Orders of the Day — GOVERNMENT OF IRELAND [MONEY] (No. 2).

– in the House of Commons on 22nd October 1920.

Alert me about debates like this

Considered in Committee.

[Mr. WHITLEY in the Chair.]

Motion made, and Question proposed, That it is expedient for the purpose of any Act of the present Session to provide for the better government of Ireland,—

  1. (1) To authorise the payment out of the Consolidated Fund, or out of moneys provided by Parliament, into the Exchequers of Southern Ireland and Northern Ireland, or to any body or person in the stead of the said Exchequers,—
    1. (a) in each year of the Irish residuary share of reserved taxes as defined by the said Act, including payments on account of that share;
    2. (b) of such sums as the Joint Exchequer Board may certify to be necessary for the purpose of providing buildings (including sites and equipment) for the accommodation of the Parliaments and public departments in Southern Ireland and Northern Ireland, respectively;
    3. (c) on the redemption of an existing purchase annuity as defined by the said Act, of a sum equal to the amount thereof in each year in which the annuity if unredeemed would have continued payable;
  2. (2) To authorise the payment in each year out of moneys provided by Parliament to the appropriate fund or account,—
    1. (a) of a sum equal to the amount payable in that year in respect of purchase annuities as defined by the said Act;
    2. (b) of a sum equal to the amount due on account of loans made before the appointed day to authorities and persons in Ireland out of public funds;
  3. (3) To authorise the payment out of the Consolidated Fund of the salary or remuneration payable to the Chairman of the Joint Exchequer Board."—[SIR LAMING WORTHINGTON-EVANS.]

Photo of Mr Donald Maclean Mr Donald Maclean , Peebles and Southern

On a point of Order, may I put this point to you, Sir? It is certainly in the minds of a considerable number of Members that this Debate should take a rather more general line of discussion than is usually permitted by the Chair, and I would respectfully suggest that in the Debate which is to take place you might, if you thought fit, exercise your discretion as to the limits of the Debate rather in favour of a more general discussion than a strictly limited discussion, because we all realise that, however generously-minded you may be towards Members in Debates of this kind, there are limits beyond which it would be quite improper for you to go. But with that in our minds, and with that disposition in yours, I hope that in this Debate we may be allowed to raise all germane points, although not very strictly within the limits of Order, so as to get as useful a discussion as we possibly could. If that were not so, the only recourse to me would be to ask you to accept a Motion to report Progress before we entered upon this discussion owing, as we think, to the changed conditions in Ireland so much for the worse, as we conceive it, than was the state of affairs when the House rose. I think if you would exercise that discretion in favour of Members who wish to discuss it, that would be a more convenient course than raising a Motion to report Progress, which must be necessarily limited to the immediate purposes for which it is moved.

The CHAIRMAN:

In the first place, it is quite clear that a Motion to report Progress would not afford any wide opportunity, in fact, an extremely narrow one. As regards the first question, I quite agree. I think this Money Resolution is the foundation for the whole finance of the Bill. It is open to hon. Members within the limits of finance, to discuss not only the proposals of the Government but their alternatives as far as the matter of finance is concerned. I apprehend that the main question, as indicated by later Amendments to the Bill, is whether the finance of the Bill ought to go much further than is proposed, whether Customs and Excise and other matters of that kind should be transferred completely to local control in Ireland. That, I think, will be quite in order. It is my intention to allow a wide debate, but of course confined to finance. There could not be anything in the nature of a Second Reading Debate on the whole Bill, but as far as finance is concerned it will be my endeavour to allow all proper width in the discussion.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

It seems to me a quite convenient course that we should consider the general provisions of the Bill and the Amendments proposed by the Government and hon. Members of the House while at the same time we discuss the Financial Resolution. I shall proceed upon that line. No doubt it will be for the convenience of the Committee if I say what the Government proposals are in regard to the Amendments to the financial Clauses of the Bill, put down to meet some of the criticisms which have been advanced since the Bill was introduced. The general scheme of finance provides that for two years Ireland shall make a contribution of £18,000,000 towards Imperial services, and that Imperial contribution is to be divided between the two Irish Parliaments. The Southern Parliament is to contribute £10,080,000 and the Northern Parliament £7,920,000. I will endeavour to show that these contributions are well within the capacity of each of the Governments, and will leave the Governments a large surplus on the basis of the estimated revenue and expenditure from the years 1920–21, which are set out in detail in the White Paper, Command Paper 707, which has been circulated. By the Amendment placed on the Paper in my name, there is power to the Joint Exchequer Board at any time after the end of the second financial year to reduce the Imperial contribution of £18,000,000, having regard to the relative taxable capacity of Ireland and of the United Kingdom, if they come to the conclusion that a less sum should be justly contributed by the two Governments. The Joint Exchequer Board may also vary the proportions of the contribution as between the Southern and Northern Parliaments. This can take place after the first two years of the coming into force of the Act. The second stage is that after the end of the first two years the Imperial contribution, instead of being a fixed contribution of £18,000,000, will be such an amount as the Joint Exchequer Board, in the light of the results of the first two years' working of the two Parliaments, think, according to the taxable capacity of the two Parliaments, can fairly be charged. The proportion of the Imperial contribution which is to be paid by the Southern Parliament and the proportion to be paid by the Northern Parliament will also be fixed by the Joint Exchequer Board according to the relative taxable capacity of the two Governments. The contribution so fixed by the Joint Exchequer Board will be subject to periodical revision at the end of each subsequent five years.

Our Amendment allows the contribution after the first two years to be altered and the incidence of that contribution to be evenly divided between the two Parliaments. That has been done for the purpose of meeting the fears of those who say that although on the estimates submitted in the White Paper the contribution seems to be fair enough and the division of the contribution between the two Governments seems to be fair enough, and they are not able to put their fingers upon any one set of figures which show any inaccuracy, yet some of them reasonably think that estimates are not always secured, and that there may be variations between estimates and results. Therefore, they desire a protection that the contribution may be taken into consideration by the Joint Exchequer Board, and that if they find the contribution ought to be amended according to the taxable capacity they should be entitled to amend it. I hope our Amendment will give the protection which is sought. If it should turn out that the estimates are not on a fair basis, the actual facts which will be ascertained will supply a fair basis, and, if necessary, a refund will be made by the Exchequer of the United Kingdom for any excess payment that may have been made.

I will now deal with the Amendments on the Paper in regard to the amount of the contribution. There are some hon. Members who think that £18,000,000 is altogether too high. The hon. Member for Bury St. Edmunds (Lieut.-Colonel W. Guinness), in his Second Reading speech, suggested that Customs and Excise should be earmarked for the purpose of securing the Imperial contribution. He has now a new proposal on the Paper He suggests that the proceeds of Income Tax and Super-tax, not exceeding £10,000,000 in any year, should be accepted as Ireland's Imperial contribution. Another hon. Member has an Amendment in much the same terms, except that he does not put any limit. Under his Amendment £11,600,000 would be the Imperial contribution. My hon. and gallant Friend the Member for Chelsea (Lieut.-Colonel Sir S. Hoare) proposes that the contribution should only be paid up to the time of Irish union. Apparently after that time there should be no obligatory contribution, but the United Irish Parliament should be able to make what contribution they think fit. The Government cannot accept any of these Amendments, and I hope to be able to satisfy the Committee that the Imperial contribution proposed by the Government is not only just but extremely moderate. In order to do so I shall have to trouble the Committee with some figures. It will be easier to follow the figures if I use round figures. The full details are in the White Paper, and if I deal with the figures for Ireland as a whole, not mentioning the separate division between the two Parliaments, it will be better. The proportions are fixed at 56 per cent. for the Southern Parliament, and 44 per cent. for the Northern Parliament for the first two years, subject to the power of the Joint Exchequer Board to vary that contribution, and it will, therefore, be reasonably easy for hon. Members to follow the figures. In the figures which I am going to give, the Excess Profits Duty is entirely excluded from the Revenue Account, and expenditure arising out of the War is also ex-eluded from the expenditure account, because it is not supposed that either that exceptional income or that exceptional expenditure will be operative or need be considered at the time that the two Parliaments are set up.

The estimates show that the total expenditure for the Irish and reserved services, together with a margin of about £1,750,000 for future services, will amount to £26,250,000, while the revenue will amount to £48,500,000. If we deduct the expenditure from the revenue there is a balance of £22,250,000, which is the amount estimated to be received in this current financial year as the Imperial contribution from Ireland. If the Government had desired to exact its pound of flesh from Ireland, the Imperial contribution would be fixed not at £18,000,000, but at £22,250,000, which is the Imperial contribution which Ireland is making this year and would make if this Bill was not passed.

Photo of Commander Hon. Joseph Kenworthy Commander Hon. Joseph Kenworthy , Kingston upon Hull Central

Is that revenue the amount that will actually be received, having regard to the fact that the Army in Ireland has been greatly increased and the police force has been increased since those estimates were made?

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

The revenue id the revenue shown in the White Paper 707, and it is the estimated revenue for this year. That is the last Paper that I have available, and the very latest information that I can give to the Committee. The date of the White Paper was May of this year. The Government recognise that it is most desirable that the Irish Governments should not be hampered, but should be allowed a substantial margin with which to meet any additional expense which may be incurred by the establishment of the new Parliaments or may be called for by various services which have hitherto not been developed perhaps in accordance with the requirements of the Irish people, and the Imperial contribution has therefore been fixed for the two years at £18,000,000, which, upon the Estimates, will leave a surplus of £4,250,000 revenue a year. Nor is this all. As the Prime Minister announced earlier in the year, the Government have decided to make a free gift of the existing land annuities amounting at present to £3,250,000, which will be available as additional revenue for Ireland. The surplus and the land purchase annuities together amount to £7,500,000. There is included in the expenditure a margin for future services which have not yet been set up, and will not mature fully for some years to come, of £1,750,000. If this is added there is a total surplus of £9,250,000 available for Ireland over and above all existing expenses after providing for the Imperial contribution. This gives Southern Ireland a total surplus of about £7,000,000, and Northern Ireland a total surplus of £2,250,000. I do not think, therefore, that it can be said that an Imperial contribution has been fixed too high upon the information at present available. On the contrary, it has been fixed at an amount which leaves for expenditure in Ireland a sum very much in excess of the highest rate of expenditure that there has ever been in Ireland in times past.

Another Amendment has been put down by the Government to relieve the anxieties of those who thought that the grant of £1,000,000 to each Parliament would be insufficient to provide for the buildings and equipment necessary for the Parliament Houses and the Government offices. The Amendment omits the limit of £1,000,000 and throws upon the Imperial Exchequer the cost of supplying the buildings, or rather of paying to the Exchequers of Southern and Northern Ireland such sums as the Joint Exchequer Board may certify to be necessary for the purpose of supplying and equipping the buildings.

There are some Amendments upon the Paper relating to the transfer to the Irish Parliaments of powers of Customs and Excise, Income Tax and Super-tax. I shall have to deal, of course, with these Amendments when we come to discuss the Clauses of the Bill, but the Committee may like me to inform them at once of what the general attitude of the Government is. With regard to Customs and Excise duties, I would remind the Committee that this is a Bill for the better Government of Ireland within the United Kingdom. It is not a Bill for the separation of Ireland from the United Kingdom. In all Federal systems the power to impose Customs duties is retained in the Federal Government. It is so in the Dominion of Canada and the Commonwealth of Australia. Indeed, in Australia it was necessary for the independent Sovereign States to give up the power to levy Customs duties before they could come together as a Federal Government. South Africa has a single Customs system. So has the United States of America. In all these great countries a single Customs system has been found necessary in order to secure national union. I do not want to argue, though I am tempted to do so, the question of Customs duties, but it is right to say that the Government is not prepared to accept the Amendments upon the Paper.

Another Amendment proposes that the power to limit Income Tax and Super-tax should be transferred to the Irish Parliament. To transfer that power would be to risk to the United Kingdom the break-up of taxation at the source, which is the mainstay of the British system of taxation. Nor is it necessary to make that transfer in order to give Ireland the power to adjust her taxation by means of Income Tax according to the needs and circumstances of her people, for by Clause 23 of the Bill the Irish Parliaments have power to levy surtax or grant relief from Income Tax, by which means they will vary the Income Tax and Super-tax on persons resident and domiciled in Ireland. The power to grant abatements enables them to relieve any class of the community that they think may be too severely hit by the amount of the British Income Tax. Moreover, Great Britain is entitled, in the present state of Ireland, to some security that the Imperial contribution will in fact be paid. So long as she retains Customs and Income Tax the security is sufficient, but if either were transferred the security would necessarily be weaker. But by Clause 34 of the Bill provision is made for reconsideration of the position after the date of Irish Union, when proposals can be considered for alternative methods of securing the Irish Imperial contribution, and that is as far as the Government can go. I notice that in some of those manifestoes which have been issued by one of the bodies of Irishmen opposing this Bill, it is stated that the financial clauses are universally condemned as illiberal to Ireland and unduly restrictive, and I believe that something of the sort has been said by some hon. Members in this House. I do not believe that those who made that observation have fully considered the actual proposals of the Bill.

Lieut.-Colonel GUINNESS:

I have read the Bill.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

I would not say that my hon. and gallant Friend has not read the Bill. I know he has read it, but the proposals are infinitely more generous to Ireland and give far greater powers and freedom to the Irish Parliament than have been proposed in any Home Rule measure which was hitherto introduced. I propose to prove that. In both Mr. Gladstone's Bills, in 1886 and 1893, an Irish contribution for Imperial services was provided for. The contributions were, of course, lower than the contribution now proposed, because the revenue was infinitely less, but proportionately this Bill is more generous and certainly the margin allowed for increased future expenditure in Ireland provided under this Bill is much larger than in any previous measure. In 1912, when the 1914 Act was introduced, Irish expenditure exceeded the yield of Irish revenue, but even then the Bill contemplated a contribution if revenue should in future exceed expenditure. This is rather curious. If the Act of 1914 were now in operation, Ireland would be making an Imperial contribution of £29,000,000 a year, not £18,000,000, which is proposed by this Bill, or £18,000,000 less the Irish Land Annuities, or something under £15,000,000 net altogether.

It is also possible to make another comparison with the 1914 Act, and to see whether, after all, it is true that this financial proposal is ungenerous to Ireland. It is possible to compare the margin for future expenditure in the 1914 Act and in this Bill. Under the 1914 Act a margin was provided of £500,000 a year, diminishing after three years by £50,000 a year until it fell to £200,000, and upon that margin, with any economies which Ireland might be able to effect in its administrative expenses, the new Government was to be set up, and it was to provide for any new services that might be required. Under this Bill there is a margin of £9,250,000 provided for the first two years, and thereafter a margin either greater or smaller according to the decision of the Joint Exchequer Board, an entirely impartial authority, as to the relative financial capacity of Ireland and the United Kingdom. The Act of 1914 gave a margin of £500,000; this Bill gives a margin nineteen times as great. This Bill, of course, reserves Customs and certain Excise duties. Income Tax, Super-tax and Corporation Tax, but it transfers certain Excise duties and all other existing taxes. The Act of 1914 transferred no existing taxes at all. It gave Ireland only a power to impose a new tax so long as it was not substantially of the same character as an Imperial tax, and it gave Ireland only a very limited power to vary Imperial taxes. For example, no Customs Duty could be put on an article not already subject to an Imperial Customs Duty. Customs or Excise Duty could not be diminished; it could only be increased, and then only 10 per cent. additional proceeds could be obtained. Certain of the Stamp Duties could not be altered at all. The Act of 1914 contemplated a taxing power which was really limited to certain minor adjustments of the existing taxes.

This Bill, with the exception stated gives much larger powers. Although the collection of Income Tax at the Imperial rate remains in the hands of the Imperial authorities, as I have shown, the Irish have power to grant relief or to increase it by means of surtax to be paid by the individuals resident and domiciled in Ireland. Other existing taxes, such as Death Duties, Stamps, Excise Licences and Entertainment Duty, are transferred to the Irish Parliament without any restrictions at all. These taxes will be levied and collected in Ireland by the Irish Government, whereas under the 1914 Act all taxes, even those which the Irish Government have power to levy, had to be collected by the Imperial authorities. I contend, therefore, that far from being an illiberal measure this Bill, whether it is looked at from the point of view of scope of taxation or from the point of view of its administrative provisions, is infinitely more elastic and gives far wider powers to the Irish Parliament than were ever contemplated by the 1914 Act. The margin of free revenue at the disposal of the two Parliaments is 19 times greater. These provisions were settled in no niggling spirit. They are generous, and sufficient to enable the two Parliaments to enter upon their duties without fear that their efforts will be stultified by want of money.

Photo of Mr Donald Maclean Mr Donald Maclean , Peebles and Southern

My right hon. Friend has made a statement with his usual clarity and has made as definite a statement as could be expected out of a wholly nebulous position. No one can doubt that to-day we are in a wholly unreal position in this discussion. I thought that perhaps my right hon. Friend would place his proposals before the Committee on the hypothetical basis that some day, when there was a pacified Ireland, these financial proposals might be expected to have a fair consideration on whatever their merits or demerits might be; but he has referred more than once to the present position, and apparently he has the present position in his mind. The Government are asking for a grant of money applicable to the position of Ireland as it is at present and as it might be remedied or otherwise by the measure now before Parliament. What is the present position from a financial point of view? What hope is there of raising these revenues from Ireland? It is not a business proposal. This Resolution, no doubt, will pass, and it will have the effect on the Treasury which all Resolutions of this kind have. This money, amounting to £18,000,000, will be earmarked definitely for the operation of this measure when it gets on the Statute Book. What justification in business is there for such an event as that? Keeping, as I hope, well within the financial Resolution, I ask, What does the Government really think is going to happen in Southern Ireland according to their own Amendments on the Paper? I take an Amendment standing in the name of the First Lord of the Admiralty. I can only touch on it very briefly. It is a proposal that all Candidates for Parliament must first take an oath of allegiance.

The CHAIRMAN:

We are here to consider the financial provisions of the Bill and not other matters, and the discussion must be confined to financial matters.

Photo of Mr Donald Maclean Mr Donald Maclean , Peebles and Southern

I pass from that to see if I can have any better luck in the second Amendment of the First Lord of the Admiralty, which contemplates that no Parliament will be set up in Southern Ireland. I hope, Sir, you will hear me while I refer to that Amendment. It is entitled: Provisions applicable in the case of either House of Commons not being properly constituted. I put it that the finances should be adjusted by the Government as practical business men. They expressly contemplate here that the Southern Parliament is not going to be set up. I submit that this Committee should address its mind to what it knows is going to happen. They ask us to give a grant of the money of which the Chancellor of the Exchequer is the guardian. The Chancellor has asked us to show him some means by which he can save £5,000,000. I am pointing out that in this case you can prevent £10,000,000 being earmarked by recognising what the facts are in Southern Ireland. They contemplate that the House of Commons there will not be set up, and I suggest that as business men they should confine their attention to the Northern Part and that it is only to that part and the finances of it the attention of the Committee as business men should be directed to-day. I cannot argue here the general position. There is a subject I desire to raise, and I do so on the general point that the Government themselves have no clear idea of what their policy should be with regard to the financial question and some most important details in it. I do not know if Hon. Members, like myself, have snatched some rare moments to study the Government Amendments as they came to us before the House met or on the day the House met. There was a very remarkable Amendment standing in the name of the right hon. Gentleman who has just addressed the Committee, on page 1844, and this is what it said:— Provided that it shall not be competent for the Parliament of Southern Ireland or the Parliament of Northern Ireland to impose any tax, whether recurrent or non-recurrent, of the nature of a general tax upon capital not being a tax substantially the same in character as an existing tax. That is not on the Paper now. It has disappeared. That very remarkable proposal we must assume was not placed on the Paper in the name of the responsible Minister especially in charge of this portion of the Bill without having been carefully thought out. They must have thought it over, and with all the rich experience of the Chancellor of the Exchequer from the Debates which have taken place, they came to the conclusion that whatever might be said with regard to the power which the Imperial Parliament might have on this question of a capital levy, at any rate the new Parliaments set up in Ireland were to have nothing whatever to do with that iniquitous proposal. There has been a change of opinion. I should like an explanation, and I think we are entitled to know what financial reason actuated this very remarkable change of front. It is typical of the position of the Government with regard to finance and other matters. They simply do not know where they are at all. If they really wish to come down to business, what they ought to do is to put the financial side of Southern Ireland on one side, as their own Amendments expressly contemplate, and deal with the setting up of a Parliament in Northern Ireland which nobody wants there. Cut down the farce to what I may call reasonable limits. Those are the only general observations I desire to make at this stage.

Photo of Mr Edward Carson Mr Edward Carson , Belfast Duncairn

I think the discussion to-day is an important one, and it ought to be made from the point of view of finance. What is the use of now discussing the setting up of a Southern Parliament, as my right hon. Friend (Sir D. Maclean) has done, when this House has already passed by a majority of 250 the general principle of this Bill. It is a most barren discussion. When my right hon. Friend says that the Government ought simply to recognize that there will not be a Parliament in Southern Ireland, and that therefore this proposal is not necessary, I do not think he apprehends what the Bill means at all. As I understand, the Amendments put down by the Government, if the Southern Parliament does not function, there will be something else in its place to which the taxation of this Bill will be relevant, and the whole provisions of the taxation will be administered by whatever is there when the Government are carrying on, if they have to carry on the government there. That was the right hon. Gentleman's first point. What on earth has that got to do with the discussion before us to-day? What was his second point? It shows the way this Bill is treated. He proceeded to elaborate a charge against the Government in reference to an Amendment which has been taken off the Paper. Is that fair? He says he observed that the Government put down—and I observed it too—that there was to be no possibility of the levying of a tax upon capital, and that has been taken off the Paper for reasons which I am at a loss to understand. We may ask at a subsequent period, when we come to the discussion of the Amendments, but upon that the right hon. Gentleman frames this statement, that the Government do not know where they are. There is now the whole indictment as against the finance of this Bill. I, at all events, cannot treat this Bill in that kind of fashion, because, so far as I am concerned, for the part of Ireland in which I hold a constituency, I am very anxious, if the Bill becomes law, that the finance should be a success, and further than that, I cannot but believe that the British Government, the present Government, if they are setting up these Parliaments, wish that both of them or either of them, if they function, should run smoothly as regards finance, and should not be hampered at the very outset of their career by anything that would strangle them in setting up a proper system of government in their respective areas.

1.0 P.M.

I approach the Bill from that point of view. I should like to say upon that, that I have had many representations from the north of Ireland as regards these figures, and I have seen very able business men who have taken the matter in hand there, and they are very apprehensive as to how this system of finance will work. There must always be apprehension in a case of this kind, when we are trying to divide the finances of two countries which have hitherto had one financial system and one administration for the whole, but I would like to remind hon. Members of this—and I am sure the Government will agree—that the passing of this Bill will not put an end to all negotiations between the new Parliaments that are set up and the Imperial Parliaments. On the contrary, so far as I am concerned, I hope the Parliaments will work, and I believe the Parliament of the North of Ireland will work, in the closest community with this Parliament, with the departments in London, and with the British Treasury, and I cannot for a moment imagine that if it was shown that there was an injustice arising out of the finance of this Bill, the British Government who are starting these parliaments would not at once be willing to remedy any defects that were found when you came to work out the particular policy of finance that is contained in this Bill. What is more, I will also remind them of this, that when they proceed to discuss these matters it will not be on the basis of one party discussing them with this Parliament; it will be two governments discussing, and that will give the Irish Parliaments far more power than they ever can have with particular parties from Ireland, trying to proceed to regulate finance. Just as the Canadian Parliament come over here and discuss finance from time to time, preferential tariffs and such matters, that they think may make for the benefit, of their Commonwealth, so I apprehend the Irish Governments will be able, I hope, in the most friendly and the most sympathetic way, to carry out any negotiations which will be-absolutely necessary to make such Amendments in this Bill when it becomes an Act as may lead to the smooth running of the two Parliaments in conjunction with the imperial Parliament.

There was one observation, the only one, of my right hon. Friend opposite, with which I agreed, I think. He said that we were proceeding upon a nebulous basis. Yes, I quite agree. The whole of this business as regards contributions, as regards revenue, and as regards expenditure is all necessarily founded on estimates. We cannot help that, when you come to think of the complicated questions that necessarily arise. Take, for instance, the one case as to how much of the Irish income tax is collected over here, and when you consider that you have to evolve how much of that collection belongs to Ireland in the case of men who are living in both countries and in the case of businesses carried on in both countries, you can easily see the problem that arises. In the same way, with regard to expenditure, no doubt you know a good deal of what has been the expenditure in the past in Ireland, but when you are breaking it up into two governments no one knows or can know, except in so far as an estimate can tell, what will be the expenditure in the North and what will be the expenditure in the South; and therefore you really, when you say that finance is founded on nebulous statements, should remember that it necessarily is so. What has the Government done, as I understand the amendments which have been put on the Paper? I myself do not agree that their figures are quite correct, and those experts whom I have been able to consult in the north of Ireland, great business men, do not agree with the figures, and I know that they have had many attempts to try und reconcile the figures and that they have not come to an agreement about them. Well, you cannot agree, but what have the Government offered, as I see by an Amendment put down in the last two days? They say that after two years the Exchequer Board will go into the whole question, not on estimates, but on actual figures, when the thing has been working for two years, and if any wrong has been done we will make it right.

Photo of Mr Austen Chamberlain Mr Austen Chamberlain , Birmingham West

That only applies to a wrong done to Ireland, not the other way about.

Photo of Mr Edward Carson Mr Edward Carson , Belfast Duncairn

I quite agree; otherwise it suggests an Amendment which I could not possibly support. There is the offer of the Government. I have asked myself, and I have asked those with whom I have had facilities of speaking if there is any other way that can be suggested, and I think not. I think this pure business. As regards the contributions of 18 millions, my right hon. Friend who addressed us from the Government Bench told us a great deal about the margin we are going to have. I doubt it very much. I do not like that pleased expression he has upon his face when he is telling us of this margin. I have never known the Treasury to give away a great deal of money in that off-hand kind of way. I am told that these figures will not work out in that way, but no doubt they will be corrected.

Then, as regards the settling of the amount of contribution that is to be paid as between the Northern and Southern Parliaments, I noticed the other day that my right hon. Friend the Member for Paisley (Mr. Asquith) talked in a very sneering way of a little patch in Ulster that was opposed to separation. If you look at the Bill the little patch in Ulster—six counties out of thirty-two—is to pay 44 per cent. of the whole contribution. That is a good little patch. I think it is too much in comparison, but let me say we wish to pay our full share of Imperial obligations, and especially the terrible outlay that brought victory in the War, which was as much for us as it was for England. Therefore, we do not shirk our fair contribution; but when you sneer at us, as you are always doing, when you are trying to drive us by your policy to join Sinn Fein, which is your real anxiety and real desire, do please remember that when you come to legislate for us you ask us to pay 45 per cent. of the contribution for six counties out of thirty-two. I believe that will probably prove too much; but this I had not noticed, though I heard it with great gratification from my right hon. Friend, who stated, if I understood rightly his proposal, that at the end of two years the Exchequer Board will also consider that matter on actual figures, and I think that is a solution of the question which may very well be accepted.

Then, really, the important matter which is at the root, which will really be the foundation of whether this is to be a success or not, is the Exchequer Board. They receive enormous powers. I notice, among other matters which will be vital in assessing the contributions, that they have the power, which I think will be a very difficult one to exercise, of saying what is an Imperial expenditure and what is not. That will be an extremely difficult matter, and I know that my own friends in the North of Ireland have been taking a good deal of exception to the Exchequer Board. I have given a great deal of time and consideration to this, and here again I approach it in this way. I am told, "Oh, the British Treasury will dominate the matter. They have two representatives. The Government have a chairman and there is one representative from the North of Ireland and one representative from the South. I have always desired to maintain the whole connection between Ireland and this country as it exists to-day, and I cannot bring myself for one moment to the least suspicion that the Exchequer Board will not wish to do justice between the two countries. What would be the object of it? What would Great Britain gain by getting their Treasury—if it is possible to imagine such a thing—to give a prejudiced decision that would strangle a newly-formed Parliament trying to extend its influence, and do its duty towards its own country, and also, I hope, towards the United Kingdom? I say to my friends, who have put this with such force from time to time, "You cannot get on if you are always suspecting and suspicious," and I rather prefer to say to His Majesty's Government that we enter into this, as you have put it upon us, although we have not asked for it, with the fullest belief and confidence that if we are loyal in the working of this Act, and in doing our best for the portion of Ireland with which we are entrusted, if we are loyal in trying to make that Parliament and this Parliament work together, you will not be the people to obstruct our path. Rather, you will strain every nerve and certainly act liberally in trying to make our Parliament a success. There is no other way, in a complicated business of this kind, in which the matter can be worked out.

I should be very glad, if, on the Report stage, it were possible for the Government to find some definition or something they could lay down to guide the Exchequer Board on this question of taxable capacity. I do not know really what it means, excepting in this general way that you are to find out how much each should pay, having regard to the relative wealth of one and the other. That is a very, very wide matter. When you come to taxable capacity, you have to take a number of standards of comfort, of living, and wages as between the two countries, or two different parts of one country. I do not believe that is really an absolutely just method of ascertaining what is the proper amount to be paid by Ireland towards this country, or between the two Parliaments of Ireland itself, and I do put it to the Government that it would be well worth their while to devote the best energy of their experts in trying to see whether it is not possible to start these Parliaments without leaving something so very indefinite and so difficult to define, which will be the very foundation of the taxation between the two countries and as between the two Parliaments in Ireland. All I can say, in conclusion, is that I think the Government have acted wisely in putting down these Amendments giving power in two years, when we have found how the Parliaments are working in relation to each other, and in relation to this country, on actual figures and on actual results, to come to more definite conclusions. Meanwhile, I beg of the Government—it is almost unnecessary to beg of them, because it is common sense, but I ask them to see, through their officials, when questions of difficulty come up in the early running of these two Parliaments, that they shall approach what is put before them from these two Parliaments in such a sympathetic manner as will conduce best to the easy working of the new Parliaments.

Photo of Mr Thomas Wintringham Mr Thomas Wintringham , Louth Borough

This Debate has been in general terms, and perhaps I may be allowed to speak in general terms for the moment. The right hon. and learned Gentleman opposite (Sir E. Carson) has said a word or two quite reasonably about the solitude of Members on these Benches. He is entitled to say what he did. I think the "Wee Frees" show a very lamentable number in this House to-day. But there are solitudes and solitudes! I would rather be in the solitude of this Bench than in that solitude which the right hon. Member faces when he is opposed to the strong sense of fairness of the world Speaking in general terms it appeared to me that the right hon. and learned Gentleman the Member for Duncairn was somewhat disappointing in what he has to say of the working of the Financial Clauses in Ireland. He assumes that he is going to turn as other Ulster Members are going to turn from facing in the direction of the remainder of Ireland to the direction of this country. There would be some hope for Ireland if, instead of Members for Ulster everlastingly turning their faces to this country and getting what they can, they would turn their faces to the rest of Ireland; then I say there would be some hope of a settlement Until they do that that settlement will not be achieved. One more general remark: I should like to say that the right hon. and learned Gentleman is not only to my mind a solitary figure, but he is an unfortunate figure in this sense, that the Government are dressing up an extraordinary figure to go to an extraordinary dance in Ireland, and he is the only Member who has promised to dance with it. The thing cannot dance.

Photo of Mr Edward Carson Mr Edward Carson , Belfast Duncairn

Would you like me to kick instead?

Photo of Mr Thomas Wintringham Mr Thomas Wintringham , Louth Borough

The right hon. and learned Gentleman will have to sit out the dance, and small blame to him if he seizes the intervals to rush away for refreshments. But let me be a little more serious. [HON. MEMBERS: "Hear, hear!"] I want to come to the reserved taxation. You have spoken in general terms. Do let me say this, that these reservations you make respecting direct and indirect taxation cut at the root of the Bill. It is all very well talking about the United States as Federal States. It is all very well talking about Canada and its provinces. But if you are aiming at a settlement in Ireland, you will have to aim at something more than what applies to the interior conditions of the United Stales and of Canada. The Minister in charge of the Bill knows perfectly well that you would not dream of reserving any taxation, direct or indirect, when you come to any of the self-governing Colonies of this country. I defy the Minister who has spoken to go and even argue this Bill in any of the Dominions of this Empire. [An HON. MEMBER: "Malta!"] I do not know about Malta, but in any other place he would be laughed to scorn. If you are aiming at a settlement for Ireland, you will have to give the people upon whom you are relying to control the country the powers of taxation. There is no other way out of it. You cannot have just a little more and a little less. You will have to rely upon the consent of the people to whom you are giving self-government. If you are not aiming at self-government, and if you are not assuming that sooner or later there will be a favourable time when self-government can be obtained by the consent of the governed, then I agree; but otherwise, if you are to reserve direct and indirect taxation, it is quite wide of the mark. It is the whole essence of the thing, and the acid test of self-government whether the people in the controlled area have the right of taxation; otherwise the thing is a farce. As a matter of fact if you are not aiming at some settlement and dreaming that some day there will be some measure of content attached to-this measure you had much better go on as you are. It will be better for Ulster, and better for the rest of Ireland. I need not say what contempt I have for this Bill. The contempt I have for it is only equalled by the derision of the whole world outside Ulster. It is no settlement. So far as Ulster is concerned it is a manœuvre. So far as Ireland is concerned it leaves the thing no better off. To reserve this taxation, direct or indirect, if you are aiming at a settlement is perfectly beside the mark.

Lieut.-Colonel W. GUINNESS:

The speech of the right hon. and learned Gentleman below me (Sir E. Carson) contained one passage with which I thoroughly agree: that every Irishman would wish the finance of this Bill to be a success. But it cannot be a success unless it' gets popular support in Ireland. Therefore I think on this general financial discussion we cannot rule out from our consideration what Amendments are necessary to make these financial proposals sufficiently popular and ensure that they shall be given a fair trial. The speech of the Minister in charge of the Bill, following on the discussion of last Wednesday, will undoubtedly create the impression that the Government are relying entirely on force in their present Irish policy, and that they still do not realise that if they are to get an immediate settlement through this scheme we must have the acquiescence of the majority of the people who are expected to work it. The Amendments to the financial Clauses, of which we have been told to-day, do not touch the place where the shoe pinches. The speech of the Minister in charge was a very able exposition of the finances of the Bill. It would have been an admirable speech for an assembly of bankers or even of economists, but I am afraid there was very little in it to appeal to popular sympathy in the South of Ireland. In this matter we have not got to think only of business, but of sentiment. The Chief Secretary told us two days ago that in a few months he would make an end of the campaign of murder. The methods in force, effective as they may be against murder, are certainly of a kind that no one can contemplate as a permanency, and can only be justified if they enable moderate opinion in the country to assert itself and play a controlling part.

Finance is the touch-stone by which the business men of Ireland, this moderate opinion, this opinion which so far has held aloof from Irish politics, will judge the Bill, and the failure of the Government to give any recognition to their feelings means that the Bill is going to drift on to the Statute Book in a form which has no support in any part of Ireland outside the six counties of Ulster. I am afraid if the Bill passes in this form it will consolidate the position of those who now have an unchallenged walk over in the matter of propaganda. In spite of what the Minister in charge said that those of us who considered that this Bill was unsatisfactory in its financial requirements could not have read it, I think there is no doubt that the Irish people, whether or not they have read it, have realised how the finance stands and consider these proposals most unsatisfactory. For that reason the only part of the Bill, as proposed by the Government, that will come into operation is the new clause to set up Crown Colony Government when the Southern Parliament fails to act The Bill satisfies only one section of opinion in six out of thirty-two Irish counties, and no business man if he ever hopes to take part in Irish politics under future conditions can support its provisions if he ever again expects to be listened to in his own country. I agree that the Government cannot attempt to satisfy the murder gang or the extremists, but they can and must provide for a saner element amongst Sinn Fein. That is the only hope of success, and the only justification for passing this measure.

The majority of this House are not acquiescing in this proposal because on its merits they think it preferable to the Union, but because the Act of 1914 committed them to try the experiment of self-government. If the Government is sincere in its effort for peace on these lines they must put themselves in the position of Irish Nationalists and deal with this claim. The chief hostility to this Bill is undoubtedly due to the financial proposals. These clauses are drawn with excessive consideration for the British Exchequer, and they take no account of Irish sentiment. Ireland does not accept as satisfactory that it should be given responsibility only for expenditure and that it should have control over merely the raising of one-fourteenth of the Irish revenue. No doubt the motive for keeping taxation under British control is to obtain security for the Imperial contribution, and I quite agree that if you propose to try to solve this problem by force you will want security. The Bill takes the present emergency taxation as the datum line of Irish revenue, and that is considered to be unfair. It takes the Imperial contribution at £18,000,000, arriving at that more or less on the lines of what is the surplus now produced over present and prospective Irish needs by British taxation.

The Minister in charge of this measure made a point that the Government were really foregoing £4,500,000. That argument might show that there is great generosity if Ireland were convinced that the present taxation of the country was fair and applicable to the conditions there, but the general feeling is that British taxation has been devised for British convenience, and that this indiscriminate taxation is designed much more for conditions in England than in Ireland. In a poor country like Ireland it is obvious that high indirect taxation and high consumption taxes put on during the war take an unduly high proportion of the national income, when you compare their effect with what happens in a rich country like Great Britain. Many years ago the Financial Relations Commission showed that this was the case and they reported that Ireland was paying one-thirteenth when it ought only to pay one-twentieth. There are economists to-day who say that in view of the increased prosperity of Great Britain in comparison with Ireland a fairer proportion would be one-thirtieth, which on our present net debt would represent about £200,000,000, and you have to set off against that the fact that it was considered by the Commission that Ireland was overtaxed then by nearly £3,000,000 a year. You could fairly write off a considerable amount of this £200,000,000 for that reason, I think Great Britain can afford to be generous in this matter, and it is all important that you should recognise Irish feeling in regard to this question.

The argument is put this way in the Irish Press: When you are taxing a poor man you do not do so according to the scale of his rich neighbour, but according to the standard of men of his own standing. Under this Bill Ireland is taxed on the British standard, and tables have been published in Ireland showing the expenditure of other small nations upon the Army, Navy, foreign affairs and commerce in proportion to their total tax revenue. On this basis the amount expected from Ireland is far beyond anything which you can find in any other small country. The amount per head of the population on the heads I have mentioned is inordinately high. Take countries like Denmark, Norway, Sweden and Bulgaria, and you will find the amount spent per head on the services I have mentioned is nowhere as much as £2 per head, whereas this Bill proposes that the Imperial Constitution shall be £4 per head in the case of Ireland. Ireland has been admittedly overtaxed in the past, and it will be worth while to settle this controversy, and in that way obtain a benefit which cannot be measured in money both in your relations with the rest of the world and especially with the British community. You are much more likely to get your contribution from Ireland if you give her generous treatment than if you try and impose it, and have either passive or even active resistance from the Irish taxpayers. Unless you can get the Southern people to work this matter, it will be looked upon as a tribute, and you will have continual friction and great expense in this respect. If you can modify the Imperial contribution by accepting one of the alternative Amendments put down by my hon. Friends and myself, you will remove the greatest obstacle to giving complete control over their finances to the Irish Parliament.

My hon. Friends and I propose to move Amendments in regard to the control of all taxation, including the Super-tax, the Income Tax, Customs, Excise, Excess Profits Duty, and the Irish Postal Services, and if we cannot get all of them at once we shall move to get them one by one. It is not necessary to discuss the details of our proposal now, but I would point out that you can ensure yourselves against any breach of Free Trade between Northern and Southern Ireland by providing that all existing Customs and Excise duties could only be altered by identical acts of the Northern and Southern Irish Parliaments until they get Irish union. The other point which was mentioned by the Minister in charge of this measure was that you must have a Free Trade system between these Parliaments, and that can easily be provided for by the express Amendment laying it down that Great Britain is to have advantages on most-favoured-nation lines. The appeal of the right hon. Gentleman to federalism as a defence against the obligation to accept this Amendment leaves me absolutely unmoved. One moment we have the Government appealing to federalism and the next moment we have them accepting a principle entirely opposed to it. I do not think that either federalism or Dominion Government are applicable to the very special conditions of Ireland. The great thing, from the point of view of the necessary propaganda in Ireland, is that financial autonomy would seize the popular imagination, do much to simplify your Bill, and enable you to sweep away the complicated provisions of Clauses 20 to 32. The need for such concession is urgent in order to counteract the feeling in Ireland that the Bill is a fraud and a sham. I say honestly that we had better pass no Bill at all than pass a Bill which would strengthen the extremists in their contention that Great Britain has always broken faith with Ireland and will always continue to do so.

The Prime Minister, the last time he spoke, told us that if someone could come forward from Ireland with a definite and acceptable proposal consistent with Imperial safeguards, the Government would be willing to negotiate. These financial Amendments are quite consistent with Imperial interests, but the condition that someone in a position to negotiate for the extremists in Ireland should come forward is absolutely unattainable. You may by reprisals and other exceptional means be stopping the murder of policemen in Ireland, but under present conditions you cannot hope to prevent Sinn Feiners from murdering each other, and any Sinn Feiner who accepted the Prime Minister's invitation would be doomed as a traitor by his colleagues of the murder gang. For this reason, you cannot hope to bargain with Ireland. You must name a fixed price. Everyone knows that the price in this Bill is not fixed. The Government have as good as said so. The Chief Secretary in Belfast said that they were prepared to amend the Bill, and, besides that, it is obviously in no proportion to the purchase of Irish peace. Opinions in Ireland change very quickly, and there may be a lull when the voice of reasonable men may be heard in Ireland, but Irish movements are fickle, and the lull may not last very long. I do beg the Government not to wait for this lull to take place, but so to amend the Bill as to appeal to the Irish imagination, in order that those who may have to work it may at once be in a position honestly to commend it to their fellow countrymen.

Photo of Viscount  Turnour Viscount Turnour , Horsham and Worthing

I can add very little to the very eloquent appeal which my hon. and gallant Friend (Lieut.-Colonel Guinness) has made to the Government to reconsider the financial provisions, and to adopt in their place the proposals on the Paper which we shall afterwards discuss. I cannot speak with his authority of Irish opinion, but I would address to the Committee one or two general considerations which appear to me to arise on this question of the financial contribution. The question of finance, after all, is the crux of the Bill, and I am bound to confess that every statement that the few English Members who have taken an interest in this Bill have made as to the unreality of the situation has been never more exemplified than to-day. What have we found? Two most important speeches have been made, one by the Minister (Sir L. Worthington-Evans) and the other by the right hon. and learned Gentleman the Member for the Duncairn Division (Sir E. Carson), in an almost empty House of Commons I should think that the right hon. and learned Gentleman, with all his great parliamentary ability, has never spoken to a more empty House, and yet he spoke on a subject that is of vital importance if there is to be any chance of this Bill being worked in Ireland. We had an admirable speech from the Minister without Portfolio delivered with all the lucidity and business capacity which his career in business and Parliament has led us to expect from him, but it was a speech, so far as the realities of the situation in Ireland are concerned, that might as well have been made in a debating society as in the House of Commons. He spoke of the great advantages that this Financial Resolution gives over those given by the Bill of 1914. What earthly connection has that with this Resolution this afternoon? Everyone knows that the Bill of 1914 will never and could never come into operation. Most of us know that this Bill will never come into operation. I am surprised at my hon. Friend (Mr. Moles) cheering that statement, because I gathered that the attitude of his party, on the whole, was that the Bill would come into operation. I hope that we shall hear more from him on that point. It would be interesting to know what are their real views. I say that it will never come into operation because to me it is inconceivable that a Bill which receives no support of any kind from the majority in Ireland, and which has only received the sort of support that we have had up to now from the minority—I am speaking particularly of this Financial Resolution, and not of the Bill as a whole—should ever come into operation.

The Committee ought to realise that the position since the recess has strengthened tremendously the attitude which we have taken up. Again and again we, a small number of English Members who take an interest in the Bill, little as we like the principles underlying it, have said that if a Bill of this kind be passed at all it must be passed so as to receive the assent of the majority of moderate opinion in Ireland. We ask for no greater justification for the attitude that we have taken up, whatever our past political history or views may have been. The proposals which we have put forward are proposals which are accepted by the majority of moderate opinion in Ireland. No one knows better than the right hon. Gentleman the Attorney-General for Ireland the state of opinion in Ireland to-day and how difficult it is for moderate opinion there to make itself known and felt and to support any proposal unless it be a proposal which, if put to the people of Ireland as a whole, would look, if I may use an American slang term, like a square deal with the Irish people. Will anyone tell me that anybody outside Ulster is going to accept this Financial Resolution as it stands? An hon. and gallant Friend near me says, "Of course it will not." I venture to suggest that those who study what is going on behind the scenes know that if this Bill is passed through the two Houses of Parliament in the form in which it now stands, although it may probably be put into operation in the North of Ireland, it will have no chance of operating in the South of Ireland, and the unhappy condition of affairs now prevailing there will simply be aggravated.

Under these circumstances it is the duty of every independent Member of this House only to vote for financial proposals which will have a reasonable chance The very admirable speech of the Minister without Portfolio in so far as the situation existing in Ireland to-day goes was an unreal speech. The atmosphere in which this Bill is being considered in this House, and the speeches made from the Government benches and by representatives of the North of Ireland, have been as an unreal drama. Whereas in Ireland the drama is very real, people are losing their lives over the disputes which we are discussing in this House in an atmosphere physically and mentally foggy. Nothing would be more interesting than to know the real views of the Members of the Government, in the light of the information which roaches them from Ireland, as to the merits of the proposal embodied in their Financial Resolution. The right hon. Member for Duncairn indicated that this was not the ultimate proposal of the Government, but that they were prepared to give Ireland a better bargain. What he appeared to suggest was that these proposals would constitute a negotiable basis after the Bill had come into operation, and that then better terms might be offered by the British Government. I do not think myself that they would make a negotiable basis, because these financial proposals are never going to be supported by a majority of opinion in the South of Ireland. The majority of moderate opinion cannot accept proposals unless they feel they will be acceptable to the mass of the people in Ireland. Therefore I say these proposals are not a negotiable basis. My right hon. Friend drew an extraordinary comparison between the financial proposals of this Bill and the position of the Dominion of Canada. I suggest there is not the slightest parallel between the financial conditions of the Canadian Dominion and that of the Southern and Northern Parliaments. Everyone knows there is not the slightest resemblance.

Photo of Mr Thomas Moles Mr Thomas Moles , Belfast Ormeau

My right hon. and learned Friend was referring to the spirit in which the two Parliaments would approach each other. He said they would approach as Governments and not merely as Parliamentary representatives.

Photo of Viscount  Turnour Viscount Turnour , Horsham and Worthing

That is a very fair interruption, but I do not think it takes away from the relevancy of my argument that the financial position of the Dominion of Canada has no resemblance to that of the financial position proposed to be set up under this Bill.

Photo of Mr Thomas Moles Mr Thomas Moles , Belfast Ormeau

My right hon. Friend spoke of the spirit in which they will approach each other.

Photo of Viscount  Turnour Viscount Turnour , Horsham and Worthing

Canada is as much an independent Government as the Government of France in financial matters.

Notice taken that 40 Members were not present; Committee counted, and, 40 Members being found present

Photo of Viscount  Turnour Viscount Turnour , Horsham and Worthing

I repeat it is difficult to draw any sort of parallel between the financial position of the Government of Canada and that of the Governments proposed to be set up in Ireland. I was amazed to hear the Minister without Portfolio refer to the situation in South Africa. He said that under the Union granted by the Imperial Government there was a Customs Union for the whole of South Africa and that Natal, for example, had not Customs freedom, but was bound by the provisions of the Act of Union. If the only proposals under this Bill are to put Ireland in a financial sense in the same relationship to this Department, then I say it is useless discussing them. I happen to have travelled a good deal, and I must say I am amazed by the statements in regard to the financial Clauses of this Bill which have been made by responsible members of the Government both in regard to the Dominions and their component parts. If the Attorney-General is going to answer, and thinks it worth while to reply to my poor remarks, I should like to ask him whether the Government think that the position of one of the provinces of the Union of South Africa at the present time is analogous to the position which the two provinces in Ireland will have under this Bill if it becomes law. If so, I can only say that discussion of these Clauses is hopeless, for moderate opinion in the South of Ireland is not going to accept the position of financial dependency that a province; in that Union occupies at the present time. I would warn the Committee, though I may be ruled out of order for doing so, against the danger of comparing the position of the Union of South Africa, or the provinces of that Union, since the Act of Union, with the position in Ireland either at present or in the future. The future position of that Union, financial or otherwise, is not assured at present, and never has been assured since the Act of Union, so that it is dangerous to draw any comparison there. The financial relations of the Union and its different provinces to the Empire may alter very much in the next few years, if the views of certain persons in the Union are accepted. At any rate it is an utterly misleading comparison.

I imagine that there can be no suggestion that that would be the future position of the two Irish Parliaments. There are several of us in this House, and I think many more outside, who do not accept the decision of the Committee on this Bill as the decision of the country as a whole. The important speech of my right hon. and learned Friend on the subject of finance was listened to by a small proportion of the members of the Committee, and, in view of the general lack of interest in the House throughout the progress of this Bill, and of the fact that the attitude which the Government have taken up is supported by no considerable body of opinion, we cannot accept the decision to which the Committee is soon going to come on this or any other Amendment. We do believe, however, that the proposals we are going to put forward, and our opposition to this particular financial proposal of the Government, are such as are, on the whole, likely to meet with the support of moderate opinion in Ireland. We only wish to gain that moderate opinion. We all of us, and particularly those who supported last Wednesday the strong action of the Government in putting down disorder, believe that there is an even greater responsibility to find, if we can, some way out of the impasse that is arising over this Bill—some way by which, when the disorder is put down, as we believe it will be, the government of Ireland may again be peaceful. As that solution can only be found, in the main, as I believe, in the financial provisions which you are prepared to make for Ireland, I say that it is in an unreal and false atmosphere that we are discussing this proposal of the Government, because it is a proposal which will not be accepted by the mass of moderate opinion in Ireland, and will never be put into operation. If it is passed, the Southern Irish Parliament will never function. It is the first and almost the highest duty of the Government—almost as great as that of finding a solution for our industrial difficulties—to put forward a proposal which will be accepted by moderate opinion in Ireland, and will make this Bill a reality.

2.0 P.M.

Lieut.-Commander HILTON YOUNG:

To-day the Chamber is empty. On Wednesday it was full, and yet, without a doubt, we are discussing to-day a question of infinitely more importance to the future of Ireland, and also to our own future, than we were discussing then. There need, perhaps, be no apology for the intervention of one who has not the means or the knowledge for viewing the matter from a northern or a southern angle, but has only such interest in the subject as we all have in good government and sound finance. I agree with the noble Lord (Earl Winterton) and with the hon. and gallant Member for Bury St. Edmunds (Lieut.-Colonel Guinness) in their contention that the best hope for the future of the Bill is in a wide extension of the financial responsibility conferred upon the new Irish Parliaments. I submit that the secret of the whole matter lies in that word "responsibility." We had high hopes, on the pronouncement of the Chief Secretary the other day, that an advance was to be made in this direction. Those hopes, alas, have been dashed. Something is done, but what is it? A further dole of cash is to be given, and a hope is offered of a possible return of cash in the future. As I have said, the secret of the matter is not more cash, but more responsibility for the Irish governments—not only upon the general ground that responsibility is necessary in order to appreciate and conciliate the self-respect of Ireland, but for the reason, which I venture to suggest is the root of the whole question, that responsibility is necessary for the Irish governments in order to enable them to construct a fiscal, revenue, and economic system which is suitable to the needs of their own country.

The root of Irish grievances and difficulties appears to me to be, in the true view, that, throughout the history of her connection with the Union, Ireland has had forced upon her a financial, fiscal, and revenue system unsuitable to her needs. This was admirably summarised by the late Lord Welby in his evidence before the Primrose Committee. Ireland, he said, is typically agricultural; the United Kingdom is typically industrial. Ireland is typically a country of a low range of incomes; the United Kingdom is typically a country of a high range of incomes. Ireland is typically a country of small capital accumulations; the United Kingdom is a country of large capital accumulations. What is the consequence? It is that, for that state of affairs in Ireland, our revenue system is the most unsuitable system in the world. It is based, and increasingly based, let us remember, upon direct taxes. Direct taxation is a system suitable and healthy in a country with large capital accumulations and industrial interests; it is unsuitable for a country in the condition of Ireland. To satisfy one's self as to the unsuitability of the system which is thus forced upon Ireland by her connection with us, we need only look at what, I think, everyone who studies taxation will look at, as the test as to whether a system of taxation is healthy for the country upon which it is imposed—that is to say, the elasticity of the revenue. The result of the unsuitable system in Ireland has been, in normal times, before the War, total inelasticity of revenue. The elasticity there—the rate of growth—was only half what it was in this country, while the rate of growth of expenditure was greater. This, as I have suggested, is the root, the far-reaching, deep-seated root, of all these great difficulties of Irish discontent which show themselves on the surface in so many different forms and characters. The fiscal, revenue and financial partnership into which she is forced with us constrains her to an unsuitable revenue system, and, as we know, to a scale of expenditure which is unsuitable to her needs. The remedy can only be in granting to her that responsibility for the construction and the framing of her own system which will enable her to adapt the machinery to her needs as regards the sources of taxation and to adapt her expenditure to her means on the other side of the account.

That is not to me, and I imagine to many, really the only reason, or even the chief reason, for the necessity of an extension of fiscal responsibility. The chief reason is in what appears to me the almost grotesque complexities, I will even say the absurdities, of the system which is proposed as an alternative. To see how those difficulties, complexities, I believe practical impossibilities of administration will really come into work, it is most useful to regard them in what will be their home, the Joint Exchequer Board. It appears to me that the Joint Exchequer Board will have submitted to it as its principal work three complete impossibilities. These will lie at the root of the new machinery which is proposed to rule the financial relations of the two kingdoms. At the root of those calculations on which the whole relation will be based lies in the first place the calculation of true attributable income. In the Treasury paper which has been for so many years, and still is, the official pronouncement on this subject, the true attributable income, under the headings of Customs and Income Tax, is stated year by year with a great appearance of scientific accuracy. As a matter of fact I think even the right hon. Gentleman himself, at any rate in the privacy which rules in the Debate to-day, might not be afraid to confess that that appearance of scientific accuracy is in fact nothing better than a humbug. At bottom the calculation of the income attributable to Ireland and England is based upon approximations so roughly accurate that I will not say they are valueless, but they do not take you out of the region of uncertainty, so much so as to be undoubtedly always subject, in the discussions of the Board and the representatives on it, to acrimonious and perpetual controversy.

To give one instance, an instance referred to by the right hon. Gentleman (Sir E. Carson), the whole question of the contribution of Income Tax to England and Ireland is based not upon a direct calculation at all, but upon an indirect analogy. It is based upon the return of the Estate Duty, and not, as I understand it, upon a modern return, but upon the figures of the average of ten years before 1914–15. It is an out-of-date analogy. There is one example of the fundamental inaccuracy and the difficulty of calculation which will have to be made by this Board. The point of this is that they are open to embittered and prolonged controversy. The second I will mention is the question of Imperial liabilities. What hope is there of the representatives of the North and the South of Ireland and of this country meeting as they must for many years at arm's length with the memories and controversies behind them, obtaining any degree of agreement as to what liabilities are to be regarded as Imperial and what as not Imperial? In the third place let me say but a word to emphasise what was so forcibly advanced by the right hon. Gentleman (Sir E. Carson) on this question of the third matter which will be left to the Joint Exchequer Board for consideration—the question of the relative taxable capacity. He, I think, was even unduly optimistic about it. He was of opinion, as I gathered, that by forethought and by regulation beforehand rules might be laid down which would enable the Joint Exchequer Board to obtain some useful result as to what taxable capacity is. I do not share that optimism. It appears to me that in setting the Joint Exchequer Board the task of assessing the relative taxable capacities you are giving them an utter impossiblity. There is no agreement in theory as to what taxable capacity means. Is it to be taken as the balance of a minimum of subsistence? Are you to allow the difference in the relative cost of Government and questions such as this on which there is no agreement and on which there never will be agreement? Even when you have got your basis as to what taxable capacity is to be in theory there are no figures which will enable you to apply it in practice. You could not do it unless you had a census of production and returns as to the location and amount of income far in excess, as regards accuracy, of anything that is humanly possible.

I would only point in this matter of the difficulty and the controversial nature of these matters which are being left to the Joint Exchequer Board to the well-known experience of similar adjustments and relations between the provinces and the central Government of the Indian Empire. It is well known to anyone who has had a previous acquaintance with the subject that the consideration and decision of questions exactly similar to this led to such furious periodic and ensanguined controversy between the provinces and the central Government that at last means had to be found for completely altering the basis of the system and for arranging for a more fixed and much more arbitrary system of contribution. Indeed the task of the Joint Exchequer Board is, I believe, as laid down, an impossible one. But it is not only for that reason that I would say that, as an alternative to greater fiscal autonomy, it is a most regrettable alternative. It appears to me that, by the establishment of this body, we shall be taking a step distinctly in a most unmistakably unconstitutional direction. This is to be a board of officials, but see what one of the implications of its tasks is to be. It is not to create charges directly on the taxpayer. It is to distribute the charge between the United Kingdom and Ireland. By increasing the percentage of one at the expense of the other it does in fact have the power of imposing a charge upon one at the expense of the other as between the United Kingdom and Ireland or as between the two-peoples of Ireland. It is therefore a body which will have in substance the power of charging the incomes of the people. To entrust powers of that sort to any body which is not representative, to any body other than the Parliaments themselves, is at any rate a startling innovation in the Constitution.

Let me refer to one supposed difficulty as regards the grant of any further or larger measure of fiscal autonomy to the Irish Parliaments which has been dwelt upon by the right hon. Baronet (Sir L. Worthington-Evans). I understand this is one that looms very largely in the official mind, and in the mind of those who shrink back from such risks and dangers as there may be in the experiment of the grant of a great measure of fiscal autonomy. It is the consequence of the grant of Income Tax control to the Irish Parliament—a breach in our own defences of collection at the source. To that great principle very great sub- servience and attention is no doubt due Undoubtedly it is one of the corner-stones of our fiscal system What danger is there in this direction? I believe it is very small. At the present time the balance of Irish revenue, according to the Treasury Estimate, truly attributable to Ireland and collected in this country, is much greater than the balance of revenue attributable to the United Kingdom collected in Ireland. I believe Ireland was our creditor in regard to attributable Income Tax for the last year (1918–19) to the amount of £6,000,000. By now, no doubt, it is a good deal more. In this work that we do for Ireland we have surely and obviously a means of bargaining by which we could reasonably require that a fiscally independent Ireland should enter into some form of convention with us as to mutual aid in the collection of each other's income at its source—a convention very easily arranged. Even were it not so, even were no such convention to be readily obtainable, owing to the unfortunate fact that the Irish Governments were at arms' length from us, a convention which would obviously be so much in their own interest, in view of the balance of revenue we collect for them, yet we have a means of self-protection in our own hands. The fear is not of anything that exists at the present time, but that there might be a great removal of the head offices of companies to Ireland, thus escaping taxation at the source from their dividends and interest for their English, Scottish, and Welsh shareholders. The businesses of those companies will, however, remain here. Their works will remain here, and we shall have a means of imposing any conditions upon such undertakings as are considered to be just and equitable. We could do so by some such legislation as that which applies to foreign companies. All that is needed is the requirement that they should have in this country a register of shareholders, and that dividends should be deducted at the source and paid in England. The means of enforcement are the same, and include the ordinary method of fine or sequestration upon the businesses which are in our power or under our control.

The difficulties in regard to this matter are, I think, exaggerated in proportion to the enormous advantage to be gained by an advance in the direction of increasing the responsibilities of the Irish Parlia- ments. If it is to be done no intelligible account can be given of the matter that does not make some reference to the Imperial contribution. It will emerge from something of what I have said, that the contribution as at present calculated is, I will not say totally unrelated to the amount of the actual contribution that Ireland might or should make, but it is not so far removed from the region of doubt as to free the matter from continued, prolonged, and bitter controversy, which would keep alive those feelings of discontent and mutual antagonism which we most desire should be allowed to die. As an alternative to it, and for the removal of those controversies and their consequent antagonisms, it would appear that the true principle must be that the contribution should be fixed so that Ireland and Irish statesmen and responsible officials may be able to see ahead what their liabilities are to be, and so as to avoid the constant wearing strain of recurring controversy as to the amount. If there is one thing that it might be useful to add it is that the Imperial contribution should in form not be a contribution for the recurrent expenses of the Empire. That is a point upon which political feeling must be awakened from year to year, as to whether it is to be made a contribution to the recurrent expenses of the Empire.

Justice is attained, and a satisfactory conclusion to both parties is far more likely to be arrived at, if the contribution is assessed as a charge in respect of debt outstanding at the time at which the Act comes into existence. In comparison with the position of the Dominions, and in comparison with any other standard, the Irish Parliament could not in equity object to undertake some charge in respect of outstanding debt at the time of the coming into effect of the Act. If that be so, I would point out one enormous advantage that might be gained. A period might be set to the time of the contribution as a whole. If it is looked upon as a charge in respect of debt, and not as a contribution to recurrent expenses, it could include a charge for the redemption of such part of the debt as might be shouldered by the Irish Parliaments in, say, a period of 25 years. I believe that that condition that the Imperial contribution was not to be permanent and variable, so marking the responsi- bilities of the Irish people and the Irish Parliament year by year for Imperial expenditure, but if it were to be fixed, limited in time nominally to a proportion of the debt, there would be a very much greater likelihood of its being an acceptable term and a satisfactory settlement, if not at once, at any rate as time enables moderate opinion to detach itself from extremist methods and to centre round that proposition.

The difficulties of the system of reservation are enormous in practice, and must inevitably lead to continuous and renewed controversies. The dangers of the grant of a system of greater responsibility to the Irish Parliaments might be counteracted by not particularly ingenious or elaborate machinery. The advantages to be gained are enormous, not only in regard to the substantial grievance of Ireland in these matters, which at the bottom is so much a fiscal and economic grievance, but in the giving of a rallying point around which that body of opinion which is only too willing and too eager for a settlement in Ireland will be able to meet with a chance of holding its head up against the urgings of the extremists.

Photo of Commander Hon. Joseph Kenworthy Commander Hon. Joseph Kenworthy , Kingston upon Hull Central

The. House always listens with the greatest interest to the speeches of the hon. and gallant. Member on financial matters, and, m fact, on every subject, and I am sure the Committee will agree with me that it is a great pity that during his speech not even a quorum was present. The most vital part of an Irish settlement is affected by the Resolution. Finance is the most vital part of any form of government. Look at the benches now, my own benches as well as any others. That alone shows the farce of the whole proceedings. I do not wish to labour that point, but I wish to traverse some of the observations made by the right hon. Gentleman who moved the Resolution. He based the so-called liberality of the concession to Ireland on the fact that we are only asking for a contribution of £18,000,000 per annum, although at the present time we are extracting from Ireland £22,250,000. He gives these figures from the memorandum on the financial provisions, Command Paper 707, but those figures date from May, 1920, and I interrupted him to point out that they have been radically altered since then. In this memorandum mention is made of the bread subsidy, which has been dropped in this country.

That is a small matter compared with that to which I am coming. The revenue in Ireland during the last terrible few months and I regret as much as anyone both the causes and the results—must have been decreased by the tremendous destruction of property. In the little patch of Ulster which the right hon. Gentleman the Member for Duncairn boasts about, though he is very ready to sneer at the rest of his fellow countrymen, the damage has amounted to £1,000,000 sterling, and the loss due to unemployment in Belfast, caused by religious and political differences, must have been colossal. Thousands of men have been driven from their employment. I am not arguing, but stating a fact, but the revenue must have decreased through these causes. Then there has been the destruction of factories, creameries, offices and farms, with the burning of ricks and cattle food in many counties in the south and west. That loss of wealth must mean a loss of income. Therefore the revenue must have decreased.

At the same time expenditure must have gone up. We have increased enormously the troops in Ireland and the police and the pay of the police. The Chief Secretary tells us with great pride that he is attracting every week into the Irish Constabulary from two to three hundred ex-officers, who are paid £1 a day and all found; I do not propose to discuss the rights or wrongs of recruiting these gallant ex-officers or paying them £1 a day, but the expenditure must have gone up. It may be said that the measures which are being adopted now will produce peace and quiet in the country and then we shall be able to withdraw these forces. That will not happen. It does not happen. Once you set up these services, especially highly-paid services, they have a habit of surviving. I am old enough to remember the recruiting for the special South African Police after the South African war. It was said that they were needed for the special circumstances of the country after it had been disturbed by two or three years of war, but they were continued up to the time of the Act of Union long after the need for them had disappeared. The same argument would be used for keeping the special police bodies in being in Ireland, even in the horrible—to my mind—result of driving discontent underground. If you suggest reducing them the officers will object to losing their jobs and the men will not be very anxious to go. If there is more or less peace on the surface it will be an argument for those who demand their presence, and vested interest will be created. Therefore even by the end of the two years, from the most optimistic point of view, expenditure in the South and West of Ireland must be very much greater than the figures given in the White Paper I shall be very much surprised when the full figures are available, which will only be when the Budget is introduced next year, if we are getting anything like a surplus of £22,250,000 at all, so that the arguments used by the Minister without Portfolio for proving that the financial suggestions are liberal fall completely to the ground.

I listen with the greatest pleasure usually, whether I agree or not—and on this occasion I do—to the speeches of the hon. and gallant Members for Horsham (Earl Winterton) and Bury St. Edmunds (Lieut.-Colonel Guinness). As far as I could gather they were pleading for fiscal autonomy for Ireland, for some sort of Dominion or Home Rule for Ireland, except strategical Ireland, for Home Rule in finance. That is the best thing that I have heard for a very long time. I rather thought they were tending in that direction in their very illuminating and eloquent speeches during last Session. I was one of the few Members who took the trouble to listen to the Irish Debates, and I rather gathered that they were quite ready to see some sort of settlement of this kind. If that is the case, why are we asking that Ireland should pay any war contribution at all? It may sound rather sudden to suggest that Ireland should be cut off from her share of war debt, but a great deal of the debt is due to disabled men and that sort of thing. I admit that Ireland has a small proportion of these, but a fiscally independent Ireland would have to look after her own pensioners and that part of the debt would be undertaken, and, if these hon. Members object to Ireland being apparently let off her share, I ask what contribution to our war debt, not their war debt, are the Dominions going to pay? They are not going to pay a penny. In fact, they are mostly in our debt. Australia and New Zealand owe money to us.

I do not want to press that. Nobody in any way attacks the loyalty or patriotism of the Dominions, but I do contend that it is not at all unreasonable to give Ireland complete fiscal independence. We did not conscript her manhood during the War. I do not argue now whether that was right or wrong. Taxation is conscription of a man's money. Therefore, for the same reason, it would not be right to conscript her money to pay a share of the debt. And compared to our total indebtedness the amount in question is not really very great. I have a great objection, which I wish to put with considerable seriousness, to the splitting up of the actual taxes that under the Bill Ireland is allowed to impose and which England retains, Ireland will be allowed to levy Death Duties but not Income Tax. Death Duties, Income Tax and Super-tax are really inseparable. If you increase Death Duties this year you will get in future years less Income Tax from the estates that are taxed, and it is the same with Super-tax. Would there not be a temptation for financial irresponsibility, especially in the Northern Parliament, to take advantage of this? They would have probably in a few years, if not almost at once, a labour majority. The Labour party in this country voted for and is practically committed to a capital levy. An Amendment which was put down by the Government, an astonishing Amendment which shows how little trust they have apparently even in the Northern Parliament, forbidding them to levy a Capital Tax, has been removed. The reasons that caused them to put down that Amendment must have been put to them very strongly by certain interests in Ireland. Perhaps there have been protests from other quarters, such as the Trades Council of Belfast. I do not know what the reason is. I do not think that we shall be told now, but they hope that they will be able to say to the semi-independent parliament, if ever they are set up, that they must not levy a capital tax because that would interfere with the Income Tax rights of this Parliament over Ireland. I am trying to view the matter through the fog that admittedly exists. This is what I see looming up. What is to prevent a Labour parliament in Northern Ireland from levying death duties of 100 per cent.? They will have no interest in Income Tax; they will be financially irresponsible. I do not see how we can object. It is utterly unsound to divide great fiscal weapons in this way. One part of the speech of the right hon. Gentleman (Sir E. Carson) I heard with the greatest horror and distress. He told us that these financial arrangements were by no means final, and he drew a picture of his Northern Parliament continually knocking at the door of this Imperial Parliament, either by deputations or by diplomatic notes or through their own members who remain sitting here, and demanding revisions of the financial proposals of the Bills. The one thing that the people of this country really want, and quite justifiably, is to be quit of worry and trouble and bitterness and agony about Ireland. This picture of the right hon. and learned Gentleman is terrible. We are never going to be quit of them; we shall have always as much trouble with them as we have had during the last 120 years.

I think we ought to consider very carefully whether we cannot devise some financial arrangement which will put Ireland once for all on her own feet as regards finance. Let them have finance in their own control and leave them alone. Then we can tax our own people without thought of Ireland. A point has been made about the lack of analogy between the Canadian Parliament and the fiscal conversations with us, and this glorified county council proposal for Northern Ireland. Of course there is no analogy. Canada does discuss with us matters of fiscal policy, and, whatever the settlement, I hope a future Ireland will also discuss with us and with other nations matters affecting her fiscal policy. The right hon. and learned Member for Dun-cairn, referring to Ireland's contribution to the Imperial Exchequer, boasted of the great share that his "little patch" is going to pay. He talks of his six counties. Whatever the present intentions of the Government, I think the right hon. Gentleman who moved this Motion must have been in another planet during the parliamentary recess. Does he really think, and does the learned Attorney-General for Ireland think, that this six-county proposal is going through without a great deal of friction and without any sort of compromise? Two of the six counties have by a fair majority declared against being joined to Northern Ireland. I know that hon. Gentlemen opposite are very strong about no coercion of Ulster. Are they going to insist on the coercion of a part of Ulster—Tyrone and Fermanagh? If so, they are very illogical.

Photo of Mr Edward Archdale Mr Edward Archdale , Fermanagh North

How has Fermanagh, which I represent, declared against it?

Photo of Commander Hon. Joseph Kenworthy Commander Hon. Joseph Kenworthy , Kingston upon Hull Central

The county council, the urban councils at all the local elections in Tyrone and Fermanagh—elections fought almost entirely on a political issue—have decided by a fair majority against union with so-called Northern Ireland. That being the case, it looks very much as if the six counties forming the so-called Northern Ireland will have to be reduced in some way. The Secretary of State for War, with his usual delicacy, at Dundee the other day, told a none too critical audience that in certain circumstances we on this side, supposing the murders went on, proposed to give more and more freedom to Ireland. That is the way he would describe the only right and just thing to do to that unhappy country, and he went on to say—I suppose if sufficient of his Black Watch soldiers were killed that we would pay to Ireland an indemnity I believe there are a few extreme Irishmen. I do not know whether they are in earnest when they say that they will demand an indemnity. These provisions certainly demand an indemnity of £18,000,000 a year from Ireland. I do not think that any serious Irishman suggests that England should pay an indemnity to Ireland. It is utterly wrong, after what has happened, and in view of our hope of a final settlement some day, to insist on this indemnity from Ireland now. I say that even £1,000,000 is too much. It would be a great economy to us in the long run to give them the fiscal autonomy which is so eloquently pleaded for by hon. Members opposite. I hope they will protest against this provision by going to a Division, and I shall certainly support them.

Photo of Sir Robert Woods Sir Robert Woods , Dublin University

In my opinion it is quite futile to expect any good results from this Bill for the so-called government of Ireland. The Bill has few friends in the North, though I think they are more passive than active. I think I am correct in saying that in the whole of southern Ireland there is not an individual who approves of it. Without enlisting the sympathy of southern Ireland I cannot see what good the Bill is likely to do. This Bill does not appeal either to our reason or to our sentiment.

Photo of Sir Edwin Cornwall Sir Edwin Cornwall , Bethnal Green North East

The hon. Member must not discuss the Bill, and must confine his remarks to the Financial Resolution.

Photo of Sir Robert Woods Sir Robert Woods , Dublin University

I am coming to that. The whole question is really one of finance. Everyone in the South of Ireland is agreed that unless the Parliament to be set up there has control of the fiscal arrangements, Customs, Excise, etc., it will not bring any peace to that part of Ireland. The question of sentiment is largely mixed up with the other question. When you put forward a demand, and call it a moderate one, for £18,000,000 per year as our contribution, I do not think that that will stand any impartial examination. The hon. Member for Bury St. Edmunds (Lieut.-Colonel Guinness) pointed out that even on a most extravagant estimate our proportion of the total amount of war debt was a matter of £200,000,000, and he gave very good reasons why that amount should be still further reduced. A sum of £18,000,000 per year seems a rather high price to pay for what is virtually the interest on considerably less than £200,000,000. Therefore the South of Ireland is against the financial provisions of this Bill to a man, and those provisions are the real crux of the matter. For that reason I hope that the Committee will reject or, at any rate, very greatly modify what I consider to be these exorbitant demands.

Captain COOTE:

I desire to ask the Minister without Portfolio to tell us how the machinery will actually work, because I do not think we have had any sufficient explanation, except in an arithmetical sense. In this connection may I say that I do not think the right hon. Gentleman the Member for Duncairn was quite fair to the right hon. Gentleman the Member for Peebles, because what worried that right hon. Gentleman and what worries me is, despite what the Minister without Portfolio has said, whether you will be able to collect your revenue in Southern Ireland. It seems to me impossible for the tax collector to do so in a country where the people are all opposed. Perhaps the right hon. Gentleman could give the Committee the figures of the actual taxation which has been collected from that part of the country since the beginning of the financial year, and could tell us what guarantee he has that it will be collected in the future. I do not wish to quarrel with the right hon. Gentleman's arithmetic. That has been done very successfully by the hon. Member for Norwich (Lieut.-Commander Hilton Young). I do think the right hon. Gentleman has left the human factor completely out of account. It must be remembered that the Irish, whether you call them one nation or two, are the only white race in the world who do not possess financial autonomy. That is a matter of history and of fact. For that reason I would suggest that some moderate concession might be made to the human side in this Bill. The right hon. Gentleman was, I think, exceedingly vague when he came to tell us of the reasons why the Government were not prepared to grant Customs and Excise and to grant Income Tax. He said that the grant of Customs and Excise would mean separation. I want to know why. The grant of Customs and Excise to Ireland could only mean separation if the Irish used that power to levy Customs and Excise in a manner hostile and detrimental to the interests of this country. Here is Ireland, a purely agricultural island, up against a big industrial island like England. What is the relative position of the two islands? Is it not inevitable that the agricultural island must be at the mercy of the industrial island provided, of course, that the industrial island can get supplies of food elsewhere in the world as this island is perfectly capable of doing. I cannot see any strength in the argument of the Government that the giving of Customs and Excise means separation. It cannot mean separation and I cannot see the danger of it. Then there is the question of Income Tax. The right hon. Gentleman said that to give it away would break up the system of taxation. Why?

Captain COOTE:

I do not quite follow what the right hon. Gentleman meant, and I should be glad of a further explanation. The general position which most speakers have taken up, and with which I am in hearty sympathy, though perhaps I would go further, is that whatever may be said of the Ireland of to-day, is it not possible to make an appeal to the Ireland of the future? What better appeal could you make than by a little financial generosity? I do not believe there is such a thing as a moderate party in Ireland to-day; but I think one might be created if there was a measure put on the Statute Book which in its financial aspects was generous. There is one point on which I disagree with the hon. Member for Central Hull (Lieut.-Commander Kenworthy). He argued against the theory that Ireland should undertake responsibility for any part of the war debt. I think that she should. He gave an illustration from the Dominions, but surely they have war debts of their own, and therefore they do really share in the Imperial war debt. I see no reason why the Dominions in Ireland should not have some responsibility for the war debt.

Photo of Commander Hon. Joseph Kenworthy Commander Hon. Joseph Kenworthy , Kingston upon Hull Central

I mentioned pensions and compensation and matters of that sort.

Captain COOTE:

I do not think that would represent the full measure of responsibility which the Dominions of Ireland should undertake. The question is in what form the payment should be made. I should like very strongly to urge the suggestion, which I think was adumbrated by the hon. Member for Norwich, that, instead of having a variable contribution going on for an indefinite period, you should have a fixed sum, if possible a lump sum, so that Ireland could know the beginning and end of its responsibility with regard to its War debt, or call it indemnity if you like. Take the case of the German indemnity. It has been proved that it would have been a wise course at the beginning in Germany's case to have fixed the sum total. That argument has been put forward and supported by every economist of repute. Therefore, I would urge upon the Committee that it is an essential thing to press upon the Government that they should consider whether it is not possible, admitting the necessity for putting upon Ireland the responsibility for some portion of the War debt, to make that contribution a fixed sum. I firmly believe that in this Bill there does lie a germ of an Irish settlement, particularly if you proceed upon generous lines in the matter of finance. An hon. Member opposite said he had the utmost contempt for it; but does he realise that you can so amend this Bill as to make it a Dominion measure precisely on the lines which his own leader suggests? I should not like the Committee to think I am in any way arguing against this Bill as such, because I believe the principle of it is right. It faces the facts to a certain extent, and it is only in detail that the Government appear to have become lost in a fog and a refusal to face the facts. I shall continue to protest against this atmosphere of unreality and of refusal, not only to face the present, but even to take reasonable measures to face the future, which they seem to have consistently adopted throughout the whole conduct of this Bill. If my hon. Friends press this matter to a Division, I shall vote with them.

3.0 P.M.

Photo of Mr John Hills Mr John Hills , City of Durham

I came down to the House in the same spirit as my right hon. and learned Friend the Member for the Duncairn Division, for, like him, I am trying to find a way to make this Bill work. The speech in which the Debate was opened by the Minister in charge of the Bill was an able financial statement. He set out the figures with lucidity, and the Committee got very clearly what is the bearing of these financial clauses, but there was not one word that brought that speech into relation with facts. There was not a single word to show that finance, which, after all, is the mainspring of the Bill, had been considered from the point of view of present circumstances in Ireland. I am not going to deal with the figures, as I think the Committee has had quite enough of them, and I am not competent to go into the details of taxable capacity, revenue and expenditure, but I mean to deal with two points only: first, the Imperial contribution, and secondly, Customs and Excise. A friend of mine, an Irishman, a former Unionist, who, when this Bill was first introduced, told me he had intended to go to Ireland to speak in favour of it, was prevented by the £18,000,000 a year contribution, which, he said, hung like a millstone round his neck. I speak with great diffidence in the presence of many Members who know Ireland much better than I do, but I wonder if the learned Solicitor-General for Ireland would care to go and defend this £18,000,000 contribution before an Irish audience; for, after all, the Bill, unless it works in Ireland, is no good at all. I do think the contribution of £18,000,000 is altogether impossible. Surely the Government has got some imagination, and let them use it on Ireland and see the effect of the, words that they use. It is all very well in this peaceful atmosphere to talk about finance, but you must judge the effect that your words will produce in quite different conditions. On Wednesday last we heard a good deal about the state of Ireland, which could hardly be worse; but surely there must be some thing there that you are appealing to, otherwise why go on with the Bill? It is no good passing a Bill that you cannot defend, and, after all, your £18,000,000 a year will only pay off a very small part of our debt. I do not agree with the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) that Ireland should pay no share of the debt at all, but I think that all that you ask her to pay you should ask her to pay in one lump sum, and thus avoid the friction of an annual contribution, which could be regarded as a hostile tribute. Therefore I hope when the time comes the Committee will give very careful attention to an Amendment on the Paper in the names of my hon. Friends and myself, to commute the annual payment into a single payment of £100,000,000, a payment well within Ireland's capacity, which she could raise by loan, and thereby exempt us from all liability for principal or interest, and no money to collect each year.

The further point, and perhaps the real point, is this: My hon. and gallant Friend who spoke last appealed to the Committee to treat Ireland with financial generosity. It seems to me that you cannot expect a country to work its Parliaments if you tie them in on every side, and I say again you have got to show us that the Governments can function under the restrictions that you impose. You have not shown it, and I do not think you ever can show it. My hon. Friends and I all through these Debates on the Committee Stage have tried to the best of our ability—I speak with great diffidence, because I know the extraordinary difficulty of the Irish question—but we have tried in so far as we could see the light to produce a Bill which somebody in Ireland will try and work. I do not believe you have got it, and yet the thing is so near. It is under your hands if you would only open your eyes and look. I was very much struck with what fell from my hon. and gallant Friend the Member for Bury St. Edmunds (Lieut.-Colonel Guinness). He told us that, accepting the assurance of the Chief Secretary that he is on the point of breaking up the murder gang—and we all hope and believe he is—he saw then a real chance of a permanent settlement, and he believed that a body of moderate opinion existed and would then form and express itself, to which some appeal could be made. I hope the Government will take up that suggestion, and they can only do so properly if they produce that scheme at once and let that scheme be on broad and generous lines. It is no use regarding this Bill as a mere bargaining counter. It will not bring you any further.

Coming to my last point, I think you will have to give Customs and Excise, be cause you cannot expect Governments of the importance of the Southern and Northern Parliaments to do any useful work unless they have the authority and responsibility that fiscal autonomy would give them. I do appeal to the Minister in charge of the Bill. I know he has spent a great deal of time over this Bill, and the Committee fully recognise that he is as anxious as any of us to settle this matter. We all here wish to do what we can to find a settlement. I welcome heartily, if I may respectfully say so, the speech which my right hon. and learned Friend (Sir E. Carson) made in the Recess, in which he expressed again the intention which he has often expressed here that he meant to do his best to put the Bill into operation. I do appeal to the Minister in charge of the Bill, I believe he has a great opportunity. You have got to run risks, I agree. The risk of giving Customs and Excise is great. Those who ask for it may be called Separatists. I do not think that is the true description. I think there is a wider meaning in Union, and I do submit that those of us who ask for this are perhaps the real Unionists. I believe there is now a chance for the Government. Things move quickly in Ireland, and that chance may go. It is almost going as we sit here to-day. I believe if the chance were taken and a broad and generous offer were made by the Government—an offer saying that that was the last concession they would make, and that they would not enlarge it—I believe that might produce settlement.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

I believe the Amendment in my name on the Paper, in view of the ruling given by the Chairman of Committees, would be, strictly speaking, out of order. Therefore, I propose to offer a few remarks on the general question. This Financial Resolution offers great temptations to all of us who think, as many of us do, that we are discussing a problem this afternoon which will never reach the realm of practical politics. But I suppose we have got to put that temptation behind us, and address ourselves to the contents of the Resolution as proposed by the Minister without Portolio. The estimate put forward by the Minister without Portfolio on which the figures are based which are presented in this Financial Resolution is drawn up on an estimate whose date is fairly old so far as Irish history is concerned. The Command Paper on which the figures quoted by my right hon. Friend are given is dated, I think, May, 1920, and on the basis of that time the estimate for revenue from both Northern and Southern Ireland under the scheme of this Bill is put down at £26,250,000. The corresponding revenue is £48,500,000, showing a balance of £22,250,000. Before we agree to those figures, there are certain events which have happened, and as a result of those events certain other calculations must obviously be made before we can for a moment agree that this figure is within the realm of what is practicable.

I am not proposing to discuss for a moment the causes or the pros and cons of the opposing forces which are responsible for these causes, but it is a fact that a great deal of expenditure is likely to be necessary in Ireland beyond this date of May, 1920, because of certain events which have happened in Ireland. For example, there has been an enormous destruction of property in Ireland. I believe there are certain hon. Members in the House who can correct me if I am exaggerating, but I believe in Belfast City alone claims amounting to £1,400,000 have been lodged, under what is known as the Malicious Injuries Act, for the destruction of property in Belfast. Then, in other parts of the country, there has been up to the moment claims, some of which have been adjudicated, for a loss amounting to £100,000 in the destruction of creameries. Indeed, it would be quite within the bounds of reasonable possibility to assert that at the present moment claims amounting to £2,000,000 are in process either of being lodged or of adjudication by the courts in Ireland for the destruction of property.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

What the right hon. and learned Gentleman says reinforces my argument, and perhaps I am not exaggerating the position as we know it, apart from political reasons. I want to discuss it purely from a financial point of view. My right hon. and learned Friend says the claims amount to a great deal more than £2,000,000. Is it not a logical deduction from that fact that that is bound to have a most material effect on the revenue which is to be derived from Ireland? I think my right hon. Friend will agree that that argument is sound. If the claim for this enormous amount of damages due to the political situation is anything in the region of accuracy, the figures presented to us this afternoon by the Minister without Portfolio, based on a White Paper dated May, 1920, must obviously require revaluation, and I do not think we are entitled as a Committee to agree to a Resolution which is on the Paper without being put in possession of the facts as they are to-day, apart from the position taken up by the Government in reference to the Bill.

There is another point on which the Committee is entitled to information. There are not only claims for damages, but much larger claims which affect the business community in Ireland more particularly. I refer to claims for compensation in respect of the actual damage which has been done. Take, for instance, the case which was thrown from side to side of the House the other day, the case of Balbriggan, in which a factory was destroyed. There was the actual damage to that factory which will require to be dealt with by the compensation authority, but over and above that there is the compensation which is due in respect of this or any other factory in Ireland on account of the damage to the business in which the people concerned are engaged. We are told—and I should like a reply to this question—that the liability in such a case rests upon the local ratepayers. I understand that is the position, that the local ratepayers are ultimately assessed on the rates for the payment of claims of this sort which are made as the result of the political situation in Ireland. Here again, obviously, you are undermining the ability of the ratepayers all round to meet the revenue which my right hon. Friend presents us with this afternoon as an estimate. It is, for example, obvious if a factory or house is burnt down, it is not a rateable subject while in that condition; therefore the capacity of the people either in the North or the South of Ireland to meet the revenue estimated by my right hon. Friend is to that extent destroyed.

There is a third point which I think we ought to take into consideration. That is the question of the insurances of businesses in Ireland at the present time. Everybody who is acquanited with the situation there knows that it is practically impossible to insure businesses or property on anything like the usual terms. I hope in a moment very briefly to show how this relates itself to this Financial Resolution. No' ordinary insurance company at the moment will cover the risks of the political situation, and business men in Ireland are therefore compelled to resort to Lloyd's. I have taken the trouble to discover the rates of insurance which are quoted at Lloyd's for these kinds of risks in Ireland. I find that for a period of three months the rate is 35s. per cent. and for six months 50s. per cent. Consider what this means? It means that every large merchant in Ireland who is a rateable subject for the purposes of this revenue which my right hon. Friend puts at 26¼ millions may lose the whole of the profit of his business in a single night as the result of a burning down or a blowing up of his factory. If that is taking place to any considerable extent—and we all know it is taking place—it is obviously bound to mean that this estimate, originally arrived at in May, is incorrect, and that there is not the same amount of country on which to levy for revenue for which my right hon. Friend hopes.

Look at the effect of this on such kinds of things as Death Duties, or Income Tax, or Excess Profits Duty. The latter are not coming in for the moment. If you have the amount of destruction of businesses as at the present time in Ireland it is bound to have a deleterious effect upon the produce of such taxes-It seems to me that if you do not take these matters into consideration you cannot present to the House of Commons an estimate which is proportionate to ability. I will not go into the question as to whether this money should be given for political reasons, but I do submit that on the grounds alone that I have given that the House is not in possession of sufficient facts to agree to the figures put forward by the Minister without Portfolio, and I, for one, am prepared to vote against the expenditure of any money for setting up an impossible Parliament in the North of Ireland, and some, form of Crown Colony Government in the South.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

The Debate this afternoon has been enlivened by the speeches of three hon. and gallant Gentlemen, voicing moderate Irish opinion. These hon. and gallant Gentlemen took exception to two points in the Financial Resolution. The first was that the contribution to be made by Ireland of £18,000,000 was excessive. If I understood correctly the hon. Member for Bury St. Edmunds, he admitted that Ireland paid one-thirtieth part of the sum paid by Great Britain as a whole.

Lieut.-Colonel GUINNESS:

I did not say that. What I did suggest was that we might set up a claim for generous treatment on the score that Ireland was overtaxed.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

If Ireland contributed the thirtieth part of the whole revenue of Great Britain, Ireland would not be over taxed. Taking that as the basis, and applying that principle to the present situation, what would the figures be? One-thirtieth of the interest on the National Debt would be £10,000,000 per year. One-thirtieth of the sum set aside for the repayment of the debt would be £7,000,000 per year. One-thirtieth part of the sum set aside for the cost pensions would be £4,000,000, and one-thirtieth part set aside for the cost of the army and navy would be £7,000,000 per year. Therefore, taking these four figures alone, the sums required this year, or rather one-thirtieth part of the sum required, would still exceed the moderate figure of £18,000,000. After, however, all has been said and done this £18,000,000 is only going to be for two years, and I for one keen as I am to conserve the country's resources, would willingly double or rather sweep away entirely that sum of £18,000,000, and not ask a penny from Ireland if by that means we could obtain the support of moderate, opinion in Ireland for this proposal. Although I am in disagreement in looking it the matter strictly, I join issue completely with my hon. Friends when they dispute or suggest that Great Britain is asking an undue contribution from Ire land. I think it could be clearly shown, so long as the present position remains between this country and Ireland, that this country will always pay very heavily in all her connections with that country.

Let me deal now for one minute with the second point made by the three hon. and gallant Gentlemen. They took exception to further powers not being granted to the Southern and Northern Parliaments. Here I find myself in agreement with them. I think that these Parliaments will require further powers of taxing their own subjects. I know the Minister without Portfolio has already said that all former Home Rule Bills were not so generous as the present Bill, and that this Hill confers greater powers on those Parliaments than former Bills. The very obvious reply is that when those Bills were passing through this House they were supported and accepted by the majority of the Irish people as a settlement, and therefore to advance what happened in 1914 and earlier is, I am afraid, no solution and no step towards a solution of the present problem. I rather join with the request that has been made that the Government, at a later stage, should grant to these Parliaments further powers so as to create in the minds of the Irish people a direct sense of responsibility, thereby giving the members returned to those Parliaments a direct incentive and interest in making the government of Ireland a special consideration of their own.

The Minister in charge of this proposal drew a clear picture of the large sum of money which would be at the disposal of the Irish Parliament, and he estimates that it will have a surplus each year of £9,000,000. The total expenditure of these Parliaments will only be £26,000,000; therefore the two Parliaments in Ireland can increase their expenditure by 30 per cent. without asking their people for a further penny of revenue. Is that the best spirit and the best method in which to approach a solution of this problem? The method of putting British money into the coffers of the Irish Parliament and into the pockets of the Irish people has been the method adopted by this country in all her dealings with Ireland for over 30 years. It is expensive, and it does not solve the problem. By all means let this country be generous to Ireland, but I do appeal to the Government to grant to this Parliament further powers in regard to Customs and Excise, and by that means direct the attention of the people to their own Parliament and at the same time create in the minds of the people a direct incentive to good government.

Major BARNES:

I beg to move, in paragraph (1), to leave out the words "or to any body or person in the stead of the said Exchequers,—"

I wish first of all to make some observations on the general question. One thing is pretty clear. Judging from the speeches of a great many hon. Members who have spoken, and who are sound supporters of the Government, it is quite clear that in their opinion the financial provisions are not just or reasonable. That fact alone might induce, anyone to look carefully at these proposals. In doing so the first thing one notices is this question of the Imperial contribution. As far as I can understand, the arrangement is that every two years the Irish Revenue is to make a contribution of £18,000,000 a year to Imperial liabilities, and after that, if the amount is found to be unjust, then the contribution is to be adjusted. I do not understand why that should not be done at the beginning. If at the end of two years there is going to be some difficulty, why is this arbitrary figure of £18,000,000 suggested?—because it seems, to me to open up a wide field of friction and dispute.

Taking the whole body of Irish Revenue, you have this first charge upon it, and after that you have the charges made by the expenditure of the Irish Parliaments. Therefore you have two bodies dealing with the same subject. The Parliaments, if they work, will be spending on their own services, and they estimate the amount at £11,000,000. On the other hand, this Parliament here will be spending a sum of about £8,000,000 on the reserved services. Those who have been in this Parliament for a number of years know that there is a tendency for all expenditure to go up, and I do not suppose that what happens here is unlikely to happen in Ireland. Things seem to be more exaggerated in Ireland than here, and therefore we shall have these two bodies committed to what is normally an increasing expenditure, and Parliament here is committed to a similar policy, and the whole funds of Irish Revenue will be used up first by the Imperial contribution and then by demands made by two entirely distinct and separate bodies—it may be—with very different policies.

One of the reserved services is that of the police and the magistrates. Taking into account the present condition of Ireland, the expenditure on those services may be increased to a very large extent. I do not know whether the "black and tan" force is a police force or a military force, but if it is a military force the expenditure will be spread over the United Kingdom, while if it is a police force it will fall entirely upon Ireland. That expenditure is of so nebulous a character that one wonders whether there will be any margin out of the Irish Revenue after the Imperial contribution is satisfied and the demands of those two bodies have been met. I wish to congratulate the right hon. Gentleman the Minister without Portfolio upon the lucidity and the clarity of the speech he made in proposing this Resolution.

It seems to me that under this proposal we are asked not only to authorise the payment of certain money, but the direction in which that money is to go is indicated. We are asked to authorise the payment, first of all, into the Exchequers of Southern and Northern Ireland, "or to any body or person in the stead of the said Exchequers." I think the right hon. Gentleman might throw a little more light upon the meaning of this provision. So far as we have gone with this Bill, with the exception of the Financial Clauses, we have had nothing to indicate that there was any alternative to the Exchequers of Southern and Northern Ireland to whom this money was to be paid. I know there is a Clause which suggests that the Government have in mind some other alternative. I do not know whether it would be in order to refer to that Clause, and I do not want to go outside the ruling which has already been given. We are being asked to authorise payments of very large sums of money to "any body or person." It is one thing for this Parliament to be willing to relinquish its control over revenue and expenditure to another Parliament, but it is another thing entirely for it to be asked to relinquish its control over revenue and expenditure to "any body or person," and I think the Committee was entitled to have some explanation from the Minister without Portfolio of the meaning of this phrase. If the passing of the Resolution as it stands is to be held to commit the House to the new Clause standing on the Paper in the name of the First Lord of the Admiralty, it should not be done without discussion. I would ask for your ruling whether, if this Resolution be passed, the House will be limited in any kind of way in discussing the new Clause which is down on the Paper in the name of the First Lord of the Admiralty?

The CHAIRMAN:

I shall be very glad to make that position quite clear. The acceptance of these words in this Resolution will not commit the House in any way to the acceptance of the new Clause standing in the name of the First Lord of the Admiralty. The House will be perfectly free to accept or reject or amend that Clause quite apart from the acceptance of these words to-day. The hon. and gallant Member is entitled to move his Amendment to leave out the words and to ask for an explanation from the Government, but he would not be right on this occasion in anticipating the discussion which will necessarily arise when we take the new Clause to be moved from the Government Bench.

Major BARNES:

I am very much obliged for that explanation. It is important and valuable to have it. I realise the full bearing and import of it. I have realised, even after the short time that I have been in the House, how binding these Financial Resolutions are and how effectively they are used later when dealing with matters that arise on the Bill in preventing either the enlargement or diminution of the Bill. We feel very strongly that we are asked to-day by passing this Resolution to commit ourselves to a very important amendment of the Bill. It has been said that the Bill is capable of being amended so as to extend dominion government to Ireland, and this Amendment seems to indicate that it is possible so to amend the Bill as to set up something like Crown colony government in Ireland. That may, in the view of some people, be an act for the better government of Ireland, but I do not think that we should move the least in that direction without having the fullest possible knowledge of the road which we are asked to take, and I cannot help thinking that it was an extraordinary omission on the part of the Minister without Portfolio that in introducing this Resolution he should not have given us some indication of the effect of this part of it. We shall be very glad to hear something from him on the point. It may be that he has some perfectly satisfactory explanation which will render it unnecessary for us to pursue this matter further, but, unless we have some explanation of that kind, it will be necessary to take a division upon the Amendment.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

I hope that I have an explanation which will satisfy my hon. and gallant Friend. He seemed to indicate a fear that under the powers of this Resolution it would be possible to dispose of sums to any person irrespective of who he was. If he will read the Resolution he will see that there is no reason to fear anything of the sort. "To any body or person in the stead of the said Exchequers." First of all, it must be a payment authorised by the Bill, and it must be to the said Exchequer or to some body to whom it may be paid in their stead. It could only be paid in that way, and the hon. and gallant Member is not precluded, when we come to discuss the new Clause to which we are refer ring or any other Clause, from cutting down any power given by the Financial Resolution, although he cannot increase it. He would like to know why these words are in at all. They are in for this reason. After the union of the two Parliaments, these sums will no longer be paid to the Exchequers of the Southern and Northern Parliaments, but to another body, the Council of the whole of Ireland. Meanwhile, there are some payments which may be paid direct to the Council of Ireland on the authority of the two Parliaments. Those may be made to the two Parliaments and then made by them to the Council of Ireland, or they may be made direct to the Council of Ireland, being dependent, not upon what we do, but upon what those two Parliaments do. Therefore, I require in the Financial Resolution to take power to make those payments to the Council instead of to the two Exchequers.

There is one other case in which moneys may he paid to a person in lieu of the Exchequer, namely, to the Lord-Lieutenant. It is in case one or other of the two Parliaments is not functioning, and some interim payment has to be made before a nominated Parliament takes place. I require to ask the House to give me that power now. It does not prevent the House when we come to discuss the new Clause either rejecting it altogether or cutting it down; but unless I take the power in this Financial Resolution the House, even if it wanted to do so, would be unable to pass the new Clause. I would ask the Committee not to divide on this Amendment, because there is nothing concealed in these words. So far as any "body" is concerned, it is absolutely essential, apart altogether from the First Lord's new Clause, and with regard to the word "person," it will probably only be required if the First Lord's Clause be accepted. It does not prejudice the House in any way. It can either reject that Clause when it comes to be moved or amend it, but it could not accept it unless these words were in the Financial Resolution. I am going to ask the Committee to give me the Resolution when we have disposed of this Amendment. I do not propose to weary the Committee with a further speech, so perhaps while I am speaking I might be allowed to reply to some of the questions.

The CHAIRMAN:

No, the discussion is limited to the Amendment. We must dispose of that first.

Major BARNES:

I am sorry to say that a not very satisfactory explanation has been given. The first point made by the right hon. Gentleman was that this is required because after the two Parliaments have come together it will be necessary to pay this money to some body other than the Exchequers. I think, under Clause 34, provision is taken for dealing with the whole of the financial situation in such an event. A provision of this kind does not appear to be necessary at the present time. It cannot be brought into operation, and Parliament will have a further opportunity of reviewing the situation when it does arise. With regard to the second point as to the payment of moneys to Councils, that opens up a terrible vista, if this Parliament is going to have financial transactions with the County Councils of Ireland.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

The hon. and gallant Member is under a misapprehension. The reference is to the Irish Council. He may not recollect the terms of the Bill but there is an Irish Council which is to have power to deal with the railways and which may have other powers devolved upon it by the two Parliaments. Then it will require revenue.

Major BARNES:

I understand. I was rather confusing two things. With regard to the Irish Council it appears to me that if occasion arose it would be easier to make provision in a more direct way. With regard to my last point which arises in connection with the Amendment of the First Lord of the Admiralty, to which we object, the whole position is one of great ambiguity. Under the circumstances I must press my Amendment.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

Yes, we must press this Amendment to a division unless we get a very much clearer explanation of the powers asked for by my right hon. Friend. One of the difficulties of discussing this question at the moment is the ruling of the Chair that we must confine ourself to the financial aspect of this particular Resolution. It is quite obvious that the words which my hon. and gallant Friend desires to omit have a very close relation to the Amendment which has appeared on the paper to-day in the name of the First Lord of the Admiralty, which covers a whole page, and which involves a principle in its application so far as the Parliament of the South of Ireland is concerned. It will certainly be opposed on this side, as it ought to be opposed by every sane man. I believe my right hon. Friend the Member for Duncairn himself will be opposed to the ridiculous Amendment to Clause 14.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

It is unfair to argue that if we allow these words to remain in the Resolution they will not have any effect. If we allow the Resolution to go as printed on the assumption that the Amendment of the First Lord of the Admiralty is destroyed—a very large assumption—there would still remain in this financial Clause powers to the present Government to hand the money over to any body or persons—

The CHAIRMAN:

This Resolution will not appear in the Bill. It does not form part of the Bill in any way. If the Committee reject the Clause to which reference has been made then these words will not operate.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

Even if that be so, we should still object to it, and I will tell hon. Members why. Because of the unrepresentative nature of the body that is set up by the Clause in the name of the First Lord of the Admiralty.

The CHAIRMAN:

I am afraid that the hon. Member does not understand. He may take objection when the time comes to the Clause to which he is referring, but he must not now anticipate the discussion that will arise when we come to that new Clause.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

I do not wish to anticipate that discussion, but this position obviously must arise some time, that if the Bill becomes an Act of Parliament and there are not the bodies in existence to which this money can be paid, then it may be handed over to certain people, say, for instance, the Lord-Lieutenant of Ireland. If your ruling is that that would not be possible it would remove my objection, but I foresee this difficulty. Supposing the Southern Parliament, or indeed, the Northern Parliament, is not in existence when this reserve revenue has to be collected and the sums handed over, to whom in that case will the money be handed over? It might be handed over on the nomination of the Lord-Lieutenant or to the Irish Council. I am asking where this Parliament will be in regard to the expenditure of these large sums of money?

The CHAIRMAN:

Certainly no money can be paid to anybody or person except as may be authorised in the words of the Bill as it becomes finally enacted.

Photo of Mr Ronald McNeill Mr Ronald McNeill , Canterbury

There is one very small drafting point to which I would like to call the attention of my right hon. Friend. I would ask him whether, in view of the explanation he has given, it is not desirable to add after the words "any body or person instead of the said exchequers," the words "or either of them." My right hon. Friend will see there are possible interpretations which may be put upon the words if these are not added.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

I am obliged to my hon. Friend, but I really do not think there is any need to add the words to the Financial Resolution which is not brought into the Bill, but which covers the powers given in the Bill.

Amendment negatived.

Main Question again proposed.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

I think the Committee will expect me to reply very briefly to some of the observations which have been made. We are not going to ask the Committee to go any further to-day than this Financial Resolution. I cannot ask it to take any of the Clauses as there is other business on the Paper which is pressing. The main burden of the criticism to the Financial Resolution has been that present facts are not sufficiently taken into account. Some hon. Members have said that the Bill has no relation to present facts. That would be much more convincing if any single Member had been able to point out that the margin of £9,250,000 which is given to Ireland is not sufficient for Irish purposes. If it is not sufficient, it ought to be very easy to show that it is not. It would then have been quite reasonable to say that we have left out of account existing facts or reasonable anticipations for the future, and have founded our Bill upon too narrow a basis, and that, therefore, it could not succeed. No such argument has been addressed to the Committee. Not one word has been said which has led one to suppose that there was any doubt that the margin of £9,250,000 is sufficient.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

It is quite true that some observations have been made suggesting that we shall not get it, but I will deal with that later. With regard to the amount of the contribution, several hon. Members have said that it is too much. One hon. Member said that no contribution ought to be taken at all. I do not know whether he could justify to the English taxpayer what would happen if no contribution at all was taken from Ireland. Even now we are staggering under a heavy Income Tax and Super-tax, while the Tobacco Duty is very high indeed, tea and sugar are taxed as much as they can bear, and even the humble glass of beer, not withstanding its low gravity, is almost too dear for ordinary consumption; and yet Ireland would be free from nearly all these taxes, and would have an Income Tax of, perhaps, 2s. or 3s., a Tobacco Duty far less than it is here, tea, beer—a land of plenty, with practically no taxation at all. That would be the result.

Photo of Sir Frederick Young Sir Frederick Young , Swindon

What about the Dominions that are paying heavy taxation for the War?

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

I will deal with that in a moment. That would be the result if Ireland were not asked to contribute at all to the Imperial expenditure. No hon. Member could go down to his constituency and justify the relief of Ireland from all contributions and an increased taxation on the people of this country. It was suggested that Dominion Home Rule should be given and that no contribution should be made; but are not the Dominions making, in their taxation, a heavy contribution to the War expenditure? Is Ireland to be let off all War expenditure of all sorts, when every Dominion in the Empire is itself paying an enormous annual taxation for the financial contributions that it made towards the War. That is not a position, as it seems to me, that it would be possible for us to take up. Another and, if I may say so, much more reasonable and interesting suggestion was made, and one of these days it may, perhaps, be found that it may be the final solution of the question. It was suggested that a lump sum should be fixed, and that Ireland should be asked to contribute that lump sum. It was suggested that her corporate self-respect would be less outraged if a lump sum were fastened round her neck than if she paid an annual contribution. I hope I do not misrepresent the proposal. Supposing, however, that a lump sum were put upon Ireland, supposing that it were agreed upon now, could it be paid now? It would be absolutely impossible for Ireland to raise anything like the lump sum that would be required if she were to pay a fair share of the War debt.

Photo of Mr Edward Carson Mr Edward Carson , Belfast Duncairn

She would have to pay 20 per cent.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

I do not believe, however good the credit of Ireland might be, that it would be possible for her, at any price, to raise the £100,000,000 or £200,000,000, or perhaps more, that would be her equitable share. Even if a lump sum were fixed at this moment, it would mean that she would have to pay interest and sinking fund upon that lump sum, because she could not pay it entirely, and you would have your annual contribution or tribute contrary to her corporate self-respect, just as we have in this Bill at the moment, My hon. Friend the Member for East Edinburgh (Mr. Hogge) and, I think, another hon. Member, also made great play on the question of the claims for compensation that will be payable in respect of burnings and of destruction of property which, unfortunately, have been going on recently in Ireland. He put them down at £2,000,000.

4.0 P.M.

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

My hon. Friend suggested that, and he seemed to think that, because £2,000,000 worth of property was destroyed, all this margin of £9,250,000 was in jeopardy, and probably would contract and disappear altogether.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

I did not say "disappear."

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

It was not put so picturesquely, but that was the suggestion. Let us consider what that means. That £2,000,000, if it be the correct figure, is paid out of the rates, and not from the taxes. It does not, and will not fall as a charge upon this margin of taxation; but up to a point it does, no doubt, affect the financial capacity. Up to what point? To the point of what would have been made out of that £2,000,000 worth of property which has been destroyed. That may mean, with a 6s. Income Tax, a difference of £30,000 or £40,000 a year—not more.

Photo of Mr James Hogge Mr James Hogge , Edinburgh East

Surely my right hon. Friend is forgetting that inside the destroyed property there was a flourishing business?

Photo of Mr Worthington Evans Mr Worthington Evans , Colchester

I am not forgetting that, but in case my hon. Friend does not agree with my calculations, let us make it £50,000 or £60,000 a year. Although it is deplorable, it is so small that it really does not upset the margin of £9,250,000 in any way. Some of my hon. Friends were very kind in their references to my speech, but they accused me of want of imagination. Imagination in finance, however, is one of the most dangerous of things. It is the one time when you really have to keep your imagination in check and stick to facts. I was asked to re-cast the finance with an imaginative eye to the future, when a moderate party would be seen coming through the fog—was it not?—and advancing towards us ready to accept some very low contribution. This was the imaginative effort that I was asked to make, and I was to fix the Bill in consequence upon that low financial basis. In finance it is better to stick to facts, and if a moderate party does arrive—and I hope, notwithstanding the suggestions that no moderate party could live at present, that it will—if a moderate party does arrive, I do not think a moderate party in Ireland will find the Government in Great Britain, whatever it may be for the time being, likely to be other than generous and willing to go forward, and give them the fullest possible powers and the lowest burden of taxation to carry out what, after all, for hundreds of years the great British people have tried to secure—friendship and amity with Ireland.

Question put, and agreed to.

Resolution to be reported upon Monday next.