HL Deb 04 September 1848 vol 101 cc770-83

On the Motion that the Bill be read 3a,


said: I trust I may stand excused if I presume to call your Lordships' attention to this Bill, respecting which no explanation has been hitherto offered by the Government, nor has there indeed been one word spoken in this House. It is nevertheless by far the most important financial measure of the Session; and no less from my conviction of the consequences to which it may lead, and the dangerous inferences it may suggest, if unexplained, than from the public offices I have filled, and the public duties I am still called on to perform, do I feel myself under the obligation of addressing your Lordships for a short time. This Bill practically sanctions an addition of two millions to the public debt, to be contracted in time of peace. It does so, likewise, without the motive or justification of any new or more extended works for our national defence, or any increase of our military or naval force or establishments. On the contrary, those precautionary measures, which at the opening of the Session were considered to be indispensable, which were recommended from the Throne, and which were submitted to Parliament by responsible Ministers to the House of Commons, in the shape of increased estimates, have since been abandoned and withdrawn. The votes in supply have been reduced by a sum of between 800,000l. and 900,000l., and yet we find ourselves compelled to borrow 2,000,000l. in a time of peace, in order to bring even to some plausible balance our income and our expenditure. Surely it behoves us, under such circumstances, to pause and inquire into the causes which produce so unsatisfactory a result. It is essential to examine carefully whether this bespeaks any falling-off in our national resources, affecting our public credit, and diminishing our powers of production and industry in peace, or diminishing our power by sea or land in case of war. My Lords, at the opening of the present laborious Session, I moved for an account which casts some light upon the subject, and to which I trust your Lordships' attention has already been directed. This account exhibits the whole of the annual supplies voted by Parliament in each year since 1835. I shall not trouble your Lordships with giving the detail of the successive years, but I must be permitted to lay before you the comparison of the first and last years of the series:—

Estimates voted. 1835. 1848. Excess in 1848.
Army (including Militia & commissariat) 6,188,000 7,012,000 824,000
Navy 4,245,000 7,764,000 3,519,000
Ordnance 1,296,000 2,801,000 1,505,000
Total for three Services 11,729,000 17,577,000 5,848,000
Miscellaneous 2,393,000 3,808,000 1,415,000
14,122,000 21,385,000 7,263,000
Kaffir War 1,100,000 1,100,000
Expenses on Emigration in Canada, and Distress in Ireland 393,000 393,000
14,122,000 22,878,000 8,756,000
In the present state of Europe I am not inclined to question what may be required for the strength and protection of the empire, although an increase of no less a sum than 5,848,000l. on a total of 11,729,000l., or more than 50 per cent, has taken place in about thirteen years. Nor do I wish to cast blame upon my noble Friends in the Government. For much of the increased expenditure incurred in the last fourteen or fifteen years, I hardly hold them or their predecessors in office directly responsible. The blame, if blame it be, may be traced to another source, and rests in a great measure with Parliament itself. During the Governments of Lord Grey and of Lord Melbourne, and I may indeed include the Government of the noble and gallant Duke immediately preceding, vigorous and effectual steps were taken to enforce the most severe and rigid economy throughout all branches of the public service. In a statement which I made in the House of Commons in July, 1833, I was enabled to show that the estimates had been then reduced 2,727,000l. below the economical suggestions of the Finance Committee of 1817; that in the salaries of the great departments upwards of 1,000,000l. had been reduced between the years 1821 and 1833, and upwards of 5,689 offices had been abolished. My Lords, the same spirit of economy continued to influence the Government for several years subsequently; though with a diminished result. No sooner was it generally admitted that the Government were strictly economical, than somewhat of a contrary spirit began to show itself in Parliament. All imaginable claims, public and private, and all grievances, real or imaginary, found earnest Parliamentary advocates, pertinacious and zealous supporters. The Baron de Bode demanded his hundreds of thousands, and Staffordshire rose in defence of a countryman. Danish claims called forth the sympathy of Sheffield, Hull, and Manchester; French claims, Spanish claims, losses for goods on shore, losses for ships at sea, losses for book debts, all followed in quick succession, and were more or less successful. The functions of the Government and of the House of Commons, seemed for the time to be reversed. The House of Commons, more especially in advocating expense, placed itself in a false position. Nor was the application of these new principles confined to the cases I have described. It was extended to the naval and military services likewise. My Lords, I consider this to have been most unwise. I hold it to be of the very first importance that the armed force of this country should learn, under all circumstances, to look up to the responsible Government, and to their commanding officers for any increase of pay or allowances, and for maintaining the efficiency of the service, rather than to the House of Commons. But this was not permitted. Take as an example the Navy, on which, as your Lordships have perceived, the largest increase of expenditure has taken place, namely, an increase from 4,245,000l. to 7,764,000l. in thirteen years. Your Lord-ships cannot but remember the Motions made and repeated, Session after Session, to compel the Government to an increase of the estimates. It was stated that our ships were under-manned, that our dockyards were neglected, that the number of men-of-war kept at sea were too few. The full pay, the half pay, the marines, the pursers, the chaplains, the old flag-officers, the young lieutenants, all found friends ready-to state complaints and to demand redress. The same course was pursued in other branches of the public service, and the result has been in multiplied ways to swell the annual expenditure. In addition to this, a system was introduced, and found favour in many quarters, of transferring heavy local charges to the public Treasury; new duties were undertaken by the State, founded for the most part, it is true, on just and noble principles, but all leading to increased demands on the Exchequer. It is far from my wish or intention to condemn this. I am stating facts, not presuming to censure. Many of these charges have been, and still are, incurred in the performance of great national duties; but those duties are costly; and when we have sanctioned and incurred the expenditure, it is childish to grumble at paying the bill. It is thus that we are called on to pay 400,000l. for criminal prosecutions, and for other expenses hitherto borne on the county rate. It is thus that we are also called on to provide 193,000l. for poor-law administration, and relief. For the improvement of our criminal law and our secondary punishments important experiments are made; and at Pentonville, Parkhurst, and Perth, prisons are maintained at a cost approaching to 70,000l. No sooner is the great improvement of railways extensively adopted than Parliament urgently require a department to be established for its regulation and control—an estimate for 17,000l. is the con-sequence. Slowly and reluctantly we admit the truth that ignorance is an enemy with which the State is bound to struggle—the performance of this Christian and social duty demands an annual expenditure of 200,000l. You are persuaded by benevolent men that factory labour requires to be regulated by Act of Parliament—that the condition of the females in mines, of the handloom weavers and of other classes, requires investigation and control. All this, too, requires money—and it is voted. The state of the narrow seas—the interests of our commercial navy—the new conditions developed by steam navigation—are pressed on your attention; 150,000l. are accord- ingly appropriated for harbours of refuge; an expense to be considered hardly more than as preliminary to the votes for the same service which must inevitably follow. You require packet communication with India—it costs you 50,000l. a year, and costs the Company as much more. But I need not do more than entreat your Lord, ships to look round you, to survey the gorgeous splendour of the House in which we sit; one glance, if it does not justify, will at least serve to account for the lavish expenditure which is taking place in every quarter. These votes in supply are not the only charges with which we have to deal. Your legislation has in late years become bolder and bolder in the tasks undertaken—tasks that have been, in many instances, nobly performed. But in proportion as the steps to be taken are bolder, so they require more preliminary inquiry and investigation. Hence the necessity of various Commissions of Inquiry; proceedings highly useful when their functions are not misapplied. In an incomplete account which is before Parliament, it is shown that the expense of these proceedings, for a very few years, has exceeded 1,129,000l. A further head of charge will be found in the new payments cast on the Consolidated Fund. You justly require an improved system for registering births, marriages, and deaths—you require your voters to be registered likewise, and they sturdily refuse to pay even one shilling to the public officer who tests and records their qualifications. You condemn all judicial and legal fees; those are, therefore, abolished, but the salaries and fees reappear as compensations, and are defrayed by the public in place of by the suitors. All this enhances the amount of public expenditure. I might carry this investigation much further; but I think I have sufficiently proved what are some of the causes of our increased expenditure. I must again repeat that I am far indeed from wishing to censure all that I have enumerated. In many respects it has been wise, and the public have reaped a full benefit from this application of the national income. But when the decision made has been that of Parliament itself—when these services have been called for by public opinion and sanctioned by the approbation of the public—it is weak and undignified to grieve over the inevitable cost, and to expect we can at once secure these expensive benefits, and refuse to submit to the burdens which they inevitably occasion. These various increased heads of charge, be it remembered, greatly exceed the 2,000,000l. which you are this year compelled to borrow. I have thus endeavoured to trace much of our expenditure to its source. Allow, me, now my Lords, to review very briefly the state of our public income, in order to judge whether it is from any permanent falling-off in our national resources, that a necessity for the present Bill arises. If this were the case, we might indeed be justified in feeling mistrust and alarm. But such is far from being the fact. Notwithstanding we have repealed taxes that would be in themselves sufficient to constitute the whole revenue of many great European Powers, notwithstanding the difficulties and losses which commercial distress and Continental revolutions have produced, I find nothing in the state of the revenue that is calculated to excite the alarm even of the most timid, or that can shake our confidence in the powers of this empire, either for maintaining unimpaired our public credit, or for defending our national honour, and our national interests. Let our friends throughout the world rejoice with us in the causes of thankfulness with which we are blessed; and do not let our enemies, if we have any such, delude themselves by the false expectation that our resources are in a state of decay. The contrary, I believe to be the fact, if we only use rightly the blessings which surround us, and the manifold advantages placed within our reach—if we are wisely economical—and if we are energetic, patient, and enduring. I have already compared the expenditure of 1834 with that of 1848. I shall now institute a similar comparison between the income of the same two years; endeavouring thus to deal fairly and justly with the whole subject. The account stands as follows:—
1836. 1848.
Customs £ 18,785,000 £19,940,000
Excise 11,720,000 13,276,000
Stamps 6,612,000 7,319,000
Taxes 3,620,000 4,347,000
Post Office 1,425,000 932,000
Surplus Fees 16,000 106,000
Hereditary Revenue 20,000 4,000
£42,198,000 £45,924,000
Property Tax £5,459,000
£42,198,000 £51,383,000
Your Lordships will see from these figures that even—omitting the property tax— the ordinary income shows a very consider-able increase. The only head of ordinary revenue which exhibits any considerable diminution is that of the Post Office, for which, I am ready to admit, to a certain extent, my own personal responsibility. But in so doing, I am at least justified in saying that I never either allowed myself to be led astray, or still less did I deceive Parliament by giving countenance to the over sanguine hopes of those who were more visionary than practical.—I never stated that the great change which the House of Commons, and, I may add, the public, required from the Government, could be made without a very considerable financial sacrifice. I announced this conviction at the hazard of much unpopularity and many bitter reproaches. The event has proved that my anticipations were well founded. But the sacrifice has been compensated by the innumerable advantages, both direct and indirect, of the change. Neither let it he thought that the amount of 500,000l. loss, is solely to be attributed to the penny postage. The increased accommodation given to the public—the multiplied and more extended deliveries of letters—the doubling of the mails—the expenditure incidental to railways—are all charges which must, to a certain extent, at least, have fallen on the Post Office revenue, at whatever rate of postage that revenue had continued to be collected. Having thus remarked upon the state both of the income and expenditure, I shall proceed to observe on the mode in which the present Bill proposes to meet the deficiency of 2,000,000l., which we are unfortunately called on to supply by incurring increased debt. I begin by admitting that my noble Friends have a precedent for the proposal they now make to us in the present Bill. A similar course was resorted to on a former occasion, and it was found to produce no sensible public inconvenience. Even if this were not so, I should be indisposed to argue against it, under the peculiar circumstances of the present Session, however I may regret its necessity. But I cannot wholly shut my eyes to its danger. The power which this Bill confers on the Treasury is of a most questionable as well as extraordinary kind. To enable the Chancellor of the Exchequer, at his own will and pleasure, with or without notice, to go into the market, to create stock, or to sell Exchequer-bills, is, in fact, to give him an authority to alter the value of the property of all the hold- ers of public securities, whether funded or floating. When an ordinary loan is contracted, the requisite formalities, the knowledge of the sum to be contracted for, the declared terms of the bidding, the open competition, place a certain limit upon the inconvenience which, under the enactments of this Bill, are very possible to arise. But I admit that the amount to be raised is small—that my right hon. Friend the Chancellor of the Exchequer is prudent—and the precedent is in his favour. This defence, however, assumes the circumstances of the present case to be the same as in the former case to which I have alluded. Such is not the fact. In two important features the cases essentially differ, if the alternative of issuing Exchequer-bills under this Act should be resorted to. In the first place, the amount of railway bonds and debentures now in the market, circulating freely from hand to hand, bearing a high rate of interest, and considered perfectly secure, have introduced a formidable competition to the unfunded debt. Next, the habits and practice of the London bankers have of late years varied. Formerly, bankers were accustomed to invest large balances on Exchequer-bills, which now, rightly or wrongly I stop not to inquire, are employed through hill brokers, on the security of commercial papers: this, again, lessens the demands for Government floating securities. Further, in earlier times, the Exchequer-bills held by the Bank were never thrown on the market. By this system the amount of disposable Government paper was reduced, and the value of that which was left at the command of the public was proportionably enhanced. But a further change has likewise taken place. The Bank Act of 1844 has now come into operation; and if its restrictions apply to this loan, should the Bank be again placed in the same position as in October last, the Chancellor may find it impossible to seek accommodation in the usual way; or, if he obtains it, it will be at the price of compelling a refusal of that accommodation required to be given by the Bank to commercial houses in the form of discounts. This furnishes an additional example of the risks which that Act of 1844 is calculated to produce in certain cases, though in cases which I earnestly hope may not he considered as very likely to recur. I have spoken hypothetically, and have suggested a doubt whether the restrictions of the Act of 1844 do apply to this Bill. My own confident belief, however, is that they do not apply, but that this Bill is a practical repeal, or at least a suspension of that Bill, so far as the 2,000,000l. proposed to be borrowed are concerned. My noble Friends are no doubt astonished at this statement; they are unconscious of their own measure. They Never felt what they were doing; Never dreamt of such a thing. If they look at sec. 4, of the present Bill, they will see that the Bank is authorised to make advances to the Treasury on the bills permitted to be issued—" any Act or Acts in anywise to the contrary notwithstanding." Now, let me assume a case in which the Bank reserve was wholly exhausted, or fell below 2,000,000l. If the Chancellor of the Exchequer required an advance of 2,000,000l. of bank notes, under such circumstances, that advance would appear to be repugnant to the Act of 1844. But this Bill would nevertheless justify such advances, "any Act to the contrary notwithstanding." Therefore, under such supposed circumstances, the Bill absolutely repeals the restrictions of that memorable statute of which my noble Friends have been such strenuous and generous champions. In dealing with the question of our finances, I cannot omit touching upon one subject inseparably bound up with this question—I mean the liabilities the public are under to the depositors in savings' banks. I am the more reminded of this, as a Bill respecting savings' hanks stands for the third reading this evening. We must never lose sight of the peculiar exigency of that engagement. It differs wholly from the responsibility we assume in relation to the remaining portions of the public debt. The 3 per cents are transferable, but not payable on demand. Exchequer-bills are transferable likewise, and, though payable on demand, yet that is only at certain times, and under established conditions—all being protections to the public which issues the bills. The savings' banks deposits, on the contrary, are not transferable; and with much facility they become debts payable on demand. This distinction is of the utmost importance. Far is it from me to suggest that the security to the depositors is not as perfect as any the public can give, or the depositors can require. But still we are bound to weigh well the consequences of this engagement as affecting the public. I know that this subject was one which pressed heavily on the mind of the ablest of our commercial and financial Ministers, Mr. Huskisson. I am convinced that this liability would not have been incurred by Parliament in 1817, had any one foreseen at that time the enormous extent to which the deposits in savings' banks have since been carried. At the outset 500,000l., or 1,000,000l. would have perhaps been the maximum amount of deposits contemplated as probable by the most sanguine. At present the deposits exceed 30,000,000l. I am inclined to think that the whole subject requires the most careful and immediate attention of Parliament, with a view of considering whether, when the deposit reaches a given amount, the public liability might not advantageously be satisfied by a transfer to the depositor of a proportionate amount of stock, the State still continuing, if it were thought fit, to act gratuitously as the broker for the depositor, reinvesting the interest when required, and transferring the stock when sold. The depositor would thus become an ordinary stockholder, and the liability to pay on demand would be lessened, with a corresponding increase of security to the public. I cannot close these observations without some remarks on the present state of Ireland, and on the renewed calamities which seem unhappily to be impending over that country. The famine—for so it is now recognised to have been—produced some of our financial embarrassments in the two last years. Their recurrence may again lead to similar results. At the outset, the extent of that calamity was unfortunately not appreciated by a great and powerful party in this country. They were led astray, and induced to suspect that it was greatly exaggerated by Irish witnesses, in order to strengthen their demands on the public purse, and exaggerated also by the Government of the day, with a view of carrying their free-trade measures through Parliament. Both suppositions were unfounded. The delusion has been dispelled by the fearful reality. But the peril of a renewed failure is imminent at present. I have understood from declarations made elsewhere, that Ministers hold themselves pledged to call Parliament together at an early time, should the exigencies of Ireland render it necessary to do so. This is but right, for it should he remembered that nothing has been as yet done to meet this misfortune, should it arise. It is important that such a declaration should be here repeated. I should deprecate raising any more general discussion on the present occasion, on the distresses of Ireland. Evil rather than good is too frequently the consequence of premature debates on subjects of this nature. I am satisfied to leave the responsibility with the Government, at the same time requesting my noble Friend (Lord Lansdowne) to communicate, as far as he can do so without indiscretion, the import of any communications which he has received respecting the harvest and the potato crop. I should hardly have ventured even to make this inquiry, but that the silence of Peers connected with Ireland, in a case where the very existence of our people is at stake, might be condemned in a country where everything is liable to misconstruction, or rather to misrepresentation. Silence would be interpreted as marking a culpable indifference where human lives are at risk. The great experiment of the working of the poor-law, and more especially the system of outdoor relief for the ablebodied, is now in progress. To that measure I expressed, at the time, my strong objection. I pointed out what I considered to be its error in principle—its danger in practice. In those objections I was strongly supported by the weight and authority of men in all respects my superiors, and infinitely better entitled to influence the deliberations of your Lordships. I allude more especially to my most reverend and noble Friends the Archbishop of Dublin, and the Earl Fitzwilliam. I am not disposed to withdraw or retract any one of those former objections. I see no reason to abandon any of those opinions. On the contrary, they are confirmed by what has occurred, and by what is still going on. The description given in another place by the Chancellor of the Exchequer of the state of Erris, confirms all my worst forebodings. But I will not at the present enhance the difficulties of the question, or the difficulties of those who administer this law by any adverse discussion. I have carefully abstained from doing so during the present Session, unless when actually compelled to interfere, as by the issue of the poor-law circular on Mr. Gregory's clause, or by that most unjust mode of proceeding in the superior courts of law, in cases where a cheap and summary remedy might have been resorted to. I shall abide by the issue of the experiment, and by the future result of that Parliamentary inquiry which is promised in the ensuing Session. Experience will then settle the question, and decide between the disputants. But I may say, in passing, that those are greatly deceived who think that the local charges of Ireland are light, or capable of being borne in many districts. The supposition is founded on an entire ignorance, or misconception, of the facts of the case. On the contrary, the burdens now cast on Irish real property, for the purpose of poor-law relief, infinitely exceed any similar local charge levied on England even in the times of the greatest distress. Of course I mean to compare the taxation in both countries, with the amount of property in each, on which that taxation is imposed. And this brings me to my closing observation. I have observed with pain that, whilst the sufferings of Ireland have drawn forth, very generally, throughout this island the deepest sympathy, leading to the no-blest sacrifices—generous sacrifices, which can never be too gratefully remembered—by which hundreds and thousands have been saved from instant death, there has arisen among the shallow, the impatient, and the superficial, an absurd notion that Great Britain might advantageously sever the connexion between herself and her western neighbour. I have witnessed with astonishment the formation of a band of English repealers, who talk almost as much nonsense as their colleagues in Confederation Hall. They are alike ignorant of what is due to the honour, the safety, and the industrial interests of the empire. They forget that though Irish distress has cost the empire millions, yet that the empire has also derived millions from Ireland. They forget that the balances of revenue actually remitted to the Imperial Exchequer from Ireland, and applied here, after payment of dividends and the payment of Irish charges, civil and military, have, from 1831 to 1847, exceeded nine millions and a half sterling. * They forget, or are ignorant, that, notwithstanding the most deplorable distress, the revenue of Ireland has not fallen off to any great degree, as is manifest from the following account:—
1845–6 £4,561,000
1846–7 4,546,000
1847–8 4,310,000
And during those very same years the repayments of advances made from the Treasury, so far from diminishing, even in proportion to the diminution of the revenue, have actually increased as follows:— *Appen. Col. Report, No. xix., p. 145.
1845–6 £307,000
1846–7 312,000
1847–8 393,000
I have now only to repeat my apologies for this intrusion on your Lordships' time, which nothing but a sense of public duty would have justified, and to express a hope that neither in the tone nor in the sub-stance of my observations has there been any thing to prejudice the public interest, or any observation of which the Government can with justice complain.


did not complain either of the substance or of the temper of the speech of his noble Friend. The Bill, he admitted, was one of the utmost importance, yet still it was one to the passing of which, under present circumstances, no one could object. By the occurrence of a series of unfortunate circumstances they had been compelled to borrow, and they would not have done their duty to their country if they had not brought forward this proposition. They had been compelled to adopt this course by the great indisposition which had been manifested by the public, both within and without the walls of Parliament, to bear the burden of increased taxation. He admitted the necessity of practising to the utmost the most rigid economy; but he contended that at present it was impracticable to bring their expenditure within the limits of their income by any cutting down of establishments only. It was impossible to make any diminution in the naval or military establishments of the country; and sooner than consent to make a sacrifice of this nature, which they felt would be to the detriment of the country, Her Majesty's Ministers would resign the conduct of affairs into other hands, and thus relieve themselves from the responsibility of making the sacrifice. Many of the burdens of which they now complained had been for years accumulating—many were of a merely temporary nature—and many had been forced by Parliament upon an unwilling Government. But he looked forward with a confident hope to the future, as the Government was determined to incur no expenses except such as were absolutely necessary for the public service. Then with regard to the method proposed to be adopted for raising this money. It was a method to which recourse had been had on former occasions, and which was best calculated to meet a case of uncertainty like the one with which they now had to deal. It would permit the Chancellor of the Exchequer to go into the money market at the time which he thought the most requisite, and under the circumstances which he might deem the most favourable; and, as a proof of the feeling among monied men on the subject, he would observe that on the day following the announcement that the Chancellor of the Exchequer meant to borrow—and that he meant to borrow in that particular mode—there was a marked rise in the funds. He believed that this power was necessary for the Chancellor of the Exchequer in the present financial condition of the country. In the midst of much occasional distress—a temporary diminution of our commercial prosperity—the result of which had been the necessity of the present measure, he nevertheless believed that there never had been a period in which the commercial, manufacturing, and financial prosperity of the country was in a sounder state; and, though there had been much distress, there was every ground for an enlarged confidence and hope for the future. It would be the imperative duty of the Government to attend to the state of distress in Ireland, and no pains would be spared by the Government or by the Lord Lieutenant to make themselves acquainted in detail with all the facts connected with that subject. But until they knew the whole extent of the mischief done to the potato crop, it would be impossible for him to say, even hypothetically, that distress would fall upon the Irish people of a nature to demand the attention, the assistance, and the interference of Parliament. All the advices which had been received during the last week as to the state of the potato crop were comparatively more favourable, and stated that the potatoes were not so universally affected as had been supposed. It was only that day that he had received accounts that the affected potatoes had put forth fresh appearances, and given indications of recent growth. He could assure his noble Friend that the state of Ireland would engage the daily attention of Her Majesty's Government until the next meeting of Parliament.

Bill read 3a and passed.