3 MAY 1873, Page 4

TOPICS OF THE DAY.

THE BUDGET DEBATE.

A I B. W. H. SMITH'S motion never had any reality in it.

We described it last week as probably intended to be a mere reconnaissance against the Government in anticipation of Mr. Stansfeld's measures on Local Taxation, and we may now add that, even as a reconnaissance, it failed. It only brought out the incohereccies of the Conservative party on the sub- ject of the burdens on land and realised property, and Mr. Disraeli was so conscious of the weakness of the position, of the divisions in his own ranks, of the want of firmness in the purpose of those who had prepared the resolution, and of lucidity in its very wording, that he did not venture to divide the House, but allowed this financial attack upon the Government to be defeated by acclamation. Indeed, Mr. Gladstone's speech was so masterly an exposure both of the incoherence of the motion and of the unpopular character of the motives on which it was based, that had Mr. Disraeli gene to a division, he would have found himself in a minority far smaller than any to which he has recently been accus- tomed.

What Mr. Smith proposed was, to declare that before "decid- ing on the further reduction of indirect taxation, it is desir- able that the House should be put in possession of the views of the Government with reference to the maintenance and the adjustment of direct taxation, both imperial and local." That evidently says very little beyond begging for a financial ex- position of vitwa and hopes, but interpreted by the speeches of Mr. Smith and his supporters, what it did mean was this,—that part of the surplus ought to have been devoted to the relief of local taxation out of imperial resources, and that this part should have been deducted not from the relief given to the payers of income-tax, but from the relief given to the payers of sugar duty. If the motion did not mean this, it meant nothing. And this,—which it did mean,—was a very bad sort of meaning. For the real justification of the cry for relief to local taxation out of the Imperial Exchequer is this,— that local taxation being levied almost wholly on the rents of houses or land, does not fall with any evenness on the wealth of the country, but is a far heavier burden on those whose rent is their chief outgoing, than on those whose rent is a very small proportion indeed of their expenditure. That is a perfectly good reason for providing a sub- stitute for rates for really imperial purposes out of taxes which fall more evenly upon the whole wealth of the country, but it is a very bad reason for selecting as the special resource out of which this relief should be granted, a surplus which would otherwise be devoted to diminish- ing the cost, or perhaps NVO should say, improving the quality, of the most wholesome of the luxuries of the poor. If either income-tax or sugar duty is to be the larger, in order that such a relief should be granted, it is clearly income-tax and not sugar duty which should be selected. Income-tax reaches all kinds of available revenue, personal as well as real, and is, therefore, precisely the kind of equivalent needed for a local taxation that presses too heavily on a single kind of property. The sugar duty is paid very largely by a class on whom the local rates would hardly press at all,—for instance, by those of the poor who live where the dwellings of the poor are virtually a monopoly, so that the landlord benefits much more by any remission of rates than the tenant. To throw a burden felt most keenly by a class that is not the poorest, the class of lease-holding occupiers, on to the shoulders of the poorest, by taking the money for the relief of the for- mer out of the sugar duty, would have been grossly unjust. And as Mr. Gladstone showed, even on the absurd hypothesis that Mr. Disraeli's figures were sound, it would have been a most unpopular measure. Mr. Disraeli assumed that only half the remitted sugar duty is paid by the poorest class, and that £5,000,000, out of the £25,000,000 at which he rated the local taxation of the country, is paid by the poor. Well, even so, as the Prime Minister pointed out, by the proposal of the Government, the poorest class obtain £750,000 of the remitted £1,500,000 of sugar duty ; while they would only get one- fifth, if the advantage of the same sum had been applied to the relief of local taxation, i.e., only £300,000 of the £1,500,000. In other words, the drift of Mr. Smith's resolution points to diverting £450,000 from the purpose of alleviating the condi- tion of the poor, and applying it to the alleviation of the condition of the comfortable. That is evidently not a very popular proposal, even if it be a just one. And yet really so

far as Mr. Smith's proposal had any accurate political meaning at all, that is a fair résumé of its merits.

The debate, however, had at least this value, that it brought out from Professor Fawcett,—who is not included, we assume,. among " those addle-brained professors," to whom Mr. Disraeli politely referred immediately after he had attacked Mr. Lowe for the freedom of a political dialect which he conjectured to be of Australian origin,—an admirable speech on local taxation, by far the best of the debate. Mr. Fawcett. insisted with great force on the danger of weakening the security for responsibility involved in the local origin of the rates, illustrating his warning by the story of an other- wise most popular county member, who lost his seat in Parliament solely by voting for a pension of £50 out of the rates to the superintendent of a county asylum, which the ratepayers thought £50 a year too much ; and yet, as Mr. Fawcett said, if he had voted for the same pension to the same man out of Imperial funds, he would have greatly increased his popularity in the county, instead of destroying it. Mr. Fawcett showed also that the rates press far more heavily on the occupiers of town houses than on the occupiers of country property, protested against the unfair exemption of game. preserves and the partial exemption of mines from local rates,. and spoke of the too low rating of mansions ; he pointed. out how heavily town rates imposed for the improvement of town property often press on house-occupiers who have taken their lease before the rate is put on, and who perhaps go on paying it for twenty years afterwards, having within that time very likely repaid the whole sum borrowed for the sake of an improvement of which the landlords will enjoy the fruits, without having contributed a penny ; in fact, Mr. Fawcett's speech was an admirable re'sume' of the inequalities and anomalies of the present system of local taxation, and a most. weighty protest against the economical danger of drawing funds for local expenditure, without the most careful guarantees for economy, out of imperial resources. The only compensation of which we know for the waste of two evenings for which Mr. W. H. Smith is responsible, was Mr. Fawcett's masterly little speech, which impressed the House deeply, will prepare the way well for Mr. Stansfeld's measures, and will help Par- liamentary opinion to resist that relaxation of economical nerve in relation to local taxation of which Mr. Smith's resolution was an impressive symptom.

The whole debate was a curious illustration of Mr. Disraeli's complaint that the Tory party has not got a policy, and cannot be expected to get one till it has been ransacking for some weeks "the archives of Downing Street." Mr. Smith's was a ten- tative resolution, which gave us a peep into the financial con- sciousness of Tory Members, and showed that financial con- sciousness to be a chaos. It brought out the utter disagreement of the Tory party among themselves, and the want of financial. head in their leader. It showed Sir Stafford Northcote and. Mr. Sclater Booth, Mr. Hunt and Mr. W. H. Smith,—who all "seem to be pillars,"—quite at sixes and sevens in their finance, and harmonious only in abusing the Government, differing amongst each other in all the high lore of the Treasury Bench, and agreeing only when they came on to common ground with the vigorous but abusive rhetoric of Lord George Hamilton.