HC Deb 30 July 1875 vol 226 cc274-82

, in proceeding to call attention to the constant delays interposed by France in carrying out the Sugar Convention of 1864, and in fulfilling assurances repeatedly made to this country on the subject, said, his object was not to complain of the action of Her Majesty's Government, as represented by the noble Lord at the head of the Foreign Office, or the hon. Gentleman who so successfully represented that Office in this House—for they had apparently done all that lay in their power for the best—but to strengthen their hands in any further representations they might make to induce the French Government to carry out their engagements. The question was one of great commercial importance to this country, as the House would see when he stated that the quantity of sugar refined annually amounted to 650,000 tons, and was of the value of from £15,000,000 to £20,000,000 sterling. Until within a few years past the English sugar refining trade had been growing and prosperous, but it had now fallen into decline. That decline was not owing to any want of skill or of enterprize on the part of the refiners, but to the unfair competition which France was enabled to carry on by the system of bounties. The duty was levied in France not on the sugar refined, but on the quantity of raw sugar that went into the refiners' houses, which was supposed to make a certain yield of refined sugar, and that supposed yield was charged. It was important, therefore, that that yield should be exactly ascertained. He could show from the admission of the French themselves that the actual yield was greater by 10 per cent than the estimated yield. The French refiner thus paid no duty on this excess yield, but on exportation he received a drawback equal to the duty he was supposed to have paid, and the French sugar refiners were thus enabled to undersell the English refiners. The industry and skill of our refiners had long enabled them to stand even this competition, but the system had now come to be intolerable. It was a rule with regard to raw sugar that the deeper the colour the loss was the yield, and the French refiners had turned this to their advantage, by artificially deepening the colour of the raw silgar and obtaining a much greater yield than was officially calculated. In the case of the ordinary cane sugar the disadvantage resulting to English refiners from this manipulation of the raw sugar was great, but in the case of beet root sugar, which was largely manufactured in France, it was ten-fold greater. One might say that this was a matter which France would soon open her eyes to. As a matter of fact, she did open her eyes to it as far back as 1864, for it was at her instance that the Convention of 1864 with England, Holland, and Belgium was entered into. Under that Convention a certain scale was drawn up, which it was said would meet the requirements of the case. The English Government had loyally carried out the terms of the Convention; but France, which had originally proposed it as the champion of the abolition of bounties, from that time to the present had systematically evaded her obligations. It was consistently insisted on the part of England that refining in bond was the only way to give effect to the Convention of 1864, and a proposition was made in the French Assembly in 1874 proposing to establish that system on the 1st of May. The proposition was rejected by a small majority, but so strong was the feeling on the subject that it was again brought forward with the consent of the French Government in the same year, and carried by a large majority. It was then decided that refining in bond should commence on the 1st of July, 1875, at the very latest; but it was also declared that every exertion should be used to bring the system into operation at the earliest possible moment after the passing of the law. That engagement was not entered into with us, because our locus standi was the Convention of 1864, for which, however, we were willing to accept refining in bond as a substitute. There was a long correspondence on the subject between Lord Derby, Lord Lyons, and the Duc Decazes; but, notwithstanding all remonstrances, France had systematically evaded that which she had promised to do, and we were now in the position that the Convention of 1864, which, as he had said, was our only locus standi, would expire to-morrow, while France declined to act upon the law which she herself had passed, and now actually proposed to do nothing in the matter until the 1st of March. "What reason did she give for this course? Within the last month or two there had been another conference between England, France, Holland, and Belgium, with the view of inducing Holland and Belgium also to refine in bond. A Convention to that effect was agreed to, and the 1st of March was named in it, because it was necessary that Holland and Belgium should get a law passed by their respective Assemblies in order to carry out the provisions of the Convention, and that could not very well be done much earlier than March. But then that excuse did not apply to the case of France because she had already passed a law for refining in bond; and further, the French delegate at the opening of the Conference, had expressly stated that whatever dates Holland and Belgium fixed for the commencement of refining in bond, Franco was bound to commence that system not later than 31st July so that the delay now proposed was a distinct breach of this understanding. He had not the slightest faith that France would carry out refining in bond even in March; but even if she did, it was a most ruinous thing for our sugar refiners to have to stand against those bounties for another six months. If the present state of things were not remedied, he did not believe that in another month there would be a sugar-refiner at work in the whole Kingdom. It had been said, why should they object to the French taxing themselves to give us cheap sugar? But it really was not a consumer's question, for the consumer did not derive any benefit from the system. The drawback received by the French refiner was £3 or £4 per ton, but he only reduced his price just below the price at which sugar could be made by our refiners; that was to say, he reduced it not more than £1 per ton or at about the rate of 1–16d. per lb. This was sufficient to close our refiners, but not enough to enable the consumer to buy his sugar cheaper. Besides the serious injury done to our refiners, there was the great injury inflicted on our sugar-producing colonies and also on our carrying trade. The right hon. Gentleman the Chancellor of the Exchequer had not long ago expressed a hope that England would become the great emporium of the sugar trade; but that was out of the question if refining was to be put an end to in this country. Was all that ruin to be suffered for the sake of £ 1 a ton upon 120,000 tons of sugar, the quantity of loaf sugar per annum consumed here? After France had obtained the entire monopoly of the sugar trade, she would be able to dictate to us what price we were to pay. What was to be done in that matter ought, he urged, to be done quickly, because the Convention expired to-morrow. What would be the effect if France applied the same principle as she did in the case of sugar to all the other manufactures of this country? It would be of little avail that we could buy her commodities at a little below cost price, if our people had nothing with which to buy them, in consequence of the destruction of the industries by which they had hitherto been supported. He was not so foolish as to think that we should go to war for the sake of that treaty, but the present case was one of so exceptional a character as to require some exceptional treatment. Our sugar refiners were not afraid of fair and open competition. This was not the case of another country being able to produce an article cheaper than we could do, but that of a large manufacturing industry of ours being destroyed by a bounty. He was afraid to speak about our putting on countervailing duties, but the circumstances were so exceptional that we might be justified in doing something of that kind. We might tell France that until she fulfilled her engagements, we would not allow her sugar to come into our market, or we might put on a duty representing the exact amount of the bounty she gave her refiners when they sent their sugar to this country. Unless we were prepared to see hundreds and thousands of our people driven from their employment and an enormous amount of capital lost, it was absolutely necessary, whether by remonstrances or by other means, to bring France to a sense of her obligations. He, therefore, earnestly trusted that the Government would adopt some method by which the injury he had described would be remedied, and a prosperous branch of manufacture in this country saved from utter extinction.


said, he would not go over the same ground as his hon. Colleague had; but this he must say, that the amount of injury which had been done to this country by Franco in the sugar refinery question was very great. He did not want the House or the Government to pursue any course that would be against the consumers' interest; but this was a long-pending question between the people of Franco and this country. France had been much favoured by this country, but she had broken all her engagements with England. Lord Derby had put the matter to her in the simplest and broadest way when he said this was not a consumers' question; it was more than that; it was a question in which the action pursued by the Government of France had almost entirely destroyed the sugar-refining interest of this country and the whole of the capital that had been invested in it; and unless something was done speedily to remedy the evil, the sugar manufacturers in this country would be obliged to shut up their houses. He believed his hon. Colleague had under-stated rather than over-stated the magnitude of the mischief done by France to one of the largest sugar-refining districts of this country. It was melancholy to witness the way in which the sugar manufactories in the Tower Hamlets had one by one succumbed, owing to the causes so well described in the admirable exposition to which the House had just listened. The course that France was adopting was the simple one of bearing down, by unfair competition, the sugar-refining trade of this country, in which so much capital was invested, with the hope of recouping herself subsequently, when she had got the whole trade in her hands, by charging a large additional price for her sugar all over the Continent. It so happened that the soil of France was peculiarly suitable for the growth of beet, and that after the sugar had been extracted from that root, the residue was nearly as valuable for feeding cattle as the root in its original state. Therefore, the French Government, by being enabled to throw into beet cultivation an enormous quantity of their land and to employ a large number of labourers in the sugar-refining trade, were able to recoup themselves for the large sum which they most unfairly paid out of public money to their sugar refiners. In these circumstances we ought not to stand upon formalities, and it would be advisable that the French Government should be informed that the course of action they had adopted was contrary to all good faith and to their express agreement, and that until they put themselves in the right, we should no longer consider that we were under any obligation to regard them as entitled to be dealt with under the most-favoured nation clause of the Treaty.


said, the question was one that was possessed of much interest for the Northern part of the Kingdom, where things were coming to a crisis with regard to it. There was only one sugar refinery in Edinburgh, and it had been working at a loss for a considerable time, and within the last day or two the proprietors had given notice to their workmen of their intention to stop the works altogether. His hon. Friend the Member for Greenock (Mr. Grieve), who was a partner in the largest sugar-refining business in the Kingdom, told him that things were in the same state in his part of the country, and that many houses thought of giving up their business altogether, which would cause thousands of men earning good wages to go idle. The mode adopted by France partook too much of the nature of the Old Bailey practice, of making a promise to-morrow in order to break it the next day, and the time had come when our Government ought to meet the matter in a very decided manner, and should teach the French Government to act like honest men. Within the last few years we had largely reduced the duty on the importation of French wines, as compared with those of Spain and Portugal, and we should take care that it was known that it was not too late for us to retrace our steps in that matter.


said, that France had been greatly favoured with respect to the duties on wine to the prejudice of the distillers of this country, and it ought to go forth to the Ministry of France that every part of the United Kingdom was agreed upon this point—that the system of allowing a drawback to the manufacturers in France, in order that they might compete with us on unfair terms, was a system which could not be tolerated by any country which respected itself. The growth of beet and the manufacture of sugar in Ireland might be profitably carried on were it not for the undue advantage that France gave to her sugar refiners.


said, he was sure that no one could be surprised that the hon. Member for the Tower Hamlets (Mr. Ritchie) had brought this subject before the House, because, if other hon. Members had seen and heard as much of the condition of the sugar refiners of this country as he had done within the last three or four months, they would be glad that the question had fallen into such able hands as those of the hon. Member. Nothing could be more conclusive than the hon. Member's statement, and he thanked him for the kind way in which he had spoken of the action which Her Majesty's Government had already taken in this matter, and for the terms in which he had referred to him personally. All he could say was, that it had given the greatest pain at the Foreign Office to hear of the great distress in the sugar-refining trade that existed in all parts of the United Kingdom, and he could assure the House that the Foreign Office had from time to time in the last few months repeatedly remonstrated with the French Government upon this question as it affected England, Ireland, and Scotland. At that hour of the night, he would not weary the House by going into the bygone story of the classification of sugar, but the debate must have reminded many of the older hon. Members of the time when the whole subject of the classification of sugar was gone into very fully, first by Sir Robert Peel, and subsequently by a Select Committee of the House in 1862. It was owing to the Report of that Committee, which the then French Minister of Finance had had translated into French, that the pernicious system that was then in force there was put an end to, and that sounder views on this question were entertained all over Europe. From 1864 to 1871 we were anxious to establish a system of classification, but no one could doubt that in reality that system broke down, for unless carried out with great fidelity, it opened the door to a large amount of fraud. In 1871, when France said she would establish a system satisfactory to us, it was found impossible to proceed with our classification system. Up to the present time France had not kept the engagements which we had a right to expect she would keep. Owing probably to circumstances over which she had no control, she said recently that she wished the time for establishing refining in bond to be extended, and now this time was fixed for March 1, 1876. Although we might feel much disappointment with the course taken by France, she had given strong pledges that she would introduce the system of refining in bond at the time fixed. Negotiations were also going on with Holland on the same subject, but until the proposal which would be made by Holland actually reached Her Majesty's Government it would be imprudent to refer to it. He might say, however, that Her Majesty's Government would be cautious how they entered into any other Convention on the subject. When the House saw the correspondence, he thought they would come to the conclusion that the Government had taken the only course open to them in withholding their consent from the proposal made to us quite lately by the four Powers. A countervailing duty upon refined sugar had been suggested, but Her Majesty's Government would not think it right to adopt this course, nor would it be sanctioned by public opinion. It also appeared to the Government that such a step would be one of doubtful policy, when in nine months they hoped to see an end to the evil now complained of. The system of bounties was a very vicious one. The only persons who could benefit by it in France were, not the beet-growers, but the refiners. It was absolutely ruinous to attempt to prop up an industry of this kind by artificial means, for when deprived of the stimulus the industry would be more depressed than ever. The system of bounties was the worst system of the most aggravated kind of protection, for whereas a system of protection in some countries and some cases might fill the treasury, a system of bounties must in all cases empty the treasury. Moreover, the taxpayer was in all cases obliged to pay the bounty, and an additional tax was placed on the article subject to that bounty. The result was that the consumption of sugar in France, owing to the heavy duties, was far less than in England, being only 17 lbs per head as against 57 lbs per head here. The French people, he believed, would soon find out that the system they were now pursuing was ruinous, and they would then urge upon their Government the necessity of putting an end to it. If the bounty system were extended in the way its advocates desired, the burden on the Exchequer would increase so largely that it would be impossible for any country to bear it. Before long, in all probability, France, Holland, Belgium, and other countries which had adopted this vicious system would find that our example was the true one to follow. The Conventions expired this very day, and France might turn, round upon us and say—" We are bound to you no longer." All we could therefore do was to establish the system which we were bound to establish, and which we thought was the best for our country; and he believed that if we could show to France that that was the best system we should produce a greater effect than could be produced in any other way.


said, he was sorry to find that, although it was admitted a wrong had been done to the English refiners, there seemed to be no idea of providing a remedy for it. While our sugar refiners were being ruined, the only suggestion of the Government was that they should be kept waiting still longer, until the trade was ruined entirely. He should have liked to hear something more satisfactory than the declaration that bounties were bad things in general, and that Her Majesty's Government intended to adopt some course which would have compelled France to do the right thing by us. He did not wish to see a commercial enterprize of that sort destroyed in England, and he hoped our Government would be wise in time.

Main Question, "That Mr. Speaker do now leave the Chair," put, and agreed to,