MR. MABERLY’S MOTION FOR THE REDUCTION OF TAXATION
28 February 1823
Mr. Maberly, pursuant to notice [cp. above p. 248], moved for the removal of the exorbitant conditions which, by the Act of 1798, were attached to the redemption and purchase of the land tax; it was reasonable to expect that, once those obstacles were removed, the remaining balance of the tax to the amount of about 1,250,000l. would be redeemed, thus cancelling a sum of about 40,000,000l. of the three per cents. This would be a substitute for the sinking fund, which could then be applied to relieve the people of seven millions of taxes. The Chancellor of the Exchequer opposed the motion.
Mr. Ricardo thought that the plan which had been proposed by the hon. mover, could by no means be considered as a desirable substitute for the sinking fund. At the same time, it might possess those merits which should induce the House to adopt it. In the manner in which his hon. friend had proposed that plan, he certainly could not acquiesce; for he thought it would fail to accomplish the object which he conceived to be so desirable. It was, indeed, most desirable, that we should diminish the amount of our debt; and to effect that diminution, he did believe it might be available; but, in such case, it must be adopted in a different way from that in which the hon. gentleman had stated it. Its object was to purchase up a certain quantity of the land tax, by the transfer of a certain quantity of stock; and then it went on to propose, that other parties might purchase the tax, in case the proprietor of the land should not choose to do so. If this had been the extent of the plan—if it had gone simply to cancel an amount of stock—if it had left the purchaser no other right but that which a mortgagee possessed in his claim upon the land—if it had allowed the parties to claim of the landlord, without any intervention of the government or its officers, then he would say, that it was certainly calculated to accomplish the great object of diminishing the debt. But if, under this plan, there was to be a receiver-general to receive the amount of the proprietor, and to pay it into the Bank—if there was to be this sort of management and collection created—it would only be substituting one debt for another; and though there might thus be 42,000,000l. and upwards, of stock, cancelled, yet he should consider, that they were only creating a new stock in its place, and transferrable in the same manner. An objection had been raised by the chancellor of the exchequer, that did not seem to possess all the weight which that right hon. gentleman attached to it. He had said,—“Would it not be a great hardship to give to a stranger the right of demanding this tax of a land proprietor?” Why, what would be the hardship? The landed proprietor, it was clear, must pay at all events; and was the receiver of the taxes so merciful a gentleman, that the House was to suppose he would exercise his official functions with much more kindness and humanity than the proprietor of the land tax would manifest? He (Mr. R.) very much regretted, that the land tax was not of that description, that it might be extended further; for if those taxes which were applicable to the reduction of the national debt could be so extended, it was quite clear that they might push that most desirable object still nearer to its accomplishment. So far he concurred with his hon. friend, and no further. He could by no means agree with him, that if the land proprietor should wish to purchase, he should have the right; but if he should decline that, then a stranger might purchase; and, failing both, that it should be sold by public auction. How such a purpose was to be accomplished by public auction, he really could not see. Certainly, the result of this plan could not, by any means, be called a sinking fund. It was totally unconnected with such a fund. But the right hon. gentleman might say, if he pleased, “Your plan is a very good one, and I will adopt it, in addition to my sinking fund.” If the plan was a good one, as he (Mr. R.) undoubtedly considered it, upon the whole, to be, he thought it might be quite desirable on its own peculiar grounds; but not as a substitute for the sinking fund. With respect to the sinking fund, he had already very frequently said, that he should be willing to vote for a reduction of taxes to the amount of that sinking fund; but he could not consent to vote any larger reduction than was equivalent to its absolute amount. It was now universally agreed, that the definition of such a fund was the surplus of our income over our expenditure. That surplus, which the right hon. gentleman estimated at 7,000,000l., he (Mr. R.), and the country in general he believed, took to be, in fact, no more than 5,000,000l. How had the right hon. gentleman got the item of 2,000,000l. which he made a part of that surplus? Was it to be obtained in any other way, than by taking it from the sinking fund itself, or borrowing it in the market? If it was borrowed in the market, it was only increasing, by so much, the debt. If it was taken from the sinking fund, it was by so much a diminution of the assumed surplus. Therefore, he (Mr. R.) could not vote for remitting taxes to the amount of 7,000,000l. He thought, indeed, that if due economy and retrenchment were observed in every department of our expenditure, it might be very possible to remit even 7,000,000l., and thus add 2,000,000l. to the proposition of the chancellor of the exchequer. But he greatly feared the fact would not be so; and he must see another account brought in by the government, before he could consent to the remission of the additional 2,000,000l. Under the false notion with which ministers seemed to be impressed about their surplus of 7,000,000l., it was much to be apprehended, that they would not prove a whit more economical than usual, were the House even to vote the remission of other 2,000,000l. They would say, “You only take away our surplus, and therefore there is no necessity for further economy.” He hoped the House would pardon him, if he was tedious, but he desired once more to explain what he meant by an efficient sinking fund. An efficient sinking fund, in the opinion of many gentlemen who sat near him, could not exist at the same period that we were increasing our debt. In that position he did not coincide. He thought, for instance, that when Mr. Pitt first established a sinking fund, and although, during a considerable portion of his subsequent life, the country was engaged in foreign wars, by the enormous expenses of which the debt was increased in a far greater proportion than the sinking fund paid it off; yet that, in effect, we then always had a sinking fund. Of every loan that was borrowed to meet those vast expenses, Mr. Pitt provided for the interest, and reserved a fund of one per cent for the extinction. Undoubtedly, an incredible weight was added to the debt by the protracted war that ensued; but, what would have been the situation of the country, had she sooner effected a peace? All those loans which had been borrowed in war time, would have been provided for, and there would have been left an efficient sinking fund. Had this system been adhered to during the whole progress of the war, he (Mr. R.) would have been the last man to raise his voice against the sinking fund. But, what was the fact? In 1813, the late chancellor of the exchequer came down to the House, took 8,000,000l. per annum away from the sinking fund, and in the same breath told them, that they were paying their debt, that the finances would be placed in the most flourishing condition; and in a short time after the peace, he told them, that they would be in possession of a greater treasure than any other nation of the earth could boast. It was at the very moment that he took away from the sinking fund 8,000,000l., that the late chancellor of the exchequer had made all those splendid promises. But, unfortunately, this was not his only attack on that fund; nay, it was a trifling one, compared to those which he subsequently made upon it. The late chancellor of the exchequer, instead of providing for the annual interest of his loans, suffered compound interest to accrue upon them. Though there was placed, in the hands of commissioners, who most conscientiously and perfectly discharged their duties, a fund of 15,000,000l., he said, “I have, by my expenditure, left you in a situation in which you have a deficiency of 15,000,000l. in your finances.” Why, where, then, was the sinking fund? Would the chancellor of the exchequer have dared to come to that House, year after year, and have calmly spoken of a deficiency of between 12,000,000l. and 15,000,000l., if he had not known all the while, that there was, in reserve, a fund of 15,000,000l. which he reckoned upon parliament’s permitting him to apply to other purposes than those which it was originally intended to effect? Now he (Mr. R.) contended, that the sinking fund of this day would have the same fate as its predecessors. If it remained, it might go on well enough for a few years; but, should the right hon. gentleman opposite continue in power, he, or if not, then some future chancellor of the exchequer, after coming down to the House, and telling them how thriving a condition this sinking fund was in, would some day inform parliament, that a deficiency of some sort or other was discovered, or that some emergency had arisen, which rendered it necessary to appropriate the whole. The language of his majesty’s ministers confirmed these anticipations in a great measure. If, however, they properly considered the matter, they ought to look upon this fund as already appropriated. It was a fund to pay off debt; and surely it was never to be considered as applicable to the expenses of a war; for if it was to pay debt, it could meet no other object. Let the House suppose the case of a private individual: suppose he had an income of 1,000l. a-year, and that he found it necessary to borrow 10,000l., for which he agreed to give up to his creditor 500l. per annum. Let them suppose his steward to say to him, “If you will live on 400l. a year, and give up another 100l., out of your income of 500l., that will enable you, in a certain number of years, to get completely rid of your debt.” The party listened to this good advice, lived on 400l. a-year, and gave up annually 600l. to his steward, in order to pay his creditor. The first year, let it be assumed, that the steward paid the creditor 100l. Then the debt would be 9,900l.; and therefore the income due to the creditor would be only 495l. But the party continuing to pay to his steward 600l. per annum, in the next year the steward paid over 105l.; and so from year to year the debt was diminished, 600l. being still received by the steward. At the end of a certain number of years, the result was this:— That out of a yearly reserve of 600l., half the debt was paid off: only 250l. was due to the creditor, and 350l. remained in the hands of the steward; his master continuing to live on 400l. per annum. At this period, some object offering to the steward, which he thought might be beneficial to the gentleman, or to himself, he borrowed 7,000l., and devoted the whole 350l. in his hands, to pay the interest on that sum. What, then, became of this gentleman’s sinking fund? Originally he was in debt only 10,000l.; now, he found himself indebted, altogether, 12,000l.; so that instead of possessing a sinking fund, as he had hoped, he was positively so much more in debt. He considered that the whole mystery of our sinking fund was, in truth, just the same. He did believe, in his conscience, that the amount of the national debt would not have been near so large as it now was, if the sinking fund had been honourably adhered to. He did believe, that such a disastrous result would not have been the case, if Mr. Pitt had continued minister. No: he would have provided—as any other honest or efficient minister would have done—for debts as he contracted them. In time of war even we should have possessed a sinking fund. But, as he despaired of ever seeing such a system followed by any minister in that House —as he despaired of seeing a sinking fund strictly and inviolably sustained—he would give his hearty support to his hon. friend’s motion, if he would make his proposed remission of taxes 5,000,000l., instead of 7,000,000l. The latter amount seemed rather beyond the mark, and therefore he could not vote for it. With respect to the memorable plan of last year, he hoped the right hon. gentleman was not one of those who could support such an inexplicable mystery. He hoped that the right hon. gentleman would repel the charge of having contributed to such a delusion. If the right hon. gentleman really wished to repeal 2,000,000l. of taxes, let him say to the House that the ministers of the crown, wishing to do so, proposed to take them out of the sinking fund. The roundabout statements, and the machinery of acts of parliament, which in recent sessions had been resorted to, were unbecoming the station of the right hon. gentleman, and unworthy of the government of a great and powerful nation.
Mr. Baring ‘could not help adverting to what he considered a contradiction in the speech of his hon. friend. His hon. friend said, he was not opposed to the principle of Mr. Pitt’s sinking fund; but he objected to the preservation of any surplus at all, because he was sure that somebody would take it away: he was afraid that some minister or other would take it away; and, therefore, he was resolved to take it away himself. This reminded him of the Frenchman in some play, who, upon being appealed to by a lady for his advice, as to the best mode of resisting the advances of her admirer, replied, that the best way of resisting temptation was to yield to it at once.’ ‘He should like to know from the hon. member for Portarlington, how, in a case of emergency, the country could effectively act without a surplus revenue? What would be the situation of the country, when deprived of credit?’ Mr. Baring next adverted to the plan for an ‘adjustment of property’ which the hon. member for Portarlington had suggested; ‘he must assert, that however specious in theory, or valid in abstract calculation,’ it was ‘totally inapplicable to any practical object.’
The motion was negatived.