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 associated 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 passed 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 partnership 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 assumed 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
homogeneous entity; the taxes imposed on individuals similarly
circumstanced 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 constituent parts. It then becomes necessary
to inquire if there is any prospect that the constituent 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