TOBACCO MANUFACTURERS. (Hansard, 25 May 1830)

§ Mr. Chas. Calvert
in moving that the Petition from the Tobacco Manufacturers of London, Westminster, and Southwark, praying for Repayment of the Duty which had been paid on Stock prior to July 5, 1825, and presented on February 17, be referred to a Committee, observed, that he made that Motion from a conviction impressed on his mind, as well as on the minds of the 1112 petitioners, that such a course would be advantageous. The petitioners before brought forward their case, and he regretted to state, that in their opinion it was not attended to in that quarter to which they naturally had recourse. In order to make the case of the petitioners intelligible, it might be necessary for him to state, that they were manufacturers of an article, the first cost of which bore no proportion to the duty. The duty on Tobacco, in fact, was equal to 1,600 per cent on the prime cost. Under these circumstances, it was quite evident that there must be at all times a great anxiety on the part of the manufacturers of Tobacco, to know whether any alteration was intended to be made in the duty. Accordingly, early in the year 1825, applications were made to the Government, to ascertain that point, and the Tobacco manufacturers were informed that it was not the intention of the Government to make any alteration. Owing to these assurances, the manufacturers were induced to lay in their stocks, paying duty to the amount of 4s. per pound; but, by some neglect, the duty of 1s. in the pound, the last duty laid on Tobacco, was not renewed, and the duty payable by law amounted only to 3s. per pound; being 25 per cent less than the duty which the Chancellor of the Exchequer stated it was the intention of the Government to continue. On the 2nd of August 1825, it was discovered that, by an omission of the annual Act of Parliament, the Government had been improperly receiving 4s. in the pound duty subsequent to the 5th of July; the duty payable by law being 1s. less than it was the preceding year. The Government was, of course, bound to return the excess of duty received subsequent to the 5th of July; and it did so, but very large sums were lost by those who purchased their stocks previous to the 5th of July, on the assurance that no alteration was contemplated. The loss certainly fell on but a few persons, but it was very hard on those few. One of the petitioners, whom he knew, lost a very large sum of money by these means. Representations had been made by the manufacturers to his Majesty's Government on the subject; but they had not been attended to. It was not necessary for him to enter further into the particulars of this case, as he thought that he had sufficiently stated the grounds on which he asked the House to sanction the appoint- 1113 ment of a Select Committee. The case of the petitioners had not been sufficiently and effectually investigated, and the only way in which it could be was by the appointment of a Select Committee. He had no doubt that, from the hands of such a committee, the petitioners would obtain that justice they had so often claimed, but which hitherto they had been so unfortunate as not to obtain at the hands of his Majesty's Government. In conclusion, the hon. Member moved "That the said Petition be referred to a Select Committee, to examine the matter thereof, and to report the same, with their observations thereupon, to the House."

The Chancellor of the Exchequer
said, he was far from thinking that a Select Committee was necessary in this case, and he hoped that he should satisfy the House, that the question lay in so narrow a compass, and the facts were so plain and simple, that it might come to a decision at once, without the intervention of a committee, as to whether the prayer of the petitioners ought to be granted. As his hon. friend had stated, in the year 1825, by an accident, the duty on Tobacco, which it was intended to continue at 4s. was fixed at 3s. per lb.; and the statement of the petitioners was, that as they were induced to lay in a stock, by the assurance of the then Chancellor of the Exchequer, and that as they had paid the full duty of 4s. on the stock in hand, twenty-five per cent should be returned to them. The petitioners, in consequence of this supposed claim, applied to Viscount Goderich, who was then Chancellor of the Exchequer. Representations had also been made to his right hon. friend near him, when he held the office; similar representations were, he believed, made to Mr. Canning; and repeated applications had been made to himself. The question had been so often discussed, that he had replied to the petitioners, that it was not thought necessary to disturb the decision already come to by the Treasury. In giving that answer, no disrespect whatever was intended to the petitioners, but a decision having been come to, after full deliberation, he should not have been justified in departing from that decision, confirmed as it was by the views of successive Chancellors of the Exchequer. It might be well to consider a little on what principle the petition claimed the return of the duty paid by them on the stocks which they had 1114 on hand previous to the 5th of July 1825. It had usually been considered proper, that when a duty was lowered, the manufacturer should have the surplus duty on the stock in hand returned to him, or be allowed sufficient time to get rid of it. In the year 1819, when the duty on tobacco was increased from 3s. 2d. per lb. to 4s. no charge was made on the manufacturers for the stock in hand. They had the advantage of buying it at 3s. 2d. to sell at 4s. and now when the duty was reduced from 4s. to 3s. what claim had they that the difference should be returned to them? But there was even a stronger case against them. The duty of 4s. ceased on the 5th of July, and the error was not discovered until the month of August. Up to the month of August, therefore, the petitioners were selling this Tobacco to the public under the impression that the duty was 4s. per lb. Every pound sold to the public previous to the 2nd of August, was charged as if the duty were 4s. per lb.; but yet, when the mistake was discovered, the manufacturers were returned the whole of the duty which had been erroneously received. The sum returned, was between 59,000l. and 60,000l., although the manufacturers had received in retail, the whole sum charged in the interval between the reduction of the duty, and the discovery of the mistake. The manufacturers charged the public the full duty of 4s. and recovered back what they had paid above 3s. Under those circumstances, the House would come to the conclusion, he hoped, that the petitioners had no just ground for the claim they had made, and would agree with him, that there was no ground for referring a question so simple to a committee. In his opinion, the claim of the petitioners was not entitled to any further consideration than it had already received.

§ Mr. Charles Calvert
said, that he was not a little surprised at the manner in which the right hon. Gentleman had met this Motion. He alleged, as a reason for doing injustice in 1825, that no additional charge had been made on the manufacturers for the stock in hand, when the duty was raised from 3s. 2d. to 4s. in 1819. What had the manufacturers of 1825 to do with the manufacturers of 1819? They were not the same persons. The case of the manufacturers of 1825 was this; upon the express assurance of the then Chancellor of the Exchequer, that no al- 1115 teration would take place, they laid in large stocks; and subsequently, contrary to the assurances on which they acted, the duty was reduced 25 per cent. The right hon. Gentleman said, that the excess of duty paid between the 5th of July and the 2nd of August, had been returned. That duty was received contrary to law, and the Government was bound to return it, so that the right hon. Gentleman must not take any credit for the return of that duty. Nor was the sum returned all profit to the manufacturers. They were bound to make allowances to retail dealers all over the country, to whom they had retailed tobacco subsequent to the 8th of July, and before the mistake was discovered. He would undertake to prove, that between 50,000l. and 60,000l. had been lost by the manufacturers. Tobacco required only three days to manufacture it, but snuff took nearly six months. During the whole time, therefore, that the snuff manufactured from tobacco, purchased under the circumstances he had stated, was in a state of preparation, the manufacturer was losing 25 per cent. He did not. propose that this House should vote an allowance to the parties who had suffered this loss, but if the House granted a committee, he had no doubt that the opinion of that committee would be, that Government was bound to make good the actual loss suffered by the petitioners. The situation in life of these petitioners, and their commercial respectability, certainly made him desirous of taking the opinion of the House on the subject.