8. If expenditure on Constabulary fell below £1,000,000, contribution 3 (d) to be correspondingly reduced.
9. Customs and Excise collected in Ireland were to be subject to following charges:—
(a) Cost of collection, not more than 4 per cent.
(b) Contributions to Consolidated Fund of the United Kingdom.
(c) Payments to National Debt Commissioners.
(d) Any sums required under the Land Act of that Session the balance being paid over to the Irish Government.
10. The Lord Lieutenant's salary not to fall on the Irish Exchequer.
Broadly the scheme gave to the Irish Government credit for the Customs and Excise collected in Ireland and charged it with annual payments of £4,502,000 in addition to the cost of collection. It is clear that Mr. Gladstone, at the time when the Irish population was about one-eighth of the United Kingdom, assumed Ireland to have a taxable capacity of one-fifteenth. If such a scheme were introduced at the present moment it is obvious that, owing to the further decline in the population of Ireland, a smaller figure for taxable capacity must be taken. What that figure should be it is difficult, if not impossible, to decide satisfactorily. It is generally assumed that on the basis of the calculations made by the Financial Relations Commission in 1896, the present relative taxable capacity for Ireland would be about one-twenty-fifth that of the United Kingdom. In the last two financial years the Irish contribution to Income Tax has been one-twenty-eighth, and the contribution to Estate Duties one-twenty-sixth of the total collection in the United Kingdom. These proportions, taken as measures of taxable capacity must be exceptionally favourable to Ireland, where the proportion of Income Tax payers and of persons possessing property paying Death Duties is relatively to the total population smaller than in the United Kingdom as a whole. If, therefore, for the sake of the present calculations the mean of two proportions—i.e. one-twenty-seventh deducible from the Income Tax and Death Duty contributions is assumed, we employ a figure exceptionally favourable to Ireland. The financial statement on the next page showing the 1886 scheme applied to present conditions has been drawn up on this basis. The revenue is here assumed to come in at the average rate of the last two years (1909-10 and 1910-11) and the expenditure is taken as that of 1910-11.
The state of the Irish Exchequer under the foregoing scheme would be indeed a parlous one. It would start with a deficit of £3,200,000, and with a prospective immediate increase by about £450,000 on account of the Insurance Act. The actual budget deficit would thus be about £3,650,000. The Imperial Parliament would collect about £7,794,000, and after deducting £5,346,000 would hand back to the Irish Exchequer the difference of £2,458,000. The revenues upon which the Chancellor in the Irish Parliament could rely would be, therefore, £6,366,000. Out of this an expenditure of £9,562,000 would have to be met. The postal services would probably not stand any increased charges; there is left, therefore, only £5,211,000 of free revenue, and only £2,753,000 under the unrestricted control of the Irish Parliament. With such resources it would be obviously impossible to make good a deficit of £3,206,000 by any increase of taxation. It must not be overlooked, also, that the effect of crediting Ireland with Customs and Excise as "collected" instead of as "contributed" is practically to make the Irish Parliament a further free gift of nearly £2,000,000.
A totally different scheme accompanied the Home Rule Bill of 1893 as introduced. The principal features of the new scheme were as follows:—