HC Deb 06 March 1857 vol 144 cc1957-2025

Order for Committee read.

Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."


Sir, I understood from what passed yesterday that the Chancellor of the Exchequer would to-day make a statement as to the course which the Government propose to take with regard to financial matters; but after I had left the House I find that the right hon. Gentleman made the statement which I anticipated to have heard from him to-night. I shall therefore take this opportunity fairly and succinctly to state to the House the course which we on this side were prepared to make with respect to financial measures under the ordinary circumstances in which they were first placed before us, and how far that course must be modified under the extraordinary circumstances in which we now find ourselves placed. The Chancellor of the Exchequer, in introducing to the House his financial propositions, stated truly that there was a very large increase in the income derived both from direct and indirect taxes, and he entered into a comparison of the relative amounts which accrued from those two sources. I think the right hon. Gentleman stated very accurately that the direct taxes produced £21,000,000, and the indirect taxes something more than £39,000,000. The right hon. Gentleman, however, omitted one item of no mean importance in the direct taxation, which upon a previous occasion, at considerable length and with perfect acquaintance with the subject, he dilated upon—and that is, the whole of the local taxation of the country. I need not remind hon. Gentlemen of the large amount of that local taxation, nor how materially it alters the balance which the Chancellor of the Exchequer struck in his financial statement. We have no wish, Sir, to disturb in any way the balance which exists between direct and indirect taxation. Our opposition to the income tax has never been founded upon the fact that it is a direct tax, but upon the circumstance that it is a direct tax of an invidious and intolerable character. It was our view generally, when the Chancellor of the Exchequer originally brought forward those propositions which in a more modified form we are now about to consider, that with wise financial arrangements, perfectly sound in principle and legitimate in practice, and with a well considered reduction of our expenditure—a reduction regarded only with respect to the efficiency of the public service, and with no other consideration—a reduction which we should have recommended, whatever might be the state of the Exchequer, whether exuberant or exhausted—it would have been possible to make adequate financial provision for the year without any material addition, if any, to the taxation of the country. We were ready, notwithstanding those opinions, to consider the propositions of the Government in a spirit which would rather have erred in perhaps unnecessarily favouring the Exchequer than in attempting to offer obstacles to the policy which Ministers originally recommended. Therefore, so far as the income tax was concerned, we were prepared to give every possible assistance to the Government consistent with maintaining the spirit of the settlement of 1853: I would even call it the compact of 1853. And I own I am rather surprised that a very high authority upon financial subjects in this House—the right hon. Gentleman the Member for Portsmouth—should have derided that idea of a compact. [Sir F. BARING: No!] On referring to an excellent speech which the right hon. Baronet made in 1853, I find he then laid it down in very strong and nervous language that the settlement of that year was a compact of such a character as that when 1860 arrived he should be surprised to see any Minister bold enough to continue the income tax. With regard, then, to that portion of the financial scheme which assumed the form of direct taxation, we wished to consider the proposal of the Minister in the most liberal and conciliatory spirit; and, provided we could have obtained from the Government a virtual pledge that the compact of 1853 would be fulfilled, we should have supported the general policy recommended in that respect. It was with that view that I gave notice of a Resolution which, while it would not have injured the Exchequer at the present moment, would have secured that in 1860 the income tax would not be higher than 5d. in the pound. Such was our policy with regard to direct taxes. Let me now state the course we intended to pursue with respect to the indirect taxes proposed by the Chancellor of the Exchequer. The most important of these indirect taxes which the Chancellor of the Exchequer proposed to deal with is undoubtedly the tea duty. It was our lot, Sir, to propose originally that the House should consider the question of the tea duty. It was our opinion that we could not deal with a tax of more importance, or one which had a greater influence upon the commerce of the country and the general prosperity of the people. Great opposition was offered to the consideration of that question, even before we introduced our scheme to the House. Many persons of very high authority were of opinion that the experiment was one which ought not to be made. We were informed that the quantity of the article on which we proposed to operate was limited, and that the only consequence of our legislation would be, the supply not being proportionately increased, to injure the revenue without benefiting the consumer. Nevertheless, taking the most sedulous means to obtain the very best information on the subject—and here I may offer our thanks to a gentleman whose name was frequently mentioned in the recent debates, Sir George Bonham, for the great trouble he took and the sound information he afforded us at that time—we believed that the views to which I have referred were erroneous—that the quantity of the article was, if I may use the epithet, illimitable, and that if we operated boldly upon the tea duties we should greatly stimulate commerce, advance our manufactures, and, above all, confer a great benefit upon the body of the people. We had not the honour of carrying that measure. It was, fortunately for the country, carried by our successors, and I ask the House whether all the benefits anticipated from that great change have not been fully realized? There has been no change in our fiscal laws, which has operated more beneficially to the great body of the people. It has been proved that the quantity of the article required is really illimitable. The immense increase in the amount of our importations proves that, and every anticipation of benefit to commerce, to manufactures, and to the community generally, has been perfectly realized? With these views, Sir, and not believing that a great increase of taxation was necessary, and being prepared to make great sacrifices with respect to increased direct taxation; believing, too, that when the war ceased the tea duties ought to fall to the particular amount which they would have touched had not the war occurred; it was our intention to resist any change in the settlement of 1853 with regard to the tea duties. I cannot say that anything which has occurred since has at all shaken our general views upon that subject. I do not want to introduce invidiously into this discussion any consideration with respect to the affairs of China; but I may perhaps be allowed to observe that probably the supplies of tea will be diminished in consequence of the hostilities now going on; and that, if you increase the tea duties instead of diminishing them, at a time when the supply of the article is less, and likely to continue to be so, the consequence must be most injurious to the consumer. So far, therefore, as to our views under the ordinary circumstances, when the proposals of the Minister were first introduced to us at the commencement of the Session. Let the House observe, however, that we are not now in the position in which we were when these propositions were first offered to us. Nay, Sir, I find the position in which we are placed is very different from what it was when the noble Viscount announced to us yesterday that it was the intention of Her Majesty's Ministers to advise Her Majesty to appeal to the country. I understood then that the noble Viscount, believing that the decision of this House on Tuesday night was an erroneous one, had made up his mind to appeal to the people to say whether they would sanction that decision. What was our position at that moment? The House of Commons had censured the conduct of the agents of Her Majesty's Government in China, which conduct had been sanctioned by Her Majesty's Ministers; and the noble Viscount, accepting our Resolution as a censure upon his Government, wished to appeal to the country, in order to ascertain whether it approves or condemns our proceedings. But, after I had addressed the House, the noble Viscount, to my great surprise, informed us that Her Majesty's Ministers have superseded the agents whose conduct we had censured. I cannot, Sir, understand the consistency of that proceeding on the part of Her Majesty's Ministers. It places this House in a very peculiar position. If the noble Viscount had not challenged the justness of our censure, I could understand the course he has taken; but first to challenge our vote, and then to turn round and appeal to the people to say whether they sanction our decision, having in the meantime superseded the persons upon whom our sentence was pronounced, appears to me extremely inconsistent. The noble Viscount, upon the question of war, says he utterly contemns the opinion of the existing House of Commons, and appeals to the opinion of a future House of Commons, which is to assemble in May. How, Sir, can we bind a future House of Commons by a decision on a subject quite as important as that of war—the subject of taxation—if our opinion with respect to the affair in China is to have no influence with the noble Viscount? If a Minister announces that the solemn opinion of this House upon the subject of war is not to influence his conduct, and he appeals to a future House of Commons, to assemble in May, I cannot see how he can ask the condemned and contemned House to levy new imposts upon the people. If the future House of Commons is, according to the anticipation of the noble Viscount, to reverse our decision with respect to China, how can we expect it to be bound by the decision of a moribund House of Commons with respect to taxation? I think it would be well for the House to consider whether at the present moment we cannot do better than vote new taxes under circumstances which deprive us of all authority, and which, if not in a legal, at least in a constitutional sense, render it impossible for us to deal with the property of our constituents. What would be the consequence? The new House is to meet in May. We can have the Budget in May. We have often had the Budget in May. In 1848 the Budget was brought forward in August. On a question so important as that of direct or indirect taxation, involving considerations of so various and so momentous a character, it would be much better that the new House should be left to decide, unaided by the judgment of a House which has been deprived of all authority, and which, constitutionally, has no right any longer to deal with the property of the people. What power has this House of Commons to pass laws that the people of England shall pay taxes for a year hence, when our authority was virtually destroyed the moment that the noble Lord made the announcement which he did last night? Under these circumstances, Sir, I hope that the House will well consider before agreeing to grant any new taxes; for we are not in a position in which we are justified in dealing with the property of the people. If we take the course which I have suggested, we shall abridge the period which it is necessary should elapse before we recur to the country. Every convenience which the noble Lord can require, every assistance which it is possible to render in order to bring about the desired consummation, I shall be most happy to give. Let his Mutiny Bill be passed; let his vote of men be agreed to, under the condition mentioned yesterday, of its being a maximum amount; let him have a vote of credit and everything that is necessary for the public service, but don't let us cancel and revoke solemn engagements when our authority as a representative assembly is about to expire; don't let us be called upon to put our hands into the pockets of the people and to levy new taxes. I hope the House will consider this question well. We shall presently have a proposition brought before us, which if carried, will have the effect that I desire with regard to indirect taxes, and will prevent any addition to them; and when we come to the income tax, as proposed for only one year, I shall ask the House to adopt a course which will, as far as possible, secure the arrangement of 1853, and which will provide that the income tax shall be, not 7d., but 5d., in the pound.


I hope, Sir, to be able to satisfy the House that the course which I am about to ask it to take is not only reasonable, but necessary, under the circumstances of the case. The right hon. Gentleman contends that we have no power to bind the decision of the next Parliament, and I quite agree with him in that view—unquestionably we have no such power; and if the propositions which I am about to make should receive the sanction of the House, it would be competent for that Parliament to alter or repeal the measures founded upon them. Nevertheless, it is necessary that we should deal with the taxation of the country with respect to that interval of time which will elapse between the end of the present financial year and the time when the legislative action of the new Parliament can come into operation. If the arguments of the right hon. Gentleman respecting the duties upon tea and sugar were valid, they would equally apply to the income tax; and he himself proposes that we should now, from the 1st of April next, alter the existing income tax, which is fixed by Act of Parliament. The Act of 1853, to which he proposes to revert, is repealed by an Act passed in 1855, which is now the law of the land; and unless that Act be repealed, the income tax of 16d in the pound would be leviable for the ensuing financial year. It is just as much in the power of Parliament to alter that Act, and to revert to the 5d. fixed by the Act of 1853, as it is to suspend the fall in the tea and sugar duties, and to fix them at the amounts which I have proposed. The plan which I submitted to the House was that the Ways and Means of the present year should be supplied by a fair balance between direct and indirect taxation. I proposed, therefore, to reduce the income tax from 16d. to 7d. in the pound, which would have diminished the amount derivable from direct taxation, and, as that would leave a deficit in the Ways and Means of the year, I proposed to supply that deficit by a small addition to the duties on tea and sugar. If that addition should not be made before the 1st of April next, the lower duties would come into operation, immediately a large quantity of tea and sugar would be released from bond, and it would not be competent for Parliament, when it reassembled in May, to deal with the question according to its discretion. But if the House should think fit to adopt the course which I propose, it will be open to the new Parliament to revise that arrangement, and to make any modification in the duties upon tea and sugar and in the income tax which it may think fit. It is clearly competent to us to deal with the question in the manner proposed, and in the meantime no other plan will so well meet the exigencies of the present year as that which reduces the income tax to 7d., and arrests the descent upon the tea and sugar duties which would take place according to the existing law upon the 1st of April next. That arrangement is consistent with the financial exigencies of the year, and in either case the interference of the Legislature will be required. It is the duty of this House to exercise such a power under the present circumstances, and it implies no greater exercise of legislative power than the voting of Supply, passing the Ways and Means, and agreeing to an Appropriation Act authorizing the Government during the next six months to apply the produce of taxes to the current service of the year. I was certainly led to believe, after the announcement of the right hon. Gentleman yesterday, that he would offer no impediment to the necessary measures for the services of the year, that we should not have been met by a refusal to supply the requisite Ways and Means according to the financial plan already submitted. If the course proposed by the right hon. Member for Buckinghamshire were adopted, and the income tax were reduced to 5d. in the pound, and if our measure with regard to the tea and sugar duties were rejected, there would inevitably be a deficiency according to the estimates for the expenditure of the year. The right hon. Gentleman may say that there will not be a deficiency, because he will reduce the estimates in Committee of Supply; but let us go first into Committee of Supply, and see if that reduction can be effected, because until that is done it is the duty of this House to find sufficient Ways and Means to meet the estimates of the expenditure of the year. I trust, therefore, that the proposal of the right hon. Gentleman to refuse the necessary means for covering that estimated expenditure will not be acceded to by the House, after the fair, but as it appears delusive, promises which he made yesterday.


said, that, after hearing the explanation of the right hon. Gentleman the Chancellor of the Exchequer in answer to the right hon. Gentleman opposite (Mr. Disraeli), it would perhaps be more convenient that the Speaker should at once leave the chair, and that they should go into Committee of Ways and Means. When in Committee he would have to submit to the House his Motion upon the tea and sugar duties, and he would be glad to defer until then the remarks which he should otherwise feel anxious to make.


said, he had been entrusted with a petition from the Grocers' Commercial Association on the subject of the tea and sugar duties; but as the rules of the House prevented him from presenting it at that stage of the business he would state the substance of it. The petition complained, and he (Mr. Roebuck) fully concurred with it, that whereas the financial plan of the right hon. Gentleman the Chancellor of the Exchequer proposed the reduction of the income tax by 9d. in the pound, it nevertheless suggested the continuance of the war duty upon articles of consumption, such as tea and sugar, which were next to the necessaries of life; it went on to point out that a patriotic House of Commons would rather tax individuals of its own class than the poor; and that if incomes were, instead of the proposed 7d., taxed to the amount of 9d., the increased duties on tea and sugar ought not to, and need not, be levied; and it, therefore, prayed that the House of Commons would, by adopting a 9d. duty on income, enable itself to relieve the proposed burden upon the poor classes.


said, the observations of my right hon. Friend (Mr. Disraeli) seem to apply to the whole scale of our taxation; the right hon. Gentleman the Member for the University of Oxford (Mr. Gladstone) is about to propose a Resolution with regard to our indirect taxation; but I have not heard him express any objection with regard to the proposal of a 7d. income tax; my right hon. Friend, however, proposes a reduction in both directions. He proposes, if I understand him, to reduce the duties upon tea and sugar to what they would be if no war had occurred; and at the same time it is his intention to move that the income tax shall come down to 5d. I confess that declaration rather frightens me. Sir, I voted on a former evening for the Resolution of my right hon. Friend, which in point of fact was to refer the original proposition for expenditure back to the Government, from a belief that it was only by such a course we could hope to enforce the acceptance of our views, In conformity with that Motion, I confess I thought that reduction was not only desirable but necessary, and I gave my vote for it. The appeal was made to the House, and the House decided that the Estimates should not be sent back for reconsideration by the Government. It was not a question of referring them to a Select Committee upstairs, but of referring them to a Select Committee in Downing Street; and if that appeal had not been rejected, I believe that these Estimates would have been much reduced without the country risking the loss of Her Majesty's Ministers. For my part, seeing the temper of the present House, I fear very much that there will be no great reduction in the Estimates; and, that being the case, I am of opinion that it would be the very worst species of economy—to run the risk of a deficiency in our revenue. I cannot exactly concur in opinion with my right hon. Friend the Member for Buckinghamshire as to the propriety of postponing the consideration of these questions until the new Parliament is assembled. So long as we sit here I think it is our duty to provide the means for carrying on the expenditure of the country. I cannot understand that because we are on the point of expiring as a Parliament, we are to inflict upon our successors the difficult task of at once providing the means for carrying on the expenditure of the kingdom. Are we less likely in our moribund state to carry out the principles of economy than a new Parliament would be? Well, then, I ask myself, shall I vote for the Resolution of the right hon. Gentleman the Member for the University of Oxford, the effect of which is to remove a portion of the indirect taxation occasioned by the war; and shall I leave the House to carry out the other reductions, which I believe cannot be afforded? In a word, shall I support the reduction of the income tax to its original standard, together with the right hon. Gentleman's proposed reduction of the tea duties? I feel, Sir, that those reductions, simultaneously carried out, would be attended with great danger to the finances of the country. I think, also, that the proposition of the right hon. Gentleman opposite is a departure from the system which was established during the progress of the war. My impression of the principle that was then recognized is that the expenditure of the country was to be divided between direct and indirect taxation. Well, if you reduce the income tax only to the standard of what it was before the commencement of the war, and our indirect taxation to the point at which it would be now if there had been no war, I think that you will be departing from that principle. When there are about £60,000,000 of taxation to be levied somehow or another, you cannot attempt to levy that amount by direct taxation; and if you could, such a system would necessarily be most injurious to the interests of the poorer classes, because it would have the effect of displacing all your available capital, which would otherwise be expended in the country, and consequently disseminate employment amongst the people. Well, what is the course which I shall feel it my duty to follow under present circumstances? I understand that the noble Lord the Member for London abandons his Amendment to the proposition of the Chancellor of the Exchequer, which would have the effect of reducing the duty upon tea to 1s. 4d. As the Chancellor of the Exchequer has modified his original proposal so as to limit its operation to one year, the noble Lord's Amendment, which embraced a period of three years, is of course given up. Under these circumstances, I feel myself compelled to oppose the Motion of the right hon. Gentleman the Member for the University of Oxford, not because I do not wish to see such reduction in the duties, if I thought the country could afford it, but because it seems to me in the present temper of the House in regard to expenditure, such a step would be a most hazardous experiment as regards the revenue of this year. The proposition of the Chancellor of the Exchequer is limited to one year only; and, of course, the new House of Commons will have the opportunity of considering the whole question, and of acting in these matters as their wisdom may suggest. I shall therefore support the propositions of Her Majesty's Government in respect to the income tax, and those articles of indirect taxation. And had the Government conceived it necessary for the good faith, the honour, and the maintenance of the power of this country, to propose a system of taxation even greater than what is now suggested, I for one should have supported them, however unpopular such an admission may make me, because I consider it to be our first duty to provide the necessary means to meet our engagements—to risk no dishonour to public faith, no injurious impressions as to our national honour abroad, but to make a suitable provision for all our liabilities in the coming year. Until, then, we have agreed upon a more modified and economical expenditure, I think, Sir, it is our duty to enable the Government to deal at once with those urgent measures of taxation.


said, he thought that the House was placed in a false position, inasmuch as it was considering Ways and Means before it knew what our expenditure would be. How could they in fairness be called upon to levy new taxes upon the people until they were first satisfied as to the necessity of the proposed expenditure? What proof had they that £65,000,000 would be necessary for the expenditure of this year? Unless they were satisfied on that point he thought that they were not justified in the course they were taking. If they required fresh taxation in order to make the Ways and Means equal to the expenditure, they were, he thought, bound by the principles of justice towards the poorer classes to impose duties upon any other articles rather than upon tea and sugar. They were bound in honour and good faith to take off the whole of the war income tax and the whole of the war duties of the tea and sugar. He asked those who were friendly to the principles of free trade whether they could justify this kind of taxation upon the necessaries of life, when they very well knew that there were £96,500,000 of our imports wholly or comparatively untaxed. It was idle to say that they were driven into a corner, and compelled to levy this additional taxation. He contended that they were guilty of a gross breach of faith in following such a course. He confessed, that for his own part, he should prefer seeing the continuance of the income tax, than the continuance of the war tax upon articles of general consumption; and he could not understand how the advocates of free trade could defend the continuation of the tax upon articles which might be reckoned among the necessaries of life. It appeared to him that the preliminary question involving their good faith ought to rule the proceedings of this House. And he again asked whether it was constitutional to discuss the Ways and Means of the country before they ascertained what supplies were necessary? They were bound to consider the question of Supply in the first instance, otherwise they would be voting taxation in the dark.

Motion agreed to.

House in Committee; Mr. FITZROY in the Chair.


Before I submit the Resolution which stands upon the paper in my name to the Committee, I am desirous of offering some explanations which will apply to the proposition which I have now to make, and also to certain objections which have been taken to the scheme in its original and more extended form. The object which I have had in view has been to modify in amount the direct taxation which presses upon the country in the shape of the income tax, and to reduce that tax to the amount at which it stood before the commencement of the war, and at which it had remained up to that time since it was first imposed by Sir Robert Peel in 1842. I must remind the Committee that since Sir Robert Peel introduced it no attempt has been made to increase the rate beyond 7d. in the pound, except upon one occasion, when it was made by the noble Lord the Member for the City, in order to support a plan of enlarged army and navy Estimates. The noble Lord desired to renew the income tax for two years at 12d. in the pound, and for three years at 7d. That plan was objected to by the House, the Estimates were reduced, and the increase to 12d. was not persevered in. Therefore, since the first introduction of the tax, it has never been fixed at a higher rate than 7d. in time of peace. Looking, then, at the strong feeling which pervaded the country upon the subject of the income tax, and to the desire which seemed to prevail throughout all classes, not even excepting the class upon which the income tax does not directly press, to revert to the rate existing before the war, it appeared to the Government expedient to recur to that amount, and to make up whatever deficiency existed in the annual taxation by a small increase in the indirect taxes. The duties augmented during the war were the spirit duties, the malt duties, and the duties upon tea, sugar, and coffee. The spirit duty has been fixed by a permanent Act of Parliament. That alteration is not temporary; it will continue until altered by this House, and it produces in round numbers the sum of £1,500,000, in addition to the sum which it yielded before the war. I stated on a former evening, in reference to something which fell from the right hon. Gentleman the Member for Carlisle, that this sum might be taken as a permanent addition to the income of the country as settled during the year 1854; that no further legislation on the subject is required; and that the present rate is fixed by a permanent Act, and would be collected until changed by future legislation. Well, then, I come to the war malt duty. That duty ceased by the operation of the Act on the 5th of July last. No doubt it would have been competent to me in the last Session of Parliament to propose the prolongation of that duty until the end of the present financial year, which would have afforded to the House an opportunity, before the expiration of this year, of reconsidering the then existing rates with a view to continue some portion of the increased war duties. However, last Session I stated my reason for not proposing any interference with the expiration of that duty, although, no doubt, last year was substantially a year of war expenditure. My reason was that, partly in consequence of the high price of barley, and partly in consequence of the operation of the increased war rate, the consumption of malt had been diminished during the course of the war. I therefore thought, on the whole (looking to the fact that under the operation of the duties on colonial produce, the consumption of tea and sugar had not undergone a diminution), that it was expedient not to interfere with the malt duty. Leaving that duty, therefore, untouched, the only indirect taxes with which it was competent to me to deal at the commencement of the present year were the duties upon tea and sugar. The duty on tea was fixed at 1s. 9d. on the pound, to fall on the ensuing 1st of April to 1s. 5d. I may say in round numbers that every 2d. in the pound on tea produces £500,000; each penny of duty is thus equal to £250,000. Under these circumstances, looking to the necessity of obtaining an addition to the revenue, it seemed to me that the duties upon tea and sugar offered a fair ground for levying a portion of that taxation which was required for the wants of the year, and that, not by increasing those duties, nor by preventing their fall altogether, but by proposing a descent less in amount than would have taken place under the existing law, I should be enabled to frame a scheme which would raise a sufficient revenue to meet the estimated expenditure of the year. On reconsidering the matter, I cannot but think the House will come to the conclusion that the proposal I made is a fair one; and it is one to which it is necessary their assent should be given before the 1st of April. If the duty had not fallen upon the 1st of April, I might have run some risk of loss, and might have left the decision to another Parliament; but inasmuch as it was necessary, in order to fulfil the pledge which has been given to the country to reduce the war income tax—which, unless this House interferes, will be leviable at 1s. 4d. in the £1 from the 1st of April next—it seemed to me a reasonable proposition at the same time to arrest the entire fall of the duties upon tea and sugar. In recommending that plan of providing for the Ways and Means of the year, I cited a passage from a celebrated writer whom my right hon. Friend (Mr. Gladstone) familiarly, and humorously I suppose, but not very affectionately, styled, "old Young"—old Arthur Young. Now, in the first place, I would remark that Arthur Young is a writer of great eminence and celebrity, and has been recognized as such by all authorities on economical science. His fame is not confined to this country—it is of European extension. His works have been translated into French by the direction of the French Government. He even, I believe, received a reward from the Russian Government, which perhaps will mitigate the asperity of some Gentlemen towards him; and with the produce of that reward, I believe he purchased an estate in the Crimea, though what has become of that estate, and whether it is possessed by his descendants, I do not know. But his antiquity is complained of. Now, I do not know why my right hon. Friend should seek to diminish Arthur Young's authority by complaining of his antiquity. The language used by my right hon. Friend would rather lead one to suppose that this was an ancient writer, whose opinions were obsolete, and had no reference to the existing state of things. Now, Arthur Young published works which have a close bearing upon events in modern times, and, considering that his death took place (he was then, certainly, at an advanced age) so late as 1820, I think I am justified in citing him as an authority of no very great antiquity. But I wish to explain to the Committee my meaning in quoting from his works. I adduced a saying of his which condemns simplicity in matters of taxation, and, with great deference to my right hon. Friend, I must maintain that that dictum, when correctly understood, is a perfectly sound one. What that dictum condemns is the attempt to raise revenue from one great article of taxation, such as some great and all-absorbing tax upon property—for example, the system which obtains in Oriental countries of providing for nearly all the expenses of the Government by a land tax. That is an instance of the system which the dictum I have quoted intended to condemn. Arthur Young meant to say, "Impose taxes upon different branches of industry and produce, and don't attempt to raise your revenue from one such branch, either in the shape of direct or indirect taxation." He had in view such a system as that which exists in this country; but certainly, when I quoted his words, I did not wish it for a moment to be supposed that I was recommending a reversal of the policy recommended by Sir Robert Peel, or that when I condemned simplicity in taxation I meant to recommend complexity. My right hon. Friend talked of simplicity as opposed to complexity, whereas I understood it merely as opposed to variety. Now, it seems to have been supposed that in the proposal which I made I have attempted to introduce principles altogether inconsistent with the doctrines of free trade, and it is said that I have, so far as my speech was concerned, "thrown overboard, condemned, repudiated—as far as the act of one year can go—principles of finance which were introduced amid difficulties and struggles, and which were first extensively applied when the party opposite was in power." Now, I am really at a loss to understand upon what ground it can be said that the proposal which I made with respect to the duties upon tea and sugar is in any way inconsistent with the principles of liberal legislation first engrafted upon our existing tariff when the party opposite was in power. By free trade I do not understand simply the repeal of the duties upon imported articles, but of duties of protective and of a prohibitory nature; in duties upon such articles as tea and sugar, not grown in this country, when imposed simply for purposes of revenue, I see nothing inconsistent with the doctrines of free trade. Undoubtedly, every such duty raises the price of the article imported, and thereby inflicts an injury upon the consumer; but, so long as it is raised merely for purposes of revenue, so long as the object is not to favour one country or one class of producers at the cost of another, or to obstruct or intercept trade, it cannot be said that any such duty is inconsistent with the principles of free trade legislation. It has been also alleged that our present financial position is gloomy, and calculated to inspire us with alarm; that we are advancing steadily to a state of things in which there will be a deficient revenue, and that unless some vigorous interposition of the authority of this House take place we must expect some extensive financial difficulties. It seems to me, however, that after a proper discussion in Committee of Supply our expenditure will be fixed at a legitimate amount. Whenever that legitimate amount shall have been determined, can it be doubted that the resources of this country are amply sufficient to raise, without any oppression of the people, revenue enough to cover the current expenditure? There never was a time when the great branches of production—our agriculture, commerce, and manufactures, were in a sounder or more satisfactory state, or on a more expansive scale. Judging from the past, and without denying that temporary interruptions of the prosperity of trade may recur, there never was in our history any moment when there was less ground for alarm as to the possibility of raising an adequate revenue from taxation without serious pressure on the springs of industry. I may carry the remark further. If we look to the state of the working classes, we shall find that all the indications afforded by the returns of pauperism and by the state of the savings' banks, with respect to deposits and the money drawn out of them, concur in establishing the conclusion that the working classes are in the main in a satisfactory state. I, therefore, do not share in the alarms which have been expressed with respect to our financial position; and, while our finances are managed with prudence, and our expenditure is fixed on a legitimate basis, I cannot doubt that this House will in each successive year provide the Government with sufficient Ways and Means for covering that expenditure, and for guarding against any such deficiency as some hon. Members seem to apprehend. Let me, before I sit down, remark that, as I have been charged, upon a mere speculative calculation, with exposing this country to the danger of deficiency at some distant period, I think, if the plan of the right hon. Gentleman opposite (Mr. Disraeli) should be practically acted on there will be a present and actual deficiency; and I trust the House will not agree to the proposals that have been made, but that they will be prepared to accede to the Motion I am now about to make,—namely, that in lieu of the Customs duties now chargeable on tea imported into the United Kingdom, the following duties shall be charged,—that is to say, to the 5th of April, 1857, inclusive, 1s. 9d. per pound; and from and after the 5th of April next to the 5th of April, 1858, inclusive, 1s. 5d. per pound.

(1.) Motion made, and Question proposed— That, towards raising the Supply granted to Her Majesty, in lieu of the Duties of Customs now chargeable on Tea imported into the United Kingdom, the following Duty shall be charged, from and after 5th April 1857 to 5th April 1858, inclusive, 1s. 5d. per pound.


Sir, I came down to the House with the anxious desire to address myself to the question that is now before us, which is a strictly practical question, and to confine myself entirely within the limits which the terms of ray Motion pointed out. My right hon. Friend (the Chancellor of the Exchequer) has entered on a very wide field of discussion, and has replied to much of a general character that has been contained in our previous debates on the Budget, while he has devoted considerable time and attention to a vindication of the fair fame of old Arthur Young. I do not propose to follow my right hon. Friend into those topics. One thing only I will say, because it really does bear on the subject now before us. My right hon. Friend says that he does not consider the proceedings of the Government during the present year are in principle opposed to those operations which I described as having been commenced amid arduous labours, under circumstances of struggle and difficulty, and first of all extensively and systematically entered on at a time when the late Sir Robert Peel held office. My right hon. Friend says, and I perfectly agree with him, that the principles of free trade are distorted and misunderstood if they are supposed to require the abolition of all indirect taxation. The comparative merits of direct and indirect taxation may be a subject for intellectual exercitation; but I entirely agree with my right hon. Friend, that indirect taxation is deeply and inextricably rooted in our financial system, and that it is neither practicable nor desirable to get rid of it. I still, however, hold that the spirit of the proposals of the right hon. Gentleman is adverse to the principles on which the operations of the last fifteen years have been conducted. What were those principles? The right hon. Gentleman treated as something that implied the getting rid of prohibition or protection. On the contrary, there were many measures adopted of the greatest importance, and eminently beneficial to the country, which had no connection with prohibition or protection. Why did we abolish many duties on exports which could not be either protective or prohibitory? Why did we abolish many hundreds of duties upon articles that were productive of extremely small amounts to the revenue? That great process of abolition, which has immensely simplified our financial system, had nothing to do with protection. But the main object of all those operations has been this—quite apart from questions of prohibition and protection—to afford an extended, a judicious, and a permanent relief to the consumers of those great commodities imported from abroad which are essentially connected with the comforts of the great mass of the population. That has been the fundamental principle and the capital feature of all those operations. It has been one on which, happily, there has been no conflict whatever of party opinion in this House; and on that account I contemplate it with all the greater satisfaction, and I regret the more sensibly and bitterly that the plans of Her Majesty's Government during the present year, for the first time, make an attack on this long established principle. Now, we are undoubtedly placed in great difficulty with regard to the whole of our proceedings as respects the finances and expenditure of the country. The hon. Baronet opposite (Sir H. Willoughby) is, in my judgment, perfectly right. I know no reason why we should deal with the Ways and Means rather than with the question of Supply in the first instance. We are involved in the greatest difficulty in consequence of the course adopted in this respect by the Government. We are called on to provide Ways and Means, and we do not know to what expenditure the amount is to be applied. It is true that in 1845 Sir Robert Peel had recourse to a different mode of proceeding from the ordinary one, and proposed a renewal of the income tax before the Estimates were voted; but it was under circumstances altogether dissimilar from the present, because the operation of his proposal was entirely apart from the operation of the Ways and Means. The income tax was not, then, proposed with the object of sustaining the expenditure of the country, but it was proposed for the purpose of obtaining the opinion of Parliament upon the vital question whether the Government was to part from it or to renew it in order to the reduction of the indirect taxation to a corresponding amount. That case affords no precedent whatever to the right hon. Gentleman the Chancellor of the Exchequer for inverting the usual course of our proceedings, and the hon. Baronet is quite justified in his remark. It appears that the Chancellor of the Exchequer has been induced to propose his Resolutions upon the recommendation of some hon. Members of great weight who sit behind the Treasury Bench. I feel the full force of what has been stated by the right hon. Gentleman the Member for Buckinghamshire. He says, you are a Parliament on whom notice to quit has been served, and just at the time you receive that notice to quit you are called on to impose new taxes on the people. Sir, I think that is a very solid and substantial remark, and it has not been got rid of or impaired by the observations that fell from the hon. Member for Huntingdon (Mr. T. Baring). It appears to me that he has entirely misunderstood the facts of the case, and I think the language of my right hon. Friend (the Chancellor of the Exchequer) tends to promote that misunderstanding. He says he is not increasing the duties on tea and sugar. He means that he is not going to levy after the 5th of April a heavier duty than is levied now. But he is going to levy a heavier duty after the 5th of April next than would he imposed by law under the existing arrangement, and therefore substantially he is laying a new tax on tea and sugar. The hon. Member for Huntingdon says my Resolution proposes to take away that portion of Ways and Means which arises from indirect taxation. There cannot be a more unfounded objection. I contend that while the Motion I am about to make is in perfect conformity with recent policy, it is likewise in entire harmony with the principle laid down by the right hon. Gentleman opposite. I lament that the forms of the House have required me to place my Resolution upon the Votes in a shape which may lead those Gentlemen who have not taken the trouble to look into the Acts of Parliament to suppose that I am interfering with the course of existing law, and that I am going to take away from the Government Ways and Means which the existing law gives them for application to the public service. That, Sir, is a total misapprehension. I do not now enter into the question of reduction, because I hope to have an opportunity of discussing it in two or three days, when I shall take a more comprehensive view of the nature of the financial proposals of the Government as they now stand. The request which I make is, I believe, a moderate one, and certainly I shall do my best to press it upon the attention of the House. You are going to take away from the income tax that which is now leviable by law, and which had been granted by Parliament for the purposes of war. I say, do not, in order to relieve yourself, or in connection with any attempt to relieve yourself, from the pressure of the income tax, impose any new burdens upon the tea and sugar of the people—burdens which Parliament, when it granted the war taxes, never contemplated, and which, as the law now stands, it is not lawful to levy. My noble Friend the Member for the City of London (Lord J. Russell) replied to me upon a former night in respect to this subject, and he did so in a tone which, I think, ought to have saved him from those imputations which were so freely cast about during the China debate. It is not too much to say that the view he took of my speech and the opinions which he entertained upon it, ought entirely to have relieved him from any imputation of being a party to factious combination. I thought in his observations—of which I am not entitled to complain, but which certainly indicated considerable hostility to the views I had advanced—my noble Friend complained that I had spoken, on the occasion I refer to, in a manner calculated to attract the goodwill of hon. Gentlemen opposite. Now, Sir, I am glad to acquire goodwill, anywhere that it can be obtained fairly and honourably, for it is not an abundant commodity; and so much do I value the goodwill of my noble Friend, that in venturing to reply to his observations, I can assure the House I shall never say anything inconsistent with the respect I bear towards him, or with my gratitude for his generous—perhaps, over generous—support of all measures emanating from my department of the Government when it was my duty to bring the financial arrangements for the year before the House. Having said so much, I now venture to observe that my noble Friend's objection to my views was a bad one. He said, "You are complaining that there is to be a deficiency in the revenue; you likewise object to the proposals to raise additional revenue by means of increased duties on tea and sugar." It is true I was then complaining of a deficiency of revenue, and I am now complaining of an attempt to increase the duties on tea and sugar; and I appeal to my noble Friend to say whether I am not in the exercise of my right and duty, as a Member of this House, in doing both these things? It is my duty to complain of a deficient supply of Ways and Means to meet the public expenditure; and it is also my duty to object to any particular Ways and Means which appear to me to be open to such great censure and objection that they ought not to be permitted for the public service. We shall, I hope, have a future opportunity of considering how far the proposed expenditure is open to debate; but I must say, in reference to what has fallen from the hon. Member for Huntingdon (Mr. T. Baring), I am not aware that the House of Commons has come to any such pretentious determination as he attributes to the decision arrived at upon the Resolution of the right hon. Member for Buckinghamshire—of an implied sanction of the Estimates upon the table. I disclaim that construction; it was not borne out by the debate nor by the terms of the Resolution proposed by the right hon. Gentleman. The objections to the Motion appeared to turn more upon its prospective character and the indirect manner in which it indicated its objects than upon any opinions the rejection of which tended to give the sanction of the House to estimates which it had had no means of examining. Well, let us come to a consideration of the subject immediately before us. I propose that the duty on tea shall remain at the point at which it is now fixed by law—namely, 1s. 3d. per 1b. from the 5th of April, 1857, to the 5th of April, 1858; and, as at present advised, I shall, if the House should adopt my proposal, then submit that after the 5th of April, 1858, that duty shall fall to 1s. per 1b., for which I will give reasons by-and-by. [The CHANCELLOR OF THE EXCHEQUER: I do not propose now to deal with any future year.] I understand that perfectly. My right hon. Friend proposes to levy a duty of 1s. 5d. for the ensuing year, and after April, 1858, to leave it entirely uncertain, and to leave all parties engaged in this important trade entirely in the dark as to what duty they will have to pay. The first point to consider is the question of a surplus. You have now got by law a surplus revenue for the coming year, because by law you have the war income tax; but if the proposals of the Government are adopted, I am thoroughly convinced there will be no surplus at all. I would wish to resist the conviction, but I cannot, that when this Parliament goes to the country, if the plan of the Government be adopted, it will go to the country with a deficiency of Ways and Means for the coming year, unless it shall determine before proceeding to grant Ways and Means to settle this question, and to obtain some reduction of the probable expenditure of the country, which is absolutely necessary in order to rectify the balance of income and expenditure. When my right hon. Friend the Chancellor of the Exchequer made his statement the other night he showed us a surplus of £890,000; but since that period he has modified his proposal with regard to tea in such a manner as to reduce his surplus to about £500,000. Thus, there is a nominal surplus of £500,000. But what has my right hon. Friend got to provide for as against that surplus? He has not yet provided one farthing for the expenses of the hostilities in China, nor one farthing for the expenses of the Persian war after the 5th of April next. He has proposed a vote for the expenses of the Persian war up to the 5th of April next; but my firm belief is that that vote will be found far below the actual amount of expenditure incurred. But, putting that on one side for a moment, you have a surplus of £500,000, and on the other side you have to meet the total expense of a Chinese war, and although you have left open the Persian war till the next financial year, there must be a great deal of additional expenditure to be provided for on this account. If there were no Chinese war the balance of income and expenditure would not in my mind be satisfactory; and I conceive it to be the duty of the House so to regulate the finances of the country as to maintain, at all sacrifices, and, so far as human foresight can do it, a surplus in our income over the expenditure. Then, Sir, I say that in the statement of my right hon. Friend there is no surplus; the £500,000 is not a surplus, when the expenses I mentioned as contingent are considered. But, even if there were, I say it is the duty of the House of Commons not to be bound to accept every proposal of the Government as to particular taxes, simply because the plan of the Government as it stands shows a satisfactory relation between income and expenditure. Of me the Government shall not have to complain for any undue anxiety to take away their Ways and Means. I emphatically concur in what fell from the hon. Member for Huntingdon, that it is the first duty of the House of Commons, under all circumstances and at all times, as far as human foresight can go, to maintain a surplus income, and I hope that if the House will be disposed to take some measures as to the expenditure, we shall prevent that great evil which I now see coming—a deficiency in the revenue of the present year. Upon the statement of the Chancellor of the Exchequer there is now no surplus—for the small amount he mentioned would be swallowed up in the expenses of the two wars I have alluded to, to say nothing of other matters, such as that referred to the other night by my right hon. Friend the Member for Carlisle (Sir J. Graham)—viz., the considerable sum likely to be required for the redemption of the Sound Dues, should the Government bind themselves by any treaty upon that subject. I only wish to show that really there is no surplus, according to the plans of Her Majesty's Government. If those proposals be adopted there will be an increase in the duties levied upon tea and sugar after the 5th of April next, and I will now try that plan by its merits. My right hon. Friend has reduced very much the scope of his proposals. Originally it was his intention to levy, instead of the present duty of 1s. 9d. upon tea, a duty of 1s. 7d. Upon this my noble Friend the Member for the City of London came in with a proposal to levy 1s 4d., and I, not aspiring to the merit of originality, was content to adopt the present law, by which after the 5th of April next 1s. 3d. per 1b. would be charged upon tea. The Chancellor of the Exchequer, being determined to be original, abandoning the 9d. and the 7d., rejecting alike the 4d. and the 3d., alights upon 1s. 5d. as the amount to be charged. We have now the simple question between the present law which fixes the tea duty at 1s. 3d. per 1b. and the proposal of the right hon. Gentleman to increase that duty to 1s. 5d. I will not repeat what I stated on a former evening of the immense importance, the enormous and unmixed benefits to the country generally that have accrued from the great reduction in indirect taxation. I am quite sure, Sir, that this fact has impressed itself upon the mind of the House, that in dealing with these duties we are dealing with a subject with which no painful recollections of former transactions are associated. The reduction of the tea duty was proposed by the right hon. Gentleman opposite (Mr. Disraeli), who had the honour of first suggesting it as the representative of Lord Derby's Government. That Government fell upon a question of finance, but those who succeeded to power adopted the proposal of the right hon. Gentleman, and it was adopted by the House with only insignificant variations. It had, therefore, the most solemn and unanimous sanction of the Commons' House of Parliament that could be given. Now, Sir, I ask for what great boon or benefit is it that the Government invite us to take the first step in the reversal of this beneficial process of reducing the indirect taxation to the wants of the people? and afterwards I will ask for what reason? Why, Sir, so far as regards the article of tea, the sum that will be gained to the revenue of the country by the proposal of the right hon. Gentleman, will not exceed £370,000, and something not very different from the same sum on sugar. That is the whole which my right hon. Friend the Chancellor of the Exchequer will gain for the present year by interfering with the existing law, and by setting what I must be permitted to call the most pernicious precedent of an act of retrogression and reaction in policy with respect to those great articles of consumption. Now, I first submit that that is a most inadequate object to be gained for such a purpose. The sum is trifling and insignificant in itself, and does not in the least degree justify on account of its importance as a matter of ways and means any step which is questionable on higher and broader grounds. The object being, as a financial object, extremely insignificant, what are the other circumstances in the case? I have been told by the Secretary to the Treasury that I myself am a great offender in this matter of the tea duties, because I proposed an increase of those duties during the war. On sugar I did, but not on tea; and so deeply were the Government to which I belonged convinced of the evil of interfering with the descending scale of tea duties that in 1854, when we obtained power to apply £12,000,000 taxes to defray the expenditure of the war, we positively did not interfere with that descending scale. When we then doubled the Income-tax and increased the malt and sugar duties we, with the full consent of Parliament, left the descent of the tea duties to take its full effect. Such was the sentiment we all entertained, and in which the noble Lord the Member for London participated, with respect to the mischief of interfering with the prospective fall of the tea duties. In 1855 the necessity was pressing, and it had become absolutely necessary to resort to loans, but while resorting to loans we likewise thought it right to obtain an increase of means from taxation, and then, with great reluctance, we arrested the next fall of the tea duties; but we did not increase their amount. Those who followed us did so. I am not saying the matter was not a fair one for consideration, but it was not the Chancellor of the Exchequer of Lord Aberdeen's Administration that did so—it was reserved for the right hon. Gentleman the present Chancellor of the Exchequer to take that step. We did increase the sugar duties under great pressure, and the House also under increased pressure thought it necessary to increase the tea duties; but the increase in these duties were war increases—they were war duties, granted by Parliament for a certain period, defined clearly in an Act of the Legislature; and that period expires on the 5th of April next. The question, then, which you have to consider is, whether you will in a time of peace carry on those war duties, or any portion of those war duties, on tea and sugar? It is useless to say that you are not increasing the tea duties—that you are only suspending their decline. A tax is a tax, and it does not signify what name you may call it by. You suspend the decline this year; another person may do the same next year; and a third the year after that. Do not, therefore perplex and involve the question in darkness by using unmeaning words. The Parliament during the war granted those duties until the 5th of April next, and I only ask you to leave them as the Parliament during the war left them. What is the consequence of the course taken with respect to the tea duties? Why, in the first place, a distinct promise was given to the parties engaged in the trade; and I confess that I think it a most serious evil that that promise should be broken. It is, all very well to come down to the House and say that, whether you grant a remission of the tea duty or not, no loss will fall on the dealer. I think nothing could be more harsh—I will not say dishonest—than such a statement. In the next place, nothing is more impolitic than to grudge to the trader the profit he derives from the remission of duty. The first effect of all remissions of duty is to throw profit into the pockets of the trader; and that process has this beneficial effect, that it excites the enterprise of the dealer and leads to an augmentation of the supply. It is therefore, most unjust and impolitic to break faith with the dealer, and to defend the non-performance of your promise to him by the argument that the loss will fall on the consumer and not on him. I think that, after the Act of 1855, those who were engaged in the China trade were perfectly entitled to consider that, unless in the event of a great stress and pressure, they were entitled to have their expectation of a reduction of the tea duties, as they stood under that Act, realized. I will not talk of a compact, because I wish to avoid verbal disputes, but I put it to the House whether there was not a fair right to expect, in the event of the cessation of the war, a decline of the tea duties as fixed by the Act of 1855? Much has been said against the expediency of prospective legislation; and now a different philosophy has come into play, and we are told that the only proper thing to do is to vote taxes for twelve months, just as we grant supplies for twelve months. As the tide seems to be running against prospective legislation, I shall not be altogether wrong in saying something about the nature of the promise on this subject; and, secondly, about the effects as regards the article of tea, of prospective legislation. I read in a public statement, free to be seen by all the world, a passage in which the Chancellor of the Exchequer is represented as having stated to a deputation on the 23rd of January, ten days before the opening of Parliament, that the war taxes on tea and sugar would terminate on the 5th of April by law. Well, I confess if those words, or any equivalent words, were used by the right hon. Gentleman, I think it is a curious fact for the House of Commons to consider, because there is not a doubt, if such words were used, that the gentlemen who heard them, being engaged in the trade, would immediately and unhesitatingly proceed to arrange their communications with China, and to conduct their operations in conformity with, and in implicit reliance on, those words. I think, then, it is a most serious objection to the proposal of the Chancellor of the Exchequer that it disappointed the expectations reasonably entertained by the dealers on account of words used by a Minister of State. So much for the promise. Now, let me say a few words about prospective legislation; because, undoubtedly, if that be bad the legislation now proposed must be good; because the Chancellor of the Exchequer proposes to grant the duty on tea for twelve months only, and to let the matter afterwards take its chance. Now, the right hon. Gentleman the Chancellor of the Exchequer of Lord Derby's Government proposed a fall of duty to run over five or six years, and I think Lord Aberdeen's Government dealt with the duties prospectively for four or five years; and we shall see what the effect of the prospective legislation of the two Governments in respect of these duties was. In 1853 this prospective legislation was first adopted; and though that legislation was adopted under very unfortuitous circumstances, for a rebellion in China had just broken out, and it was morally certain that to some extent this would interfere with the operation of that legislation, still, notwithstanding that circumstance the traders and merchants of this country were so active in supplying the people with tea, that while the imports in 1853 had been 71,000,000 1bs., they reached nearly 86,000,000 1bs. in 1854. Towards the close of this latter year it first became necessary to arrest the descending scale of 1855, and the moment the descent in the duty was arrested, the increase in importations was arrested also. The supply in 1854 as compared with 1853 had risen 15,000,000 1bs.; but the supply in 1855 as compared with 1854, not only did not rise, but actually fell 2,500,000 1bs. below that of 1854. During the years 1854–5–6 the supplies remained as nearly as may be stationary; thereby showing that your prospective legislation, proposing as it did extended reductions, gave rise to extended operations in the trade. [The CHANCELLOR of the EXCHEQUER read the returns for 1856]. The importations were 86,160,000 1bs.; but that helps to prove what I want to show—that from 1853 to 1854 you had an ascending scale, and that from 1854, instead of ascending in the supply, we stood still. Exactly as the decline of duty was arrested, the ascent in the supply was arrested. The consequence of the prospective legislation of 1853, therefore, has been this, that you have now got a state of things in this country which saves the people from the chance of a famine in tea. You have now got a larger stock of tea by a great deal in the country than you have ever had before. There has been no example of such a stock. It is to that that my right hon. Friend trusts, because he thinks that the tea dealers will have such large stocks on hand that they must sell, whatever the duty may be, and that he will therefore be able to gain something from them in that respect. But I hope that this House will not be led by any such narrow policy to exult in the gains that are to be got out of dealers by a disappointment of the expectations that they have entertained. This stock of tea is such that we may reasonably hope that, if the expectations held out by this House are fulfilled, the public, notwithstanding the war, will get the full benefit of the reduction of the duty, and perhaps even more, because large quantities of tea have been reserved until the time when the reduction should take place.

My hon. Friend the Secretary for the Treasury (Mr. Wilson) founded his argument in favour of these augmentations of indirect duties upon a ground which I do not think he ought to have been the man to advance. He said the Government are in the unfortunate condition of having to make provision for war obligations which were contracted before their accession to office, and left unprovided for. I must say, Sir, that my hon. Friend is entirely without foundation in making that statement. The war obligations were not left unprovided for. They were provided for, or were meant to be, and have been provided for, to a great extent, by the half-year's war, income tax that will come in after the 5th of April next. In the year 1854, when the House of Commons granted to the Government of Lord Aberdeen authority to contract certain temporary obligations in the shape of Exchequer bonds or Exchequer bills, the Government explained to the House that, although the taxes were granted, the collection of them would be necessarily six or eight months in arrear; and over and over again the Exchequer bonds that were then authorized to be issued were described by me, as the organ of the Government, as intended to raise the money which we were going to borrow, not as an addition to the debt of the country, but in anticipation of the taxes that Parliament had actually granted. Well, all that was of course very simple and plain. And now with respect to the plan for redeeming these pledges. There were £6,000,000 of these Exchequer bonds issued, towards the payment of which was to be devoted that half-year's income tax which would come in after the 5th of April next, and which would amount to £4,500,000 or £5,000,000. What is going to be done with that half-year's income tax? £2,000,000 of it will certainly go towards the payment of these Exchequer bonds. That is perfectly right as far as the redemption of the promise of Parliament goes; but the other £2,500,000 of that tax ought, in justice to the promise made in 1854, to be applied to the further reduction of these obligations, and not to Ways and Means; and, therefore, I must tell my right hon. Friend that, so far from his being encumbered with war obligations left unprovided for, for the liquidation of which he is obliged to tax the tea and sugar of the people, there is a provision for the discharge of the war obligations which he is going to apply, not to purposes for which Parliament intended it, but for maintaining the establishments of the year. So much for the doctrine of war obligations; and I venture to say that the more we go back to 1854, the more we regard the intention with which Parliament granted authority to issue those Exchequer bonds, the more we shall see that they were granted in anticipation of taxes the payment of which would always be in arrear. There is no ground, then, whatever for the plea that, in order to pay war obligations, you must lay fresh taxes upon the tea and sugar of the people. Perhaps it will be convenient to the Committee if I should now make some observations with regard to the sugar duties.

I think that my right hon. Friend (the Chancellor of the Exchequer) made a very serious error in the case of sugar. I understood him to say that the war taxes upon tea and sugar had been borne without any diminution in the consumption. Now, the war tax upon sugar has caused an extraordinary diminution in the consumption. I am far from saying that that is the only cause; I admit that another—namely, that of high prices—has seriously contributed to that diminution within the last two years. I am about to refer to an eleven months' Estimate, and that is sufficient for my purpose, of the consumption of sugar in 1854. During the first eleven months of that year it was 7,500,000 cwt.; during the same part of the year 1855 it was 7,178,000 cwt; and in the first eleven months of 1856 it was 6,771,000 cwt.; so that in the course of only two years in this most important article of sugar there was a decrease of about 800,000 cwt., or an eighth of the whole consumption. Now, that is a serious fact for this House to consider. We have laboured, and struggled, and contended for many years to reduce the duties upon sugar. For many years the question of the sugar duties, not merely as a question of revenue or protection, but as a question connected with high social interests of humanity, was a capital question of debate in this House. The House, in order to increase the comforts of the people, inflicted a serious detriment upon the sugar planters in the British colonies, the only class, as far as I know, who have been great sufferers by the transition from protection to free trade. Their condition, I think, entitles them to the fair consideration of the country. But for the sake of increasing the supply and consumption of sugar by the people you not only sacrificed a large revenue, and prejudiced the interests and fortunes of a class of proprietors, but you risked and hazarded a serious evil by giving a new stimulus to the slave trade, which you are constantly endeavouring at an enormous cost to repress. Such was the importance that you attached to that object. And now, owing to the combined influences of high prices, which you could not help, and the war, which was a matter more within your discretion, you have had within the short space of two years a reduction in consumption of one-eighth upon the whole amount. It is impossible to show more clearly that this is a matter which demands the most careful attention of the House. And it must not be said that, with respect to sugar, the supplies are so limited that it does not signify whether the duty is 1s. more or 1s. less. That is the grossest fallacy in the world. As regards tea you are great consumers. I speak in the presence of those who can correct me, but I take it there is no doubt that much more than one-half, probably nearly two-thirds, of the tea that is exported from China comes to England: and therefore you may truly say that when you make an alteration in the duty upon tea, it will not very greatly affect the supply to your market in relation to the supplies to other markets, because you have not many other markets to draw upon. There is no great area in the supply from which you can draw tea by the inducements that you hold out by a reduction of duty. But that is not the case with sugar. On the contrary, the article of sugar is produced in enormous quantities and in an immense variety of countries. Your consumption is now about 350,000 or 360,000 tons. The entire exportable product available for the use of Europe and of the United States of America may, I believe, be taken at something not less than the enormous amount of 1,400,000 tons. Therefore there is an immense area from which you can draw your sugar. And every one knows that in the course of trade a multitude of ships come across the Atlantic with cargoes of sugar, absolutely not knowing to what market they are to go. They come first, I believe, to Cowes, where they learn what is the price in London, in Hamburg, in Amsterdam, and other ports, and they go here or there in proportion as the inducement offered here or there is greater or less. Well, that question of inducement is therefore affected by every 1s. of duty that you put on or take off. Every 1s. or every 2s. more or less of duty determines to what market the ship shall go. Now, Her Majesty's Government are going to lay an additional duty of 1s. upon sugar, and they think to induce us to sanction that proposition by telling us that the supplies of sugar are so small that it is quite unimportant what we do with regard to the sugar duty. Unless you are prepared to continue, without necessity and without justification, the grinding prices to which the necessities of the war drove you, and which you justifiably adopted, the very fact that the stocks of sugar are small ought to prevent you from laying any fresh burden upon that article, and induce you rather to reduce than increase the duty upon it.

I have stated to the Committee what is necessary to put this question in a fail point of view, not wishing to repeat the more general representations which I made on a former evening; but I must again enter my protest against the supposition that we are now called upon to take a course of mere secondary importance. It is represented to us as if this were only adjourning a little the date at which these duties are to fall—as if it were only reserving the question for the judgment of a new Parliament. Sir, it is no such thing. If we can leave the matter in statu quo, let us do so; that is just what I propose. I propose to leave it in statu quo, and to let a new Parliament exercise its judgment upon it. But do not, under the name of a mere secondary or formal proceeding lead the House into taking the first step in a course of retrogression upon a path, every onward step on which has showered fresh and yet fresher blessings on the people of England. It is very easy to say that this is a small matter, that we are not going to make an increase, but only to postpone a decrease. You are going to postpone a decrease; and under what circumstances? If you adopt the proposal of the Government, what sort of an example will you set to future Chancellors of the Exchequer? You have by law at this moment a surplus revenue; and in order, as you say, to make certain reductions, upon which I will not now enter, you are going to impose new duties upon tea and sugar. What will be the probable condition of those who will next year have to reconsider your proposal? What will be their prospect of a balance between revenue and expenditure? You have now got large and ample means in your hands. Woe be to the man who next year stands at that box to open his budget! You are going to cut away those means, and unless this House take—as I trust it may—views of expenditure very different from those of Her Majesty's Government, you are obviously going to cause an enormous deficiency in the revenue of the year 1858–9. That will be the result of your votes to-night. The Chancellor of the Exchequer who in that year shall come down to this House and shall ask, not for an increase, but for a further suspension of the fall in the duties upon tea and sugar, will in all probability have an infinitely better case than the Government which is now setting the example. If, at a time when by law there is a surplus of revenue, this House, in order to do something which will be agreeable to the wealthier classes of this country, agrees to impose taxes upon tea and sugar, it will afford a fatal precedent to future Governments and future Chancellors of the Exchequer, who one year, two years, or three years hence—it matters not when—may again propose to arrest the reduction of these duties, and who will be able to say, "It is all very well, but you should not have taken the first step. It was the first step which set the example, and under what circumstances was that step taken? You actually had in your hands the means of defraying the whole public expenditure; but the Parliament of 1857, which was upon the eve of dissolution, left a large deficit, which we are now called upon to meet. Under these circumstances a large addition of new taxes has become necessary. We must divide these taxes between direct and indirect; and, glad as we should be to see the taxes upon tea and sugar fall to the level of the golden age of about 1850 or 1851, it is obvious that we are driven, however sorrowfully and however reluctantly, to a further suspension of their reduction."

Sir, I, for my part, am most anxious to avoid any thing in the nature of a factious opposition to any proposal, however much I may object to it. I wish, with the kind indulgence of the House, to make a fair and full statement of my objections, and if I perceive that the opinions which I individually entertain are not largely supported by the House, then, after having taken the sense of the Committee, I shall respectfully withdraw; but if those opinions are supported, as I trust they will be, by this Committee, I shall not shrink from doing them all the justice in my power, I am deeply convinced that the rigid maintenance of the pledges given, even by the Parliament which raised these taxes during the war, is of the utmost importance in itself—of the utmost importance with a view to the increase of the comforts of the people—of the utmost importance to the satisfaction, contentment, and loyalty of the people; and, speaking of these proposals as precedents, I do not hesitate to add, of the utmost importance to the stability of the political institutions of the country; because I think that, in a country where the representatives of the people are elected, not by the entire mass of the population, but only by those who are generally above the level of the labouring classes, it is most important, if you intend to have tranquillity and contentment, that the labouring classes of the people should see that their interests are fairly, justly, and liberally cared for by Parliament, and that there is in that body no disposition to respect unduly and unequally the interests and convenience of those classes who possess the franchise. If I were an agitator for extended and organic reform in the Parliamentary representation of the people, I should not desire a better case than to go forth among those upon whom I sought to act and say to them: "See, here is a fair test of the effects of a limited representation. Here is a case in which Parliament had in its hands, provided by law, ample means of defraying the expenditure of the country. A movement was got up among the classes who possessed the franchise for a reduction of taxation. They did not, as they ought to have done, look first to what would be the expenditure of the country and govern themselves as to taxation accordingly; but they at once determined, with a dissolution in prospect, that whatever might be the expenditure the wishes of the enfranchised classes should be met; and to meet these wishes they not undid, but began to undo, the beneficial work of former years and of former parliaments, and added to the burdens which were leviable by law upon the tea and sugar of the people."

Amendment proposed, to leave out "1s. 5d.," and to insert "1s. 3d." instead thereof.


I have listened with great attention to the speech of my right hon. Friend, but I regret to say that, as in the case of a former speech of his made during these discussions, I am incapable of understanding the drift of the policy which he recommends to us. Each part and portion, each sentence of my right hon. Friend's speeches is highly polished and refined; but when I attempt to understand them as a whole they seem to me to be deficient in coherency and intelligibility. In his style of speaking he reminds me of the sculptor described by Horace,— ——Ungus Exprimet, et molles imitabitur ære capillos, Infelix operis summâ, quia ponere totum Nesciet. I confess that if, setting aside the Budget which I have presented to the House, I were now called upon to prepare one founded upon the principles recommended by my right hon. Friend, I should be wholly at a loss to know how to set about it. My right hon. Friend complains of my proposal to arrest the fall of the duties upon tea and sugar, and, greatly refining upon the words, and perverting them from their obvious meaning, says,—"What you are proposing is not a reduction, but an increase of the duty. All I ask is that you should leave the law as it stands." What my right hon. Friend means is this, that a reduction which is a less reduction than a greater reduction is not a reduction. [Mr. GLADSTONE: No, no!] Let me explain what I understand to be the facts, and then my right hon. Friend will see whether I have not expressed his ideas in correct language. The present duty on tea is 1s. 9d. a pound; by law it would on the 1st of April next fall to 1s. 3d. a pound. I propose from the 1st of April a duty of 1s. 5d. a pound. What I maintain is, that to alter the duty from 1s. 9d. to 1s. 5d. is a reduction. My right hon. Friend says that it is an increase, because it is a less reduction than a greater reduction; therefore I have quite correctly interpreted his meaning when I say that he contends that a reduction which is a less reduction than a greater reduction is not a reduction. At all events, what I propose should be the duty from the 1st of April next, although it is higher than that which would be the duty if the law was to take full effect, is a less duty than that which now exists. Then I take it, it will hardly be disputed that a change from 16d. to 7d. upon incomes above £150, and of11½. to 5d. in the pound upon incomes between £150 and £100, is also a reduction. It will further not be denied, that when I take no measures for interfering with the fall of the war duty upon malt, that also is a reduction. The same is the case with regard to coffee, the entire reduction of the duty on which, fixed by law, will take effect. I made a statement on a former night which my right hon. Friend (Mr. Gladstone) has characterized in no very measured terms as calculated to deceive the country. I certainly did inadvertently use the words, that I proposed certain reductions of duties, whereas I ought to have said that, in consequence of the plan which I proposed, certain duties would be reduced. With the explanation which I have now given, can anything be more unfair than to assert that I have introduced a Budget the main characteristic of which is the increase of taxation? Any stranger in this House who listened to the speech of my right hon. Friend would suppose, that at the close of a war I was bringing forward a plan for adding to the burdens of the people. All that he can accuse me of doing is the not allowing the whole of the contemplated reduction of taxes to take effect. I am not arresting the entire reduction, but merely qualifying it to a certain extent. In order to prevent all misunderstanding I will again read what the remissions, according to rates calculated for the whole year, will be for the ensuing year, as compared with the amount at which these imposts stood during the period of the highest war taxation, two years ago:—There will be a reduction—

On malt £2,000,000
On income tax at the war scale 9,125,000
On tea 600,000
On coffee 135,000
On sugar 342,000
Making in the whole £12,271,000
It is quite true, as my right hon. Friend reminded the House, that the whole of that reduction will not accrue within the financial year, inasmuch as it is well known that taxes are not always paid at the time they become due; but that is the only way in which you can estimate remissions of taxation. I reiterate, then, quite deliberately, the statement which I made on a former night, that taking the taxation of the present year, as compared with the highest taxation during the war, there will be a relief to the country of more than £12,000,000 sterling. My right hon. Friend says all he asks is that we should leave the law as it is. Very well, Sir. If he places me in the position of making a bargain with him for the Exchequer, and assumes that I have interests distinct from the public, I say I am ready to take the law as it stands. Continue the war income tax for the next year—let the tea and the sugar duties go down; and the Exchequer will be an enormous gainer. By that arrangement a much larger sum will be levied from the public than by the plan I propose. What my right hon. Friend does, however, is this: he picks all the plums from the pudding—he does not take the rough with the smooth, but keeps the smooth to himself and leaves the rough to me. He says, "I deny you the increase (as he calls it) of the tea and sugar duties, but I will exact from you the remission of the income tax." And that, forsooth, he calls leaving the law as it is! I cannot understand how he could have thought the House would overlook a consideration so obvious; and I must only suppose that amid the labyrinth he pursued in the course of his speech he lost the clue of his argument, and became bewildered in his own ingenious calculations. He said that I denounced prospective legislation upon taxation, and he also referred to the scheme introduced by the right hon. Gentleman the Member for Buckinghamshire, when Chancellor of the Exchequer, for prospectively reducing the tea duties. He might likewise have enumerated, if he had deemed it worthy of mention, the Act that I myself proposed on the same subject, and carried through this House. That Act, which is now the law, established the very fall in the duties which I now seek to arrest. It must, therefore, be evident that I can have no insuperable objection to prospective legislation respecting the duties on tea, or any other duties with regard to which it may seem possible to propose a prospective reduction. Indeed, the policy of prospective reduction is quite familiar to the House, and I really cannot conceive how my right hon. Friend should imagine that anybody can have any fundamental objection to so well-known and long-recognized a principle of legislation. My reason for not recommending a prospective reduction of the duty contemplated by the Resolution before the House, as was clearly stated by my noble Friend at the head of the Government yesterday, and also indicated by me, was that we did not think ourselves justified, in our present circumstances and in the provisional position of our legislation, in proposing to go beyond what is absolutely necessary for the service of the year. I proposed at the beginning of the Session prospective duties for three years, both upon tea and sugar, thereby plainly indicating that I was not hostile to prospective taxation; and I withdraw that part of the plan referring to the two last of those three years in the Resolutions of which I gave notice yesterday, on the sole and simple ground of the altered position of the Government. Sir, if I attempted to carry more than is essential for the requirements of the year, is there the smallest doubt that I should have been met with the very reasonable objection that I was asking the House for more than was necessary, and more than, according to our own showing, we have a right to ask? For the same reason that we have confined our demand to six months' supply, and propose also to limit the Mutiny Act to a similar period, we are equally bound to ask for taxes for only one year. We could hardly ask for taxes for a shorter time than a year. Nobody ever heard of taxes being enacted on tea and sugar for a period of six months. Our merchants have to send out their orders to places at a remote distance, and it is important to the mercantile community that it should know beforehand what are to be the taxes for at least a twelvemonth. So also with the income tax—it is necessary that it should be fixed for a year. But beyond a year it is not needful to go, and on that account alone I have restricted my proposition to one year, and not because of any antipathy to prospective legislation.

Sir, I now come to a part of my right hon. Friend's speech which, I confess, puzzled and perplexed me more than any other—the part, I mean, which referred to the redemption of the war loans. He says that £4,500,000, which will be collected in the ensuing year, as arrears of the high income tax, in the current year ought to be applied to the redemption of Exchequer bonds. Well, £2,000,000 will be so applied, if the House thinks fit to grant sufficient Ways and Means for the service of the year. If my right hon. Friend's proposal to refuse the increase in the tea and sugar duties should be acceded to, I presume the result would be that it would be necessary to borrow again for the discharge of £2,000,000 of Exchequer bonds; for it is necessary that the current expenditure should take precedence of the redemption of debt. Therefore his proposition, by an inevitable consequence, would lead to the postponement of the redemption of these bonds. As far as I can understand his doctrine, it is that we ought to apply £4,500,000, that would be received next year in respect of the war income tax, to the redemption of the Exchequer bonds. I do not know why we should give those bonds the priority over other modes of redeeming debt; but my right hon. Friend must be aware that if the House is disposed to impose £2,000,000 of new taxation for the services of the year, in order to enable us to apply £2,000,000 of income tax to the redemption of the debt—because that would be necessarily involved in his plan—there would be no power, as the law stands, to appropriate that money to the extinction of Exchequer bonds. The Exchequer bonds of next year are held by different parties, and we have no means of redeeming them till the regular time for their redemption arrives. We cannot go into the market and buy them up, unless the persons to whom they belong are willing to sell them—you can redeem them only when they reach the proper period. You have no legal means for keeping in the Exchequer the surplus of the present year with which to redeem the debt in a future year. The Commissioners for the Management of the National Debt are bound, under the existing law, to apply any surplus that may arise in the present year to the extinction of debt, but not to the extinction of the debt in a future year. Therefore, to carry out my right hon. Friend's plan, this must be done:—You must, in the first place, pass an Act of Parliament enabling you to impound £2,000,000 of the revenue this year, and to keep it locked up in the Exchequer in order to be ready in the month of May, 1858, to redeem £2,000,000 of Exchequer bonds then coming due. Next, inasmuch as you have a deficiency in the revenue for the present year, you must also impose £2,000,000 of additional taxation to cover it. My right hon. Friend's financial scheme leads to this consequence, that you must raise £2,000,000 this year of unnecessary taxation, in order to store over £2,000,000 with which to redeem Exchequer bonds next year. That, as far as I can comprehend it, is the practical result of his plan. If it can be attained in any other way, I confess 1 am totally unable to discover it. If he means that we are to continue the war income tax to the full extent of £16,000,000, then, no doubt that would very much facilitate the redemption of the debt in the next year, because there would be a surplus of £4,000,000 handed over for the following year. I do not know whether that is my right hon. Friend's plan, but the result of it would be that we should have a surplus for this year for which we have no application, and also a high income tax next year to redeem the debt. Instead of doing this by the clumsy mode of levying too large a tax this year to obtain a surplus, let him propose an additional charge to the income tax for next year, which would give him what he wants when the exigency arises, without placing unnecessary burdens on the country this year.

My right hon. Friend stated that I misunderstook or mistook what he said respecting the consumption of tea and sugar. Well, now, he read a return of consumption extending over eleven months. I have the statement before me for twelve months; and let the House observe the progress made in the consumption of tea, and how far the duty I proposed has had the effect of limiting and checking the consumption of tea. These figures, which I will read, are those upon which my right hon. Friend founded his impassioned and pathetic complaint, that we were grinding and crushing the poor with imposts on necessaries unheard of in the annals of taxation. Let the House judge from the following figures how far the war duty of 1s. 9d. has checked the consumption. I will go back as far as 1835 to show the progress of consumption. The quantities I will read are those retained for home consumption. In 1835 the quantity was 36,574,000lbs. in 1845, 44.193,000 lbs.; in 1852, 54,713,000 lbs.; in 1853, 58,834,000lbs. That was the year before the war, and it will serve for a point of comparison. In 1854 the consumption rose to 61,953,000 lbs. In the years of high war duties the consumption was as follows:—In 1855, 63,429,000 lbs.; in 1856, 63,277,000 lbs. These two last years were thus years of the highest consumption of tea ever known in this country, and under this "grinding and crushing tax," which is now 1s. 9d. And what I propose is to reduce this tax still further to the ''grinding and crushing" duty of 1s. 5d. per lb. I will now take the article of sugar. In 1835 the quantity of sugar taken out of consumption, refined and unrefined jointly, was 4,022,850cwts.; in 1845, 4,856,680cwts. There was afterwards a great change made, and in 1852 the consumption was 7,172,858cwts.; which in 1853 rose to 7,487,589cwts. My right hon. Friend says that I mistook the figures, and that I was wrong in saying that the consumption of sugar was not materially affected by the war. Now, in 1853 the consumption was 7,487,000cwts., which in 1854 rose to 8,333,407cwts. In 1855 the quantity certainly fell to 7,547,157cwts., and in 1856 it was 7,361,371cwts. Thus, although in the last two years the consumption was less than in 1854, yet in 1855 it was greater than in 1853, and in 1856 it was nearly equal. It is therefore obvious that the consumption of sugar has not been materially affected by the war duties. The consumption of molasses has gradually increased from 844,030cwts. in 1853 to 927,266cwts. in 1854, 920,940cwts. in 1855, and 938,776cwts. in 1856. Therefore, with regard to molasses, the consumption of last year was greater than that of any previous year. If, on the other hand, I take the article of malt, I find that the consumption of malt in 1852 was 41,071,636 bushels; in 1853, 41,992,178 bushels; in 1854, 36,812,727 bushels; in 1855, 33,879,381 bushels; in 1856, 36,970,427 bushels. So that a more decided effect was produced by the war duties upon malt than upon either of the articles of tea or sugar. I will only mention the opinion of Mr. M'Culloch, whose authority must have considerable weight upon a question of this nature, and who is acquainted with all the statistics of taxation in this country. In his Commercial Dictionary, he said— When not carried to an extravagant height, duties on sugar afford, in truth, one of the least exceptionable means by which a large revenue may be most conveniently raised. Sir, the additional revenue I propose to raise on the articles of tea and sugar is not very large. It will not, I think, amount to £1,000,000 in the present year. It is, nevertheless, a part of the financial plan of the year, and, although I lament as much as my right hon. Friend himself, or as any hon. Member can do, the necessity that exists for imposing duties upon articles that are extensively consumed, not only by the upper and middle classes, but also by the working-classes, and although I much wish that it were in my power conscientiously to accede to the Motion of the right hon. Gentleman, and allow the decline of duties to take place without impediment, yet still I believe that if we are driven to find an alternative, and if the House, rejecting this proposition on the part of the Government, should substitute some other tax on some other article of general consumption, it will be found that that substitute will not be less onerous or more acceptable to the bulk of the people than that which I now propose.


There is one question which the right hon. Gentleman has not answered, but upon the answer he gives to that question will depend my vote. The right hon. Member for Oxford University has stated that, in a conversation held between the dealers in tea and the Chancellor of the Exchequer, in January last, the right hon. Gentleman, in answer to their application, said that the duty would lapse by law on the 5th of April. Now, what he wished to know was whether that avowal was accompanied by any qualification or not. If it were an unqualified answer, then they could not come to any other conclusion than that the cessation of duty was to take place; and in that case the plan of the Chancellor of the Exchequer will be a direct breach of faith, and the House will do well to pause before they agree to it, My views were in favour of the right hon. Gentleman's Resolutions; but I cannot think of giving them my support if there is the shadow of a breach of faith.


I am much obliged to my hon. Friend for giving me an opportunity of answering his question. I can of course hardly be expected, at this distance of time, to recall the exact words that fell from me on that occasion. At the time to which he refers I had the honour of receiving a deputation of gentlemen, who came to press me to inform them whether it was the intention of the Government to adhere to the whole amount of income tax for the ensuing year, and whether the Government viewed those words in the income tax which have been so often referred to as constituting a sort of bond between them and the House of Commons, of which the Government were entitled to avail themselves, whether the service of the year required it or not. In answer to that question I stated what was the law with respect to the different duties that were imposed during the war, and I said that the war duty on malt had expired on the 5th of July; that by law the tea and sugar duties expired on the 1st of April next. I explained the law with regard to the income tax, and proceeded to give them an answer to the question with respect to the intentions of the Government, telling them that it was not the intention of the Government to take advantage of a technical expression in the Act of Parliament. I have no doubt that the words cited are substantially what I said, but I merely stated a matter of fact. The deputation did not ask a question about tea or sugar—those articles were merely mentioned incidentally. It was a deputation, if I remember aright, from the Society for the Reduction of the Income Tax, and they came to me exclusively on that question. [Mr. SPOONER: They did not represent the tea dealers then?] They not only did not represent the tea dealers, but they put to me no question on the subject of the tea duties. I introduced it upon my own thought and suggestion, and did not lead them to expect that those duties would be increased or diminished, or dealt with in any manner whatever.


Having given notice of an Amendment to the duties proposed by the Chancellor of the Exchequer, it is due to the Committee that I should state the course that I propose to take. But before I do so, as a renewed discussion has been raised, first by the Chancellor of the Exchequer and then by my right hon. Friend the Member for the University of Oxford, with regard to the merits of the Budget, I must in a few words restate my opinion. My right hon. Friend says that I objected very much to the propositions that he stated, and no doubt it is my habit, when I have formed my opinion after some labour and deliberation, to state my opinion as strongly as I can—not, I hope it is unnecessary to say, from any wish to impose my opinion upon the House, but in order to make the House perfectly understand the reasons on which I have acted. It appears to me on considering the Budget that the Chancellor of the Exchequer has proved that it was a very fair and honest statement of the requirements of the year, and of the manner in which he proposed to meet them. It appears to me that, as the ratification of a treaty of peace does not carry with it immediately an end of the expenses of war, it is necessary for the Chancellor of the Exchequer to consider in what manner those expenses shall be met. The present Chancellor of the Exchequer, in conformity both with the principle and the policy which were established during the war, proposed that those expenses should be met partly by an income tax, reduced and carried beyond the period fixed by law for its expiration, and partly by carrying on the tea and sugar duties, in like manner beyond the period fixed by law for their fall. It seems hardly worth while to consider whether this is reduction or augmentation. The question is whether it is a fair quota in the present state of the finances of the country. I do not think it would be right for the House to say, "We will leave on a considerable portion of the war income tax, but we will take away entirely the duties on tea and on sugar; and at the same time I think it would be also wrong to carry further the reduction of the income tax and leave a greater tax on tea and sugar than the Chancellor of the Exchequer proposed. It appears to me that, as property has borne a large proportion of the expenses of the war, it is fit that, if further sacrifices are necessary, the community at large should contribute. I cannot see the slightest ground for the statement of the right hon. Member for the University of Oxford, that the most extreme Parliamentary Reformer will obtain the great advantage of being able to say, "Look at the unfairness of taxation; the rich are relieving themselves, but the comforts of the poor are taxed." It might be so if the income tax were altogether abolished; but I think that the poor, with the sound sense and reason which they possess, will see that, to tax equally and fairly, Parliament must tax, according to their means and expenditure, the poor as well as the rich. Observe, besides that this tax on tea and sugar does not fall exclusively on the humbler classes; that while the income tax falls exclusively on parties who have certain incomes, the tax on tea and sugar also falls on them, at the same time that it falls on those who are in a less fortunate position. I say, then, the principle which the Chancellor of the Exchequer laid down in his Budget was a perfectly fair one, and, with the exception of this article of tea, I agreed in his proposals. I regret that circumstances should induce my right hon. Friend to make provision for a less time than he then proposed. I understand from him that it arises from some necessity in consequence of the approaching dissolution. But my opinion is that the Chancellor of the Exchequer having made a full statement to the House, the right hon. Gentleman the Member for Buckinghamshire having made a most able speech against the Budget, and been supported by the undoubted and almost unequalled abilities of the right hon. Gentleman the Member for the University of Oxford, and the House, after hearing those speeches, having come deliberately to a decision by a majority of eighty in favour of the propositions of the Government, the Chancellor of the Exchequer was in a position to go on with his plan for three years according to the principle he at first laid down, and I regret that he has not thought proper to do so. He has not, however, taken that course; but he proposes now, instead of giving up one-third of the reduction of 6d.,—which, if the law were not altered, would be the case—to give up two-thirds. That is a very different proposal from the one with which I had to deal when, speaking on the Budget, I gave notice of my Amendment; but, as the only difference between us is no longer the difference between 4d. and 7d. but the difference between 4d. and 5d., I think, out of the respect which is due to a Chancellor of the Exchequer, I ought not to divide against the proposition of my right hon. Friend. I have never myself been Chancellor of the Exchequer, but I always feel great compassion for the gentleman who holds that office, and I own I am rather surprised that the right hon. Member for the University of Oxford, who has held that office himself and cannot be unaware of the difficulties against which he has to struggle, should not have more sympathy for an official from whose labours generally so little satisfaction results. There is an objection, I think, to the proposition of the Chancellor of the Exchequer,—one which, it is admitted, peculiarly applies to the article of tea. It has been found that a scale falling from year to year produces very injurious consequences to trade, that during only about nine months of the year business can be done, and that in the other three months there is total stagnation, because the stocks are being reduced as low as possible in anticipation of the day when the duty is reduced. This is a very great inconvenience; and, whether the duty were 1s. 4d. as I proposed, or 1s. 5d. as the Chancellor of the Exchequer now proposes, or 1s. 3d. as the law states, I should have been better satisfied if it had been settled for three years at a uniform rate. There is no article with respect to which the benefits of a large consumption arising from diminished duties and increased business are more apparent than the article of tea. The consumption, which in 1837 was about 30,500,000 lbs. was in the last two years upwards of 63,000,000 lbs., being an increase of more than 100 per cent. It is, moreover, remarkable that the falling off which took place last year, from 63,500,000 lbs. to 63,070,000 lbs., was consequent upon the increased duty. It is therefore of the greatest importance to settle that duty for a fixed and determinate period. I am not disposed to divide the House against the proposition of the Chancellor of the Exchequer. I cannot give my vote to the right hon. Member for the University of Oxford. I think to adopt that right hon. Gentleman's Amendment would be to cause a great loss to the revenue; I consider it to be against the principle of the Budget which has been adopted by the House; and I believe it will oblige the Government to have recourse to some other mode of taxation to make up for the deficit.


said, that what he complained of was not so much the amount of the duty as the continual tampering with and changing commercial arrangements. He was not one of those who thought that the Budget of 1853 was binding upon Parliament; but he was certainly of opinion that when an arrangement had been made with a certain trade, as regarded the imposition of duties, Parliament had no right to alter those duties unless at the same time it altered the duties on other commodities. It was distinctly understood by the deputation that waited on the Chancellor of the Exchequer that the war taxes on tea and sugar would terminate on the 5th of April next, and from the words which the right hon. Gentleman used it was inferred that the Government had no intention of varying the law so as to postpone the period at which those duties would cease. Moreover, this interpretation was borne out by something that took place subsequently to the interview. As late as the 17th of November, I856, a gentleman, who had some idea that the usual course would be pursued of tampering with the duties on tea and sugar, deranging the trade, and upsetting the calculations which had been made, wrote a letter to the Customs, asking what was to be done; and he held in his hand a copy of the answer of the Customs to that application. The answer was as follows: — Board of Customs, Nov. 17, 1856. Sir, I am directed by the Commissioners of Customs to acquaint you, in reply to your application of the 11th instant, that the reduction of the duty upon tea from 1s. 9d. to 1s. 3d. will take place on the 6th of April, 1857. I am, &c., W. MACLEAN. Of course, this letter would not have been written without previous communication with the Treasury.


No reference whatever was made to the Treasury by the Commissioners of Customs in respect to that letter.


Then the officers of the Customs must be in a very bad state of subordination if they were allowed to write such letters as this to mislead the public. But there must have been some sort of communication with the Treasury, because a short time after the following letter was written in answer to a gentleman in the trade who had made an application in respect to sugar:— Custom House, Nov. 29, 1856. Gentlemen,—The Commissioners of Her Majesty's Customs, having had under consideration your application of the 25th instant, referring to my letter of the 17th preceding, addressed to Mr. S. Sampson, and inserted in The Times newspaper of the 19th following, in regard to the duty which will be payable on tea after the 6th of April, 1857, and representing, as the articles of sugar and coffee stand in the same category, that it would be extremely satisfactory to the trade if the Board would communicate the intentions of the Government also with respect to those articles, I am, in the first instance, directed to state that my letter alluded to was in reply to Mr. Sampson's request soliciting information as to the date when the duties on tea would be reduced from 1s. 9d. to 1s. 3d. per 1b. With reference to the terms of the existing Act of Parliament, and as sugar and coffee are placed in the table of duties annexed to the Act 18 & 19 Vict., cap. 97, under terms similar to those applicable to tea, as regards the prospective reduction in the rates of duty chargeable thereon, such reduction of duty will under that Act take place at the same period—namely, the 6th of April, 1857. I am, Gentlemen, your most obedient servant, "W. MACLEAN. [Mr. WILSON: Hear, hear !] He supposed the hon. Gentleman cheered on account of a supposed reservation in this letter; but he (Mr. J. L. Ricardo) must say that if ever there were letters which were calculated to mislead the trade, these were. There might have been a reservation intended; but the trade certainly understood them to mean that there was no intention on the part of the Government to interfere with the reduction of duties which was to take place on the 15th April, 1857. He could not agree with the noble Lord (Lord J. Russell) that the poor had no cause to complain on this subject, because they all knew that a much larger proportion of the income of the poor man was expended on tea and sugar than of the income of the rich man. Moreover, in making almost his sole articles of luxury dear to the poor man, they were at the same time injuring him as regarded his employment. These frequent changes, too, did great damage to our trade. While they were raising their taxes on sugar the United States were lowering theirs to the extent of 8s. per cwt. The consequence would be that the sugar of the Colonies would find its way to the United States instead of coming here, and the industry of that country would, of course, be employed in purchasing it. The classification of sugar was even a greater evil than the tax itself. There were three elements in the classification, namely, grain, colour, and saccharine matter, and he would put it to any one who was acquainted with the subject, whether custom-house officers were sufficiently learned in the matter to distinguish those elements. Colour was the principal criterion. There was what they called a whitish-yellow, and there was a yellowish-white, there was also a whitish-brown and a brownish-white. In fact, there were all sorts of shades; and when an officer looked at the different shades they became so blended in his eye that it was impossible for him to distinguish them. The consequence was, that not only was a different duty levied in London from that which was levied in Liverpool on the same sugar, but a different duty was levied in one dock from what was levied in another dock in the same port. The hon. Gentleman the Secretary to the Treasury, who, during his tenure of that office, had become very learned with regard to the qualities of sugar, had been obliged continually to alter the standard; and there had been many cases in which the custom-house officers, not being able to tell under what class a particular sugar ought to be charged, had been obliged to send to the hon. Gentleman at the Treasury for a standard to enable them to judge. Some time ago he wrote to the hon. Gentleman to ask him to be good enough to let him have a return of the number of instances in which complaints had been made of sugar having been charged in a higher class than it really belonged to; and the reply was that the return, if made, would be so voluminous, would take so long a time to draw up, and the expense would be so great, that he had better not press for it. Accordingly he did not press for it. Again, he must point out to the House that the present system was protection under a disguise, enabling the bad sugars of Demerara, Berbice, and other colonies, to realise the price which the better sorts of sugar would obtain were the duties levied in the proper manner. He held in his hand an account, from which it appeared that the waste on Muscovado sugar by drainage by the time it arrived in this country averaged 10 per cent, and that, generally speaking, taking the contingencies of the voyage, it was 18 and 20 per cent. It was calculated that the loss from this cause was in weight in a year 460,000 cwts., and in value £259,000. Nor was this all. On good sugar all this waste would be avoided. The bad sugar, whose importation was thus encouraged, was of a most deleterious nature. As the House was aware, an investigation was made lately for The Lancet with regard to the adulteration of various articles of food consumed in the metropolis. He would read to the House the result of that investigation with regard to sugar. The Lancet said:— The impure sugars are dark coloured, imperfectly crystallized, heavy, clammy, and damp, readily caking into masses; examined with the microscope they are found to contain fragments of cane, woody fibre, grit, &c., and to abound with animalculæ or acari, and sporules of fungi. We have seen that nearly all the brown sugars imported into this country contain a large amount of impurity, but in general the sugar procured from the grocers does not alone contain this same amount, but it is increased, sometimes doubled and trebled, by the use of variable proportions of other sugars still more impure, in fact, the most impure that can be purchased, so that in the state in which it reaches the public it is entirely unfit for use. We have now adduced incontestable evidence of the impure condition of the majority of brown sugars as imported into this country, and particularly as vended to the public. These impurities prevail to such an extent, and are of such a nature, consisting of live animalculæ or acari, sporules of fungi, starch, grit, woody fibre, grape sugar, &c., that we feel compelled, however reluctantly, to come to the conclusion that the brown sugars of commerce are in general in a state wholly unfit for human consumption. This being the case, he would like to see the classification of sugars entirely abolished, and the same duty applied to all quantities. He could not imagine why the public should be called upon to pay as high a price for bad sugar as that for which they could obtain good sugar if the amount of duty was equalized. He believed the existing system operated injuriously with regard to trade, and led to the importation of an unwholesome article when a better might be imported at the same price; and he would, therefore, though unwillingly, again take part in the "coalition" that had been so much talked of, and vote for the Motion of the right hon. Member for the University of Oxford.


said, the answer which the Chancellor of the Exchequer said he had given was the only answer that, under the circumstances, he could have given. He stated what was the law, and nothing less or more. He entirely concurred in the views of the hon. Gentleman who had last spoken with regard to the assessment of the duty on sugar. He had always regarded the present system as perfectly intolerable, and he hoped it would soon be abolished. Under the present system the duty was assessed by persons who were utterly incompetent to judge of the quality of the article, and the consequence was that mistakes were constantly committed, a high duty being levied upon the lower descriptions of sugar, and a low duty upon those of superior quality. He believed the adoption of a duty of 10s. would encourage importers to bring good sugars into the market. With respect to the duties on tea, he had proposed a Resolution, which received the sanction of a public meeting, that the duty on tea should be fixed at 1s. 4d. a pound for three years. That Resolution had been placed in the hands of the noble Member for the City of London (Lord J. Russell), and it was left to his discretion whether he would, or would not, propose to the House the adoption of such a rate. The noble Lord, in the exercise of that discretion, had determined not to press the proposition, and he (Mr. Gregson) would therefore not oppose the proposition of the Chancellor of the Exchequer—the difference between 1s. 4d. and 1s. 5d. being so small—to levy a duty of 1s. 5d., which was to be continued only for a year, and would then be open to revision. The right hon. Gentleman (Mr. Gladstone) had calculated that the duty of 1s. 3d. upon tea, which would have been imposed had the existing arrangement continued in force, would yield a revenue of £4,000,000; but if a duty of 1s. 5d. were adopted it would afford an additional revenue of £550,000. A duty of 1s. 5d. would amount to 115 per cent. upon the gross value of the present stock of tea. The value of the stock was about £5,400,000, and the duty amounted to nearly £6,000,000. That duty was so excessive that it ought not to be long continued. He was an advocate for the reduction of the duty to 1s., which would amount, on the average, to 100 per cent, upon the importing price, and as the consumption was rapidly increasing an enormous revenue might be derived from this source. He hoped the right hon. Gentleman (Mr. Gladstone) would not divide the Committee; he (Mr. Gregson) could not support his Amendment.


considered, as the effects of the war had not yet passed away, it would be unreasonable to expect that the Chancellor of the Exchequer would find himself in a position to meet the war expenses, which could not yet have ceased, without having recourse to some of the most obvious sources of revenue. It was to the credit of a reformed Parliament that they showed themselves more willing to meet the heavy expenses of war by immediate taxation than was the case with our ancestors in former wars, who had burdened the country with such an enormous amount of permanent debt. He had always been in favour of direct taxation. [An Hon. MEMBER: Then why not support direct taxation now?] The reason why he did not support a further increase of direct taxation was because he did not think the country could support more than an income tax of 7d. in the pound. Thinking, therefore, that the Government had exercised a wise discretion in the course they proposed to take, he should vote for the Motion of the right hon. Gentleman the Chancellor of the Exchequer.


said, he had been somewhat perplexed, after the speeches they had heard, to know what it was they were asked to vote for. He understood the proposition of the Government to be this—that, whereas the present law said that from and after the 5th of April the duty on tea should be 1s. 3d., they proposed that it should be 1s. 5d. The hon. Gentleman who had just sat down said he was an enemy to indirect taxation, but, nevertheless, he would vote with the Government for a great increase of indirect taxation. He could not understand the difficulties which some Gentlemen had as to the proposition before the House. It simply amounted to this—that there was to be an increase in the duty on tea greatly above what it would be if the present law were let alone. It was to defray certain expenditure which the Government told them was in their opinion necessary, but on which the House had pronounced no opinion. Now, he believed that the Estimates might be reduced to an amount far Greater than would be obtained by adding 2d. to the tea duty. In these circumstances how could they deliberately, at the end of a moribund Parliament, impose an increase of the tea duty, and thus, as the right hon. Gentleman the Member for the University of Oxford had told them, reverse the whole fiscal system which of late years they had endeavoured to support? To increase the amount of tea duty in a time of peace was to establish a dangerous precedent. And why was this to be done without an attempt to reduce their expenditure? Were they to impose taxes whether they were necessary or not? and how could they tell whether they were necessary till the opinion of Parliament had been ascertained as to the amount of expenditure? He thought they should support the Motion of the right hon. Gentleman the Member for the University of Oxford. He must decline to forestall the opinion of the country on this important question. It was not merely an addition of 2d. to the tea duty that they were to consider—the proposal involved an important commercial principle, and would be viewed in that light by the country. If they took advantage of a future Parliament by fastening on the country this increase of duty on tea, they would have great difficulty in giving a satisfactory explanation of this conduct to their constituents. Aye, a day of reckoning would come. The noble Lord at the head of the Government told them they ought to have pleasure in going before their constituents. He (Mr. Gibson) would have that pleasure, and it would be very much increased if he could give a satisfactory account of his public conduct, and show that his votes were consistent with sound principle, and given with a view to promote the welfare of the country. He earnestly hoped that those of his friends who had been prominent in the cause of free trade would not, when they knew nothing of our expenditure, be found ready to rivet on the country for the next year an increase of the tea duty. There was an important change in the proposition of the Government. They proposed that the duty should be 1s. 5d. for 1857–58, but they had lost sight of the shilling to which it was ultimately to have been reduced. This was the worst proposition that had yet been made. There was a rate of 1s. in the old proposal.


wished to observe that in regard to the year commencing the 5th of April next, he proposed that the duty should not be 1s. 3d., but 1s. 5d. In respect to the subsequent year he left the duty as it was left by law.


The right hon. Gentleman meant to leave the present law unaltered in regard to next year; but he (Mr. Gibson) objected to any increase of duty in the present year. He felt none of that compassion which they were told they ought to feel for Chancellors of the Exchequer. They never got anything out of a Chancellor of the Exchequer except by want of compassion. Compassion to the Chancellor of the Exchequer was cruelty to the country. On these grounds he would vote for the Motion of the right hon. Gentleman the Member for the University of Oxford.


said, that the common sense of the country would perceive that the proposition before the House was to increase the duty on tea, and that consequently the Chancellor of the Exchequer was about to impose an additional tax upon the people of the United Kingdon. The additional war taxes on malt, coffee, and sugar had expired, or would expire, in a month; but with respect to the item of £9,125,000, representing the income tax, he protested against its being assumed that the Government had remitted that amount as an act of generosity, for the House had distinctly declared that the war portion of the income tax should expire on the 5th of April next. Agreeing in the soundness of that conclusion he was in favour of reducing the whole of the war portion, and allowing the tax to stand for 1857–58 as if no change had been made for war purposes. With respect to the tea duty, he confessed that he should have opposed any reduction of only 2d. in the pound, for this reason, that so small a diminution of duty would not have carried with it any appreciable benefit to the consumer, while the abstraction of the 2d. would have made a considerable difference to the revenue. He had been given to understand that the proposition of the noble Lord the Member for the City of London, to reduce the tea duty to 1s. 4d. per pound for three years, and then to fix it at 1s. per pound, would have met the approval of the trade, and he for one would have voted for it. But the noble Lord did not think that the present Parliament would be justified in attempting to legislate for three years on such a subject, and had withdrawn his proposition. He always disliked anything in the shape of varying and sliding duties. Now the duty on tea was settled for one year only. That he thought a great disadvantage; but under all the circumstances he would vote for the proposition of the Chancellor of the Exchequer, as he believed it would be acceptable to the trade of the country.


said, he was opposed to indirect taxation. He did not agree with the last speaker that a duty of 2d. would not make any appreciable difference to the consumer. It amounted to £500,000 per annum, and he was not prepared to say that the labouring classes could afford to lose so large a sum. He agreed with the noble Lord the Member for the City that additional taxes would make the people sensible of the evils of war; but the duties on tea and sugar were paid mainly by the working classes, who were not directly represented in that House, and who had, therefore, little to do with the waging of wars. If the taxes were confined to electors, and the collector called upon them to pay the amount for the purpose of defraying the expenses of the war, there would be no end to the outcry the electors would raise. The right hon. Gentleman the Member for Huntingdon (Mr. T. Baring) had said that if the direct taxes were maintained at their present rates capital would leave the country. He maintained, on the contrary, that capital, like water, always found its level; that it favoured those places where there were large profits; and that large profits were obtained by increasing the resources of the country, which could not be done in a more effectual way than by substituting direct for indirect taxation. He recommended the House to open the ports, to reduce the duties on articles of consumption, and thus to do justice to the working classes. Looking upon all indirect taxation as fallacious, he should support the Motion of the right hon. Gentleman.


said, that at a meeting of those interested in the tea trade a protest was made against a graduated scale of duties, and a resolution was come to in favour of commuting the duty to 1s. 4d. for three years, as was proposed by the noble Lord the Member for the City of London. A committee was appointed to carry the views of the meeting into effect. That committee heard with surprise and dismay the proposition placed on the table last night, and as it entirely disregarded what they wished for—namely, certainty as to its operation, and introduced an element of uncertainty which was more detrimental than even the amount of the tax—they had instructed him to address the Chancellor of the Exchequer on the subject. He had addressed a letter to the right hon. Gentleman, informing him that his proposal of 1s. 5d. was contrary to Act of Parliament, and also to the expressed wants and wishes of the trade. There was another point to which he wished to direct attention. It was the practice in the tea trade to sell tea ordinarily "duty paid," and enormous contracts had been made on the faith of the existing Acts of Parliament. That practice obtained throughout the whole of the United Kingdom, and in all the large towns of the empire tea had been sold "duty paid." The effect of the Chancellor of the Exchequer's proposition would be to give a kind of premium to bad faith, and the amount which was involved in these transactions was very great. Moreover, it made the supply for the ensuing year uncertain, because it was impossible to say what the tax next year would be. The Chancellor of the Exchequer intimated that it would be 1s. per lb.; but if he meant that, he ought to have stated it in the Resolution, because his present proposal gave no security whatever to importers. The only objection of the least degree feasible which he had heard to a reduction of the duties was, that it would create a deficiency in the revenue. If he thought that it would do so, he would not support the Motion of the right hon. Gentleman; but believing that it was in the power of the Government greatly to reduce the expenditure of the country, he anticipated no danger from agreeing to the proposition.


regretted that the noble Lord the Member for London had withdrawn the notice which he had given, and that he had given so fallacious a reason for doing so. The difference might appear small, but 1s. 4d. would have satisfied the dealers and importers, while 1s. 5d. would not. A few years ago there was a great agitation for the reduction of the duty on tea, and the right hon. Gentleman the Member for the University of Oxford, being Chancellor of the Exchequer at the time, arranged a graduated scale of duties, by which, after a short time, the duty would arrive at 1s. Unfortunately the war broke out, and the right hon. Gentleman felt himself obliged to impose an additional tax. [Mr. GLADSTONE: No !] At all events to arrest the decline of the duty. That was done by Act of Parliament. Now though he did not attach much importance to the so-called compact between the Chancellor of the Exchequer and the House, or to the more statement of the Chancellor of the Exchequer to a deputation on the subject, he did attach some importance to an Act of Parliament. The Act in question was more than an ordinary Act. It provided that certain duties should be leviable during the war. When the war ended those duties were to cease, and so far there did appear to be a compact of the House in accordance with the proposition of the right hon. Gentleman the Member for the University of Oxford. But after the course taken by the noble Lord the Member for London, and after what had been said by hon. Members on the question, he felt placed in some difficulty as to the course he should adopt. Whereas he thought the right hon. Gentleman (Mr. Gladstone) right in principle, he had presented a petition from his constituents in favour of a duty of 1s. 4d., as the noble Lord the Member for London had proposed and withdrawn; now he was told by the chairman of the East India and China Association, that the merchants of London would be satisfied with the duty of 1s. 5d., which the Chancellor of the Exchequer had proposed as a sort of compromise. Conscious of the difficulty as to how he should vote, he thought the consistent course would be for him to walk out of the House.


said, that according to the settlement of 1853, the scale of duties would have been at this moment—income tax, 5d. in the pound; duty on tea, 1s. per pound; and duty on sugar, 10s. per cwt. The war unfortunately disturbed that happy state of things, and the consequence was that we now found ourselves under the existing law, with the income tax at 16d. in the pound, tea at 1s. 9d. per pound, and sugar 15s. and 13s. 9d. per cwt. It was proposed to reduce the income tax from 16d. to 7d., but by the original scheme it would now stand at 5d. Then, again, as regarded the tea duty, it was proposed to reduce it from 1s. 9d. to 1s. 5d., while by the original plan it ought to stand at present at 1s. The question was one which deeply affected the principles of free trade, and it appeared to be forgotten that by the introduction of that principle, although £11,000,000 of duties had been remitted, the receipts in consequence of increased consumption had increased. If it were necessary to provide for an increased expenditure, the additional taxes ought to have been fairly apportioned between direct and indirect taxation; but, in his opinion, the apportionment proposed was neither fair nor equitable. For these reasons he thought that the Resolution before the Committee ought not to be adopted, unless the most urgent necessity for it could be shown to exist. The whole amount which would be gained by the proposal of the Chancellor of the Exchequer was only £500,000, and he fully expected that when the Estimates came under the consideration of the House it would be by no means impossible to reduce them by that amount. Already, in consequence of the pressure which had been employed, they had been reduced by £1,000,000, and perhaps a little more pressure would produce a still greater result. And still more, even if they could not be reduced to the extent of £500,000, it would be better, in his opinion, to allow that amount of Exchequer bonds to stand over, and not, as the Resolution before the House would do, to infringe upon the principles of free trade.


confessed his inability to discover any connection between this question and free trade. If we grew tea and exported it, the question might be one of free trade; but it appeared to him to be merely one of meeting by direct and indirect taxation the necessary expenditure of the country. The amount of increase, or suspended decrease, of the tea duties was not such as to be felt by the consumers, and he believed that the opposition to the measure lay entirely with the importers, who were, in his opinion, the only persons who would profit by a reduction of two-pence. In point of importance to the public generally, he did not think the question of the tea duty would for a moment bear comparison with the reduction of the income tax, which, though not directly, nevertheless exerted considerable pressure upon the poorer classes in various ways. He believed that it would be a great benefit to the country if the Government proposal were carried out. It was the best for the Government and the best for the people, and he should give it his support.


wished to state why he must support the proposal of the Chancellor of the Exchequer. He preferred adopting the statement of the Government as to the probable financial necessities of the country to crediting the speculations of the right hon. Gentleman the Member for the University of Oxford, who had nothing to do with the framing of the Estimates. He felt the force of the argument of the hon. Member for Huntingdon (Mr. T. Baring), and he did not wish to vote for a deficiency, a re-result which the right hon. Member for the University predicted, whilst urging a further reduction of the revenue. He had protested against, and had divided the House against, going into a Committee of Ways and Means before a Committee of Supply, but he had met with little support. They were consequently in the dark as to the expenditure. They had had no opportunity of hearing the statements of Ministers with respect to the Estimates, or of considering the Estimates in Committee of Supply. He must, therefore, accept the Estimates, as far as they had been laid before them, on the responsibility of the Government. On the subject of the income tax, the Government had given way to the extent of £9,000,000, and that he thought offered a fair presumption that the Government had gone as far as they considered that they could with prudence in the way of reduction of revenue. The House was not in a position to enforce further reductions, because they were not able to say that they had examined the Estimates. No one could regret more sincerely than he did the course which the House had pursued; they were in an absurd position. He could not but express his regret at the policy adopted of late years with respect to the revenue from Customs, which appeared to him to tend to place indirect taxation in peril, because, after having swept away considerable amounts of revenue, the incidence of which had been distributed over a large number of articles, heavy rates of taxation, uncompensated by any countervailing advantages, had been left to press with undue severity on a few articles of very general consumption. He thought it would be well if this country were to imitate the United States, the Customs taxation of which was distributed far more equably over a much larger number of articles for purposes of revenue. The financial position of the United States was, indeed, most enviable; they either had, or were in a position to liquidate the whole of their federal debt, while their Government were urged by no clamorous demands for the reduction of indirect taxation. He feared that if the House proceeded in their present course, without a knowledge of expenditure, they would be exposed to great pressure from without for the reduction of the duties on those articles of general consumption from which a large part of their revenue was at present derived. Not being in a position to form anything like an accurate estimate of the expenditure necessary for the public service, he must accept the statement of the Government, who were responsible for the votes to which it called upon the Committee to assent.


I think my hon. Friend has not placed this question fairly before the Committee. He has argued it as a question involving the reduction of taxation. To my mind it is a question of a new tax. Virtually we are called upon to decide whether we shall increase the taxation of the country, and not whether we shall reduce it. Now the temper of the Committee on this subject proves how inconvenient it is during the last days of a Parliament to entertain questions of such moment and responsibility as the proposal of a new tax. Here you have the Member for the commercial capital of the country, who has deeply considered this subject, who has listened to deputations, who particularly represents those most interested in the duty on tea, and who gives a notice, after a due consideration of the course which he thinks it most advantageous for the Committee to adopt. That proposition, however, after having been so maturely adopted, is hurriedly withdrawn, because the noble Lord thinks there is not authority enough in the present House of Commons to deal with a question of this kind. I said at the beginning of the evening I thought it unwise and impolitic that during the last days of our existence we should be entertaining the consideration not only of new taxes, but generally of the most important subjects of direct and indirect taxation. The Chancellor of the Exchequer seemed at first to argue against that proposition. But what is the course taken by the Government themselves? The Government themselves came forward with [Cries of "Question !" and "Divide!"]—I have sat in this House twenty years, and I am interrupted by voices which will not be heard in the next Parliament. Do you think that sounds such as those will prevent me from expressing my opinions and the opinions of those who sit behind me? No! I say that the course pursued by the Government proves the justness of my position, because their original financial propositions extended over a period of three years, while now they have made them apply only to one year, because they felt that they could not offer such propositions to the consideration of a House whose tenure of existence is so nearly expiring. Such a course is an admission of our diminished authority, and an admission that the policy which the noble Lord at the head of the Government recommended Her Majesty to follow, and the propriety of which I do not question—at least, I shall not do so on this occasion—has a great effect upon the subject of new taxation. I must now come to the consideration of this peculiar tax. I am told it is nothing. My hon. and learned Friend the Member for Wallingford (Mr. Malins) says, "It is only twopence. What is twopence? It is not felt." Well, then, if twopence is not felt, if 1s. 5d. is not felt, why should not 1s. 7d. next year be also unfelt? By this rule you may be every year increasing your taxation. My hon. and learned Friend should understand that what is "only twopence" represents to the consumer £500,000 sterling, and the addition of two or three twopences may constitute an amount which may not only be severely felt by the consumer, but may have a most injurious effect on the trade and commerce of the country. I certainly did think the House of Commons had had sufficient experience no longer to consider that what may appear a slight amount of taxation will in the aggregate produce no effect upon the consumer and upon our commerce. But then we are told that we must have this new tax, because we have announced to us on the part of the Ministry an expenditure which must be met by a certain amount of revenue. We are really to carry into effect new legislation opposed to the whole spirit of our previous legislation, which really strikes at the root of all those principles which we thought were established; and this increased tax on tea is to be imposed (considering it now irrespective of all financial considerations) by a House which favours temperance, which wants to elevate the condition of the people, and which wishes to divert them from those habits of intoxication which we are assured are the great root of the moral degradation of the people. We are now told that we must vote this tax, opposed to every sound principle of political economy, opposed to every sound principle of political morality; and why? Because we have it declared from the Treasury bench that a certain expenditure must be incurred, and a certain revenue must be furnished. But, Sir, we have not the slightest evidence as to the necessity of that expenditure. No proofs are before us; and we have pursued a course which never was pursued before in Parliament, and which has, in fact, brought us into this dilemma. We have placed the cart before the horse. What is the reason we have gone into Committee of Ways and Means before going into Committee of Supply? With surprise I heard the First Lord of the Admiralty say the other evening that I had recommended this course. At the time, from my recollection only of what had passed, I offered a respectful contradiction to the right hon. Gentleman, but on examining subsequently the records of the debate I find that I not only did not sanction, but spoke in this very place against the proposition, receiving an answer from the right hon. Member for Oxford (Mr. Cardwell), who offered a precedent, which, by the way, did not apply, in favour of the Government policy. On my own behalf, and on that of other Gentlemen who sit on this side of the House, I protest against any attempt to fasten the responsibility of this maladroit course upon us. It is the course of the Government, and because they have pursued that course, totally opposed as it is to the usual Parliamentary mode of proceeding, it is not for them to rise and say,—"We call upon you, without deliberation, and under circumstances in which it is impossible gravely to consider this question—during the last days of an expiring Parliament—to assent to new taxes, direct and indirect, of a very grievous kind, and to the amount of millions." ["Divide!"] No; I won't divide. What would have been the course of the House if we had gone into Committee of Supply in the first instance? We should have had the Estimates before us, we should have had an analysis of those Estimates—a criticism upon the expenditure, and Motions for the reduction of that expenditure. Then we should have had a China debate; the same result would have followed as ensued on Tuesday, the same counsel would have been given to the Sovereign, the Government would have made the best arrangements they could to meet the necessary immediate expenditure, and Parliament would have been dissolved. But then you could not have come forward and said that the credit of the country required we should vote in the dark for new taxes. You would have made the best arrangement you could; you would have said, "The new Parliament shall assemble as early as possible," and the Chancellor of the Exchequer would then come forward and make his proposals before an assembly which could deliberate upon the subject of taxation with great advantage to the country, and without being pressed for time, while the public would give a cordial and sympathetic approval of their decision upon the subject. We should have had the financial statement in May. Why can we not have the financial statement in May? Why should we be called upon, without the slightest knowledge of what the wants of the country are, to vote new taxes just as we are on the eve of going back to our constituents? I am told that there have been many causes of expenditure never anticipated, and claims upon Government not foreseen. Granted. But show us what those claims are, and what are those causes of expenditure? Let us have before us some evidence that the demands upon the Exchequer really require these new sacrifices from our constituents If, however, these sacrifices were to be made, a tax on tea would be the last proposal I should support. I believe it to be opposed to sound policy—I believe that it will restrict our commerce and diminish the comforts of our people. Some words have passed between the right hon. Gentleman the Member for the University of Oxford (Mr. Gladstone) and the Chancellor of the Exchequer as to whether this is a retrograde movement. Now, I am sure the Chancellor of the Exchequer is the last man who would deal lightly and carelessly with a question of this sort; but if I must give an impartial and well-considered opinion on his policy, and if you ask me whether I regard it as a retrograde one, and whether the consequences of assenting to a Resolution of this kind will be such as materially to change the commercial system of this country as far as finance is concerned, I say I sincerely believe that it is a reactionary policy. We have seen the effects of it in the House to-night. Hon. Members say that the question is only one of 2d., without refleting that that 2d. involves in the aggregate an increase of half a million of taxation. It is the last straw that breaks the back of the camel. The same argument will apply to-morrow; and in the next Parliament you will have greater difficulties to deal with if you now vote Ways and Means in the dark. I thought it was clearly understood that, whatever might be the temporary advantage gained by dealers upon the remission of a tax upon an article of consumption, that was not a question which Parliament considered. We know very well that in the end the great body of the people benefit by these remissions, and that there is an increased consumption of the articles so dealt with. We cannot dwell upon minute points like this. We must take a broader view and be guided by large results. I repeat, then, that this policy is a reactionary one, and I will tell you what will be the consequences of such a system. The moment you increase indirect taxation to a point when it becomes intolerable you will render a recurrence to direct taxation inevitable. Of that you may be certain. It is a truth in finance which all experience proves, and because I think this is a policy which leads to that result—although I feel it is impossible, under such circumstances, now fairly and calmly to consider this question—I will never sanction, in the last days of an expiring Parliament, the levying of new taxes, and especially new taxes of this kind.


My right hon. Friend the Chancellor of the Exchequer has not left the question in a position perfectly clear. He still contends that he is going to make a reduction of taxes, and he complains that I hold that a reduction which is a less reduction than a greater reduction is no reduction at all. That was the expression of the Chancellor of the Exchequer earlier in the debate, and I reproduce it in a fuller Committee for the edification of hon. Members. I will not debate the question with my right hon. Friend whether in that sentence he has correctly defined the position I take, because it is a definition which requires a considerable effort of mind to follow; but I tell him that his reduction is no reduction at all if he says he is giving a reduction of duty from 1s. 9d. to 1s. 5d. I say he is not giving such a reduction; that the law has given it already, and that he is no more the giver of it than he is the giver of Magna Charta. But it is said you ought not to leave the whole burden on direct taxation. It is admitted that the war has added something to the burdens of the country, and you are told that you ought to give a portion of that to direct taxation and a portion to indirect taxation. Why, Sir, my right hon. Friend is going to add £2,000,000 for one year, and he proposed to add £2,000,000 for three years to the direct taxation of the country. The Government has also already, in the shape of the duty on spirits, added a large sum, more than £1,000,000, to the indirect taxation of the country, and, therefore, do not tell me it is necessary to increase taxation on tea and sugar, or to impose taxes which in their very nature must be so objectionable to the great mass of the population.


I think it is desirable that my right hon. Friend the Chancellor of the Exchequer should give some further explanation on a point of some importance. I refer to his answer in regard to the duty on tea for the next year, after the expiration of the duty which he now proposes. I understood him to say he did not mean to interfere with the operation of the law, but that in April, 1858, the duty should be reduced to 1s. That may be understood in two ways. The one may be in the sense in which he fairly stated it to a deputation which recently waited upon him—namely, that on the 5th of April next by law the tax would be reduced to 1s. 3d. But in the other sense it is open to him to come forward at some other time, and propose to reduce the tax which he now fixes at 1s. 5d. to 1s. 3d., or 1s. 2d., or any other sum. That would not be a very fair thing to persons engaged in the tea trade, because, if they cannot make preparations for a large supply for next year, they will be to a great degree prejudiced, as will also the great body of consumers. If he means that, so far as he is concerned, the tax, after the expiration of the year ending the 5th of April, 1858, shall be reduced to 1s., it would be satisfactory to have a statement to that effect from my right hon. Friend.


I meant to refer exclusively to the operation of the law in 1858. I cannot give any such assurance; I can only say that, if I shall have the honour of holding my present office when another Parliament is assembled, I shall feel myself at liberty to submit to it a proposition for increasing the duty on tea beyond the amount of 1s. I express no opinion as to the policy of altering the law. I wish to refer to a letter mentioned in the course of the debate by the hon. Member for Stoke (Mr. Ricardo) as having been written by the Commissioners of Customs to Mr. Sampson, the well-known writer of the "city article" in The Times. That gentleman addressed a communication to the Commissioners inquiring what would be the rate of duty under the existing law after the 5th of April. The Commissioners of Customs, without referring to the Treasury, stated the effect of the law then in force. If the Commissioners had referred to the Treasury, they would have been told that that would be a proper answer to give to such an inquiry. It is the duty of the Finance Minister not to make premature communications to the public in respect to contemplated changes in the revenue, for nothing is so much complained of as when persons are in a position to conjecture what course the Government of the day is likely to take in reference to commodities in which they deal, and when such persons are enabled, in consequence, to take articles out of bond. I can only say, if, the day before I had to open a Budget in my capacity as Chancellor of the Exchequer to this House, I were asked what would be the amount of duty upon a particular article after a given time, I should reply that that would depend upon the decision of Parliament; for no Executive Government can act on any other principle. With respect to an observation which fell from my right hon. Friend the Member for the University of Oxford, it seems to me that his very acute mind must have been refreshed by the recent study of certain logical puzzles printed at the end of a work on logic, which both he and I were in the habit of reading when we were members of the University of Oxford. He certainly appears to me to have perplexed a very simple subject by a very unnecessary amount of refinement. I will restate what I have already said on the point in question. I did not take any credit for making a reduction to the public. I merely described what would be the effect if the Resolution I proposed were agreed to by Parliament. What I stated was this, that if a duty which is now 1s. 9d. a pound were fixed at 1s. 5d. it would be a reduction, although it would not be so great as if it were fixed at 1s. 3d. That is a plain statement of fact. The duty at present is 1s. 9d. a pound. I propose a Resolution under which, if it receive the force of law, the duty will be 1s. 5d. My right hon. Friend may refine on the subject as much as he pleases; but, nevertheless, a trader who has to pay the duty will come to the conclusion that that duty is a reduced duty. Unquestionably the duty will not be so much reduced as it would be if it were reduced to 1s. 3d.; and I still maintain that I was right, in describing the objection of my right hon. Friend to my proposition, when I stated that he held that a reduction which is a less reduction than a greater reduction is no reduction at all.


said, that as he differed from those near him, he wished to explain that, although he objected to that amount of duty, still he had greater objections to leaving the revenue in a deficiency for the year. The proposal now was, to strike off £500,000; but the Chancellor of the Exchequer had himself reckoned his surplus at only £800,000 or £900,000, and from that he had taken £500,000 already, leaving only £300,000; and therefore another £500,000 off it would, he feared, leave a serious deficiency for the year. The Committee should pause, therefore, before they agreed to such a hand-over-head Resolution as that before it.


inquired whether the right hon. Gentleman the Member for the University of Oxford wished his Amendment to be put separately?


replied that his object was to maintain the existing law, and he would propose a Resolution to that effect if it should be deemed the most regular course.


suggested that the right hon. Gentleman's object would be attained by simply negativing his (the Chancellor of the Exchequer's) Resolution.


did not concur in that view, as a simple negative to the Resolution would leave it open to any other hon. Member to propose another Amendment.

Question put, "That '1s. 3d.' be there inserted."

The Committee divided:—Ayes 125; Noes 187: Majority 62.

Original Question put, and agreed to.


said, that after the division which had just taken place, he should not trouble the House to divide on the sugar duties he had intended to propose, but should allow them to be negatived.

(2.) Motion made, and Question proposed— That, towards raising the Supply granted to Her Majesty, in lieu of the Duties of Customs now chargeable on Sugar imported into the United Kingdom, the following Duties shall be charged, from and after 5th April 1857 to 5th April 1858, inclusive:— Sugar, viz:—

s. d.
"Candy, brown or white, refined sugar, or sugar rendered by any process equal in quality thereto the cwt. 18 4."

Amendment proposed, to leave out "18s. 4d." and to insert "16s. 8d."—insteat thereof.

To 5th April, 1857, inclusive. From and after 5th April, 1857, to 5th April, 1858, inclusive.
£ s. d. £ s. d.
Cherries, dried the pound; 0 0 0 0 2
Comfits, dry
Ginger, preserved
Plums, preserved in sugar
Succades, including all fruits and vegetables preserved in sugar, not otherwise enumerated

Question, "That '16s. 8d.]' be there inserted," put, and negatived.

Original Question put, and agreed to.

s. d.
"White clayed sugar, or sugar rendered by any process equal in quality to white clayed, not being refined, or equal in quality to refined the cwt. 16 0."

Amendment proposed, to leave out "16s. 0d." and to insert "14s. 7d."—instead thereof.

Question, "That '14s. 7d.' be there inserted," put, and negatived.

Original Question put, and agreed to.

s. d.
"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 the cwt. 13 10."

Amendment proposed, to leave out "13s. 10d." and to insert "12s. 9d."—instead thereof.

Question, "That '12s. 9d.' be there inserted," put, and negatived.

Original Question put, and agreed to.

s. d.
"Brown Muscovado, or any other sugar, not being equal in quality to yellow Muscovado or brown clayed sugar the cwt. 12 8."

Amendment proposed, to leave out "12s. 8d." and to insert "11s. 8d."—instead thereof.

Question, "That '11s. 8d.' be there inserted," put, and negatived.

Original Question put, and agreed to.

s. d.
"Molasses the cwt. 5 0."

Amendment proposed, to leave out "5s. and insert "4s. 6d."—instead thereof.

Question, "That '4s. 6d.' be there inserted," put, and negatived.

Original Question put, and agreed to.

3. Resolved, "That, towards raising the supply granted to Her Majesty, in lieu of the Duties now chargeable on the following articles imported into the United Kingdom, the following Duties shall be charged.

Resolutions to be reported on Monday next; Committee to sit again on Monday next.

House resumed.