Chapter IX: Section 92: in each province the legislature may exclusively make laws as (2)

The grant to Ireland of the _collected_ not the _true_ duties of Customs and Excise was open to grave objection. It presented her with the duties levied in Ireland on articles consumed in Great Britain, but if at any time the habits of the people, such as decrease in drinking, reduced this practical gift—estimated at £1,400,000, or if changes in law or practice transferred the payment of these duties from Ireland to Great Britain, the financial equilibrium of the scheme would be destroyed. This was a real danger as under the bonding system the British trader could, if he pleased, pay these duties in Great Britain.

The decision that Ireland was not to be represented at Westminster led to a clumsy device for giving Ireland a voice in the Imperial Parliament when Irish interests were involved. This would be the resource if a war contribution had to be obtained.

The scheme of 1886 can only, therefore, be regarded as a draft to be tested and modified in discussion and to form the basis of a revised and amended scheme.

THE BILL OF 1893

Mr. Gladstone introduced the second Home Rule Bill in February, 1893. In the discussion he pointed out how incredibly wasteful the method of governing Ireland was; the Irish Civil Government grants, which had averaged from 1833 to 1837 £762,000, had risen between 1888 and 1892 to £4,042,000, and the cost of local government in Ireland was twice as much per head as the like cost in England.

Under the scheme of 1886 Irish representatives were not to sit in the Imperial Parliament, but the Government found that under existing financial arrangements there must be financial connection, unless Parliament was prepared to face a different system of trade laws between the two countries, and provision must be made for that connection. Mr. Gladstone, therefore, reversed the decision of the Government in 1886. He proposed to retain Irish representatives at Westminster, reduced in number to 80. They were not to vote on purely British questions, but in his opinion it would be difficult to make that distinction as far as the mass of business was concerned. The Irish representatives would not vote on any tax which was not to be levied in Ireland or on any grant of money for other than Imperial purposes as scheduled in the Bill. By this means Ireland would have a voice, if emergency, such as war, rendered fresh taxation necessary.

In the interval between 1886 and 1893 knowledge had been gained to some extent as to what constituted the “true” revenue of Ireland, and the Inland Revenue thought it possible to levy in Great Britain the Excise duties collected in Ireland on articles consumed in Great Britain and _vice versa_. These Excise duties represented the greater part of the sum of £1,400,000, previously described as the difference between duties, so to speak, belonging to Ireland and duties collected in Ireland, a difference estimated in 1893 at £1,800,000. If Ireland retained that difference, as contemplated by the scheme of 1886, it was equivalent to a grant from Great Britain to Ireland. On the other hand the Customs were not able to make the separation thought possible by the Excise.

With these facts before him Mr. Gladstone made an entire change in the financial scheme. As in 1886, he held that Ireland must make a proper contribution to Imperial expenditure, but he abandoned the principle, adopted in 1886, of obtaining that contribution by a quota of one-fifteenth of Imperial expenditure, that is a contribution of £2 by Ireland to £28 by Great Britain. He retained instead the whole of the Customs revenue collected in Ireland as the Irish contribution. He proposed that Great Britain should pay any excess of the charge of constabulary over £1,000,000, out of the contribution, the balance representing Ireland’s share of Imperial expenditure. He justified the change on the ground that as the management of trade was reserved to the Imperial Government, the management of the Customs so closely connected with trade should be Imperial also. The Customs were expected to produce a net revenue of £2,370,000. He estimated it as equivalent to about 4 per cent. of Imperial expenditure whereas the actual contribution was about 12 per cent. The contribution would, of course, vary as the net Customs revenue rose or fell. On the other hand the Irish Government were to take all the rest of the “true” revenue of Ireland and to defray out of it all local Irish expenditure, including a fixed sum of £1,000,000 towards the cost of the constabulary and Dublin police, which were temporarily to remain Imperial services. Customs and Excise duties were to be regulated and collected by the Imperial authority which was also to fix postal rates; but all other taxes were to be imposed by the Irish Legislature.

The interests of existing judges, and existing civil servants, and of her constabulary, which remained under the control of the Viceroy, were secured. The constabulary would be gradually replaced by a force under the control of the Irish authority. Two Exchequer Judges would be appointed to guard observance of the Act, and appeals lay to the Privy Council which would try on the motion of the Viceroy, or of the Secretary of State, any question as to invalidity of an Irish Act. These arrangements might after fifteen years be subject to revision in pursuance of an address to Her Majesty from the House of Commons or the Irish Legislative Assembly.

The receipts and expenditure of the Irish Government under this scheme would have stood as follows:

RECEIPTS. (1) Excise true revenue exclusive of licences £3,220,000 (2) Local taxes: Stamps, Income-tax, Excise licenses £1,495,000 (3) Postal revenue £740,000 (4) Other non-tax revenue £205,000 Total £5,660,000

EXPENDITURE. (1) Civil Government charges, except Constabulary £3,210,000 (2) Collection of Inland revenue £160,000 (3) Postal service £790,000 (4) Contribution to Irish Constabulary £1,000,000 Total £5,160,000 Surplus £500,000

The Bill passed the House of Commons, but the financial clauses were greatly recast in Committee. The changes originated in the fact that the Inland revenue had overestimated the “true” revenue of Excise by a very considerable sum, and the error would have reduced to an insignificant sum the free starting balance for the Irish Government provided in the original scheme. Mr. Gladstone decided in consequence not to keep the Customs revenue as Ireland’s contribution to Imperial expenditure, but to let that revenue fall into the common stock of Irish revenue and to take out of that common stock one third of the “true” Irish revenue. This third was to cover Ireland’s contribution to Imperial expenditure together with one third of the cost of the Irish constabulary and Dublin police. Ireland was to meet all her local charges out of the remaining Irish revenue. The Imperial Government was to retain for six years the imposition and collection of all taxes; the Irish Government having only supplementary powers of taxation. At the end of six years the Irish contribution was to be revised, and Ireland would be empowered to impose taxes other than Customs and Excise, and she would collect taxes, the Customs alone being retained by the Imperial authorities. The “true” revenue derived from the Customs and Excise was to be ascertained by a Joint Committee of the Treasury and the Irish Government. The financial result of these changes is shown in the following figures:

(1) Customs:
Revenue collected in Ireland £2,136,000
_Add_ estimated allowance for duties paid in Great Britain on articles
consumed in Ireland £266,000
Total estimated Irish revenue £2,402,000; Amount Payable to Irish
Exchequer Two-Thirds £1,601,000
(2) Excise:
(_a_) Spirits. Revenue collected in Ireland £4,112,000
_Deduct_ duties ascertained to be paid in Ireland on spirits consumed
in Great Britain £1,872,000
Total £2,240,000
(_b_) Beer. Revenue collected in Ireland £811,000
_Deduct_ estimated allowance for duties paid in Ireland on beer
consumed in Great Britain £187,000
Total £624,000
(_c_) Licence duties collected in Ireland £194,000
Total estimated £3,058,000; payable to Exchequer £2,039,000
(3) Stamp duties collected in Ireland £707,000 estimated, £471,000
payable
(4) Income-tax collected in Ireland £552,000 estimated, £368,000 payable
(5) Crown Lands amount estimated to be due to £65,000 estimated, £43,000
payable
Total £6,784,000 estimated, £4,522,000 payable
(6) Miscellaneous Irish Revenue £138,000 estimated, £138,000 payable
Totals £6,922,000 estimated, £4,660,000 payable

Irish Expenditure, 1892-3. (1) Civil Government charges (exclusive of Constabulary and salary of Lord-Lieutenant, but inclusive of local charges met out of local taxation account) £3,123,000 (2) Constabulary charges (£1,459,000) two-thirds of £973,000 (3) Estimated deficit on postal account £52,000 Total £4,148,000 Surplus £512,000 Total £4,660,000

The schemes of 1893 again illustrate the difficulties inherent in a severance of the two Exchequers. The revise left more points open for difference between the two Governments, and it had the serious defect of revision after the short interval of six years.

The original scheme was far preferable. The retention of the Customs as the Imperial contribution reduced opportunity for conflicts of opinion to a minimum, and the interval of fifteen years before revision left ample time for the new Irish Government to put its house in order. I venture to think it would have been wise to make good the error in estimating the “true” revenue of Ireland (which invalidated the scheme) by an Imperial Grant, at all events for a time. Under the scheme the Imperial Government provided £500,000 for the constabulary. If it had granted £300,000 or £400,000 more, the net Imperial contribution derived from the Customs would have been reduced to say £1,400,000, not a large sacrifice for the end in view—reconciliation with Ireland.

The Bill as amended passed the House of Commons but was thrown out in the Lords. This Parliament refused to accept Mr. Gladstone’s proposals to give Ireland Home Rule, and nineteen years elapsed before a third Home Rule Bill was submitted to Parliament.

In the three schemes of 1886 and 1893 the Imperial contribution was very similar, perhaps somewhat larger in 1893. In all three schemes, also, the net gain to the British Exchequer was reduced by the grant from that Exchequer of £500,000 to the cost of the Irish Constabulary.

The difficulty of devising a financial scheme fairly simple and workable, which was experienced in 1886 and 1893, has been disappointing, but not discouraging. It was inevitable but it can be surmounted.

THE BILL OF 1912

In 1911, Mr. Asquith pledged the Government to take up again in the ensuing session the question of Home Rule. In 1910 the Conservative Party, at least a considerable part of it, in presence of a probable dissolution on the Parliament Bill, showed, as in 1885, a disposition to coquette with Home Rule, but the movement came to nothing, and the Party settled into determined opposition to the Home Rule policy, submitting themselves to the lead of the Ulster extremists, who preached sedition in no measured terms. In other respects, the prospects of Home Rule are fairly favourable. England, apart from Scotland, Wales, and Ireland, still returns a majority opposed to Home Rule, but public opinion does not show any signs of vigorous or violent opposition as in 1886. The Liberals, the Irish, and the Labour Party are united in its favour. The passing of the Land Acts is rapidly removing the agrarian evil, and the landlords have not the same cause for anxiety as formerly. The grant of Local Government is working well, and in spite of much poverty the condition of the people is improving. Lastly, the passing of the Parliament Act has made it possible, in spite of opposition in the Lords, to pass a Home Rule Act within the limits of the present Parliament.

On April 11th, the Prime Minister introduced the Government Bill. He regarded it as the first step in a comprehensive policy of devolution. It retains permanently at Westminster 42 Irish Members, so that Ireland will have a voice, not only on questions in the Imperial Parliament which concern Ireland, but on questions of Imperial interest, such as war and peace. The Bill of 1886 reserved to the Imperial Parliament certain questions. The Bill of 1893 also made necessary reservations, though its tendency was towards more complete autonomy; but in the interval between 1893 and 1912 great changes have taken place, and the Imperial Government finds itself hampered by new liabilities. The Old-Age Pension Act, the Land Purchase Act of 1903, the National Insurance Act, and Labour Exchanges have added very greatly to Irish expenditure. On the other hand, the contribution to Imperial expenditure, unluckily for the British taxpayer, has disappeared. The problem is, therefore, a new one, and the Government solves it, at all events for the present, by keeping in its own hands a large number of Services, as will be seen hereafter.

In 1885-6 Ireland contributed a surplus of considerably more than £2,000,000 to Imperial expenditure; in 1895-6, £2,000,000.(103) The Government estimates the true revenue of Ireland in 1912-13 at £10,839,000; and the expenditure on Irish services at £12,354,000. Therefore the new Irish Government will start with a deficit of £1,515,000. That deficit is now charged on the British taxpayer. It results from British management of Irish finance, for, on the one hand, Irish revenue is limited by the relatively limited means of Irish taxpayers; on the other hand, England has regulated Irish expenditure on the lavish scale of her own expenditure.

The Government lays down certain principles on which Home Rule finance will be based:

(1) Ireland must manage her own finance and must have powers of
taxation consistent with leaving to the Imperial Government a
field of taxation sufficiently wide for Imperial needs.

(2) The Budgets of the two countries must not hamper each other.

(3) Ireland must bear the cost of any increase arising hereafter
on Irish services, but she must benefit by economies in those
services.

(4) She must have power to reduce taxation if her economies permit
it.

The scheme which will give effect to these principles may be described as follows.

In the first place the Imperial Government retains in its own hands the imposition and collection of all Irish taxes, the Post Office duties alone excepted, which will be transferred to the Irish Government. _Normal_ increase in Irish Revenue will not be applied to Irish services. It will reduce the deficit. The Irish Government, however, will have supplementary powers of taxation.

An Irish Exchequer and an Irish Consolidated Fund will be created, and an Irish Auditor-General appointed. Further, a joint Exchequer Board, consisting of Treasury and Irish officers, will adjust the accounts between the two Exchequers, based upon what it declares to be the actual cost of Irish services when the Act comes into operation. If the Irish Government, using its supplementary powers of taxation, increases or reduces taxes, the Exchequer Board will vary accordingly the sum to be paid by the British to the Irish Exchequer on account of Irish expenditure, and it will determine the effect of any other changes taking place in the relations between the two Exchequers. Lastly, if and when normal increase of Irish revenue puts an end, during a period of three years, to the existing deficit, the Exchequer Board will make a report to that effect, and the financial arrangement between the two countries will then be reconsidered in order to secure a fair contribution from Ireland to Imperial expenditure.

The Government, as I have stated, estimates the revenue of 1912-13 at £10,839,000. That sum represents the whole “true” revenue of Ireland, viz., taxes and miscellaneous, £9,485,000; Post Office Revenue, £1,354,000. The Imperial Government adds to this revenue of £10,839,000 a free gift of £500,000 at the cost of the British taxpayer, in order to give the Irish Government a fair start. The total Irish income in the year 1912-13 will therefore be £11,339,000.

On the other side of the account, the Imperial Government retains in its own hand various Irish Services, termed in the Bill “_Reserved Services_,” described later. It transfers from the British to the Irish Exchequer the sum allotted to Irish Expenditure (outside the Reserved Services), estimated in 1912-13 at £5,462,000, the cost of the Postal Service £1,600,000,(104) and £500,000, the free gift mentioned above, making a total transfer of £7,562,000.

If in the future the sum of £5,462,000 allotted to Irish Expenditure and the free gift of £500,000 are exceeded, the Irish Legislature must provide the necessary ways and means.

The transfer of £7,562,000 from the British to the Irish Exchequer leaves a balance on the British Exchequer on the Irish Account of £3,777,000(105) free to that extent to meet the charge of the Reserved Services.

These Reserved Services are:

(1) Old-age Pensions £2,664,000 (2) National Insurance Labour Exchange £191,500 (3) Land Purchase £761,000 (4) Constabulary £1,377,500 (5) Collection of Revenue £298,000 Total £5,292,000

Therefore the excess of Irish Expenditure in 1912-13 over Irish Revenue as provided results in a deficit of £1,515,000 payable by the British taxpayer, and if the free gift of £500,000 by the British taxpayer included in the provided revenue be added, the total charge on the British taxpayer in 1912-13 on account of Irish Expenditure is £2,015,000.

This annual gift of £500,000 is after three years to diminish yearly by £50,000, until a minimum of £200,000 is reached, which will eventually represent the gift of Great Britain to Ireland, until prosperity or good management enables Ireland to pay her own way, and at the last to make a contribution to Imperial Expenditure.

The Government estimates a normal growth in Irish Revenue of £200,000 a year, which, to the extent it is realised, will reduce the deficit payable by the British taxpayer.

The Imperial guarantee on Irish Land Stock is to continue in full force.

EFFECT OF FUTURE MODIFICATION

If the Imperial Parliament increases or reduces taxation, the change will not affect the Irish Budget, for the transferred sum will remain unaltered.

The Irish Parliament will have power to reduce taxes levied in Ireland. It will also have power to impose taxes. It may add at will to Excise duties, and if so the Customs duties on beer or spirits must vary with the Excise duties. It may levy new duties which do not interfere with the Imperial system of taxation—for instance, a house duty, or establishment licences. It may add to Income-tax or death duties, and also to Customs duties (other than beer and spirits) provided that the addition does not exceed 10 per cent. of their yield. This 10 per cent. resembles the “centimes additionels” which are levied in foreign countries on direct taxes, and are applicable there to local expenditure. But the Irish Parliament must not trench on Imperial taxes. This increase or reduction of Irish duties will not affect the British Exchequer, but it will increase or diminish the “sum transferred” to the Irish Exchequer.

The Irish Parliament will not have power to tax articles not subject to Imperial taxes for the time being. If in the exercise of its power it differentiates Customs or Excise duties in the two countries, there will be a differential duty on such goods passing from one to the other.

Public Works Loans granted before the passing of the Home Rule Act will remain under the management of the Imperial Government. Future loans will be managed by the Irish Government.

The Irish Parliament will have power to raise loans on the security of the “transferred” revenue, sufficient provision being made for interest and sinking fund. If the Irish Government desires it, the Exchequer Board above-mentioned, may issue an Irish Loan, deducting the charge from the sum “transferred” to Ireland.

Such are the provisions of the Bill. It cannot be denied that they appear complicated, but they will be found less so in practice. The machinery of financial administration in a great State is necessarily complicated, and a radical change in that machinery involves a multitude of changes in detail for which the reforming Act must provide. Root and branch opponents of Home Rule naturally criticise those provisions, and exaggerate with _Ulster_ vehemence the administrative difficulties which attend radical change, but the advocates of great measures, while recognising difficulties can take juster views of their extent, and they know that they can be surmounted.

In the first place an expert body (the Exchequer Board) will interpret the financial provisions of the Act. It will consist of two members appointed by the Treasury and two by the Irish Government, and a chairman appointed by the Crown. Their decision is to be final. On these questions there is therefore no power reserved to the Imperial Government, which might cause friction. The Chairman should probably be a man of judicial rank. Possibly a case might arise in which a revision of the Board’s decision would be needed. So far this important section of the machinery is not complicated. In the next place the Imperial Government remains responsible and liable for all the “reserved” services. Here again there is no complication. _Thirdly_, the Customs and Excise Clauses appear complicated, but they are for the most part machinery clauses, common to Revenue Acts. _Fourthly_, the Free Trade Clause offends of course the Unionist-Protectionist party, but its merits need not be discussed here. I venture to doubt where Ireland is likely to set up a Protectionist policy against Great Britain. Our market is too important to her. If such a policy were established, history tells us that British Protectionists will not consult Irish interests. Lastly a certain, but not a great, inconvenience will attend the taking of an official record of goods passing between the two countries essential to determining the true revenue of Ireland.

Thus the apparent complications of the Bill dwindle greatly on examination. The Bill of 1912 is no doubt much less simple than that of 1893 as introduced by Mr. Gladstone, but that Bill was not, however, so simple as it appeared. It was based on the principle of autonomy, but it retained great powers in Imperial hands. In fact it gave autonomy as far as autonomy was practicable. Circumstances have changed much since 1893, and the problem is now in some respects easier. The pivot and crux of Mr. Gladstone’s scheme, the Imperial contribution, has, for the time, disappeared.

Sir Henry Primrose’s Committee adopted unanimously and unhesitatingly the principle of simplicity. They recommend that the power of imposing and levying all taxation in Ireland, subject to reservations on questions of trade and of foreign relations should rest with the Irish Government. They urge that that policy accords with the general policy of Home Rule, as removing causes of friction, as avoiding need for revision of the arrangement (excepting a future question as to an Imperial contribution), it terminates the extravagance inherent in the partnership, and makes the responsibility of the Irish Government for Irish administration complete.

The Committee examine the objections to the grant of complete power of taxation, viz., that (1) it would break up the fixed unity of the realm; (2) that it would impair facilities of trade between the two countries; (3) and that it is at variance with the principle of a Customs Union, said to be a feature common to federations.

On the first point the Committee reply:

(1) That in their view the Irish Government should have power to
impose Customs duties only for the purpose of raising revenue, and
that the Imperial Government should reserve questions of tariff,
and foreign relations. Thus fiscal unity on important points would
be maintained. For sixty years from the Union separate machinery
existed for the collection of different rates of duty in the two
countries. If Union could dispense with fiscal unity, _a fortíorí_
can any less close form of association do so.

(2) The Committee do not attach importance to the second
objection. The Custom House does not seriously trammel the
convenience of traders between this country and the Continent, and
it was found endurable when the variance between England and
Ireland was more formidable than now.

(3) On the third objection the Committee argue that a Customs
Union is indispensable, when the boundaries of federated states
form a ring fence. It is not indispensable when, in a case like
that of England and Ireland, the two countries are separated by
sea.

These reserves diminish, of course, the severe simplicity of the scheme, and the Committee’s answers to objections admit some inconvenience to trade, but a great change like that of Home Rule must have some drawbacks, and in the opinion of Home Rulers, the end to be gained far more than compensates for slight inconveniences which attend its execution. It is certain, moreover, that, whatever may be the measure adopted, it will be necessary to take means for ascertaining the “true” Revenue of Ireland, and to that extent there must be some slight interference with trade.

I agree with the Committee in their preference for the simplicity of complete autonomy.

Sir Henry Primrose and his colleagues agree to a great extent with a Minority Report of the Financial Relations Committee (1896), signed by Lord Farrer, Mr. Bertram Currie and myself. The advantages of complete autonomy are obvious, and I cannot avoid a regret that it has not been possible to adopt it. I note, however, that the greatest Irish authority on Irish Government, Lord Macdonnell, though in favour of Home Rule, is entirely opposed to the grant of fixed autonomy to Ireland.

We must not misunderstand the relations of the Committee to the Government. They were not appointed to draw a Home Rule Bill. They were to ascertain and consider the fiscal relations between Ireland and other parts of the United Kingdom as they exist to-day, paying special regard to the changes which have taken place in revenue and expenditure since 1896, the date of the Report of the Royal Commission; to distinguish between Irish Local Expenditure and Imperial Expenditure in Ireland; and to consider, in the event of Home Rule being established, how the revenue required to meet the necessary expenditure should be provided. The function of the Committee was, therefore, purely financial. They had to collect financial information, a necessary preliminary to a consideration of the Bill, and to advise as to the method of providing the revenue required. They had no mission to examine the political conditions which must be satisfied by a Bill designed to effect a Constitutional Revolution. That was the function of the Cabinet. The Committee, limiting itself to its instructions, recommended the method of raising revenue which they thought wisest, independently of any but financial considerations. The Government consider the question from a wider point of view. Their measure must be founded on policy as well as finance. They do not adopt the Committee’s recommendations. They decide to retain for a time, more or less indefinite, a closer relation between the two financial systems. Much as I should like greater simplicity, a study of their measure leads me to the conclusion that its provisions are, in the main, wise. Let us then consider how far the provisions of the actual Bill satisfy the conditions needed to insure the success of Home Rule.

In the first instance, and for an uncertain number of years, the Imperial Government keeps a tight hand upon the Irish Government. It reserves large powers enabling it to reject, postpone, or test the validity of Irish Bills. It regulates and levies all taxes, and fixes postal rates. It secures the interests of various classes of public servants, and retains temporarily the police under its own control. It fixes Irish Local Expenditure at a certain sum, and it issues that sum yearly to the Irish Government together with a free gift of £500,000 a year for three years, falling gradually to a permanent gift of £200,000. _Normal_ increase of Irish Revenue is appropriated to reduce the deficit to be borne by the British Exchequer. If, therefore, the Irish Government increases its own expenditure beyond the fixed sum allotted to it, it must find the revenue required, and for that purpose powers of taxation are given to it.

The nursing hand of the mother is, in fact, present at every point of the Bill, but it must be remembered that a hostile step-mother may, at any time, replace the kindly mother.

There is no escape from the conclusion that these reservations restrict the autonomous power of the Irish Government. On the other hand, the whole spirit of the Bill marks the greater part of them as temporary. The Bill, in fact, confers autonomy by gradual steps, and holds out prospects that eventually the relations between the two countries will be simple and workable. At the outset, and for some time onward, the Irish Government, freed from liability for the costly “reserved” services which the “partnership” has bestowed or inflicted on Ireland, will occupy itself with the organisation of its own home administration. It starts with no previous experience of administration, and it is clearly desirable that it should proceed by steps, gathering experience as it goes. Its field of work at first should not be too wide, and six years is not too long a period for it to reform and reconstitute its administrative organisation. This is its first duty, and it undertakes it under favourable conditions.

In six years the constabulary will be transferred automatically from the charge of the Imperial Government to that of the Irish Government with the sum allotted to its support.(106) That sum will be increased by any saving which accrues to the British Exchequer from the transfer, and in determining that sum regard is to be had to the _prospect_ of any increase or decrease in the cost of the service, expected to arise from causes not being matters of administration.

In the next place, the Irish Parliament may, at any time, on twelve months’ notice assume the legislative and executive control of three reserved services, viz., Old-age Pensions, National Insurance, and Labour Exchanges. If they are taken over, the sum transferred with them will be determined on the same principle as in the case of the constabulary. Autonomy, therefore, in regard to these services is granted to the Irish Government, and they will only be retained under the control of the Imperial Government, if, and so long as the Irish Government desires it.

The Postmaster-General said in his speech on the introduction of the Bill that the old-age pension charge is now practically at its maximum, gradually diminishing, and the Primrose Committee (paragraph 54), estimate the charge at the time when the Bill becomes law at £3,000,000. The question then arises what will be the amount transferred, if the Irish Government, seeing its way to more economical administration, were to give at once the twelve months’ notice and take over the service at the end of a year. It would not, I presume, be £2,664,000 the charge at which the Treasury in its “outline of financial provision” (paper 6154), estimated it in 1912-13, but £3,000,000, modified to some extent by the prospect of reduction.

The cost of National Insurance and Labour Exchanges is estimated by the Treasury in 1912-13 at £191,500, increasing by £300,000 in ten or fifteen years. If the Irish Government were in like manner to take them over, the amount transferred would, I presume, be £190,000 with a sum added representing the prospect of increase.

In the event then of those services being taken over by the Irish Government, they would considerably exceed their charges as estimated by the Treasury for 1912-13, and the excess would entail a corresponding increase of charge on the British taxpayer, to be counterbalanced gradually by the normal increase of Irish revenue, which the Postmaster-General estimates, with due reserve, at £200,000 a year, and by the gradual reduction (£50,000 a year) of the free gift of the British taxpayer from £500,000 to £200,000.

It must be remembered that these increased charges on the British taxpayer are not the result of Home Rule, they are an inheritance from the “partnership.”

When these services are transferred from the Imperial to the Irish Government, the Imperial Government will only retain control over the land purchase charges and the regulation and collection of taxes. The former will apparently remain permanently with the Imperial Government, involving an estimated increase of charge on the British taxpayers of £450,000 a year (Treasury Paper 6154). With regard to the latter, it is clearly desirable that at the outset the Imperial Government should be responsible for levying and collecting taxes. If difficulties on that subject should arise in parts of Ireland, the Imperial Government will settle them with an authority which the new Irish Government cannot possess. Clause 26, however, holds out a possibility hereafter of extended autonomy to Ireland. If for three years the revenue of Ireland exceeds the expenditure on Irish services by the Imperial and Irish Governments, the Parliament of the United Kingdom will revise the financial provisions of the Home Rule Act, with a view to securing a proper contribution from Irish revenues to Imperial expenditure, and extending the powers of the Irish Government _with respect to the __ imposition and collection of taxes_, and if extension were then granted in a liberal spirit, there would be little left to desire.