PAPER DUTIES. (Hansard, 5 July 1836)

§ Mr. Pease
was anxious to know whether it was the intention of the right hon. Gentleman the Chancellor of the Exchequer to continue the existence of the drawback allowed to the King's printer 1284 and the two Universities. The reason he put the question was, because he knew it was looked upon as no slight grievance that in the present state of these drawbacks, the printers to whom he had referred were enabled to compete with unfair advantages in their favour.

§ The Chancellor of the Exchequer
replied, that it was his intention to let these drawbacks remain as they now were. This measure was one for the reduction of the duties on paper; but he did not think it right to discuss a subject such as that referred to by the hon. Member for Durham incidentally.

§ The Chancellor of the Exchequer
said, he hoped to be able to prove to his hon. Friend, the Member for Middlesex, and the public, as he had already done to the parties interested in the adjustment of the question out of doors, that to go beyond what this Bill provided for would not be expedient. Whenever a reduction in duty was made, and at what ever period it commenced, it was clear, 1285 without making some legislative arrangements, those who held stocks on hand at the time the reduction was effected, would meet those who laid in stocks which were subject only to the new and reduced duty with some disadvantage. Various modes had been acted upon for counteracting this evil, and amongst them was the obvious and mechanical one now advocated by his hon. Friend, the Member for Middlesex, namely, to make a reduction or allowance on the total amount of stock there might be on hand when the reduction came into effect. If that could be attained without inconvenience to the public, it followed, that all traders would start on an equality, and enter into a competition on fair terms. Amongst the attempts made to adopt this proposal was that which took place when a reduction was made in the duty on silk. A draw back was then allowed on the amount of the stock in hand and the consequence was, that the Government had to pay back a much larger amount of duty than was ascertained to be paid by the silk proprietors. This, besides being productive of an enormous burden to the country and fraud on the revenue, had this effect also, that whereas a fraud was committed, and there existed an amount in the stock which had not paid duty, the parties claiming the drawback were benefited by receiving not only a sum for duty which had never been paid, but by being enabled to enter into competition with their honest rivals in trade on unfair terms. It should also be recollected, that when at past periods the duty on paper had been raised, it was never levied on the stock in hand; so that when the rise in price took place (which followed from the imposition of the additional duty) the trader received a considerable benefit; and the reduction in duty being now pro posed, whatever were the disadvantages under which the trader was placed by it, they formed but a counterbalance to the benefit which he had received by former measures. He would endeavour to explain in a very (few words, what it was his intention to effect by the present Bill. He must, in the first place, say that he did not object to the principle of a draw back, if fraud could be guarded against by it. The plan which he had devised would effect its object without giving an opportunity for the commission of fraud, and he should explain it in as short a time 1286 as possible. First, he intended, under the provisions of this Bill, to postpone the commencement of the repeal of the duty to the 10th Oct. The effect of that would be, to allow parties to work off their existing stocks before the alteration was effected. This period, he thought, would be fully sufficient for the purpose which he had mentioned, particularly when it was considered that these parties had quite sufficient notice of the intention of Government—first by the Report presented by his right hon. Friend, Sir H. Parnell, next by the discussion which took place when the noble Lord, the Member for South Lancashire (Lord Egerton) presented a petition on the subject, and finally by his (the Chancellor of the Exchequer's) notice of it on the Budget Speech. But it might be said, that if things were left in that state, no purchase would be made from the manufacturer. Now to obviate that objection, he contended that it should be open to parties to take from the mill paper to any extent they pleased, which should bear not only the Excise mark, but be so identified and distinguished as to exclude all attempts at fraud. They might take this paper into their stock; and on every portion of it that remained on band on the 10th of October a draw back would be allowed, and return made of the amount of duty upon it. That was the way in which he proposed that relief should be afforded; and he did not think it would be just or expedient to go further. He called on the Committee, if they wished that the system of reductions of duty should be persevered in, not to encumber such questions as the present with those of allowances and drawbacks. He trusted his statement had given satisfaction to the Committee. He could inform them of this, that when a deputation had lately waited upon him, and when he had told them what he meant to propose, they expressed a hope that he would adhere to the plan which he had then described—" Because, "they said," if, after making this communication to us, you should think fit to change your resolution, all we can say is that you would effect more injury by passing, after the announcement which you have made, measures which we proposed at first, than you will by persevering in your determination".

§ Mr. Hume
thought, that all attempts at fraud might be perfectly guarded against by appointing to each town, some one 1287 place and one day where an examination should take place, for the purpose of pre venting any forgeries. He was of opinion that every ream of paper might be traced from the mill to the warehouse, and to the shop of the dealer, so as to prevent all possibility of fraud. In the case of stamps now issuing, there was an understanding that the duty on the portion not consumed, at the periods of the Bill passing, should be returned. Why should not this precedent be adopted in the case of paper. The hon. Member concluded by intimating, that he would persist in his proposition.

§ Mr. Brotherton
said, that great frauds had been committed upon the alteration of the silk duties, in consequence of the adoption of such a proposition as that urged by the hon. Member for Middlesex. He would, however, recommend the Chancellor of the Exchequer to consider whether, by the adoption of additional pre cautions, the suggestion might not be rendered practicable.

§ The Chancellor of the Exchequer
ob served, that nothing would be more easy than to cheat the revenue, by placing within marked excise covers paper which had not paid duty. He feared, therefore, he could not consistently, with his duty, adopt the hon. Member's proposition.

§ Mr. Robinson
thought the more just course would be, to allow a drawback on all paper on hand, at the period of the Act passing. It was unfair to deprive the honest portion of the paper trade, because a roguish trader might, by possibility, commit an isolated case of fraud. He thought, that means might easily be devised to make the parties prove they had paid the duty.

Mr. F. Baring
observed, that the par ties had full notice of the course Ministers intended taking, with regard to the question raised by the hon. Member for Middlesex, from the Report of the Excise Commissioners, and yet it was not objected to by them when the Bill was submitted to their consideration. Again, in the finance exposition of April last, the matter was mentioned, and then not protested against. It was, besides this, notorious that the stationers had been of late considerably reducing their stock of paper, in anticipation of the present measure. His great objection to the proposition, however, was the opportunity it would afford for fraudulent practices — practices, by the way, which no foresight could guard against.

§ Mr. George F. Young
did not see how the allowance of the drawback could open the door to frauds. The dealer could just as well commit fraud now, as after the Bill passed with the proposed proviso. If the hon. Member pressed his proposition to a division, he should feel it his duty to support him.

§ Mr. Baines
supported the proposition of the hon. Member for Middlesex, which he contended would do justice to the trade without exposing the revenue to the smallest risk of fraud. He was anxious to know what arrangement the Government had made with respect to the allowance of the drawback on the paper known as "press boards." This class of paper was much used by his constituents, who, under the 42nd Geo. 3rd chap. 94, were allowed back the entire duty, on a certificate being forwarded to the proper office of its having been used in the woollen trade. Was this arrangement, he desired to know, to be continued?

§ The Chancellor of the Exchequer
re plied, that up to the 10th of October next the present arrangement should continue in force, but that after that date the class of paper alluded to, would be charged three-half pence duty. This arrangement would be rendered necessary by the impossibility of making a distinction between the several classes of paper after the passing of the Act.

§ Mr. Hume
said, that although he felt it an act of gross injustice not to allow a drawback on the stock in hand, yet he did not think it worth while to press this amendment to a division, but would con tent himself with entering his protest on the subject.

§ The Chancellor of the Exchequer
ob served, that whoever had stock in hand on the 10th of October, would obtain the difference between the new duties and those which he had paid on that stock.