LIBERAL AND CONSERVATIVE FINANCE.
THE prolonged conversation about Public Expenditure which occupied the House of Commons on the afternoon of yesterday week, was more polemical in form than it was in substance. On this head there is very little to choose between the two Parties by which the affairs of the country are alter- nately administered. Each has its peculiar temptations in the matter of finance, and each, on the whole, resists them with tolerable success. There is not much credit due to them for this resistance, because, though the temptation is undoubtedly great, the danger of yielding to it is very apparent. Extrava- gance is, or is thought to be, so very telling an accusation with the Constituencies, that no Government is likely to risk incurring it except under strong pressure. The connection between ex- penditure and policy, though obvious, is not an opinion of as much moment as is often supposed. To those who dislike a particular policy, it is no doubt an aggravation of its vices that they have to find the means of carrying it out. The Liberals felt this strongly under the late Government, and a certain section of the Radicals are likely to feel it equally strongly under the present Government. Sir Wilfred Lawson thinks Mr. Gladstone's action in Africa as needless and mischievous as Mr. Gladstone thought Lord Beaconsfield's action in Asia. But it cannot be contended that any Government is bound to weigh too minutely the cost of vindicating the honour or interests of the country. They are to blame if they form a wrong estimate of what that honour or those interests demand of them, but having formed their estimate, they ought not to come short of it for economy's sake. A policy is not necessarily sound because it is cheap, or unsound because it is dear. In this respect its character is determined by other considerations, and the less or more money that has to be spent in giving effect to it has but little to do with the question.
That minute and vigilant scrutiny into the expenditure of the several Departments which lies at the root of all real economy is loss and less perhaps in danger of being neglected. The necessary expenditure of the country is so large, and the means of meeting it are so few in number, and with one ex- ception so little susceptible of sudden increase, that the Ministers who are responsible for the Estimates have a very direct concern in keeping them down. They are Members of the Cabinet, as well as Heads of Departments, and if they are anxious to spend money in the one character, they will cer- tainly wish to save it in the other. Still, even the Cabinet as a whole is usually tempted to spend money in one particular direc- tion, though that direction is different, according as one or other party is in office. The Liberal inducement is the extension of State supervision ; the Conservative inducement is the relief of local taxation. It is comparatively a new thing for Liberals to be animated by this desire to make the State omnipresent and omnipotent. It is 'one of the specific features of the new Radicalism that it is greatly impressed by the power of the State, and greatly desirous of enlisting this power on the side of the changes it desires to see effected. Whether this end be good or otherwise in itself, it cannot be accomplished without money. The social reforms which are now so popular, whether they be already in action or are only contemplated, have one feature in common. Something is to be done, and as those upon whom the duty is imposed cannot be trusted to do it of their own free-will, the State must see that they do not neglect it. Somewhere or other in every social measure there is sure to
be a provision for inspection. Of course, this does not constitute a condemnation of the measures in question. A social policy, like a foreign policy, must be weighed in other scales than those of comparative cost. But in preaching economy to Governments, it should always be remembered that inspection and economy are opposing ideas. You may choose which you like, but you cannot have both. If the State undertakes that a large number of acts which men were for- merly supposed to do or to leave undone, according as their tastes or their consciences prompted, shall be done universally and by compulsion, officials must be employed to see that the law is obeyed. The payments to these officials may not be large in themselves, but if more of them have to be made as year succeeds year, the charge continually becomes heavier. State supervision may be very desirable, but it is not cheap.
The Conservatives, now-a-days, are free for the most part from this temptation. There was a time, indeed, when Mr. Disraeli talked of sanitary legislation in a tone which seemed to promise that none of us would ever be suffered to go out of sight of a medical officer. But he did nothing to realise this magnificent vision, and so far as the public health was concerned, Sir Stafford Northcote was not called upon to meet any very serious drafts on the Exchequer. The Conservative idea of a useful expenditure of public money is that the taxes should be made heavier, in order that the rates may be lightened. It is natural enough that this notion should specially recommend itself to Conserva- tives, because as a party they feel the burden of local taxation more than the Liberals feel it. The great vice of our rating system is that the money is levied on a single description of property. No doubt, the difficulties in the way of an amend- ment of the system are very great. A local income-tax would be extremely unpopular, an octroi would be extremely incon- venient, and the consequence is that land and houses continue to be the only things taxed for local purposes. As the Con- servatives are pre-eminently the land-holding party, the things taxed for local purposes are in a disproportionate degree their pro- perty, and they are naturally anxious that the burden shall some- how be lessened. If you cannot distribute local taxation equit- ably over all kinds of property, at least, they say, you can redress the inequality by making a grant in aid of local taxation out of funds that are more equitably raised. In itself, the sug- gestion is reasonable enough, but it is open to a fatal objection. It works no permanent reduction in local burdens. There is a constant rush of new expenditure to fill the vacuum created by the diversion of this or that charge from the local to the Imperial Exchequer. The ratepayers become less sensitive to the importance of economy in other directions, because they are relieved from the need of considering it in the particular direction in which they have been helped by the Government.
Questions of finance have become of immeasurably greater importance since the extension of the suffrage has impaired the connection between representation and expenditure. Of old, the abuse wits that those who had no votes were expected to pay for the measures passed by those who had them. To- day, the danger is that those who do not pay Income-tax will have the power of decreeing expenditure which will be ex- clusively borne by those who do pay it. It would be a very great gain to sound finance if some tax could be devised which could be raised or lowered in sympathy with the Income-tax, without the course of trade being disturbed by the change. The only contribution the Conservatives have made to the solution of the problem is to defray extraordinary expenditure by Debt, instead of by taxation,—an expedient which merely relieves the present generation at the cost of those that are to come,
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