RESOLUTION.

HC Deb 03 March 1859 vol 152 cc1189-202

MR. MITCHELL

said he rose to move a Resolution to the effect that it was the opinion of the House that the duties on foreign and colonial wood should be repealed. Considering the uncertain state of the revenue at the present moment, he did not propose by his Resolution to ask the House for the repeal of the duties on wood this year or at any definite period. What he wished the House to do was, to express its abstract opinion as to these duties and on the expediency of repealing them as soon as the state of the revenue would render such a measure possible. To show how the question stood he would give the House a short historical summary of the gradual reduction of those articles. In 1841, and for a considerable time previous, the duty on foreign wood had stood at 55s. per load, and that on colonial 20s. Wood was one of the three great articles a change in the duties on which was proposed by the noble Lord the Member for the City of London in 1841. He need not say that that proposal was unsuccessful. In 1842 Sir R. Peel brought in his celebrated budget, in which he proposed that the duties on foreign timber should be reduced to 30s. in 1842, and to 25s. in 1843. The duty on colonial timber he brought down at once to the merely nominal sum of 1s. a load. On that occasion Sir Robert said, that if there was an article on which a reduction of duty would be a benefit to the people, it was wood. The impost remained unaltered at this amount until 1845, when, in the budget accompanying the total repeal of the Corn Laws, Sir R. Peel proposed that the duties upon foreign wool should be reduced to 20s. a load in 1846, and to 15s. a load in 1847. This state of things continued until 1850, when the repeal of the Navigation Laws relieved from duty the manufactured article of shipping. As one who had given a cordial support to that measure, he certainly did not feel it his duty to object to that clause, because he felt that when British shipowners were exposed to competition with all the world they were entitled in turn to buy their ships in the cheapest market. But then they were left with this anomaly, that while the manufactured article was admitted free of duty, the raw material was left burdened with a heavy one. The consequence was, that in 1850 he (Mr. Mitchell) brought forward a proposal for allowing ships to be built in bond. The right hon. Member for Halifax (Sir C. Wood,) who was then Chancellor of the Exchequer, declined to deal with the subject at that time, in consequence of the state of the revenue, and on account of the great difficulty which a system of drawbacks would entail, but he promised to consider the question at a subsequent period, and in conformity with that promise the right hon. Gentleman in 1851 proposed and carried a reduction of the duties on foreign wood of from 15s. to 7s. 6d. a load upon hewn, and from 20s. to 10s. a load upon sawn timber. That was the point at which the duty at present stood. Now, what had been the effect of this reduction in stimulating the importation and consumption of wood in this country? Prior to 1843 the annual imports of wood somewhat exceeded 1,100,000 loads. He would not trouble the House with the amount in each year up to 1857, but in that year the wood imported was 2,494,964 loads. In this quantity he had included both hewn and sawn timber. The importation, therefore, had nearly doubled in the fourteen years from 1843 to 1857, during which the reduction of the duty was made. He was bound to admit that there had been a falling off it 1858, but that might be accounted for by the crisis in the preceding year in this country. The timber trade was always the last to feel a commercial crisis, and it was also the last to recover from it; but lie had no doubt that the small falling off in 1858 would be abundantly made up in the present year. It would be seen that colonial timber had experienced a considerable reduction in the amount of protection afforded to it; but there had nevertheless been no falling off in the colonial trade. In 1857 the quantity of wood imported from our Colonies exceeded the total quantity of our imports, foreign, and colonial, in 1842. He (Mr. Mitchell) objected to the continuance of the timber duties on four grounds—First, it was the only duty that existed on a raw material—at least, he knew of none of any importance. There were three great articles which entered into all our manufactures—coal, iron and wood. Fortunately we had the two former within our own shores; but, with the exception of oak, we were obliged to bring all our timber from abroad. But it was unfortunate that we had to import so much of an article which entered so largely into our manufactures; but surely it could not be to our interest to aggravate that misfortune by imposing a duty besides, and to do so was contrary to the whole course of recent legislation, the tendency of which had been to free raw materials from taxation. The duty on the wood used in the smallest hovel which could be erected in this country would amount to 20s., while upon an ordinary cottage of six rooms it would be £3. Its pressure in this way was therefore considerable. Another ground of objection was that it operated as a protective duty in favour of Canada to the extent of 14s. a load, or thirty per cent. Now, he did not know why we should go out of our way to benefit Canada, inasmuch as the Canadian Legislature, he believed, were imposing duties on our manufactures in favour of native industry. With the exception of sugar, there was no other large article placed in the same position as timber. His third reason for objecting to the present duties was, that at the present moment they were unequal and unjust. All the higher classes of wood, such as African oak, teak, and mahogany, were admitted free of duty. The consequence was, that, while the mahogany table of the rich and the middle classes was free of duty, the deal table of the poor cottager was taxed. This was effected under Sir Robert Peel's tariff, who, with a view to encourage the furniture trade of this country, admitted all the furniture woods duty free; and since that time the importation of mahogany had doubled. His fourth reason was the claims which the shipbuilding interest had to their notice. He thought that interest had been treated with the greatest possible injustice. Ever since the repeal of the Navigation Laws the shipbuilders of this country had had to sustain a competition with the foreigner in the building of middle-class ships; and he need not remind the House that they had to pay certain enhanced prices in proportion to the cost of bringing the wood to this country, and thus they were placed under considerable disadvantages. For instance, take the price of white oak. At Dantzic it was worth 80s. a load, and the import charges amounted to 22s., making the cost about 30 per cent. more. Again, the price of pine was 40s. a load, and the import charges about 20s., or an enhanced cost of about 50 per cent. Those were disadvantages under which shipbuilders in this country were placed in the competition they had to sustain with the shipbuilders of the Baltic. Independently of this natural disadvantage, however, Parliament imposed an artificial one, in the shape of a heavy duty. Ships built in this country were divided into various classes—from 4 A to 13 A—the lowest being registered at Lloyd's as A 1 for four years, and the highest class as A 1 for thirteen years. He found the actual per centage of duty on the cost of the hull of a ship registered as a 4 A ship to be no less than 9¼ per cent., which he considered was a great disadvantage. He calculated the quantity of timber at 400 tons, at £5 10s. per ton, which gave £2,200 as the value. Such a ship could be built only of foreign timber. The hull of a 5 A ship at £6 per ton would give a value of £2,400; and the duty would be equal to 8¼ per cent. on the outlay. The hull of a 6 A ship at £6 10s. per ton gave a value of £2,600; and the per centage of duty upon that was about 7⅝. On a 7 A ship at £7 per ton, and on a value of £2,800, the duty was 7 per cent. In consequence of the duty being injurious to the trade, the lowest classes of ships—those registered as 4 A and 5 A, &c.—were not much built in this country. When they came to the higher classes, they would find that the ships were built of timber of the favoured sorts, such as teak, oak, and mahogany, and consequently the per centage of duty was a much less rate in proportion to the cost. He should now ask the House to consider whether it was just or politic to maintain a tax which, while the manufactured article in the shape of a ship was admitted duty free, pressed heavily upon the raw material which the shipbuilder had to use. For the accuracy of the statements which he had made he could vouch, and he had been deterred from bringing them under the consideration of the House some years ago simply because he felt that during the progress of the Russian war it would be inexpedient to ask for the remission of a tax which yielded £600,000 per annum. Now, however, that the year 1860 was at hand, when a great alteration in our financial position would be produced by the falling in of the terminable annuities, he thought he might very fairly venture to ask the House to pronounce the continuance of the duty undesirable.

MR. FENWICK

said, he rose to second the Resolution, and in doing so he would beg to call the attention of the House to the words of it, and to point out that it contained nothing to pledge hon. Members, should they assent to it, to the repeal of the duty at the present moment, or indeed to do so at any particular time. All it called upon the House to do was to affirm the general principle, namely, that the timber duties were unjust both in principle and practice. Neither his hon. Friend nor himself was anxious that the remission of the duties should take place at a time which would be injurious to the public service. It had been recognized over and over again that a tax on the raw material ought not to exist if it could be possibly prevented. That principle had been carried out so far as it concerned cotton, wool, and other things—timber alone was the exception. Upon those grounds it was perfectly fair to ask the House to ratify the Resolution. His constituents had a special interest in its repeal as they were more largely engaged in shipbuilding than any others in the country; for on the Wear there was more shipbuilding than in almost all the rest of the kingdom. Two years since the shipbuilders on the Wear turned out 60 per cent more ships than the whole of England did a few years ago; and that showed that the port of Sunderland and the interests of his constituents were largely concerned in the fate of this question. There was a duty on imported timber of from 10 to 25 per cent, but at the same time ships built in the Baltic and in Canada were permitted to be brought to this country and sold without any duty being charged at all. Such a system interfered to prevent shipbuilding in the north of England, and operated most injuriously upon the shipbuilding interest generally. It was well known that Canadian timber was not so good for ordinary purposes as Baltic timber, but the duty on Canadian timber being only 1s. a load, whilst on Baltic it was 7s. 6d. and 10s., an inducement was offered to use an inferior article, and the consequence was that a great number of houses had been built of timber which was not fit for the purpose. Her Majesty's present Government were generally supposed to have a special lean. ing in favour of the shipping interest; but that impression could no longer prevail if they should resist that fair and reasonable Motion. With these few remarks he begged to second the Resolution.

Motion made, and Question proposed— That it is the opinion of this House, that the Duties on Foreign and Colonial Wood should be repealed.

SIR STAFFORD NORTHCOTE

said, that when he first saw the Resolution on the paper it appeared to him to be one which was aimed at the immediate remission of a very important item in the revenue of the country. It seemed, however, from what had fallen from the hon. Gentleman who had just spoken, that it did not necessarily bear that construction; but he could not help thinking that a mere abstract Motion, calling upon hon. Members to express an opinion as to the expediency of taking a certain course at some future time, and under some possible circumstances, was one which was more suited to the proceedings of a debating society than to the deliberations of the House of Commons. If, therefore, the Resolution under discussion were agreed to, it must, he thought, be regarded as pledging the House to a repeal of the duties in question, if not immediately, at all events at no distant period. Now, it was, he believed, an established rule in the conduct of its proceedings that the House should first vote the Supplies necessary to be granted to Her Majesty, and should afterwards resolve itself into a Committee of Ways and Means, to decide upon the mode in which those Supplies were to be raised. The usual course was to wait for the Estimates, and after hearing from the recognized authority on those matters—the Chancellor of the Exchequer—an account of the state of the finances of the country, then to consider the relations between income and expenditure, and what were the most proper taxes for reduction or remission if such could be made. But this Motion was made before half the Estimates had been laid before the House, when only a single vote had been taken in supply, and without any reference to the comparative claims of other articles to be released from taxation if such a course was possible. It must be borne in mind that the produce of these duties was no less last year than £564,000, which was too large an amount to give up at a moment's notice. At all events, it was necessary that the Chancellor of the Exchequer, when he came to make his financial statement, should approach the subject with his hands unfettered by any Resolution of the House. What would be the effect of passing such a Resolution? Naturally, all the other interests which thought they had a claim to the remission of duties, would get their friends to come down, and make a tolerably good muster, and say—of course without prejudice to anything—"Just let us declare that this or the other is a very bad tax." The result would be that nearly every existing tax might be condemned by Resolution of the House. But if that would be an inconvenience to the Chancellor of the Exchequer in dealing with the finances and expenditure of the country what would be the effect upon the timber trade? Consider the effect on the timber trade if to-morrow morning it went out that the House had adopted a Resolution that those duties ought to be repealed. At present the timber trade was in a state of considerable agitation, and great efforts were being made to raise prices. The effect of passing this Resolution would be to increase that agitation, and to a certain extent it would paralyse those engaged in the trade, who would not know on what footing they were to proceed. And if the Resolution were passed, and no effect were given to it, those who had made arrangements believing that it would be carried into effect, would have a fair right to complain that the House had acted so as to inflict upon them serious injury. Then the mover and seconder of the Resolution had taken it for granted that the reduction of those duties would have the effect of reducing the price of timber. It was, however, a remarkable fact that former reductions of duties upon timber had nut been always attended by a diminution of price to the consumer. In 1842 the duty on foreign timber was reduced from 56s. to 31s., and on colonial from 11s. to a nominal duty of 1s. The immediate effect of that was to produce a considerably increased importation. In 1840 the price of duty-paid timber was somewhere about 83s.; in 1844 it had fallen to 56s. The next great change was in 1851, when Sir Charles Wood further reduced the duty on foreign timber from 15s. to 7s. 6d., not reducing the duty on colonial, because it was merely nominal. The effect of that bad been perhaps to stimulate, to a certain extent, the importation of foreign timber; but prices were actually higher now than they were before that alteration; and there- fore the whole of the revenue sacrificed had gone, not into the pockets of the customers, but those of the growers or importers. He had in his hand a statement which showed that in 1844 the price of Memel timber on board was 31s., the duty being then 25s., making a total of 56s.; but in 1858 the price on board was much higher, and the price to the consumer was rather higher. In 1850, the prices of Memel and Dantzic timber, the best fir, ranged from 65s. to 70s.; they were now from 75s. to 80s., showing an increase of 10s. The same with regard to Riga fir; it had risen from 65s. to 75s. The probability was that if they were now to take off the duty on foreign timber, the same result would follow; though the revenue would lose, the consumer would gain very little indeed. This country was not wholly dependent on foreign timber, but partly on that of Canada; at present we took nearly equal quantities of each. Now the price was necessarily regulated, not by the price at which the merchant could afford to bring it here, but by the price which he could get when he brought it here; because, though the reduction of duty would enable him to bring it here at a lower price, he would not sell it at a lower price when he could get a higher; and as long as the duty on Canadian timber remained the same, its price must regulate that of all the timber sold in the country. It should also be borne in mind that though the importation of foreign timber had been considerably increasing, that of colonial had been decreasing, although it was almost free of duty. From that they might infer that colonial timber could not be brought profitably to this country at a lower price than at present. Therefore, whether they took off the foreign duty or not was immaterial to the colonial producer; he would be obliged to demand the same price for his timber then as now; and if he did so, the foreign producer would also demand the same price for his timber as he did now. Therefore, though the foreign producer might gain considerably by the reduction of duty, the consumer would probably gain nothing. The total quantity of foreign timber imported last year was 1,100,000 tons, and of colonial very nearly the same, 1,095,000 tons—the consumption of colonial timber having, since 1843, fallen off by 186,000 tons, and that of foreign having increased during the same period by 454,000 tons. The case of the hon. Mover broke down at this point—whether the reduction would really have the effect of benefiting the consumer; and if so, the whole case he had made fell to the ground. The hon. Gentleman had also denounced the duties as anomalous because some of the most valuable kinds of wood were wholly exempted. As those favoured woods were exactly those which were mostly used in shipbuilding, he did not see how the shipbuilders of this country could be benefited by the change proposed by the Resolution. It was further said that this duty was bad as being a protective duty, and there could be no doubt but that duties of that description were very objectionable in principle, and he could not deny that this duty was to a certain extent protective, and therefore objectionable. But there must have been something exceptional in the case of these duties which had induced Sir Robert Peel and the other great Free Trade authorities in the three Ministries since his time to exempt timber from the general operation of the doctrine, that all protective duties must be abolished. The fact was, that the quantity of home-grown timber which came into competition with the classes of foreign timber subject to duty was so small that the present duty could not be said to act as a protection in favour of the produce of our own country, and with regard to the colonial timber, the difference in the cost of freight was much more important than the difference in the duty. So that though the duty was in theory objectionable as being protective, the protection was really so trifling that the objection had little practical weight. If there were no other tax which pressed heavily upon the country, it might be a matter for consideration whether they ought not to take off the duty on foreign timber; but certainly no case had been made out to justify the House in expressing an opinion upon the subject before the general statement of the finances of the country had been made. He did not consider it necessary, in opposing this Motion, to enter into any details, but simply rested his objection on the general ground that it was inexpedient under ordinary circumstances to anticipate a financial statement, and even if it were considered expedient in certain exceptional cases, it had not been shown that this was a case which justified such an interference with the ordinary course of business.

MR. WILSON

said, he could have wished that the hon. Baronet (Sir Stafford Northcote) had confined his objections to the points upon which he had first addressed the House; for, objectionable as were the timber duties in principle, and much as they had been condemned by almost every eminent statesman in that House from the time of Sir Robert Peel, he (Mr. Wilson) could never vote for their repeal until he saw the way clear in a financial point of view. The removal of the duty would be a great advantage, but it was a much greater advantage that they should have a good financial arrangement. But, apart from the consideration arising out of the financial state of the country, he was bound to say, that he, for one, would never vote for the repeal of that duty on the Motion of an independent Member. Ho must confess, however, that when he came to the second series of objections, he was greatly surprised at the doctrines which had been enunciated by the hon. Baronet opposite, which seemed to him to be a return to those principles of protection which he thought had been for ever abandoned. The hon. Baronet had said it was not a protective duty, because they had to pay a larger freight from Canada. Why, would not the same argument apply to corn? On the same principle the hon. Baronet might ask the House to impose a duty of 5s. per quarter on German corn because it cost 5s. a quarter more to bring it from Canada than from Germany. That was an argument which had been strange to his ears for ten years. With regard to the first series of objections, he quite coincided with them. The effect of this Motion would be to pledge the House to repeal the timber duty when they did not know whether it would be consistent with the financial arrangements of the year or not, and if it should turn out that they were unable to fulfil their promise, they would be open to the charge of deceiving the country. Feeling how important it was that at the present juncture the national finances should be in as good a position as possible, he must vote against the Motion.

MR. HUDSON

said, he must complain of the great injury which the shipbuilders of Sunderland sustained in consequence of the pressure of the timber duties. He was quite sure, that if the Government had the power, they did not want the will to remove them, and therefore he saw no reason why an independent Member should not take the opinion of the House on the question. When the Navigation Laws were repealed, it was held out to the shipbuilders, by the then Presi- dent of the Board of Trade, who brought in the measure, that the oppressive tax on timber should be repealed, and that the shipping interest would labour under no disadvantage whatever. The tax was a blot on our Statute book in an age of free trade, seeing that it was almost the only article which was taxed in the shape of raw material. Since the doctrine of free trade had been recognized by the Legislature, they must be prepared to carry it out to the full, without any exception. It was true that at first the duty was felt by the producer, but eventually it fell upon the consumer. Nor was the hardship confined to the shipping trade. As the House knew, a portion of the population of Sunderland were engaged in the manufacture of glass, and one of the manufacturers had recently told him that he calculated he paid £300 a year taxes upon the wood which was used in packing cases alone, and inasmuch as the French and German glass was admitted into this country duty free, it was felt to be a great hardship that the glass manufacturers of this country should have to pay duty upon their packing cases. For his part he should cordially support the Motion if it were pressed to a division, believing, as he did, that it related to a subject calling loudly for the interference of the House, and that if the duties in question were remitted, the effect would be to lower the price of timber generally, and bring it more extensively into use, especially in the building of houses and cottages for the humbler orders of the people.

MR. LABOUCHERE

said, that he could never have made any promise at the time of the abolition of the Navigation Laws that the timber duties should be repealed, because it was not in his power to perform any such promise. What he said was, that the duty was objectionable, and that he hoped the time would soon arrive when it could be repealed. He must express his surprise at the doctrines which had been enunciated by the hon. Gentleman the Secretary to the Treasury. He could not agree in the panegyric passed upon these duties by the hon. Baronet. His opinion, on the contrary, was that they constituted one of the worst kind of taxes ever imposed on the people of this country. With regard to the shipping interest there Was no fear that British shipbuilders would not be able to compete with these of foreign countries. So for was it front being true that the shipbuilding trade had been transferred to other countries in consequence of the withdrawal of protection that precisely the contrary took place. At the present moment there were more ships built in England and sold to foreigners than were purchased by Englishmen. He believed if the raw material of timber were made cheap great benefit would accrue to all classes of the community, and not to the shipping interest alone. Though he was in favour of the principle embodied in the Motion, he should not, however, vote for an abstract Resolution pledging the House to the repeal of any tax whatever until he had heard the financial statement of the year.

LORD HARRY VANE

said, he joined in the surprise which had been expressed at the fallacies enunciated by the hon. Baronet opposite (Sir Stafford Northcote), which he thought were long ago exploded. With regard to the reduction of the timber duties, he certainly thought that it would lead to a greatly increased consumption, and therefore he quite agreed with those who had urged this question on the consideration of the House. It was quite clear that the hon. Gentleman behind him did not wish to press for the immediate repeal of the tax, but only wished to get the opinion of the House with respect to its continuance. He thought, therefore, that if the hon. Gentleman would consent to add to his Motion some words which would be expressive of the opinion of the House that the timber duties should be repealed at the earliest period consistent with the general state of the finances of the country, it would meet the view of almost every one conversant with the question, and ensure the support of the House.

MR. MITCHELL

said, he was quite willing to respond to the appeal of the noble Lord, and therefore he would propose to add to the Motion the words, "as soon as the state of the revenue admits of it." He might make this remark. It seemed to him that if the argument of hon. Gentlemen who objected to bringing forward a question of this kind at the present time were tenable a private Member would be altogether precluded from doing so, inasmuch as if he brought it on before the Budget he was met by the cry of "Wait till the financial statement is made," and if afterwards the objection would be immediately raised that inasmuch as the financial arrangements of the year were already completed he was too late to propose any alteration.

THE CHANCELLOR OF THE EXCHEQUER

Sir, the proposed addition to the Motion renders it much more objectionable. As it now stands, the Motion only asserts that the duties on timber ought to be repealed, but as amended by the addition, it pledges the House to repeal those duties as soon as ever the state of the revenue permits. I should like to know whether those hon. Gentlemen who sit near the hon. Member, and who have pressed on the House the necessity of repealing the paper duty and other taxes on knowledge, think it advisable that the House should be pledged to apply the first surplus which may accrue in the revenue to the repeal of the timber duties. I cannot agree with the hon. Member for Bridport (Mr. Mitchell) that this is the only mode in which taxes of this sort can be brought under the consideration of the House, and that unless the House sanctioned Resolutions of this character it is impossible that the grievances of any class of the community can be redressed. There are means by which before and after the financial statement is made, and before it is adopted, the character of any tax can be brought under the consideration of the House, and the opinion of the House expressed upon it in a manner which must influence the financial Minister if he have any surplus to devote to the lightening of the burdens of taxation. I cannot say that the position of the Chancellor of the Exchequer is at this moment of such a nature that there need be any scramble among the community as to which class shall get a relief, and I must ask the House to support the Minister who at present occupies that position—one of no little difficulty,—and not to sanction a Motion of this kind, winch must have an injurious effect upon the public mind, and must lead to a great deal of feverish anxiety in the various branches of this particular trade. The observations of the Secretary of the Treasury have been much misrepresented. He did not for a moment I maintain that this tax, which is a tax on raw material, was not a bad tax; he admitted that it was one of a protective character. What he said was—and I agree with him—that there were many other taxes on raw materials worse than the tax on timber. In that he is supported by the highest authorities. I should be happy myself to put an end to this tax, bat at present I am not in a position to hold out any hope of the kind. In a very short time, certainly in a month hence, it will be my duty to call the attention of the house to the financial state of the coun- try, and it will be open to those who represent the timber trade, or who are in favour of the abolition of this tax, to bring the subject before the House, when, no doubt, it will receive a fair consideration.

Motion, by leave, withdrawn.

MR. MITCHELL

said, he would then put his Motion in the amended form.

Motion made, and Question put— That it is the opinion of this House, that the Duties en Foreign and Colonial Wood should be repealed, as soon as the Revenue admits of it.

The House divided:—Ayes 77; Noes 133: Majority 56.