CLAUSE 19.—(Powers of Taxation.)

HC Deb 28 October 1920 vol 133 cc1999-2063

(1) The power of the Parliaments of Southern Ireland and Northern Ireland to make laws shall include power to make laws with respect to the imposing, charging, levying, and collection of taxes within their respective jurisdictions, other than customs duties, excise duties on articles manufactured and produced, and excess profits duty, and (except to the extent hereinafter mentioned) Income Tax (including Super-tax), or any tax substantially the same in character as any of those duties or taxes, and the Governments of Southern Ireland and Northern Ireland shall have full control over the charging, levying, and collection of such taxes as their respective Parliaments have power to impose, and the proceeds of all such taxes shall he paid into the Consolidated Fund of Southern Ireland or Northern Ireland, as the case may be.

(2) Provision shall he made by the Parliaments of Southern Ireland and Northern Ireland for the cost within their respective jurisdictions of Irish services and, except as provided by this Act, any charge on the Consolidated Fund of the United Kingdom for those services, including any charge for the benefit of the Local Taxation (Ireland) Account, or any grant or contribution out of moneys provided by the Parliament of the United Kingdom so far as made for those services shall cease, and money for loans in Ireland shall cease to be advanced out of the Local Loans Fund.

(3) For the purposes of this Act the excise duty on a licence granted to a manufacturer or producer of an article, the amount of which varies either directly or indirectly according to the amount of the article manufactured or produced, shall be treated as an excise duty on an article manufactured or produced; but, save as aforesaid, nothing in this Act shall be construed as preventing the Parliaments of Southern Ireland and Northern Ireland from making laws with respect to excise licence duties, or duties of excise other than excise duties on articles manufactured or produced.

(4) Any articles which are brought into Great Britain from Ireland, or into Ireland from Great Britain, shall be deemed to be articles exported or imported for the purposes of the forms to be used, and the information to be furnished under the Customs Consolidation Act, 1876, and Section four of the Revenue Act, 1909, but not for any other purpose.

(5) Nothing in this Section shall be construed as authorising the Parliament or Government of Southern Ireland or Northern Ireland to impose, charge, levy, or collect any duties of postage so long as the postal service remains a reserved service.

Lieut. Colonel GUINNESS

I beg to move, in Sub-section (1), to leave out the words "other than Customs Duties, Excise Duties on articles manufactured and produced."

My Amendment will have the effect of transferring all the reserved taxes to the control of the Irish Parliament. To enable my Friends to move subsequent Amendments, I will ask leave to put it in three parts, and in the first instance to allow us to have a discussion on the matter of Customs and Excise. The geenral arguments for granting fiscal autonomy to Ireland were discussed in the Debate on the Committee stage of the Financial Resolution, and they apply with special force to this Amendment, affecting as it does more than half the total Irish tax revenue. I will therefore avoid going over this ground again. But as the broad political side of the question is affected by this Amendment about Customs and Excise, more perhaps than by any of the subsequent ones, I would remind the Committee of the present position as bearing on this question of financial responsibility. I think every Irishman, including the Ulster Unionist Members who sit below me, would probably share my opinion that the suggestion thrown out in recent speeches of the Prime Minister of negotiations with the leaders of the Sinn Fein party is absolutely impossible. Judging by their actions, however, the Government have an alternative hope of Irish settlement. With the exceptional police measures now in Ireland, combined with the first new Clause as to the oath of allegiance before election, standing on the Paper in the name of my right hon. Friend (Mr. Long), they hope to make it possible for the Southern Parliament to be elected and to come into existence. Events in Ireland supply enough in the way of wet blankets, and it would be perhaps rather inconsiderate for me to apply a verbal wet blanket, and so I will not venture any prophesy as to whether this policy of the Government is likely to succeed, but the enterprise is, in any case, so hazardous a thing, under conditions which are not under the control of the Government, that prudence would demand from them that they should so frame the conditions under which this settlement is to work as to remove all the difficulties they can which are under their own control. It is quite certain that the Government scheme cannot succeed unless men other than those of extreme revolutionary views will offer themselves as candidates.

The financial arrangements which are possible under this Bill must be the chief subject of discussion, and the counter-propaganda to Sinn Fein—propaganda, that is, favourable to a settlement—cannot even begin until a satisfactory financial basis is offered. By finance the honesty of your intentions is being tried now, and if you want to avoid the damaging, though, I quite agree, not just, charge that this Bill is intended to levy a British tribute on Ireland, the propaganda point being made by the extremists, you surely ought to go as far as you can to satisfy Irish feeling in the matter. That means that you ought to give freely that greater, though unknown, quantity which was being suggested in speeches by the Prime Minister as possible to concede in negotiation with the Sinn Fein leaders, and above all your present Bill must not be less favourable to Ireland than Home Rulers were led to expect by previous utterances of the Prime Minister and by the provisions of the Act of 1914. I shall hope to show that financial control is consistent with the Home Rule demand which you could grant without any endangering of Imperial interests, and which would be a most effective antidote to the separatist campaign. I know a certain family where the children used always to be given the same diet and medical treatment. If one needed cod liver oil, or if one even needed an oil of vegetable origin and even less pleasant taste, the same doses were uniformly administered to the rest of the family. It was all right if the whole family had the same food, but the dose which was suitable to the brother, after perhaps an indiscretion in the eating of unripe fruit, was by no means necessarily convenient or wholesome for the anæmic little sister. Ireland's case has been very much the same. In taxation she has been subjected to continual blood-letting, which suited the condition of her well-fed British partner, but reduced her to a posi- tion of economic prostration. Seeing the impoverishment of her system Great Britain has recently pressed upon her, if I may come back to my parable, the best brandy and the most costly champagne. All kinds of administrative luxuries have been thrown upon Ireland far beyond her means and far beyond her necessities. She now claims to decide her own treatment and, by arranging her fiscal system as suited to her condition, to avoid both the impoverishment caused by excessive taxation and the wasteful remedy of costly administration.

The political importance which the Government seems to attach to fiscal unity is quite a modern development. Long after the union there continued to be separate Exchequers for Great Britain and Ireland. After these Exchequers had been amalgamated, even after the abolition of the Irish Custom Houses in 1825, different duties continued to be charged on each side of the Irish Channel. More than half a century after the legislative Union the duty on spirits in Ireland was only 2s. 8d. a gallon, while in England it was 7s. 10d. It was only in 1858, sixty years after the Act of Union, that Mr. Disraeli first achieved the complete equalisation of Excise Duty. If, therefore, you are simply thinking of Imperial interests, and desiring to guard against separation, there is no kind of historical foundation for the view that you must continue to control Irish Customs and Excise. The question is one of expediency, and as to what arrangement in this respect is most likely to load to a permanent settlement and to avoid friction. If during the long Home Rule controversy you asked the educated Home Rulers why they wanted Home Rule, we were given various sentimental reasons, but only one big practical argument, namely, the advantage of Ireland being responsible for raising and eon-trolling her own finances and internal administration. In the raising of Irish finance, of course, Customs and Excise are by far the most important elements, because they produce in Northern Ireland nearly one-half, and in Southern Ireland two-thirds, of the whole revenue. In Ireland there is no very great love for the British fiscal system, because while Great Britain has gone ahead steadily under free imports, Ireland has gone back. Before the Union Ireland lived on her own resources, and after the Union Ireland continued to increase until the establishment of the system of free imports. The census returns only go back to 1821, but if you take the decennial periods you find that steadily from 1821 onwards the population increased until it reached the high-water mark of nearly 8,200,000 in 1841. After the repeal of the Corn Laws the population of Ireland began to decrease, and it decreased from 6,500,000 in 1851 to less than 4,400,000 in 1911. I am far from suggesting that the cause of the decrease of Irish population is anything so simple as free imports, and my point in mentioning it is that you must put yourselves in the mentality of the Irish Home Ruler if you want to find a reasonable method of settlement. The modern Home Ruler has been brought up on the Report of the Financial Relations Commission of 1894. Although that Royal Commission brought in five different reports they had a very interesting couple of pages at the beginning, and they agreed on five very important conclusions. I will only read three of those conclusions: That the Act of Union imposed upon Ireland a burden which, as events showed, she was unable to bear. That identity of rates of taxation does not necessarily involve equality of burden. That whilst the actual tax revenue of Ireland is about one-eleventh of that of Great Britain, the relative taxable capacity of Ireland is very much smaller, and is not estimated by any of us as exceeding one-twentieth.

Home Rule in those days was a very long way off. Apart from the Irish representatives on that Royal Commission, there were three English commissioners, who appended a Report of their own in favour of the grant of fiscal autonomy. They said: One sure method of redressing the inequality would be to put upon the Irish people the duty of levying their own taxes, and of providing for their own expenditure. If it is objected that the course which we suggest may load to the imposition of new customs duties in Ireland, we might reply that, in this case, as in that of the Colonies, freedom is a greater good than free trade. We doubt, however, whether Irishmen, if interested with their own finance, would attempt to raise fiscal barriers between the two countries, for we are satisfied that Ireland, and not Great Britain, would be the loser by such a policy. The market of Great Britain is of infinitely greater importance to Ireland than that of Ireland to Great Britain.

These were not the views of violent Sinn Fein revolutionaries. They were the views of three British financial experts, Lord Farrer, Lord Welby, and a distinguished London banker, Mr. Currie. The next published document bearing upon this vexed question is that of the Primrose Commission on Irish Finance, which reported in 1911, the members of which were men of great experience in the financial and banking world. They reported: It is a first principle of sound government that the same authority that has the spending of revenue should also have the burthen, and not infrequently the odium, of raising that revenue. That one government should have the unpopular duty of providing the means, and another the privilege of expending them, is a division of labour that leads to disaster. For over a century the Irish representatives in Parliament had not the power or the duty of raising or of expending the Irish revenue, but they had unlimited opportunities of pressing on the Treasury never-ending demands for fresh expenditure in Ireland. This condition of affairs was calculated to weaken the sense of responsibility in regard to public funds of the Irish people and of their Parliamentary representatives. Hence a strong tonic is now required to rectify an infirmity of long and slow growth.

They recommended that The power of imposing and levying all taxation in Ireland should rest with the Irish Government, subject to such reservations as may be necessary to guard against the raising of tariff questions that might prejudice relations with Foreign Powers or trade and commerce between Great Britain and Ireland.

That was the unanimous report of the Frimrose Commission. At that time Ireland was not paying her way. From 1910 onwards Great Britain was having to make up the balance between Irish expenditure and Irish revenue. From the Irish point of view, therefore, the question of complete fiscal autonomy at that moment became less urgent. Home Rulers, however, still professed confidence that they could effect savings in administration which would balance the account. They also challenged the accuracy of the Treasury method of estimating true revenue and of allocating charges to local and Imperial account. Whatever may be the merits of the case, the Home Rule Act lays it down in Clause 26 that if the Joint Exchequer Board finds Irish finance self-supporting for three years, the matter may be reviewed with a view to securing a proper contribution from Irish revenues towards the common expenditure of the United Kingdom, and extending the powers of the Irish Parliament and the Irish Government with respect to the imposition and collection of taxes.

That provision in the 1914 Act caused me a good deal of surprise in view of the statement by the Minister without Port-folio (Sir L. Worthington-Evans) the other day that, under the 1914 Act, Ire land would have had a far less generous settlement and would have been paying £29,000,000 a year as an Imperial contribution. It was generally understood that these arrangements were purely temporary during the continuance of these Irish deficits and that they should be completely recast when Irish finance again became self-supporting. The Nationalists in Ireland have expected that they would get control of Customs and Excise as soon as financial equilibrium was restored. The Act of 1914 already allowed the Irish Parliament to raise duties of Customs and Excise, and it was generally understood that the words I have read from the Act with respect to the extension of powers over Irish finance were meant to cover the granting of powers, also to lower duties in Ireland. In 1918 the Prime Minister did not think that it was impossible that Ireland should have this control over taxation, for in a letter to Sir Horace Plunkett, the Chairman of the Irish Convention, he based his objection to the granting of these powers to the fact that we were at war, and that possibly it might be incompatible with a federal re-organisation of the United Kingdom. He goes on to say: On the other hand the Government recognise the strong claim that can be made that an Irish legislature should have some control over indirect taxation as the only form of tax which touches the majority of the people and which in the past has represented the greater part of Irish revenue.

Acting no doubt on that message, the Nationalists' two Reports demanded fiscal autonomy, though one Report agreed to its postponement, and both agreed to guarantees for free trade between the two countries; one Report wished this guarantee only to be for a reasonable term of years. My friends and I have put down Amendments which we believe will provide effectively against the danger of a breach of free trade either between Great Britain and Ireland or between the Northern and Southern Parliaments of Ireland. We provide that Customs and Excise Duties as between the North and the South of Ireland should only be varied by identical Acts of these two Parliaments, and in the case of a possible variation of duties between Ireland and England, we provide that Great Britain should have the most favoured nation treatment. Therefore, unless Ulster were to agree to the variation of tariffs between herself and the South of Ireland, no variation of tariffs could be made between the South of Ireland and England because the most favoured nation treatment as between the Southern Parliament and the Northern Parliament would rule it out. However, this is not the time to discuss these safeguards. The Primrose Report foreshadowed the way in which it could be done, and it is only a matter of drafting. I suppose the Government opposition to this proposal, which I expect after the speech of the Minister without Portfolio last Friday, will be based on the risk of giving up the control over these £24,000,000 of revenue which they wish to maintain as security for the Imperial contribution. If they think they are going to get the Imperial contribution by force and not by consent, there is a good deal in their position, but my friends and I have various alternatives.

To avoid misunderstanding I may say that we do not believe that our method would lead to any less contribution than that proposed by the Government. We consider that a definite settlement between Great Britain and Ireland is necessary as to the past and that you ought to leave open the future to negotiation between the Parliaments. The difference is that the Government hope to get this Imperial contribution by a complicated and unpopular method, while we propose that they should get it partly by the transfer to Ireland as first charge on her credit of responsibility for a certain proportion of British war debt and partly by a friendly arrangement with the Irish Parliaments as to a contribution to the British Army and Navy. Failing the acceptance of our Amendment for complete autonomy we have an alternative Amendment to constitute the Income Tax and Super-tax as security for a smaller annual contribution, because I do think that if you are to have this security at all it is less likely to be unpopular in Ireland if you secure it by direct taxation, rather than if you secure it by indirect taxation, which is certain to offer irresistible temptation to agitation among the more ignorant class of the population.

In dealing with the Imperial contribution, the Minister without portfolio disclosed a second line of defence. He alluded to the feeling which would be caused in England if Ireland had a low Income Tax and Tobacco Duty far less than it is here while on tea and beer there was practically no taxation at all. We do not wish for reduction of taxation at the expense of the just rights of the British taxpayer but we do want to give Ireland the benefit of her own economy. See where the Government scheme is likely to lead us. It means that you are to continue indiscriminate taxation, to throw over the unanimous view of the Childers Commission, that identity of rates of taxation does-not necessarily involve equality of burden. It is true that the Irish Parliament, even if the Amendment were rejected, would be able to reduce Stamp Duty, Excise, Licence Duties, or Death Duties, and also redistribute the burden of Income Tax. It might let off the small man and grade up on the rich man. But the Irish complaint is the burden of indirect taxation. They urge that out of the total national income an excessive proportion is taken because the Irish income is made up of a large number of incomes of very low levels and they also say that British customs and excise duties bear very hardly on them owing to a difference in national habits. Take tea, for instance. We in Ireland have no taste either for cocoa or for the cocoa Press, and people, therefore, drink tea among other bever ages. What is the use to the old woman, whose one joy in life is a cup of tea, if you let her off an Income Tax which she will never pay?

Dr. MURRAY

Take stout!

Lieut.-Colonel GUINNESS

That is another instance bearing rather the other way. It is rather remarkable that in that case the British Exchequer do not object because the national taste is for a beverage of a rather more sedative and heavy character than that which has been imposed on the English beer drinker. In that case no complaints are made, probably because this taste is so profitable to the Exchequer, but I do not think it necessary to follow up all these differences in national habits beyond saying that inevitably they do mean that taxation which may be perfectly bearable and reasonable in one country may bear with unreasonable oppression on another country of different social habits. If Ireland is not to be allowed to vary her customs and excise duties, what advantage is she to have from any economy? Many people have long thought that the present Government measures our prosperity in this country not by our revenue but by the expenditure of public money. That is a criterion which is by no means likely to find favour with business men in Ireland, who are much more likely to accept the view of the majority of the Financial Relations Commission that excessive expenditure would not be regarded as a set-off for excessive taxation.

I ask the House, therefore, to face this dilemma. Either Ireland is or is not to get the benefit of economies in her own administration. If she is to get the benefit of those economies there must be differences in taxation. If she is not to get those benefits, your professions of goodwill, your aspirations for a settlement will be considered hypocrisy. Moderate men in Ireland will not, in my opinion, seek to evade reasonable financial contribution, but if Great Britain grudges to Ireland the right to apply the benefit of economies in her own administration to the reduction of her own indirect taxation, then you had better have done with talk of conciliation and settlement, and frankly take your stand on a union imposed and maintained by force.

The PRESIDENT of the BOARD of EDUCATION (Mr. Herbert Fisher)

At first sight the Amendment which the hon. and gallant Gentleman has moved with such attractive eloquence appears to us, and I think he intends, to raise in a very wide and sweeping form the full issue of Irish fiscal autonomy, but when we consider this Amendment in the light of subsequent Amendments placed on the Paper by the hon. and gallant Member—the safeguards to which he has alluded—it becomes clear that the concessions to Ireland which he is prepared to make fall very far short of complete fiscal autonomy. I do not make this observation in any spirit of complaint. I appreciate the spirit in which the hon. and gallant Member has moved the Amendment. He desires, as the Government desire, to make this Bill acceptable to the Irish people, and to see it honestly worked by the two Parliaments, and he desires to rally round the Bill the moderate opinion of reasonable and substantial men all over Ireland, so that in the two areas Governments may be set up which will harmonise with the spirit of the people and give to them larger opportunities for the exercise of the art of responsible management of public affairs. But I notice that the hon. and gallant Member is conscious of the difficulties that attach to full fiscal autonomy for Ireland, little as those difficulties were evidenced in the speech to which we have just listened. For instance, he is prepared to make Ireland pay a contribution. It is quite true that the contribution which he desires to impose is considerably less than the contribution which is provisionally stated in the Bill. He proposes to charge a contribution of £10,000,000 in respect of Imperial liabilities and expenses as against £18,000,000 provisionally fixed in the Bill, and although he is willing in certain circumstances to concede the Income Tax, he surrounds his concession of that tax with a number of stipulations which render it less extensive as a concession than the concession which is made in the Bill by the Government, and he has an Amendment which raises the, question of Customs and Excise.

Lieut.-Colonel GUINNESS

I do not like to interrupt the right hon. Gentleman, but he may not quite understand that those Amendments on the Paper are alternatives as regards Imperial contribution. As to the Income Tax Amendment, to which he refers, he will find that it is no longer there because it was an early Amendment put down many months ago, which has now been removed in view of certain representations.

Mr. FISHER

I am grateful to the hon. and gallant Member for his explanation, but that does not affect the foundation of my argument. The hon. and gallant Member is not proposing full fiscal autonomy for Ireland, but is proposing fiscal autonomy with certain safeguards. Dealing with Customs and Excise, he proposes to reserve them to the Parliament of the United Kingdom until such time as the two Irish Parliaments by identical Acts make other arrangements. Here, again, I do not wish to advert to these considerations by way of criticism. I think that the hon. and gallant Member did quite right to recognise the very great difficulty which surrounds any attempt to give Ireland at this present moment and in the political and constitutional conditions which will arise when this Act comes into force, the boon of full fiscal autonomy, and it is well that we should all realise how difficult is the task of severing two communities whose financial, commercial and industrial interests are so closely interwoven.

5.0 P.M.

The hon. and gallant Member has criticised the existing fiscal relations between England and Ireland in terms of great severity and has spoken of the economic prostration of Ireland. I admit that if it can be proved that the inclusion of Ireland in the fiscal system, the Customs system of the United Kingdom, had been attended by economic prostration, if it could be shown that this connection had been injurious to Irish agriculture, commerce and industry, if it had resulted in a falling off in the bank balances and was inconsistent with Irish prosperity, then I should say, whatever other predilections we might have, there would be a grave and substantial case for considering an alteration of the fiscal arrangements. But when the hon. and gallant Member alludes to the economic prostration of Ireland, surely he is in the realmsnother with regard to the recent history of Ireland, it is that Ireland, from the material point of view, has been increasing steadily in prosperity. Take one or two obvious tests. The deposits in the Joint Stock Banks in the year 1907 were £14,000,000. In 1907 the total was £17,000,000, and the total has risen since very nearly to £76,000,000. The rise has been gradual and continuous, Take the test of the Irish deposits in the Post Office Savings Bank. In the year 1900 the deposits amounted to £7,791,000, and in 1917 to £10,926,000. Investments in Government Funds, Irish land stock and India stock, dividends on which are payable by the Bank of Ireland, were in 1915 £46,936,000 and in 1917 £70,317,000. I contend that those figures are entirely inconsistent with the theory of economic prostration. That being so, are we not entitled to consider the general economic reasons which govern the question of the concession of separate Customs and Excise powers. I think everybody will agree that, at any rate, as long as Ireland is divided in a Southern and a Northern Government, it would be impracticable and uneconomical to establish a Customs barrier across the island. That is admitted in one of the Amendments which the hon. and gallant Member proposes to move later. The example of France before the Revolution, the example of Germany before the Zollverein, the example of Australia before Federation, and the example of all the communities of Northern America, show us abundantly how important it is for the economic prosperity and development of great tracts of continuous territory that they should be brought under a single fiscal system. If we look nearer home to the history of the union between England and Scotland, we find that it was the removal of the fiscal barrier between England and Scotland which made the union a success. Before the union and while that barrier still existed Scotland was a poor country. A great development of Scottish wealth was a direct consequence of the removal of the fiscal barriers between Scotland and England. Accordingly, to all those who hold the belief that fiscal barriers are in themselves an evil, there is a primâ facie argument against the erection of a fiscal barrier between England and Ireland or between one part of Ireland and another. Of course, I quite admit that this argument is not in any way conclusive.

Our great object in this Bill is to effect, if possible, reconciliation between the English and Irish races, not only in Ireland, but throughout the British Empire and the world. We might very well be willing, and I think the British public would be willing, not only to face a considerable financial sacrifice, but also to take a step which, from a purely economic point of view, may appear to reasonable men to be a retrograde step, if we could show that it would contribute to that great object. What will the hon. and gallant Member's proposals amount to? He proposes that the Northern and Southern Parliaments should be enabled by identical Acts to enact fiscal autonomy for Ireland. From those proposals it would, I suppose, be natural to expect, if the hon. and gallant Member is correct in his diagnosis of the state of opinion in Southern Ireland, that. Session after Session and year after year, the Parliament of Southern Ireland would produce an enactment advocating fiscal autonomy, to be met by a negative from the North. Does the hon. and gallant Member think that under this proposal he will be accelerating the date of Irish unity? Is not the plan pursued by the Bill in reality more favourable to the achievement of Irish unity? Under the plan suggested by the hon. and gallant Member this fundamental question of fiscal autonomy for Ireland is continually raised. The Irish public is never allowed to escape it. It is a continually burning issue, presented year after year, and, as I think, creating acute contention between North and South. We cannot deal with this question of Customs and Excise for Ireland without taking into account the very profound and acute differences of opinion between Northern and Southern Ireland on this subject. That is really the root of the difficulty. Incidentally, I observe that, although the hon. and gallant Member is clearly of opinion that it would be unwise and impracticable to set up two fiscal systems for Ireland, his Amendment does not in reality secure his object, because, under the terms of the Amendment, it would be quite possible for the two Irish Parliaments, by arrangement, to pass identical Acts creating one Customs system for the North and another Customs system for the South.

Let me turn from those general considerations to some of the criticisms which the hon. and gallant Member has passed upon the scheme of the Bill. He tells us that under those proposals he is substituting a simple method for a complicated and unpopular method of dealing with taxes in Ireland. I should have thought that the method of the Bill was the simpler method of the two, because the Bill provides that the Irish Government shall have the advantage of the existing fiscal machinery for the collection of their taxes, and when we take into account the great responsibilities which are devolved under this Bill upon untried bodies of men, who would be called upon to deal with a great number of complicated and difficult problems, is it not a considerable advantage to say to those new Parliaments, "We are not

going to impose upon you the additional burden of creating for yourself a new machinery for the collection of taxes. We are giving you the benefit of the machinery which exists at the present time. You take it over, you raise taxes, and you realise your reserve fund." It is said by the hon. and gallant Member that under his proposal Ireland will reap the benefit of her own economies. Is that so? Under the proposal of the Bill the two Irish Parliaments, if our Estimates are correct, will receive the whole surplus, and they will consequently have the option either of reducing taxation or of spending their surplus upon large objects of social and economic reform. Let me point out that the powers which they will receive in the way of reduction of taxation are very considerable. It would be open to the Irish Parliament to reduce Income Tax by one-half under the Bill. That is a very considerable concession.

When it is said that this is a Bill which gives nothing to Ireland, surely that is a very important concession to offer her. The hon. and gallant Member has cited the evidence of the Childers Commission and the Primrose Committee. I quite agree with him that the question of the true taxable capacity of Ireland is a question of great complexity and difficulty. It admits of a great deal of variety of opinion. We have not in this Bill attempted to decide. We have devolved the difficult task of assessing the true taxable capacity of Ireland on the Joint Exchequer Board, and we distinctly provide that, if the Joint Exchequer Board comes to the conclusion that the Irish contribution of £18,000,000 is not warranted by the taxable capacity of the country, it will be open to it afterwards to reduce that amount.

Sir F. BANBURY

Can you increase it in the contrary event?

Mr. FISHER

No, but it will be open to us to reduce it. That is not ungenerous. Under the scheme of the Bill it is expressly provided that, on Irish union being achieved, if an Address for the purpose is presented by both Houses or the House or the Parliament of Ireland, the Joint Exchequer Board shall forthwith take into consideration the transfer to the Parliament and Government of Ireland of the powers of imposing, charging, levying and collecting customs duties and excise duties reserved by this Act, and report thereon and on the methods by which in case of such transfer the payment of the Irish contribution to Imperial liabilities and expenditure can be secured, and shall cause a copy of their report to be laid before the Parliament of the United Kingdom and the Parliament of Ireland. While, therefore, the Bill does not provide that Customs and Excise should go over to Ireland automatically on Irish union a distinct indication is given that the whole question can then be taken into account. I have no doubt I shall be told that Irish union may be long delayed, and that it would be fairer to allow the Northern and Southern Parliaments of Ireland to come to independent conclusions with respect to Customs and Excise in advance of Irish union. That is the proposition that is put before us. Is there not, quite apart from the question as to whether Ireland should continue to be part of the United Kingdom, something to be said for a plan which leaves the two Irish Parliaments during the initial and difficult period of their new experience Customs and Excise reserved until the period of Irish union for the discussion of such a fiscal revolution as the hon. and gallant Member proposes? For these reasons the Government is unable to accept the Amendment.

Lieut.-Colonel Sir S. HOARE

The President of the Board of Education, as he always does, has delivered so well phrased and closely argued a speech that I hesitate to say anything in criticism of what he has said. But I must say, as I listened to him, I had a feeling of very deep disappointment. The right hon. Gentleman is believed to be a sincere believer in the principle of self-government for Ireland, and yet when time after time hon. Members on this side of the House and in other parts have made proposals breathing some shadow of life into this Bill and making self-government real self-government, it is the right hon. Gentleman who always has the best possible reasons why those proposals should not be adopted. I know that this particular Amendment raises a very difficult and contentious question. In every discussion that has ever taken place, and there have been many, upon the subject of Irish Customs and Excise any number of difficulties have been raised against the proposal to give indirect taxation to the control of the Irish Government. I admit the force of those objections. I admit the force of the objection that to give Customs and Excise to an Irish Parliament or to Irish Parliaments is an anti-federal action. I admit also that to give Customs and Excise to an Irish Parliament or to Irish Parliaments may raise the possibility of tariff controversies both between Northern and Southern Ireland and between Ireland and Great Britain. To each of those objections let me make one or two short passing allusions. First of all there is the Federal objection. If this Bill were a Federal Bill and if its intention were to lay the first foundation of a Federal system for the whole of the United Kingdom, then I should say that objection is a very strong one. But it s not a Federal Bill and it is not intended to be a Federal Bill. I am surprised when my hon. Friend the Member for Oxford City (Mr. Marriott) asys that it is a Federal Bill. He says now that they professed that it was. If that is so, I cannot understand how the operating Clause of the Bill, under which the residuary powers instead of being kept by the Federal Government are transferred to the Irish Parliament, has ever been inserted in the Bill. With that Clause before us and already passed in Committee, I cannot admit, nor do I think anyone can believe, that this is a Federal Bill. Moreover, if it were a Federal Bill, I imagine the practice would have been adopted, which is always adopted in similar cases by Federal Governments, and that the proceeds of Customs and Excise would have been retained for the Federal Government. That again is not the case in this Bill. What analogy is there between the case of Ireland and of Great Britain when Ireland is divided from this country by a sea frontier, whereas, in the case of every other great Federation of the British Empire, Federation has been forced on them by the fact of a contiguous line of land frontier.

Passing from the Federal question, let me come to what seems to me to be a much more serious objection against my hon. Friend's Amendment, namely, that if it is carried there is a danger of fiscal controversy between Northern and Southern Ireland and between Ireland and Great Britain, and that it would mean the setting up of Customs houses. Already we have far too many Customs houses. Europe to-day is suffering from one end to the other from a plethora of Customs houses. I admit that at once, but I would point out to the President of the Board of Education that even under his scheme some system of Customs examination is absolutely necessary. The finance of the Bill is based upon what is known as the true revenue of Ireland. What is the true revenue? The true revenue of Ireland is the revenue estimated by the Treasury upon certain general estimates. It is nothing more than an estimate. That does not matter when the Treasury return is only wanted to be used for the general information of Government offices or for Members of Parliament, but when it comes to basing the whole financial stability of the Irish Governments upon a return of that kind, I am certain the right hon. Gentleman will agree when I say that it is quite evident that estimates are far too vague and that some system of Customs examination, even if the Customs and Excise are still retained by the Imperial Parliament, will have to be set up at once. How far is there a real danger of a fiscal war between Great Britain and Ireland, and how far is it really likely to come about if the control of Customs and Excise is put into the hands of the Irish Parliament? As my hon. and gallant Friend who moved the Amendment said, Ireland is much more dependent upon English markets than Great Britain is on Irish markets. In the case of the Northern Parliament, I feel certain from what the Ulster Unionist Members have said that there is not the least risk of a tariff being set up against British goods. The only practical danger therefore is the danger of the Southern Parliament setting up differential duties against us here. What is the risk of that? Southern exports will be mainly agricultural produce of a perishable kind, and that produce must find a market in Great Britain. It would be suicide for the Southern Parliament to embark upon a fiscal war with this country, and we could destroy the Southern Parliament in a fiscal war in a fortnight. Fiscally, the Southern Parliament is in our hands, and it seems to me to be raising imaginary dangers to suggest that we are running any risk in allowing the Southern Parliament to have control of its own Customs.

But suppose that I am wrong, and suppose that the Southern Parliament were likely to embark on a fiscal war with Great Britain, we must leave nothing to chance, and I should say that this House should take every precaution to avoid the risk of that contingency. My hon. and gallant Friend has recommended various ways in which that might be done. He suggested, for instance, identical Acts of the two Parliaments and also most-favoured-nation treatment between the two countries. These may not be the best precautions, though, personally, I think they would meet the case. Supposing they do not, that does not alter our position. We say, give the two Parliaments control over indirect taxation, and then take every precaution that you will to prevent these fiscal wars being foolishly undertaken. It may well be that a Convention between the three Parliaments would be the best way to avoid the risk of fiscal controversies. Be that as it may, give the Parliaments control of their indirect taxation, and then Bake whatever step you will to ensure fiscal agreement betwen the three authorities. The right hon. Gentleman in the course of his remarks emphasised a number of objections to taking such a course, but it is a significant fact, a fact to which my hon. and gallant Friend has already alluded, that whenever there has been an expert inquiry into this question, the body of feeling in that inquiry has always been strongly in favour of giving the control of indirect taxation to Ireland. Not so long ago the Prime Minister himself, in the letter which he wrote when the Convention was first started, actually threw out the suggestion that in certain circumstances Ireland should have control of its indirect taxation. That being so, and recognising the practical objections to which I have already alluded, let me put to the Committee the broad case in favour of it. This is, I understand, a Kill to give self-government to Ireland. If it is not, why has it been introduced? It is no answer to say, as the President of the Board of Education said, that Ireland has become rich under a system of indiscriminate finance; it is no answer to say that under this Bill we are giving Ireland a number of generous doles. That is not the object of the Bill.

The object of the Bill, if it has any object at all, is to give real self-government to the two Irish Parliaments. Finance is the key to self-government. In Ireland, which is mainly an agricultural country, finance principally means indirect taxation, namely. Customs and Excise. The Irish revenue for 1920–21 is £46,000,000, and of this, no less than £30,000,000 comes from Customs and Excise. Ireland, therefore, if it is to have real self-government, must control its Customs and Excise. The choice, as it presents itself to me, is between the possible inconvenience of fiscal independence and the intention to give Ireland self-government. I should say that the objections to which the President of the Board of Education has alluded are greatly exaggerated, but even if they are not, I should still say that if you wish to give Ireland self-government you must be prepared to take the risks. There is a great deal to be said for Union government, there is something to be said for Union finance, but there is nothing to be said for a hybrid system, and least of all is there anything to be said for a camouflaged Home Rule. It irritates Unionists, and it docs not satisfy Nationalists. If you do not give the Irish Parliaments Customs and Excise, the self-government that you are offering is a sham self-government, and you will get no moderate men behind you in support of your proposals. The President of the Board of Education said or implied that he did not think it is a suitable moment to take risks. I venture to disagree with him and to think that now is the moment to make an arresting appeal to the men of moderate views in the South and West of Ireland. If you tie them up with all this British control, as you are doing with your present fiscal proposals, there is not the least chance of being able to make any such appeal. Moreover, you will not make Irishmen responsible for their own government, and as long as they are not responsible it seems to me that they will continue to fight amongst themselves and to unite only in abusing Great Britain and in bleeding the British Treasury. As an English unionist, I desire to protest against that prospect, and I say as emphatically as I can, either put life into the fiscal Clauses of this Bill, or drop it altogether, and let us go back to the intelligible system of Union government.

Mr. MARRIOTT

I do not think any hon. Member can complain of the way in which this question has been brought before the Committee by the hon. and gallant Members who have spoken from these Benches. The whole argument which they have addressed to the Committee is entirely consistent with the attitude that from the first moment they have taken up upon the Bill. Nevertheless, I do desire very respectfully to congratulate my right hon. Friend the President of the Board of Education on the very stout resistance which he has offered to this Amendment. What are the arguments which my hon. and gallant Friends have put to the Committee on behalf of their Amendment? The hon. and gallant Member for Chelsea (Sir S. Hoare) maintains that there would be no real danger in giving the control of Customs and Excise to the two Irish Parliaments. I think he said that there was no chance at all of the Southern Parliament embarking on a fiscal war with Great Britain. I quite admit that if all the affairs of the Southern Parliament in Ireland were to be conducted, as the Debate in this Committee is being conducted, in the absolutely dry light of reason, then the danger would not be a great one, but you have got to contemplate a state of things when policy is inspired less by reason than by passion. Then my hon. and gallant Friend added, "Give them entire control over their fiscal arrangements, but," he said, "although it is desirable to give them entire control, yet you must impose every sort of precaution that they should not misuse that control." I confess that that is an argument which seemed to me to be absolutely contradictory in its essence. Let me come, next, to the suggestions which were made by the hon. and gallant Member who moved the Amendment. First of all, he made an appeal to the Committee in regard to the economic prostration of Ireland. That is an argument which, it seems to me, has been entirely disposed of by the speech of the President of the Board of Education. Nobody who has any real acquaintance with the economic condition of Ireland to-day—and I venture to say that there are not many English Members of the House who have a more intimate acquaintance with it than I have myself—can describe it as a condition of prostration, for never at any time during the last century has Ireland enjoyed greater or more general prosperity than she enjoys to-day. Therefore the argument of economic prostration seems to me entirely to fall to the ground. Then we were told by my hon. and gallant Friend—and a most remarkable argument it was, I thought, to address to the Committee—that the depopulation of Ireland in the last half-century, or the last 60 or 70 years, was due to the operation of Free Trade.

Lieut.-Colonel GUINNESS

I particularly said that I did not by any means accept that argument, but I mentioned it to the Committee because they ought to put themselves into the mentality of the Irishmen who take that view. I expressly dissociated myself from the argument.

Mr. MARRIOTT

I beg my hon. and gallant Friend's pardon. He is perfectly right. The argument which he addressed to the Committee—and I hope I shall not misrepresent him again—was this, not that the depopulation was duo to Free Trade, but that the Irish people, or a great many of the Irish people, thought it was due to Free Trade. I have listened to endless Irish Debates in this House, and I have heard one argument repeatedly used by Members from Ireland on the opposite Benches, who. I think, may be thought to understand the mentality of the Irish at least as well as my hon. and gallant Friend, who have insisted, not once, but again and again, that the depopulation of Ireland was due to the Irish famine. I have heard dozens of those speeches in which the Irish famine has played a principal part in regard to the depopulation of Ireland. On this point I agree with my hon. Friends opposite. I think that is the true explanation, and with very great respect I do not think the view of my hon. and gallant Friend is really widely entertained among the people of Ireland. Then there was another point on which he laid very great stress, and I invite the Committee to examine this argument rather narrowly. He said that Ireland is suffering from an excessive burden of indirect taxation, but what is the proposal of my hon. and gallant Friend? It is that they should be permitted to impose additional indirect taxation, that they should be given such control over their fiscal affairs, their Customs and Excise, that they should be in a position to increase the already excessive burden. That, again, seems to me a very astonishing argument to put before the Committee. But fundamentally the question, I take it, which is at issue—and it was perfectly fairly faced by my hon. and gallant Friend the Member for Chelsea—the fundamental point which divides my hon. and gallant Friends from myself and others is as to the real intention of this Bill?

Sir S. HOARE

Yes, what is it?

Mr. MARRIOTT

Exactly, what is it? My hon. and gallant Friend does not expect me to expound it, but I will take the intention of the Bill as repeatedly expressed by the Government themselves. If they do not understand their own intentions, it is not for me to instruct them. But what have they said from the first? They have said this is a measure which is intended to fit in with what is generally known as the federal solution of the Irish question. I entirely agree with my hon. Friend below the Gangway that if the genius and intention of this Bill is not federal, but frankly separatist, then all the arguments which have been addressed to the Committee to-night by him and his friends are not only entirely relevant but entirely consistent. Personally I should never have voted for the Second Reading if I had regarded it as a step towards separation. The majority of those who supported the Government on Second Heading accepted their account of the Bill that this was intended to be a step in the direction of what is called the federal solution. If it is and assuming that the Government's account of their own Bill is a fair and an accurate account, then I submit that this Amendment entirely cuts across the whole purpose and intention of the Bill. I do not know a federal system in the world into which you could introduce such a proposal as that made by my hon. Friend. His case for his Amendment is this is not a federal Bill. I can only say if this is not a federal Bill, but is a Bill which is intended to pave the way to separation, it will have no further support from me; nor can I support an Amendment which is consistent only with an interpretation of the Bill denied and vehemently denied by those who are reponsible for its production.

Lieut.-Commander HILTON YOUNG

I am sure one might discuss for long as to whether this Bill was federal or separatist in its tendencies, and one might discuss for even longer whether the Irish question was capable of settlement by reference to any fixed theory of federalism or separation. Indeed, I believe it is not, and that the only solution of which it is capable is a purely empirical one, and I am one of those who think that, in searching round for the empirical methods which will lead us to a solution, we have come, in the course of our discussions on the Bill, to the essential and most important practical point. In the most persuasive speech of the right hon. Gentleman the President of the Board of Education there was one argument which appealed with almost overwhelming force. It was that which he based upon the proposition that a fiscal barrier is never a good thing, and is always a bad thing. That is also a proposition with which I have always found myself in agreement. In the most lucid and exhaustive speech of the hon. and gallant Member for Bury St. Edmunds (Lieut.-Colonel W. Guinness) I observed. I think, a tendency in the argument to suppose that there is no constitutional objection inherent in a fiscal barrier as such. That only shows that from this empirical point of view, starting from opposite points, one may arrive at the same result. So strongly do I think that point of great importance, that, if indeed I were to suppose there was a very grave danger under the proposal of this Amendment of new fiscal barriers being created, it might give me serious pause, but I do not. Is there any real danger of tariff walls? The hon. Member opposite says: "Yes, in a moment of passion." In a moment of passion, of course, anything may happen. Unfortunately the relations of the countries now are in that condition, but, were the experiment tried, the result must be so immediately disastrous to either part of Ireland, that it would learn a very bitter lesson in a very short time.

This matter has been argued with so much lucidity by the hon. and gallant Member for Chelsea (Sir S. Hoare) that there is only one word I would say in emphasis of his argument. His argument which I think so forcible was that in the state of dependence in which Irish producers are upon British markets, a tariff wall must be suicidal, and that condition is growing from year to year. Year by year the specific products of Ireland meet with more and more competition in the British markets. Year by year her position here becomes more and more insecure, and her dependence on the British markets more absolute. There was one argument, at first attractive, in the right hon. Gentleman's speech which, on further reflection, I wondered I found so convincing. His argument seemed, at first sight, so impressive that the tender Parliaments in Ireland must be protected from too heavy responsibilities, and that you must avoid placing too much of a burden in their infant hands. That, of course, makes a strong appeal to the feelings. The appeal becomes less strong if one detects, as one perhaps does, that the analogy is not perhaps correct. The legislative capacities, the political capacities, of the Irish people are of no infant growth. They have had a long, vigorous life for very many centuries; yet they have a specific character. I should say, at the present moment, that they suffer not from infancy, but from a specific ailment. The ailment from which they suffer is lack of responsibility.

What they need, then, if that be true, is not a sedative, but a tonic. There is no tonic so stimulating as direct responsibility. I believe that a wide principle, which lies at the root of all good government, is contained in this Amendment. It is that you cannot establish any sound system of government unless the same men who are spending the revenue are also responsible for collecting it. Under the present scheme, according to my calculations—whether it be right or wrong, I will not venture to dogmatise—Ireland will be directly and truly responsible for only 6 per cent. of the revenues she collects. Under those circumstances, there can be no such responsibility as would brace statesmen and politicians of Ireland to the establishment of their own new system upon a sound basis. There may be risks in the policy recommended by the Amendment, but they are economic risks, and risks of the smallest extent. On the other hand, there are political risks—risks involved in the continuation of the present situation, in the non-acceptance of the Bill by moderate opinion in Ireland. Ireland is not economically formidable Politically formidable she is. What a gain, then, to transfer our risks from the political to the economic sphere!

Earl WINTERTON

The answer which has just been given by my hon. and gallant Friend, although he does not agree entirely as to the lines on which we proceed in our Amendment, supplies the real answer to the argument put forward by the hon. Member for Oxford City (Mr. Marriott). In the course of his speech, my hon. Friend the Member for Oxford City asked, what is the object of this Bill? It is a question which many of us have been putting to the Government throughout the course of these Committee Debates, and, indeed, at the time of the Second Reading. It is perfectly clear that, in speeches made on the subject in different parts of the House, the objects sought from the Bill by different sections of the House are entirely different. My hon. Friends who sit for Ulster, for example, have quite different views as to the ultimate object to be sought from the Bill from many of us, who believe that the only future of Ireland, if the Union is to be cut into by any form of Home Rule, is the ultimate unity of Ireland. That shows a fundamental difference between us. Others, like the hon. Member for Oxford City, regard the Bill, if I may say so, from rather an academic point of view. Others, like my hon. and gallant Friend who has just spoken from a more detached point of view, look at it from the point of view of obtaining the best system for finding a solution, if it can be found, for dealing with one of the most terrible situations with which the British Empire has ever been faced. The real answer to my hon. Friend's question is that this is a Bill, according to its title—and which we must suppose the Government honestly wish to carry out—for the better government of Ireland. The point we have to ask ourselves, it seems to me, in considering this Amendment, is whether or not the proposal we put forward is likely to lead to the better government of Ireland by producing a solution of the present difficulties, and to look at it from that point of view, rather than the point of view of the merits or demerits of a federal system. I remember a very eloquent speech from my hon. Friend in the early stage of the Committee, in which he said he could not really support this Bill because it was not a federal Bill. He made a very able speech in which he gave many of us quite a new light on the operation of federalism in different parts of the world. Now, he says, we have set aside the principle of federalism, which has already been set aside by the principle of the Bill.

6.0 P.M.

My hon. and gallant Friend the Member for Bury St. Edmunds has been criticised because, having, at the commencement of Iris speech, said we wished by our Amendment to give much fuller financial responsibility to Ireland, we then qualified the effect of that by saying we were going to impose all sorts of safeguards. I do not see the force of that argument at all. It is quite obvious that in the present relationship of Ireland, however great the financial responsibility will be, you must have financial safeguards of some kind. It surely ought to be the object of any of us who wishes to find a solution of the present unhappy situation, in this and in all other matters, to put forward the most free and generous proposals that we can put forward con sonant with the Safety of the United Kingdom as a whole. That is the justification for this Amendment. We believe it gives a much fuller financial responsibility—it is unnecessary to argue that point; it is obvious—to that proposed in the Bill. We believe by the safeguards which are put down in subsequent Amendments we shall prevent that financial responsibility being used as an engine against the interests of the United Kingdom as a whole and particularly against this portion. The point of view we put forward this afternoon is in a sense the essence of our whole scheme. It is a scheme that we believe will meat moderate opinion in Ireland. The Government scheme does not make a sufficiently generous provision that moderate opinion could, without danger to itself, support, and that is the reason that moderate opinion is at the present moment silent and dumb on this question and on every other question. We say we should put forward a scheme that would appeal to that.

The only other thing I desire to refer to is a matter referred to by my hon. Friend the Member for Oxford City, and also referred to by the Minister of Education. Both of them took great exception to the statement put forward by my hon. and gallant Friend who proposed the Amendment on the subject as to the relative prosperity of England and of Ireland. I think they misunderstood the purport of his argument. My hon. and gallant Friend never suggested that Ireland is not a much richer country to-day than it was, for example, in 1841, or that relatively it is not considerably richer than 15 or 20 years ago. That has never been the point of his argument—or of ours. This has always been—that the conditions in Ireland are wholly different to the conditions in this country. This is a great manufacturing country—or was a great manufacturing country. Whether or not it is going to be one much larger has nothing to do with this Debate. But Ireland has always been a purely agricultural country. Although the relative prosperity of Ireland is greater to-day, or was greater in 1917, as my right right hon. Friend by statistics showed, than in 1914, that does not mean to say that the position in Ireland is anything like the position of this country, say before the War. After all, it is not pleasant and rather indelicate to refer to the matter, but we must remember that one reason why Ireland was relatively so prosperous was that Ireland did not practically feel the effects of the War in which the rest of the United Kingdom was taking part. There was no conscription in Ireland—even in the North, where the people came forward splendidly—but the relative position—

Mr. MOLES

What about my city?

Earl WINTERTON

Your city! I am talking about the whole of the North of Ireland. The hon. Member seems really not to have noticed any difference between the effect of conscription and non-conscription. I assert, and I base it upon statistics, that the number of people in the North and South of Ireland who went out to fight were less than in this country. Obviously, no country in the world where some people are fighting under conscription and others are not under it can be other than different. I am not making any complaint; I am merely dealing with the facts. The effect of conscription in this country was that numbers were drawn from industry. The effect of that was to allow Ireland to gain a lap upon us in the race for relative prosperity. That is an obvious principle of the relative prosperity. It was most absurd—if that be not too strong a term to use—for the Minister of Education to take 1917 in Ireland and compare it with 1900. Ireland attained wonderful prosperity. Every country which did not feel the full effects of the War—and this applies to other parts of the British Empire, South Africa, for instance—gained relatively to this country, for we carried the heaviest burden of all.

That, however, does not take away the fact that Ireland will always remain a country economically poorer than this country. In this country we have the coal which we use for our manufactures, and I hope it always will have. That, really then, is the argument always used when considering these financial proposals. A country like Ireland is bound to suffer in the long run from a system of taxation primarily intended for a rich country like this, and which is not suited to a poor country like Ireland. I am surprised that anybody denies that. In the old days when on the Benches opposite the Nationalist party gave us the advantage—or the disadvantage—of their presence, I heard many arguments they used. They said that the economic position of Ireland was different to the economic position of this country, and that, therefore, the taxation system ought to be different. I never—and those of us who differed from them in those days and objected to the then Home Rule Bill—never based our objection on the ground that there was not any dissimilarity between the economic position of this country and of Ireland. On the contrary, we always admitted it was widely different. The Committee must remember that a great many people in those days, those of us who took the view of Unionists against the Home Rule Bill of those days, as far as taxation was concerned, believed in some kind of financial devolution for the whole of the United Kingdom. We have been accused absolutely of throwing away all our principles by bringing forward these Amendments, but, after all, they are only based upon the principles in which all of us believe. I have always believed in some form of financial devolution to meet the apparently complicated and complex system of Imperial taxation at the present time, and what we are putting forward is only in consonance with those principles.

The main thing, after all, is to put forward proposals which have some chance of being accepted by the moderate people in Ireland. From that point of view, I desire to repeat, one is bound to express one's deep disappointment at the answer of the Minister in charge. Once again the Government appear to be dealing in a theoretical way with this question. No doubt it is admirable from a theoretical and academic point of view to apply the same principles of taxation to this country and to Ireland. I do not agree with that contention, but from the point of view of the exposition of financial principles no doubt the thing is fine. After all, this is not the only question involved. It is only a very small part of the question as to how to get out of the morass into which we have been led by the present condition of affairs in Ireland. If this Bill is for a better condition of things, and an attempt to get us out of that morass, surely it is the duty of the Committee to give adherance to the proposals put forward, provided they do not interfere with the future of the whole of the United Kingdom. We do not want the secession of Ireland from this country. Therefore, surely, it is our duty to give regard to the proposals which may get on the side of the Government for its Bill the moderate opinion of Ireland that the proposals of this Bill cannot obtain.

None of us believe that by putting forward those proposals we are doing anything to injure the strategic position of Ireland in relation to this country. I Would be prepared to say this—although it might be obvious: in considering the whole of this Bill, subject—and I believe there are many outside who support the Bill and who support the present Government who would say the same thing—subject to two conditions, firstly, that any proposal that is carried in the Bill is a proposal to which the assent of Unionist Ulster can reasonably be given; that is to say, that any proposal which ensures the future security of the people in the North-Eastern corner of Ireland, and subject to the same strategical position of Ireland in regard to England, I am prepared to go to very great lengths indeed in order to bring about a solution of the present difficulties in Ireland. The solution of these difficulties, even if it is not to be found in the proposals we are putting forward, is unquestionably to be found somewhere in the financial proposals of the Bill. The attitude of the Government ignores what I may call the psychological aspect of the question. There has not been a word about it from the right hon. Gentleman this afternoon, nor was there on Friday. I would venture to put this challenge to any subsequent spokesman of the Government on this Amendment: do they think this Clause as it stands has the slightest chance of being accepted by the majority even of the moderate opinion in Ireland? There is no chance of acceptance. Why, then, leave it in the Bill? Why waste the time of the Committee in continuing the discussion of proposals which have no chance of being accepted? If we need any excuse for putting forward our proposals, it is that on consideration they might be found acceptable.

Major-General SEELY

I think the Government ought to make some reply to the appeal made by the Noble Lord for information upon this specific point. Have they any reason to believe that the Bill as it stands in relation to Customs and Excise will be acceptable to any part of Ireland, except the North-Eastern part of Ulster? If not, surely we are wasting our time in continuing the discussion of this Bill. It may be said that our discussions here on this Bill have an air of unreality, because five-sixths of Ireland are not represented. The hon. Gentleman the Member for Oxford City, who is not now in his place, could not conceivably have made the speech he did had any representatives from that five-sixths of Ireland been here. He talked of the subject as though it was entirely an abstract proposition to be viewed like a specimen under a microscope. The question has been asked again and again. What is our object? Our object is stated to be the better government of Ireland. It has been said in set terms to be the self-government of Ireland by Ireland herself. But if five-sixths of Ireland will, in fact, reject any Bill that has this provision relating to the Customs and Excise what is the good of calling it a Bill for the better government of Ireland? For my own part, from the very beginning I have supported this Bill, and have always stated that I would do my utmost, in my small way, to support all those on both sides of the House who advocated an extension of the financial powers sufficient to make them acceptable to what one may call the loyal part of Southern Ireland. When I say "loyal" I mean those who are not revolutionaries and who are not trying to upset the existing order. I am quite persuaded by friends and relatives of mine in Ireland that there is an immense body in Ireland keenly desirous of supporting self-government within the Empire, hut one and all say, without exception, if you are going to give self-government to this country you must give control of the Customs and Excise. Of course, we know the old argument—that they will set up tariff barriers. As a Free Trader I should regret that there should be any tariffs. There is this one point which I think is a strong one. If the fear is that barriers can be erected to interfere with trade between the two countries, it is worth considering whether the weapon of an economic boycott is not far more formidable than any tariff. If the Irish people resented this Bill they could, by an economic boycott, do just as much harm to trade in that way as by the erection of any tariffs. How can you say that you are giving self-government to any portion of the British Empire if you are withholding from them the Customs and Excise, and the greater part of your taxing power? I am sure that the only way to achieve a satisfactory result is to give Ireland her freedom, and then let her come into a federal system when that system is ready for her inclusion. Anything is better than the existing system, under which we are endeavouring to govern Ireland by trying to stamp out a rebellion with no body of persons to negotiate with or to assist us. I believe that a generous measure of self-government would be calculated to rally moderate opinion in Ireland. I believe this particular Bill is good in form, and I believe it is a better plan to set up a Parliament in North-East Ulster and one in Southern Ireland than to set up one Parliament and then give the other the opportunity of contracting out, well knowing that it would contract out.

Mr. FISHER

Do I understand the right hon. Gentleman wishes us to grant Ireland fiscal autonomy at once before Northern Ireland and Southern Ireland have agreed?

Major-General SEELY

I think we must give fiscal autonomy at once. I was going to say that the obvious solution would be to let the two Parliaments agree, and then they should have fiscal autonomy, and this is giving an added reason for bringing Ireland together. But the objection to that is fatal. The Bill will not function at all unless you meet my hon. Friend's point and give fiscal autonomy to five-sixths of Ireland. All you will have done will be to pass an Act authorising five-sixths of Ireland, and it will have no effect. The people will refuse to work it, and the Act will be a dead letter so far as five-sixths is concerned. I appeal to the Government to reconsider their position, and whatever happens I shall support my hon. Friend in the action he is taking, believing that by trusting the Irish people, as far as is consistent with our national safety, and at the same time safeguarding Ulster, by that means alone can we get a real solution of the Irish question.

Sir GODFREY COLLINS

The President of the Board of Education seems to have his mind fixed upon two objects. The first is the Bill before the House, and the second the developmnt of a larger opinion in Ireland, which we all hope may come about. The only question, however, before the Committee this afternoon is the present Bill. In the first half of the speech of my right hon. Friend he looked back and drew a glowing picture of the present prosperity of Ireland, and that is gratifying to the British people. What he suggests, However, is not satisfactory to the Irish people, and therefore we are not concerned this afternoon so much with looking back, and we are more concerned with trying to visualise the situation when these Parliaments come into being.

I want hon. Members to imagine the Chancellor of the Exchequer in the Southern Parliament bringing his annual Budget. We all know that in this House of Commons the most important day of the year is when the Chancellor of the Exchequer produces his Budget. The Irish Chancellor of the Exchequer will remind the House of the growing prosperity of Ireland. He will tell them that the Irish coffers are full, and that through the system of taxation devised by the Imperial Parliament the revenue of Ireland is abundant. Then he will go on to remind the members that he has no power to reduce a single penny of indirect taxation which may bear very heavily on the poorer classes, although he will be able to impose more direct taxation. Can you imagine a Parliament being respected and commanding the assent of the vast majority of the Irish people when the Chancellor of the Exchequer of that country has less real power and responsibility than a single Treasury connected with any town councils, or county councils in Great Britain. The Government are really asking these Parliaments to perform an impossibility.

I want to attract to these Parliaments the best men in Ireland; but unless they have real power and responsibility those Parliaments will not function at all. This House is always generous in its treatment of Ireland, and I want to ask the Government not only to be generous with the money of the British taxpayer, but also to show much greater generosity in placing direct responsibility and transferring powers at present exercised in this House to the shoulders of the Irish Parliament. Every speaker but one who has spoken this afternoon has appealed to the Government to entrust the Irish Parliaments with greater powers, and unless I am very much mistaken, public opinion outside is with us in that appeal. It may either be a federal or a non-federal appeal, but every hon. Member who has voted for the Second reading is anxious that this Bill should work in practice. Unless the Chancellor of the Exchequer in Ireland has power to lower taxation, he will become merely a dispenser of the money of the British taxpayer, and he cannot lower the taxation which may press heavily on the Irish people. I appeal to the Government to be more generous in granting further powers and responsibilities to the Parliaments to be set up in Ireland

Sir RYLAND ADKINS

The Government have heard various speeches from Members of different political traditions all agreeing in asking the Government to accept this Amendment, or, at any rate, to very greatly enlarge the financial powers of the Parliaments which it is proposed to set up in Ireland. I should like to give the strongest possible support to the speeches that have been made with that object. We are being asked to support this Bill. The circumstances since 1914 have changed so greatly that another Home Rule Bill was inevitable, and I think the Bill now before the House has advantages over previous Home Rule Bills. There are, however, many dangers ahead in Ireland, and it is necessary when you are making these modifications that you should take all the more care to see that you are really giving to Ireland powers worth having, and that you are giving a Bill the contents of which are so valuable that, while many may be unable to agree with it in the present heated condition of Irish feeling, there will be an increasing number who will be glad to accept it because of the real policy they find in it. Surely under these circumstances there is nothing more important than to give a genuine financial autonomy.

Those of us who hold strenuously certain views on fiscal policy would be sorry to see a certain policy practised by any country, but oven if there happened to be a chance of that, I would rather give to persons whoso freedom we desire to help the power of doing right or wrong than keep them in financial leading strings against their will. Unless you do give substantial power and frankly aim at establishing financial autonomy, you will put this Bill out of relation with the real governing facts of the time and the situation. I agree that there is a very great body of opinion behind the suggestions which have been made this afternoon. There are large bodies of people in this country who cordially supported the Home Rule Bill of 1914 who are quite prepared to accept and support this Bill, but who look with the greatest anxiety at provisions which cut down the financial powers of Ireland so as to make what is left a sort of dole as to which the people of Ireland can have very little power or modification, and in regard to which they have no power of initiative at all. This is a current of opinion which the Government will do well to recognise. We have heard from my Noble Friend a statement with regard to opinion in Ireland, and, I know there are largo currents running in precisely the same direction.

I realise, as we all do, that it is impossible to have any Bill for local government in Ireland which does not meet with the pronounced consent of all kinds of people in that country. Therefore, it is the duty of this HOUSE to give to Ireland something which at the moment she may not welcome, but when you are imposing upon a community a new kind of legislation, surely it is vital to see to it that the character of that legislation is in itself so good and so full and valuable that, although they may not be prepared to accept it at the outset, they may decide to test and work it, and then they may find that the more they look into it the more they will find it is worth trying, and that it will prove to be to their advantage, and that of the Empire, that they should work it. Unless there is financial autonomy how can it be said to be worth while for those to work it, who, if they had financial autonomy, would be anxious to try the experiment without separation and without disloyalty to the English connection? It is because I want this Bill to have in it that which by its own merit will steadily and continuously win its way that I have put my name down in favour of this Amendment, and urge the acceptance of it by the Government. I assure them that the experiment they are trying, and the objects which they have in view, are far more likely to be successful and to be attained, if they will give way to this unanimous request from all parts of the House.

Mr. BIGLAND

I wish to say how pleased I am to know that the Government intend to reject this Amendment I believe many people wish for some measure to be passed by the Government in regard to Ireland, because they want it to imitate the State Legislatures of North America. But imagine anybody proposing in Washington that between the different States a separate Customs house should be erected! Such a proposal would be rejected. It could only produce fearful confusion. If this Bill is going to be the basis of a federal system, to be later on adopted in regard to Scotland and other parts of the United Kingdom, it cuts the whole idea right in two We cannot imagine the different parts, of the United Kingdom being allowed to have Customs authority of their own. It is for this House to do what is just and right. I do not want it merely to do justice to Ireland; I want it to do justice to England. If 4,000,000 out of 44,000,000 of people are to be excused all this taxation, then I say we are not doing justice. As a Member of this House I have voted for huge sums to be raised in this country in respect of which I, as a Member and as an individual taxpayer, am liable for my share, and why should I voluntarily cut off one-tenth of the people of the United Kingdom from paying those taxes? It is not fair to my constituents. It is not fair to ourselves to say that one-tenth of the people of the United Kingdom, who all rejoiced in the grand work done by our Navy in saving our coasts, should be exempt from the taxes levied in order to pay interest on the debt thereby incurred. I hope the House will see to it that this Clause remains in the form in which it has been drafted, and I shall vote with the greatest certainty in my own mind that the bulk of those whom I represent are not willing that Ireland should run her own Customs house against us.

Mr. MURRAY MACDONALD

This Amendment raises a difficulty that will tend to divide the governing power into two separate independent bodies, and that difficulty is that of giving both bodies full responsibility for their revenue and expenditure. Such a difficulty has not arisen in the case of the Dominions, because they have not contributed to Imperial expenditure and have no voice in determining Imperial revenue. Ireland, however, has been an integral part of the United Kingdom, and has hitherto taken her share in contributing both to the expenditure involved in the maintenance of the civil government of the United Kingdom and in maintaining the Empire as a whole. Now it is proposed to set up a Government in Ireland with very restricted financial powers. To that I assent, and I deny that this Bill does not give Ireland any real responsibility over her revenue. She will under its provisions have complete responsibility for her expenditure, while her control over revenue will be, of course, of a limited kind. Any suggestion that we ought to hand over to her complete fiscal autonomy because it is essential to good government and because it is the only means by which we are in the least degree likely to succeed in that country needs to be carefully considered. If I were quite sure that it would be the means of conciliating Ireland to this country I would be quite prepared to consider a proposal to grant to Ireland Dominion powers. But I am not sure. On the contrary, I am very doubtful.

I know it is true that moderate opinion in Ireland is in favour of the larger fiscal powers asked for in this Amendment, but I have never heard from any person or any Irishman any suggestion of willingness to give Dominion powers to the two Parliaments proposed to be set up under this Bill. What I understood was that when they contemplated asking for Dominion powers they had in their minds a united Ireland and not separate parliaments. It might be feasible to give Dominion powers to a united Ireland, but we ought to refuse them to separate parliaments in a disunited Ireland. We have to consider not merely by what means we are likely to conciliate opinion in Ireland with that in Great Britain, but also by what means we are going to conciliate the North with the South. I would like to ask those who support this Amendment if they see in it any means of conciliation between the North and the South of Ireland. It is necessary for the peaceful settlement of this question that we should have a scheme that will not merely bring together the peoples of Great Britain and Ireland, but which will also bring together the peoples in the North and South of Ireland. No scheme that does not aim at both those purposes is a good scheme or one that could ultimately hope to be successful. Will the grant of Dominion powers under this Bill to both the Southern and the Northern Parliaments be the means of bringing together the people of the South and of the North? Will it narrow the bridge which exists between them at the moment? Personally, I am convinced it will not only not do that, but that it will enormously exaggerate the differences between the two sections. Members who have supported this have constantly spoken of Ireland, whereas in reality they are dealing only with one part of Ireland. No one has to-day referred to the effect which the adoption of this proposal would have on the two sections of Irish opinion. I oppose this scheme partly because I recognise it to mean that Ireland ceases to form a portion of the United Kingdom. Ireland, if this scheme were adopted, would cease to send Members to this House. If she had complete fiscal autonomy she would no longer send representatives of any kind to the Imperial Parliament. I oppose the Amendment because it certainly would for the time being completely sever the connection between Ireland and Great Britain, and also because I am quite convinced in my own mind that it would tend to perpetuate the differences now existing between the North and South of Ireland. There is no scheme that we can pass in this House that will be successful unless it helps at one and the same time to conciliate the people of Great Britain and of Ireland and the peoples of Southern and Northern Ireland.

Sir F. BANBURY

I came into the Committee two hours ago when the Minister of Education was speaking and when in fact he had nearly finished his speech. Unfortunately I had not the advantage of hearing the whole of it, but the part which I did hear seemed to me to thoroughly dispose of the Amendment which we have now under consideration. I thought, in fact, of going out of the House because it did not seem possible that any further discussion could arise after the speech of the right hon. Gentleman. I am sure he will acknowledge that I am sincere in this. It was one of the few speeches made from that Bench during the last few years that have been not only able but to the point, and it seemed to me to admit of no argument.

Major HILLS

You only heard the end of it.

Sir F. BANBURY

That is so, but I have no doubt that if I had listened to the whole of it, my impression as to its convincing character would have been greatly strengthened. There was a speech by the hon. Member for Oxford (Mr. Marriott). It is quite true the Noble Lord the Member for Horsham (Earl Winterton) made a very good debating point in regard to it. He possesses an excellent memory, which enabled him to recall the fact that the hon. Member for Oxford City did in a moment of forget-fulness make a slight slip in his argument, and on that alone my Noble Friend founded his argument. Then there was the speech of the hon. and learned Gentleman the Member for Middleton (Sir E. Adkins), who declared that everybody in the country was anxious for this Amendment to pass.

Sir R. ADKINS

What I said was, not everybody, but that large bodies of opinion in England and Ireland favoured it, and I repeat that statement.

Sir F. BANBURY

I will not go into the question of opinion in Ireland, there are so many different sets of opinion there. There are the opinions of the hon. Members from Ulster. There are also the opinions of hon. Members from Ireland who are conspicuous by their absence. But I must not be led into a Third Reading discussion. An hon. Member below the Gangway said that there was a considerable body of opinion in favour of this Amendment, but I venture to say that there is a very considerable and much larger body of opinion against any Amendment of this sort.

What does this Amendment mean? It means, as the right hon. Gentleman opposite (Mr. Macdonald) said, complete separation and nothing else. You cannot possiby grant to a country power to tax itself unless you give complete self-government to that country, and it means complete separation from any other country with which it has been formerly connected. I believe—it is only what I hear myself, and I may be wrong; I may only hear a certain class of opinion—I believe that opinion is hardening against anything which will lead to the separation of Ireland from this country. Then why bring forward an Amendment of this sort, which, if it be carried, must tend to separation? It has been said that we were not touching the Imperial contribution. Supposing, however, that you grant autonomy in taxation to Ireland, and supposing that the South of Ireland says, "We will only raise taxes to a sufficient amount to pay the actual expenses in the South of Ireland," then there will be nothing left for the Imperial contribution. How are you going to get it in that case? You must impose some taxation, unless you do what, apparently, the troops have been doing in some parts of Ireland. They have gone into a bank and transferred to the State the whole of the balances of the Sein Feiners who banked there. That was not all a bad thing to do under the circumstances, but it would be a little drastic, after you have given financial autonomy to Ireland, to take some step of that sort. I hope that, this being the Committee stage, my noble Friend (Lord Winterton) will answer me, and will show me if I am wrong, and how he proposes to obtain the contribution from Ireland to England if this Amendment is carried. An hon. Member on the Front Bench said, "Let us be generous; let the English people be generous to Ireland." I am rather inclined to think that the general feeling in this country, and quite rightly, is that we have been a great deal too generous to Ireland, and that the result of our generosity has been, not thanks, but a request for more. If we are going to let this Bill have any chance of success, it will not be by conceding further measures of independence to Ireland, but by letting Ireland see that, while we will allow her to manage, perhaps, her own internal affairs, we will not allow her to separate herself from this country.

Mr. HASLAM

After having heard the arguments adduced in nearly all the speeches this afternoon, I have come to the conclusion that those who are supporting this Amendment are taking what I may be allowed to call a short-sighted view of the situation. It has been pointed out that to grant to Ireland the right to levy Customs duties different from those of this country is really to make Ireland a foreign country. They would have the power, in those circumstances, of setting up Customs houses hostile to ours. It might he foolish of them to do so, but they would have that power, and they would also be able to search the luggage of passengers coming from England, as is done in foreign countries.

Lieut. - Commander KENWORTHY

They do that now.

Mr. HASLAM

It would be of no practical advantage to Ireland to have the right of levying Customs duties at a different rate from those obtaining in this country. For instance, according to a calculation which I made in 1914, a difference of one penny per lb. in the tax on tea in Ireland, as compared with England, would only represent 6d. per annum per head of the population. Is it worth while to upset the whole of our fiscal system for so small an advantage or disadvantage as that might prove to be? Then, again, the position of the poor in Ireland with regard to these taxes is exactly the same as that of similarly poor people in England, in Wales, or in Scotland. To differentiate the taxes in Ireland might, perhaps, lead to a demand in England, Scotland and Wales for the same privilege. Just imagine the chaos that would exist if we had to have Customs houses between the different parts of the country. I say that we ought to take the example shown by the history of all our Colonies. Where they have had separate Customs duties in the past, they have in every case agreed that the duties ought to be collected from one centre. That is so in Australia, in Canada, I believe in South Africa, and also in that great English-speaking nation, the United States. In fact, wherever the English language is spoken, it is considered to be the proper principle that such taxes as Customs should be levied from one Imperial centre.

I think that for strategic and all other reasons we ought to combat anything that will separate Great Britain from Ireland. The Irish people at the present time really do not know what they want. They are not in a position, quarrelling as they are now, to tell us what policy we should pursue. It is, therefore, our duty to look forward in the light of the lessons that we have learned from past history, and to legislate on such principles that in the long run the people of Ireland will be made happy and contented, rather than in a way that is likely to break up the British Empire. I do not think I am speaking too strongly when I say that there are forces at work, both in Ireland and in other parts of the world, which are endeavouring as far as they can to break up our Empire. Let us, therefore, see that Great Britain and Ireland shall be joined together in a union of such a nature that it must in the future result in the prosperity of both countries.

Mr. LANE MITCHELL

This is the first occasion upon which I have spoken in a Committee of the whole House, and I am bound to say that I do not think very much of the Committee of the whole House, on account of the waste of time that is caused by the repetition of the same kind of speech and argument upon every Amendment that comes forward. The hon. Member for Greenock (Sir G. Collins) is a Scottish home ruler, and he tells as that, when Scotland has Home Rule, if the Chancellor of the Exchequer in the Scottish Parliament has not a Customs duty to collect, his position will not be equal to that of the Treasury representative. I rose chiefly because he characterised the speeches as being, with one exception, all on one side. Those hon. Members who support the Government, however, do not want to waste the time of the Committee by repeating the same thing time and again; they are content to rest the case upon the speech made by the President of the Board of Education. It was said that the Southern Parliament will not function. If that be so, how on earth can it be advisable to hand over to them the collection of Customs duties? If the Northern Parliament does function—and as far as I can make out they do not want this Amendment—there will have to be Customs houses at every point between the six counties. Speaking as practical men, is it not wise that we should suspend any decision, as far as Customs are concerned, until Ireland is prepared to deal with the matter as a whole? The one objection that I always see to this Irish business is that you speak of taking from them £18,000,000 every year as an Imperial contribution. That seems to me to be the greatest difficulty, because it will be looked upon by Irishmen as a tax from us in which they have no interest. There is a great deal in what was said by the right hon Baronet the Member for the City of London (Sir F. Banbury), namely, that if you do not have some of it in hand you will never get it; they simply will not pay any more. I support the view of the Government that it should not be done, at the present time at any rate. I rose simply to make it clear that everyone who has not spoken does not necessarily agree with the Amendment.

7.0 P.M.

Captain ELLIOT

It is a little difficult for a Scotsman to intervene in this Debate after the speech which we have just heard, but I am emboldened to do so by hearing from my hon. Friends on the back Bench that the hon. Member sits for an English constituency. His speech simply resolved itself into an attack on the Committee of the whole House. It may be that there has been tedious repetition of argument in bringing forward this Amendment, but I think it rather hard that an hon. Member, appealing for mercy on the ground that this is his first speech in a Committee of the whole House, should, under cover of that smoke-screen, deliver a poison gas attack. In view of the course which the Debate has taken, and after the swashbuckling attack of the light hon. Baronet the Member for the City of London (Sir F. Banbury), and the logical grasp of the realities of the situation shown by the Unionist Members who have brought forward this Amendment, I feel that the Conservative party is a much superior party to any other in the House of Commons. The fact that several of the speeches against this Amendment have been delivered by Coalition Liberals I think shows that a rose has fallen from their chaplet. The Amendment brings forward a proposition which brings me to the three points: firstly, will it do any good to Ireland; secondly, will it do any harm to Ireland; and, thirdly, will it do any harm to England? The entrusting of Customs and Excise to Ireland has surely this benefit, if it has no other, that it is giving them something real. The tragedy of the Irish situation just now is not that the King's writ does not run in certain parts of Ireland—there have been parts of my own country where the King's writ did not run, and it was no worse for that. The tragedy is that the word of an Englishman does not run in Ireland. They do not believe in the honour of an English gentleman. The word of an Englishman is a pledge which has been taken all over the world. It is a proverbial word of good faith wherever the human family meet together, yet in one part of the world alone, 20 miles from our own shore, it is regarded as an absolutely negligible thing which no reasonable man would trust for a moment. [HON. MEMBERS: "How about the Scots?"] I am talking as an alien in this matter, and I am not saying that the word of a Scotsman is by any moans so preferable as the word of an Englishman.

Lieut. - Commander KENWORTHY

What about a Welshman?

Captain ELLIOT

It would be a hard thing to say anything about the word of a Welshman, with so many eminent Welshmen not only in the House but in the Government. I simply say that the word of an Englishman is not trusted in Ireland to-day.

Sir J. BUTCHER

By whom.

Captain ELLIOT

It is not trusted by the South Irish as a whole, not only by men who are opposed to every institution of England, root and branch; who murder policemen and ambush them, and commit every sort of atrocity—these are not the men whose goodwill I should be sorry to lose—it is the goodwill of the men who fought for us in the War that I am sorry to lose. How can any of us look the men of the 16th Division in the face to-day, or the men of the Irish companies who fought in the War? They distrust our word. That is a statement that I have heard made here by the son of the former Leader of the Nationalist party, who was a man who went out to the War and who was worthy of consideration as an Irishman.

Mr. MOLES

Five battalions of them were Ulstermen. Get an Army List, and see it.

Captain ELLIOT

I do not wish to be drawn into a controversy with Ulstermen. They are too near my own race either to agree with them or to quarrel with them. I am sure no man from Ulster will deny that many gallant men from the South of Ireland volunteered, and that many of those gallant men to-day are heart sick and heart broken at the condition in which the South of Ireland finds itself. This is, in addition, a proof that we do intend to make some difference in the status of Ireland in this Bill. It has been constantly demanded by Irish representatives. Financial automony, and particularly the control of customs and excise was one of the things they always asked for. At any rate, on these two grounds, that the Irish have asked for it, and because everybody has admitted that it would be an act of trust in Ireland, I support it.

The next point is, would it do any harm to England? On this question there can be very little controversy. Suppose, by this Amendment, we were unsheathing a sword; then the hilt of the sword would be in the hand of England and its point would be at the heart of Ireland. If there is one thing of which the world is more afraid than the British sword it is the British business man. When the British sword is unsheathed everybody is afraid; when the British £ sterling is thrown into the balance everybody gives up the struggle. Surely the big business men of England are not afraid of a customs war with the agricultural population of Ireland? The thing has only to be stated to see its impossibility. The economic weapons which we can loose against Ireland are so much more deadly than anything the Irish can loose against England that the campaign would be won almost without a battle. At the present moment we are subsidising Irish coal; we are paying a heavy subsidy to Ireland, which produces no coal; we are giving them coal at the cost price at the pit head. If we took away that privilege and made them buy coal in the open market, we could wring far more money out of Ireland than we should stand to lose by any of the adjustments proposed under this Bill. That is merely one example. The financial struggle of Ireland against England would surely be too difficult to be lightly undertaken; and if it were undertaken then experience would be the only thing that could teach the Irish. We have tried to look after the Irish from the island of England long enough. The mere fact that the population of Ireland fell from 8,000,000 to 6,000,000, and again to 4,000,000 shows that however good we have been in looking after their bank balances, we have not been very successful with their homes and cradles. I was astonished to hear the President of the Board of Education, himself a cultured man, neglect the figures of population and quote bank balances. We might have remembered the famous couplet: I ll fares the land, to hastening ills a prey. Where wealth accumulates, and men decay. What is the use of coming here and saying that the dividends paid through the Bank of Ireland have been a great deal higher this year than a few years ago? At any rate, will this do any harm to England? No. Will it do any harm to Ireland?

Sir F. BANBURY

Yes.

Captain ELLIOT

Is the right hon. Baronet then here to plead the cause of the Irish? They must learn by experience, and experience is the only thing by which they will learn. It is said that this discussion has entirely turned on giving the Customs and Excise to South Ireland, and has entirely neglected the difficulty that that would involve to North Ireland. I would ask North Ireland whether, at this moment, owing to the strain that has been set up in Ireland, the economic ties between Ulster and the rest of Ireland are not snapping one by one? [HON. MEMBERS: "No! "] I only know that in my own home town of Lanark, to our horse fair only last month there came a man who had never been near Scotland for the purchasing of colts before. He had bought his colts at Mullingar, but he said that he would not dare go near Mullingar just now. It is an axiomatic fact that if you have practically a state of war existing between two parts of the country the economic relations will not for ever stand the strain. South and North Ireland cannot, under the present conditions, continue in the easy state of trade in which they have been. Economic conditions are worsening between Ulster and the rest of Ireland, and will continue to worsen unless we come to some arrangement, and in some way gain the goodwill of the moderate men in South Ireland. One of the ways in which we can get these moderate men into the open is by giving over to them power which it will be worth their while to exercise. If the country is governed, as it will be under this Bill, by a nominated Parliament under the Lord Lieutenant, then, surely, if they see that Council exercising real power, such as the control of Customs of Cork and Dublin would give them, the men in the South of Ireland would be much more anxious to get it than if they were asked to pass a vote of thanks to the bountiful and beautiful British Treasury which had given them so much money in the past-There has been so much unreality about the discussion, as though we were not embarking upon this desperate adventure as an attempt to escape from a desperate certainty. We have conditions in Ireland which cannot go on. I am greatly concerned at the fact that we have locked up nearly the whole of our general reserve in little packets in the country, from which we cannot withdraw it except at the risk of seeing the whole country burst violently into flame. There are some things that are difficult to say in the open on the floor of the House of Commons, but can anybody suggest, if grave civil disturbances had broken out in this country, or were yet to break out in this country, on account of some industrial dispute—and there are desperate men in this country who are only too anxious to bring about civil disturbances—that you could withdraw any largo number of the troops from the places where they now are—up and down South Ireland—for any effective use in this country. I ask the Committee to contemplate the danger in which we are, not only in Ireland, but also in England, as a result of the policy which we are at present carrying out in Ireland. I beg them and the Government to see whether it is not possible, on this occasion, to make some concession to the small group who have brought forward this Amendment, and who are inspired, I believe, with a genuine desire for the better government of Ireland. These are men who, in most cases, have a War record which is sufficient to show that they do not desire in any way to weaken the position of Great Britain, either at home or in the councils of the world, and they ask the Government if they cannot, even as a symbol, give us this concession for which we are asking.

Mr. RONALD McNEILL

My hon. Friend has made a very humorous speech which has covered a very variegated field on the value of the word of an Englishman and other topics, the relevancy of which to Customs and Excise was not exactly conspicuous. Ho said the only thing that was as much feared as the British soldier was the British business men, and he went on from that proposition to infer that the British business man ought not to be scared by a Customs barrier either between Great Britain and Ireland or between the North and South of Ireland. I do not suppose for a moment he would be frightened of anything of the sort, but I would ask him, if the British business man is the formidable creature that he is, what is it that has made him so? If he is the formidable crature that he is it is because he has learnt to conduct his business upon sound principles, and it is because he does conduct his business on sound principles and has made himself formidable by doing so that I believe the great majority of British business men would be unalterably opposed to the proposal to set up a Customs barrier either between different parts of Ireland or between Ireland and Great Britain. This is entirely an economic proposition, and I think we should do well to leave out of account all those irrelevant questions which have been dragged into it. I have one disadvantage perhaps in discussing this matter. I have to speak in this House as a representative not of Irish, but of British taxpayers, and I have to have regard to the interests of British taxpayers. But if I were to go to my constituents, and were to tell them it was a matter in which the British taxpayer was to be generous I should, no doubt, be met by the objection on the part of my constituents, "It is all very well for you to say the British taxpayer—that is us—ought to be generous to Ireland, but unfortunately for you you are an Irishman yourself," and if I regard it, as I am bound to do, from the point of view of those whom I represent, I say this is a matter upon which the very last thing that Irishmen ought to demand is any special generosity at the hands of the British taxpayer.

I go further. I think it was the Prime Minister who the other day made a speech upon the contrast which would De drawn, and naturally drawn, between the taxation of this country and the taxation in Ireland if complete fiscal autonomy were conceded to Ireland. I am afraid the Irishman is not particularly popular in this country at present, in view of the record of the War, and I do not believe on platforms in this country it would be at all a popular proposition to say, "It is quite true you have to pay Income Tax at 6s. in the £, and that you have to pay enormous duties upon your tobacco, sugar, tea, wine, and beer, but the Irishman, who at all events did not surpass you—I will not put it higher than that—in the record of the War is to be exempt from a very large proportion of his fair share in paying for the debt incurred by the War, and he is to emerge from that period, in virtue of his War record, in a privileged financial position." I do not think for a moment that is a proposition which British taxpayers and their representatives in this House will tolerate for a moment. My hon. Friend who spoke from the Front Bench below the Gangway (Sir Godfrey Collins) put forward a most extraordinary proposition in support of the Amendment. He said, if the Bill as it stands becomes law, the Prime Minister or the Chancellor of the Exchequer in Southern or Northern Ireland would not have as much power as any ordinary mayor of an English city. But does my hon. Friend realise that he would have as much power as the Chancellor of the Exchequer of Ontario or of New South Wales, or any other of the great component States that make up our Dominions? Can anyone seriously allege that the position which the Parliament In North or South Ireland would occupy is not sufficiently great to attract the allegiance of its people merely on the ground my hon. Friend emphasised, that it is actually not to have greater powers than those great States which for a long time were sovereign Colonies until they were brought into the federation of which they now form part. Therefore, on that aspect of the case I think the advocates of the Amendment have really no ground to stand upon.

The right hon. Gentleman opposite (General Seely) strongly appealed to the Committee on the ground that these financial proposals, as they now stand, are repugnant to five-sixths of the Irish people. He said although as an economist he was not in favour of the proposals contained in this Amendment, nevertheless he was willing to depart from his economic principles if by doing so he could make the Bill acceptable to these five-sixths of the Irish people. Does he or any other hon. Member seriously imagine that the carriage of this Amendment would alter in the slightest degree the attitude of those five-sixths of the Irish people to this Bill.

Earl WINTERTON

Then drop the Bill.

Mr. MCNEILL

That is another proposition.

Earl WINTERTON

No. it is the same.

Mr. MCNEILL

That is not at present before the Committee. The proposition we are now debating is the Amendment of my hon. and gallant Friend (Lieut.-Colonel Guinness). On economic grounds, on sentimental grounds, and on grounds of justice to the people of Gt. Britain, as well as Ireland, I hope the Government will persevere in resisting the Amendment.

Mr. STEWART

I listened to the opening of the Debate by my hon. and gallant Friend with great interest. He stated his case well. He spoke about the depopulation of Ireland and its being in an anæmic condition, owing to having blood squeezed out of it by the British Government. But although Ireland may not have as many people to-day as it had in days gone by, those people are largely in Great Britain, having come here for their own ends, and are deriving very great benefit from the transfer of their labour to this island. There are probably more Irishmen in Glasgow and the neighbourhood than in Belfast, and I am sure in Lancashire there are a great many more than there are in Dublin. Therefore that Ireland should show a little depopulation I think need not be taken too sadly to heart, because the people are here for their own benefit. I thought the Minister for Education had demolished the case altogether. I had to go out of the House for a time, and when I came back I found that everyone who had spoken had spoken in favour of the Amendment. I therefore take the opportunity of asking the Government to resist firmly this Amendment. It is well meant, and I think the Gentlemen over there, who have studied the Home Rule Bill very carefully and honestly, and have done their best to make a good arrangement between Ireland and Great Britain, in this case at any rate are adopting rather an an sound course. I imagine this is still the United Kingdom. The right hon. Gentleman (Mr. Murray Macdonald) drew attention to that fact, and he has been on the Speaker's Committee on Devolution. This proposal would make it cease to be a United Kingdom altogether.

We might take an example from our enemies. The Germans used to have taxes in all their different States. They stopped that and united into one. In the United States each individual State is a sovereign State, but they do not go in for giving Customs to each individual State. I have seen it stated by those people who particularly affect support of the League of Nations that it would be very much better that a great many of these new States which are being called into existence in the East of Europe should have no Customs barriers between them at all. If that is a fair proposition why should we willingly, and with our eyes wide open, make Customs barriers within the very restricted area of the United Kingdom? My own feeling is that there are elements of danger in such a proposition, and there would be various quarrels between us and Ireland and between the two Parliaments in Ireland, and so on, and little duties put on here and there which would make for friction and create points of discord. In addition to that we may imagine that a whole mass of petty officials created in Ireland would cause a great leakage of public money and would make for patronage and lobbying and all sorts of things, and I think the Government would be well advised not to en-courage anything of that sort. Those who thought that the friendship of Ireland could be bought with money were pursuing a phantom. I think the Irish are extremely well treated financially in this Bill. The British taxpayer, for the defence of the United Empire, has to pay £14 13s. 4d. a head against £4 2s. 6d. or something of the kind in the Home Rule Bill for the Irish taxpayers. They do not like it. They do not realise it for the moment, but when they do they do not like it. It is not fair to our people and to our constituents that we should assent to any alteration in the Home Rule Act whereby the people of Great Britain have to bear this enormous burden. They fought and won the War and now they are paying for it. I think the Government would be well advised, in resisting this proposal.

Captain COOTE

I rise to try to re-move, if I may, the slur which was cast upon the escutcheon of Coalition Liberals by the hon. and gallant Gentleman (Captain Elliot). I support this Amendment as earnestly as I can, and indeed, I took some hope that the Government might perhaps be wavering when I saw the hon Member (Mr. McNeill) come and sit behind the Prime Minister and thence rise to make his speech. I should like to take up one of his points—the economic point. He said this was an economic question. He says we cannot go back to our constituents and ask them to agree that Irishmen should be put economically on a better footing than English and Scotch taxpayers. Has he ever considered, and has the Government considered, what it is costing thorn to collect their revenue to-day? That is the whole point. There is the maintenance of 50,000 soldiers in Ireland and there is the maintenance of an extra special police force. There is a vast payment by way of compensation for the destruction of property. Does that count for nothing, and is it not worth something to infuse a little generosity into a Bill which may have some possible chance of putting an end to that deplorable state of affairs? I should not support this Amendment if I did not believe that it is one of the few remaining chances that we have of putting an end by consent to that state of affairs.

Let me turn to another argument which has been very frequently advanced and which I do not think has yet been answered, I moan the question whether this Amendment would lead to the establishment of a Customs barrier between Ireland and this country. That, I hope, was sufficiently answered by my hon. and gallant Friend (Captain Elliot). What I would ask those who oppose the Amendment is to consider the question of the possibility of the establishment of a Customs barrier between the North and South of Ireland. Is it seriously to be considered that that would be a possibility under this Bill? [HON. MEMBERS: "Yes! "] If it is a possibility, then if such a Customs barrier is established it would bring the date of Irish union, for which everybody has professed such a longing, very much nearer, because the people in the North and the people in the South would not tolerate such a condition of affairs.

I should like to refer to a question which I do not think has been touched upon, and that is as to how best we can accelerate the date of Irish union. I believe that the passing of this Amendment is one of the few real means whereby we can accelerate the date of Irish union, and I ask the President of the Board of Education to note that this Amendment is not put forward by those who malignantly, or for some special reason, absent themselves from the discussion on this Bill. It is put forward by those who have consistently shown an earnest and eager desire to further the Government's policy as regards Ireland, and who believe, at least I believe, that the germ of a true settlement is contained in this Bill. That is why I am so distressed and so grieved to see the Government throwing away a chance and a weapon which they have in their own hands. If I did not believe that by refusing this Amendment we are destroying one of the fairest chances which the Government's own plan gives them, I should not be supporting the Amendment. It scorns to me that this Amendment really docs raise in a concrete form the old difference between the Liberal point of view and the Tory point of view with regard to responsible government. [HON. MEMBERS: "Oh, oh!"] I am not going to insult any hon. Member who may have Tory traditions, but there is one school of thought which says, "We believe that nobody should be given autonomy or responsibility until they have been educated up to it." There is another school of thought which says, "We do not care upon what stage of political advancement people may be, the best way to make them competent to exercise self-government is to give them responsibility and to make them exercise it and find out by their own mistakes." The latter, I submit, is the Liberal point of view, and that is why I rather resent the slur which was put upon Coalition Liberalism by my hon. and gallant Friend. Surely that is a very valid and concrete difference. What I may call the Liberal point of view has been admirably exemplified by many incidents m history. Let me refer to one which has a direct bearing upon this Amendment. When the British North America Act was passed in 1867, a very few years after very grievous disturbances had taken place in that country, there was a deliberate provision in that Act that British Imperial troops should occupy two ends of the country, and that beyond those, Halifax and Esquimo, there should be complete fiscal and financial autonomy. I am not anxious to put into the hands of any Sinn Feiner or into the hands of the Irish Republican Army authorities any weapon which they can possibly use to the detriment of this country. I am not one of those who believe that they should be allowed to shirk the responsibility which Ireland as a part of this Empire has for the War debt. I submit that there is a better way within the limits of the Government policy whereby these very desirable ends may be achieved, whereby on the one hand we can obtain, with a measure of consent from Ireland herself, an acknowledgement of this responsibility, which you will never get if you go on as you are doing, and, on the other hand, you will be able to do so without in the very least, as it appears to me—and I have heard no argument which has convinced me to the contrary—endangering those permanent bonds between Ireland and this country which I, for one, should be the last to wish to see her destroyed.

Lieut.-Commander KENWORTHY

I have listened to practically the whole of the speeches this afternoon and there has been a good deal of talk about Liberals and Conservatives, Coalition Liberals and Tories, and the rest of it, and it seems to me remarkable that it should be possible in this House as at present constituted to get a party of people under 50 and a party of people over 50. I do not say that a Government of the under fifties would be any better, and I do not say they would be right, but there is a distinct cleavage of opinion between the two sections of thought, and anybody who looks through the OFFICIAL REPORT to-morrow will see what I mean. I want to put one point of view which is rarely touched upon, but which has some bearing in this controversy, and that is as to the whole fiscal future of Ireland. Suppose that the improbable event happens, and that the two Parliaments in Southern and Northern Ireland are set up and that they function. I put this point of view to hon. Members from North East Ulster. You will have in Ulster, very probably, a succession of Radical or Labour governments. Normally speaking, the industrial part of Ulster is one of the most politically advanced and progressive parts of the country. I am leaving out of account the normal political differences and the religious differences. In the South you will have a government resting largely on a majority of small peasant proprietors, and those men are by nature Conservative. Some hon. Members may say that they are reactionary. At any rate they are Conservatives. Farmers all over the world are farmers, and they are mostly Conservatives. When they are smallholders they are more Conservative and when they are Catholics—I say this with all respect to my Catholic friends—they are even more Conservative. You see that in Bavaria, in Hungary and in Russia. In Russia it is the Greek Church. The present proprietors in Russia if only they could be left alone would probably be more Conservative than the peasant proprietors of France.

You would have this state of affairs in the South and West of Ireland, that there would be Conservative Governments, and the taxation would be conservative. There would be no talk about capital levies, or anything of that sort. In the North you would have, on the other hand, advanced Radical, Labour, or even Socialist Governments; at any rate, very progressive Governments. The Government in the North would attack the vested interests, the great wealthy industries, and you would have the captains of industry, the great shipbuilders, and the great linen spinners, and the great business men generally of the north-east of Ulster drawn politically towards the peasantry and their representatives in the Southern Parliament. That, I believe, will bring about union in Ireland. You will have the peasants in the South naturally anxious, in spite of the Radicalism of the north-east of Ulster, to see unity in Ireland. I believe you would see the great captains of industry in the north-east swallowing union with the Southern Parliament in order to stabilise the Government and, as they hope, to bring about a more conservative fiscal policy. If His Majesty's Government are sincere—I believe the right hon. Gentleman who replied for the Government, although he disappointed so many of us, is sincere—in wishing to see a united Ireland, I commend this view to them. I think it will bring about unity in the long run, and that is to give the fiscal autonomy which this Amendment partly brings about.

I entirely agree with what the right hon. Gentleman (Mr. Fisher) said about the undesirability of putting up economic barriers in regard to the narrower point of view of Customs, and I hope he will bring that view forward in the Cabinet when the Dumping Bill is under discussion. One of the curses in Europe to-day is the fact that the great economic units of the Austrian, German, and Russian Empires have been broken up, and artificial Customs barriers have been set up between the new States. I am not comparing the case too closely because we are not discussing now an independent Ireland, but I am pointing out that this state of things has brought about terrible results in Europe to-day. The Amendment suggests giving power to set up a Customs barrier to the Irish Parliaments. That hangs on the larger question of fiscal autonomy. We do not want to see fresh barriers set up; on the contrary, I want to see them swept away, but I would rather see them cut down as low as possible or swept away by the free consent of the Parliaments, otherwise, if you take away their right to put up these Customs barriers, they will always be wanting to put them up. The fact that Ireland depends so much upon us for coal is an important fact. She also depends upon us for iron. There is a little coal in Ireland, and there is peat which can be exploited much more than it is at the present time, because we have scarcely begun to touch peat commercially, but there is practically no iron in Ireland.

Major O'NEILL

Ireland exports iron ore to this country.

Lieut. - Commander KENWORTHY

The right hon. Member for Duncairn (Sir E. Carson) is my guide in this matter. The other evening he was justifiably boasting of the great success of the shipbuilding yards in Belfast, and he said that their success was even more remarkable by the fact that the whole of the iron ore had to be imported.

Mr. MOLES

Steel.

Lieut.-Commander KENWORTHY

I stand corrected. I am entirely wrong. At any rate, the whole of their steel comes from this country. The fact that Ireland is so economically dependent upon this country is a safeguard against these Customs barriers which it will be most unfortunate to see set up between the two countries. Their not having the liberty to set up such barriers, if they so desired, would have the very effect which we wish to avoid. There is great irritation in Ireland about the export of cattle. I understand that they are not allowed to export directly to the continent. For various reasons their cattle has to come here, and I know from my friends who write to me from Ireland, Protestant farmers from the North East of Ulster, that that is a very real grievance. Those are the sort of things that irritate and embitter relationships, and for that reason I am most disappointed that the Government have not been able to accede to this Amendment. The hon. Member for the Wirral Division of Cheshire (Mr. Stewart) said it was no good giving Ireland money; that the more she gets the more she wants. We propose to take £18,000,000 a year from Ireland. I wonder whether hon. Members over read the Irish newspapers. I do not mean the Nationalist organs. Do they ever read the "Irish Times?" Did they read a leading article in the "Irish Times" of the 15th of this month, in which that great Unionist organ, or that one-time Unionist organ, stated that Ireland was divided into two sections—the Republicans and the Dominion Home Rulers. I suppose they know what they are talking about, and if that is the case, what is the use of our making proposals such as have been made from various quarters of this House? We cannot go back to the union with Ireland. We have got to give a measure of self-government, and the more generous it is the safer for this country, and the better its chance of support in Ireland.

Major BARNES

Two dangers have been apprehended from the acceptance of this Amendment. First, that the Imperial contribution will be imperilled, and, second, the setting up of customs barriers. But these powers are to be given in the first place to the Parliament of Northern Ireland, and there is no danger that the Imperial contribution from Northern Ireland will be imperilled. Also, there is no danger, if Northern Ireland gets these powers, that she will set up Customs barriers. The relationship between Northern Ireland and this country is such as to make that impossible. Then, these powers are to be given to the Parliament of Southern Ireland. We know that no Parliament in Southern Ireland is going to be set up except under the conditions prescribed in the Amendment of the First Lord of the Admiralty: There is going to be no Parliament in the South of Ireland composed of Sinn Feiners. It will be a Parliament of moderate men who will take the Oath of Allegiance. There is no reason to fear, with such a Parliament, that the Imperial contribution from Southern Ireland will not be paid or that Customs barriers will be set up. Failing that Parliament, we are to have a nominated Parliament. There is no reason to expect that a Parliament nominated by the Crown would refuse to make an Imperial contribution or would set up Customs barriers. It is evident, therefore, that the granting of Customs and Excise under these Amendments cannot lead to the dangers that have been apprehended. On the other hand, these Amendments offer a great inducement to work the Bill. That is a result for which it is worth while to take a risk, and if as a result of being granted Customs and Excise Southern Ireland is prepared to accept and work the Bill, the gain to the Government and to this country will far outweigh any possible dangers that may arise.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 166; Noes, 37.

Division No. 343.]	AYES.	[7.50 p.m.
Agg-Gardner, Sir James Tynte	Gilmour, Lieut.-Colonel John	Munro, Rt. Hon. Robert
Allen, Lieut.-Colonel William James	Green, Joseph F. (Leicester, W.)	Murray, Major William (Dumfries)
Amery, Lieut.-Col. Leopold C. M. S.	Greenwood, William (Stockport)	Neal, Arthur
Archdale, Edward Mervyn	Gregory, Holman	Newman, Sir R. H. S. D. L. (Exeter)
Baird, Sir John Lawrence	Greig, Colonel James William	Nicholson, Reginald (Doncaster)
Baldwin, Rt. Hon. Stanley	Gritten, W. G. Howard	Nield, Sir Herbert
Balfour, George (Hampstead)	Guest, Capt. Rt. Hon. Frederick E.	Oman, Sir Charles William C.
Banbury, Rt. Hon. Sir Frederick G.	Hamilton, Major C. G. C.	O'Neill, Major Hon. Robert W. H.
Barnett, Major R. W.	Hanna, George Boyle	Parker, James
Barnston, Major Harry	Hanson, Sir Charles Augustin	Parry, Lieut.-Colonel Thomas Henry
Barrie, Rt. Hon. H. T. (Lon'derry. N.)	Harmsworth, C. B. (Bedford, Luton)	Pearce, Sir William
Bell, Lieut.-Col. W. C. H. (Devizes)	Haslam, Lewis	Peel, Col. Hn. S. (Uxbridge, Mddx.)
Bellairs, Commander Carlyon W.	Henderson, Major V. L. (Tradeston)	Perring, William George
Benn, Sir A. S. (Plymouth, Drake)	Henry, Denis S. (Londonderry, S.)	Pinkham, Lieut.-Colonel Charles
Betterton, Henry B.	Herbert, Dennis (Hertford, Watford)	Pollock, Sir Ernest M.
Bigland, Alfred	Hewart, Rt. Hon. Sir Gordon	Pratt, John William
Boscawen, Rt. Hon. Sir A. Griffith	Hope, James F. (Sheffield, Central)	Purchase, H. G.
Breese, Major Charles E.	Hope, Lt.-Col. Sir J. A. (Midlothlan)	Randies, Sir John S.
Brittain, Sir Harry	Hopkins, John W. W.	Raw, Lieutenant-Colonel N.
Britton, G. B.	Hopkinson, A. (Lancaster, Mossley)	Rees, Capt. J. Tudor- (Barnstaple)
Broad, Thomas Tucker	Horne, Edgar (Surrey, Guildford)	Reid, D. D.
Brown, Captain D. C.	Horne, Sir R. S. (Glasgow, Hillhead)	Richardson, Alexander (Gravesend)
Brown, T. W. (Down, North)	Hotchkin, Captain Stafford Vere	Robinson, S. (Brecon and Radnor)
Bruton, Sir James	Hume-Williams, Sir W. Ellis	Robinson, Sir T. (Lanes., Stretford)
Buckley, Lieut.-Colonel A.	Hurst, Lieut.-Colonel Gerald B.	Samuel, Samuel (W'dsworth, Putney)
Burn, Col. C. R. (Devon, Torquay)	Insklp, Thomas Walker H.	Sanders, Colonel Sir Robert A.
Burn, T. H. (Belfast, St. Anne's)	Jephcott, A. R.	Sassoon, Sir Philip Albert Gustave D.
Butcher, Sir John George	Jodrell, Neville Paul	Seager, Sir William
Cayzer, Major Herbert Robin	Johnson, Sir Stanley	Seddon, J. A.
Chamberlain, Rt. Hn. J. A. (Birm. W.)	Jones, Sir Edgar R. (Merthyr Tydvil)	Shaw, William T. (Forfar)
Chamberlain, N. (Birm., Ladywood)	Jones, J. T. (Carmarthen, Llanelly)	Shortt, Rt. Hon. E. (N'castle-on-T.)
Churchman, Sir Arthur	Kerr-Smiley, Major Peter Kerr	Simm, M. T.
Clay, Lieut.-Colonel H. H. Spender	King, Captain Henry Douglas	Sprot, Colonel Sir Alexander
Cobb, Sir Cyril	Law, Rt. Hon. A. B. (Glasgow, C.)	Stanier, Captain Sir Seville
Cohen, Major J. Brunei	Lewis, Rt. Hon. J. H. (Univ., Wales)	Steel, Major S. Strang
Colvin, Brig.-General Richard Beale	Lewis, T. A. (Glam., Pontypridd)	Stewart, Gershom
Coote, William (Tyrone, South)	Lloyd, George Butler	Sturrock, J. Leng
Craig, Capt. C. C. (Antrim, South)	Lloyd-Greame, Major Sir P.	Taylor, J.
Craig, Colonel Sir J. (Down, Mid)	Locker-Lampson, Com. O. (H'tingd'n)	Thomas-Stanford, Charles
Craik, Rt. Hon. Sir Henry	Lonsdale, James Rolston	Thomson, Sir W. Mitchell- (Maryhill)
Davidson, Major-General Sir J. H.	Lorden, John William	Townley, Maximilian G.
Davies, Alfred Thomas (Lincoln)	Loseby, Captain C. E.	Tryon, Major George Clement
Davies, Thomas (Cirencester)	Lynn, R. J.	Whitla, Sir William
Davies, M. Vaughan- (Cardigan)	Macdonald, Rt. Hon. John Murray	Wild, Sir Ernest Edward
Dixon, Captain Herbert	M'Lean, Lieut.-Col. Charles W. W.	Wills, Lieut.-Colonel Sir Gilbert
Donald, Thompson	Macnamara, Rt. Hon. Dr. T. J.	Wilson, Daniel M. (Down, West)
Edwards, Major J. (Aberavon)	McNeill, Ronald (Kent, Canterbury)	Wise, Frederick
Eyres-Monsell, Commander B. M.	Marks, Sir George Croydon	Wood, Sir H. K. (Woolwich, West)
Falle, Major Sir Bertram G.	Marriott, John Arthur Ransome	Worsfold, Dr. T. Cato
Fell, Sir Arthur	Mason, Robert	Worthington-Evans, Rt. Hon. Sir L.
Fisher, Rt. Hon. Herbert A. L.	Mitchell, William Lane	Yate, Colonel Charles Edward
Ford, Patrick Johnston	Moles, Thomas	Young, Sir Frederick W. (Swindon)
Forrest, Walter	Molson, Major John Elsdale	Younger, Sir George
Foxcroft, Captain Charles Talbot	Mond, Rt. Hon. Sir Alfred M.
Fraser, Major Sir Keith	Morden, Colonel H. Grant	TELLERS FOR THE AYES.—
George, Rt. Hon. David Lloyd	Moreing, Captain Algernon H.	Lord E. Talbot and Mr. Dudley Ward.
Gilbert, James Daniel	Morison, Rt. Hon. Thomas Brash

NOES.
Acland, Rt. Hon. F. D.	Hayward, Major Evan	Rodger, A. K.
Adkins, Sir W. Ryland D.	Herbert, Hon. A. (Somerset, Yeovil)	Scott, A. M. (Glasgow, Bridgeton)
Barnes, Major H. (Newcastle, E.)	Hills, Major John Waller	Seely, Major-General Rt. Hon. John
Bennett, Thomas Jewell	Hoare, Lieut.-Colonel Sir S. J. G.	Shaw, Hon. Alex. (Kilmarnock)
Birchall, Major J. Dearman	Hogge, James Myles	Thomson, T. (Middlesbrough, West)
Briant, Frank	Holmes, J. Stanley	Wallace, J.
Coote, Colin Reith (Isle of Ely)	Johnstone, Joseph	White, Charles F. (Derby, Western)
Davies, Sir William H. (Bristol, S.)	Kenworthy, Lieut.-Commander J. M.	Williams, Aneurin (Durham, Consett)
Elliot, Capt. Walter E. (Lanark)	Locker-Lampson, G. (Wood Green)	Wood, Major M. M. (Aberdeen, C.)
Entwistle, Major C. F.	Malone, Major P. B. (Tottenham, S.)	Young, Lieut.-Com. E. H. (Norwich)
Fremantle, Lieut.-Colonel Francis E.	Murray, Dr. D. (Inverness & Ross)
Galbraith, Samuel	Newbould, Alfred Ernest	TELLERS FOR THE NOES.—
Glanville, Harold James	Ormsby-Gore, Captain Hon. W.	Lieut.-Colonel Guinness and Earl Winterton.
Graham, W. (Edinburgh, Central)	Raffan, Peter Wilson

Major HILLS

I beg to move, in Subsection (1), to leave out the words, "and excess profits duty."

This Amendment raises a point which is small in comparison with what we have been discussing, but is still important. The Bill reserves to the Imperial Parliament Excess Profits Duty, and I am going to submit a simple argument why that tax should be conferred on the two Irish Parliaments. The tax falls with very different incidence on the two countries. It is mainly a tax which applies and is intended to apply to industry, and therefore in that view hardly affects Ireland at all. That being so, I do not see why we should go on collecting it. But a further explanation is that agriculture is further excluded from Excess Profits Duty. No doubt you will get a certain amount of duty from the big businesses of the North-East of Ireland, but the vast area of Ireland is entirely free from liability. No farmer pays this tax. The larger part of Ireland is entirely agricultural. Therefore I do not see why you should go to the trouble and expense of collecting a tax that will not bring in a great deal of revenue and will be troublesome to collect. And every single tax which you do collect and bring over here will be regarded in a hostile spirit by the South and West of Ireland.

8.0 P.M.

Then the tax is entirely a temporary tax. It is a war tax. It is going to come off in this country. The Chancellor of the Exchequer told us he needs to substitute another duty, and I do not see why a temporary tax which will be off, I suppose, next year should be included in the reserved taxes and remain part of the financial system. There is a further and a much stronger reason. In the financial provisions of the Government's scheme in March last a sum of £2,000,000 is credited to the two Parliaments of Ireland and it expressly says that the Excess Profits Duty has been excluded from the statement and this £2,000,000 is inserted to represent the Irish yield of whatever permanent tax may take its place. You have not given Ireland credit for Excess Profits Duty. The tax that will take its place is the Corporation Profits Tax, and by an Amendment that stands in the name of my right hon. Friend he expressly includes the Corporation Tax in the reserved taxes. Therefore, you are imposing Excess Profits Duty on Ireland and not giving Ireland the credit for it. I am sure that is a mistake. The only part of Excess Profits Duty that we as a British Exchequer are entitled to is the unpaid balances. As the Committee knows, Excess Profits Duty is not paid in the year for which it is leviable, and there are large unpaid balances. I agree that those ought to form part of what we get. But the Bill goes far beyond that. The share of the Northern and Southern Parliaments of the reserved taxes will not be increased by a single penny of Excess Profits Duty. I am quite sure that that was not intended. Except for the unpaid balances which, on the passing of the Act, are due to the Imperial Exchequer, I appeal to the Government to omit Excess Profits Duty altogether.

Sir LAMING WORTHINGTON-EVANS (Minister without Portfolio)

I think my hon. and gallant Friend has moved this Amendment under a misapprehension as to the facts regarding Excess Profits Duty and Corporation Profits Tax. If he will refer to White Paper No. 707, which shows the estimates for the later period, he will find that the reserved taxes, which figure in the revenue statement at £43,336,000, do not include Excess Profits Duty. That figure is made up without taking into account Excess Profits Duty at all. Excess Profits Duty is entirely outside this account, but included in these reserved taxes is the share of Corporation Profits Tax. Excess Profits Duty is treated outside this account as a temporary receipt retained by the Imperial Exchequer for temporary war purposes. It has not been overlooked in any way. The principle has been adopted, rightly or wrongly, of retaining that as Imperial revenue to meet special war expenditure, such as the bread subsidy and other things of that sort which do not appear in the estimate of expenditure. The receipt has been excluded from the revenue side of the account, and the expenditure for which it is allocated has been excluded from the expenditure side of the account.

Let me deal with the Amendment on its merits. My hon. and gallant Friend asks that Excess Profits Duty should no longer be a reserved tax, and should be passed over to the two Irish Parliaments, and it is said that if they like to levy it they should be entitled to levy it. The tax was put on for the purpose of meeting an Imperial expenditure arising out of the War; it is in the nature of a reserved tax and should any contingency arise which calls for some special taxation, it is there always as a reserved tax. It is not intended as an ordinary peace-time tax, and therefore it is not intended to pass it over to the Parliaments for their ordinary revenue purposes. As a matter of fact it would be extremely difficult for them to deal with it, even if they were entitled to do so. It is levied through the income tax authorities, dealt with for practical purposes on income tax accounts, and if two authorities were concerned, one in dealing with Income Tax and another in dealing with Excess Profits Duty, both intended to be levied on the same basis, you would have one authority coming to one decision with regard to Income Tax, and another authority coming to a different decision upon the same facts with regard to the other tax. You would have such a state of chaos that the taxpayer would be rightly entitled to complain. There is another reason which is not less important from the English taxpayers' point of view. The Excess Profits Duty comes in front of the Income Tax. If the two Parliaments chose to levy the Excess Profits Duty, the Income Tax, which is a reserved tax under the Bill, might be adversely affected. Therefore I am unable to accept the Amendment.

Lieut.-Colonel GUINNESS

I agree there is a great deal of force in the right hon. Gentleman's contention that the Excess Profits Duty and Income Tax must be levied by the same authority. Obviously it would be most inconvenient to have two lots of officials going over the accounts of companies and individuals. We have put down this Amendment because we hope that the Government will transfer the more important tax, the Income Tax and Super-tax, to the Irish Parliament. The argument that the right hon. Gentleman used is fully realised by us, and it is largely because we feel that the two taxes hang together that we felt it necessary to raise this question. Apart from this fact, I think the Mover of the Amendment is to be congratulated on raising the matter, for it has produced a very interesting bit of information. We imagined that the financial statements that have been published in the form of White Papers disclose the true balance sheet of the future Irish financial position, and that they keep nothing back from the public knowledge. Now, quite by the way, it appears that this matter of £2,000,000 does not appear on either side of the account.

Sir L. WORTHINGTON-EVANS

It is in the White Paper.

Major HILLS

Corporation Tax, not Excess Profits Duty.

Sir L. WORTHINGTON-EVANS

It is in words on page 3. Excess Profits Duty is entirely excluded along with the broad subsidy and any other War services which can be treated as Irish services under the Bill.

Lieut.-Colonel GUINNESS

It appears in the White Paper, but it is not credited to Ireland with the proceeds of the other reserved taxes after the deduction of the Imperial contribution.

Sir L. WORTHINGTON-EVANS

It is stated in the White Paper.

Lieut.-Colonel GUINNESS

Whether stated or not, the point is that, in fact, this £2,000,000 is an addition to the Imperial contribution. I do not want to misrepresent the right hon. Gentleman. We are in a fog about it. We understand that this £2,000,000 is quite apart from the Imperial contribution. It is going to be retained over and above it. Therefore the Imperial contribution is at least £20,000,000. We were told that the Imperial contribution was the amount which Ireland could spare, and, anyhow, we had a great case made by the Government that they were acting very generously. I think it is well that my hon. and gallant Friend should have elicited this information I hope we shall be told whether any other taxes are treated in the same way. I do not know why it should be considered natural, because the Excess Profits Duty is a war tax. After all, most of our taxation is war taxation. The increased Income Tax, increased Customs Duty, and so forth are war taxation. It is very remarkable that the Government have never thought it necessary to explain this matter previously. I think Excess Profits Duty is a most un-suitable duty for a cummunity in the condition in which the Irish arc. It may be a suitable tax for large businesses and great commercial concerns which keep elaborate accounts, but it is a tax which imposes enormous trouble on individuals who are trading on their own account, and it is a tax which rather encourages people who have not a good accountancy system to resort to dishonest methods.

Amendment negatived.

Sir L. WORTHINGTON-EVANS

I beg to move, in Sub-section (1), after the word "duty" ["Excess Profits Duty"], to insert the words "Corporation Profits Tax and any other tax on profits."

This is really a consequential Amendment, and I hope it will be accepted without any further statement from me now.

Major HILLS

The country ought to know that we are taking a tax from Ireland for which Ireland has not got credit.

It being a quarter-past Eight of the clock, and there being Private Business set down by direction of the Chairman of Ways and Means under Standing Order No. 8, further Proceeding was postponed without Question put.