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Against Home Rule (1912) by Various

V >> Various >> Against Home Rule (1912)




Passing from the consideration of revenue it is necessary to examine the
relation of present revenue to present expenditure. The first table in
the present article shows that the ascertainable expenditure for Irish
purposes in 1910-11 was about L1,400,000 more than the revenue. To this
expenditure must be added about L300,000 for the State Share of the
benefits under Part I. of the National Insurance Act, about L50,000 in
respect of Part II., and about L100,000 for cost of administration of
both parts, increasing the immediate deficit to about L1,550,000. This
calculation, moreover, includes no charge against Irish revenue on
account of Imperial Services--navy and army; National Debt, interest and
management; the diplomatic services, and so forth. The equity of such
payments has been consistently recognised in the two Bills and the three
financial schemes submitted by Mr. Gladstone. However moderate the scale
of contribution it would in the present case double or treble the margin
between Irish revenue and Irish expenditure for local purposes. If, for
example, the precedent of the 1886 Bill were followed, and Ireland
charged with a contribution for Imperial services in proportion to the
estimated relative taxable capacities, the additional charges on the
Irish Exchequer would amount to not less than about L4,000,000 on the
1910-11 figures if the taxable capacity of Ireland be taken at
one-twenty-fifth, and to nearly L3,500,000 if it be taken at
one-thirtieth.

It may be worth while here to refer to the amazing statement that Great
Britain has made a large "profit out of the Union." At the last meeting
of the British Association, Prof. Oldham affected to prove that Ireland
"in the course of one hundred years ... had sent across the Channel as
her contribution to the British Exchequer a clear net payment of about
330 millions sterling." The same contention has been urged by Lord
MacDonnell. This calculation ignores the fact that even the Irish
Parliament between 1782 and 1800 acknowledged its obligation to
contribute to Imperial services, and voted contributions for Imperial
purposes, besides raising and maintaining in Ireland a force of 12,000
to 15,000 men, some of whom were available for foreign service. It makes
no allowance also for the debt which Ireland brought into the Union
when the Exchequers were amalgamated in 1817. The importance of the last
item may be judged from the fact that if the whole of the so-called
contribution to Imperial services, _i.e._ the excess of true revenue
over local expenditure, had been employed since 1817 in paying interest
at 3 per cent. on the old Irish debt and the whole of any balance
remaining after payment of interest had been used for redemption of the
capital, this debt would only have been extinguished in 1886. If a
contribution of only 1 per cent. to the cost of Imperial services had
been previously charged against this excess, there would be a large
balance of the Irish debt still outstanding. As a matter of fact, in the
same period that Ireland is said to have contributed L330,000,000, Great
Britain may be shown by a precisely similar calculation to have
contributed no less than L5,800,000,000 for Imperial purposes. The
measure of "injustice to Ireland" meted out by unsympathetic Britons in
respect to the Imperial contribution extracted from Ireland may be seen
from the following comparison for different dates in the last century.

RATIOS OF POPULATIONS AND CONTRIBUTIONS TO IMPERIAL SERVICES
OF IRELAND AND GREAT BRITAIN AT DECENNIAL INTERVALS.

Ratio of British to Ratio of British to
Irish Populations. Irish Contributions.

1819-20 2.1 12.7
1829-30 2.1 10.9
1839-40 2.3 11.5
1849-50 3.2 17.6
1859-60 4.0 9.8
1869-70 4.8 12.3
1879-80 5.7 16.3
1889-90 7.0 22.6
1899-00 8.9 46.5
1909-10 9.3 [52]

The truth is that from a financial point of view Ireland has no valid
complaint to make on the score of her contributions for Imperial
purposes. Between 1820 and 1840 the Irish population was a little less
than one-half of the population of Great Britain; her contribution for
Imperial Services varied from one-eleventh to one-thirteenth. In
1899-1900 the British contribution was 46-1/2 times the Irish, though
the population was less than nine times as large. If any contribution
for Imperial Services from Ireland is justified, and Mr. Gladstone at
least acknowledged it, no one can say that the contribution actually
taken from Ireland has been excessive.

As already stated we are still without any information as to the
financial proposals to be included in the Home Rule Bill of 1912. The
Government have appointed a Committee to advise them upon this subject.
Though the cost of the Committee has been met out of public funds, and
sources of information were laid open to them which are not readily
available to the public, the Prime Minister has steadily refused to
supply to Parliament any information as to the results of their
labours.[53] The terms of reference to the Commission; the witnesses
examined by them; the information placed at their disposal; the
character of the conclusions and recommendations; these have, all alike,
been refused to the House of Commons. But while Parliament has been
denied this information, there is every reason to believe that the
leaders of the Nationalist Party have been taken fully into the
confidence of the Government. We do not know whether, for example, the
Customs or Excise or both will be imposed and collected by the future
Irish Parliament. We do not know whether any contribution will be
required for the Irish share of Imperial services. We are equally
uncertain whether any and what purely Irish services will be retained by
the Imperial Parliament, and charged on the Imperial Exchequer. And
lastly, the intentions of the Government in regard to the payment of a
subsidy from the Imperial Exchequer to the Irish Parliament, with which
rumour is busy, are as yet unrevealed.

In spite of this lamentable paucity of information as to the Government
plan, I think it can be safely said that no scheme even remotely
resembling any of those presented in connection with the two previous
Bills can be put forward now. Each of those schemes would involve the
Irish Parliament in a huge deficit from the very outset. Even if the
schemes were adapted to the changed modern conditions the same
impassable gap between available revenue and certain expenditure
remains. Those schemes presumably embodied principles which the
Governments of 1886 and 1893, and the Nationalist parties of those dates
regarded as adequate. It would be strange if it were otherwise, seeing
that an examination and comparison of the separate schemes can discover
no other consistent principles except the solitary one of juggling with
the revenues, expenditures, and contributions in such manner as would
start the Irish Parliament with a small surplus. In view of the
importance of these earlier attempts to secure an approximation to
financial equilibrium, it appears desirable to examine how Ireland would
fare in modern conditions under each of them.

The essential features of the 1886 scheme were as follows:--

1. Customs and Excise to be under the complete control of the Imperial
Parliament.

2. Irish Parliament to have power to levy any other taxes.

3. Ireland to contribute annually to the Consolidated Fund of the United
Kingdom.

(_a_) L1,466,000 for interest and management of Irish share of National
Debt.

(_b_) L1,466,000 for contribution to Imperial Defence.

(_c_) L110,000 for contribution to Imperial Civil Services.

(_d_) L1,000,000 for Irish Constabulary.

4. Contributions 3 (_a_) to 3 (_d_) were not to be increased for thirty
years, but might be diminished.

5. Irish share of National Debt to be reckoned at L48,000,000, and Irish
Sinking Fund to begin at L360,000, increasing by amount of interest
released on redeemed portion of debt.

6. Contribution to Imperial Defence and Civil Services not to exceed
one-fifteenth of the total cost in any year.

7. Irish contribution to be credited with receipts on account of Crown
Revenues in Ireland.

8. If expenditure on Constabulary fell below L1,000,000, contribution 3
(_d_) to be correspondingly reduced.

9. Customs and Excise _collected_ in Ireland were to be subject to
following charges:--

(_a_) Cost of collection, not more than 4 per cent.

(_b_) Contributions to Consolidated Fund of the United Kingdom.

(_c_) Payments to National Debt Commissioners.

(_d_) Any sums required under the Land Act of that Session the balance
being paid over to the Irish Government.

10. The Lord Lieutenant's salary not to fall on the Irish Exchequer.

Broadly the scheme gave to the Irish Government credit for the Customs
and Excise _collected_ in Ireland and charged it with annual payments of
L4,502,000 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 L3,200,000, and
with a prospective immediate increase by about L450,000 on account of
the Insurance Act. The actual budget deficit would thus be about
L3,650,000. The Imperial Parliament would collect about L7,794,000, and
after deducting L5,346,000 would hand back to the Irish Exchequer the
difference of L2,458,000. The revenues upon which the Chancellor in the
Irish Parliament could rely would be, therefore, L6,366,000. Out of this
an expenditure of L9,562,000 would have to be met. The postal services
would probably not stand any increased charges; there is left,
therefore, only L5,211,000 of free revenue, and only L2,753,000 under
the unrestricted control of the Irish Parliament. With such resources it
would be obviously impossible to make good a deficit of L3,206,000 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 L2,000,000.

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 L2,400,000, and seeing that in 1886 her
reasonable share of liability on account of Imperial Services was put at
L4,600,000, 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 L500,000. During the discussions of
the Bill an error in the Excise contributions, reducing the revenue
available to the Irish Exchequer by L356,000 was discovered. The reduced
surplus of L144,000 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.

SCHEME B (BASED ON BILL OF 1893, AS INTRODUCED).

REVENUE. L EXPENDITURE. L

1. Excise (true revenue 1. Civil Government
_ex._ licences) 2,952,000 charges (_ex._ Constabulary
2. Local Taxes-- and Lord
(_a_) Stamps 333,000 Lieutenant's salary) 6,952,000
(_b_) Death Duties 914,000 2. Collection of Ireland
(_c_) Income Tax 1,307,000 Revenues, etc. 298,000
(_d_) Excise licences 284,000 3. Postal Services 1,404,000
3. Postal Revenue 1,155,000 4. Contribution to Constabulary
4. Miscellaneous 150,000 (2/3rds of
--------- L1,464,500) 976,000
7,095,000
Deficit 2,535,000
--------- ---------
9,630,000 9,630,000

The narrow surplus of L144,000 has disappeared, and instead there is on
present-day figures the substantial deficit of L2,535,000. Here again it
may be observed that the Excise duties are fixed by the Imperial
Parliament, and the Postal charges are presumably also invariable. The
first Budget deficit would, as before, be not less than L3,000,000. The
taxes within the absolute control of the Irish Parliament would have
been producing a revenue of L2,838,000. It is within this range of
taxation, or by the imposition of new direct taxes, that the Irish
Chancellor of the Exchequer would have been compelled to raise an
additional L3,000,000 in order to make the two sides of his account
balance.

Owing to the mistake already referred to, Mr. Gladstone prepared and
presented a third scheme, whose principal features were as follows:--

1. Ireland's contribution to Imperial expenditure to be one-third of
the true revenue of taxes levied in Ireland.

2. Ireland to be credited with miscellaneous receipts and surplus (if
any) arising from postal services.

3. Ireland to pay out of revenues credited to her, two-thirds of the
cost of the Constabulary, all Civil Government charges and any deficit
on postal services.

4. The Customs and Inland Revenue duties and the rates for Postal
charges to be fixed and collected by Imperial Parliament.

5. After six years (1) Irish contribution to Imperial Services to be
revised; (2) the collection of Inland Revenue duties to be undertaken by
Irish Government; (3) Irish legislation to impose the stamp duties,
income tax, and excise licences. The financial clauses as thus
remodelled and simplified were expected to produce a surplus of
L512,000. The characteristic feature of this arrangement was the
provision for handing over to the Imperial Exchequer one-third of the
Irish true tax revenue as Ireland's payment on account of Imperial
Services. How matters would stand if this arrangement were applied to
the present financial situation in Ireland may be seen from the
following table.

SCHEME C (BASED ON BILL OF 1893, AS AMENDED).

REVENUE. L EXPENDITURE L

1. Customs 2,866,000 1. Civil Government
2. Excise (_ex._ licence Charges 6,952,000
duties) 2,952,000 2. Constabulary (2/3rds
3. Stamps 333,000 of L1,464,000) 976,000
4. Death duties 914,000 3. Estimated deficit on
5. Licence duties 284,000 Postal Services 249,000
6. Income Tax 1,307,000
7. Crown Lands, etc. 25,000
---------
8,681,000
---------
8. 2/3rds of L8,965,000 5,757,000
9. Miscellaneous Receipts
115,000
---------
5,902,000
Deficit 2,275,000
--------- ---------
Total 8,177,000 Total 8,177,000
--------- ---------

The main Irish objection to a scheme of this description is that,
whatever tax be imposed, the amount taken from the Irish taxpayer would
be 50 per cent. greater than the amount going into the Irish Exchequer.
It is easy to foresee that such an arrangement would have led to much
friction and difficulty, and that it could not have lasted even the six
years for which it was provisionally fixed. If applied to the present
situation Ireland would have been contributing less than L3,000,000 for
Imperial services, although a very moderate estimate of what her
contribution should be would require her to pay at least L5,000,000. In
spite of this modest payment, however, this scheme would have confronted
the Irish Chancellor of the Exchequer with a deficit of more than
L2,250,000 rising at once to L2,700,000 in consequence of the Insurance
Act.

In reviewing the three financial schemes which have previously seen the
light, the following facts stand out clearly:--

1. Some contribution was expected from Ireland for Imperial services in
each scheme.

2. The rates of customs, excise, and postage were in all cases to be
controlled by the Imperial Parliament.

3. The customs were in every case to be collected by officers of the
Imperial Exchequer.

4. In the two schemes of 1893 "true" revenue and not "collected" revenue
was the basis of the financial arrangement.

5. Each of these schemes would involve the Irish Parliament from the
outset in a huge deficit.

In view of these facts it is certain that any arrangement which
pretended to give a Budget surplus to the Irish Parliament would
involve, overtly or covertly, the payment of a large subsidy to Ireland
out of the Imperial Exchequer. Such a contingency is not likely to make
Home Rule more acceptable, or the path of any Bill through Parliament
more easy.

FOOTNOTES:

[Footnote 50: See Parliamentary Debates.]

[Footnote 51: Based on White Papers 233 (1910) and 220 (1911).]

[Footnote 52: No contribution from Ireland in this year; local
expenditure is estimated to have been in excess of revenue contributed.]

[Footnote 53: Since the above was written, Mr. Birrell has promised
(March 27, 1912) to publish the report "some time" after the
introduction of the Home Rule Bill.]




V

HOME RULE AND THE COLONIAL ANALOGY.

BY L.S. AMERY, M.P.


There is no argument in favour of Home Rule for Ireland which is more
frequently used to-day than that which is based on the analogy of our
Colonial experience. In the history of every one of our Colonies--so
runs one variant of the argument--from Lord Durham's report on Canada
down to the grant of responsible government to the Transvaal, "Home
Rule" has turned disaffection into loyalty, and has inaugurated a career
of prosperity. Why should we then hesitate to apply to Irish discontent
the "freedom" which has proved so sovereign a remedy elsewhere? Again,
if our Dominions have been able to combine local Home Rule with national
unity--so runs another variant--why should a policy which works
successfully in Canada or Australia not work in the United Kingdom?
Another suggestion freely thrown out is that Home Rule is only the
beginning of a process of federalisation which is to bring us to the
goal of Imperial Federation. In one form or another the Colonial Analogy
occupies the foreground of almost every speech or article in favour of
Irish Home Rule. The ablest, as well as the most courageous, piece of
Home Rule advocacy which has so far appeared, Mr. Erskine Childers's
"Framework of Home Rule," is based from first to last on this analogy
and on little else.

That the argument is effective cannot be gainsaid. It is the argument
which appeals most strongly to the great body of thoughtful Liberals who
from every other point of view look upon the project with unconcealed
misgiving. It is the argument which has appealed to public opinion in
the Dominions, and has there secured public resolutions and private
subscriptions for the Nationalist cause. In one of its forms it appealed
to the imagination of an Imperialist like Cecil Rhodes. In another it
has, undoubtedly, in recent years attracted not a few Unionists who have
been prepared to approach with, at any rate, an open mind the
consideration of a federal constitution for the United Kingdom. And,
indeed, if the analogy really applied, it would be difficult to resist
the conclusion. If Ireland has really been denied something which has
proved the secret of Colonial loyalty and prosperity, what Englishman
would be so short-sighted as to wish to deprive her of it for the mere
sake of domination? If Home Rule were really a stepping-stone towards
Imperial Federation, how insincere our professions of "thinking
Imperially," if we are not prepared to sacrifice a merely local
sentiment of union for a great all-embracing ideal!

But, as a matter of fact, there is no such analogy bearing on the
question which, here and now, is at issue. On the contrary the whole
trend of Colonial experience confirms, in the most striking fashion, the
essential soundness of the position which Unionists have maintained
throughout, that the material, social and moral interests, alike of
Ireland and of Great Britain, demand that they should remain members of
one effective, undivided legislative and administrative organisation.

The whole argument, indeed, plausible as it is, is based on a series of
confusions, due, in part, to deliberate obscuring of the issue, in part
to the vagueness of the phrase "Home Rule," and to the general ignorance
of the origin and real nature of the British Colonial system. There are,
indeed, three main confusions of thought. There is, first of all, the
confusion between "free" or "self-governing" institutions, as contrasted
with unrepresentative or autocratic rule, and separate government,
whether for all or for specified purposes, as contrasted with a common
government. In the next place there is the confusion between the status
of a self-governing Dominion, in its relations to the Imperial
Government, and the status of a Colonial state or provincial government
towards the Dominion of which it forms a part. A truly inimitable
instance of this confusion has been provided by Mr. Redmond in a
declaration made on more than one occasion that all that Ireland asks
for, is, "What has already been given to twenty-eight different portions
of the Empire."[54] Considering that the "portions" thus enumerated
include practically sovereign nation states like Canada, provinces like
those of the South African Union, with little more than county council
powers, and stray survivals, like the Isle of Man, of an earlier system
of government, based on the same principle of ascendency and
interference as the government of Ireland under Poynings's Act, it is
difficult to know which to admire most, Mr. Redmond's assurance, or his
cynical appreciation of the ignorance or capacity for deliberate
self-deception of those with whom he has to deal. The third confusion is
that between Imperial functions and national or Dominion functions, due
to the fact that the two are combined in the United Kingdom Parliament,
which is also, under present conditions, the Imperial Parliament, and to
the consequent habitual use of the word "Imperial" in two quite
different senses. It is this last confusion which makes such a
declaration as Mr. Asquith's about safeguarding "the indefeasible
authority of the Imperial Parliament" a mere equivocation, for it
affords no indication as to whether the supremacy retained is the
effective and direct control maintained by Canada over Ontario, or the
much slighter and vaguer supremacy exercised by the United Kingdom over
the Dominions. It is this same confusion, too, which is responsible for
the notion that the problem of creating a true Imperial Parliament or
Council by a federation of the Dominions would be assisted, either by
creating an additional Dominion in the shape of Ireland, or by
arranging the internal constitution of the United Kingdom, as one of the
federating Dominions, on a federal rather than on a unitary basis.

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