HC Deb 27 February 1863 vol 169 cc946-59

Order read, for resuming Adjourned Debate on Amendment proposed to Ques- tion [23rd February], "That the Bill be now read a second time;" and which Amendment was, To leave out from the word "That" to the end of the Question, in order to add the words "a Select Committee be appointed to inquire into the expediency of altering the Laws for raising a Revenue on Tobacco,"— (Mr. Ayrton,) —instead thereof.

Question again proposed, "That the words proposed to be left out stand part of the Question."

Debate resumed.

THE CHANCELLOR OF THE EXCHEQUER

said, that the hon. and learned Member for the Tower Hamlets (Mr. Ayrton) having stated at great length his objections to this Bill, he should be compelled to trouble the House with a few observations in reply. He should first wish to advert to two objections of a general character. One was that this Bill ought to have been considered in connection with the financial arrangements of the year. He thought, on the other hand, that it was more convenient and advantageous to bring in this Bill at a period of the Session when the House could give greater attention to its details. The period when the financial measures of the year were submitted to the House was generally a time of great pressure; and if this Bill had been mixed up with the questions of far greater interest which were usually connected with the Budget, its details could not have been so carefully examined as the interests concerned were entitled. There was another objection — which rested on an entire misunderstanding—it was said that this Bill cheapened the commodity to the rich man, and took no cognizance of the commodity consumed by the poor man. This objection was very wide of the truth. No doubt this Bill tended to cheapen tobacco and cigars of the highest quality, such as were consumed by the rich man, but it also applied alike to every kind of manufactured tobacco. It had been argued by a portion of the press as if there were a difference between the poor and rich in this respect, that while the rich man consumed manufactured tobacco, the poor man consumed tobacco in leaf. But the poor man did no such thing, for even the sale of the tobacco in the leaf was illegal. The leaf was unfit for consumption until it was manufactured, and the effect of the Bill was not to cheapen the high-priced cigar of the rich man, but to open the door of a fair and healthy competition in a commodity which had been excluded from our imports, not by an absolute prohibition, but by a duty so extravagant as practically to amount to a prohibition. So far as the poor consumer was concerned, the present system was as complete a monopoly as if there existed an entire prohibition; while in the case of the rich man the grievance involved was of so trifling a character, if, indeed, one existed at all, as to be hardly worth the consideration of the House. Having made those observations, he should proceed to deal with the Motion of the hon. and learned Member for the Tower Hamlets, which he hoped the House would not be disposed seriously to entertain; for if they should do so, they would be setting a course entirely at variance with established practice. The case at issue, it should be remembered, was one in which the executive Government proposed to the representatives of the people a reduction of taxes levied on the people; and in the history of the last twenty years, during which period more than a thousand proposals of a similar character had been made by different Governments, he was aware of no instance in which one had been met by a Motion similar to that which the hon. and learned Member had brought forward; although on several occasions particular propositions had been characterized as unwise, or of such a nature that they ought not to receive the sanction of Parliament; and sometimes it has been proposed to substitute another proposal in its stead. The present proposition of the hon. and learned Gentleman would do neither of these. The Motion, in effect, went the length of saying, that the executive Government, which was responsible for the taxation of the country, having laid before the House of Commons a Bill the object of which was the reduction of certain duties, a private Member was justified in rising in his place, and while declining to take the sense of the House as to whether the measure was or was not a wise or a good one, seeking to postpone it for an indefinite period. Now, the universal practice of the House, which, he ventured to contend, was founded on wisdom, was altogether opposed to such a mode of proceeding—a mode of proceeding which, if it had been pursued in former years, would have rendered progress in our commercial legislation almost impossible. The minute examination of details which it was the duty of the Government to institute with regard to such questions as the present, and which they submitted to the consideration of hon. Members on the floor of that House when making the proposals which they deemed it to be their duty to lay before Parliament, had hitherto, he might add, been found the practical mode of carrying out great commercial reforms; but if the whole of those details were, because some timid interest or another happened to be the victim of imaginary danger, instead of being taken on the responsibility of the Government, to be sent upstairs to a Committee, to be dealt with by a system of examination and cross-examination, the progress by which our legislation had of late years been distinguished would never have been made. He should, therefore, without hesitation, appeal to hon. Members to say whether they would abandon the wholesome practice which had hitherto prevailed, and lend themselves to sanction a course which amounted to nothing more than an evasion of the question at issue. He would not, in the course of the observations which was about to make, trouble the House by entering into a lengthened explanation of those details of the Bill which might more conveniently he discussed at a future stage; but would enter at once into the general merits of the subject, premising that he was at a loss, after having heard the speech of the hon, and learned Member for the Tower Hamlets, to know why he had adopted the particular course which he had taken—why he had not conic forward like a man and asked them to reject the proposition. The hon. Member said, he had plenty of reasons for doing so. He had stated that he stood out as the supporter of the existing law, which he seemed to regard as one of a perfect character—a law which had been devised, as he would have it, in 1823, for the purpose of benefiting the revenue and to suppress smuggling, in both of which objects the hon. Gentleman maintained it had succeeded to as great a degree as in human affairs was practicable. Why was it, then, that entertaining that view, the hon. Gentleman had not moved the rejection of the Bill before the House?—a Bill which he appeared to think would have the effect of introducing innumerable horrors into our commercial system. He had conjured up every horror in connection with the ruin of the British manufacturer for the benefit of the foreigner, and, indeed, he had gone so far in his opposition to it as to picture the foreigner gloating over the deserted dwellings of the great manufacturers in this country, and to conjure up images of starving operatives which were quite harrowing. He saw the slave-owner taking the benefit of the Bill; and he saw the Royal monopolist of Manilla deriving incalculable advantages at the expense of the ruined British workman. Those, however, were but old stories after all, and required something in the nature of proof before they could be implicitly relied upon, for prophecies such as those of the hon. Gentleman had been discredited by uniform experience. The hon. Gentleman seemed to think that by the proposal he had made he was giving effect to the wishes of the tobacco trade; but the justice of that supposition he for one disputed. A statement on behalf of two respectable members of the trade had, indeed, been circulated which might be said to be on the hon. Gentleman's side; but their share in the matter was, after all, but infinitesimal, and he himself, who had daily communications either directly or indirectly with the largest manufacturers in the three kingdoms, could safely say that not one of them had made of him the requirement which the hon. Gentleman had made of the House of Commons. On the contary, they had approached the question like practical men, and while submitting that the duty on a particular description of tobacco was fixed at too high a rate, or that certain regulations ought to be relaxed—points which were perfectly legitimate subjects for discussion—never advocated the relegation of the question to a Committee—a course which could lead to no other result than an indefinite waste of time. Now, passing by the minute details connected with the question, it became his duty to show good grounds for introducing the Bill, and for seeking to disturb the present state of things. Those grounds were four, and any one of them would, in his opinion, be sufficient to justify the step which he asked the House to take, while combined they were perfectly irresistible as arguments in its favour. He might perhaps, in the first instance, state that he had that very day received a communication from the Anti-Tobacco society—which, perhaps, had been put in motion by the hon. Member for the Tower Hamlets (Mr. Ayrton)—protesting against the Bill, as being calculated to have the effect of increasing the consump- tion of tobacco. It would be a piece of the most ridiculous purism to presume that an article which constituted a comfort to the masses ought to be proscribed and repressed, and that for the sake of proscribing and repressing it they should endeavour to keep up something in the shape of a monopoly. There was no reason why the consumer of tobacco should be subjected to disadvantages imposed by the restrictions of the present law when the people were freed from restrictions with regard to every other article. If our fiscal necessities compelled us to levy high duties on tobacco, it was a very good reason, in adjusting the duties on the manufactured article, for being especially careful not to do injustice to the manufacturers of tobacco at home. But, on the other hand, as soon as that object was attained, the price of the article should not be enhanced by artificial and arbitrary restrictions. The next ground upon which the Bill might be supported was the prevention of smuggling. He was astonished at the courage of the hon. and learned Member (Mr. Ayrton) who, with perfect self-possession, could state to the House, that so perfect was the present system, there was no smuggling in tobacco. The opinions of the Government, of the Revenue Department, of the Committee of this House, and of every witness examined before it, were against the hon. and learned Member. The fact was notorious, that smuggling existed to a great extent. Whether they would get rid of it altogether he could not pretend to say, but the provisions of the Bill were of a character which would tend to diminish the inducements and the means of smuggling. It would be a good argument for the present system if it could be said that certain descriptions of tobacco, being prohibited, wherever they were caught they might be seized; but the present law did not prohibit the entry of foreign manufactured tobacco, and while, perhaps, 100 lb. of Cavendish paid the duty of 9s. 6d. per lb., it was known that there were many thousands of pounds in the country which could not be seized because it was difficult to say which were the particular pounds on which the duty had been paid. In order to operate against smuggling, it was proposed to give the British manufacturer the power of manufacturing Cavendish tobacco in bonded warehouses, and in consideration of the extra expense in respect of the premises, and the disadvantage in disposing of the stalks and refuse, to allow him 4d, per lb. The present system charged 9s. 6d. per lb. on foreign Cavendish, and prohibited its manufacture by the British trader. He proposed to establish a system under which the British trader could manufacture in bond, paying a duty of 3s. 8d., and the foreigner would pay on introducing the foreign-manufactured Cavendish 4s. per lb. He asked the House which system was most likely to prevent smuggling? and he asked the hon. Gentleman whether he was prepared to support the paradox in the face of the House that the duty on cigars at 5s. was more likely to promote smuggling than the present duty of 9s. 6d. per lb. The hon. Gentleman took up the cudgels in favour of the revenue; but if there was any reason for relying on the opinions of the best-informed men, he could confidently state that the change could not be otherwise than favourable to the revenue. he now came to the interest of the manufacturer, and not only did he hope that the Bill would not realize the phantoms and visions which the hon. Member had conjured from the limbo to which he trusted they had long ago been quietly consigned, but he must express his belief that well-considered legislation would materially improve the position of the British trade. He did not say that with reference to alterations, but with reference to additions to the Bill. Very early in the discussion the question was raised, whether it would not be possible to extend to traders in cigars the privilege of manufacturing them in bond. He had examined that question attentively, and he had come to the conclusion that there was no mode in which such manufacture could be carried on in bond, because there was such a number of persons of small means engaged in the trade that it would be impossible to reconcile the operation with the requirements of the bonding system. Neither would it be possible to permit the manufacture of common tobacco in bond. If it was thought by any hon. Member that they ought to revert to the practice of 1840, and permit the mixture of all sorts of things with tobacco, he could not concur with him. But he did think it might be in the power of the Government to propose something better for the trade than allowing the manufacture in bond—namely, the readjustment of the present system of drawbacks, which would have the effect of opening up advantageously to the British manufacturer the export trade. The duty of the Government was to make the measure as favourable as possible to the British trader.

MR. AYRTON

said, he did not pretend to represent the manufacturers of tobacco generally; but the manufacturers of cigars of all England had met together and placed a Resolution in his hands, which they requested him to support in the House.

THE CHANCELLOR OF THE EXCHEQUER

did not admit that all the manufacturers of cigars were present on that committee. The secretary of the committee, who was the principal person upon it, had no share whatever in the circulars which had been placed in the hands of hon. Members. He (the Chancellor of the Exchequer) begged to state, that, over and above the trade which was open to the British manufacturer by the Bill as it stood, he was sanguine of being able to submit to the House a proposal which would give the manufacturers of all descriptions of tobacco power to enter into the export trade. The present system of drawbacks took no cognizance of the different kinds of tobacco, and was founded on the assumption that the exporter would put as much moisture as possible into his tobacco, in order to get as large a drawback as he could; and the effect of that was, that the tobacco which was exported as ship's stores was in a very moist state. But he was prevented from entering into details, in consequence of the hon. and learned Member's Amendment standing in the way. The question which was before them now was whether the hon. Gentleman would permit them to discuss the subject. He could show, if there was an opportunity of doing so, that many of the hon. Member's statements were unfounded; for instance, the manufacture of cigars, as explained by him, was unknown to the vast majority of the manufacturers of the country. The question was not one of starving operatives at home and bloated foreigners, but simply this: — What measure of relief could be given to the consumer, and how they could at the same time put the manufacturer and trader in a good position without damage to the revenue of the country? That was the principle upon which he proposed to go into Committee, and upon which he asked the House to reject the present Motion.

MR. ROEBUCK

said, the right hon. Gentleman was so emphatic and so peremptory that it almost daunted a timid person like himself. The right hon. Gentleman had referred to him.

THE CHANCELLOR OF THE EXCHEQUER

—I never made any reference to the hon. and learned Member.

MR. ROEBUCK

thought he had, from the manner in which the right hon. Gentleman pointed his finger. The right hon. Gentleman, however, stated distinctly that the proposition of the hon. and learned Gentleman to refer the question to a Select Committee was an unusual and improper one, because it interfered with the conduct of the Government in a matter of fiscal arrangement. But he (Mr. Roebuck) had known the timber duties to be referred to a Select Committee, and he wanted to know why the tobacco duties should not also be referred to a Select Committee. The right hon. Gentleman's rhetoric was like the proboscis of an elephant, which could pick up a pin or lift a cannon. Bishop Berkeley had written an admirable metaphysical treatise on the question of tar-water; and so, in like manlier, the right hon. Gentleman had delivered a discourse on political economy à propos of the making of cigars. The plain state of the case appeared to him (Mr. Roebuck) to be this:—In this town 10,000 persons were employed in making cigars, and he was told that the effect of the plan of the right hon. Gentleman would be to bring the home maker of cigars into unfair competition with the foreign maker, as the former worked with an article paying a very high duty, while the latter worked with an article which paid no duty at all; and therefore, if the duty were reduced from 9s. to 5s., all these people would he thrown out of work. He was also told that the foreign maker of cigars took the leaf, extracted the oil from it, and thereby diminished the weight one-half. The English maker could not do that, because it would diminish the weight of the material, on which he had already paid duty. He understood many workmen in the trade had already been thrown out of work by the terror created by the right hon. Gentleman's Bill. He wished the Chancellor of the Exchequer to consider these points.

THE CHANCELLOR OF THE EXCHEQUER

explained, that he did not mean to say that Select Committees had never sat on commercial duties. What he intended to state was, that he had never known an instance since the commercial legislation of 1842, when the Government on their responsibility proposed a particular plan bringing to issue the whole question, of the House refusing to entertain that plan in consequence of the interposition of a general Motion for inquiry.

MR. LOCKE

thought, that if the question had been complicated before, the right hon. Gentleman's speech only made it more complicated than ever. If the matter were submitted to a Select Committee, the House would have something to act upon. If the matter were so complicated as it now appeared to be, his hon. and learned Friend was not open to animadversion for seeking to obtain an investigation. It was an inquiry into the hop duties which led to the final settlement of the question. The right hon. Gentleman, feeling the injustice which was going to be done to the British tobacco manufacturer, said he hoped that he might some day become an exporter. He said his proposal was for the benefit of the consumer. What consumer? If he meant by that that it would benefit the great body of the people, he denied it altogether. At present a large portion of manufactured tobacco paid a duty of 500 per cent; and he contended that the working man would derive no benefit, unless it were by the reduction of the duty on cavendish and negro-head. The great bulk of tobacco was left entirely untouched. As to smuggling, it took place chiefly in cavendish and negro-head, and the other manufactured tobaccos. The smuggling of cigars was on a very small scale indeed, and he held it would not be put an end to by this measure.

MR. T. BARING

said, he had always thought that tobacco duties ought to he treated with the greatest caution in making any change, not only because of the amount of revenue which they produced, but also on account of the difficulties incidental to the manufacture of tobacco. It was said that this was the last remnant of a bad system. He begged to remind the House that hitherto they had always gone upon the principle of taking off duty on raw material before subjecting their own manufacturers to foreign competition; but here was a heavy duty which would still remain on the raw material in this country, while in other countries there was no duty at all. He confessed that he could not ascertain what was likely to be the effect of the proposed change. It might prevent smuggling, benefit the munufacturers, and lower the price to the consumer; but they had no sufficient data to guide them—nothing, in short, but the authority of the right hon. Gentleman. The right hon. Gentleman intimated that lie had a scheme for enabling the manufacturers of this country to export; but he had not told them what it was. There had hardly ever been a great change of duties without the propositions having been considered in Committee, and this question had never yet been specially considered by any Committee—the proposal rested entirely on the recommendation of the Chancellor of the Exchequer; and he (Mr. Baring) did not think it ought to be adopted without a further examination of those who were specially interested.

MR. BRADY

thought there ought to be a thorough investigation of the subject before they went any further. In the interior of the county there were no bonded warehouses in which the manufacture could be carried on. Moreover, the supervision of the manufacture would involve a large expenditure. These matters required careful consideration, and he would move the adjournment of the debate.

MR. MAGUIRE

seconded the Motion. It was clear that smuggling had not increased, for during the year 1862 the revenue from this source had increased £110,000. Ireland was deeply interested in this question, for £2,000,000 of this revenue came from that country. It was the opinion of persons connected with the trade, who had much more complete information than the Chancellor of the Exchequer, that the trade were not properly protected. They state that to make a pound of snuff required a pound and a half of stalks, on which 4s. 9d. duty was paid to the Crown. [The CHANCELLOR of the EXCHEQUER: Oh, no!] Would the right hon. Gentleman allow the point to be investigated by a Committee, then? Let him have the matter thoroughly sifted; and if the right hon. Gentleman were shown to be right, he would gladly support the Bill. By his own speech the right hon. Gentleman had completely condemned his plan for manufacturing in bond, for in a moment of unofficial candour he called it "at best but a defective, clumsy, and costly expedient." And yet he called this unfair competition with the foreigner "free trade." Would the right hon. Gentleman consider, too, the justice of releasing the trades from the burden of the Excise regulations? It was because he believed that the right hon. Gentleman had been earwigged by some Department of the Excise or Customs which found itself without work at the present moment, and that he was groping blindly about in the dark, that he supported the Motion for adjournment.

MR. MILNER GIBSON

said, he was a little astonished at the alarm felt at this proposal for cheapening in some degree the price of tobacco. It was said that the rates of duty proposed by his right hon. Friend were not what they ought to be. That was a very fit question to he discussed in a Committee of the Whole House. he had seen a whole tariff, containing hundreds of different articles, discussed in such a Committee, and no proposition made to refer any of the rates of duty to a Select Committee. A Select Committee on duties had generally been proposed by Members of that House in order to force on the Government the reduction of some duty; but this was the first time he had known an hon. Member to come forward, on a proposition by the Government for a reduction in favour of the consumer, with an Amendment to refer the question to a Select Committee. He must set the hon. Member for Huntingdon (Mr. T. Baring) right on one point, and remind him the case of the duty on malt showed that the principle to which he had referred was not the one that had been acted on in this country. The duty levied on foreign malt was in excess of that paid on the home article only to the amount barely necessary to allow for the expense of carrying on the manufacture under the Excise.

MR. T. BARING

wished to explain that he had spoken of the Customs duty, and said that the duty was either taken off or reduced on the raw material before competition was allowed on the part of the foreign manufacturer.

MR. MILNER GIBSON

said, that the case of refined sugar was one in point against the hon. Gentleman. The foreign refiner was allowed to compete with the English on other terms than those referred to by the hon. Member. This was a consumer's question. The consumer was now subjected to an additional charge arising from the monopoly price demanded for tobacco by the home manufacturer. He hoped the House would not consent to the proposition to refer this matter to a Select Committee.

COLONEL DUNNE

supported the proposition for further inquiry, and said it was ridiculous to call this a free-trade question while there was an absolute prohibition against the agriculturist growing tobacco at home.

MR. AYRTON

appealed to the Government to consent to the adjournment of the debate, in consequence of the absence of an hon. Gentleman on the opposite side of the House who took a leading part in financial questions. Another reason for adjourning the debate was, that the Chancellor of the Exchequer had entered into no explanation of the provisions of the Bill. The right hon. Gentleman had promised on a former occasion to make a statement to the House; but his speech to-night had been confined to personal allusions and other matters foreign to the merits of the Bill.

THE CHANCELLOR or THE EXCHEQUER

said, he could not consent to the adjournment of the debate on account of the absence of an hon. Member who had not so much as intimated his intention to take part in the discussion.

Motion made, and Question put, "That the Debate be now adjourned."

The House divided:—Ayes 71; Noes 137: Majority 66.

Question again proposed, "That the words proposed to be left out stand part of the Question."

SIR HUGH CAIRNS

hoped the Government would now see the propriety of allowing the debate to be postponed till another day. There were a great many hon. Members who were anxious to express their views upon the subject. In substance the present discussion was a discussion on the second reading; and if it were to be closed now, there would be no subsequent debate until the House went into Committee. The President of the Board of Trade had made the strange assertion that the question of rates, which was the only question in dispute, ought to be discussed in Committee. It was utterly impossible for any hon. Member in Committee on the Bill to propose to increase rates which had been settled by a Committee of the Whole House.

MR. MILNER GIBSON

said, it would be quite competent to discuss in Committee any rates lower than those now chargeable by law. He did not suppose there was any intention to propose higher rates.

SIR HUGH CAIRNS

said, that if the question of rates could be discussed in Committee, he was at a loss to conceive why the Chancellor of the Exchequer had thought it necessary to go into Committee of the Whole House for the purpose of considering that very point.

THE CHANCELLOR OF THE EXCHEQUER

had already stated that there was no necessity for going into Committee of I the Whole House, and that he had printed I the Resolutions merely for the convenience and information of hon. Members.

Motion made, and Question put, "That this House do now adjourn."

The House divided:—Ayes 70; Noes 134: Majority 64.

Question again proposed, "That the words proposed to be left out, stand part of the Question."

COLONEL DUNNE

moved the adjournment of the debate.

THE CHANCELLOR OF THE EXCHEQUER

would not continue an unprofitable controversy, and would yield to the proposal of the hon. and gallant Gentleman.

Debate adjourned till Monday next.