§ Order for Committee read; Instruction to the Committee, that they have power to make provision in the Bill pursuant to the 4th Resolution of the Committee of Ways and Means, which was reported and agreed to on the 29th day of May last.
§ House in Committee.
§ On Clause 1 (Duties on Sugar and Molasses to be levied after the 5th day of July, 1854),
MR. MOFFATTmoved, as an Amendment, "that foreign refined sugar be admitted on the 5th day of July at 16s. per cwt., as provided by Act of Parliament. The difficulties as to the application of this measure were felt to press very unjustly on those principally interested in the question, and he hoped that Government would not urge the Bill, as it at present stood, upon the acceptance of the House. The modifications which had been introduced into the Bill were, no doubt, intended to affect foreign refined sugar, and to act as a protection to home refiners; but they would not, in his opinion, answer any such purpose. At first it was proposed to exclude foreign refined sugar until the 16th August, as a protection to the refiners; but they new proposed a differential duty of 1s. 4d. per cwt., which was so small that it would not prevent a single hogs-head coming in. He therefore proposed that the distinction should be expunged: it would not make a difference of 5,000l. to the revenge.
§ MR. J. WILSONcould not understand for what purpose the hon. Member persevered in his Amendment after the question of compromise had been fairly and virtually agreed on out of doors, both by importers and refiners. He could not see what induced the hon. Member so needlessly to interfere on the subject, and he hoped that the Committee would not entertain the Amendment, which, if carried, would, notwithstanding the statement of the hon. Gentleman, make a considerable difference to the revenue.
§ MR. HORSFALLdid not speak on the question die other evening, because he was desirous to ascertain the feeling of those interested before he expressed an opinion upon it, He had since had an 1237 opportunity of seeing some of the leading refiners and dealers in the matter, and he was happy to say that they had expressed themselves perfectly satisfied with the proposition of the Government. He should therefore oppose the Amendment.
MR. BLACKETThad received a communication from some of his constituents to the effect that they were very much dissatisfied with the Government proposition. He should therefore support the Amendment.
§ MR. ARCHIBALD HASTIEsaid, he believed that the mode of proceeding suggested by Government would give universal satisfaction.
MR. MOFFATTsaid, that the interests he represented had no desire to avoid a fair share of a war tax, but they did object to be unreasonably or unfairly taxed. The hon. Member the Secretary to the Treasury was mistaken in supposing that the Government proposition gave general satisfaction. He knew that in the City of London it hod given very great dissatisfaction. He would, however, if it were the feeling of the House, withdraw his Amendment.
§ MR. J. L. RICARDO,on the contrary, hoped the hon. Gentleman would press it to a division. He could see no reason why, because we were involved in a war, it was imperative or necessary to alter the relative duties between raw and refined sugar, which were definitively settled during the Government of the late Sir Robert Peel. The mode of proceeding proposed by the Government was, in fact nothing less than giving protection to foreign refiners in contradistinction to and against British refiners. Such alterations as those proposed might just as well have been made seven or eight years ago as at the present time, and, inasmuch as they were quite unnecessary, he must say that he looked upon them as merely going back to the system of taxation and protective ditties upon manufactured articles.
THE CHANCELLOR OF THE EXCEQUERsaid, he was very much disposed to agree with the hon. Gentleman who had last spoken, that there was something, of the character of protection in what the Government proposed to effect by the measure they were now disputing; but, at the same time, he thought that that protection was diametrically the reverse of what it was represented to be by the hon. Gentleman. The question really was, whether we should give protection to British interests 1238 against foreign invasion, and not whether we were giving protection to foreign refiners in contradistinction to and against British refiners. The Dutch refiner paid a duty on raw sugar just as well as the English refiner, but he got that back on the refined, in the shape of a drawback, when exported to this country; and, in fact, it was a very great question, into which he would not pretend to enter, whether he did not get back something more than he had paid on the raw sugar, so as to have an absolute bounty on the transaction. The real question was, whether they would protect the Dutch refiner at the cost of the British, by calling on the British to pay a tax which the Dutch did not pay. The question was, whether for four weeks the moderate allowance of 1s. 4d per cwt. should continue as a duty on refined sugar imported from abroad, over and above the duty apparently paid. The question might be looked at in two lights. It might either be contended that the arrangement proposed by the Government was unjust in principle, or it might be admitted that it was just in principle, but that, not having been embodied in the Act of 1848, the law ought to remain as it was settled at that time, and the question ought not to be reopened. The hon. Member (Mr. Ricardo) seemed to consider that the arrangement was not just in principle; but he (the Chancellor of the Exchequer) thought it so plain as hardly to require argument. that the British refiner who had to fill his refinery with raw sugar, upon which he had paid duty at a certain rate, was entitled to expect that when he brought his refined sugar into the market he should compete only with foreign refined sugar which had paid a duty proportioned to the duty which his own raw sugar had paid. He admitted that this matter ought to have been settled in the year 1848; but at that time Parliament had great and complicated questions in hand—questions in which much larger interests were involved—and it was really no matter of surprise that, amid the pressure of public business, a question of this kind should for the moment have escaped attention. But then, if it had escaped attention in the year 1848—and if an error of adjustment had been then committed, which bore rather hardly on the British refiner—it surely could not be contended that Parliament had forfeited its right, or, under all the circumstances of the case, was released from the obligations of doing the refiner justice by 1239 rectifying its own mistake, and mitigating the pressure upon him. The Government had felt it to be its duty to endeavour to make some arrangement, in order to meet the case; and, having to consult various interests and various claims—the claims of the British producer of raw sugar, of the refiner of sugar from abroad, and the refiner of sugar at home—he did not think that a fairer arrangement could have been made than that which his hon. Friend (Mr. Wilson) now proposed. Although they might not have succeeded in satisfying everybody, yet the testimony which had been borne by the hon. Member for Liverpool (Mr. Horsfall)—whose constituents were more interested in the question than any other class—was a proof that they had succeeded to a very considerable extent.
§ MR. HUDSONwould support the proposition of the Government as a fair compromise, and hoped the hon. Member would not divide the House.
§ MR. MUNTZsaid, that though the arrangement might be satisfactory to the refiners, there was great dissatisfaction with the Government proposal among large consumers of sugar, from whom he had received-representations on the subject, and if the Amendment were pressed to a division he should certainly support it.
§ Amendment withdrawn.
§ On the proposition that the duty on yellow muscovado be 12s. per cwt.,
§ MR. MILNER GIBSONwished to ask on what principle the difference had been made in relation to the duties on raw and refined sugars—whether any new saccharometer had been invented, or the Secretary of the Treasury had discovered that nobody had known until now the relative proportions of saccharine matter which raw and refined sugar contained? Unless this change had been made upon some scientific principle, they were certainly giving an improper protection to the refiner by raising the duty upon refined sugar more than the duty upon raw. Unless some explanation were given he must agree with the hon. Gentleman (Mr. Ricardo) that the Government had made a retrograde step.
§ MR. J. WILSONsaid, the change had certainly been made upon scientific principles, for it had been made in accordance with the rules of arithmetic. If the right hon. Gentleman would make a rule of three sum of it, he would find that the proposed duties of 12s. and 16s. on raw 1240 and refined sugars bore the same proportion to each other as did the old duties of 10s. and 13s. 4d. The same relation subsisted between 12s. and 16s. as between 10s. and 13s. 4d.—that was, the smaller amount in each case was exactly three-fourths of the larger; so that, in fact, no alteration whatever had been made in the proportion.
MR. MOFFATTsaid, the answer of his hon. Friend was based on the assumption that the sugars which the refiner would use would pay a duty of 12s. per cwt., whereas there could be no doubt—and He had the authority of men of great experience in the sugar trade for the statement—that the sugar which would go exclusively to the refineries would be that which would be admitted under the new scale at 11s. per cwt., so that the bon. Gentleman's rule of three sum was not quite so clear as he made out. The practical effect of this Bill would be to put the whole system of the duties on sugar on a sliding scale, and it was to the great uncertainty which must result from this that the sugar importers mainly objected. He should therefore move the omission of the new differential duty on muscovado sugar.
§ MR. J. L. RICARDOalso expressed himself dissatisfied with the hon. Gentleman's answer. At present the differential duty in favour of the refined sugar was 3s. 4d. per cwt.; under the proposed arrangement it would be 5s.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, the question at present before the Committee was the propriety of proposing a duty of 12s. per cwt. upon "yellow muscovado and brown clayed sugar, or sugar rendered by any process equal in quality to yellow muscovado or brown clayed, and not equal to white clayed, according to a standard to be furnished by the Treasury." Did hon. Gentlemen object to that proposition? ["No, no!"] Then, if that proposition were not objected to, he fell back at once upon his hon. Friend's rule of three sum. It was exceedingly inconvenient to be discussing two questions at once; and the proper time to deal with the 11s. duty would be when they came to it.
MR. MOFFATTsaid, that "yellow muscovado" sugar was of an entirely new description in our market, and he would move, as an Amendment, that the words "yellow muscovado" be omitted from the clause. As regarded colonial sugar, he believed 1241 that great inconvenience would be experienced from the passing of this clause. He objected to the proposed mode of determining the amount of the duty by a standard to be furnished by the Treasury, and of charging "yellow muscovado" 12s., and "brown muscovado" 11s. per cwt. The tests proposed, he understood, were granulation, colour, and quantity of saccharine matter. But he defied his right hon. Friend the Chancellor of the Exchequer, together with his hon. Friend the Secretary of the Treasury, with all their knowledge of sugar, to distinguish by these tests between any two. The tests were of the most fallacious kind. At present the system was in operation with respect to about 20,000 tons of the sugar annually imported; but, although so limited in its application, it led to great inconvenience, uncertainty, and delay, and to frequent appeals to the Treasury. If it were now extended to the remaining 380,000 tons, these evils would, of course, be very greatly increased. The importers did not care whether the duty was 11s. per cwt. or 12s., but they objected very much to the mode in which the duty was to be charged. The distinction proposed to be made would involve a sacrifice of revenue, which was wholly unnecessary, to the amount of 150,000l. a year, and it would be giving a premium of 1l.. per ton to the producer of bad sugar.
§ Amendment proposed, page 1, line 19, to leave out the words "Yellow Muscovado and Brown Clayed Sugar, or Sugar rendered by any process equal in quality to Yellow."
§ MR. J. WILSONdefended the clause. If they charged the same duty upon sugar which would yield but 40 lbs. or 50 lbs. of refined sugar to the cwt. as they did upon sugar which would yield 90 lbs., it was obvious that the pressure of the tax would be most unequal. A very strong feeling had arisen in favour of refining in bond, and he was not prepared to say that, if refining in bond could have been permitted without involving extensive restrictions and impositions on trade, it would not have been by far the best mode of levying the duties. But, as this could not be done, it was only right to make a difference in the amount of duty, and the arrangement now proposed was, in fact, only an extension of the principle which was already in operation with respect to refined sugars, and which was acted upon also in assessing the duties upon spirits imported 1242 into this country above proof and under proof. Government proposed to allow very low sugars to come in at a lower rate of duty than at present, and no objection had been made to the proposal by the trade. On the contrary, the numerous deputations which he had received upon the subject considered the new arrangement nothing but a fair and equitable adjustment of the duties. No doubt there must be difficulties in establishing a standard, and it would be much better for the Custom-House officers if the sugars which were brought over were of uniform quality, so that the duty could be uniformly charged; but as that was not the case, there was no reason why an attempt should not be made to levy the duties as equally as possible. The difficulty of levying the duty had been exaggerated. At first there was a difficulty, but the Custom-House officers and the trade had now learnt to understand each other better. He wished that some arrangement could be come to, to which no objection could be attached, but as that was an impossibility, the present arrangement was offered as the best solution of the difficulty. The principle was not new; it was only extending, for the first time, to muscovado sugars, the produce of our own colonies, the precise principle which in 1848 was applied to brown clayed sugars. He believed that those who were best acquainted with the subject, and who were most deeply interested in it in the colonies, admitted that the proposal was as fair a compromise and as proper a solution of the question as could be made.
§ MR. GREGSONdid not assent to the statement of the hon. Member for Ashburton (Mr. Moffatt) that the importers did not care what the amount of duty was. For his own part, be hoped that a considerable quantity would come in at the 1ls. duty. Although the consumption of sugar had increased in ten years from 200,000 to 400,000 tons, the total amount of duty was the same upon the larger as it had been upon the smaller quantity. And with respect to price, what had formerly cost 23,000,000l. now cost 14,000,000l., consequently there was a saving to the public in the reduction of the price and the duty of 8,000,000l. or 9,000,000l. a year. They had, therefore, every reason to be satisfied with the position in which they stood; and he thought the proposed increase, from 10s. to 12s. per cwt., under present circumstances, very moderate.
§ MR. THOMSON HANKEYsaid, the 1243 importers of sugar from the West Indies were not indifferent as to whether they should pay 11s. or 12s. per cwt. As a matter of compromise, the West India body, to get over the difficulty, were ready to try the measure as some approximation to the state of things they desired, in the hope that, if it should lead to inconveniences, the question should again come under the consideration of the House.
§ MR. J. L. RICARDOcould not separate the two questions of the 11s. duty and the 12s. duty; and the Amendment proposed aimed at the assimilation of the two. The opposition was not directed to the classification of sugar, but that a new class had been introduced. It would be impossible for any Custom House officer to distinguish between the different classes to the extent proposed; and the vexation and annoyance which had already been experienced in this respect ought to be a warning to the Government not to introduce new elements of discussion between the importer and the Custom House officer. It had been said that the 12s. duty was now under consideration, and that the 11s. duty and the 12s. duty ought not to be mixed up in the discussion. Now, he objected to the differential duty between 11s. and 16s., which was a larger differential duty than that which existed under the old scale; and he did not think the hon. Gentleman justified in taking the yellow muscovado sugar as his datum line in calculating the differential duty. The differential duty had always been calculated hitherto as between the worst and the best descriptions of sugar, and he thought it was unfair to take an intermediate description and tell the importers that the differential duty was to be between that class and the refined sugar. A fourth class of sugars should not be introduced. but the old classification should be continued; and if this was a war tax, and it was wished to raise a revenue, let the 16s. duty be taken as the point on which to go, or have a lower charge, but let the difference between the worst and best sugars be the same as heretofore.
§ SIR W. CLAYunderstood the intention of the Government to be this—that the standard of sugar which was to pay the 12s. duty should be identically the same as that which now paid the 10s. duty. If that were so, the relation between the 12s. and 16s. duties would be the same as between the present duties of 10s. and 13s. 4d. The Government seemed to him justified 1244 in maintaining, the distinction between 12s. and 16s., while the colonial interest were gratified with the new distinction that had been taken.
§ MR. MILNER GIBSONThe hon. Baronet seemed to him to depend upon a supposed assurance of the Secretary of the Treasury, which had not been given. He doubted, indeed, whether the hon. Gentleman either could or ought to give these assurances. If there was one thing more important than another, it was this—that the trade should be dealt with impartially, and that one person should not pay a higher duty than another on nearly the same description of sugar, in consequence of the matter being left too much to the discretion of Custom-House officers. It was not desirable to introduce new classes so slightly distinguished from others that the officers in different ports would differ on the subject of the quality. The distinction ought to be sufficiently broad to prevent injustice being done. Sir Robert Peel fixed three classes, and it was now proposed to break in upon that important principle.
§ THE CHANCELLOR OF THE EXCHEQUER,said, it appeared that two objections were taken to the plan of the Government. One of them was the difficulty with respect to the enforcement of the lower classification by the Custom-House officers, inasmuch as it rested almost on their discretion. The other was the objection to classification upon principle. The right hon. Gentleman said it was difficult to distinguish classes of sugar, and objected to any discretion being placed in the haunts of the officers—[Mr. M. GIBSON: Too much discretion.] Then it was only a question of degree. What, then, was the simplest mode of dealing with a question which was so full of difficulties, and which was, in fact, only a choice of difficulties? What was the inequality proposed to he got rid of? An inequality which charged at the same rate two samples of sugar not precisely the same, one of them yielding 45lbs. of refined out of 112lbs. of raw, and the other yielding 80 lbs. The question was not whether the Custom-House officer might be a trifle wrong, and err about 6d. or 1s. per cwt., but whether a system should be adopted which would charge the same duty upon two articles, one of which was double the value of the other. They were now dealing with a commodity which entered this country as a raw material, and which had to undergo an important manufacturing process before it 1245 could get into consumption; and the question affected not only the home consumption, but the export trade, which was conducted under a drawback. If it were admitted that the refiner ought to pay upon the raw material a duty proportionate to the amount of refined sugar yielded by the raw material, and that he ought to receive such a drawback as would enable him to meet a rival in a third market, then the Government ought to see whether there was any insuperable difficulty in a proper classification. Now, what were the difficulties of classification? No doubt, formerly these difficulties were very serious, and now they were not inconsiderable. As to the "discretion" of the Custom-House officer, the word might be used in two different senses—judgment and caprice. They must trust to his judgment, but not to his caprice. His duty was to verify the conformity of certain sugars to a certain standard given to him. These were difficulties that must he encountered; but they were as nothing compared to the enormous inequality and injustice that would be done by refusing to admit classification. The hon. Member for Stoke-upon-Trent (Mr. Ricardo) had said that the Government were now introducing a new principle, and departing from that laid down by Sir Robert Peel, and by the Act of 1848. Now, that was a mistake, for the Act of 1848 established exactly this classification. But then the Committee were told that the difference between 11s. and 16s. was too much, and was unfair. But let the hon. Member turn to the Act of 1848, and examine the duties that were levied upon refined sugar imported from abroad, as compared with foreign sugar imported raw. By the Act of 1848, it would be found that muscovado, or any other sugar not equal in quality to brown clayed sugar, was liable to pay a duty of 12s, whilst the refined article was liable to pay 17s. 4d. This principle had been in operation ever since sugar had been introduced into the market upon a large scale, and was a greater difference, both positively and relatively, than was now sought to be established. It was true that that applied to foreign sugar only, and not to British sugars, and that this kind of classification had never been applied to British sugars, but that was the very grievance with which the Government and Parliament had had to deal every year since the passing of the Act of 1848. The refiner had not felt the grievance, because there was a protective 1246 duty in favour of the British sugar producer, and when he purchased British sugar of low quality the difference was made up to him by a deduction from the protection enjoyed under the law; but when the differential duty was disposed of, the fund was disposed of out of which that difference was adjusted; and, in dealing with the Act of 1854, they must be prepared to deal with the case of British sugars, either by classification or by refining in bond. By adopting the latter course, it would be necessary to apply a system of excise to a great article of British manufacture; whereas, by the system now proposed, the great refining trade would be set free from every restraint—a trade in which Great Britain was as well qualified to take the lead, and keep the lead over every other nation, as in any branch of trade. He submitted that the proposal of the Government was the best way of encountering those difficulties which could not be altogether overcome.
§ MR. J. L. RICARDOsaid, the right ben. Gentleman had stated the difference between two samples of sugar as varying from 45 lbs. to 80 lbs. Now, when the right hon. Gentleman alluded to the 80 lbs., he must be verging hard upon the white clayed sugar. The right hon. Gentleman had taken two extremes, between which there were from twenty-five to thirty different grades to be left to the discretion of the Custom-House officers. The right hon. Gentleman had nut answered his objection that the Government were now establishing a larger differential duty than before. The Government were about to propose an additional protective duty of 1s., which, he maintained, was a retrograde step in the legislation of this country.
§ Question put. "That the words 'Yellow Muscovado' stand part of the clause."
§ The Committee divided:—Ayes 69; Noes 12: Majority 57.
§ On the Question being put, that the clause, as amended. stand part of the Bill,
MR. HUMErose, to recommend that those who were employed to decide on the quality of these sugars should be persons of god education, that they should have some chemical knowledge, for the fact was, much must be left to their discretion, and men should, therefore, be selected who were qualified to discriminate between the different classes. As this could not be dune with mathematical accuracy. there must be irregularities which it was desirable to restrict as much as possible.
§ MR. GOULBURNurged the same consideration. Persons with chemical knowledge were appointed in the higher departments of the Excise, but they were still more necessary in the Custom House.
§ Clause agreed to.
§ Clause 2.
§ MR. J. WILSONstated, in reply to a question from Mr. MOFFATT, that as soon as this Bill was passed, standard samples of sugar would be put into the possession of the officers of the Customs, and the trade would be allowed every facility for inspecting them.
§ MR. THOMSON HANKEYsaid, it was not enough for the trade to know the standard sample, but it was also desirable that they should understand the mode in which the Customs officers compared the various sugars with the standards. Hitherto, different modes had been adopted at different ports, which was not of so much consequence under the old arrangements; but now that more stringent rules were to be adopted, it came to be matter of great importance that the same duties should be levied on the same samples in every port in England, and therefore it would be necessary that there should be one description of samples at the various ports.
§ MR. J. WILSONexplained, that some misapprehension had gone abroad, as if colour alone were to decide the duty without regard to the qualities of the sugar. That was not the intention of the Government, and he had introduced some words into the clause to make it clear that the duties were to be levied according to the general qualities of the sugars.
§ Clause agreed to, as were the remaining clauses.
§ New clauses brought up. Clause being read, abolishing the practice of refining in bond,
MR. MOFFATTwanted to know why that system of refining in bond was to be abolished? It was done with scarcely any expense to the Government, and he believed it was the desire of many persons in the trade to carry it on.
§ MR. J. WILSONsaid, it was the unanimous desire of all whom he had met that this system should be abolished. It was adopted at a time when foreign sugars were not allowed to be entered for home consumption; but these restrictions were now at an end, and it was desirable that all refining should be on one uniform system.
MR. HUMEexpressed his great satisfaction with the arrangement of the Go- 1248 vernment. He hoped to see the day when every restriction on trade—stamps, Excise, and all—would be removed. He thought Government deserved great credit for this arrangement.
§ Clauses agreed to; House resumed; Bill reported; as amended, to be considered on Thursday next.