport)|
|Hope, James Fitzalan (Sheffield)||Parker, Sir Gilbert (Gravesend)||Williams, Col. R. (Dorset, W.)|
|Hope, Major J. A. (Midlothian)||Pease, Herbert Pike (Darlington)||Willoughby, Major Hon. Claud|
|Horner, A. L.||Pretyman, E. G.||Winterton, Earl|
|Hunt, Rowland||Pryce-Jones, Colonel E.||Wood, Hon. E. F. L. (Ripon)|
|Ingleby, Holcombe||Ratcliff, Major R, F.||Wood, John (Stalybridge)|
|Kebty-Fletcher, J. R.||Rawson, Colonel R. H.||Worthington-Evans, L.|
|Kerr-Smiley, Peter Kerr||Rees, Sir J. D.||Wortley, Rt. Hon. C. B. Stuart-|
|Kerry, Earl of||Rolleston, Sir John||Wright, Henry Fitzherbert|
|Knight, Captain E. A.||Ronaldshay, Earl of||Yate, Col. Charles Edward|
|Lane-Fox, G. R.||Royds, Edmund||Yerburgh, Robert A.|
|Larmor, Sir J.||Rutherford, Watson (L'pool, W. Derby)||Younger, Sir George|
|Law, Rt. Hon. A. Bonar (Bootle)||Salter, Arthur Clavell|
|Lewisham, Viscount||Samuel, Sir Harry (Norwood)||TELLERS FOR THE NOES.—Sir H.|
|Locker-Lampson, G. (Salisbury)||Sanders, Robert A.||Carlile and Mr. J. C. Lyttelton.|
Question put, and agreed to.
§ Committee report Progress; to sit again To-morrow (Tuesday).