Clause 21. — (Irish contribution to Imperial expenditure.)

Postponed Clauses. – in the House of Commons on 29th October 1920.

Alert me about debates like this

  1. (1) Ireland shall in each year make a contribution towards the Imperial liabilities and expenditure mentioned in the Third Schedule to this Act.
  2. (2) The amount of the contribution shall in each year until the end of the second financial year after the appointed day be a sum calculated at the rate of eighteen million pounds a year, and after the end of the said second financial year shall in each financial year be such proportion as is hereinafter mentioned of the amount which the Joint Exchequer Board certify to have been the amount for the preceding financial year of the said liabilities and expenditure.
  3. (3) The proportion of Imperial liabilities and expenditure to be so contributed shall 2142 be such as the Joint Exchequer Board may, having regard to the relative taxable capacities of Ireland and the United Kingdom, determine to be just; but the proportion so determined shall be subject to revision by the Joint Exchequer Board at the end of the fifth financial year after the date when it was first so determined and at the end of every fifth financial year thereafter.
  4. (4) The said contribution shall be apportioned as between Southern Ireland and Northern Ireland in the following manner, that is to say:—
    1. (a) So long as the contribution remains at the rate of eighteen million pounds a year, fifty-six per centum thereof shall be apportioned to Southern Ireland and forty-four per centum thereof to Northern Ireland:
    2. (b) Thereafter such part shall be apportioned to Southern Ireland and Northern Ireland respectively as the Joint Exchequer Board may determine to correspond to their relative taxable capacities at the time when the proportion of Imperial liabilities and expenditure to be contributed is fixed.

Further Amendments made: In Subsection (2) after the word "be" ["day be "], insert the words "subject as hereinafter provided";

Leave out the word "millions" ["eighteen millions"], and insert instead thereof the word "million."

At the end of Sub-section (4) insert a new Sub-section—

(5) If the Joint Exchequer Board at any time after the end of the said second financial year are of opinion that the said contribution for the first or second financial year ought justly to have been some less sum than eighteen million pounds, or ought to have been apportioned as between Southern and Northern Ireland otherwise than in the manner hereinbefore provided, they shall certify accordingly and direct, as the case requires, either that an amount equal to the difference between the contribution made, and that less sum shall be credited to the Exchequers of Southern and Northern Ireland in the proportions in which the contribution was made by them, or that the contribution shall be treated as having been apportioned between Southern and Northern Ireland in such manner as may be specified in the certificates, and such adjustments as are necessary for the purpose of giving effect to any direction under this section may be made by the Board in any payments to be subsequently made to those Exchequers on account of the Irish residuary share of reserved taxes.—[Sir L. Worthington-Evans.]

Question proposed, "That the Clause, as amended, stand part of the Bill."

Lieut.-Colonel GUINNESS:

My hon. Friends and I had various Amendments down on this Clause which we have not moved, because we felt that after the full discussion yesterday and the very clear intention of the Government not to accept any fundamental amendments as to finance, it would only be wasting the time of the Committee to raise these points of detail. To prevent misunderstanding of our position, I wish to say a few words on the Clause, because several hon. Members who spoke yesterday assumed that our counter proposals involved a remission, at the expense of Great Britain, of the just demands upon the Irish taxpayer. That is not my intention or that of my hon. Friends. We only wish to put forward on this question of Imperial contribution a method of obtaining payment from Ireland in a less unpopular form than that laid down in the Bill. We feel that to enact the provisions in regard to the Imperial contribution that are contained in the Bill is asking for friction. We want to avoid expense, and we want to forestall an agitation in Ireland against this taxation as a method of imposing a British tribute. We feel that there is now a very large Imperial expenditure on account of friction in Ireland, expenditure on the Army, the Navy, and various other services, which does not appear on the Irish Vote, and which in the White Paper is not attributed to Ireland. We think that it would be in the public interest to make a generous financial settlement if some of this incidental expenditure could thereby be avoided. The most important part of our suggested Amendment in regard to this Imperial contribution is contained in a new Clause, "Contribution towards National Debt," which provides that— The contribution of Ireland towards the public debts of the United Kingdom shall be a sum of one hundred million pounds, of which fifty-six per centum shall be apportioned to Southern Ireland and forty-four per centum to Northern Ireland, and the shares of Southern Ireland and Northern Ireland, respectively, shall be payable to the Exchequer of the United Kingdom out of moneys to be provided by the Parliaments of Southern Ireland and Northern Ireland, respectively. Interest on the said shares or on so much thereof, respectively, as shall for the time being remain unpaid shall be payable quarterly at the rate of five per centum per annum as from the fifth day of April next after the expiration of one year from the appointed day to the Exchequer of the United Kingdom, and shall be a first charge on and be paid out of the consolidated funds of Southern Ireland and Northern Ireland, respectively, or the growing produce thereof. As I shall not have a chance of moving that new Clause when Clause 21 is accepted as part of the. Bill, I think it well to make a brief allusion to it. The principle of that Clause, which has been put down at the instance of many of the most influential business men in Dublin, is that Ireland should know what is her actual liability, and that she should in that way have a much freer hand in regulating her own finances. The principle of the Clause is that Ireland should at once, under this Bill, make a settlement for her past capital liabilities in connection with Great Britain. We suggest that she should take over a definite part of the Imperial War Debt as a capital liability. She need not pay it off at once, although my hon. and gallant Friend (Major Hills) suggested this morning that there would be no difficulty in doing so if she wished to do it. If there were no other liabilities on capital account she could probably raise it from the bank. Our Clause does not lay it down that she is to pay it off, but only gives her the option, and suggests that she might prefer to go on paying, with interest and sinking fund, for a period of years. The point is, she would then know where she stood. The question arises, what would be a fair proportion of capital liabilities to be taken over as a share by Ireland?

In view of the great prominence given by Government speakers yesterday to the prosperity of Ireland and the increase in Irish wealth, it is perhaps well to mention the evidence which was given yesterday by the Chancellor of the Exchequer, that far from Irish wealth having increased in the same proportion as British wealth, it has relatively lessened. I agree that Great Britain has done an enormous amount for Ireland. She has gone in, as has so often been said, for a method of doles, but that has not brought about the economic prosperity which Irishmen of certain opinions—I do not necessarily agree with them—believe might be brought about if there were certain changes made in their fiscal system. The President of the Board of Education yesterday made out that Ireland was bulging with prosperity. The Royal Commission on Financial Relations nearly 25 years ago gave details about Income Tax as a basis for arriving at the respective wealth of the two countries, and they say, applying these figures to assessments in Great Britain and Ireland, it would appear from the evidence that Ireland's proportion of the gross assessment is 5.4 per cent., or about 1/20th of the whole. The Irish proportion of the net assessment is 4.6 per cent., or about 1/21st part. The yield from that is 4.1 per cent., or about the same as the net assessment.

I asked the Chancellor of the Exchequer yesterday for figures which would compare with these figures on which the Royal Commission based their estimate of 1/20th as the comparative taxable power of the Irish population, and the Chancellor of the Exchequer gives the figure for the net assessment, from which it appears that Ireland no longer produces 1/22nd, which was the figure in 1806, but now produces only 1/38th of the total assessment. He goes on to say A more reliable approximation of the true income of taxpayers liable to the tax is arrived at by taking the figures representing the original assessment."—[OFFICIAL REPORT, Thursday, 28th October, 1920, Vol. 133, col. 1957.] On this basis, which according to the Chancellor of the Exchequer is a fair one, the relative wealth of Ireland is only about one-half what it used to be 25 years ago and is only one-40th of the total wealth as shown by the Income Tax standards of the two kingdoms. On this basis my friends and I thought that £100,000,000 of national debt would be a fair sum to take over having in view the undisputed fact that, whatever may have been the case in the last 20 years, certainly for the first century after the union Irelnd was overtaxed. But we did not propose to move this Clause as a full settlement of the Irish contribution for imperial purposes. We put forward this Clause as a settlement for the past, and we leave over the matter of the annual sum, because we feel that the Irish Parliament, or a united Irish Parliament, would feel it necessary in their own interests to contribute to the British Army and Navy, because they will finally realise the advantages of having troops stationed in Ireland, and of the revenue which is enjoyed by Irish trade owing to that fact, and we believe in that way, by free negotiation, if and when this Act comes into operation, quite as big, if not even larger an Imperial contribution might be secured without the friction which would be entailed by the method proposed in this Bill. I make this explanation so that it should not be felt that in saving the time of the House by not moving our Amendment we were running away from our principles. I regret that the Government of Ireland have not seen their way to do something to meet the undoubted unpopularity of the financial proposals in Ireland but fully recognising that there had been a full and free discussion in the matter, we do not like to take up unnecessarily the time of the House.

Photo of Mr Lewis Haslam Mr Lewis Haslam , Newport (Monmouthshire/Gwent)

Referring to the remarks of the hon. Member for Bury St. Edmunds (Lieut.-Colonel Guinness), it appears to me that the collective wealth of Ireland is not the basis on which taxation should be assessed. The point is whether the taxes bear to an unfair extent on the individual. If you take the individual incomes of persons in Ireland, say, £100 a year, £200 a year or larger incomes still, you would find upon the whole that the taxation paid by these individuals would be even slightly less than that which is paid by persons of the same income in this country. That being so, I can see no unfairness in graduating the taxable amount to be gathered from Ireland on the basis of the individual rather than on the collective amount of the wealth of the community. I believe that the hon. Member's amendments have been directed towards increasing the powers of the Irish Parliament with the idea that if that were done, the Act would be more effective. I believe that the extension of the powers in the direction of enabling the Irish Parliament to impose taxation would have the opposite effect, because, if they have the power to reduce taxation there would always be a controversy at elections as to which taxes would be reducted, and there would therefore be a great deal of time lost in discussing the subject when the time of the Irish Parliaments would be much better exercised in the administrative functions over which they have control under this Bill. I feel very strongly that this is a very generous Bill and a Bill which the Irish people will accept in the course of time, for when, in the North of Ireland, they have their Parlia- ment, the South of Ireland will want one also, and when this Bill gets into operation the ultimate effect will be to unite the Irish people. To enable them now to differentiate taxes in Ireland would have the effect of introducing elements subversive of the specified ideals, the consummation of which is still intended.

Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.