CUSTOMS AND INLAND REVENUE BILL.

HC Deb 09 May 1878 vol 239 cc1650-86

(Mr. Raikes, Mr. Chancellor of the Exchequer, Sir Henry Selwin-Ibbetson.)

[BILL 146.] THIRD READING.

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the third time."—(Mr. Raikes.)

MR. RITCHIE

rose for the purpose of moving that the Order for the third reading be discharged, and that the Bill be re-committed, in order to amend it, so as to establish a difference of 2s. per lb. between the duty on unmanufactured tobacco and cigars, instead of 1s. 10d. as provided by the Bill. He regretted that he was obliged to trouble the House again on this question, as he had already had opportunities of raising a discussion upon it on two previous occasions. When he brought the question under the notice of the House before, he had hoped that the Chancellor of the Exchequer would be influenced by the representations he made on the subject. But, although he must thank the Chancellor of the Exchequer for the courteous manner in which he had invariably received his representations, yet he regretted to find that the right hon. Gentleman had not yielded to his appeal. If he had had the opportunity, on previous occasions, of taking the opinion of the House on the subject, he should not have thought himself at liberty again to trouble the House with it; but, in consequence of a private Member not being able to move any Resolution which would have the effect of increasing taxation, he had hitherto been unable to take the opinion of the House. This Amendment, however, was drawn up in such a way as to enable him to do so, and he would endeavour to lay his arguments as clearly as possible before the House. In the year 1863 a re-settlement of the tobacco and cigar duties was made by the right hon. Gentleman the Member for Greenwich (Mr. Gladstone), who, after full inquiry, established a difference in the duties on unmanufactured tobacco and cigars. The relative duties which he introduced, were 3s. 1⅘;d. on unmanufactured tobacco and 5s. on cigars, leaving a margin between the two duties of 1s. 10⅕d. The pro- posal made by the present Bill was that 4⅕d. should be added to the duty on unmanufactured tobacco, and that 4d. should be added to the duty on cigars. Thus, the duties would be respectively, 3s. 6d. on unmanufactured tobacco and 5s. 4d. on cigars, leaving a margin of 1s. 10d.—the margin which was deemed sufficient under the plan of the right hon. Gentleman the Member for Greenwich. But what was a sufficient margin on 3s. 1⅘d. and 5s., was obviously not sufficient when the duties were raised to 3s. 6d. and 5s. 4d. The exact ratio, to correspond with the increase of duty, was 3s. 6d. and 5s. 6d., as proposed by his Amendment. If that Amendment were carried, then it would be the duty of the Government to increase in Committee the duty on cigars by 2d., leaving the duty on unmanufactured tobacco the same as they now proposed. He was afraid it would be necessary for him to trouble the House at some length, because this would be the last opportunity he should have of presenting his case; and it was also, he regretted to say, a matter of figures to some extent. He understood that the position taken up by the Chancellor of the Exchequer on this matter was that he had no desire to interfere with the basis fixed by the right hon. Gentleman the Member for Greenwich in 1863; that on that basis the manufacturers of cigars were only prejudiced to the extent of about one-third of 1d. per lb. by the proposal of the Government; and that the stalks were now worth 4d. per lb. more than they were in 1863, which would more than compensate the manufacturers for the loss they sustained in other respects. As to the basis of 1863, the Chancellor of the Exchequer had himself stated in the House that the calculations of the right hon. Member for Greenwich were very carefully made. They were discussed at great length, not only in that House, but in all parts of the country. The right hon. Gentleman the Chancellor of the Exchequer said he accepted the basis established in 1863. Well, he (Mr. Ritchie) was also prepared to accept and to argue upon that basis. He maintained that that basis ought not to be disturbed, until after full inquiry by some tribunal which would hear all the parties who were interested in this matter. He was not surprised that the Chancellor of the Exchequer proposed to rest his case on the basis of 1863; because, if the right hon. Gentleman had done otherwise, he should have been able to quote from a speech delivered by him in 1863, and show that even at that period the right hon. Gentleman objected to the settlement which was then made, because sufficient inquiry had not been instituted; and, if he was not mistaken, the right hon. Gentleman voted for the proposal brought forward by Mr. Ayrton, to the effect that before the duties were fixed, the subject should be investigated by a Committee of that House. The cigar-making trade now courted such an inquiry, because they believed they would be able to show that the settlement of 1863 was not in their favour, but against them, and too much in favour of the foreign importers. Whatever might be the result of the division which he should take that night on his Amendment, he would suggest to the Chancellor of the Exchequer that a Committee of the House should, before the next Budget, inquire into the subject, and see whether the basis fixed in 1863 was satisfactory or not. It was desirable for him to point out that, in the opinion of many people, in 1863, the basis then established was one which told against the manufacturers of cigars in this country. From the report in Hansard, he found that, in a discussion in that House, Mr. Ayrton said— He accepted the principle that there was to be a duty equivalent to that imposed upon the imported article, and that there was to be a surcharge by way of compensation for the increased expense put upon the English manufacturer by reason of his working a highly-taxed commodity under a most oppressive system of combined Customs and Excise; but he denied that the application of that principle in the present instance was either just or honest towards the English manufacturer and English workman."—[3 Hansard, clxix. 1613.] The hon. and learned Member for Sheffield (Mr. Roebuck) also said— 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."—[3 Hansard, clxix. 954.] He would now adduce a still higher authority. The right hon. Gentleman the present Chancellor of the Exchequer said, in the course of the same debate— If the reduction (so as to allow of foreign cigars entering into competition with English) went too far, they might be injuring the English manufacturer, without benefiting, but rather injuring, the Revenue. And the right hon. Gentleman went on to say— The Chancellor of the Exchequer had told them that it was necessary to make a distinction between the manufactured and the unmanufactured article, in order to place the British producers on a fair footing with foreigners; but the question whether the protection given was adequate could not be discussed properly in a Committee of the Whole House without further inquiry."—[Ibid. 985.] He thought these quotations showed generally, that there was some ground for doubting whether the settlement which took place at that time was sufficiently favourable to the English manufacturer to enable him to compete in our own market with the foreign manufacturer. He might also point out, that from the other point of view the settlement had certainly secured one of the desired results, inasmuch as it had enabled German manufacturers to send their cigars into this country, and to compete with the English manufacturers. Before 1863 there was no importation of German cigars at all; but, since 1870, the following were the figures:—573 cases were imported in 1870; 1,060 in 1871; 1,555 in 1872; 1,969 in 1873; 1,986 in 1874; 2,381 in 1875; 2,980 in 1876; and 3,118 cases in 1877. All these importations were from Germany. It was evident, therefore, that if one of the objects of fixing the ratio of these duties in 1863 was to secure competition in our markets, and enable foreign manufacturers to sell their cigars here, that end had been attained. They ought, surely, to take very great care, in putting any additional duty on tobacco, that the condition under which the English manufacturer had been competing with his foreign competitors should not be altered so as to tell more against the English manufacturer than the settlement of 1863 did. He should prove, presently, that although the Chancellor of the Exchequer had expressed a desire not to interfere with the basis of 1863, he did actually propose very seriously to interfere with it, and to interfere with it without a full and proper inquiry— a course which the right hon. Gentleman deprecated so strongly in 1863. The right hon. Gentleman told the House, when this matter was last discussed, that the manufacturer was not more than one-third of a penny worse off than he was before the imposition of the new duty. This was not the first position which had been taken up in the matter by the right hon. Gentleman. The first position taken up by the right hon. Gentleman was, that if they added 4d. per lb. all round, the manufacturers would be in exactly the same position as before. But the second position which was taken up now—namely, that the manufacturer was only damaged to the extent of one-third of a penny, was as erroneous as the first contention. What he proposed to do was to take from Hansard the exact figures and examples given by the right hon. Gentleman the Member for Greenwich (Mr. Gladstone) in 1863, and to compare them with a calculation at the new rate of duty on exactly the same basis. By means of this comparison, he should prove that under the proposed new system the manufacturer would lose not one-third of a penny but 1¾d. The right hon. Gentleman the Member for Greenwich, when he imposed this differential duty, said he would illustrate the case of cigars by two examples. He said— He would take the number of pounds of cigars which the manufacturer could make out of 100 lbs. of tobacco, and divide the total amount of duty paid, directly or indirectly, by the number of pounds of cigars made out of the 100 lbs. of tobacco, and that would give the amount of countervailing duty. Now, 100 lbs. of Havannah leaf, of a somewhat dry quality, yielded 17 lbs. of stalks, which, though not worth anything for entering into cigars, would sell for 2s. 4d. a-lb. in the market. There would be 14 lbs. of refuse and moisture from such an amount of this tobacco. Deducting 17 lbs. of stalk and 14 lbs. of refuse, or 31 lbs., from 100 lbs., there would remain 69 lbs. of cigars to be got from 100 lbs. of tobacco. Now, the duty paid, including the allowance for interest on the duty between the time when the article was imported and the time when the duty was received back from the consumer, and other contingencies, was £16 1s. 9d., deducting from that the sum of £1 19s. 8d., the value of 17 lbs. of stalks, there remained £14 2s. 1d. Dividing this by 69 lbs. of cigars, it would be found to represent a payment in duty of something like 4s. 1d. per lb. He proposed to allow 5s., in order that the labourers who were employed, in the manufacture, amongst whom were women and children, might be well looked after."—[3 Hansard, clxix. 1619.] This left a margin of 11d. per lb. Following precisely the same lines, he (Mr. Ritchie) would now state the result of the calculation at the new scale of duty. The duty paid, including allowance for interest, on 100 lbs. of tobacco, would be £17 17s. 6d. Deduct from that the sum of £2 5s. 4d., the value of 17 lbs. of stalks at the increased rate of duty, and there remained £15 12s. 2d. Dividing this by 69 lbs. of cigars, it would be found to represent a payment in duty of something like 4s. 6¼d. The proposed new duty on cigars was 5s. 4d., thus leaving a margin to the manufacturer of 9¾d., instead of 11d. per lb. under the old rate of duty; or a disadvantage, as compared with the previous settlement—which the Chancellor of the Exchequer said he had no desire to disturb—of 1¼d. per lb. on this comparatively dry tobacco. Let them now take the other example given by the right hon. Gentleman (Mr. Gladstone) in 1863— He would now take the extreme example of Havannah tobacco. This might be stated to contain about 23 per cent of moisture.…. 100 lbs. of this leaf contained 23 lbs. of moisture, 18 lbs. of stalks, and 2 lbs. of refuse, smalls, and waste. It followed that there were 43 lbs. to be deducted from the 100 lbs., which left 57 lbs. of cigars to be got out of the 100 lbs. But then the 18 lbs. of stalks sold for 2s. 4d. the lb.; and, making the calculation and allowances as before, the result showed that the duty which the manufacturer paid on 57 lbs. of cigars was £13 19s. 9d., or 4s. 10⅞;d., or say, in round numbers, 4s. 11d. per lb."—[Ibid. 1620–1.] The result of the calculation on the new basis was as follows:—The duty paid, including allowance for interest, would be £17 17s. 6d. Deduct the 18 lbs. of stalks at increased duty, £2 8s., and there remained £15 9s. 6d. Divide this by the product of cigars—57 lbs.—and it would be found to represent a payment in duty of something like 5s. 5⅛d. The proposed new duty on cigars was 5s. 4d.; thus, on this example, there would be a balance against the manufacturer of l⅛d. per lb., instead of in his favour, under the old system, of l⅛d. per lb.—being, in comparison with the old system, a difference of 2¼d. per lb. against the manufacturer. Thus, on the first example, he lost 1¼d. per lb., and on the second example, 2¼d., or an average of 1¾d. Now, his Amendment proposed to establish a difference in the duty between unmanufactured tobacco and cigars of 2s. per lb. instead of 1s. 10d. as proposed by the Bill, an increase of 2d., which would just about place the manufacturers on the same footing as they were under the old system. He would, in half-a-dozen words, state another mode of calculation which he thought hon. Members would understand. The moisture stated by the right hon. Gentleman the Member for Greenwich to be in 100 lbs. of leaf was 14 lbs. on one example, and 23 lbs. on the other, or an average of 19½ lbs. The product of cigars was 69 lbs. on one example, and 57 lbs. on the other, or an average of 63 lbs. The manufacturer would now have to pay a duty of 4d. per lb. on the moisture, which on 19½ lbs. would give a loss of 6s. 6d. In addition, there was the initial loss of one-fifth of a penny on 100 lbs. of leaf, which came to 1s. 8d., and there was the loss of interest on duty, which came to 9d., making altogether 8s. 11d. Dividing that by the average product of cigars, it would be found to give exactly 1¾d., which the manufacturer would be to the bad. He thought he had shown that his calculation was the correct one, and that the Chancellor of the Exchequer, in his calculation of one-third of a penny, must necessarily be wrong. He could clearly see where the right hon. Gentleman had made the mistake. He had omitted, in his calculation, to take account of any loss arising to the tobacco manufacturers from having to pay duty on moisture. The cigar importer only paid duty upon the dry cigars and not upon any moisture, whereas the tobacco importer paid duty upon the moisture. When the right hon. Gentleman made the admission that the manufacturer might be prejudiced to the extent of a third of a penny, he said—" Oh, but the stalks have risen in value since 1863 to the extent of 4d. per lb., and that will more than compensate the manufacturer for the loss." He would show that the right hon. Gentleman, or rather he presumed the Customs' authorities, who had supplied him with his figures, were also wrong in saying that the stalks had increased in value. But, even if it were otherwise, he should still maintain that what was now proposed was to interfere with the settlement of 1863, and to do the very thing which the Chancellor of the Exchequer professed he had no wish to do, and that without proper inquiry. With respect to the question of stalks, he would ask the right hon. Gentleman whether he thought that this duty ought to fluctuate with the changes in the value of stalks? He should presently show, however, that the ground upon which he based that assertion was not correct. But he wished to make this further observation with reference to stalks—that, seeing that this question about the stalks was not relied upon on either of the two occasions when the matter was brought before the House, or upon the occasion when he had the honour of introducing a deputation to the Chancellor of the Exchequer on the subject, he thought he was justified in saying that it was altogether an afterthought. It was clear, from the remarks of the right hon. Gentleman on the occasion when he was waited upon by the deputation, that he never took the question of stalks into his calculation. He then said— Let us first of all assume that the difference was properly fixed in the year 1863. Why should there be, if it was properly fixed, any additional hardship upon the English manufacturer of cigars from adding 4d. all round? Then, of course, comes the other question, whether it was properly fixed at that time, which is a question always open to be raised, but one which I did not expect would be raised. Mr. Freeman, a member of the deputation, remarked "that 4d. added to 3s. 2d. was a larger percentage than added to 5s." The Chancellor of the Exchequer then said— If the difference in cost between making the cigar in England and the cost of the cigar as imported is 1s. 10d., supposing you raise the duty to 4d. on cigars, you get the 1s. 10d. difference. That, the House would now see, was an entire fallacy; but he had quoted it to show that certainly the element of stalks did not enter into the right hon. Gentleman's mind at that time, and that he was under the impression that the addition of 4d. all round would leave the manufacturer in the same position as he was before. He had now shown that the calculation of the right hon. Gentleman was wrong, so far as the third of a penny was concerned, and he would also show that he was mistaken as to the value of the stalks. He was inclined to agree with the opinion which the right hon. Gentleman himself expressed in 1863, that the calculations of the Customs and Excise were not always to be implicitly relied upon. The right hon. Gentleman, in 1863, was reported to have said— When a mistake in the calculations of the Treasury and Customs on one point was thus admitted, he thought that their conclusions might be fairly challenged on other points. The House was told that the right hon. Gentleman only wished to give fair play to the home manufacturers; but with every wish to do that, he might have made some mistake in the figures, as had been done in the instance he had just mentioned. For these reasons, he thought it desirable that the question should be considered in a Select Committee."—[3 Hansard, clxix. 986.] It would seem that the right hon. Gentleman was now disposed to place more faith in the figures of the Customs and Excise than he was at that time. He had said that the stalks were only worth 2s. 4d. in 1863, and that they were now quoted in brokers' circulars as worth 2s. 8d. Now, when he had brought this question before the House on the former occasion, he produced a circular from very large tobacco brokers in the City, showing that the price of stalks in April, 1863, was precisely that quoted in their last circular of April, 1878. Moreover, he had found that the right hon. Gentleman the Member for Greenwich, in 1863, quoted Messrs. Grant, Hodgson and Co., as being his authority for many statements which he made. Now, he happened to have a letter from that firm, in which they stated that— From April, 1863, to the time of the recent alteration of the duties, our quotations for mixed stalks generally ranged between 2s. 7d. to 2s. 8d. and 2s.8d. to 2s. 9d. per lb.—the chief exception being in 1871, when, for nine months, our quotations were 2s. to 3s. per lb. On the 1st April last, the quotations were from 1s. 8d. to 2s. 9d. per lb., at which prices they had remained for eight months without change. In 1863, notwithstanding that the right hon. Gentleman the Member for Greenwich (Mr. Gladstone) had information before him that the stalks were quoted in the market at 2s. 8d., he estimated them, in his calculations, as only being worth 2s. 4d., and the Chancellor of the Exchequer now, seeing that the stalks were quoted at 2s. 8d., immediately jumped to the conclusion that they had risen in price; but he (Mr. Ritchie) thought he had successfully shown that that was not the case. The question was why the right hon. Gentleman the Member for Greenwich took the stalks as worth 2s. 4d. if they were worth 2s. 8d. in the market? It was impossible for anyone to say what was present in the mind of the right hon. Gentleman the Member for Greenwich; but he (Mr. Ritchie) had no doubt whatever that the right hon. Gentleman had very good grounds for estimating the value at 2s. 4d., although that did not apply to all the statements the right hon. Gentleman made. Seeing that the right hon. Gentleman was in correspondence with large brokers in London, and seeing that the question was discussed all over the country, there was no doubt that he had very good reason for making the margin of 4d. per lb. upon the price of stalks, as quoted in the market. There was one thing which might have induced the right hon. Gentleman to make that difference. There was an article of refuse in the manufacture of cigars called "shorts," and the right hon. Gentleman made no allowance whatever in his calculations for these. Therefore, he (Mr. Ritchie) was led to suppose that he might have had that in his mind when he made the difference in the price of stalks compared with the market price of the day. At any rate, it was no part of his duty to prove that the right hon. Gentleman's calculations in 1863 were correct. If he (Mr. Ritchie) proved—and he contended he had—that there had been no advance whatever in the price of stalks since the calculations made in 1863, he maintained that no difference should now be made in any of those calculations without full and proper inquiry—an inquiry where all interested could represent their case. The right hon. Gentleman the Chancellor of the Exchequer, in the Bill before the House, proposed to alter the position of the English manufacturers of cigars—a position occupied by them for many years—to the extent, at least, of 1¾d. per 1b.; and, that being so, he would be giving the foreigner an advantage to that extent over the home manufacturer. The last time the question was before the House, the Chancellor of the Exchequer proposed to make a concession to the English manufacturer. There was a portion of refuse in the manufacture of cigars on which "drawback" was allowed; but this question of drawback could not be entertained, unless the stuff was ex- ported. The consequence was that this stuff had to be exported to the Channel Islands, or to Hamburg, and destroyed, in order to get this drawback, and a cost of about 30s. a-ton had to be incurred for exporting. The Chancellor of the Exchequer now proposed to relieve the manufacturers to that extent, by destroying the stuff at the Custom House free of charge; but that relief was infinitesimal. This subject was one on which he (Mr. Ritchie) felt he could appeal to both sides of the House. It was not a question of Party, but simply one of justice to the home manufacturers—whether they were to be loaded with additional duties to the extent of 2d. per lb., as compared with the Continental manufacturer, and thereby imperil their large trade. All that was claimed was that the settlement of 1863 should not be disturbed, or certainly not without a full and fair inquiry. What the Government proposed was to disturb the settlement of 1863, not in favour of the public, but in favour of the foreigner. When the matter was last before the House, and when every hon. Gentleman who spoke, with one exception, strongly advised the Chancellor of the Exchequer to yield the proposition which he (Mr. Ritchie) made, the right hon. Gentleman said that no doubt hon. Members had been in correspondence with their constituents, and that in some cases it was a constituents' question; but the Government had the consumer to consider in the matter. So far as constituents were concerned, he (Mr. Ritchie) acknowledged it was his duty, in any case where his constituents were injured, if their complaint was founded on justice, to bring the subject before the House. At the same time, he must say, however strongly he might be urged to represent a constituents' grievance, he would not do so if the proposals would be unfavourable to the country generally. The hon. Member for Hackney (Mr. Fawcett) had also urged the Chancellor of the Exchequer to give way upon this question of tobacco duties; and he was sure the hon. Member, who enjoyed so high a reputation as an admirer of free trade and as an exponent of the true principles of political economy, would not have imperilled that reputation by advocating anything which was in any way of the nature of protective duty in favour of our home manufac- turers. But yet, if he were not much mistaken, he believed the hon. Member for Hackney would again be found advocating the cause he (Mr. Ritchie) had brought before the House. The Chancellor of the Exchequer spoke about the consumer. He (Mr. Ritchie) would like to know where he was injured. How was the consumer injured if 6d. a-lb. was added to an article worth from 10s. to 50s. a-lb., when 4d. was added to tobacco worth 4s. a-lb.? Could they be said to injure the consumer by adding 6d. a-lb. to a very expensive article, when they added 4d. to tobacco sold at 4s. a-lb.? He hoped they would hear nothing more about the consumers of cigars; but there were consumers of the necessaries of life who, if this trade were destroyed in London, would lose their employment and bread, and those were the consumers for whom he pleaded. He spoke strongly upon this question, because he felt strongly. To his constituents this matter was one of vital importance, because it was a question as to whether the trade should continue in the land or not. They knew in the East End of London the effects likely to be suffered by unfair foreign competition, as already shown in the sugar refining trade. It was but a few short years ago since the East End of London was covered from one end to the other with large sugar refineries, employing many thousands of hands and hundreds of thousands of capital. What had become of that capital, and of those employed in the refineries. The capital had been entirely lost, and employment had been taken from thousands of persons. He trusted the House of Commons would prevent such a result taking place with regard to the tobacco trade, and not allow it to be utterly destroyed, as it might be if the Bill of the Chancellor of the Exchequer passed in its present shape.

MR. SAMUDA

seconded the Motion of his hon. Friend and Colleague (Mr. Ritchie), and said the matter was by no means so small a one as it seemed. Under the present Bill, there would be an entire change in the relations of the manufacturers of cigars as to the tobacco duties, compared with the arrangement made in 1863, when the right hon. Gentleman the Member for Greenwich (Mr. Gladstone) so carefully estimated the amount that should regu- late the duties on the manufactured and on the raw material; and he would remind the House that the importation of the manufactured article had kept on increasing from that time to this. It had been clearly shown, in the statement of the hon. Gentleman who had just sat down, that the price of stalks had not at all varied since 1863, and this was not extraordinary; for he supposed the only value they possessed at all was that obtained in the shape of drawback. True, the cigars manufactured in England were of an inferior quality to some of foreign importation, and it was a class of cigar which the hon. Members of that House might not care to smoke; yet they must consider the welfare of those persons employed in the manufacture, and be careful that the trade was not injured by the action of the Customs authorities. It was clear that the Chancellor of the Exchequer had been misled—unintentionally misled, he thoroughly believed— as to the effect of this altered duty; and he appealed to him, not only as a gracious, but also as a fair act, to rectify such mistake, which, if adopted, would greatly injure the manufacturers of cigars in England. He knew that the right hon. Gentleman had one reply in reserve, and that was that he intended to change the mode of paying for "drawback." The right hon. Gentleman said, and said truly, that he would decrease the cost which manufacturers were now put to in respect of the drawback, by having the tobacco stalks destroyed at the Custom House, instead of putting them to the expense of sending them abroad. But, by such a process, the manufacturers would only be benefited to the extent of ⅛d. per lb. He hoped the House would be saved from going to a division on the question, and that, having listened to so elaborate and clear a statement from the hon. Gentleman opposite (Mr. Ritchie), hon. Members would accept the carefully-obtained figures he had put before them, showing the radical mistake which existed in supposing that there was now any difference in the value of stalks from that existing in 1863; and that, therefore, the proposals of the Bill now before the House were untenable.

Amendment proposed, To leave out the words "now read the third time," in order to add the words "re-committed, in order to amend it, so as to establish a differ- ence of two shillings per pound between the Duty on unmanufactured tobacco and cigars, instead of one shilling and ten pence, as provided by the Bill,"—(Mr. Ritchie,) —instead thereof.

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

THE CHANCELLOR OF THE EXCHEQUER

said, there was no doubt that this question, though not one of very great magnitude, was one of some complication, and which involved a great deal of arithmetical calculation. His hon. Friend the Member for the Tower Hamlets (Mr. Ritchie) had given, in a very clear form to those who took the trouble to follow him, the calculations upon which he rested his case, and he (the Chancellor of the Exchequer) was bound to say that with regard to nearly the whole of those calculations he had no fault to find. His hon. Friend took the calculations which were made by the right hon. Gentleman the Member for Greenwich (Mr. Gladstone) in the year 1863; he took the same figures, and he altered them to apply to the present rate of duty which was proposed under the Bill now before the House, and he derived from that comparison the conclusion that the difference in the duty on the cigars imported from abroad and the cigars manufactured at home would be 1¾d. per lb.—that the duties on the home manufactured cigars would be increased by 1¾d. in consequence of the changes made. He was not prepared to dispute the fact that he had made out a case; but, on the other hand, he wished to compare the propositions of his right hon. Friend the Member for Greenwich with the actual state of the case as it would stand if the Bill before the House should be adopted as it now stood. His right hon. Friend the Member for Greenwich went through a series of calculations, in order to ascertain at what point he ought to fix the duty on foreign cigars in order to give adequate protection and do justice, and no more than justice, to the manufacturer at home; and he made the calculation in this way—he took certain qualities of tobacco, and he ascertained as best he could what quantity of cigars could be made out of 100 lbs. of tobacco, and what the duty upon 100 lbs. of tobacco was. Then he took the quantity of cigars made out of the 100 lbs. of tobacco on which duty had been paid, and he endeavoured to calculate how much the manufacturer could make out of the residue, calculating the price which he would get either by disposing of the stalks or by the drawback upon the stalks; and, having made that deduction, and then having ascertained what the total amount was which the manufacturer would have paid as the net result for duty on the cigars produced, he divided the result by the number of pounds of cigars which could be made out of 100 lbs. of tobacco, and so he found what the cost of the duty was on 1 lb. of cigars, and he considered what the difference ought to be between that and what was charged. In the first place, the right hon. Gentleman the Member for Greenwich took the case of tobacco which would yield 69 lbs. of cigars for 100 lbs. of tobacco; and he arrived at the conclusion that, after allowing all the duty paid on the 100 lbs., and after deducting the value of the stalks which remained, the charge against the British manufacturer should be 4s. 1d. per lb.; and then, fixing the charge against the foreigner at 5s. per lb., he left the British manufacturer with a difference of 11d. in his favour. The right hon. Gentleman considered that an adequate sum to leave, and that it would be sufficient to compensate the British manufacturer for all the loss and all the inconvenience to which he might be put in carrying on his manufacture at home. That was the system upon which the trade had been carried on for the last 15 years, and certainly it had not been injured thereby. His hon. Friend the Member for the Tower Hamlets (Mr. Ritchie) said the measure had produced the result which it was intended to produce, that it had allowed of the importation of a considerable quantity—and an increasing quantity—of foreign-made cigars, and that was perfectly true. But it was also true, that while the foreign cigars had been imported, as it was intended they should be, and as it was desired they should be, in order to provide a healthy competition against the British manufacturer, it was also true that the quantity of unmanufactured tobacco which had been consumed in this country had also largely increased; and there was no evidence whatever to show that the cigar-making business in this country had been a sufferer, or that it had in any sense suffered, in consequence of that change. Well, then, taking the case, and looking at the same quality of tobacco as that which the right hon. Gentleman the Member for Greenwich took into his calculations—the 69 lbs. of cigars made out of 100 lbs. of tobacco—he (the Chancellor of the Exchequer) had endeavoured to estimate what, in the present state of things, as proposed under the Bill before the House, would be the position of the British manufacturer. And by following out that calculation, he arrived at precisely the same result as the right hon. Gentleman the Member for Greenwich intended to arrive at by the settlement which he made in 1863. That was to say, taking the price of the article and deducting the charge recovered for the stalks, he found the difference would be exactly 11d. on the pound. What was the explanation of that? because there was undoubtedly a difference between the circumstances which existed in 1863 and what would exist to-morrow, if his Bill passed. The whole thing depended on the difference in the price of the stalks, and that was the point upon which attention must be concentrated. The right hon. Gentleman the Member for Greenwich rested his calculation upon the value of the stalks at 2s. 4d. per lb.; in the calculation he (the Chancellor of the Exchequer) had made, the value of the stalks—and he ascertained that from the prices of the day—was taken at 3s. per lb. His hon. Friend had said that it was not easy to understand why the right hon. Gentleman the Member for Greenwich should have taken the price at 2s. 4d., when, in fact, it was quoted at 2s. 8d. He (the Chancellor of the Exchequer) was not able to explain that; but he certainly did say that the price was now taken at the figure that he had stated, and that, taking the calculation, upon that figure, the result was arrived at of a difference of 11d. in favour of the British manufacturer. It appeared to him obvious that, previous to the settlement of 1863, the advantage that was given in the shape of drawbacks was really not one that entered into the consideration of the question. The effect of the drawbacks now given had been to make that valuable, which formerly was thoroughly valueless, because everything in the nature of stalk was capable of being ground into what by courtesy was called snuff, and a drawback was allowed upon it, whatever its value might be; and, in many cases, it appeared that the substance, as so presented, before the system of drawbacks, was of no value at all. That was proved by the fact that the manufacturer to whom it belonged found that the best thing to do with it was to incur all the expense and trouble of sending it across the sea, either to the Channel Islands or to Hamburg, there to be destroyed. That, no doubt, had given a fictitious value to the stalks, and the result had been that the manufacturer had gained a considerable amount of advantage from the arrangement. Well, he proposed to make that real which had hitherto been fictitious. In point of fact, with regard to much of this offal, it might be said that the Government, in giving the drawback as they had done, had been giving compensation to the manufacturer, and he proposed that that should be done without rendering the circumlocution necessary of sending it abroad at considerable expense. That was the real state of the case. The proposal of his hon. Friend (Mr. Ritchie) was one that would not, of course, be injurious to the Revenue. On the contrary, it would lead to an increase of duty; but it was one that he did not think it was desirable that they should adopt. It seemed to him that the matter was of very small moment, and he did not believe that it really could make the smallest practical difference to the home manufacturer. They might hope that the addition to the duty would not be for ever and ever; but he believed that the settlement the Government had proposed was a better settlement than that suggested by his hon. Friend, as being one that made the addition to the duty simple and uniform. He trusted that the House would support him in maintaining the lines of the Budget as it had been voted. It would be very inconvenient, indeed, to make changes in its arrangements, and he did not see really that any practical case had been made out for taking such a course. There was, no doubt, a small addition made to the difference, or rather a small diminution made in the difference, which had existed of late years between the duty on the foreign cigars and on the British manufactured cigars; but, on the other hand, the difference which he proposed now to establish would be exactly that which was intended to be established by the Chancellor of the Exchequer in 1863. Therefore, while regretting very much that it was not in his power to accede to the proposal of his hon. Friend, he hoped the House would support him in maintaining the Budget in its present form.

Question put.

The House divided:—Ayes 184; Noes 82: Majority 102.—(Div. List, No. 114.)

Main Question, "That the Bill be now read the third time," proposed.

MR. DILLWYN

said, he understood there were many hon. Members who, on this Motion, wished to address the House at some length upon a very important point; and he, therefore, begged to move that the debate be now adjourned.

Motion made, and Question proposed, "That the Debate be now adjourned."—(Mr. Dillwyn.)

MR. ASSHETON CROSS

thought the Motion of the hon. Member for Swansea (Mr. Dillwyn) was one which the House would not assent to. It was only 10 minutes to 12 o'clock, and there was ample time to discuss any question which could fairly be raised. He must impress upon the House, in view of the debates that were pending, the necessity of taking the third reading of the Bill at the present time.

SIR GEORGE CAMPBELL

said, he had a Motion upon the Paper with regard to this Bill which the Forms of the House would not allow him to move; but he must say that he had hoped that the Chancellor of the Exchequer, upon a candid consideration of the whole matter, would have thought it right to concede its substance. The ground upon which he had founded his Motion was simply that it was right and necessary that they should make due provision for honestly paying their way, and finding Ways and Means to pay the expenses for the year. If this Bill had been one of several Money Bills which would come before them, he should not object to proceeding with it that night; but upon this measure their whole Ways and Means for the year were founded, and if they passed it that night they would put themselves out of court—they would have no further taxation to fall back upon. The Chancellor of the Exchequer had told them that they were not to burden posterity with the expenses of this year, but that they were honestly to pay their way. That was all he asked the right hon. Gentleman to do. It had now become known to the House that they were to have heavy Supplementary Estimates for certain military charges which were not mentioned in the Budget Statement of the Chancellor of the Exchequer. The right hon. Gentleman said the other night that he told the House there would be Supplementary Estimates. That was true; but he had also told them at the time what those Estimates were to consist of, the result being, from his own showing, a Supplementary Estimate for certain specified military charges which might amount to £1,500,000. The expenses still due on the lapsed Vote of Credit were £700,000. The Chancellor of the Exchequer estimated the charge for Reserve Forces at £600,000, and for additional Navy expenses at £400,000, making the full £1,500,000 without any margin. But he (Sir George Campbell) ventured to submit to the House, the other night, that the expenses of the Indian troops before they were got back to India would be very large indeed. The Chancellor of the Exchequer could not tell yet what they would be. Nor could he (Sir George Campbell), but he ventured to repeat that they would be very large, and his humble advice to the right hon. Gentleman was that he should frame his Estimate in this way. He should take care to include every possible detail, allowing a margin for a liberal sum for contingencies; and, having done that, he advised him to double his Estimate—and, if he wished to be very prudent, to double it again. He would then, perhaps, arrive at something like the cost of the movement of their Indian troops before they got back to India. Therefore, if the Chancellor of the Exchequer proposed to follow out his own plan of honestly paying his way, he must re-cast his Budget in order to provide for this large additional expenditure, which he had in no way provided for, but left wholly outside his Budget. But this Indian military expenditure was not the only expenditure looming in the distance. This country was carrying on a large war in South Africa, the expenses of which must be taken into account. They had been told early in the evening that the whole of the expense was being met at present by advances from the Imperial Treasury. He would ask the Chancellor of the Exchequer, whether he had satisfied himself that there was any security that these advances would be repaid? Apparently, the money was being spent by our Government without any authority from the Cape Legislature—that Legislature, in fact, not having been called together. Upon these grounds, he would put it to the Chancellor of the Exchequer, whether, in pursuance of the honourable principle which he had laid down of honestly paying their way, it was not desirable that they should delay the final passing of this Bill, and thus not shut themselves out from further resources? That would be the result of the Motion now before the House, and upon that ground he would support it.

THE MARQUESS OF HARTINGTON

Sir, I am afraid that, if the Government do not give way, the only effect will be that we shall have two discussions when one only, if taken at an earlier hour, would be sufficient. It must, I think, be admitted that the Motion for Adjournment is a very reasonable one. This is the last stage of the last Bill on which the House will have an opportunity of considering the financial proposals of the Government as a whole. Those proposals have, no doubt, already been discussed fully, and at considerable length; but I wish to point out to Her Majesty's Government that all the discussions which have hitherto taken place on those proposals have taken place with insufficient knowledge on the part of the House. Since the last discussion of the proposals of the Government, a fact—a most important fact—has come to the knowledge of the House. It has certainly not been communicated to the House in any way; but it has come to the knowledge of the House that Her Majesty's Government propose to despatch a considerable Force of Indian troops from India to Malta. That will involve considerable expense, and there are two questions for the House to consider. In the first place, whether the Government were aware—as they neces- sarily must have been when their financial proposals were submitted—of the intention to send these troops, and whether they ought not to have included this financial charge in their proposals? The other consideration is, whether, having this knowledge, we can now pass the financial proposals of the Government as such as are adequate and proper under the circumstances of the case. I think the Government cannot but admit that these are circumstances which we have not yet had an opportunity of discussing, and which are fully worthy of being discussed by the House. It is quite impossible that the discussion can take place at this hour of the evening, and I really think the Government would save time by consenting at once to the proposal for adjournment. I will only add that the right hon. Gentleman agreed the other night to report Progress at 10 o'clock, or as near 10 o'clock as possible, with a view of having a general discussion on the Budget Resolutions. No doubt, it was not the fault of the Government, but Progress was not, as a matter of fact, reported until half-past 10, and the time which has elapsed since has been occupied in discussing a purely technical point. It is, therefore, quite impossible that questions which still remain, and which are of very great importance, can be discussed at the hour we have now reached.

THE CHANCELLOR OF THE EXCHEQUER

Sir, I cannot think the hour is at present too late for such a discussion as might be raised on the third reading of this Bill. If, indeed, we were in the position the hon. Member for Kirkcaldy (Sir George Campbell) says we are in—and which the noble Lord opposite seems to favour—that this is the last occasion on which a discussion of the financial proposals of the Government could take place, and if we were to accept the hon. Member for Kirkcaldy's notion, that if once this Bill is passed, there can never be, in the course of this Session, any further financial proposals, I admit that the case must be very different from what it is. But that is not at all the real state of the case. Any hon. Member who has attended to the Business of the House for the last few years must know that it is always the duty of the Government, if circumstances render it necessary to make further financial pro- posals, to make them. And, of course, if circumstances should arise—I do not say they will—to render it necessary for other financial proposals to be made, they will be made. But, with regard to this particular question, so far as it relates to the expense of moving the troops from India to Malta, that must be made the matter of a Supplementary Estimate, and when that Supplementary Estimate is laid before the House, it will be perfectly open to the House—and, indeed, I apprehend, the natural inclination and duty of the House—to canvass the proposals so made, not only on the merits of the particular expenditure that may be recommended, but also in reference to the general financial position of the country. The House could do that whether this Bill was passed or not, and the only opportunity in which the matter can be properly discussed, with a full knowledge of the subject, will be when we are in a condition to present a Supplementary Estimate to the House. If it were two or three, or even five, hours earlier than it is, we are not able to prepare such an Estimate of the probable expense of the movement as would enable us to make such a statement in its proper connection with the financial proposals of the year. But in the meantime, there is this Bill, which, to a certain extent, affects various interests in the country. The proposals of the Government have been, so far, accepted by the House, by the stages of the Bill having been allowed to pass; and, in point of fact, we are acting upon them—the income tax, for instance, being levied at the rate proposed in the Bill. But all that is beyond strict law, and it is very undesirable that any postponement of this measure should take place. It has been fully discussed and considered, and any further postponement would be highly inconvenient to the public service. The noble Lord has remarked that there may be a question whether, if the Government knew at the time the Budget Statement was made, that this expenditure was to be incurred, it was not their duty to state it to the House. Now, I must act frankly with the House in this matter. The Budget Statement was made on the 4th of April, and at that time the principle of bringing Indian troops to Malta had been under the consideration of the Government, and had been accepted in principle by the Government; but the details had not been gone into at the time. No orders had then been given, nor, indeed, until a week after the Budget Statement was made, and it would have been impossible to make any statement in regard to that matter at the time the Financial Statement was made. I may also draw attention to the construction of the Budget of this year. It was in several respects peculiar, and peculiar in this respect, that we did not attempt, in the one financial year, to bring about an absolute balance between Income and Expenditure. We proposed to provide for the ascertained deficit in the year, apart from our special military service, of about £1,500,000. We desired to provide for such Supplementary Estimates as we were then able to foresee, and we proposed to pay off as much of the loan raised for the Vote of Credit as we might be able to do out of the Ways and Means we asked for. The Estimates which I then presented were necessarily of a tentative and uncertain character; but the general result was, that I proposed to provide Ways and Means sufficient to cover the estimated deficit in the ordinary Expenditure, to provide for £1,500,000 of possible Supplementary Estimates, and to provide about £750,000 towards the reduction of the Debt, leaving a certain amount due to be paid off next year. That was altogether a Statement which was evidently incomplete, because the outcome of it must depend on the unascertained quantity of the Supplementary Estimates; and, undoubtedly, it would be the duty of the Government, in the course of the Session, to present to the House as full an account as possible of the Supplementary Estimates which were to be expected, including what the hon. Member for Kirkcaldy has referred to—namely, the expenditure at the Cape—and of any other matter on which an expenditure of money may be necessary. It will be the duty of the Government, of course, to present such Estimates as these to the House, and, at the same time, to state what proposals they have to make. These proposals will be shortly laid before the House, and will have to be canvassed, of course, freely and fully. We shall in no way shrink from the discussion of them. I think it would be for the convenience of the House—not a question merely of convenience to the Government—that some time should be allowed to elapse before we are called on to enter upon a discussion which, perhaps, might after all, have to be renewed again, and might last a considerable time, when we have the means of giving fuller information than we can give at the present moment. Under these circumstances, I hope the Motion for Adjournment will not be pressed; and if there are any further observations to be made, I hope we shall not be led into a full discussion of the whole of the financial policy of the Government at a moment when we have reached, as it were, the conclusion of the Budget Resolutions proper, and the Government is not in a position to give the full information which will be necessary before we can have a full and satisfactory discussion of the new points which have been raised, and the new events which have transpired.

MR. DODSON

said, it appeared to him that the right hon. Gentleman in his observations had furnished a very good reason why they should adjourn the debate. The right hon. Gentleman said they stood now in the position of discussing the whole financial proposals of the Government. Now, that was exactly what they wanted to have the opportunity of doing. The right hon. Gentleman added, that they would have an opportunity of discussing the movement of the Indian troops when the Supplementary Estimates were laid before them. No doubt, when the Supplementary Estimates were submitted, the House would wish to discuss them very fully indeed; but he thought the House would also wish, before parting with the Budget Bill, to have an opportunity of discussing the financial arrangements of the Government as a whole, and it was upon that Bill that they could have that legitimate opportunity. In the Budget Speech, the right hon. Gentleman stated the amount of his deficit, and the amount he intended to provide for by the taxation of the year, and he informed the House that he was prepared to leave a remanet which might amount to £1,500,000 or £2,000,000, to stand over until next year. Since that Statement was made, and since the House adjourned for the Recess, the circumstances had materially altered. They knew now that there would be a further deficit. They did not know the amount; but they knew that there would be a farther de- ficit, and they wished to have an opportunity of discussing the change in the circumstances which had taken place. He contended that that change was one of a very important character. The right hon. Gentleman told them now that at the time the Budget was introduced, the Government had come to a decision to summon these troops from India. Then, he (Mr. Dodson) thought the House was entitled to have a full explanation from the right hon. Gentleman, and a full discussion of the reasons which had induced the Government, knowing that that change was determined on, not to include it in the Budget of the year, nor with the analysis of the deficit the right hon. Gentleman looked forward to.

THE CHANCELLOR OF THE EXCHEQUER

The right hon. Gentleman is not quite accurate in his statement or recollection of what I said. What I did say was that the movement of the troops from India to Malta had been decided upon in principle, but that the matter was under consideration at the time of the Financial Statement, and that no orders were given in reference to the matter until a week after the Budget was introduced.

MR. DODSON

said, that, at any rate, the movement was decided upon in fact, while the discussions on the Budget were proceeding; for the House adjourned for the Easter Recess on the 16th of April, and on the 17th it was announced in the papers in London that the troops were coming. It would appear that the matter had then been fully decided upon, because the telegram from Calcutta mentioned what regiments were coming and under what circumstances. The right hon. Gentleman himself told the House the other night that the matter had been decided some time ago. Therefore, although the matter had only been decided upon in principle on the 4th of April, still it was decided upon, as a matter of fact, while the Budget Resolutions were being discussed; and the House would require a full explanation from the Government why the expenditure was not provided for in the Ways and Means of the year. He would remind the House, in connection with the matter, of another circumstance which just occurred to his mind. On the last evening before the House adjourned for the Recess, after consi- dering the Budget Bill, the right hon. Gentleman proposed that the House should take the unprecedented course of passing two stages of a Money Bill in the same Sitting, although the right hon. Gentleman knew that this charge was coming, and that no explanation had been offered to the House. He regarded this movement of the Indian troops as a very serious matter. He would not enter into the question whether it was Constitutional or not; but he did say that, politically and financially, it was a very serious innovation both as regarded our position towards India and our position towards Europe. It was a serious innovation as regarded our position towards India, if it were to be understood that it was to be possible that the Government should, at the expense of India, maintain a surplus Army in India which was to be at their beck and nod, available for service in Europe; and it was a serious matter as regarded our position towards Europe, owing to greater facilities and temptations it afforded to any Government to commit the country to wars in Europe, or elsewhere, by using an Army, the men belonging to which were not voted by Parliament, and the money for maintaining which was not voted by Parliament. ["No, no!"] It very clearly was so. This would materially increase the facilities of the Government to go to war, because what would be the position? There was an Army ready, maintained at the expense of India, without the control of Parliament either as to men or as to money. The Government could bring that Army over by an order whenever they pleased; and then, by Act of Parliament, the troops having been brought out of India could no longer be charged upon the Revenues of India. The House of Commons had then no option but to pay the Bill presented to it, and it was idle to talk of its financial control. That was the position the House of Commons and the country were placed in, and he contended that it was a serious innovation, and one that, whether right or wrong, ought not to be assented to without discussion. Let it be ever so much an act of wise and great statesmanship—he, for one, offered no opinion on the point—but, at the same time, it was a great innovation in our mode of dealing with the Indian Army, and it was a matter which the House was entitled most fully to discuss, and to receive the fullest explanation from Her Majesty's Government why no provision was made for such a step in the Ways and Means of the year. He therefore thought it would only be graceful and fair on the part of the Government towards the House, under the circumstances, to accede to the Motion for Adjournment. He would remind the right hon. Gentleman of what was mentioned by the noble Lord the Member for the Radnor Boroughs (the Marquess of Hartington), that the right hon. Gentleman consented to report Progress at 10 o'clock, in order that there might be a full discussion upon the Bill. From an accidental circumstance, the discussion in Supply went on until half-past 10, and then the Amendment of the hon. Member for the Tower Hamlets (Mr. Ritchie) took up considerable time, and led to a division. The result was that the House had now arrived at a period when it was impossible to have a satisfactory discussion.

MR. NEWDEGATE

remarked, that early in the evening he inquired when the right hon. Gentleman the Chancellor of the Exchequer would produce his Estimate to provide for the expense of moving the troops from India to Malta? The right hon. Gentleman early in the evening was elsewhere engaged—whether in opening a debating club at Oxford or not he did not know—but the right hon. Gentleman was certainly not in his place. He scarcely thought, when important Business demanded attention, that the time of the Leader of the House should be occupied in regulating a debating club. ["Oh, oh!"] He would remind hon. Members on that side of the House that it was 25 years since he was one of those unavowed officers whose business it was to make a House, to keep a House, and to cheer their Leader when he was wrong. He wished now to call attention to that which was admitted by the Leader of the Opposition to be an innovation and an anomaly; because it was now declared by the right hon. Gentleman the Chancellor of the Exchequer that the Government intended to make provision for the importation of Indian troops into Europe—for to say Malta was not in Europe was a geographical quibble—which had never hitherto been the case, there to be used and commanded as though they were a portion of the Regular Forces of Her Majesty. Under the Act for the Government of India, such powers might be exercised; but that which was unprecedented was that Her Majesty's Government should undertake to exercise that power without having previously informed the House of Commons, and obtained the sanction of the House of Commons to that proceeding, not only by the production of an Estimate, but in anticipation of such a requirement. When it was proposed that we should undertake the Abyssinian War, the Leader of the House came down and informed Parliament that it was part of the policy of the Government, for the first time in the history of this country, to use that which had always been considered the local Force of Her Majesty's great Dependency for Imperial purposes. He thought the noble Lord the Leader of the Opposition was only fulfilling his bounden duty in calling attention to the circumstances of the case. He was justified, as the Leader of the Opposition—and, therefore, as one of the two Leaders of the House—in requiring that, before this innovation should proceed further, the House should be afforded a regular opportunity of discussing the question in connection with the whole of the financial proposals of the Government. All that was asked was that the financial measures provided for in the Ways and Means of the year should be postponed until this, which was called a Supplementary Estimate, but which was treated as one of the Regular Estimates for the first time by the Chancellor of the Exchequer, was submitted to the House. He hoped the Government would feel that they were not taking an unprecedented step, and he hoped the House of Commons would agree that it was an occasion on which they ought not to deprive themselves of their legitimate power to control the Expenditure of the country.

MAJOR NOLAN

observed, that two Cabinet Members had spoken in this discussion, deprecating adjournment; but English county Members had got up on the Ministerial side of the House, and their example had not encouraged the Opposition to fall in with their view. His remarks might not be listened to; but he felt it his duty, nevertheless, to make them. He was not going to raise any novel ground of objection to the Budget. It was an old ground taken against it, but he felt it strengthened somewhat by communication with his constituents, who approved of his resistance to every attempt of the Chancellor of the Exchequer to carry a tax which would peculiarly affect them—the tobacco tax. The Chancellor of the Exchequer, in introducing the Budget, made a remark which had very much struck him. He said they had to make a choice between direct and indirect taxation, or a combination of the two. Now he wished to raise his protest against indirect taxation being applied for war purposes, until there was a sufficient amount of direct taxation imposed to make the indirect taxation equitable as between the rich and the poor. He never heard the Chancellor of the Exchequer say that the rich paid the proportion of their incomes in taxation as the poor. Not one attempt had been made to argue that the rich at present paid the same proportion of their incomes as the poor. In Ireland, the expenditure of the poor in taxation amounted to about £1 per head per annum, being about £3 or £4 for a family, and representing about 7 or 8 per cent of their incomes. The whole taxation of the rich, direct and indirect, did not exceed 3 or 4 per cent. He intended to divide the House, therefore, on the third reading of the Inland Revenue Bill—not that he objected to granting the money the Government asked for, but that he objected to indirect taxation being applied until the rich were taxed to the same extent, in proportion, as the poor.

MR. CHILDERS

said, that the object of the few remarks he intended to address to the House, was to show the strange anomaly of the position taken up by the Government with respect to the Supplementary Estimates of this year. When the Chancellor of the Exchequer brought in the Budget, he mentioned that besides the ordinary expenditure it would be necessary to provide £1,500,000 for certain additional charges, which he enumerated under five heads; and he had told them that night that the Supplemental Estimate for those charges would not be laid before them for some time to come. He had also told them that night that at the time the Budget was prepared the Government contemplated the sending of troops from India, and that they should have in a few days a Supplemental Estimate of the expenditure for that purpose. The Budget was thus constructed for changes for which they had not, and would not have for some time, the Estimates; but, at the same time, the Government had been contemplating an expenditure not included in the Budget, and the details of which they had been promised should be placed before them in a few days. The House could not be too careful as to how it acted in such an extraordinary state of things. After that statement made to them by the Chancellor of the Exchequer, it was absolutely necessary that they should have a full opportunity of discussing the subject, and to elicit full explanations concerning it, if they wished to keep up that financial control of which the House was so jealous. Otherwise, they would go before the country as adopting a Budget of which they were not to have the details for some time; while details of expenditure were to be laid before them in a few days, which had not been included in the Budget, though it was contemplated when the Budget was laid before them. Now that question of the Indian expenditure being, or not being, included in the Budget was an extremely serious one. He would only remark that the last occasion on which troops were sent from India for war purposes was when they were despatched in support of the Abyssinian Expedition. On that occasion the same question arose as to whether the Government had taken Parliament into their confidence as early as they might have done. And what was the difference in the two cases? In the first of these cases, and speaking in "another place," the late Lord Derby, then First Minister, stated that the Government came to the decision to send the troops on the 19th of August, and that on the 21st of August Parliament was so informed. When, in the following November, the Question was asked—"Why did you not give the Estimates in detail at that time?"—the answer was—"We took Parliament into our confidence the very moment we could do so. Supply was closed, the Appropriation Act had left the House, and Parliament would have objected to being kept together longer. If Parliament had been sitting a few days longer, a Vote would have been taken at once; but Parliament was called together as early as it could be in the Autumn." In that case, the present Chancellor of the Exchequer, on the part of the Government, made it a great merit, and took great credit, for having taken Parliament into its confidence, within two days of its having come to that resolution, and offered the most humble apology, and solicited condonation, for not having actually obtained a Money Vote. The House was bound, therefore, to insist on satisfactory reasons being given for the high-handed proceeding now adopted; and, as this could not possibly be debated after half-past 12 o'clock, the debate should certainly be adjourned.

COLONEL PARKER

thought his hon. Friend the Member for North Warwickshire (Mr. Newdegate) had fallen into an error, and that that error should be corrected. The hon. Member was wrong in saying that Indian troops had never been employed for Imperial purposes. It must be in the memory of many hon. Members there present, that in the early part of the century Indian troops were often employed for Imperial purposes. They were so employed in Egypt. Who was there that did not remember with what honour Indian troops served for Imperial purposes under Abercrombie? And, again, when Java was in the possession of the Dutch, and it was thought desirable for Imperial purposes that it should be occupied, Indian troops were for that reason landed in the Island. It was not right that it should be said, therefore, that they had not been employed for Imperial purposes; and if it were said, what he had stated should be borne in mind. Whenever the services of those troops were again needed, he had no doubt they would be rendered as freely and as efficiently as they had been before, and he hoped they would receive the reward which a generous and kind country could bestow.

MR. NEWDEGATE

asked leave to explain that he stated, not that Indian troops had never been employed by Her Majesty's Government for Imperial purposes—because they all knew they had been so employed in the China War—what he stated was, that they had never been used for Imperial purposes, whether in Africa or, he believed, in China, without a previous communication being made to Parliament.

MR. WALTER

observed, that they had already passed an hour in discussing the question—whether they should proceed with the discussion of the Bill that night. Having sat in that House during 30 years, he might say he had always found such discussions extremely unprofitable; and he would appeal to the Chancellor of the Exchequer, whether it was worth while to refuse to accede to the request preferred by the Leader of the Opposition, probably with the support of the majority of Members on that side of the House. What would be the consequence? On a division, he would, no doubt, get a majority; but would he be any nearer gaining his end than if he conceded the request at once? He would find that they had only been carrying on a useless discussion, with a loss, perhaps, both of time and of temper. He did not wish to express any opinion whatever adverse to the policy of Her Majesty's Government with regard to the despatch of troops from India; but, looking at the attitude of the front bench of the Opposition, and to the general wish that there should be a fair discussion of the question, he would appeal to the Chancellor of the Exchequer to give way, as a matter of good feeling.

MR. PAGET

thought it desirable the House should understand what was the reason of their being asked to adjourn the debate. Was it because it was necessary now to discuss the principle of that movement of the Indian troops? ["No, no!"] It was not? then let them put that aside, and let that be agreed by all. Let them agree that it was a question to be discussed, but to be discussed at the proper moment, when, as the Chancellor of the Exchequer had just told them, he would be in a position to furnish them with all the details, and all the figures; and, when alone, the House would be in a position to enter into the discussion of the subject. But if they could not do that now, he wanted to know of what use was the discussion? The right hon. Member for Chester had spoken of this measure as an instance of great and wise statesmanship. ["No, no!"] Well, if he had not expressed that opinion, at any rate he had said that he could not say it was not; and he hoped that when the right hon. Member came again to the discussion of the question, he might have made up his mind on the matter. The right hon. Gentleman the Member for Pontefract (Mr. Childers) had endeavoured to make a strong point out of the fact that the Chancellor of the Exchequer had stated that when he introduced his Financial Statement, the Government had, as a matter of principle, determined on this step; but, as a matter of fact, it was more than a week afterwards that any definite resolution was taken as to what was to be done. The Financial Statement must be brought forward in each year at a given time. It was impossible to delay it; and it was impossible that it could include any provision for an expenditure, the extent of which was unknown. There was, in fact, no means of dealing with this expenditure which had arisen except by a Supplemental Estimate; and was it because they were told that there was to be a Supplemental Estimate, that the whole of the Budget, and all its necessary arrangements were to be delayed until the Supplemental Estimate was brought out? He apprehended that the Budget for the present year was prepared under very exceptional circumstances; and if, from any exceptional circumstances, occasion arose for increasing the expenditure, it would have to be met by a Supplemental Estimate. There could be no reason, therefore, for further adjournment. The whole financial policy of the Government was before the House, and had been assented to by it; and as the House had agreed to the financial policy of the Government, let them settle it now, and decide on the question of the movement of the Indian troops when the Estimate relating to those troops was before them.

Question put.

The Committee divided:—Ayes 85; Noes 170: Majority 85.—(Div. List, No. 115.)

Main Question, "That the Bill be now read the third time," again proposed.

MR. HUSSEY VIVIAN

said, he had sat in the House for a quarter of a century, and had never yet moved the Adjournment of the House. If he made such a Motion now, therefore, it was not likely that it could be called a factious Vote. He must say that, in his opinion, it was most improper to attempt to pass the Bill that night without any discussion or any allusion to what he believed to be an un-Constitutional and illegal proceeding on the part of the Government, in bringing Indian troops to Malta without making any provision for the consequent expenditure, with no materials for forming an opinion in their possession, and with no knowledge of what was going on, they were called on to read the Budget Bill a third time at midnight. He said, decidedly, that the House should not be called on to do so. He appealed most earnestly to his right hon. Friend the Chancellor of the Exchequer not to press the question at that moment. When he saw the desire that the measure should not be pressed at that time, he begged of him to respond to the appeal which had been made to him, and not to press the measure that night, but to allow it to stand over, and be gone fully into on an early day. He thought the question of so much importance, that he begged now to move the Adjournment of the House.

MR. MITCHELL HENRY

seconded the Motion. As the Government had denounced it as an un-Constitutional proceeding on the part of the Leader of the Opposition, to oppose the third reading of the Budget Bill at 1 o'clock in the morning, they might be content with having made that remarkable declaration, and allow them to adjourn. The country did not know what was to come. Another friendly Force might be employed by the British Government, to come from another part of the world. They might require the services in Europe of a number of Fingoes without the consent of Parliament. That was a principle and a policy which could not be characterized in too serious terms, and which the country would be glad to see discussed. Before the financial policy of the Government became law, the House should be fully informed upon it in order that the policy of the Government might be considered from the point of view stated by the Leader of the Opposition as to the altered circumstances brought about by the knowledge of expenditure of which they had been kept in the dark. He trusted that their resistance was not going to be a mere brutem fulmen—that they were not going merely to discuss, and not to insist on their views after all. If they were led by the front Opposition bench as gallantly as they had been hitherto in this matter, and if they should be backed by the noble assistance that had unexpectedly come to them from the other side, they might still hope that their objections would not have been urged in vain.

Motion made, and Question proposed, "That this House do now adjourn"—(Mr. Hussey Vivian.)

MAJOR O'GORMAN

observed, that if this Motion had been brought forward originally at half-past 12 o'clock, he could better have understood the course that had been taken. He certainly thought they might have continued the debate on the third reading of the Bill until half-past 12 o'clock, or even up to that moment (1 o'clock), and then have considered the question of the Adjournment of the House. It would have been perfectly competent for any hon. Member to move the Adjournment at the later hour; and, no doubt, hon. Members on that (the Opposition) side of the House would have been glad of the opportunity to speak against the third reading of the Bill. He had voted against the Adjournment and should do so again, as he considered the Government were clearly entitled to the hour that had been lost.

THE CHANCELLOR OF THE EXCHEQUER

I earnestly hope that the Government may, at some time or other, come by its rights, and I shall be much obliged to my hon. and gallant Friend if he will tell us by what process we are to gain them? I think, at all events, if we cannot get them at a late hour, we must consider what will be the most economical arrangement with regard to a future occasion. I am utterly at a loss to understand what is the precise object of the Motion for Adjournment, or what is the precise nature of the discussion to be raised. I cannot, however, fail to see that it is to the convenience of the House that we should accede to the Adjournment when it is desired by 85 Gentlemen, and when the Motion, after being once rejected, is again pressed. Of course, in that case, the Motion will no doubt be withdrawn; but when we agree to the Adjournment, I think there should be some understanding, after what has been said, as to the time to which the Adjournment is to be made; because, if I comprehend matters aright, the question is, not whether this Bill is, in itself, a proper Bill or not, but what the financial arrangements of the Government ought to have been, and what our foreign policy ought to have been? I do not quite understand how we are to discuss that question until we have arrived at such a development of the position generally as will enable us to come forward with exact statements of all the Supplementary Estimates, if any, that may be required in the course of the Session. I am prepared to agree to put down the third reading of this Bill for Monday; but I should like to know from the noble Lord opposite, and some of the Members on that side of the House, whether they think, by our placing the Bill as the first Order on Monday, they will attain their object; or, whether we shall then be asked again to adjourn the debate upon the third reading until we shall have placed on the Table a Supplementary Estimate, which we may not be able to present for some little time?

THE MARQUESS OF HARTINGTON

So far as I am concerned, I do not wish to dictate to the Government as to what time their Budget Bill should be postponed. All I desired, when I rose before to address the House, was to obtain from the Government a fair opportunity for hon. Members on this side, to consider the new information that has reached them during the last few days, and to consider its meaning before the original financial proposals of the Government are finally disposed of. I have, therefore, no objection to the suggestion of the Government that the debate should be adjourned to Monday. The Government may probably have further financial proposals to make in the course of the Session; but still, if they are in a position to submit them to the House, with the knowledge that these troops are to be despatched from India, I think the House will be prepared to discuss those proposals; and all I ask for, is that the discussion should take place at a becoming hour.

Motion, by leave, withdrawn.

Main Question, "That the Bill be now read the third time," again proposed.

THE CHANCELLOR OF THE EXCHEQUER

moved that the debate be adjourned until Monday.

Motion agreed to.

Debate adjourned till Monday next.