HOME-RULE FINANCE. [COMMUNICATED.] P may safely be assumed that at the
coming General Election the Irish Nationalists will make a determined effort to force the pace on the question of Home-rule, for their claims have been more or less shelved in the present Parliament, and they will take all means in their power to prevent a repetition of that experience. Unfortunately for the Nationalists, their Liberal allies have not merely shelved the question of Home-rule, they have made it financially impossible. A few people realised this fact directly the Old-Age Pensions Act was passed ; more will realise it in the course of the next few months. At the present moment Ireland, treated as a separate entity, is insolvent. She not only is failing to pay her own way, but she is costing the National Exchequer very nearly £2,000,000 a year. Such a financial situation could not be allowed to continue under any system of Home-rule. In introducing his last Home- rule Bill into the House of Commons on February 13th, 1893, Mr. Gladstone made it clear that the semi-indepen- dent Ireland which he proposed to create must not only pay her own way, but must contribute to the general expenses of the United Kingdom. " The principle," he said, " to which we are bound to give effect is that Ireland is bound to bear her fair share of Imperial expenditure." In passing, we may remark that any other scheme of Home-rule is unthinkable. Even the Colonial precedent on which the Irish have long relied as an excuse for paying less than their fair share of Imperial expenditure has broken down, for the Colonies are now taking steps to become contributing members of the Empire. In any event, it is certain that the people of Great Britain would not consent to establish a new Government in Ireland, while leaving that Government without any financial responsi- bility for its defence. The extreme Nationalists, who in their heart of hearts want separation, and not Home-rule, are equally in a difficulty, for if Ireland were separated from Great Britain, she would find the cost of defending herself enormously greater than any fair contribution she might be called upon to make to the Imperial expenditure of the United Kingdom.
That is the first financial difficulty which Home-rulers have to face. There is another and almost equally serious difficulty. At present Ireland is drawing upon the credit of the United Kingdom to finance her land-purchase scheme. It is an enormous draft, which may ultimately reach the huge total of £200,000,000. The credit of the United Kingdom even now is so good that Irish landlords and tenants are able to borrow with the guarantee of the Imperial Exchequer at something less than 3 per cent. No Irish Exchequer could possibly afford to lend money at such a rate. But if Ireland is to have Home-rule, she cannot also have the Imperial guarantee behind her new land system. The taxpayers of Great Britain in self- defence would demand that Ireland should alone shoulder the whole of the huge debt that has been incurred solely for her benefit. That must mean either a very great increase in the annuities which the Irish tenants have to pay, or else a big deficiency which the Irish taxpayer would have to make good. A similar consideration applies to the bonus which has been granted as a free gift from the Imperial Exchequer to Irish landlords to induce them to tell. In any settlement between a Home-rule Parliament and the Parliament of Great Britain this would have to be taken into account and added to the Irish Debt.
Let us now try to see what all this means in actual figures. Mr. Gladstone in his Home-rule Bill of 1893 was not content to lay down general principles. He made specific financial proposals. His first proposal was that the Irish Customs should be retained by the Imperial Government on the ground that the income which they were then yielding—namely, £2,370,000—was between four and five per cent. of the Imperial expenditure of that time. The approximate justice of this percentage as a basis for Ireland's contribution was subsequently confirmed by the Royal Commission on the Financial Relations between Great Britain and Ireland, which put the taxable capacity of Ireland at something less than a twentieth of that of Great Britain. Mr. Gladstone's original proposal to lay hands upon the Customs was not relished by the Irish Members, and subsequently, while still adhering to the same main idea that Ireland should contribute approximately four per cent., he pro- posed a new arrangement for arriving at a similar, if not identical, result. He proposed on June 22nd that Ireland should contribute one-third of her ascer- tained revenue, in addition to any tax imposed by the Imperial Parliament for the express purpose of war or special defence. This would have involved an immediate contribution which was estimated by Sir William Harcourt at £2,276,000 a year. Sir Henry Fowler, now Lord Wolverhampton, speaking on June 31st, said that in 1886 Mr. Gladstone had estimated Ireland's contribution at one twenty-sixth, and that under the system now pro- posed Ireland would pay one twenty-seventh or one twenty- eighth. He went on to say that it was not proposed that Ireland should make in the future any less contribution than she was then making. Thus, on the final financial terms as proposed in the Home-rule Bill of 1893, Ireland would have contributed one twenty-seventh of the Imperial expenditure, and would have been also liable for any war- tax which the Imperial Parliament might impose. This Bill, which the Irish Nationalists at the time accepted as a bargain, would have become law but for the action of the House of Lords.
To simplify the figures, while at the same time making a considerable concession to Ireland, let us assume that Ireland is now called upon to pay three and a half per cent. of the Imperial expenditure. That would involve a charge of well over £3,000,000 a year. Adding this to the present deficiency of nearly £2,000,000, we have at the outset an additional charge of £5,000,000 a year to be imposed on the Irish taxpayer. To this must be added at Least one per cent. on the Irish Land Stock, which will shortly mean an additional £1,000,000 a year, with further liability in the future. Where is the Irish politician who will go to the people of Ireland and tell them that Home-rule means an additional £6,000,000 a year raised entirely out of Irish pockets ? Not one of them will dare to do it, for they all know that such a statement would be the death-knell of Home-rule. Yet ultimately there is no escape from that confession, for by no manner of means can Irish politicians cut dawn the Irish expenditure sufficiently to meet this additional burden which Home-rule must involve. Mr. Redmond, who sees perhaps farther than many of his colleagues, was one of the first to detect the blow which the Old-Age Pensions Act has struck at the cause with which he is identified. In a recent speech in the House of Commons he had the courage to express his dissatisfaction with the Pensions Act, and bluntly to declare that an Irish Parlia- ment with two and a quarter millions to spend would have found a much better way of spending it. Yet if he goes among his countrymen he will find that the Old-Age Pensions Act is the only piece of British legislation which has really appealed to the Irish mind, for it gives them cash down and asks nothing in return.
There might, indeed, be some economies made in other directions in Irish administration, but they are not economies that will amount to millions, at any rate for a long time to come. It is one of the worst features of Governmental extravagance that when once expenditure has been undertaken vested interests are created which cannot be disregarded, so that the expenditure must go on until these interests have died out. In this respect the Irishmen will now have to pay the penalty for their cynical attitude in the House of Commons with regard to public expenditure in Ireland. They have always welcomed any dole which any British Ministry was willing to make to any section of the Irish population, and they have constantly clamoured for more. At intervals they have for political purposes denounced the extravagance of the Irish Administration, but whenever any little economy was effected they have at once demanded that the money thus saved should be spent in another way in Ireland. By this continuous policy they have succeeded in making their country financially dependent upon Great Britain ; now they have to pay the price in the loss of their ideal, for political independence is impossible without financial independence. The Nationalists and the Liberals between them have killed Home-rule.