DUTY ON SOAP.

HC Deb 28 February 1832 vol 10 cc898-908

Mr. Alderman Thompson

rose to propose a modification of the Duty on Soap. It was certainly with some diffidence that he proposed to deal with an item of revenue of so large an amount as 1,200,000l., especially when the expenditure of the country last year exceeded the income by the sum of 700,000l., and when, according to the Estimate of the noble Lord opposite, the surplus of income for the current year would be so small as 165,000l. However, he would not propose to sacrifice any portion of revenue without providing an equivalent for it. He would never advocate any measure which would injure public credit, for the honour and character of the country depended on that, being supported. It was his opinion that the plan which he was about to propose would put an end to the competition which at present existed between the fair and the dishonest manufacturer, and that was his chief inducement to bring it forward. The duty at present laid upon soap amounted to 100l. per cent. It was not an ad valorem duty, but a rated duty of 3d. per pound. This duty operated most unequally, for upon the inferior kinds of soap it amounted to 120 per cent, whilst upon the superior kinds, which were exclusively used by the wealthy classes, it was only seventy per cent. In Ireland no duty whatever was paid, and the English and Scotch manufacturers received back the full amount of the duty they paid when they exported soap to that country. The consequence was, that an immense contraband trade was carried on with Ireland. For this purpose the steam communication between Liverpool and Ireland, and the coast of Scotland and the north of Ireland, afforded great facilities. It appeared from papers before the House, that in the last year the amount of soap exported to Ireland, on which drawback was paid, was nine times greater than in 1828, in the former year the quantity was, 301,346lbs.; in 1829, 947,926lbs., and in 1830, 2,551,000lbs. This extraordinary increase of export could only be accounted for by supposing the existence of an extensive contraband trade. The soap, in fact, was not consumed in Ireland, but smuggled back to England, and re-exported to Ireland, and another drawback paid upon it. He would now call the attention of the House to the manner in which the system worked in England, and he thought he could satisfy the House that one-third part of the soap consumed in England did not pay duty. The population of England and Scotland, according to the census of 1821, consisted of 14,118,638 persons, which were, by the tables of the the Statistical Society published in 1827, divided into seven classes, consisting of 2,941,383 families, and whose consumption of soap, according to an Estimate which had been formed by very competent persons, after great labour and research, was as follows. But it was material first to state what the actual consumption of soap had been in the workhouses of six of the most populous parishes in England for each person, viz., Manchester, Salford, Lambeth, Whitechapel, Norwood, and Christchurch: the average consumption of each inmate per annum had rather exceeded 71b.— 1st Division.—The poorest class of peasantry and labourers, 3½b. each person per annum. 2d Division.—Labourers earning less than 12s. per week, workhouse allowance, 71b. each person per annum. 3d Division.—Labourers and artisans earning 12s. to 20s. per week, 91b. each person per annum. 4th Division.—Ditto, ditto, 40s. per week 121b. each person per annum. 5th Division.—Shopkeepers and others, whose incomes are under 400l. per annum, 151b. each person per annum. 6th Division.—Middle class, 24lb. each person per annum. 7th Division.—Upper class, 30lb. each person per annum.

The average quantity of soap consumed, according to the fore-going classification, would ex-

This result proved, that the average consumption by each person, of duty paid soap, was only about 61b.; which was less than the average quantity used in the six workhouses before referred to. This, he thought, was an unanswerable argument, that a great contraband trade was carried on in this article. He would now proceed to show how the alteration he proposed was likely to effect the revenue. His plan was, to reduce the duty on soap in England to one-half of its present amount, or from 3d. per lb. to 1½d., and to levy a duty of 1d. per lb. on Irish soap.

The net amount of duty received in 1831, at 3d. per lb. was		£1,283,458
Proposed reduction leaves half the duty	£641,779
Duty on smuggled soap 49,351,513lb.	308,446
Ireland, calculated at only half the consumption per head as compared with England and Scotland—say 51b. on 8,000,000—the last population return would yield, at 1½. per lb.	250,000
Increased consumption of soap—say, at least, 5,000 tons, at 14l. per ton	72,000
	1,272,225
Leaving only a deficiency of	£11,233

to cover which there would be the duty on the increased consumption of tallow, palm oil, and other foreign commodities used in the manufacture of soap. Another benefit which he anticipated from the reduction of the duty, would be the entire suppression of smuggling and all its demoralizing effects. It had been asserted that it would be better to remove the tax altogether, and substitute another on all the foreign articles from which soap was made, but he had great objection to taxes on raw materials, and, therefore, he could not agree to that assertion. With respect to the manufacture of the article, every thing tended to convince him that a very large illicit trade existed. Excise prosecutions were common, and the number of licenses had much increased. In the years 1824, 1825, and 1826, the average number granted was about 327; in the years 1827, 1828, and 1829, the average number was 584, each of which cost 4l. It appeared that forty-six of the persons who obtained those licenses only made in the whole about fifty-one and a-half tons, or on an average, about twenty-two cwt. each. It must, therefore, be obvious to any person that it could never be worth their while to pay 4l. for a license to make so small a quantity. The fact, he believed, was, that some of the soap maufacturers dealt in the contraband article, and the license was a convenient cover to their smuggling. On these grounds he submitted to the House, and to the noble Lord, the Chancellor of the Exchequer, the propriety of agreeing to his proposition. There never was a period when the reduction of the duty on this primary necessary of life, would be received with more gratitude than at the present moment, when it was declared by the highest medical authorities, that the best protection against the malady which was spreading through the country, was cleanliness. He concluded by moving, that "the House do resolve itself into a Committee of the whole House, to take into consideration the propriety of reducing the duty on hard soap manufactured in England and Scotland, from 3½d. per lb. to 1½d. per lb., and also, of imposing a duty of 1½d. per lb. on hard soap manufactured in Ireland.

Mr. Dixon

seconded the Motion; although he must be permitted to say, that he should prefer a tax on tallow if there was any deficiency in the revenue occasioned by the reduction of the duty on soap. He thought, at all events, the landed interest would be benefitted by that, as well as the public in general. There could be no doubt that a vast illicit trade had been carried on, when the duty amounted to 100 per cent upon an article of such primary convenience, and in such universal use.

Lord Althorp

said, that the form of the notice of the hon. Alderman did not lead him to expect that he would have concluded by a direct motion to repeal half the duty on soap; he had supposed merely that the hon. Alderman intended to take this method of stating the case on behalf of the soap manufacturers. His attention, however, had, for a considerable time, been directed to the question, and he was aware of all the facts connected with it. He would at once fairly own that the only objection he had to the reduction of the duty was, the risk to which it would expose the revenue: at the present moment, and with our present prospects, he should not feel justified in hazarding a sum so considerable. The hon. Alderman had argued that the loss at all events would not be large, but he had assumed also that the reduction to half the present duty would put an end at once to smuggling, which was by no means evident. He doubted the correctness of some of the hon. Alderman's calculations. It was ingenious enough to divide the community into classes, and assume the consumption to be 101b. each person on an average, but there was no proof of that. In fact, throughout, the hon. Alderman had been rather too sanguine in his anticipations, and the loss could not be compensated by a duty on tallow without thereby augmenting the impost on candles, for it must be recollected that this country did not produce enough tallow to supply her own consumption of that article, and a tax upon the importation of it, therefore, would have the effect of raising the price of all the tallow in the market to the extent of that duty. The consumers would be injured to that extent, and candles were as much in demand amongst the poor as soap. He was obliged unwillingly to resist the motion, as he had said before, merely on the ground that the executive government could not afford to hazard so large a sum: could it be done safely, he believed that it might be done advantageously.

Mr. Robinson

was of opinion that it was by no means expedient, in the present circumstances of Ireland, to impose a new tax upon that country, and would much rather impose a duty upon foreign tallow. It was not desirable that there should be different rates of duty in Great Britain and Ireland; but this was not the time to impose new taxes on the people of Ireland, as it would only tend to increase the discontent which prevailed to such an alarming extent in that country. He was aware that the Government was placed in a situation of great difficulty. On the one hand, the amount of our expenditure was at present so great, as to require the utmost care to prevent a defalcation in any branch of our revenue; while, on the other, there were many taxes which pressed heavily on the productive industry of the country—the removal of which would be attended with the greatest benefit. As to imposing a duty on Russian tallow, be would ask, whether it would not be wise to show that Government which had imposed almost prohibitory duties on the commodities of this country, that we had the power in our hands of retorting. The only mode by which Russia and other powers could be made just, was to adopt the principle of retaliation. That policy had been pursued towards the United States, and when that power imposed heavy duties on our ships, we prevented the American ships from trading with our colonies in the West Indies, and the American government was very soon glad to change its system. That he knew was contrary to the opinion of those who said "let us act upon a liberal system of policy, and in time we shall convince other nations of the folly of adopting a different policy; but he feared, however, that these anticipations would never be fulfilled. Individuals might be liberal; but nations would never act on such principles. Nations like individuals, ought to be just before they were liberal. When the noble Lord (Lord Althorp) sat on that side of the House, he supported the Motion of the hon. member for Dover, for an inquiry into the whole of our fiscal system, with a view to adopt some changes in the system of taxation, and he, therefore, trusted that the noble Lord would not now overlook the subject. He agreed with him that it was inexpedient to yield to the motion of the worthy Alderman at present, as it might lead to a serious falling-off in the revenue; although, at the same time, the greatest good would result from the repeal of the soap tax. But before any change was made, he would recommend the noble Lord to refer the whole of our fiscal system to the consideration of a Select Committee, with a view to improve it.

Mr. Hume

believed, that no one objected more to a tax upon raw produce than he did, but if ever a case existed, which would justify a departure from general rules, that case existed with regard to Russian tallow. Before, however, he touched upon that part of the subject, he must say a few words respecting the soap and other Excise duties. He believed that an Excise duty was never imposed upon a commodity, without materially deteriorating the quality of it. It was owing to the Excise duty on the manufacture of this article, that we had worse soap than any other nation in the world; he had been informed that the interference of the Excise in the manufacture was considered as equivalent to a charge of twenty per cent. He thought that the House, therefore, would be justified in calling upon the noble Lord for an immediate repeal of this tax. He understood that it was usual for the Excise officers to visit every tallow-chandler's shop, as they did before the reduction of the duty on candles, under the pretence that they were ordered to see that no soap was made on the premises. The expense, therefore, of the Excise officer, was the same, although the revenue had been greatly reduced. This was another ground upon which he pressed upon the noble Lord the propriety of reducing the duty on soap. With respect to the duty on foreign tallow; it amounted at present to 3l. 10s. a ton. The Russian merchant, also, had to pay to his government, on exporting tallow, a duty of 4l. 10s. a ton; and the probability was, if we imposed an additional duty on the importation of tallow, that it would compel the Russian government to remove that tax. He believed the average amount of Russian tallow imported into this country for the last few years was between 50,000 and 60,000 tons; yielding to the emperor of Russia a revenue paid by us of between 200,000l. and 300,000l. Nearly all the tallow exported from Russia was sent to England, so that we had it in our power to compel the Russian government to reduce this duty, or the Russian tallow would be excluded from our market, and then we might resort to other nations for a supply. In point of fact, we were paying a tax to a foreign State which we might, with little difficulty, secure for ourselves, and, at the same time, be able to remove a most objectionable tax. On such an account, he thought the noble Lord acted wisely last year, in putting a small duty on raw cotton in lieu of the Excise duty on printed cottons, as the latter tax was ten times more than the former. He knew that taxes generally on the raw material were objectionable, and he trusted that we should soon get rid of the duty on the importation of cotton, but it was infinitely better than an Excise tax upon a manufactured article. He was against a duty on soap either in this country or in Ireland, and he had hopes that we might soon get rid of the Excise laws altogether. At present we granted a drawback of 92,000l. on soap used in certain manu- factures; why should this favour be shown. All manufactures ought to be placed upon an equal footing with regard to the use of soap? It was said that if this duty was imposed, it would enhance the price of all tallow in the market. Our agriculturists would benefit by that, and the consumer would not be much injured, and we should be able to get rid of a most objectionable tax. From 80,000 to 90,000 tons were used, besides that which was imported, and a duty on imported tallow would not be so much felt by the country, as the present duty on soap—an article which everybody was obliged to consume. We should raise nearly the same sum of money by a duty on imported tallow, as by the duty on soap, and should free an important branch of industry from the trammels of the Excise laws. It was bad in principle to impose a duty on the raw material, but balancing that evil with the evils of the present Excise duty, the public would benefit by exchanging the last for the first. He hoped to see every branch of our manufactures free from the Excise, for it was only by giving industry and capital full play that any Chancellor of the Exchequer could hope to develope all the resources of the country.

Lord Robert Grosvenor

did not think any reduction of taxation expedient in the present state of the finances of the country, however desirous the House might be to afford relief to the poorer classes of the people, but he would readily admit that the duty on soap ought to be one of the first remitted.

Mr. Labouchere

thought it highly desirable that that tax should be reduced, as it was most impolitic to tax the necessaries of life, of which soap must be considered one. He regretted that the present state of the revenue rendered the question very difficult to decide. He was not friendly to commutation of taxes generally. It often produced injury without realizing the views of those who proposed it. He would recommend, however, a commutation of those which pressed upon the lower classes, and particularly of the duty on soap. It would be received as a great boon by the people.

Mr. O'Connell

said, the Irish soap manufacturers loudly and justly complained of the injuries inflicted on them by the present system. The importation into that country was immense, and the frauds considerable. The duty was calculated upon the size of the frames in which the soap was made, but the drawback allowed on exportation was paid in the real weight of the article, and the difference between these methods of calculation was fifteen per cent in favour of the latter. But, besides the bonus given to the Liverpool manufacturers for exportation to Ireland, another advantage was given to them, and it was, that the drawback was remitted immediately upon exportation, while the duty was not demanded for six weeks, during which time they had the use of the public money. But the Irish manufacturers had, besides, great reason to complain of the partiality of the officers of the revenue. They stated, among other matters, that when Mr. Woodbine Parish was sent to Liverpool to inquire into the subject, he called the soap manufacturers before him, and asked them whether any fraud was committed upon the Irish? They, of course, answered no, which he wrote down in his book, and so the matter ended. It was thus the interests of the Irish manufacturers were attended to. He had an opportunity of examining this Gentleman on the malt drawback Committee, and then ascertained that many of the most important questions relating to Irish manufacturers had been decided according to his recommendations. The present system was a bad one, but he preferred it to the introduction of Excise officers into every manufactory in Ireland. Although many of the manufacturers would consent to that alteration, the expense of it would cost more than the revenue collected. There was, however, no doubt that with the present high duties on soap in England, smuggling and all sorts of frauds would increase. In his opinion, therefore, a tax on tallow would be preferable to this duty, and, besides, it would be of some advantage to Ireland in another way, as they produced that article, and a tax on the foreign commodity would operate as a bounty to her on this account. He had heard the remarks of the hon. member for Middlesex with much pleasure.

Mr. Goulburn

said, he saw no opportunity in the present state of the finances of remedying the evils and frauds complained of by a reduction of this duty. He regretted that the noble Lord (the Chancellor of the Exchequer) did not avail himself of the recommendation offered to him last year, and repeal half the duty on soap, in place of the whole of the duty on candles. It would have conduced much more to the health, comfort, and cleanliness of the people, than the course adopted by the noble Lord. When the member for Middlesex recommended a duty on tallow, after having voted for the reduction of the duty on candles, did he suppose it would not increase the price of candles? There were 112,000,000lbs. of candles manufactured in this country, and taking 60,000 tons of tallow to be the quantity imported, was it to be supposed that a duty of twenty shillings per cwt. on that quantity, would not add very materially to the price of candles. And this duty would not prevent the export duty of 4l. 10s. a cwt in Russia being still continued. The only effect of the tax would be to enhance the price of tallow generally throughout the country.

Mr. Hunt

said, he was the first Member of this House to call the attention of Government to the duty on candles. He was grateful to the Ministers for taking off the duty, and he would not consent to any addition to the duty on foreign tallow. If the British consumer could not derive a benefit from a reduction of the duty on soap, he would not vote for it. Some other way of meeting the reduction of taxes might be adopted, such as a reduction of the salaries of Ministers and other public officers. However, as he was anxious for the consideration of the Reform Bill, and indeed for its success, he hoped the motion would not be pressed. So anxious was he for the success of the Reform Bill, that he would defer a motion of his own which stood for to-night till another period.

Mr. Briscoe

said, that protection should be extended to the manufacturers of soap in this country, if it were only to prevent smuggling, which was carried on to such an immense extent. He was sure, that the attention of Government could not be too speedily directed to this important subject. The remarks made by the hon. member for Kerry, relating to the manner in which the drawback was allowed, had made a considerable impression on him, so much so, that he thought a Committee up-stairs should be appointed to investigate the matter. In such a Committee, he believed, it could be proved that the reduction of the duty on soap would benefit the consumers, particularly the poorer sort of people, as well as the manufacturer and the revenue by preventing the illicit manufacture of the article.

Mr. Callaghan

said, that under the existing laws relative to soap, great frauds had taken place, not only against the revenue here, but against the Irish manufacturers of that article, many of whom were undersold in their own market. The traffic in soap between Liverpool and Cork led to smuggling and to fraud. There was scarcely a seaman belonging to any of the steam vessels who was not employed in smuggling soap, a great quantity of which had the drawback allowed upon it more than once, for after being regularly exported from England, it was clandestinely brought back again and handed to the manufacturers who obtained another drawback upon its re-exportation. In short, no justice would be done to Ireland if the law upon this subject were permitted to remain as it now was.

Mr. Ewart

said, several hon. Members from the sister country had allowed their imagination to overpower their judgment upon this occasion at the expense of the people of Liverpool. The supposed frauds were mere assumptions against which was to be placed the fact, that a regular inquiry had taken place which had terminated in their favour, although a reduction of the duty was much desired by his constituents who had considerable mercantile transactions in the articles of which soap was made, and if the duty on them was reduced, more British manufactures would be exported.

Mr. Alderman Thompson

said, that after the discussion which had taken place, and the statement of the noble Lord, (the Chancellor of the Exchequer) he would not press his motion.

Motion negatived.