Against Home Rule (1912) Part 7

[Footnote 30: Childers, p. 340.]

[Footnote 31: See Cambray, "Irish Affairs and the Irish Question"

(Murray, 1911), p. 146.]

[Footnote 32: Mr. Gladstone always declined to call it a "Parliament,"

but some Ministers of to-day are less scrupulous.]

[Footnote 33: Dicey, "A Leap in the Dark" (Murray, 1911), p. 71.]

[Footnote 34: See "The Church of Ireland and Home Rule," by J.H.

Bernard, D.D., Bishop of Ossory, 1911.]

[Footnote 35: House of Commons Papers, 1864, xli. 79.]

[Footnote 36: Parliamentary Papers, 2079.]

[Footnote 37: Parliamentary Papers (Cd. 2905).]

[Footnote 38: "Home Rule Problems," p. 124.]

[Footnote 39: See the Newfoundland railway case of 1898 (Parliamentary Papers, Cd. 8867, 9137).]

[Footnote 40: "A Leap in the Dark," p. 110.]

[Footnote 41: "Home Rule Problems," p. 112.]

[Footnote 42: Mr. Redmond rejected the provisions of the 1893 Bill, saying in the House of Commons on August 30, 1893, that "as the Bill now stands, no man in his senses can any longer regard it as a full, final, or satisfactory settlement of the Irish Nationalist question."]

[Footnote 43: Speech at Belfast, February 8, 1912.]

[Footnote 44: July 18, 1886, at c.o.c.kermouth.]

[Footnote 45: See "The Perils of Home Rule," by P. Kerr-Smiley (Ca.s.sell, 1911), p. 45, where Lord Morley's opinion to the same effect is quoted.]

[Footnote 46: Speech at Whitechapel (_Times_, October 11, 1911).]

[Footnote 47: Sir John Simon at Dewsbury (_Times_, February 8, 1912).]

[Footnote 48: No such charge of ambiguity applies to the forcible letters of "Pacificus" on "Federalism and Home Rule" (Murray, 1910).]

[Footnote 49: The changes in the Australian Const.i.tution have been in favour of greater unity.]

IV

HOME RULE FINANCE

By THE RIGHT HON. J. AUSTEN CHAMBERLAIN, M.P.

The financial problems connected with the grant of Home Rule in 1912 are among the most complicated that call for solution, and differ fundamentally from those which faced the Governments of 1886 and 1893.

And by common consent, the problems are not merely different; they are immensely more difficult. No clauses in the earlier Bills lent themselves more readily to destructive criticism; and though the provisions of the new scheme are still shrouded in mystery, it is inherent in the conditions under which it must be framed that the financial clauses will prove to be even less defensible on the grounds of logic or equity than those of either of its predecessors.

Since the first Home Rule Bill was introduced the interests of Ireland--social, economic, industrial, and political--have become increasingly identified with those of the other parts of the United Kingdom. The commercial, banking, and railway systems of Ireland are intimately a.s.sociated with those of the greater and more firmly established systems of Great Britain. Irish railways are so largely controlled at the present time by British concerns, and there exist so many agreements and understandings between them and British companies as to facilities and rates, that they might be regarded as part of the same network of communications. Hardly less close are the relations which now exist between British and Irish banks.

It is not, however, on the commercial side only that greater intimacy and more firmly established relations exist now than formerly. Irish industries are agricultural, dairying and manufacturing. In each of these branches the country is increasingly dependent on the markets of England and Scotland; while reciprocally the products of the factories and workshops of Great Britain find in Ireland one of their most important markets. We do not always sufficiently realise that on the other side of the St. George's Channel lies a country whose annual imports amount to sixty-five millions sterling. Even less do we realise that one-half (thirty-two millions sterling) is the value of the imports of manufactures, mainly British, into Ireland. This trade in manufactured goods is not only already enormous; it is rapidly growing.

It has increased by more than four millions in four years. Any ill-considered legislative measure which interfered with or disturbed this great volume of trade would no doubt cause serious loss to Ireland; but it would bring bankruptcy and disaster to many British firms and their workmen.

It is, nevertheless, in respect of the political changes and the legislative measures pa.s.sed in the last quarter of a century that the most serious obstacles will be found in the way of framing any satisfactory scheme for financing a measure of Home Rule. The Irish Local Government system, framed on the British model by the Act of 1898, the Congested Districts Board, and the Department of Agriculture, have hitherto depended financially, either wholly or in part, on Imperial grants in aid. Local taxation payments alone from the Imperial Exchequer amounted in 1910-11 to 1,478,000. The financial scheme under Home Rule must obviously contemplate and provide for the continuance of those grants. Land Purchase schemes have been enacted which have already had the effect of converting a quarter of a million tenants into owners under a contingent liability of 120 millions sterling guaranteed by the Imperial Exchequer. No financial scheme can ignore the fact that the earliest of the annuities created under the Wyndham Act will not expire before 1972, so that the Imperial liability for the payment of the bulk of the annuities already created will continue for at least seventy years more.

Finally, we are faced with the fact that in the last twenty-five years the relations of the State to its citizens have been completely reformed and extended. Social reform is now in the programme of all parties. Education costs several times as much as in 1885. The aged poor have been provided with pensions by the State, and the Insurance Act of last year will shortly call for additional subventions from the Imperial Treasury.

In addition to the new duties thus undertaken by the State, the cost of Defence and of the Civil Services has grown by leaps and bounds. We need not look too closely into the apportionment of these charges whilst we remain partners in a United Kingdom, but if the partners.h.i.+p is to be dissolved at the suit of Irish Nationalism, a new balance must be struck, and on any fair basis the contribution of Ireland under present-day conditions should far exceed the amount under either of the schemes for which Mr. Gladstone made himself responsible. Both schemes recognised the equity of some contribution for these services from Ireland, and it must be a.s.sumed that the same broad principles will be applied in any scheme which may be framed hereafter.

By way of introduction to any adequate discussion of the possible financial proposals of any Home Rule measure, it is desirable to set out in some detail the existing financial relations of Ireland and Great Britain. The Treasury calculations on this subject are embodied in two White Papers which have been prepared and published annually during the last eighteen years. It is true that doubts have from time to time been cast on the accuracy of these calculations and of the methods by which the materials on which they are based have been collected. As to this, it is only necessary to say that the information in the possession of the Treasury officials is infinitely more voluminous and likely to be more accurate than any in the possession of private individuals; and there is no reason to suppose the succession of eminent public servants, who have been in turn responsible for the preparation of these returns have been moved in one direction or the other by prepossessions or bias.

Their one attempt has been throughout to present a statement, as accurate as it is possible to make it on the one hand of the cost of the existing administration in Ireland and the expenditure incurred there, and on the other of the revenue derived from persons or property living or situated in that country. As the Prime Minister said on November 27 of last year--

"The utmost pains have been taken to make the estimates of 'true'

revenue approximately correct, and it is believed that the total revenue as given in the revised returns approximates closely to the facts."[50]

So long as Ireland is an integral part of the United Kingdom, such an investigation has mainly an academic interest. The State is a h.o.m.ogeneous ent.i.ty; the taxes imposed on individuals similarly circ.u.mstanced are the same (with some trifling exceptions--all in favour of Ireland) in whatever quarter of the United Kingdom the individual resides. But the case is wholly different when a proposal is made to split up the State into its const.i.tuent parts. It then becomes necessary to inquire if there is any prospect that the const.i.tuent parts will have resources sufficient for the various services, commitments and liabilities--present and contingent--which do or will belong to them.

And the beginning of any such inquiry is, as has been already said, the present Irish revenue and expenditure.

The essential figures for such an investigation are contained in the following statement. This shows separately the expenditure on the various items which have been the subject of discussion or special mention in the different financial schemes proposed in connection with Home Rule. On the revenue side the effect of the delayed collection of duties under the Budget of 1909-10 has been eliminated by taking the average revenue in the two years in certain items. The figures of expenditure relate to the year 1910-11. The corresponding figures for both collection and contribution are set out in this table in consequence of the suggestion made in some quarters that we should revert to the Gladstonian proposal of 1886 and credit Ireland with the full revenue as collected. Though any such proposal is patently absurd it is mentioned here for the sake of completeness.

STATEMENT SHOWING ESTIMATED REVENUE AND EXPENDITURE IN IRELAND (BASED ON WHITE PAPERS 220 AND 221 OF 1911).

Revenue As collected. As contributed.

1. Customs[A] 2,922,000 2,866,000 2. Excise (_ex._ licences)[A] 4,872,000 2,952,000 3. Licence Duties[A] 284,000 284,000 4. Estate, etc.[A] 914,000 914,000 5. General Stamps[A] 310,000 333,000 6. Income Tax[A] 1,106,000 1,307,000 7. Postal Services 1,155,000 1,155,000 8. Miscellaneous 139,000 139,000

Total 11,702,000 9,950,000

[A] = Average of two years, 1909-10 and 1910-11.

Expenditure.

1. Civil list and miscellaneous charges (_ex._ Lord-Lieutenant's salary) 118,500 2. Lord-Lieutenant's salary 20,000 3. Local Taxation Payments 1,477,500 4. Public Works 415,500 5. Civil Service Departments 289,500 6. Department of Agriculture 415,000 7. Police 1,464,500 8. Judiciary, etc. 924,000 9. Education, etc. 1,805,000 10. Old Age Pensions 2,408,000 11. Superannuation, etc. 103,000 12. Ireland Development Grant 191,500 13. Miscellaneous 12,000 14. Revenue Departments 298,000 15. Postal Services 1,404,500

Total 11,346,500

The first striking fact in the foregoing statement is the large difference between "contributions" and "collections," _i.e._ between the "true" revenue derived from Ireland and the sums merely collected there.

During the last two financial years this difference amounted to an average of 1,752,000. The excise collections alone represent an excess of 1,920,000 over the actual contribution. This, of course, arises from the movements of duty-paid spirits and beer between different parts of the United Kingdom. The last Report of the Commissioners of Customs and Excise (Cd. 5827) gives the amount of home-made spirits on which duty has been paid in Ireland at 5,209,000 proof gallons, whereas the quant.i.ty retained for consumption was only 2,776,000 proof gallons. A similar but smaller difference exists in the case of beer. To credit Ireland with the full amounts of the duties collected in Ireland, as was done by Mr. Gladstone in 1886, and as is now proposed in some quarters, would, in effect, amount to a gift from the British Exchequer of 1,750,000 a year. And there is obviously no security that the Irish Exchequer could rely on this boon being continued for more than a short time. There would be nothing to prevent the British spirit merchant from removing his spirits to this country in bond and paying the duty here after arrival. It is obvious that the Treasury would be compelled to grant facilities for this course. The present system is merely one of book-keeping and administrative convenience, but as the withdrawal of this sum from the British Exchequer to which it properly belongs would have to be made good from other British sources, there would be every inducement for the British merchant to effect such slight changes of method as would transfer the whole of this sum from the Irish to the British Exchequer. Having regard to the fact that on the other sources of revenue the collections in Ireland are estimated to fall short of the actual contributions by nearly 200,000, and that these are in the main direct taxes paid by the individuals concerned, it is not unlikely that a scheme which gave to Ireland the full benefit of her revenues as collected would in a short time be converted from a gain of some 1,700,000 to a loss of 100,000 to 200,000 to the Irish taxpayer.

Stability in the tax system and reliability upon the realisation of the estimated revenue could not be a.s.sumed if "collections" instead of "contributions" were to be made the basis of any financial arrangements.

Turning next to the contributed revenue upon which alone an Irish Parliament could rely, we note first the large proportion of the revenue represented by Customs and Excise. Contrasted with the figures for Great Britain, it is seen by the following table that whereas in Ireland the revenue from Customs and Excise amounts to 60 per cent. of the total, in Great Britain the proportion was not more than 36 per cent.