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CONSERVATIVE AND LIBERAL

FINANCE.

On the 22nd of September, addressing the members of the Plymouth Conservative Association, I made some observations upon a financial statement which had been made by the Prime Minister at Edinburgh three weeks before, and which he had declared no man could shake.

The criticisms I then made attracted public attention, and my speech was brought to the notice of the Prime Minister by one of his political supporters, who received an answer stating that Mr. Gladstone was prepared to stand by the figures he had used. A later speech of mine on the same subject was also sent to him, and he then said that he believed his figures might be relied upon, and observed, with regard to myself, that I did not appear able to comprehend the system on which the finances of the country are conducted.

Upon the assembling of Parliament I communicated to Mr. Gladstone my intention of bringiug the subject before the House of Commons, and eventually I gave notice that I would do so upon the 21st of November, and I obtained the second place for that day. Upon entering the House that afternoon I received a letter from the Prime Minister stating that he should make no answer to my speech, and inclosing a memorandum upon the points which I had raised, and I refrained in those circumstances from addressing the House.

In the following pages will be found as exact a report as I am able to prepare of the speech which I should have delivered, and I append to it the letter and memorandum sent to me by Mr. Gladstone.

EDWARD CLARKE.

Sir, I rise to call attention, according to notice, to the comparative expenditure of the late and present Governments, with especial reference to certain statements made by the First Lord of the Treasury in a speech delivered by him at Edinburgh, on the 1st of September last.

The general question was dealt with in debate in this House on Monday last, but I had no idea that the subject was then likely to be discussed. I had not with me at the House a copy of the right honourable gentleman's speech upon which I shall liave to comment,

and if I had been prepared to enter into the debate I should not have done so, feeling that it would have been discourteous and unfair to the right honourable gentleman that I should make an attack upon him on Monday when I had given formal notice that it would be made four days later.

But, Sir, the debate on Monday dealt in great measure with questions of policy, and with the justification which might be alleged for the increased expenditure of the present Government.

I do not, Sir, propose to enter upon any question of policy this evening, and I intend to confine myself to an examination of the figures themselves.

The question of comparative expenditure as between successive Governments is undoubtedly an important one, and will always be of interest to the country; and it always has been, especially with the right honourable gentleman, a favourite weapon of party warfare.

But in order that a fair comparison may be made between the expenditure of two Governments, two things are essential: first, that the figures employed shall be accurate; secondly, that they shall be treated upon principles which involve no unfairness to either party.

Now, Sir, when the right honourable gentleman was before his constituents at the Corn Exchange, in Edinburgh, on the 1st of September last, he was undoubtedly in a difficult position. On the 29th of November, 1879, he had, in the very same place of meeting, denounced the enormous expenditure of the Tory Government then in power, and had declared that extravagance was “a vice which appeared to be ingrained in the Tory party of the day.'

In 1884 he had to apologise for, and to explain, as well as he could, the fact that he himself had become responsible for an espenditure vastly larger than that which he then denounced-an espenditure which, during the last four years, has reached an average of six and a half millions more than the average expenditure of the late Government during their term of office. I own there was no want of courage in the speech which the right honourable gentleman made in September; there was no hesitation in the words which he used; and I will quote to the House the passage in which he then dealt with the financial question, and ask the House to note the repeated declaration of the right honourable gentleman that no man can shake any one of the figures he then put forward. These were his words :

I will give you with the utmost exactness a comparative statement which it is quite impo-sible for them (the Tories) to shake, and which I will conrey to you in no very great number of words, avoiding all detail, lumping all large sums of money, and making use of round numbers for the sake of greater simplicity and intelligibility. For the last four years of the late Government the gross expenditure of th country was 329 millions ; in the last four years of the present Gorernment-do not be alarmed—the expenditure of the country has been 342 millions ; that is, amarently, in comparing the two Governments, our account is 13 millions to the bai. Let us look a little further into the matter. I must first of all deduct

the expenses of collection. You know we bave vast establishments connected with post-offices, telegraphs, and so forth. To charge them to taxation would be absurd. I do not therefore take the expense of collection, and the two sums then would be -that for the late Government 297} millions, and that for the present Government 306,7 millions. There are still 94 millions remaining to the bad against us ; but I go further, and deduct the debt we have paid off, because undoubtedly what you spend in the payment of debt ought not to be reckoned as expenditure. We have paid, as I have told you, 25 millions of debt against 11 millions; and, consequently, when we bring that into account, we are no longer to the bad, but are to the good by the amount of 4 millions.

A little later on in the speech he again said, 'So far I have been dealing with matters of fact, and no man can shake one of the figures I have laid before you.'

This, Sir, was something more than the expression of individual opinion. It was a deliberate statement as to facts made by the First Minister of the Crown, and couched in terms which were intended to induce, and no doubt did induce, the people of this country to accept it as an absolutely trustworthy statement.

I propose to show the House that the figures of the right honourable gentleman are incorrect; that he has treated them in a manner which is unfair to his opponents, inconsistent with his own practice, and with the interests of the public service, and that even if we assumed or admitted that his figures were correct, and his mode of treating them reasonable, he would still have committed the very serious blunder of charging twice over as against his opponents a sum of nearly ten millions of money. And I now proceed to give the House, with only so much detail as is absolutely necessary, the figures and authorities by which I support that specific statement.

The first figures to which I will direct attention are those contained in the following sentence : For the last four years of the late Government the gross expenditure of the country was 329 millions; in the last four years of the present Government it has been 342 millions. These figures, Sir, are not correct: the gross expenditure of the last four years of this Government was not 342 millions, but at the very least 3454 millions. If members will consult the "Statistical Abstract' for the last fifteen years, issued by the Board of Trade in June of the present year, they will find a column giving the total gross amount of the actual public expenditure of the United Kingdom, and they will find that that column gives the gross expenditure of the last four years at 344 millions.

But they will also find that that figure needs correction. Down to the year 1882 the payments on account of the Military and Naval services which were defrayed out of Extra Receipts were included in the total of the national expenditure. But in 1883 only the arrears, about 500,0001., of those payments were so included, and in 1884 they were omitted altogether. This change in the mode of keeping the public accounts was authorised by an order of the Treasury issued VOL. XVI.-No. 94.

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in 1881 in consequence of a Report made in that year by the Committee of Public Accounts. But that Committee is certainly not responsible for the way in which their recommendation has been carried out.

I find at paragraph 13 of their Report the following words :Your Committee learn with satisfaction that the Treasury have in view the adoption of independent measures by which Parliament may be duly informed of any material variations in the state of the balances of the stocks of those departments. It is obvious that if no such information is given to Parliament it will be in the power of the Military and Naval authorities dangerously to reduce their stock of material in order to defray expenses for which Parliament has given no authority. But so far as I can discover, the independent measures which were then promised by the Treasury have never been taken at all. Again, on the 5th of April, 1883, the right honourable gentleman the Member for Westminster (Mr. W. H. Smith) suggested that it was desirable that the finance accounts should show the amount of the extra receipts now taken in aid of the Army and Navy expenditure; and the Chancellor of the Exchequer (Mr. Childers) said that the suggestion was a very proper one, and added, these amounts will be shown in the return.'1

I have, Sir, before me a copy of the Finance Accounts for the year ending March 1884, presented to Parliament in July of this year, and there is no trace in that account of this item of Extra Receipti, and no information given as to the Military and Naval expenditure which has been defrayed out of sums not voted by Parliament. But, Sir, whether the Treasury order of 1884 be right or wrong, there can be no question that payments made for the Military and Naval services out of moneys obtained by the sale of stores or horses, from the purchase of discharges, or from the rents of the lands and buildings which are let by the Naval and Military authorities, are just as much part of the national expenditure, and require just as much to be brought under the cognisance and control of Parliament, as if they were defrayed out of money raised by taxation; and the only way of ascertaining the gross expenditure of the last four years is to add to the expenditure shown upon page 7 the sum which under that order of 1881 has been kept out of the accounts. I do not know how to find out what that sum exactly is, but it amounts at the very least to 1 million. Thus the gross expenditure of those years was 31 millions more than the figures given by the right honourable gentleman.

The fact is, Sir, that the right honourable gentleman has taken the figures for the last four years from the table on page 11 of the Statistical Abstract. But that table does not profess to give the gross expenditure; its heading states that it is revised so as to exclude the

· Hansard, 277, 1513.

payments made from the Army and Navy extra receipts.' And I need scarcely point out that a table from which payments to the amount of 850,000l. per annum are excluded cannot be a table of gross expenditure.

But the right honourable gentleman having gone to the wrong table does not accept the figures of that table for both sides of his account. The Liberal expenditure there given in the line of total expenditure’ is rather more than 3424 millions, but the Conservative expenditure is given as 3267 millions and not 329. Thus there is a balance against the Liberal Government of 15} millions. The right honourable gentleman reduces this to thirteen millions by adding to the Conservative expenditure the amount which in their four years of office was expended out of loans raised for the erection of Fortifications and Barracks. I dispute, Sir, the justice of charging that against the Conservative Government. The scheme of raising loans for this expenditure was devised by a Liberal Government in which the right honourable gentleman held the post of Chancellor of the Exchequer twenty-four years ago, and it happened that the last year of that expenditure was also the last year of the existence of the late Government.

The Conservative Government were not the authors of the scheme, and the expenditure was in the nature of capital expenditure, which could not with any reason be charged against the accounts of the year in which it is incurred. And it is clear from the mode in which the accounts have been kept, from the fact that at page 7, and again at page 11, those amounts are excluded from the statement of annual expenditure, that it has never been considered reasonable that they should be charged as part of the ordinary expenditure of each year.

But, Sir, as against the right honourable gentleman, I have upon this point the strongest of all authorities, and that is his own declaration and practice.

I have said that the right honourable gentleman was Chancellor of the Exchequer when the Act was passed in 1860 which authorised the raising of these loans. In the year 1861 he, as Chancellor of the Exchequer, made his financial statement to the House, and I find in it the following passage

The expenditure which was estimated and provided for in the regular votes for the year, and entirely apart from the Act which was passed towards the close of the session, for erecting with borrowed money certain fortifications, amounted to 73,564,0001.; and, inasmuch as the Act relating to fortifications was by common consent treated as a matter entirely distinct from the ordinary financial arrangements of the year, I shall not further refer to it, except casually on one or two points, or in any manner include its provisions in the statement I have to make to-night.

From that year, Sir, down to the year 1880, the expenditure upon Fortifications and Barracks out of loans has never by any Chancellor of the Exchequer been included in his statements to the House of

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