HOME RULE FINANCE.
AFTER the Ulster problem, finance is the most im- portant of all the questions raised by the Home Rule Bill. It is essential hero that the British elector should understand exactly what the Government is asking him to do, and therefore we make no apology for dealing with the matter once more. Mr. Samuel, who did his very best on Monday last to offer an apology for the Bill, admits " the annual loss that will remain at the outset will be two millions." In other words, instead of the Irish people setting up for themselves, managing their own affairs, and paying their own way, as the great majority of the electors fancied they would do under Home Rule, and according to the South African analogy, which is so often paraded before us, the taxpayers of England, and " at the outset " of Scotland and Wales, will pay over two millions a year in cash as a subsidy or tribute to the Irish Parlia- ment and Executive. But this is by no means all that the British taxpayer is going to do for the Irish taxpayer when Ireland manages her own Irish affairs in her own way, and yet continues to have a most potent voice in our private affairs owing to the presence of forty-two Irish members in our Parliament. The British taxpayer is going to continue to pay for what are called the reserved services—services which, considering the general trend of the Bill, one is not surprised are some of the most expen- sive. Among those reserved services are the cost of collecting Irish taxes, the charges for Old-Age Pensions, for National Insurance, and for Land Purchase, and also the charge for the Police. The total cost of these reserved services is about £5,000,000 a year. But, as we understand Mr. Samuel, there will be still in. the hands of the Imperial Exchequer to meet these reserved charges £3,000,000 of money raised in Ireland. Therefore the direct annual burden on the British taxpayer works out at £2,000,000. But Ireland under the Government scheme is not going to be asked to pay anything whatever towards the Army, the Navy, the ambassadorial, consular, and other Imperial services, the interest of her share of the National Debt, or any part of the reduction of the Debt. Yet Ireland's just share of this Imperial expendi- ture amounts at the very least to £4,000,000 a year. Therefore in reality our subsidy or tribute to Ireland will amount at the very least to £6,000,000 a year. No doubt only £2,000,000 of this sum will be paid in gold, but a subsidy is not loss a subsidy because the money is not paid direct to the recipient but goes in discharge of obligations which the recipient ought to pay himself, and would have to pay himself if some one else were not ready to pay them for him. What, then, the taxpayer of England, and " at the outset " of Scotland and Wales, is preparing to do is to pay all his own taxes and in addition £6,000,000 a year of what, under any rational scheme of national self-government, ought to be Irish expenditure. To say we already pay almost as much is no argument in favour of the finance of the Bill. At present we have control over the expenditure in question, can see that it is pro- perly administered, and can take care that no injury is done to the donors. Under Home Rule we can do none of 'these things. When a daughter says, " I am costing you £300 a year while I live at home, therefore you have no right to refuse me £350 a year in order that I may sot up for myself," the father is apt to regard the attempt to exploit his generosity as somewhat predatory. The facts we have just stated are the essential facts in regard to the finance of the Home Ride Bill, but there are other points hardly less important. In the first place, the National Irish Parliament and Executive are to have the right to borrow to any extent for national development. But, considering the far-reaching aspirations of the Nationalist Party, this is only too likely to mean some gigantic scheme for public works such as the French undertook in the eighties and with such disastrous financial results. It is hardly too much to say that public developments by public authorities through public borrowings always involve bad finance. They are luxuries which very rich nations like France can just manage without disaster, but which almost always crush poor States. The only check is that after a certain. amount of indulgence the small State finds that it can only borrow at rates too high to be entertained. But Ireland is not likely to encounter this check till very late in the game—and for this reason. Those who are asked to lend money to her will know that their money is pretty safe because the United Kingdom would find it impossible to allow Irish repudiation. However much we may warn the investing public that if they lend money to Ireland it will be at their own risk, the said public will know perfectly well that we cannot afford to lot Ireland repu- diate her debts. The threat that we shall sit by with folded hands and see the Irish Government go into bank- ruptcy is not practical talk. The Irish Government, whether we like it or not and whatever we may say about the matter, will be able to pledge British credit. We may therefore feel sure that, if the Bill passes, Irish loans will play a very great part in the future finance of these islands. The Irish Parliament in truth is extremely likely to adopt Artemus Ward's advice to his friends : " Let us live within our moans, even though we have to borrow the money to do it with."
Another point which we noticed last week must be noticed again, that is, the power which the Irish Govern- ment will be given under the Bill of destroying our Free Trade system, Curiously enough, in the present Parliament whenever Irish affairs are concerned there is nobody to say a word on behalf of Free Trade. The whole of the Govern- ment people are dumb, for it would be a breach of party loyalty to quarrel with the details of a Liberal Bill, and party loyalty is, of course, with them far superior to the interests of Free Trade. The Unionists, on the other hand, are all Protectionists, and therefore they are not concerned to defend Free Trade. In all probability, too, they do not properly understand the Free Trade argument. Hence the cause of Free Trade is entirely deserted and we see the monstrous proposal for breaking up the customs union of the United Kingdom which is involved in the Bill. In former days the first step towards Federalism or the closer drawing together of self-governing States was always, as in the case of Germany, a ZolIverein, or customs union.—Such a union, again, existed in South Africa before the coming of political union.—The present Government, however, has a new view of Federalism. Their first step in what they call the Federal direction is actually the break- ing-up of the customs union which has bound England and Ireland throughout the last hundred and ten years. It is true that Ireland will not at once have the power to impose taxes on British goods, but, as Mr. Bonar Law pointed out, she may at once, if she likes, reduce the tobacco duty by half. But if she does so, what is to prevent the Irish tobacconists doing a roaring trade through the Post Office in pound packets of tobacco ? They could afford to retail tobacco in this way at prices which would completely undersell the English traders. This is only one example, however, of interference with Free Trade which might take place under the Irish Parliament's 'right to diminish in some cases and increase in others existing duties on certain articles. A worse right of interference lies behind. As far as we can see, there is nothing whatevet in the Bill to prevent the Irish Parliament adopting the system of bounties which flourished under Grattan's Parliament. Part of the scheme of developing Irish industries might be for the Dublin Parliament to borrow twenty millions and spend it in ten years in giving bounties of two millions a year to certain selected trades, say Irish tobacco growing, the Irish motor industry, and an Irish sugar beet industry. To do that is well within the fiscal powers conferred on Ireland, and would undoubtedly delight a daring Irish financier. Part of the joke would be to see the poor English Free Trade pig squeaking under the treatment meted out to him by Hibernian. Protectionists. Before we leave the subject of Irish finance we should like to say a word as to an extraordinary delusion which is apparently entertained by a great ninny English Liberals. It is that the Irishman of £4,000 a year, X4:00 a year, or £40 a year is less able to bear taxes imposed upon him— taxes, remember, of equal amount—than the Englishman or the Scotsman with similar incomes. We are not mocking or exaggerating when we say this, for there is really no other explanation possible of the allegation that Ireland is overtaxed. If Ireland is overtaxed Irishmen must be overtaxed. But if Irishmen are overtaxed then the con- dition which we have just suggested must exist. " Ale" it will be said, " your argument is only true of direct taxation. Take indirect taxation, and the case is very different. Whisky is the national drink of Ireland, as beer is the national drink of England, and whisky is selected for higher taxation than beer. That is why Ireland is at present overtaxed." Unfortunately, however, for this argument, reference to statistics shows that as a matter of fact the contribution per head to the whisky tax is higher in Britain than in Ireland. In other words, for every alleged oppressed whisky drinker in Ireland there are two or three oppressed whisky drinkers in Britain. But it may be said wages are lower in Ireland, and therefore the poorly paid Irishman is more hardly pressed by the taxes on whisky than is the English or Scottish whisky drinker. This might possibly bo a fair line of argument if it is admitted that it is absolutely necessary for a man to drink whisky just as it is absolutely necessary for him to eat food. But surely the Liberal Party are not going to accept the argument that whisky is essential to a man's welfare. A tax which a man can avoid by a very little self-control can hardly be regarded as a political crime. As a matter of fact, however, the lowness of Irish house rent and of the cost of living generally in Ireland gives the poorly paid Irish labourer quite as large a margin for expenditure on such " necessaries " as tobacco and alcohol as it does to the Highland crofter or the agricultural labourer in Wiltshire, Dorset, and Somersetshire. Every very poor Irishman can be matched by an equally poor Englishman. Possibly both of them if they are consumers of alcohol and tobacco are over- taxed, but one is not more overtaxed than the other. In a word, the allegation that the Irishman is, and has been, so greatly oppressed by our system of taxation that in the future we must pay him a subsidy of six millions a year is one which will not hold water for an instant. It is mere political humbug—au argument invented to excuse party leaders from making a bargain with a group whose votes they need to keep them in power.
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