Broadly the scheme gave to the Irish Government credit for the Customs
and Excise _collected_ in Ireland and charged it with annual payments of
£4,502,000 in addition to the cost of collection. It is clear that Mr.
Gladstone, at the time when the Irish population was about one-eighth of
the United Kingdom, assumed Ireland to have a taxable capacity of
one-fifteenth. If such a scheme were introduced at the present moment it
is obvious that, owing to the further decline in the population of
Ireland, a smaller figure for taxable capacity must be taken. What that
figure should be it is difficult, if not impossible, to decide
satisfactorily. It is generally assumed that on the basis of the
calculations made by the Financial Relations Commission in 1896, the
present relative taxable capacity for Ireland would be about
one-twenty-fifth that of the United Kingdom. In the last two financial
years the Irish contribution to Income Tax has been one-twenty-eighth,
and the contribution to Estate Duties one-twenty-sixth of the total
collection in the United Kingdom. These proportions, taken as measures
of taxable capacity must be exceptionally favourable to Ireland, where
the proportion of Income Tax payers and of persons possessing property
paying Death Duties is relatively to the total population smaller than in
the United Kingdom as a whole. If, therefore, for the sake of the present
calculations the mean of two proportions--_i.e._ one-twenty-seventh
deducible from the Income Tax and Death Duty contributions is assumed,
we employ a figure exceptionally favourable to Ireland. The financial
statement on the next page showing the 1886 scheme applied to present
conditions has been drawn up on this basis. The revenue is here assumed
to come in at the average rate of the last two years (1909-10 and
1910-11) and the expenditure is taken as that of 1910-11.
The state of the Irish Exchequer under the foregoing scheme would be
indeed a parlous one. It would start with a deficit of £3,200,000, and
with a prospective immediate increase by about £450,000 on account of
the Insurance Act. The actual budget deficit would thus be about
£3,650,000. The Imperial Parliament would collect about £7,794,000, and
after deducting £5,346,000 would hand back to the Irish Exchequer the
difference of £2,458,000. The revenues upon which the Chancellor in the
Irish Parliament could rely would be, therefore, £6,366,000. Out of this
an expenditure of £9,562,000 would have to be met. The postal services
would probably not stand any increased charges; there is left,
therefore, only £5,211,000 of free revenue, and only £2,753,000 under
the unrestricted control of the Irish Parliament. With such resources it
would be obviously impossible to make good a deficit of £3,206,000 by
any increase of taxation. It must not be overlooked, also, that the
effect of crediting Ireland with Customs and Excise as "collected"
instead of as "contributed" is practically to make the Irish Parliament
a further free gift of nearly £2,000,000.
A totally different scheme accompanied the Home Rule Bill of 1893 as
introduced. The principal features of the new scheme were as follows:--
1. Customs, excise, and postage to be imposed by the Imperial
Parliament.
2. Excise and postage to be collected and managed by the Irish
Parliament.
3. Customs to be collected and retained by the Imperial Parliament in
view of contribution to Imperial services.
4. Excise duties collected in Ireland on articles consumed in Great
Britain to be handed over to Imperial Exchequer.
5. If Excise duties be increased the yield of the excess duties to be
handed over to the Imperial Exchequer.
6. If Excise duties be reduced and Irish revenue diminished, the
deficiency to be made good to Irish revenue.
7. Two-thirds of the cost of the Constabulary to be repaid to the
Imperial Exchequer.
Some of the provisions of this scheme are of exceptional interest. If it
had ever been in operation the plan, for example, of adjusting the
payments from one exchequer to the other in the event of changes being
enacted by the Imperial Parliament in the Excise duties must have been
fruitful of difficulties and created much friction. If the duties had
been reduced there might have been an increased consumption. Who can say
how much of the revenue lost to the Irish Exchequer in the event of a
reduction of duties would have been due to the reduced rates of duty,
and how much had been regained by increased consumption. Again, if the
Excise duties had been increased, as in the Budget of 1909, to such a
degree that the total revenue at the higher duty was less than the total
revenue from the lower duty, who could have determined whether this was
a case requiring a payment from the Irish to the British Exchequer, or
from the British to the Irish Exchequer.
Perhaps the most striking novelty of the first scheme of 1893 was the
retention of the Customs duties in lieu of Ireland's contribution to
Imperial Services. At that time the estimated value of the Customs
contributed by Ireland was £2,400,000, and seeing that in 1886 her
reasonable share of liability on account of Imperial Services was put at
£4,600,000, the very large gift to Ireland represented by this scheme
may be readily imagined. Even with the full advantage of this gift the
estimated Irish surplus was put at £500,000. During the discussions of
the Bill an error in the Excise contributions, reducing the revenue
available to the Irish Exchequer by £356,000 was discovered. The reduced
surplus of £144,000 was regarded by Mr. Gladstone as "cutting it too
fine," and the financial scheme was completely recast. Before explaining
the third scheme it might be well to examine as before how the original
scheme of 1893 would work out at the present time. This is shown in the
following balance sheet.