With these facts before him Mr. Gladstone made an entire change in the financial scheme. As in 1886, he held that Ireland must make a proper contribution to Imperial expenditure, but he abandoned the principle, adopted in 1886, of obtaining that contribution by a quota of one-fifteenth of Imperial expenditure, that is a contribution of £2 by Ireland to £28 by Great Britain. He retained instead the whole of the Customs revenue collected in Ireland as the Irish contribution. He proposed that Great Britain should pay any excess of the charge of constabulary over £1,000,000, out of the contribution, the balance representing Ireland’s share of Imperial expenditure. He justified the change on the ground that as the management of trade was reserved to the Imperial Government, the management of the Customs so closely connected with trade should be Imperial also. The Customs were expected to produce a net revenue of £2,370,000. He estimated it as equivalent to about 4 per cent. of Imperial expenditure whereas the actual contribution was about 12 per cent. The contribution would, of course, vary as the net Customs revenue rose or fell. On the other hand the Irish Government were to take all the rest of the “true” revenue of Ireland and to defray out of it all local Irish expenditure, including a fixed sum of £1,000,000 towards the cost of the constabulary and Dublin police, which were temporarily to remain Imperial services. Customs and Excise duties were to be regulated and collected by the Imperial authority which was also to fix postal rates; but all other taxes were to be imposed by the Irish Legislature.
The interests of existing judges, and existing civil servants, and of her constabulary, which remained under the control of the Viceroy, were secured. The constabulary would be gradually replaced by a force under the control of the Irish authority. Two Exchequer Judges would be appointed to guard observance of the Act, and appeals lay to the Privy Council which would try on the motion of the Viceroy, or of the Secretary of State, any question as to invalidity of an Irish Act. These arrangements might after fifteen years be subject to revision in pursuance of an address to Her Majesty from the House of Commons or the Irish Legislative Assembly.