A century ago today, The Irish Independent¹ ran an article entitled “How we are fleeced”. The piece described how Ireland contributed around 50 million pounds to the British Revenue but Ireland received only 29 million pounds of government spending in return². The rest of the revenue went on “Imperial Services” – presumably the cost of keeping other parts of the Empire under control. As the War of Independence was reaching a climax, it must have been particularly galling for nationalists to learn that they were effectively subsidising the very people that they were fighting (the various Crown Forces had just burned Midelton in reprisal for IRA attacks). It probably didn’t help either that there was an unfolding Income Tax scandal in both Britain and Ireland (many taxpayers complained that the tax demands/estimates were inaccurate). The data in the article is very interesting :-
1) The difference between the English and Irish (and Scottish) economies is astonishing. England’s revenue was 65% of the UK’s total revenue (compared to Ireland’s 4% and Scotland’s 8.5 %). There was also 22%of revenue listed as other sources – presumably colonial. By contrast in 2019 , Britain’s entire government revenue was around 635 billion pounds, compared to nearly 80 billion pounds for Ireland – a ratio of 88% to Ireland’s 12%.
2) Most government revenue was raised by Customs and Excise , even though most of the trade was with the rest of Britain. It was a bit of a sore point too, since the tax revenue had almost doubled since the previous year, mainly due to increased duties on beer and spirit (compared to a much more modest increase in Belfast). The Irish Independent described it in another article titled “How we are bled”.
3) Running an empire was expensive. The total contribution (from England, Ireland and Scotland) to Imperial Services was nearly 800 million pounds in 1920 (about 35 billion in today’s money)
4) I’ve always thought that an interesting part of Ireland treaty settlement with Britain after the War of Independence was that, having fought for freedom, Ireland effectively ended up buying freedom instead, through the annuities payments and the continued use of the four naval ports for years afterwards. Given that Ireland was already contributing a surplus to the British coffers, the treaty outcome was a sweet deal for Britain.