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CHAPTER IV.

FINANCIAL AFFAIRS-Mr. Sheridan mores for leave to introduce a Bill to diminish the duty on Fire Insurances-The Chancellor of the Exchequer and Lord Palmerston oppose the motion-The motion is carried against the Government by 127 to 116, but the Bill is not proceeded with. THE BUDGET—Mr. Gladstone makes his Financial Statement in a Committee of Ways and Means, on the 3rd of April -He enters at much length into the state of the Revenue and Expenditure, and the results of past Remissions of Taxation-Proposes to modify the Wine Duties, and to commute the Hop Duty for a Licence on Brewing-A short discussion takes place on this occasion, but on a subsequent day Mr. Disraeli enters fully upon the subject of Finance, and impugns the Chancellor of the Exchequer's policy as unsound and fallacious-Mr. Gladstone justifies the measures proposed by him, and retorts on Mr. Disraeli–Sir Stafford Northcote enters upon an elaborate criticism of the Budget, and expresses dissatisfaction at the financial position-Discussion on the proposed Licence Duties on Brewing-Mr. Bass, Sir John Trollope, and other Members object to the scheme-The Chancellor of the Exchequer abandons the Duty on private Brewing-A general Debate on the Financial Policy of the Government takes place on the Second Reading of the Inland Revenue Bill-Sir Stafford Northcote again dissects the financial arrangements of the Government, and intimates distrust of their calculations-The Chancellor of the Exchequer enters fully upon a defence of his measures-Mr. Disraeli attacks both the Financial and the Foreign Policy of the Government, which is vindicated with much spirit by Lord Palmerston-On the Third Reading of the Inland Revenue Bill, Mr. Disraeli again inveighs against the unsoundness of Mr. Gladstone's Financial Policy-He is answered by Lord Palmerston-Remarks of Mr. Lindsay, Sir H. Willoughby, and other Members - The Bill embodying the several provisions of the Budget passes the House of Commons-It meets with considerable hostility in the House of Lords -Earl Granville moves the Second Reading on the 30th of May— It is supported by the Dukes of Newcastle and Argyle, and by Earl Russell, and opposed by the Earl of Carnarvon, Earl Grey, Lord Overstone, and the Earl of Derby-The Bill is passed and bec mes law-Incidental Discussions on Finance. The Income TaxMr. Hubbard moves a Resolution affirming the injustice of applying the same rate of Taxation to Incomes derived from fixed property and those of precarious tenure-Mr. Crawford seconds the motion

-The Chancellor of the Exchequer opposes Mr. Hubbard's scheme as incongruous and impracticable-The motion is negatived by 99 to 62. Reduction of Public Expenditure-Mr. Stansfeld gives notice of a motion affirming the feasiblity of re ́renchment without impairing the efficiency of the public service-Several Members give notice of amendments on this motion-Proposed amendments of Mr. Walpole and Lord Palmerston - On the day fixed for the motion Lord Palmerston, treating the question raised by Mr. Walpole as one of confidence in Ministers, calls on the other Members to waive their am ndments —An irregular discussion ensues Mr. Stansfeld addresses the House and moves his Resolution, which is seconded by Mr. Baxter-Lord Falmerston moves his Amendment, expressing approval of retrenchments already made and a hope of further diminutionSpeeches of Mr. Disraeli, Mr. Hor man, Mr. Cobden, and other Me nbers-On a division Mr. Stansfeld's Resolution is negatived by 367 to 65-Mr. Walpole then, disclaiming any intention of hostility to the Government, abandons his amen Iment-Sarcastic observations are made thereon by Mr. B. Osborne and Mr. Disraeli, who recommends the House to pass Lord Palme; ston's Amendment, which is accordingly adopted without opposition.

THE Chancellor of the Exchequer gave notice that he should make his financial statement to the House of Commons on the 3rd of April. Two days previously to that appointed for the Budget, Mr. Sheridan brought forward a motion for leave to introduce a Bill to reduce the duties on Fire Insurance. The measure which he now proposed differed from that which he bad unsuccessfully attempted in the preceding Session, in that it sought to reduce the present duty of 3s. per cent. by 1s., and at the end of five years by another 1s.; and he proceeded to show that the loss would be eventually made up by the reproductive effect of the reduction of the duty, the high amount of which, according to the best authorities, checked insurance. He denied that the opposition to the tax was organized by the fire insurance companies, who had an interest in the maintenance of the present

rate of duty, for the collection of which they received a percentage: and argued that competition would prevent an augmentation of the rate of insurance. He denounced the tax as false in principle, as well as unequal and unjust. It punished a man for taking care of his goods, without any equivalent, and left the improvident and reckless man untouched.

The Chancellor of the Exchequer, in opposing the motion, said he was not aware of any Government having been a voluntary party to the introduction of a Bill for the abolition of a tax, unless they were prepared to assent to such abolition. For this reason, and because it was mischievous to raise expectations out of doors that were not to be fulfilled, he should ask the House to refuse leave to introduce the Bill. He disputed the correctness of the facts relied upon and the arguments employed by Mr. Sheridan, and appealed to experimental evidence adverse to

his theory that a reduction of the Guty would greatly increase the amount of the property insured. He pointed out the fallacy of regarding this particular tax as a punishment on the ins rer, to whom, it was said, nothing was given in return. Was a man punished for buying tea and sugar? And what had he in return for the tax upon those articles but the protection of the law? This was a question to be judged of like other questions of finance. No member could vote for the motion, unless he was prepared to reduce this duty, whether there was a surplus or not, or, if there was a surplus, to reduce it in preference to any other. The House should not propose to give away anything till they had it; and when they had something to give away, they should consider claims and merits.

Mr. Malins and Mr. Hankey supported the motion.

Lord Palmerston observed that the main argument in favour of the motion was. that this tax was objectionable; but every tax was liable to some objection or other. His great objection to the motion was founded upon the time when it was brought forward. It was the constitutional principle that the Chancellor of the Exchequer should have the discretion of proposing the financial arrangements for the year, and if the House, before the Budget was proposed, picked out a particular tax for reduction, it was impossible to tell how it might affect those arrangements.

Upon a division, the motion was carried by 127 to 116, being a majority of 11 against the Government; but it led to no result,

the Bill being rejected in a subsequent stage.

On the 3rd of April, pursuant to his notice, the Chaneellor of the Exchequer, in a Committee of the whole House, made his annual statement of the national finances. The right hon. gentleman observed that it was, in some respects, simpler than the statements he had made on former occasions; at the same time, there were secondary questions, relating to matters requiring readjustment, which would oblige him to trespass for some time upon the indulgence of the House. The office of a Finance Minister upon such an occasion was a simple one,-to lay before the House such information as the Government could give on the revenue, expenditure, and resources of the country. The expenditure for the last year had been estimated by him at 69,875.000l.; but subsequently to his financial statement, there had been supplementary grants to the amount of 1,499,000l., which made the total estimated penditure 71,374,000l. The actual expenditure of the year was 70,838,000l., or 536,000. less than the total estimated expenditure. Compared with the year 1860-61, the expenditure of which was 72,504,000l.. the decrease in 1861-62 was 166,000l. The revenue of the past year amounted to 69,674,0007., which left a deficiency of revenue to meet the expenditure of 1,164,000l. Deducting this sum from the amount of the supplemental grants, 1,499,000l., there resulted a surplus of 335,000l. Comparing the revenue of the last year with that of 1861 62,it must be remembered that we had parted with three im

ex

portant sources of revenue, whereby we had lost at least 2,637,000l. We had likewise to encounter the difficulties created by the American blockade and a deficient harvest; and, as we must expect, our revenue was declining, though not in an alarming manner. The expenditure for the coming year, 1862-63, he estimated at 70,040,000l., and the revenue at 70,190,000l., leaving a surplus of 150,000l. Under these circumstances, the question was-there being so close a balance between revenue and expenditure-whether any new taxes should be imposed. In considering the causes which influenced our revenue, they might all be expressed in one'word, "America;" and the main question in relation to our export trade was, whether a large portion of the population of this country was to be supplied with the raw material, without which they would be deprived of employment. The great extension of our trade with France gave reason to hope that the commercial relations between the two countries would be valuable to us, not only in an economical view, but as a guarantee of friendly feelings and the best security for the peace and tranquillity of the world. The Government had not considered it their duty to propose the imposition of any additional taxes, reserving to themselves the right to consider in what mode they should meet any emergency in the public service that might possibly arise. As to the remission of taxation, it must be remembered that, though no taxes were remitted the burdens of the country would be lighter by 600,000l. or 700,000l. Va

rious changes in our taxation had been demanded of the Government by different interests,— the reduction of the duty upon spirits, an alteration of the sugar duties, the malt credits, the minor charges upon imports and exports, the wine duties, and the duty on hops. Mr Gladstone indicated certain minor changes he proposed to make in the inventory duty in Scotland, a moderate charge of an eighth per cent. upon all loans raised in this country, and upon supplementary licences to publicans to supply fairs; and he then adverted to the spirit duties. He had expected, he said, somewhat more than he had got; but all the evidence showed that the cause of the deficiency was not illicit distillation, and that the diminution of duty resulted from diminished consumption, combined with the increasing sobriety of the country. In Ireland there was an increase in the year's revenue that was perfectly satisfactory. The Government, therefore. would be in error if they failed to maintain the spirit duties. With regard to sugar, the question was complicated; but the West Indians were satisfied, and, like the refiners, protested against any change. His conclusion was that, if any change were to be made, it must be after a careful and protracted inquiry, and the Government would not oppose such inquiry if it were asked for. With respect to the malt credits, he must dispose of that question in the same manner. With reference to the minor charges upon trade, he admitted that the charge upon bills of lading had a strong claim for remission when we had a larger

surplus than 150,000l. He was willing that the subject of these minor charges should likewise undergo an impartial inquiry. As to the wine duties, according to the experience of the revenue department, and to the convictions of the Government, there would be difficulties in introducing a fundamental alteration in those duties, and the principle of an alcoholic test, to distinguish what he would call natural wines and brandied wines, would, he thought, be found a satisfactory basis for charging the duty. It did not follow, however, that the scheme might not be improved. Inquiries had been made in wine-growing countries, and the result was, that he proposed to alter the scale of duties. At present there were four rates; under 18 degrees, 1s.; 18 to 26, 1s. 9d.; 26 to 40, 2s. 5d.; 40 to 45, 28. 11d. He proposed to reduce the four rates to two; up to 26 degrees, ls. ; and from 26 to 42, 2s. 6d. Above 42 degrees he proposed a virtually prohibitory duty of 3d. for every additional degree of alcohol. The financial result would be a net gain of revenue of 15,8001. The case of the hop duty had, in his opinion, been very much exaggerated; but be admitted that there were

difficulties in the trade. Having, however, a surplus of only 150,000l. he could not part with 300,000l. a-year. The question arose whether it was not possible, with equity to all parties, by a commutation of this duty, to set free the foreign as well as the British trade in hops. He proposed, as such commutation, to remit the Hop Duties, and to re adjust the scale of brewers' licences on the principle

of accommodating the duty to that remitted. The brewer would derive a benefit from the remission of the duty on hops, and would be allowed 3d. per barrel drawback on the export of his beer. He explained the new scale of duties on the licences, and the mode in which he proposed to deal with private brewing. He would exempt persons residing in houses under 207. rent (he subsequently, however, intimated his reaness to reconsider his limitation), charging 12s. 6d. upon licences for private brewing in houses paying a higher rent. The result of this financial opera on would be a loss of revenue or 15,000/. The House was now, he said, in possession of the views of the Government. The prominent features of his statement were, that the year was to commence without any real surplus over expenditure, and that the circumstances in which the country had been placed were exceptional. He then proceeded to call attention to matters of a larger and more comprehensive character. The impression that the public expenditure was growing was, he said, not correct. He showed that, in point of fact, the expenditure had of late years been decreasing. At the same time, he admitted its amount to be such as ought to attract serious attention. The cause was due to the growth of the real and permanent wants of the country; to apprehensions as to the security of the country, and an anxiety to make provision for it; to the establishments and expenditure of other countries, and to special demands. He enlarged upon these topics, specifying the balance of taxes imposed and re

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