HC Deb 28 February 1831 vol 2 cc1045-53

Lord Althorp, in moving that the House go into a Committee on the Excise Acts, said, his object in doing so thus early was to state definitively what the Government intended to propose with respect to the duty on Printed Calicoes. He adopted this course in order to put an end to the suspense which prevailed in the trade with respect to the amount of the duty to be taken, and the time drawbacks were to be allowed. Great objections had, he admitted, been taken to the original proposition but after repeated discussions, and much consideration of all the bearings of the question, he was happy to say, that an arrangement had been come to with the gentlemen engaged in the trade, which he hoped would prove satisfactory. He admitted freely that the tax on printed calicoes was an impolitic one; but he thought the tax on raw cotton a good deal less so than one on the manufactured article, although he conceived it to be the duty of any Finance Minister of this country to get rid of it as soon as the circumstances of the country would allow him. The mode of taking the duty on raw cotton at present was by a charge of six per cent ad valorem. Now, he proposed to take the duty off printed calicoes, and lay a duty of five-eighths of a penny per pound on raw cotton. He had originally proposed a duty of one penny; but, in compliance with the wishes of the trade, he now consented to throw off three-eighths from that proposition. This duty was, however, not to be levied on Colonial cotton, which he left unaltered. He had paused a good deal with respect to the question of drawback on the stock on hand, but after the best consideration he had been able to give the subject, he had come to the conclusion, that the only way to do justice to the public, and at the same time to preserve the interests of the Government, was to take the duty off printed calicoes immediately, and allow the drawback for three months. He knew well that some loss would be sustained by the manufacturers, but it was impossible to avoid it. They heard every day that the taking off a tax was not always attended with the lowering of the price of an article, and as the price was not expected, therefore, to fall immediately, the loss would not be so great as some persons apprehended.

Mr. Goulburn

did not rise to object to the noble Lord's proposition, but. as it was stated by the noble Lord, when he brought forward the Budget, that the loss from the repeal of the: tax on printed calicoes would amount to 500,000l., and that he would be unable to make good that loss without a duty of one penny per lb. on raw cotton, he wished to know, now that the noble Lord had reduced that duty to five-eighths of a penny, how the sum was to be made up, when even the increased tax on colonial cotton was also to be deducted from the anticipated amount? He did not object to the arrangement of the noble Lord; but when he saw how very small a surplus of revenue was provided for the year, he certainly felt anxious to know how the deficiency produced by this change, which he took to be 250,000l., was to be made good. It was true, that there were two hundred millions of pounds weight of cotton imported, and that the duty on that would be 500,000l., but then, by the duty of six per cent to be repealed, there would be a loss of 250,000l. With respect to the system of drawbacks, he knew it was extremely difficult to deal with it; but he confessed he saw much to object to in the plan of allowing the drawback for three months on the export of calicoes already printed. At the present moment, the law allowed an unlimited period for the export of printed calicoes, but if the drawback was to be allowed for three months, no longer than three months, he thought it would be very easy for persons engaged in the trade to print calicoes, and obtain the drawback, in the same manner as if it had been printed before the alteration. He did not, in fact, understand at present how frauds on the revenue were to be prevented.

Mr. Alderman Waithman

was not opposed to the slight increase of duty on the raw material, but he objected to the term of three months for claiming the drawbacks. The necessities of the trade required six months, and he thought that the wishes of men in business should be attended to. There was another point, however, relative to the stock on hand, which he thought worthy of attention. He knew from the best authority, that the quantity of printed calicoes in England at the present moment was equal to the whole of one year's home consumption, and therefore, if the duty was taken off, without making them any allowance, he might fairly calculate the loss of the holders of these calicoes at 500,000l. It was, indeed, plain, that if a large quantity of goods were thrown upon the market without paying any duty, that there must be a loss equal to that duty, on all the goods on hand which had paid it. But it was not the calico printers, nor the merchants who would suffer most; the retail dealers were the persons who would be most affected. He knew, indeed, twenty- two persons engaged in the country trade, whose stocks amounted to 160,000l., and whose loss would amount, to 38,000l. by taking off the duty. It might happen, that some of these individuals were not in prosperous circumstances, and a loss which the most opulent could ill bear, would ruin them. Such parties were well entitled to compensation. Why should any man in a small way of business lose 30l., 40l., 50l., or 60l., by a change in the measures of the Government? One of its own servants, who was to suffer such a loss by a change beneficial to the whole people, would demand a compensation, and he would find advocates in that House to talk of his vested rights. These retail traders were already exposed to heavy losses: by the changes in the seasons, and by public mournings they had suffered very severely; by the change in the currency the prices of all their goods had fallen after they had bought them, and thus, therefore, this was not the time when the retail trader could bear additional losses. He had occasion lately to inquire into the state of trade, in consequence of a motion with respect to the Assessed Taxes, and he found that in one, the most leading street in the Metropolis— he need not name it—there were 300houses, and yet there had been 178 failures in the course of five years. He entreated the noble Lord to review his decision with respect to the drawbacks.

Mr. A. Campbell

was enabled to say, on the part of the calico-printers of Glasgow, that if sufficient time were allowed for the drawback duty on the stock on hand, the noble Lord's measure would be beneficial to the trade: but if sufficient time were not thus allowed, serious injury to many in the trade would be the consequence.

Mr. Wilson Patten

hoped that the noble Lord would come to some definite final arrangement with respect to the duty, as, at present, the trade was at a standstill, and would be so till Ministers had decided one way or another.

Lord Stanley

was glad that he was enabled—having attended several deputations of the Manchester cotton manufacturers which waited on the noble Lord, the Chancellor of the Exchequer—to say, that, as a whole, the noble Lord's measure was satisfactory to himself and his constituents. The abolition of the duty on printed calicoes they received as a great boon, and he had communications in writing from the trade, to say, that they regarded the whole measure with approbation, though they wished the noble Lord could have dispensed with the additional tax. He trusted, however, that five-eighths of a penny duty on raw cotton would be only a temporary tax, to be wholly dispensed with when the revenue was more flourishing.

Sir R. Peel

should have much preferred a duty on the printed calicoes to the noble Lord's tax on the raw material, even though the tax were to be but a temporary one, because the encouragement just now bestowed in France and America, on the manufacture of cotton, should make us very wary as to the imposition of any new impediments in the way of our own domestic manufactures of that article. This was not, however, the point to which he then wished to particularly direct the attention of the House, with reference to the noble Lord's proposed reduction and substitution of duty. The noble Lord had not informed them how he meant to make good the deficiency which would accrue to the revenue from his change from an ad valorem duty of six per cent on the manufactured article, to a duty of five-eighths of a penny on the raw cotton. That loss would be, as he should presently show, not less than 250,000l.; and when this sum was added to the defalcation which would ensue from the repeal of the duties on coals and candles, there would remain a total loss to the revenue of 1,200,000l., which he knew not how the noble Lord could compensate. Then, let them consider how his proposed drawback duty would also affect the revenue. That drawback was to be in force three months,—that is to say, that though the five-eighths of a penny duty on raw cotton was nominally to commence from the present day, the revenue would be at a certain loss for three months, without any counterbalancing advantage. Now, that the amount of this loss would be very considerable was evident from the sum paid as drawback allowance last year. The ad valorem duty last year amounted to 1,942,000l.; the drawback allowance on exports to 1,390,000l.; leaving a clear nett revenue of 552,000l. Supposing, then, that exports of printed calicoes for the ensuing three months, during which the drawback allowance was to be in force, would be only one-fourth of the amount of last year, it was plain they would be much more, inasmuch as the drawback for a limited period must operate as a stimulus to the exports during that period. There would be an actual loss to the revenue this year of 347,500l. Again he must say, he knew not how the noble Lord proposed to make good the deficiency from the revenue which his measure would occasion.

Lord Althorp

begged leave to say, in answer to the hon. Alderman (Waithman) opposite, that he did not extend the period for allowing the drawback beyond three months, because on inquiry he learned, that that time would be sufficient for disposing of the stock of printed calicoes now on hand. With respect to the observations of the right hon. Baronet who had just addressed the House, all he had to say was, that he was not unaware that his drawback allowance would occasion a certain temporary loss to the revenue; but, besides that the loss would be but temporary, he was sure it would be much less than the right hon. Baronet estimated. To extend the period of the allowance would be, pro tanto, equivalent to a repeal of the tax altogether,—a repeal which the revenue could not at present admit of. He therefore felt himself bound to have it in force but for a short definite period, hoping, that though at the outset the revenue would be a loser, it would ultimately be considerably a gainer from the increased consumption of manufactured cottons. But, the right hon. Baronet asked, how are we to make good the loss in this year to the revenue from the change? In answer, he must remind the right hon. Baronet, that when he submitted his financial statements, some ten or twelve days ago, to the House, he laid down the probable loss to the revenue from his reductions at the highest possible rate,—that is, he estimated it from the consumption of last year, without at all taking credit for the increased consumption, and thence increased revenue, consequent upon a reduced duty on the articles he proposed for reduction. Now, if the probable amount of increased consumption of printed calicoes, consequent upon a reduced duty, were taken into account, it would be seen, that the right hon. Baronet had much over rated the loss which the revenue would experience, even this year, from his proposed measure, while the revenue must, in the face of the matter, be a gainer henceforward. Then it must also be recollected, that when stating the losses to the revenue which his relief to the general consumer of the articles, the duty on which he proposed to reduce would occasion, he took credit for a new revenue of 1,200,000l. from a one-half per cent transfer tax; and that, having abandoned that, he felt himself compelled to relinquish his intended reduction of duty on tobacco and glass, from which reduction there would have ensued a loss to the revenue of 1,400,000l., that is, 200,000l. more than his transfer duty would have furnished him. Then, with respect to the cotton duty now under consideration, he maintained, that the rated duty on the raw article would be much more productive to the revenue than the ad valorem duty for which he substituted it; besides that, the cost of collection would be saved; and he, therefore, was warranted to take credit for this increase, the rather, as he was confident that the right hon. Baronet's estimate of loss from the drawback during three months would be found in the sequel to be much too high. He was aware, however, that he ran a slight hazard from his proposed reduction, but he trusted that if the House would go with him the whole length of his plan, it would be found, that while the revenue would be the gainer ultimately, the general comfort and prosperity of all classes would be essentially promoted.

Mr. Goulburn

could not see what advantage could accrue from a rated duty which the present ad valorem one did not possess. It could not be one of certainty, for nothing was easier to estimate than the ad valorem amount on the 214,000,0001b. of cotton which this country annually imported, exclusive of the produce of our East India colonies.

Mr. Alderman Thompson

regretted very much that the noble. Lord had not allowed a drawback on the export of the manufactured cottons on hand, with an option to the holder to pay half the duty should he retain his stock for home consumption. As the noble Lord had not consented to the propositions of the London dealers, he was sorry to say, that he could not express the same satisfaction with the measure, as the member for Lancashire. He had no objection to offer to the principle of the five-eighths of a penny duty on the raw article.

Mr. P. Thomson

begged leave to remind the right hon. Baronet (Sir It. Peel) opposite, that when he talked of the necessity of our guarding against the consequences to our domestic cotton manufactures, which the anxiety of the French to encourage such a manufacture would point out, that there was a tax of 1¼d. on all raw cotton entering France, which, when we took into account our superiority in machinery, fuel, &c, would be found much more than proportionate to his noble friend's five-eighths of a penny duty. He was more apprehensive of the United States than of France, particularly as to coarse cottons, but he did not think that even the Americans would injure us. Then as to the assertion of the right hon. member for Armagh (Mr. Goulburn), that the ad valorem duty must be as productive as the proposed rated duty, it was sufficient to say, that the ad valorem duty was but six per cent—that is, three-eighths of a penny per pound, while the rated duty would be five-eighths of a penny on the same amount of imports, not to say anything of the 30,000l. a-year that would be saved by the collection of the latter form of duty. The right hon. Member assumed also, that the quantity of East-India cotton imported was greater than it actually was. He calculated on an addition to the revenue from an increased consumption of cotton which last year was 238,000,000lbs. A considerable sum also would be saved by saving the drawbacks on soap and starch. Taking into account all circumstances, he did not think that the loss to the revenue would exceed 130,000l.

Mr. Whitmore

was happy to hear it admitted, that this tax was one which ought to be removed whenever the improvement of the revenue would permit. At the same time he regretted that the noble Lord should find it necessary to propose an additional duty on the raw material, which he for one would not assent to, but in the hope that it would only be temporary.

The House then went into Committee.

Lord Althorp

proposed a Resolution, that the duties of Excise now payable on Printed Calicoes, &c, and the drawback on the exportation thereof, do cease and determine. It was not usual to state the time when they would determine in the present stage of the measure. It was usually fixed in the Bill.

Mr. Hume

rejoiced in the course now taken on the subject by the noble Lord opposite, and did not participate in the fears of those who apprehended a great defalcation of the revenue. He was sure that the duty on raw cotton would be only temporary. He thought that the manner in which the stock in hand was to be treated, was a very great hardship on the holders, and he hoped the noble Lord would find means of giving them relief before the Bill passed. He concurred, however, on the whole, in approbation of the measure then in progress.

Mr. Bernal

wished that that noble Lord would grant a drawback or allowance to the retail dealers for their stocks on hand; otherwise, many of those persons, who could ill afford it, would suffer great losses, and might be ruined. In his opinion, the Chancellor of the Exchequer would not surrender one iota of the manliness of his character, if he had yielded to the representations made to him on this subject.

Mr. J. Wood

rejoiced that the duty had been taken off the printed calicoes, and regretted that any duty had been laid on the raw article. The merchants were inclined to feel satisfied with this tax, because they understood that it was to be only temporary. Like other hon. Members, however, he must regret that an allowance was not made for the stock in hand. By not doing that, some persons would lose 5,0001. or 10,000l., which was a fortune.

Mr. Alderman Waithman

mentioned several houses which would suffer materially from not having the drawback allowed on the stock in hand. He hoped that the noble Lord would do something to assist them. He wished to know whether the noble Lord had made up his mind to adhere to his present proposition.

Lord Althorp

said, that on the best consideration, he was determined to stand by that which he had already proposed, namely, to allow a drawback for three months on goods printed for exportation since January, 1830. He believed that goods made for the home market might be exported to save the loss, and he was sure that if he made any allowance for the stock in band, he should open the door to an immense deal of fraud.

Mr. Robinson

concurred in the proposition of the noble Lord, and stated, that he thought it would be wise, in order to prevent clamour, if the House would lay down some certain rule as to allowing drawbacks when duties were remitted.

Mr. Goulburn

suggested, that as there was no duty whatever on printed cottons in Ireland, the dealers of Manchester would be induced to ship their goods to an immense amount at Liverpool, and so transport them, by means of steam-boats, to Dublin, on the chance of a sale in the sister kingdom during the three months which would elapse before the allowance of a drawback was to be discontinued, or bring them back to dispose of in the English market. The parties would gain the drawback, which would cover their expenses, and allow them a handsome profit. He had always thought this duty on printed cottons highly objectionable; but the question was, what other duty would they find more eligible to substitute? and that question he candidly confessed, it was not in his power to answer. He wished to know when the remission of the duty was to commence?

Lord Althorp

replied immediately.

Mr. Spring Rice

supported the Resolutions, on the ground that a permanent grievance was worse than a temporary inconvenience, which would be amply counterbalanced by the benefit that would hereafter accrue from the policy of Government.

Lord Althorp

admitted, that some inconveniences would result from the change, but not to the extent supposed by the right hon. Gentleman. He took that opportunity to state, that it was not his intention to abandon the Timber Duties with their proposed alterations; on the contrary, he would bring the subject, before the House on Friday, if there should be time after the discussion of the Colonial Trade Bill, already appointed for that day.

Resolutions agreed to, and the House resumed.