The English Budget

London, Feb. 11, 1860

The last was a great night, in the Parliamentary sense of the word. Mr. Gladstone, in an immense speech[a], simultaneously divulged the mysteries of his budget and of the commercial treaty, linking both carefully together, and propping the frailty of the one by the boldness of the other. As to the treaty, now laid with all its details before the world, you will find the sketch I gave you many weeks ago[b] to have been quite correct, and, in fact, I have nothing to add to the general criticism I ventured upon at the time. Consequently, I propose considering Mr. Gladstone's budget as a simple operation of English finance, a treatment of the subject the more called for since the impending Parliamentary debates are sure to enlighten us, by the by, on the diplomatic undercurrent of Mr. Gladstone's facts and figures.

Now, whatever inconsistencies may be traced in the details of the budget; whatever political objections may be raised against the prudence of answering a deficit of more than 14 per cent on the total revenue, and a vast increase of expenditure, by one full sweep of many existing duties, part of which did hardly weigh upon the mass of the people; nevertheless, common fairness obliges me to say that Mr. Gladstone's budget is a great and bold stroke of financial ingenuity, and that the British Free-Trade doctrines once accepted—apart from some glaring incongruities necessitated by the treaty with France, as well as by the tenderness every British Chancellor of the Exchequer will always bring to bear upon the rent-rolls of the 50,000 paramount landlords—it is a fair budget. The position of Mr. Gladstone was fraught with difficulties created by himself. He was the man, who in 1853, in his so-called standard budget prospectively extending over a space of seven years, had pledged himself to definitely do away with the income tax in 1860-61[c]. He again, in a supplementary budget[d], called into life by the Russian war, had promised to abolish, at no distant date, the war duty on tea and sugar. The same man, now that his promissory bills have fallen due, comes forward with a scheme in which the latter duty is maintained, while the income tax is enhanced from 9d. to 10d. in the pound; that is to say, by 11 1-9 per cent. But, you will remember that, in my strictures on his budget of 1853, I tried to prove that, if the financial legislature of free-trade meant anything, it meant indirect taxation being displaced by direct taxation[279]. I dwelt at the time on the incompatibility of Mr. Gladstone's pledge of going on with the removal of custom and excise duties, with his simultaneous pledge of altogether expunging the income tax from the tax-gatherer's list. The income tax, only that it is partially, unjustly, and even stupidly laid on, is the best item in English financial law. That Mr. Gladstone, instead of seriously taxing landed property, maintains a war duty upon such first necessities as tea and sugar, is a cowardice due much more to the aristocratic structure of Parliament than to any narrowness of mind on his part. If he had dared lay his hands on the rent-rolls, the Cabinet, whose prospects of life are precarious enough, would have gone to the wall in no time. It is an old proverb that the belly has no ears, but it is no less true that rent-rolls have no conscience.

Before giving a succinct statement of the alterations contemplated by Mr Gladstone, I shall first call the attention of the reader to some incidental remarks dropped in the course of his speech. First, then, the Chancellor of the Exchequer admitted that the common opinion of free-trade being incarnated in the English financial system was mere slang. Secondly, he admitted that England had no commerce worth speaking of with France, while France, on the contrary, had a very extensive and expanding trade with England. Thirdly, he could not help confessing that Palmerstonian policy, embarking upon "friendly expeditions" behind the back of Parliament, had turned the scale, and paralyzed the in-crease accruing to the Exchequer from the extension of British commerce and industry. Lastly, although gilding the bitter pill with a sweet envelope, and presenting it in as handy a shape as French apothecaries are used to present you the most abominable pharmaceutical stuff, he could not but own that the same dear ally, to whom Great Britain is just about sacrificing nearly two millions of income, is the mainspring of British military and naval expenditure being swollen, for the year 1860-61, to the stupendous amount of 30 millions. Eighteen millions, it should be recorded, was the maximum of war expenditure, which the Iron Duke[e], twenty-four years since, entreated English rationalism to swallow.

After these preliminary remarks I come to the changes proposed by Mr. Gladstone. They are divided into two categories, the one resulting from the treaty with France, the other embracing subsidiary changes which Mr. Gladstone was compelled to introduce in order to free his budget from the reproach of being a concession extorted from a foreign despotic power, and imparting to it the more acceptable color of being a general reform of the existing tariff.

The changes introduced by the commercial treaty with France are these: There will at once be a clean sweep, absolutely and entirely, of manufactured goods off the British tariff, with the exception, for a limited period, of three articles only, viz.: cork, gloves, and another trifling article. The brandy duty will be reduced from 15s. a gallon to the level of the colonial duty of 8s. The duty on all foreign wines will be immediately diminished from nearly 5s. 10d. per gallon to 3s. a gallon. England engages further to reduce the duty from April 1, 1861, to a scale proportioned to the quantity of spirit contained in the wine. All duties upon foreign articles which are also produced in England, and there subject to an excise duty, will be reduced to the standard of the home excise. Such is the pith of the first set of changes to be introduced.

The alterations which, independently of the treaty with France, are to give the present budget the character of a general reformation of British financial legislature are these:

There are to be abolished immediately and entirely the duties on butter, tallow, cheese, oranges, and lemons, eggs, nutmegs, pepper, licorice, and various other articles, of which the total duty is about £382,000 a year. Reductions are to take place in the present duty raised on timber from 7/ and 7/6 to the colonial rate of 1/ and 1/6[f] On currants, from 15/9 to 7/; on raisins and figs, from 10/ to 7/; on hops, from 45/ to 15/. Lastly, the excise upon paper is to be abolished.

The account of the financial year 1860[-61] stands thus[g]:

Now, on comparing expenditure with income, it will be found that a deficit to the amount of nearly £10,000,000 sterling is avowed, for which Mr. Gladstone, as already said, thinks to make up by the increase of the Income Tax from 9/ to 10/ and by the maintenance of the war duties on tea and sugar. The minor alterations, by which he proposes getting a penny here, and another penny there, it is not necessary to dwell upon in this general survey of the British Budget for 1860-61.

Notes