THE COST OF CONSERVATIVE GOVERNMENT.
IN acknowledging a resolution of the West Ham Liberal Association the other day, Mr. Gladstone referred to the dangerous character of the present Government's finance. The reference directs attention to an evil which is assuming serious proportions, and as we doubt whether even yet the weakness and extravagance of the existing financial Adminis- tration are fully understood, it may be well to state shortly the increase in the expenditure and taxation which have been made since the General Elections.
In the first estimate for 1874-5—the estimate, that is, be- fore the surplus was given away—the expenditure is set down at £72,503,000. This was Mr. Gladstone's estimate. In his Greenwich address he not only stated what the surplus would be, but declared that his plans for its disposal were settled, which implies that the outlay of the year was deter- mined. Besides, the date itself proves that the require- ments of the Departments must have been ascertained before the present Cabinet was formed. The figures given represent, therefore, the total cost of Govern- ment at the close of the last Liberal Administration. By turning to the latest weekly return, we find the estimate for the present year to be £84,386,000, and additional supple- mentary estimates are understood to be in store for us. Disre- garding these, however, we get, as the ascertained addition to expenditure by the existing Ministry, £11,883,000 ! From this, however, we have to deduct £1,300,000, allocated to the new Sinking Fund ; £450,000 interest on local loans, brought to account by Sir S. Northcote, and applied to the repayment of debt ; and £200,000, the charge of the Suez Purchase, but covered by the Egyptian annuity,—a total of £1,933,000. This reduces the real increase to £9,933,000, which is very nearly at the rate of £2,000,000 per annum for the five years em- braced in our survey. In other words, the Government has added the proceeds of a penny Income-tax to the outlay in every Budget it has presented.
This vast augmentation, with the exception of about £600,000, is under the three heads,—Army, Navy, and Civil Service. The increase under the latter amounts to £3,529,000. The Army and Navy swallow up all the rest. In fairness, per- haps, we ought to strike out of our account the additional education grant, as it was demanded by public opinion ; like- wise, the cost of working Mr. Plimsoll's measure. But on the other hand, we have a right to look for counterbalancing economies. And the subventions to local rates were a sheer bribe to the landed interest. Respecting the augmented military and naval outlay, amounting, roughly, to five and three-quarters millions, £3,271,000 are due to recent events. Consequently, about two and a half millions are admittedly permanent. The chance that the later and, as it is called, temporary increase will be much diminished, is not consider- able. The occupation of Cyprus and the Anglo-Turkish Con- vention, not to mention Afghan complications, are hardly likely to allow speedy retrenchment. When Sir S. Northcote took charge of the Exchequer, he succeeded to a splendid surplus of six millions. In a single Budget he dissipated his inheritance, and ever since his diffi- culties have gone on accumulating. The penny Income-tax taken off in 1874 he put on again in 1876. The twopenny Income-tax imposed this year more than counterbalances the sugar duties, the horse, and other small duties, repealed when in possession of the Surplus. And there is still to be mentioned the addition to the Tobacco Duties. Thus he has made a net augmentation in our taxation of £1,278,000, in excess of the sums remitted in his first Budget. Contrast with this the net reductions of taxa- tion by the Gladstone Cabinet of £12,451,000. Adding the remissions of Sir S. Northcote's first Budget, which were earned, though not personally made, by Mr. Gladstone, the total reductions of taxation actually effected or rendered pos- sible by his brief Administration, in round numbers reached £17,000,000. The increase of taxation in the past three years amounts to £5,833,000, and yet, great as it is, especially when regarded in the light of Mr. Lowe's and Mr. Gladstone's achievements, it does not suffice to cover the expenditure. Last year a debt of 21 millions had to be incurred, and this year power has had to be taken to borrow two millions more, or a total of 4 millions. The power so taken may not require to be fully used, but there are no means of forming an opinion on that point, as yet, for with further Supplementary Estimates to come, it is, even towards the end of September, no more possible to say what the expenditure will be than to predict the amount of the revenue.
It is to this uncertainty more particularly that Mr. Glad- stone referred in his West Ham communication. The present Government, in fact, has borrowed one of the very worst practices of the French Empire—that of rectificatory Budgets. Hitherto in this country, a Chancellor of the Exchequer was bound by his original Estimates. Now the Estimates do not furnish even an approximate idea of the outlay of the year. In April, Sir S. Northcote made a statement to the effect that he was providing for the repayment of part of the debt incurred under the Vote of Credit. In August he made another statement, in which he not only admitted that he would be unable to do this, but actually proposed to increase the debt. And in the last statement, as in the first, he withheld from Parliament the information - which would have enabled it to judge what the expenditure will really be. If this is turned into a precedent, our Budgets will be as illusory as the Napoleonic ones, and will as effectually cloak all kinds of tampering with the credit of the country. All that is certain is that the Liberal practice of reducing taxation is ended, and that in three years an addition of £5,833,000 has been made ; that the admitted expenditure is now, when the repayment of debt is allowed for, very nearly ten millions greater than it was at the close of the Gladstone Administration, and yet its full amount is not known ; and that the floating debt has been considerably augmented.
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