In order to meet the existing deficit, the Committee suggest that the British Exchequer should take over liability for all old-age pensions which had been actually granted at the date when the Home Rule Bill comes into operation. They estimate that liability at £3,000,000 a year, gradually, of course, diminishing. If necessary, the liability in whole or part of the Irish Constabulary Pensions (£400,000) might also be transferred to the British Exchequer. They advise that the obligation of Ireland to contribute to the Imperial expenditure should be affirmed, but that a settlement of the amount of the contribution should remain in abeyance; and lastly, that the guarantee of the Imperial Exchequer in respect of the Land Stock should remain, but that means should be taken to secure regular payment of the sum due from Ireland to the National Debt Commissioners.
I shall contrast later the recommendations of the Committee with the actual provisions of the Home Rule Bill.
I will now compare the finance of the three Home Rule Bills which have been submitted to Parliament, those of 1886, 1893 and 1912.
The Bill of 1886
Mr. Gladstone made it an essential condition of his plan that there should be an equitable distribution of Imperial charges and that Ireland should pay her fair proportion to the common expenses of the Empire. In 1885 that contribution was represented by the surplus of Irish Revenue remaining after deduction of the expenditure in Ireland on Irish services. He calculated in 1886 that the surplus above described [pg 127] provided a contribution by Ireland to Imperial expenditure equivalent to £2 where Great Britain contributed £23. This proportion contrasts with Mr. Pitt's arrangement in 1800 that Ireland should pay £2 where Great Britain paid £15. Mr. Gladstone proposed in future that where Great Britain paid £28, Ireland should pay £2, a concession of moment to Ireland, and he supported it on the following ground: he measured the taxable capacity of the two countries by (1) the Income-tax returns (2) the death duty returns, and (3) the valuation of property. Income-tax gave a proportion of £38 to £2, but he held Income-tax an imperfect test, because it was paid in Ireland on a lower valuation than in Great Britain and because many Irishmen receive dividends on securities which pay Income-tax in England. He thought that £34 to £2 would be nearer the true proportion. He held the death duties to be a better test and they showed a proportion of £26 to £2, while the valuation, lower in Ireland than in Great Britain, gave a proportion of £24 to £2. Arguing from these premises, he held that his proposed contribution of £2 to £28 was an equitable and even a generous arrangement, justified by the necessity of starting the Irish Legislative body with a balance to its credit.
A table is given showing how the contribution was appropriated.
The amount to be contributed by Ireland to Imperial expenditure being thus ascertained, the more difficult part of the problem remained, viz., how to provide the fund out of which the contribution would be payable and how to secure its payment. The plan which commended itself to him as insuring the fiscal unity of the three kingdoms, and giving absolute security to the British Exchequer, left the imposition and collection [pg 128] of Customs and Excise duties with the Imperial Government, and under Imperial control. This plan was to be carried into effect in the following manner. The Customs and Excise were to be levied under Acts of the Imperial Parliament, and were not to be subject to the control of the Irish Legislature. The Irish Legislature with that exception could impose taxes on Ireland. Under the Land Purchase Bill, which was to be introduced concurrently with the Home Rule Bill, a Receiver-General was to be appointed, into whose hands the Customs and Excise Duties and other taxes were to be paid, including taxes imposed by the Irish Parliament. The Imperial Receiver-General, having thus in hand all Imperial and local taxes levied in Ireland, would in the first instance pay out of them the Imperial charges. Apart from the Imperial charges there were other charges, strictly Irish, such as Judges' salaries, pensions, the salaries of existing civil servants, for the security of which the Bill provided. The Bill bound the Irish Parliament to impose taxes sufficient to meet such charges, and ordered them to be paid by the Receiver-General. The Receiver-General was to keep an Imperial and an Irish account. The Irish charges would of course be paid from the latter account. He was to carry the Customs and Excise Duties in the first instance to the Imperial account, and the local taxes to the Irish account, transferring to the Irish account the surplus of Custom and Excise, after payment of the Imperial contribution. He was subsequently to pay the balance remaining on the Irish account to the Irish Exchequer.
An Imperial Court of Exchequer was established in Ireland to watch over the observance of the Act, and all Revenue acts were to be tried and defaults punished in that Court. The Bill further enabled the Irish [pg 129] Parliament to take over the Irish Post Office, if it should so desire, though it was Mr. Gladstone's opinion that it would be for the convenience of both countries if the Post Office were to remain under the control of the Postmaster-General.
The Imperial contribution payable by Ireland was not to be increased for thirty years, though it might be reduced if the Imperial charge for Army, Navy and Imperial Civil expenditure for any year should be less than fifteen times the contribution paid by Ireland. In that case one-fifteenth of the diminution could be deducted from the Imperial contribution.
Existing Civil Servants were retained in their offices at existing salaries. If the Irish Government were to desire their retirement, they would be retired on pensions. On the other hand, if at the end of two years the officers themselves desired to retire, they could do so, receiving pensions on the usual abolition of office scale.