and that has been increased to £508,000, in this country, and a portion of the in consequence of the whole of the cur- usual revenue comes into the Exchequer rent charges for the cost of collection through the medium of the Customs of the Inland Revenue being now paid instead of through the medium of the for the first time out of the Excise. It Excise duties. Therefore, when we fail has been transferred to that Department to find the amount we expect under the for the purpose of simplifying the ac- head of Excise, we naturally turn to the counts; but that fact has the effect Customs duties to see if we can see anyof interfering with the comparison, un- thing there which will account for that less the matter is explained. With deficit. And in this year, although not regard to the Stamps, the principal varia- to the extent which might have been extions have been as follows:-There has pected under other circumstances, we find been an increase in legacy and succession that the Customs duties do, to a certain duties of £285,000, in the common law extent, afford some explanation of the court stamps of £90,000, in the receipt deficit in the Excise duties. I have stamps of £10,000, and in the fire insur- already stated that the Customs duties ance stamps of £33,000. On the other upon foreign spirits show an increase in hand, there is the decrease I have men- the past year of £126,000. There has tioned in marine insurances of £270,000, been, I believe, a falling off in the duty a decrease on bills of exchange of upon rum and brandy, but there has also £45,000, on probate duty of £20,000, been a considerable increase under the and on deeds of £30,000. Then, with head of Geneva and other spirits. I am regard to the Taxes, the Committee will told that there is a spirit that comes into recollect that there was an alteration made this country under the denomination of last year with regard to the dog duty, German spirit, which is largely used for which was then transferred from the Taxes fortifying, on account of its possessing but to the Excise; the assessed tax duty little flavour of its own, and it is the infor the last year of collection having been creased importation of this spirit which reduced from 12s. to 7s. But, notwith- accounts for the increase under the head of standing this reduction, the Taxes show Geneva and other spirits. This increase, an actual increase, which is attributable to however, must be attributed partly to the the increase in the house duty, of £41,000, deficiency in our harvests and to our and of an increase in the Income Tax of having recourse to foreign markets for £477,000, which latter is partly owing to spirits which we fail to get at a sufficiently the extra duty imposed last autumn under low price in this country. Therefore this that head. sum of £126,000 increase in the Customs I think may fairly be considered to have replaced an equal amount of revenue in the Excise. There is also an increase this year in the duty upon the sugar used by brewers. The excess of Excise duties upon this article amounts to £32,000, and as all sugar used by brewers, excepting the small quantity made in this country, pays Customs duty, besides paying Excise duty, it follows that part of the increase in the Customs Revenue must be attributed to the importation of sugar for brewing purposes. Now if we take roughly the proportion of duty payable under the head of Customs and of Excise upon this article, I find that the Customs duty is about three times the amount of the Excise duty. Thus we have a sum of about £100,000 of Customs revenue derived from the sugar duty, which no doubt must have replaced an equal amount of malt duty, which under other circumstances would have come under the head of Excise. These two sums taken together-the in Perhaps the Committee will now allow me to advert to the somewhat striking discrepancy between the Estimate of the Revenue taken by my right hon. Friend at the commencement of last year and the actual receipts as regards the different sources of Revenue from which the National income has been derived. Now, if we compare the Customs with the Excise revenue we shall find the following to have been the result. There is an excess over the Estimate in Customs of £650,000, while there has been a decrease in the Excise of £538,000—the excess of the Customs over the deficit of the Excise being something over £100,000. It has often been observed that, in those years when there has been a deficiency in the harvest of this country, the Excise revenue suffers while the Customs revenue increases. On those occasions we are obliged to have recourse to foreign markets for the supply of those articles which under unfavourable skies are not produced in the usual abundance VOL. CXCI. [THIRD SERIES.] 2 P crease under the head of Geneva and other spirits, and that under the head of duty upon sugar-account for two-fifths of the difference between the estimated and the actual receipts of Excise up to last April. In addition to this, the fact I before mentioned, that the payments into the Exchequer on account of Excise revenues have been diminished by more than £100,000, must, of course, be taken into account, and that also reduces the payments under the head of Excise revenue into the Exchequer by that amount. After taking this into consideration, there is a deficit remaining of about £200,000, which must be attributed to a less amount of consump. tion having taken place than was anticipated at the commencement of the last financial year. Then, as regards the excess of the receipts of Customs over that which was estimated, I have already mentioned the sum of £226,000 as having found its way into the Customs which would in ordinary years have found its way into the Excise, and to that we must add £70,000 for the corn duty, also attributable to the bad harvests of the last two years. These three sums together account for nearly one-half of the excess of Customs revenue over the Estimate. The remaining increase upon the Customs receipts over the Estimate must be attributed to the increased power of consumption of the country of Customable articles, unless we assume-which I fear is too sanguine a supposition-that the increase due to the receipts of tea duties is the result of a change in the habits of the people, and that the beverage "which cheers but not inebriates has taken the place of those ardent liquors which so often are more profitable to the Exchequer than beneficial to the individuals who consume them. There has been a deficit in the Income Tax received, compared with the Estimate, of nearly £663,000, which is attributed by that Department to an actual loss of revenue of £200,000, and to arrears amounting to £463,000, which sum is expected to fall in during the current year. The deficit upon the Post Office arises solely from the change we have made by determining to omit from the Estimates Votes for the Postages for the public Departments. We came to the conclusion that it was useless to ask Parliament to vote money which had afterwards to be paid into the Exchequer as Revenue, and therefore we determined not to submit to the House Estimates for such postages. Had this determination not been arrived at, it would have been necessary to have submitted to this House a Supplementary Estimate for Postages for public Departments, which would have brought up the revenue of the Post Office to the sum which it was estimated to produce. The deficiency upon the Miscellaneous Receipts is only in round numbers £14,000 short of the Estimate; but in the statement made by my right hon. Friend (Mr. Disraeli) last April he took into account a certain amount he expected to receive from the operations of the Fees and Fines (Ireland) Bill; but the House showed such a reluctance to pass that measure and sanction that transfer that the Government did not press it, and the consequence has been a certain loss to the Revenue under the head of Miscellaneous Receipts. The result of all that I have stated is a deficit of £370,000 upon the Estimates, which would have been more than counterbalanced had it not been for the delay in the collection of the Income Tax at the close of last year. The Committee will no doubt wish to be informed of the effect of the small alterations which took place in our system of taxation last year. The alteration in the marine insurance duty was estimated to cause a loss of £210,000, but the actual loss was £270,000. I am, however, informed that this loss is more apparent than real, because there were certain old stocks of stamped papers in the hands of persons concerned in that business which have been exchanged for new ones; and this accounts for some of the loss. Then there is another matter which, although it was not dealt with as part of the Budget, must be considered as forming a part of the financial arrangements of the year-namely, the alteration in the dog duty. When the Bill upon that subject was introduced last year, this tax was estimated to produce £300,000; but the produce of the Excise duty upon dogs last year amounts to £366,000. The Committee will remember that during the year of the alteration the Excise duty was taken for merely nine months. The new duty commenced at the beginning of the last financial year. Of the £366,000 a sum of £207,000 was collected during the nine months ending 31st December, 1867, and the remaining £159,000 during the first three months of the natural year 1868. The Committee may like to have a comparison between the number of dogs brought into charge under the old system than the Estimate. The other ordinary and that under the new. The number of charges on the Consolidated Fund were dogs charged under the assessed taxes up £1,893,898, being £6,000 less than the to April, 1867, was 445,645. The number Estimate. The Army expenditure amounted of dogs brought into charge under the Ex- to £15,418,582, being £118,000 more cise licences between April and December, than the Estimate. The Navy charges 1867, was 828,341; and the number of amounted to £11,168,949, being an exdogs for which licences had been taken cess of £102,000 over the Estimate. The out this year up to March was 637,000. I Miscellaneous Civil Services amounted to think the Committee will be of opinion £8,491,342, being £83,000 more than that the change which was made has been the Estimate. The Revenue Departments a success; and this result gives rise to the took £4,883,203, being £170,000 less than consideration whether, at some future time, the Estimate. The Post Office Packet Serit may not be desirable to make a like vice was £808,518. With regard to the change as regards some others, if not all, Extraordinary Expenditure for the Service of the assessed taxes. The advantage of of the Abyssinian Expedition, the Estiturning assessed taxes into Excise duties mate was not exceeded. The whole shows is this that you pay for the year in which a total expenditure of £71,236,242, as the articles are kept. Under the assessed against an Estimate of £71,287,000; so tax system no one is called for a return of that the expenditure was less than the the articles kept till the year has expired; Estimate by £51,000. and it frequently happens that the most conscientious persons, anxious to make a most correct return, are not able to do so, not remembering exactly the date of the changes made in their establishment. Besides, in making such charges it seems more reasonable that the tax should be on the number of articles kept on the year for which the charge is made, rather than on the number kept in a previous year. Moreover, a great loss often falls on the Exchequer, because people keeping articles this year may become bankrupt or insolvent, or may disappear from the country, or from the world altogether; and consequently there is a great difficulty in collecting assessed taxes to the full amount they ought to be collected. Therefore I say it will be well to consider whether at some future time it may not be well to follow the initiative taken with regard to dogs in respect of the other assessed taxes. I now come to the Estimate of the expenditure compared with the result:-and in taking the Estimate of expenditure I am taking the Estimate of the interest of Debt and of the ordinary charges on the Consolidated Fund, as stated by my right hon. Friend at the commencement of the last year; but the Supply Services I am taking as they were voted, because, some alterations were made in them some diminutions and some increases. I am afraid there was more increase than diminution after these Estimates were originally presented, and therefore I am taking them as they were voted. With regard to the interest of Debt, the actual payment was £26,571,750, being £178,000 less I now proceed to compare the expenditure for 1867-8 with that for 1866-7. In the interest of the Debt there was an increase of £489,972; on the other ordinary charges on Consolidated Fund an increase of £29,567; on the Army there was an increase of £743,042; on the Navy of £492,848; on Miscellaneous Civil Services of £678,648; on the Revenue Departments £59,245. Then there was an extraordinary item of £2,000,000 for the Abyssinian Expedition: thus making the total expenditure for 1867-8 a sum of £71,236,242, as against an expenditure of £66,780,396 for the year 1866-7, showing a total increase for the past year of £4,493,322. Of course, the Abyssinian Expedition accounts for nearly half that -namely, £2,000,000. I come now to state the Revenue and expenditure of the previous year, as compared with each other. I have already stated the expenditure of 1867-8 at £71,236,242 ; while the Revenue was, in round numbers, only £69,600,000, showing a deficit on the year of £1,636,000; but I think it would be right to call attention to the fact that some part of this expenditure was not due to the year just past, but to the previous year; because there were Excess Votes taken to the amount of £228,000 for sums paid in respect of money spent in 1866-7, though they come into the account of 1867-8. deficiency I have stated was £1,636,000; and it will be remembered that when the Supplementary Financial Statement was made to the Committee of Ways and Means in November last we estimated for a defi The ciency. We estimated for taking out of the balances a sum of £960,000, to which the Committee assented. The Committee would, no doubt, wish to hear how the difference between those two sums is to be accounted for. At that time we estimated a surplus of £200,000, which has not been realized. On the contrary, the Supplementary Estimates and Excess Votes have swelled the expenditure by £362,000. The expected saving of £100,000 on expenditure has not been realized in the way we then anticipated. This shows how the difference between the deficit which we estimated in November and the deficit which appeared when the accounts were actually made up is accounted for. This deficit has however been met out of the balances in the Exchequer. There was besides an excess of expenditure over income on the Revenue and expenditure of the year, also an excess of payments over receipts in the Exchequer accounts other than the Revenue and expenditure to a considerable amount, which further reduced the balances by £876,000. That is principally-indeed, I may say entirely-due to payments on the Sinking Fund account. The result is that the balances which on the 31st of March, 1867. stood at £7,294,000, were on the 31st of March, 1868, reduced to £4,782,000, showing a diminution of £2,512,000, between the two periods. I do not think that the balances stand as high as they should do; but, at the same time, we found at the commencement of this quarter sufficient to carry us through without having recourse to the Bank for advances. We have been able in this quarter to pay the interest of the Debt, the charges on the Consolidated Fund, and all other demands on the Exchequer, and to leave a sum remaining without having recourse to the assistance of the Bank. Therefore, though the balances are lower than I think they ought to be, I cannot say that, up to the present time, that has caused us any practical inconvenience. The Committee may wish to have some account of the alterations which have been made in the Public Debt during the year that has passed. In addition to the conversion of the Bank Debt to the amount of £24,000,000 there was further a conversion into Terminable Annuities to the amount of £2,500,000 under the Acts of last Session. Besides this, we cancelled stock to the amount of £888,766 under ordinary powers. Then, Exchequer Bills have been cancelled under the permanent Acts to the amount of £45,700, while stock has been cancelled by conversion into life and other annuities under old Acts to the amount of £804,102. Then, in accordance with what I stated to the Committee in November last, Sinking Fund money to the amount of £901,638 has been applied in repayment of Bank advances, which would, if our Exchequer had been in a more flourishing state, have been applied to the extinction of the permanent Debt. The power given to the Government to renew Exchequer Bonds to the amount of £1,700,000 has been exercised, and the Bonds have been renewed; but they have been renewed on more favourable terms than before-namely, at the rate of 3 per cent interest, instead of 3 per cent and 4 per cent. And now I come to the present financial year, 1868-9, and I think I shall best consult the convenience of the Committee if I first of all deal with the estimated ordinary expenditure and income, putting aside the Abyssinian Expedition for the present. We can afterwards see what must be added to each side of the account in consequence of that Expedition. The interest of the Debt I take at £26,700,000; other charges on the Consolidated Fund, £1,865,000. Then, as regards Supply Services, the estimated expenditure will be as follows:-For the Army, £15,456,000; for the Navy, £11,177,000; for the Civil Services, £9,173,000; for the Revenue Departments. £4,968,000; and for the Post Office Packet Service, £1,089,000. The total of these amounts is £70,428,000. It may now, perhaps, be convenient to the Committee to hear what alterations have been made in the charge for the interest of Debt in consequence of the operations of the previous year. There is an increase in respect of Terminable Annuities expiring in the year 1885 of £801,134, and on account of interest on life and tontine annuities there is an increase of £47,253, making a total of £848,387. Against this, however, savings on other accounts must be set. In the first place, a deduction of £292,870 must be made in respect of "the dead-weight annuities" which have expired. Then there is a diminution of. interest on the permanent Debt, to the extent of £438,569; and on annuities for terms of years to the extent of £2,297; saving, in consequence of lowering the rate of interest on Exchequer Bonds, £11,000; a similar saving on the interest on Exchequer Bills to the amount of not carefully studied the Estimates, or the abstracts of them, the change will be exceedingly misleading, and I regret that the hon. and gallant Gentleman should have been led to think that the Government had been indulging in very extraAnd now, I should like, if the Commit- vagant notions and propositions. The fact, tee will allow me, to say a few words I believe, is that on the Navy Estimates about the increase in the Estimates for there is really an increase of £10,000 the present year; and I think it is the only. In the Army Estimates, it is true, more necessary that I should do so in con- there is an increase of £200,000; but the sequence of the remarks which the hon. cause of that has been already explained and gallant Gentleman the Member for to the House by my right hon. Friend the Aberdeen (Colonel Sykes) began to make Secretary of State for War. There is an the other evening when, by the ruling of increase on the Civil Service Estimates of the Chairman, he was prevented from something over £400,000. A great part concluding them. These remarks had re- of that increase-I think about £170,000 ference to the great increase of the Civil or £180,000-is attributable to the intenService and Revenue Department Esti- tion on the part of the Government to mates for the present year. Now, the extend education; and the exact amount greater part of that apparent increase is will be found under the head of "Educaentirely due to a different mode having tion in England and Ireland," and "Scibeen adopted in making out the accounts. ence and Art." About £198,000 is under It was formerly the practice in the case Class 1, for Buildings. Now, I believe of regular Votes to apply the extra moneys that, with the exception of about £34,000, received by a Department to the reduc- these sums are taken for the purpose of tion of the amount it required, and only to continuing works which have already reask the House of Commons to vote the ba-ceived the sanction of this House, and lance; but in the early part of this Session, an Act of Parliament was passed which provided that the Treasury might require that all such extra receipts should be paid into the Exchequer, the object being that the House might have a greater control over the expenditure of the various De partments. The new system was followed in making out the Estimates for the present year, the consequence being that the Votes have been greatly increased in nominal amount. The desirability of making that change was carefully considered by the Government, and it was thought expedient to make it for this reason-because a Department might, by estimating its extra receipts under the amount it was likely to receive, really get more money to expend than the House of Commons intended it to have. Indeed, during the last few years, some glaring instances of this have occurred, and the Government, therefore, recommended the House to pass a Bill on the subject. There existed considerable difference of opinion, I am aware, as to the expediency of the change; but we were in favour of it because we were greatly impressed with the desirability of bringing under the notice of the House the whole of the expenditure of each Department, and we, therefore, introduced the Bill. To those, however, who have which must therefore be of necessity followed up. I do not, of course, say it necessarily followed that the additional sums should be asked for this year; but, at all events, it was desirable to complete without delay the buildings which had been commenced. Some other items in excess this year are owing to the legislation of last year. The House has recently shown increased anxiety to prevent the food of the people from being adulterated, and also to protect the people in their employments; and in accordance with these beneficent views, Acts of Parliament were passed last year which required a great deal of inspection of people in their employments under the Home Office, and of the articles of consumption to be made use of by people at sea, under the administration of the Board of Trade. This circumstance also accounts for a considerable increase in the Civil Service Estimates. In addition to this, the Bill passed last year in regard to the Irish constabulary made a considerable increase in the Estimates; and there is also a proposition to be made this year for an increase of the Metropolitan Police, to which it is proposed that the Government should contribute in the same proportion as they have hitherto done. I believe I have now indicated the principal sources of increase in the Civil Service |