§ MR. GREGSONrose to call the attention of the House to the Customs' duties new levied on tea and sugar, and to suggest to the Government that they should take the subject into their early consideration. The hon. Member spoke nearly as fellows:—After the discussion which has just taken place on an item in the War Expenditure for China, I turn with pleasure to a more agreeable subject relative to our commercial relations with that country, and I have now to beg the indulgence of the House, feeling that I may be thought to have undertaken a hopeless task in appealing for a reduction of the Customs' duties on tea and sugar, especially after the recent decisions of the House against 228 the repeal of the hop duty, and the modification of the fire insurance duty. I am aware also that many hon. Members may say, if any reduction of taxes be practicable let us have a reduction of the income tax, and the hon. Member for Birmingham will call out for the abolition of the paper duty; but it must be borne in mind that some of these reductions would involve a partial and others a total permanent loss to the Revenue, while the two great commodities of which I speak being of universal consumption are classed in the demand for them, and would by a reduction of duty not only in a short time restore but absolutely improve the Revenue. Tea and sugar are now as necessary to us as our daily bread. I propose, first, to show the very heavy duties imposed on the importation of tea and sugar; and then to endeavour to prove from past experience that a reduction of duty would lead to a great increase of consumption and a consequent increase of Revenue. The stock of tea in this country on the 1st of January, 1861, was 69,000,000 of lbs., the average value of which was 1s. 3d. per lb., amounting to £4,000,000 sterling, while the duty at 1s. 5d. per lb. amounted to £4,500,000, being equivalent to a duty of 110 percent. rather different from the import duty at which by the new treaty we have stipulated for the admission of our manufactures into China, namely, at about 5 per cent. The heavy duty on tea may be shown in another way:—Average price in bond 1s. 3d. per lb.; duty, 1s. 5d.; 2s. 8d.; trade profit say 1s.; duty paid, 3s. 8d. per lb. The dealer in tea must, of course, as in other commodities, take his profit on the whole cost to him, whether it be in the value of the tea or the duty comprising his cost. Thus the consumption in 1860 being 77,000,000 of lbs., the dealer's profit on his outlay for duty at 6d. per lb. would be nearly £2,000,000 additional paid by the consumers; a charge which does not fall on the public in the case of the income tax, directly paid to the Government collector of that tax. The Revenue from tea at a duty of 1s. 5d. per lb. is larger than it was when the duty was 2s. 2¼ d. per lb. fourteen years ago. Duty in 1846, 2s. 2¼ d.; Revenue, £5,000,000; in 1857, 2s. 2¼ d.; Revenue, £5,700,000; in 1860, 1s. 5d.; Revenue, £5,400,000, being equal to 110 per cent on the gross market price, which includes prime cost in China, insurance, freight, and all charges; and if the duty were reduced to 1s. per lb., it would be 229 100 per cent on the probable price when the trade is permanently established in peaceful intercourse. The consumption of tea was in 1846, 47,000,000lb.; in 1851, 54,000,000lb.; in 1860, 77,000,000lb.; and though this is a surprising increase, it gives only about 2½ lb. per annum per head for the whole population, while in the Channel Islands it is stated at 4 lbs. per head. In Australia 10lb. to 12lb. per head. In this country the allowance to domestic servants at ½ lb. each per week would be 13lb. per annum. An increase of 1lb. per head on the general consumption would bring up the quantity to 100,000,000lb., and the duty at 1s. per lb. would amount to fully £5,000,000. I shall now advert to Sugar, but not in the same detail. A very large increase of consumption has followed the reduction of duty, and the admission of Mauritius and Bengal sugar. The consumption was in 1843, 200,000 tons; in 1853, 370,000; in 1860, 440,000 tons; but the duty is still too high, being 50 per cent on the gross market price. The cost of sugar consumed in 1860 was—price in bond, £12,000.000; duty, £6,000,000; together, £18,000,000; and the cost of tea consumed was—price in bond, £5,000,000; duty, £5,000,000: total, £10,000,000. Thus—
First wholesale cost, the retailers profit to be added. This is a marvellous amount, partly owing to increase of population, but mainly owing to the increased ability of the people, consequent upon the extension of commerce by free trade, a very gratifying result of that policy.
Sugar. Tea. Total. Duty £6,000,000 £5,000,000 £11,000,000 Cost £12,000,000 £5,000,000 £17,000,000 Total £18,000,000 £10,000,000 £28,000,000 I may give another instance in coffee, which is not in the same universal demand as tea and sugar. In 1800, the consumption was 750,000lbs.; in 1860, 40,000,000lbs. The duty in the first period at 1s. 6d. per lb. was £12,000; in 1860, the duty at 3d. reached £500,000. I will now refer to the Acts imposing Customs Duties on tea and sugar. Tea, by the Act of 1853, to pay 1s. 10d. per lb. until it gradually descended in 1856 to 1s. per lb.; but the decline in 1854 was arrested and 1s. 9d. imposed, but to continue only till twelve months after peace with Russia; in 1857, to be 1s. 3d. per lb; in 1858, and after, 1s. per lb. Another disappointment oc- 230 curred, in 1857 the duty was altered to 1s. 5d. per lb., which in 1860 was again continued till the 1st of July, 1861, and it is now to be hoped these repeated disappointments will not be continued. The duty on sugar, which in 1852 had descended to a uniform rate of 10s. per cwt., was raised in 1854 to a complicated differential scale of about 14s. per cwt., varying from 18s. 4d. to 12s. 8d. per cwt. This mode of assessment is very inconvenient and uncertain, and encourages the production of a lower quality of sugar to save the higher rate of duty, while a fair uniform rate encourages the importation of the best sugar, and I hope before the expiration of the Act on the 1st of July next this grievance will be remedied. The progress of the trade with China since the abolition of the East India Company's monopoly is well worthy of observation. The India Company imported annually about 3,000 bales of silk. In 1860, free trade brought us 70,000 bales, increase more than twenty fold: value, in the East India Company's time, £300,000; in 1860, £7,000,000. Likewise in tea—it was said by the Company Free-traders would not be able to procure tea, and the quality would be inferior; the result is, as good tea comes in abundance, and, while the annual supply by the East India Company was 24,000,000lbs., in 1860 we imported 92,000,000lbs., the increase being nearly four-fold. But it may be asked if silk, a luxury, has increased so enormously, why has not tea, a necessary of life, increased in the same proportion? The great reason is silk was then subject to a high duty on importation—it is now entirely free, while tea is still taxed more than 100 per cent. I will now very briefly draw attention to the large amount of shipping engaged in carrying these two commodities. Tea, 95,000 tons; sugar, 440,000 tons; together, 535,000 tons; and I contend that this tonnage is susceptible of great extension by a reduction of duties. Even the addition of 1,000,000lbs. of tea gives employment to 1,000 tons of shipping. Let the duty be made 1s. per lb. on tea; the duty on sugar uniform at 10s. per cwt., and the good effects will soon appear. I beg to thank the House for this patient hearing, and I will conclude by addressing a few words to the right hon. Gentleman the Chancellor of the Exchequer. I do not ask him to give me any answer now, but I do earnestly entreat him to ponder these facts during the rather long Easter recess. I hope he 231 will proceed in that course which he has so ably and successfully pursued in the reduction of Customs' duties; and especially with regard to tea and sugar, I ask him to consider the commercial, the shipping, the social, the moral, and, for his revenue, even the fiscal bearings of this subject: and I do hope on all these grounds he will give further encouragement to "The cup which cheers but not inebriates."
§ THE CHANCELLOR OF THE EXCHEQUERAs it would have been very disagreeable to me to decline any request proceeding from a Gentleman so much respected as my hon. Friend (Mr. Gregson), I am exceedingly glad that he does not ask for an answer to his statement. It would have been quite out of my power now to enter into a discussion of any subject connected with the duties upon tea and sugar. The facts given as to the growth and the consumption of tea and sugar, and as to the trade with China, are facts of the highest interest and importance, and I am only sorry that there has not been a more favourable opportunity of bringing them under the notice of the House, proceeding, as they did, from one who is entitled to speak with the highest authority upon the question. To one administrative question relating to the classification of the duty upon sugar, apart from the amount of the duty, I may for a moment refer. With respect to that, I must remind my hon. Friend that it is a subject of the greatest difficulty; that it embraces not merely the classification or non-classification of the lower descriptions of sugar, but, likewise, whether the uniformity of duty for which he would call is to be extended to refined sugar or not; because the duty upon unrefined and refined sugar is a matter of degree just as much as the difference between different sugars of any other classes. This being so I am not sanguine that the difficulty will within any reasonable time be entirely overcome.
I now proceed to answer what has been said by my right hon. and gallant Friend (General Peel). He is not precisely accurate when he represents me as saying that no portion of the £850,000 Vote of Credit for 1859–60 would be applicable to defray in part the £610,000 claim which was coming in from the Indian Government. That is little more than I stated. What I said was that with regard to the £430,000, which was the most bulky item of that claim, I did not conceive it to be a proper object of the Vote of Credit of 232 £850,000 to provide for meeting that sum; nor, indeed, I may say, to meet the Indian claim, excepting in a very small degree. I do not agree in the opinion that when a certain estimate is framed as to the amount of any amount of incoming claim the amount of that estimate ought to be asked from Parliament forthwith, irrespective of the period when demand for payment is likely to be made. I may be wrong, I do not know of any absolute rule in the laws of this House or in the law of the land which determines the principle; but, undoubtedly, I have always, generally speaking, considered it to be the duty of the Government to ask the House from year to year to meet what is likely to be the probable demand upon the Exchequer within the year for each particular service. Consequently, if we had attempted to found a statement for a Vote of Credit for £850,000 in 1859–60 upon a notice from the Indian Government that early in 1860-61 they considered they would be in a condition to make that claim, we should, in ray opinion, have committed a great error. I do not say that we had a discretion, and exercised that discretion in a particular manner, for, upon that point, I think we had no discretion. There is another point to which I may refer. I do not think my right hon. and gallant Friend takes an altogether accurate view of the responsibility of the Treasury in proposing Votes of Credit. In my opinion the primary responsibility for proposing Votes of Credit rests with the military department, and the responsibility of the Treasury lies in the manner in which they deal with the demands made by the military department. If, for example, the Treasury undertook to cut down the demands made by the military department, it would incur serious responsibility, and would be exclusively bound to show the grounds upon which. those demands were cut down. The primary responsibility as to the sufficiency of a particular Vote of Credit lies with the particular department in which the demand originates. However, as regards the £850,000, we acted with strict propriety in bringing together first of all the demand made by the War Department; secondly, the demand made by the Naval Department, and in adding, thirdly, a small residue on account of any possible charge in India, or rather by way of margin, over and above these demands. My right hon. and gallant Friend then says—" If you had in view a demand 233 amounting to £500,000, which was not provided for by the Vote of Credit in the year 1859–60, why did you come to Parliament at the time of our Budget for so small a sum on account of China as £500,000, which sum undoubtedly did not include a margin to cover that demand? "My answer is two-fold. In the first place, at that period—namely, in January—I had not the smallest means of judging from former practice, and from the system pursued in the settlement of accounts between the Indian and the British Governments, as to the time when the demand from the Indian Government would be made. It is true it was to be made in respect of expenditure incurred by the Indian Government for an expedition to sail in May, 1860; but I ask my right hon. Friend to look back at the manner in which the whole of these war accounts have been conducted between the two Governments for a series of years. I beg him to bear in mind the principle I lay down, and which I am prepared to defend—namely, that it is the business of a Government to ask in each year for the sums which will probably be payable within the year; and then he will see that the question whether that particular sum would be claimable and claimed even in 1860–61 was a question of a very shadowy description and exceedingly difficult to deal with. It is true we have now materially altered that system, and, that though the formal settlements of accounts with the Indian Government are still unsatisfactory, yet we are paying up with great comparative rapidity, so as not to be heavily indebted on account of charges incurred. But that is a practice which grew up only in the course of the last year. At the time we speak of the orders had hut recently been sent out, That is the first element of my answer to my right hon. and gallant Friend. But there is another most important one. When we asked Parliament for £2,500,000 for the expenses of the Chinese expedition, that was an arrangement based strictly upon the facts before us—namely, that we had failed to obtain the ratification of the Treaty of Tien-tsin, and had in consequence ordered an expedition of considerable numbers and charge to go to China. But the calculation was not based on the knowledge of the contingency of absolute war. There are some hon. Gentlemen here who saw—after the fact—that war would occur; but, even had we been among the fortunate individuals who foresaw what would take 234 place in China, we should not have been justified in asking Parliament to provide a war expenditure till we were certain there would be war. But, suppose the war had not broken out, the question was would the Treaty of Tien-tsin be ratified? If it had been, then, in a few months we should have come into the receipt of a considerable sum of money from the Chinese Government that would have been applicable to the Ways and Means of 1860–61. There would have been ample means from that source of covering the outside of the Indian demand. That is the answer I must give the right hon. Gentleman. Looking back at the circumstances of the time, I do not think we should have been justified in asking Parliament for a larger sum than we did ask on account of the expenditure for the Chinese expedition.
With regard to the question raised by the hon. Gentleman the Member for Stamford (Sir Stafford Northcote) it was quite a different one. It would be unreasonable to complain of the hon. Gentleman raising a discussion upon it. He is one of the few who are acquainted with the dry details of accounts, than which nothing is more difficult to make intelligible across the table. But I think the principle he lays down as to Votes of Credit is entirely wrong. He says we asked for a Vote of Credit of £850,000, and that in doing so the Secretary for War was bound to state as clearly as possible the reasons for asking for it. The hon. Gentleman also says that this information having been given, the money is to be considered as a formal addition to the Vote for the two services, and that the Government is not at liberty to use the money except according to the explanation. But all the information respecting this war expenditure was essentially uncertain, and to say that giving that information tied up the hands of the Government—the same as if half a million had been added to the Vote for the army and a quarter of a million to the Vote for the navy—is a doctrine that would destroy Votes of Credit altogether. The Government must have a larger discretion in the application of the money between all the services engaged in the operations of the war. If the hon. Gentleman's doctrine is a sound one, no such thing as Votes of Credit can be asked of the House of Commons. But, as this subject is to be referred to a Committee which will examine the accounts, I shall be happy to render every assistance to the elucidation and dis- 235 cussion of the matter. It is one of great importance; but the principle laid down by the hon. Gentleman is wholly opposed to the public convenience and the practice and usage of all Governments. The time is near when the army account will be closed, and only then can the real issue be raised.