HOME RULE FINANCE.
TT has become almost a commonplace that the most serious difficulty in the way of the coming Home Rule Bill is the financial issue. In anticipation of this difficulty the Irish leader and his lieutenants are very ingeniously re-emphasizing the old unfounded charge that Ireland is overtaxed, and are even beginning to suggest that she is entitled to a refund of the excessive contributions she is alleged to have made in past years. Mr. Redmond, who possesses a picturesque command of figures that even Mr. Lloyd George might envy, stated a fortnight ago that in the course of a hundred years Ireland had contributed something over £300,000,000 to Imperial expenditure. The figure is approximately accurate—and perfectly justifiable. It amounts to only a trifle over ..C3,000,000 a year, and that is certainly not an excessive contribution for Ireland to make on the average over a period which included some eighteen years of war expenditure. In 1893 Mr. Gladstone, when putting forward the Home Rule Bill of that year, estimated that Ireland ought to contribute between 4 per cent. and 5 per cent. of the Imperial expenditure, and Sir W. Harcourt, in the same year, put the actual sum to be contributed by Ireland at £2,276,000. This was in a year of peace, when our naval and military expenditure was less than half what it now is. Both Mr. Gladstone and Sir William Harcourt made it clear that Ireland's contri- bution would have to be increased to meet war expenditure or expenditure upon preparation for war. At the present time Ireland ought to contribute approximately £4,000,000 a year. There is, therefore, nothing in Mr. Redmond's .2300,000,000, though it sounds appalling on a platform. If we were to calculate England's contribution during 100 years the figures would seem far more terrific.
Nor is there anything in the case so astutely put forward that Ireland suffered some injury as a result of the financial arrangements made by the Act of Union. It is worth while to recall what those arrangements were. Under the Act of Union Ireland was required to contribute two-seven- teenths or 111 per cent. of the common expenditure of the United Kingdom. This proportion was arrived at after very careful estimates had been made and after full dis- cussion in both Houses of the Irish Parliament. It is worth noting that at the time of the Union the population of Ireland was very nearly half that of Great Britain, so that the bargain meant that each inhabitant of Great Britain had to pay on the average three and three-quarter times as much as each inhabitant of Ireland. If a period of peace had followed the Act of Union it is probable that the bargain would have turned out very satisfactorily for Ireland, but instead of peace there was almost continuous war, and war on a larger scale than England had ever known before or has known since. The enormous growth of expenditure was naturally a more serious matter for the poorer than for the richer country, and it is cer- tain that if Great Britain had insisted on the financial bargain struck by the Act of Union the Irish people would have been taxed beyond their resources. But the bargain never was enforced. The actual proportion paid by Ireland during the first seventeen years after the Act of Union was only 7:1 per cent. instead of 114 per cent. For the rest Ireland fell into debt, as also did Great Britain, and if Ireland had been compelled to shoulder her own debt she might have had a grievance. But when the two exchequers were amalgamated in 1817 the debts were amalgamated also, so that Ireland never had to bear the exclusive burden of the debt in which she had been involved as the joint result of the Act of Union and the Napoleonic wars. Instead, she was required to bear a share of the common debt of the United Kingdom together with a share of other Imperial expenditure ; but that share was not main- trilled at the high level fixed by the Act of Union. In the years immediately succeeding the amalgamation of the two exchequers Ireland's share was estimated at 9.3 per cent., and the highest point it ever reached in sub- sequent years was 11.1 per cent. Since the seventies the proportion has steadily been declining, till now Ireland's contribution has become a minus quantity.
Even in the few years when the Irish contribution was highest the statement that Ireland was overtaxed rests on the fallacious assumption that a geographical area pays any taxes at all. The taxes derived from Ireland are paid by individual Irish people, and at no period since the Act of Union has any Irishman ever been called upon to pay a higher tax than he would have paid if he had been living in England. On the contrary, during the whole of the period Irishmen have been exempt from taxes which Englishmen and Scotsmen have had to pay. Down to 1853 the spirit duties in Ireland were appreciably lower than those in Scotland, and very much lower than those in England. For example, in the year 1835 the Irish spirit duty was 2s. 6d. a gallon, the Scotch 3s. 4d., and the English 7s. 6d. It may be argued, and often has been argued, that a tax on whisky, which is a common drink in Ireland, bears unfairly upon Irish people, but an examination of the figures of consumption will show that the whisky tax is a far more serious burden in Scotland than in Ireland. The truth, of course, is that the grievance, if it be a grievance, is common to spirit drinkers in whatever portion of the United Kingdom they may live, and obviously it is no grievance at all to the Irishmen who drink only beer or tea. In the same way it has been argued that the tax on tea is an injustice to Irishmen because they are very poor and drink a good deal of tea. But here again the injustice is one from which every poor drinker of tea suffers in whatever part of the United Kingdom he may live. The way to remedy these alleged grievances is not by any readjustment of the financial rela- tions between Great Britain and Ireland, but by a general reduction of taxation on articles of popular consumption.
Moreover, it so happens that while the Irish poor, like the English poor, were overtaxed during a large part of the last century, well-to-do Irishmen were under- taxed in comparison with their fellows in Great Britain. During the first half of the nineteenth century Irishmen were exempt from income-tax, however wealthy they might be. That exemption was abolished in 1853, but other exemptions were continued. Even at the present day Irishmen pay no land-tax, no inhabited house duty, no establishment licences, and no railway ticket duty. How in such circumstances as these it is possible for any person to contend that Irishmen are relatively over- taxed is a mystery. No doubt if we treat Ireland for purposes of argument as a separate fiscal entity then we are compelled to admit that during certain years of the nineteenth century the proportion of revenue contributed by Ireland was greater than her relative poverty justified. But that was only during a comparatively brief period, and the excess contribution has been cancelled a dozen times over by the deficiencies of the contribution in subsequent years.
The position at the present time is a little difficult to state precisely owing to the grave confusion introduced into the finances of the last few years by Mr. Lloyd George's Budget of 1909. The best course is to give the published figures for the last three years as contained in the parliamentary paper entitled " Imperial Revenue Collection and Expenditure (Great Britain and Ireland), 1911 " (H. of C. No. 221). They are as follows :—
Year ended March 31st, Ireland's Contribution,
1909 .., ... + 583,000
1910 — 2,357,000 1911 + 162,000
It will be seen that, on the average of the three years, instead of contributing anything to Imperial expenditure, Ireland has involved a charge on Imperial revenues of £537,000 a year. It is probable that in the present year this deficiency will be considerably increased.
These are the broad facts which the defenders of Home Rule have to face. The Irishmen can take it any way they like. If they wish to appeal to the Act of Union let them make good the bargain which their ancestors then struck and pay Great Britain for a period of 110 years 111 per cent. of the Imperial expen- diture. If they wish to appeal to Mr. Gla.dstone's Home Rule Bill, then they must face the proposition that they ought to pay something between 4 per cent. and 5 per cent. of Imperial expenditure. Finally, if they argue that Ireland is a nation, then they must consider what it would cost them to maintain an Army and Navy and Diplomatic Service of their own. At present their position is that they wish to have all the privileges of independence and to leave England to foot the bill. That is a position which Englishmen certainly will not tolerate. We are perfectly willing to be generous to those who remain in the common household, but if Ireland is determined to break the partnership and set up housekeeping on her own account she must pay her own bills.
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