§ Upon the question for the third reading of the Bill for charging the Loan for the service of the year, and the amount of Exchequer Bills, funded in the present session of parliament, upon the Duties granted to his majesty during the War,
Lord Viscount Sidmouthrose to make some observations, which, from a regard to the convenience of others, he had reluctantly deferred till the present stage of the bill.—It had indeed, he said, been painful to him to refrain so long from expressing the feelings of astonishment and alarm with which he contemplated the enormous amount of our expenditure, and the delusive and improvident means by 906 which it was to be defrayed. The amount, exceeding by about five millions that of the last year, and by more than nine millions that of the year 1807, far surpassed whatever the exaggerations of the timid, or the factious, had at any period foreboded; and the means of defraying it by taking one million from the war taxes for the purpose of supplying the interest of the loan, were directly at variance with the system of financial policy adopted by parliament at the renewal of the war, and most injurious in their tendency to the future prospects of the country.—The contest, in which we were engaged, was evidently one of indefinite duration. To this view of it, founded on the circumstances under which it took place, and on the boundless ambition, and known character of the ruler of France, he had endeavoured in the years 1803 and 1804, to adapt our expenditure, and the system by which it was to be provided for. The former, though complained of at the time, as being restricted within the limits of a too rigid œconomy, had nevertheless been found fully sufficient, not only, for the purpose of complete domestic security, but for more extensive foreign conquests than had ever been made in the first year of any former war: and the latter, the objects of which were to prevent, by the operation of the sinking fund, combined with the imposition of war taxes to an unexampled amount, any considerable addition to the public debt, or permanent taxes, was carried into immediate effect by the firmness of parliament, seconded by the ardent zeal and fortitude of the people. The conviction had become universal, that the renewal of war was solely occasioned by the restless and insatiable ambition of the enemy, and accordingly the truth of what was said by Mr. Burke, that the pecuniary moans of a country, which were accessible by taxation, consisted not merely of what it possessed, but of what it would consent to pay, was never more completely illustrated than at that memorable period. War taxes to the amount of upwards of twelve millions, were imposed by parliament with little, or no opposition in either house, and submitted to without complaint by the people; although an addition of near one hundred millions to the public debt, and of near five millions to the permanent taxes had been made in the year 1802, for the purposes of funding the sum, for which the income tax had been mortgaged, and of 907 winding up the arrears, of the war. That this system was eminently successful, was manifest from the fact, that, with a loan of ten millions only, the provision for the first year of the war proved not only adequate to its expenditure, but, as appeared from a resolution passed by the house of commons after he had quitted office, to be also sufficient, (supposing the war had then terminated,) to liquidate the whole of the funded and unfunded debt incurred during that year, and to leave a surplus of upwards of two millions to the disposal of parliament.—In the subsequent year (1804) the loan was for no more than ten millions: but as an increase of expence had taken place, he had proposed, and parliament had adopted, the measure, of adding one million to the war taxes; a measure directly opposite to that of the present year, by which, even under the pressure of increased expenditure, one million was to be withdrawn from that fund. The great object he had in view, was to arrive at the point where the sum borrowed, would be balanced by the sum to be redeemed in the same year; after which, if there was no additional expenditure, the public service would be carried on with a diminishing, instead of an en-creasing debt. It was however at that time, and continued to be his decided opinion, that, if an addition to the expenditure became necessary, it ought to be provided for by an addition to the revenue, so that the great object of preventing a permanent accumulation of debt might be effectually accomplished. He acknowledged it to be also his opinion, that, when the sum borrowed could by the amount of war taxes, be brought within the limits of the sum redeemed it would be warrantable and wise to leave the interest of the sum annually paid off to the disposal of parliament. This would nearly fix the limits of taxation during war, as no more would be required from that source, than the comparatively small charge, under the provisions of the Act of 1792, of one per cent. on the loan for the service of the year. Thus would the people find an immediate reward for their privations and sacrifices, in the accomplishment of the important object, of having enabled their country to maintain the great contest in which it was engaged, with a diminishing debt, and with little or no addition to the public burthens.
The arrival however at this splendid and impregnable situation of financial security, 908 which he was firmly convinced might have been attained, had, to say the least, been unfortunately retarded by the great increase of expenditure, which took place after the period, to which he had particularly referred. The amount of the loan for the year 1805 was twenty millions, and the addition made at that time to the war taxes, consisted of 1½ per cent. on the property tax, which addition was not taken at more than 1,140,000l. This provision was so inadequate to the increase of the expenditure, that the noble lords who succeeded to the offices of First Lord of the Treasury, and Chancellor of the Exchequer, in 1806, had the wisdom and fortitude to propose an immediate addition to the war taxes of near six millions; but, after having successfully laboured to reduce the public expenses, (and those who know the difference between prevention and retrenchment would not be surprised that the reduction was not greater, they found the amount still so large, and the pressure of taxes recently imposed so burthensome, as to afford them no hope of carrying into full effect the system, which had been adopted at the commencement of the war. The plan however to which they had recourse, appeared to be the best that circumstances would admit of, and it was marked by the decided approbation of parliament and the public. According to this plan the expenditure of each year, exclusive of subsidies, being estimated at thirty two millions, beyond the surplus of the consolidated fund, and the produce of the annual taxes, the war taxes, which were computed at twenty one millions, were to supply not only the interest, but a sinking fund, for the loan of each year, the capital of which would, at any probable price of stocks, be redeemed within fourteen years. Without entering further into the particulars of this plan, he would observe, that it contained principles of the utmost importance, of which the project of the present year was wholly destitute; he meant those of redemption, renovation, and permanency: that it was founded upon a correct view of the nature of the contest in which we were engaged, as it derived from the concurrent aid of the sinking fund, and the war taxes, the means of carrying it on for an indefinite period, upon the scale of expense that had been stated, without any permanent increase of debt, or any immediate addition to the permanent taxes, and with a comparatively small addition to them at a future period: 909 and that the conduct of those by whom it had been brought forward afforded a striking and creditable contrast to that of his majesty's present ministers, inasmuch as the former had considerably diminished the public expenditure, and increased the income, and the latter had diminished the income, and enormously increased the expenditure. He must also observe, that by the transfer of war taxes from their destined purpose to that of defraying the interest of the loan, the people were deluded into a disregard of a profuse expenditure by the appearance of being spared the pressure of additional burthens; whereas the effect of the transfer was to render those perpetual, which would otherwise have ceased with the war, and to create the necessity of borrowing an additional million, the interest of which must be provided for by fresh taxes. To parliament the measure could not be deemed respectful, inasmuch as, without an alledged necessity, it was a departure from a system which the legislature had deliberately sanctioned, and approved; to the country it was degrading, as it either called in question its means and resources, or the good sense, the spirit, and firmness of the people; but above all, it was most mischievous in its tendency, as it could not fail to animate the hopes, and encourage the perseverance of the enemy, to whom it would be obvious that such a spendthrift policy must necessarily tend to limit the duration of our exertions; and that, although our fleets and armies should be every where triumphant, all their victories might be ultimately unavailing, and compromise and submission rendered unavoidable, by the prodigality and improvidence of our government. This, he trusted, would never be our condition; but to avert such a staff of calamity, and disgrace, it was necessary that the vigilance of parliament should be roused, and its authority exerted. Some of their lordships might not perhaps have fully ascertained the advantageous effects of that system, which was now for the first time invaded: they might not he aware, that the war taxes had not only occasioned the facilities in all money transactions, which the state of public credit (as far as it was benefited by the comparatively small amount of our loans) could not fail to produce, but that since the renewal of the war, they had, upon the lowest computation, prevented an addition of more than two hundred millions of debt, and of near ten millions of permanent taxes.—This was the system 910 in which a breach had been improvidently made; he trusted it would be repaired; or at least that the attention of parliament and the public being awakened, 'his delusive, weak, and ruinous expedient would not be repeated. He wished not to check or discourage exertion: but he was anxious to see œconomy go hand in hand with vigour, and our income and expenditure brought as nearly as possible to a level with each other.—His lordship concluded by saying that in thus delivering his sentiments, he had discharged an indispensable duty not only to his country, but to himself; as his silence might have been misconstrued into an acquiescence in a measure, utterly inconsistent with a just view of our actual situation, and of the nature of the present contest, and directly adverse to opinions, which he had always entertained, and upon which he had constantly acted. If persisted in, it had an obvious tendency to lay us at the feet of the enemy; although, humanly speaking, the means and resources we possessed, were, if wisely applied, fully sufficient to frustrate all his projects for our destruction, and to conduct us through the struggle, not only with security to our independence, but with increased glory, and augmented power. To a measure of such a description he could not but express his decided, and unqualified dissent.
The Earl of Liverpoolcontended that the noble viscount was in error, in supposing that the annual expenditure during the probable continuance of the war could be limited to any definite sum. This, from the unavoidable fluctuation of circumstances and the varying price of all articles necessary to our numerous and diversified equipments, was actually impossible. He regretted as much as the noble viscount, the great increase of our expenditure, but it should be recollected that the shutting of the ports in the Baltic and the embargo in the American ports, must have necessarily increased the price of naval stores, and of all the various articles which were requisite for supplying our maritime forces. With respect to the mode of carrying on the war, by assisting those powers on the continent who were struggling against the common enemy, this was not the time for discussing that question. Circumstances had arisen which had necessarily increased the expenditure under that head; he alluded to the rising of the Spanish people; but in every point of view in which that object could be con- 911 sidered, whether with reference to the additional means afforded of combating; the ruler of France, or to the considerations of public interest, national honour or liberal policy, he would say, that we were called upon by all those considerations, as well as by every principle of sound policy, to render assistance to that nation in their struggle against the oppression of France, and it would be a cheering consolation to the country that such assistance had been promptly and generously rendered, even though it should ultimately fait in its object. With respect to the actual amount of expenditure, it might be a question of policy as to whether we should carry on the war upon a certain definite scale, with a view to its long continuance, or whether we should carry it on for a short time upon a more enlarged scale, with a view to more immediate advantages. He would not now, however, consider this question, but proceed to consider the question more immediately under consideration—the subject of finance. The objections he had to the financial arrangements and plan of the noble lord opposite (lord Grenville), were, first, that they proceeded upon the assumption of a certain definite annual expenditure during the war, which was absolutely impossible; and secondly, that they amounted to a breach of faith towards the existing public creditor in the new sinking fund, which would be created, and by which a bonus would be given at a time when it was not wanted, whilst when it would be useful, it could not be forthcoming. The present ministers had acted upon the plan of the noble lord in the first year of their coming into office, he having previously pledged a certain portion of the war taxes for the interest of the then loan, and the extraordinary increase of the provision for the sinking fund. It was known to be a part of that plan, that in consequence of raising the war taxes to the amount to which they were then brought, no new taxes should be imposed for three years. In the last year there was no necessity for resorting to new taxes, with some trifling exceptions, the falling in of the annuities and other sources of augmented revenue having furnished nearly sufficient means for defraying the interest of the loan and the one per cent for a sinking fund upon the stock created. In the present year ministers had resorted to the mode now proposed of pledging 1,000,000l. of the war taxes to defray the interest of the loan; but he wished it to be distinctly 912 understood that this was not part of a system to be permanently acted upon, and that the subject remained completely open for future consideration. If the plan of the noble lord (Grenville) had been acted upon during the three years, there would now have been 3,600,000l. of the war taxes pledged for the interest and sinking funds of the loans of those three years. By the system under which the present ministers had acted there would be pledged, if the present bill should be passed, a sum of 2,200,000l. of the war taxes. There was, therefore, this difference between their system and the plan of the noble lord, that by the latter one million four hundred thousand pounds more, of the war taxes would be appropriated to the payment of interest and sinking funds upon the last three years Loans than by the former. There was not, it was true, any sinking fund created in the present instance; but that might be done hereafter, if it should be thought necessary; and, at all events, the whole subject was open for the consideration and decision of parliament.
§ Lord Grenvillesaid, he felt it an irksome task, upon the present occasion, to call their lordships' attention to this subject of finance at this very late period of the session, when the attendance was so thin, and when he had to address nearly empty benches. Ministers seemed determined, that their lordships should scarcely have an opportunity of discussing this bill, by taking care to bring it up to that house at a period when a full attendance could scarcely be expected; they did not even condescend to state its object, and thus it was, that a bill for imposing taxes in perpetuity upon the country, to the amount of a million a year, had hitherto passed through the greater part of its stages unnoticed, and almost unknown, and he even doubted whether many who heard him were at all aware, or had even a suspicion, that the object of the bill was to impose taxes to the amount of a million a year in perpetuity upon the country. The noble earl (Liverpool), in contending that the annual expense of the war could not be definitely fixed at any limited sum, had contended for that, which nobody could doubt. Every one must be aware that the sum could not be precisely limited within the bounds of any previous calculation; but here was an increase of expenditure, in the course of two years, to the amount of 9,000,000l.; and yet, notwithstanding this enormous increase, a general apathy seem- 913 ed to prevail in the public mind upon the subject. The people, wholly indifferent to this most important consideration, were occupied in discussing minute points, with respect to which it was impossible that from any practicable modification any material alleviation of their burthens could arise, and those were only deluding them who endeavoured to persuade them that such would be the result. The enormous increase of 9,000,000l. in the public expenditure, and that in the short space of two years, was surely a subject of no ordinary importance, and demanded the most serious investigation. The noble earl had declined going into the discussion of those political measures from whence this enormous increase of expense had arisen; but surely it was not enough to say, that this augmentation of expenditure had taken place in consequence of these measures, and that therefore it was unnecessary to inquire into it; that the expense had been incurred, and therefore it was needless to go into the discussion of the political measures which occasioned it. Some substantial reason ought to be given to their lordships and the public for so enormous an increase of expense. Looking to the situation and the resources of the county, it must be at once evident that the greatest error, where all was error, was this enormous increase of the expenditure of the country, and this at a time when it was more than ever necessary that we should husband and economize our resources. The noble earl had objected to the financial plan of the late administration, that it assumed a definite annual expenditure, which it was impossible to keep within; but it surely must be evident to every one, that some definite sum must be taken, in order to found upon it any precise detailed calculation. It might not have been, practicable to keep down the annual expenditure to 32 or 33,000,000l., stated in that plan, though he thought much might have been done towards the attainment of that object; but the great advantage of that system would have been, that the excess of expenditure above that sum being to be provided for by immediate taxes, parliament and the country would have been fully aware of the increase of the expenditure by the proposed increase of taxes, and a salutary inquiry into the cause of that increase would have been the necessary result. On the contrary, under the plan of the present ministers, the people were to be deluded with the shew of imposing 914 no taxes, whilst the enormous increase of expenditure was kept out of sight, and a permanent burden was imposed, which tended to the ruin and destruction of our resources. The noble earl had stated, that under the plan of the late administration 3,600,000l. would now have been mortgaged, and that under the present plan 2,200,000l. only were mortgaged; but mark the difference, by the former there would only have been an annuity for fourteen years with the improved operation of the sinking fund created, whilst by the present plan a burden of 1,000,000l. a year was imposed for ever upon the country. The present ministers had no sooner come into office, than they set about deranging this plan of their predecessors. It was true that it was partly adhered to in the first year; but with this marked difference, that the property tax was included in the pledge, which it was the object of the late ministers to exclude. By the plan of the late administration, the war, as stated by his noble friend (lord Sid-mouth,) might have been carried on indefinitely. The enemy aiming at nothing short of our destruction, had adopted two modes of attempting that object, which he sometimes pursued united, sometimes separately; the one was direct attempts upon the country, the other endeavouring to wear us out by protracted hostility and, thereby exhaust our resources. To repel the former, we must rely upon the valour and discipline of our navy and army, to the spirit and bravery of the people. To meet the latter, it became necessary to adopt some permanent plan which should place our resources beyond the peril of being thus exhausted by the artifices or obstinacy of the enemy. It was with this view that the plan of the late administration was formed, under which each portion of the war taxes, after paying off in fourteen years the sums charged upon it, would have been released from all incumbrance, and again applicable to the public service for a similar purpose; and thus we might have been enabled to maintain the dreadful contest in which we were engagad indefinitely, and convince the enemy, that he could have no hope in continuing the war of being enabled either to exhaust our means, or to render us more accessible to his power by any perseverance in his designs against our finances. But what must be the consequence if the plan of the present ministers were persevered in? by pledging one 915 million a year in perpetuity, it must be evident to every one, it must immediately be evident to the enemy, that at the end of a certain definite period our resources must be utterly exhausted; for when the war taxes should be in this way all mortgaged in perpetuity, to what resource could the noble earl then resort to carry on the war, or to support the credit of the country? He was, however, glad to hear from the noble earl, that this arrangement of the present year was not intended as part of a system that was to be permanently acted upon; and he was anxious to hear what was the system which ministers had in their contemplation; but, in truth, there appeared to him to be no system at all contemplated by them either in their financial or their political measures. The maxim of the noble earl seemed to be "sufficient for the day is the evil thereof;" and all that was looked for was to provide for the pressing occasion and to satisfy the exigency of the moment. The noble earl, when he had proposed this measure, was evidently at the end of his finance, and looked no further than next year, when a new supply must be raised and a different experiment resorted to. He was surprized to hear from the noble ear], at a distance of two years, that the plan of the late administration would have operated as a breach of faith towards any description of persons, still less to the public creditors. No persons were more alive to their interest, and justly so, than the public creditors, and yet from those gentlemen no complaint of this nature was heard when the arrangements of the late administration were brought forward. So far from it, that at the time of negociating the loan, after this plan was brought forward, when he (lord Grenville) was in office, one of the gentlemen who had contracted for it told him that the advantageous terms then obtained for the public were to be solely ascribed to the salutary operation of that plan. Upon what terms could the present ministers expect to borrow, if the war taxes were to be mortgaged in perpetuity?—a measure so pregnant with danger and injury to public credit. He could not quit this subject without again deprecating and condemning those measures which had been the principal cause of the late enormous increase of our expenditure.—He was thoroughly convinced that no possible advantage could be derived from continuing to keep up a British force in Spain. A 916 system of utter delusion had been practised with respect to the state of affairs in that country, where there appeared no hope of maintaining an advantageous contest, or prosecuting the war with any prospect of a successful issue. To carry on a land war on the continent was the greatest impolicy of which we could be guilty, and in direct opposition to the only system of policy to which we ought to resort—to that of husbanding our present resources in order to secure the means of our ultimate defence. His lordship proceeded to ask what we had gained by this increased expenditure, and by the addition thus made to our debt? We had gained the convention of Cintra, the retreat of Salamanca, the loss of our brave officers, and the dispersion of our army, as an army.—What, on the other hand, had we lost? We had considerably lost in having an increase to our debt of 9,000,000l. and an annual burden of 1,000,000l. additional imposed on the people of this country. The burthens altogether to which not the higher nor the lower, but the middling class of the community of this country had of late years submitted to, were inconceivable. He was one of those who, far from countenancing or supporting, highly reprobated and disapproved of the practices resorted to in order to excite clamour and disaffection; but at the same time he must caution ministers not to refuse their attention to the voice of the well-affected, and the unaffected expression of the sentiments of the nation. He could not forbear from expressing his surprise that a most unqualified attack should have been made upon the proposition made by him (lord Grenville) while in office, by the noble secretary, who now himself proposed to carry through a measure which went so far, he must add, extremely beyond what he (lord Grenville) had ever had in contemplation. He requested of the house to bear in mind the opposition which the noble lord opposite, and those who acted with him, had shewn to the proposition which he had formerly submitted, and to compare that proposition with the present measure. The present, he contended, was a measure which had uniformly been discountenanced by Mr. Pitt, by his noble friend (lord Sidmouth,) and by the administration of which himself formed a part. The plan which he had in view would have affected part of the war taxes, at the very most only for 917 fourteen years, though, in his mind, for a far shorter period; the present measure went to affect them permanently. It had gone abroad in the country, that he approved of the present measure, and this he wished most explicitly to deny. He esteemed the present the most destructive financial measure which could be adopted. His plan, he begged to remind their lordships, also went to provide an immediate and permanent peace establishment, whereas in the present plan no such thing was thought of.
§ Lord Harrowbysupported the bill. He maintained that it must be attended both with immediate and future advantage. It was attended with good at the moment, in as much as it prepared the people to pay the taxes with which they were at present burthened. It must be attended with advantages in future, by affording ministers an opportunity of judging of the best means of making the existing taxes most effectual.
§ Lord Grenvilleexplained. He declared his opinion that the system which in the present state of affairs we should adopt, was one of husbanding our means and providing for eventual defence. We had nothing to do with sending an army to the continent. That he might not be misunderstood, he expressly stated that our government ought not to have sent an army to Spain. Such had always been his opinion. The noble lord asked, why did he not tell this sooner? He did on the first day of the present session explain these to be his sentiments, and complain that ministers by not consulting parliament on the subject during the last session, had not afforded him an earlier opportunity of stating what his opinion was. If the inhabitants of Spain could not defend themselves, in his judgment any army we could send into the peninsula would be of no avail. All that we had a right to do was to provide them, as far as was in our power, with arms, clothes, and ammunition. He begged also to State, as a proof of the increase of our expenditure, that the single article of transports had increased from one million and a half to three millions.
The earl of Liverpool, lord Sidmouth, and lord Grenville again explained; after which, the bill was read a third time and passed.