The first of these principles would have been closely scrutinised in Committee, but probably in the main it could have held its ground. In the first place, it reduced considerably the Imperial contribution, consisting hitherto of the balance of revenue after payment of Irish charges. As Mr. Gladstone pointed out, the amount of military expenditure, on which the proportion of 2 to 28 was calculated, was considerably reduced, and Great Britain had to pay the difference, and so far the change was favourable [pg 133] to Ireland. In the second place, Irish expenditure was increasing, and under the existing system the balance of Irish revenue, constituting the Irish Imperial contribution, was, as the sequel lamentably proved, diminishing, and, a result not foreseen at the time, the wasteful and unsound finance which financial partnership entailed upon Ireland ere long extinguished it. The grant of autonomy was an effective check on this continued waste, otherwise the contribution of a fixed quota would soon have reduced the Irish Government to insolvency.
The grant to Ireland of the collected not the true duties of Customs and Excise was open to grave objection. It presented her with the duties levied in Ireland on articles consumed in Great Britain, but if at any time the habits of the people, such as decrease in drinking, reduced this practical gift—estimated at £1,400,000, or if changes in law or practice transferred the payment of these duties from Ireland to Great Britain, the financial equilibrium of the scheme would be destroyed. This was a real danger as under the bonding system the British trader could, if he pleased, pay these duties in Great Britain.
The decision that Ireland was not to be represented at Westminster led to a clumsy device for giving Ireland a voice in the Imperial Parliament when Irish interests were involved. This would be the resource if a war contribution had to be obtained.
The scheme of 1886 can only, therefore, be regarded as a draft to be tested and modified in discussion and to form the basis of a revised and amended scheme.
The Bill of 1893
Mr. Gladstone introduced the second Home Rule Bill in February, 1893. In the discussion he pointed out [pg 134] how incredibly wasteful the method of governing Ireland was; the Irish Civil Government grants, which had averaged from 1833 to 1837 £762,000, had risen between 1888 and 1892 to £4,042,000, and the cost of local government in Ireland was twice as much per head as the like cost in England.
Under the scheme of 1886 Irish representatives were not to sit in the Imperial Parliament, but the Government found that under existing financial arrangements there must be financial connection, unless Parliament was prepared to face a different system of trade laws between the two countries, and provision must be made for that connection. Mr. Gladstone, therefore, reversed the decision of the Government in 1886. He proposed to retain Irish representatives at Westminster, reduced in number to 80. They were not to vote on purely British questions, but in his opinion it would be difficult to make that distinction as far as the mass of business was concerned. The Irish representatives would not vote on any tax which was not to be levied in Ireland or on any grant of money for other than Imperial purposes as scheduled in the Bill. By this means Ireland would have a voice, if emergency, such as war, rendered fresh taxation necessary.
In the interval between 1886 and 1893 knowledge had been gained to some extent as to what constituted the “true” revenue of Ireland, and the Inland Revenue thought it possible to levy in Great Britain the Excise duties collected in Ireland on articles consumed in Great Britain and vice versa. These Excise duties represented the greater part of the sum of £1,400,000, previously described as the difference between duties, so to speak, belonging to Ireland and duties collected in Ireland, a difference estimated in 1893 at £1,800,000. If Ireland retained that difference, as contemplated by the scheme [pg 135] of 1886, it was equivalent to a grant from Great Britain to Ireland. On the other hand the Customs were not able to make the separation thought possible by the Excise.
With these facts before him Mr. Gladstone made an entire change in the financial scheme. As in 1886, he held that Ireland must make a proper contribution to Imperial expenditure, but he abandoned the principle, adopted in 1886, of obtaining that contribution by a quota of one-fifteenth of Imperial expenditure, that is a contribution of £2 by Ireland to £28 by Great Britain. He retained instead the whole of the Customs revenue collected in Ireland as the Irish contribution. He proposed that Great Britain should pay any excess of the charge of constabulary over £1,000,000, out of the contribution, the balance representing Ireland's share of Imperial expenditure. He justified the change on the ground that as the management of trade was reserved to the Imperial Government, the management of the Customs so closely connected with trade should be Imperial also. The Customs were expected to produce a net revenue of £2,370,000. He estimated it as equivalent to about 4 per cent. of Imperial expenditure whereas the actual contribution was about 12 per cent. The contribution would, of course, vary as the net Customs revenue rose or fell. On the other hand the Irish Government were to take all the rest of the “true” revenue of Ireland and to defray out of it all local Irish expenditure, including a fixed sum of £1,000,000 towards the cost of the constabulary and Dublin police, which were temporarily to remain Imperial services. Customs and Excise duties were to be regulated and collected by the Imperial authority which was also to fix postal rates; but all other taxes were to be imposed by the Irish Legislature.
The interests of existing judges, and existing civil servants, and of her constabulary, which remained under the control of the Viceroy, were secured. The constabulary would be gradually replaced by a force under the control of the Irish authority. Two Exchequer Judges would be appointed to guard observance of the Act, and appeals lay to the Privy Council which would try on the motion of the Viceroy, or of the Secretary of State, any question as to invalidity of an Irish Act. These arrangements might after fifteen years be subject to revision in pursuance of an address to Her Majesty from the House of Commons or the Irish Legislative Assembly.