Financial Cost to Scotland of the Union

[Treaty of Union Articles Contents]


  SIR, -The debates in the Scottish Parliament on the Treaty of Union turned largely on what would now be regarded as small matters. In these, the English party made some concessions, but, when examined, they amount to little compared with the defenceless condition to which Scotland, with its 45 members, was reduced in an English Parliament of 513.  The Scotch M.P.’s were soon made sensible of their impotence. Prior to the Union, the Land Tax was the main source of the revenue in both countries, and some Scotchmen, no doubt, plumed themselves on having secured, by the 9th Article of the Treaty, a restriction of Scotland’s quota of the Land Tax to the proportion of £48,000 for Scotland as compared with £1,997,763 for England – Scotland’s taxation on land being thus about one-fortieth of the amount exigible from England. But as regards stamp duties, window tax, coals, and malt, Scotland was exempted from the English taxation only during the currency of the existing English imposts, all of which expired at latest in 1710. Thereafter, no mercy was shown to the poorer country. The Land Tax remained as it had been, but all other taxes were imposed without regard to the comparative poverty of Scotland. It was invaded by an army of English excisemen – the ‘Gaugers’ – against whom the Scotch fisher-folk and illicit distillers waged ruthless war for more than a century. The imposition, after the war, of a duty on the inferior malt of Scotland, the same as that on the richer malt of England, was one of the four chief grievances which induced Lord Findlater and Seafield, supported by the Duke of Argyll – two of the Scottish statesmen who had done most to bring about the Union – to introduce a motion for its repeal six years afterwards, which was only defeated in the House of Lords by a majority of four. It was not only the severity of the measures, but the manners of the men who introduced them, that added gall to the bitterness of the cup which the Scottish members had to drink at Westminster. Most of them had supported the Union to gratify their own ambition or avarice, but the English statesmen by whom they had been suborned showed little consideration for their tools. ‘A tax upon linen cloth, the staple commodity of Scotland, having been proposed in the House of Commons, was resisted by Mr. Baillie of Jerviswood and other Scottish members, favourers of the Union, until Mr. Harley, who had been Secretary of State during the Treaty, stood up and cut short the debate, by saying: ‘Have we not bought the Scots, and did we not acquire a right to tax them? or for what other purpose did we give the equivalent?’ Lockhart of Carnwath arose in reply and said, he was glad to hear it plainly acknowledged that the Union had been a matter of bargain, and that Scotland had been bought and sold on that memorable occasion; but he was surprised to hear so great a manager in the traffic name the equivalent as the price, since, the revenue of Scotland itself being burdened in relief of that sum, no price had been in fact paid but what must ultimately be discharged by Scotland from her own funds.’1

   The Treaty of Union, after these very temporary enactments for the relief of Scotland, contains (Art. 14) the following provision:- ‘And seeing it cannot be supposed that the Parliament of Great Britain will ever lay any sorts of burdens upon the United Kingdom but what they shall find of necessity at that time for the preservation and good of the whole, and with due regard to the circumstances and abilities of every part of the United Kingdom; therefore it is agreed that there be no further exemption insisted upon for any part of the United Kingdom, but that the consideration of any exemptions, beyond what are already agreed on in this Treaty, shall be left to the determination of the Parliament of Great Britain.’ 

   If the great Lexicographer had been present when this clause was accepted by the Scottish Commissioners and Parliament, there would probably have been less exuberant confidence in the fairness of ‘the Parliament of Great Britain.’ Beer – ‘two penny’ as it was called – seems, at the time of the Union, to have been the favourite beverage of the Scottish common people. But the unfair duty on malt imposed by the British Parliament turned the attention of Scotsmen to the ‘barley-bree.’ Breweries decreased and distilleries increased, until, at the time of the Crimean War, whisky had become the national drink of Scotland. The duty on malt and spirits had up to this time been so differentiated in England and Scotland as to secure a practical equality between the two countries. The war requiring an additional revenue, the first increase of duty – in 1854 – was imposed on malt and spirits in similar proportions. Next year, 1855, the beer-swilling Englishman began to grumble, and from that date, the additional duties required were imposed on spirits alone, the additional duty which had been imposed on malt being struck off when the war ended. 

   And thus it could be said in 1878 that ‘if the production of the 58,543,252 quarters of malt consumed in England, Scotland, and Ireland in making porter, ale, and beer, were charged at the same rate as whisky, it would yield to the revenue upwards of £44,000,000, instead of £8,000,000.’ ‘Why,’ it was asked by Mr. Orr Ewing in the House of Commons, on 11th April, 1878, ‘should this be? Why should spirits or alcohol in the form of ale, porter, or beer pay only one-sixth of the duty that it would have done for the same amount of alcohol in the form whisky? It is said that beer is less injurious to the morality of the people, but I deny this, and I assert that any man who drinks malt liquor to excess would suffer more than the man who drank whisky to excess, and I think all will admit that there are no more industrious, powerful, and law-abiding people than the Scotch.’ 

   In 1885, Mr. Childers, then Chancellor of the Exchequer, proposed to increase the tax against the Scotch and Irish by imposing an additional duty of 1s. per gallon on spirits, leaving the beer of England untouched. He, of course, hoped to carry his Budget by the overwhelming English vote, but, fortunately, the Scotch and Irish members, on that occasion, stood together, and the Liberal Government was turned out. 

   That the unfairness, previously, was gross enough is evident from the following figures taken from the Economist of 2nd May, 1885:- ‘Taking the official estimates of the three divisions, we have the following, which shows the revenue per head which each contributes by its consumption of spirituous liquors:- 



in 1884. 

Revenue from 

Beer and Spirits. 

Revenue per head 

of Population. 

£         S.         D. 




0         10         5 




1         3         4 




0         17         6 

   Here, then, we find, that, while England pays 10s. 5d. per head, Scotland pays 23s. 4d., and Ireland 17s. 6d. per head, the chief reason, of course, being, that spirits, which are the common drink of the Scotchman and the Irishman, are taxed at a far higher rate than the beer which is the common drink of the Englishman.’ Even Mr. Goschen shows the same unfairness towards the weaker countries, for he contrived last year to impose an additional duty of sixpence per gallon on spirits, while leaving the Englishman’s beer untouched. 

   A Parliamentary Committee is now engaged upon an enquiry into the relative taxation of the three kingdoms, and their Report will, it is hoped, furnish figures which are not at present to be easily extracted from the Blue Books. Perhaps the most complete statement of Scotland’s financial position is to be found in a very able and moderate Paper, contributed by ‘a well-known financier’2 (who has, however, preserved his incognito) to the Scottish Review of October, 1887, under the title of ‘The Union of 1707 viewed financially.’ ‘We prefer,’ he says, ‘to take the Union at the highest value which its most enthusiastic admirers can possibly place upon it, and to regard it as a measure of the utmost advantage both to Scotland and to England; but while doing so, we shall show, what many Scotchmen little dream of, that a price is being annually paid by the former country to the latter for the boon – a price partly paid in hard cash, the amount of which it is possible with more or less certainty to approximate, but partly also in disabilities and deprivations which have followed as direct consequences of the Union, and which have entailed, and continue annually to entail, upon Scotland a vast pecuniary loss which marks but cannot measure certain lamentable social evils from which Scotland suffers.’

   I can give but a brief summary of the figures in which the annual losses suffered by Scotland are clearly brought out. 

   1. Scotland contributes a disproportionately large share of Revenue to the Imperial Exchequer. According to the census of 1881, Scotland’s population is 10.6 per cent. of that of the whole United Kingdom, while the gross Revenue of the whole according to the return for 1884-5 was –


Imperial Taxation. 

Population per cent. 

Taxation per head. 




£2     1      1 

England and Wales, Isle of Man, and small dependencies 






£2     2      3 




1     11      3 




2     5      8 

As above 



£2     1      13

   Ireland, according to her population in 1881, ought to contribute 14.6 of the gross Revenue of the United Kingdom, but only gave 10.5. The deficit of 4.1 is unequally borne by the people of England and Scotland in the proportions of 20 per cent. and 80 per cent. respectively, or 1s. 2d. and 4s. 7d. per head, so that Scotland contributes to the Imperial Exchequer an annual sum more than the amount proportionate to her population, not far short of 


   2. Excluding the burdens of the National Debt, and foreign and local expenditure, the charges on the Consolidated Fund, on account of the Civil List, for Annuities and Pensions, Salaries and Allowances, Courts of Justice and Miscellaneous, amounted for 1886-7 to


   Of which, according to population, Scotland should have received 


   Scotland only received, however 


   Being less than her due proportion by over 


   3. The Army and Navy charges in the Budget for 1886-7, amounted to £31,226,000, of which the proportion of charges for the Army in the United Kingdom, of 93,758 officers and men, with 294 field guns, amounted to about £8,319,000. The proportion of this force, which, according to her population, should have been maintained in Scotland, was little short of 10,000 men; but in place of this, it was only 3,987, depriving Scotland of an expenditure of probably £500,000 but say only


   4. As regards the Navy, it is well known that the great bulk of the expenditure upon dockyards, naval and victualling yards, and the provisions for the materiel and armament of the fleet, goes to the more favoured portion of the Island – an extremely low estimate of what Scotland ought to, but does not receive being


   5. The expenditure upon the Civil Services amounted to the enormous sum of


   Of which, according to population, Scotland should have received 


   The following were the sums allocated to Scottish purposes:- 

Public Works and Buildings 


Public Departments 


Law and Justice 


Education, Science, and Art 


Non-effective and Charitable Services 






   A deficiency of fully 


6. The expenditure on Customs and Inland Revenue was


   Of which, according to population, Scotland should have received 


   Roughly speaking, Scotland received only about 


   A further deficiency of above 


7. The Post and Telegraph and packet Service for the United Kingdom absorbed


   Of which Scotland’s share, according to population, should have been 


   While Scotland’s requirements were moderately stated at only 


   Leaving her again a loser by upwards of 


   The total annual loss thus inflicted on Scotland being over 


    8. To this may be added the pecuniary loss annually entailed on Scotland by having to get her private bills and appeal cases carried to London – a loss which is very moderately estimated at


    9. ‘The loss which Scotland suffers through the withdrawal and diversion to England of so much of the expenditure of the wealthiest classes, and especially of the landed aristocracy, which has followed as a consequence of the Union of the Kingdoms and the transfer of the Legislature from Edinburgh to London,’ is estimated by the financier in question at



   ‘Making a yearly total of upwards of four millions sterling – or about a pound per head per annum for the whole population of Scotland.’

   The Marquis of Bute, in his paper on ‘Parliament in Scotland,’ published in the Scottish Review of October, 1889, says the above ‘article, as far as it goes, is unanswered and unanswerable…’ 

   ‘But there was certainly one thing in which the well-known financier who wrote that article was wrong. He greatly under-stated his own case. With regard to a particular item, for instance, such a phrase occurs as “probably £500,000 would not overstate it, but to keep well within the mark, we shall place it at £300,000.” His weakest statement is probably that in which, after showing that Scotland contributes to the Imperial Exchequer about £1,000,000 more, and receives about £1,250,000 less than her population warrants, and that at least £150,000 is annually spent in London upon Scottish local legislation, he remarks that the annual value of land in Scotland assessed to income-tax is about £7,500,000, of which about three-sevenths belong to peers or baronets, and proposes to name £1,000,000 as representing the amount of their incomes spent in London and elsewhere in England, and an equal sum as the amount so spent by commoners other than baronets. By this means he arrived at the conclusion that the Union impoverishes Scotland yearly to the amount of more than £4,000,000. He left out of the calculation any incomes not derived from land, the fact that to a very large number of Scottish proprietors their annual sojourn in London occupies the greater and certainly constitutes by far the most costly portion of their year, and that peers and baronets certainly do not form the half of those whose incomes are thus applied. From the figures upon which he himself went, it is clear that he ought to have set down the annual dead loss in money which is entailed upon Scotland by the Union of 1707 at a sum of eight or ten millions rather than of four.’4

   It is so difficult to grasp such enormous figures or to conceive that our poor country can be robbed to the amount of eight or ten millions a year, that I may be allowed to quote from the report of a speech made by Dr. Clark, M.P. for Caithness, at Dumfries, on 21st August last, a few instances ‘to show how our money was not spent in our country, how our own people were paid in a mean and miserly fashion, while everybody else, especially in Ireland, was paid in a free and generous way.’ 

   ‘First, take law changes. He did not take in the prisons or police; but merely the law charges that were paid, not from the consolidated fund, but from revenue year by year. If he were to take the whole charges, it would show much worse. They voted this year £860,000 for law charges in England; £527,000 for Ireland; and £122,000 for Scotland. Well, they knew the proportion. We had about four millions of a population, against the Irish four and three-quarters. But the law charges of Ireland were four times the amount of those for Scotland, although the difference in the population was very little. And they had also an Irish constabulary, which was merely an army in disguise, for which we pay a million and a half. Local Government in England cost the Imperial Exchequer £464,747; in Ireland, £132,600; in Scotland, only £9,500. The cost of local government in Ireland was fifteen times greater per head than in Scotland; so that we were spending for that purpose £1 in Scotland for £15 in Ireland. Turning to the medical and scientific branch of local government, he found that they paid for medical superintendence in England, £17,755; in Ireland, £5,800; in Scotland, £500. In fact the only sum for medical superintendence in Scotland, voted by the Imperial Government, was £200 for Dr. Littlejohn, medical adviser of the Board of Supervision, and £300 to Dr. Husband, who takes charge of the Vaccination Department; while in Ireland you had got one man with £1200 a year and several men with £600 a year to assist him. The result of this niggardly policy was that the Public Health Act had never been put in force in Scotland. There were thousands of preventable deaths taking place in Scotland which, had the Public Health Act been applied, never would have occurred. They pressed on Government this year to give us something, and they gave us £15,000; but they gave it out of our own budget, out of our own local resources, whereas in England and Ireland they paid it out of the imperial taxes. In Ireland they paid half the salary of every medical officer of health, and £15,000 for sanitary inspectors; in Scotland, not one penny. The same thing occurred in every department. We had been fighting for free education. We had two centuries of free education. Thanks to John Knox, we had the brains of our people developed by generation after generation of educated men, until the average intelligence of the Scottish ploughmen was greater than that of the lower professional classes of England. It was only in 1803 that the heritors got a right to charge a fee at all. We had always been in favour of free education. In the fight for life, or rather for position in life, education and technical education was what determined a man’s success or want of success. They had in England a Royal School of Science, and we voted every year for that school £16,000 for salaries and about £3,500 for scholarships and bursaries. We voted for the Geological Museum £20,573. Not a penny came to Scotland for such purposes. In Ireland they had a Royal College of Science in Dublin, to which they voted £7000 a year, of which £800 was payable in scholarships. He had tried time after time to get a grant for the Watt Institution in Edinburgh and the West of Scotland Technical Institution in Glasgow; and it had always been refused. The Government brought forward a vote of £15,000 for English and Scotch colleges; and how much of that vote did they think Scotland got? Not a single penny. When they rushed through the estimates at the end of the session, the only thing he could say was, ‘Well, I’m not going to discuss this, but I should advise the Chancellor of the Exchequer, for accuracy, to strike out Scotland all together, for it is obtaining money under false pretences.’ Last year the excuse was that no Scotch school had applied. They sent down information to the colleges at Liverpool, Leeds, Manchester, and other places, and they got some £3000 a-piece from this £15,000. This year the Scotch had applied; but no Scotch need apply, for they had not got a penny. Scotchmen were thus, he pointed out, unfairly handicapped, when their rivals in engineering and other branches of industry were educated at the public cost and they were refused the same privilege. He thought they might be able to obtain a grant now out of the whisky duty. After two days’ wrangle, when four-fifths of the entire Scotch members pressed the wishes of Scotland on the Government, the Government refused; but the Scotch members renewed their demand on the report stage, after a portion of the English money had been granted optionally to County Councils to be spent in technical education, and they granted it. He had not seen the bill as it stood, for it was hurried through, no man knowing very well what was being done, but knowing that the Government was conceding something. He could go through a long list, pointing out things that in Scotland were defrayed out of local rates, and in Ireland and in England either wholly or in part from imperial taxation. In England, part of the cost of registration of births, deaths, and marriages was paid from the Imperial Exchequer; here it was paid entirely from local rates. The same thing occurred with the inspection of certain schools and vagrant institutions; and the expenses of auditors of local boards were defrayed by imperial grant in England, and in Scotland from our own pockets. Looking at it from every standpoint, we were treated financially with a meanness and niggardliness that was disgraceful to a country like England.’ 

   It may occur to one reading this extract from Dr Clark’s speech to ask how it happens that England, so niggardly towards Scotland, is so lavish towards Ireland, which draws from Imperial Revenue five times the amount allowed to Scotland, though it contributes much less? I can only account for it by contrasting the importunate and determined ways in which the Irish M.P.’s insist on justice to Ireland, with the half-hearted and perfunctory manner in which the Representatives of Scotland attend to their duties. If Scotland had a dozen members like Dr. Clark, the position of our country would be very different. Unfortunately, the want of Home Rule deprives Scotland of the services of Scotsmen, who, if they could only go to London, might be trusted to stand up for their country. 

   The criminal ignorance or insensate folly which possesses the so-called Scottish Unionist, acquiescent under such injustice to Scotland, could only be excused if he were able to answer in the negative the question of the Laureate:- 

‘Are there no beggars at your gate,
Nor any poor about your lands?’

   Enough under the head of financial grievances has probably been said to show how well-informed the Rev. Dr. Begg was in 1871, when in a magazine article he wrote as follows:- 

   ‘In a word, it may be said that the state of the matter is nearly this – 

Ireland receives all benefits and few burdens;

Scotland all burdens and few benefits;

England burdens and benefits alike.

   ‘These things it may be convenient for Mr. Gladstone to forget, but the more intelligent people of Scotland have marked them; and now that they have more political power than they have ever possessed since the days of John Knox, they will deserve to be trampled upon if they submit any longer tamely to unworthy treatment.’ – I am, &c. 


1  Sir Walter Scott. 
2  See Lord Bute’s Paper on ‘Parliament in Scotland,’ Scottish Review, October, 1889. 
3  In the interesting book just published by Mr. Waddie, Hon. Secretary of the Scottish Home Rule Association, ‘How Scotland lost her Parliament and what came of it,’ he give figures to show that, in the period of thirty years, from 1861 to 1891, Scotland has lost from over taxation alone no less than £92,684,319. 
4  Mr. Waddie adds to the over-taxation of 30 years 
   Under-payments to Scotland during the same period 
   Bringing our country’s loss – 1861-91 – to the enormous aggregate of 
– Scots Magazine, Sunday 1st March, 1891.

13 thoughts on “Financial Cost to Scotland of the Union

    1. Unfortunately, not so familiar to some, hence why I feel the information was important enough for its own post 😉

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