HC Deb 22 April 1890 vol 343 cc1084-98

Motion made, and Question proposed, That, in lieu of the Duty of Customs now chargeable upon Tea, there shall be charged and paid, on and after the first day of May, one thousand eight hundred and ninety, the Duty following, and such Duty shall continue to be charged and paid upon Tea imported into Great Britain and Ireland until the first day of August, one thousand eight hundred and ninety-one (that is to say): Tea …the pound Four Pence.

*(2.49.) MR. CHELDERS (Edinburgh S.)

A conversation occurred a few minutes ago in reference to the desirability of placing these Resolutions upon the Paper. The Secretary to the Treasury very handsomely took upon himself the responsibility of not having put them down to-day, but I trust that he will go further, and promise that the omission will be repaired in future.


I think that the general feeling of the House is in favour of that course, and I will see that, as far as I am concerned, it is adopted in future.

(2.50.) MR. PICTON (Leicester)

While I am sure that we all of us rejoice that the Tea Duty is to be reduced, I trust that, at the same time, I may be permitted to express my regret that the Chancellor of the Exchequer has frittered away an opportunity of conferring a very great blessing upon the people of this country. We are often told that half a loaf is better than no bread, but the proverb scarcely applies to a third of a loaf. The taking away of a third of the duty will, of course, confer benefit upon some people, but not exactly upon the people whom the right hon. Gentleman himself desires to benefit. The Committee will remember the fervid eloquence with which the right hon. Gentleman urged and insisted upon the buyers of tea standing out for their rights. He was evidently afraid that they would not get the benefit of the reduction of 2d. Indeed, the language which the right hon. Gentleman used on the subject, if it had been used in Ireland upon a matter of popular interest, would most probably have subjected him to the attention of the police. He said that all buyers of tea should consider whether, by better organisation—which I take to mean combination—or by other means— which I take to mean the boycotting of refractory shopkeepers—they cannot secure to themselves the benefit of this reduction. I know that, at the present time, there is a very keen competition in the wholesale tea business, and, doubtless, enterprising merchants and middlemen will see it to their interest to give to those who buy from them the full benefit of the reduction of the duty. But how far this applies to the shopkeeper, and those especially who sell to the poor, is altogether another question. In suggesting this doubt, I do not wish to insinuate anything against the shopkeepers I am quite sure that they desire that the poor should have the benefit of the reduction of duty: but I question their capability of conferring it upon them. With regard to those who buy tea by the pound, or in larger quantities, it is easy to imagine how they will get the full benefit of the reduction of duty; but in regard to those who buy tea by the ounce, and they comprise hundreds of thousands of the population —probably millions—it is difficult to see how they can get any benefit from it at all. A reduction of 2d. per lb. amounts to half a farthing per ounce. I do not recollect having seen a half-farthing lately, and I do not think half-farthings are actually coined. Therefore, it may be difficult, if not impossible, to take off half a farthing per ounce, and consequently in regard to the enormous majority of the consumers of tea the reduction of 2d. will practically confer on them no benefit whatever. But there is another matter. This halfhearted measure for the reduction of the Tea Duties does not at all affect the evil principle of a tax which is essentially and necessarily an unjust tax, by reason of the disproportionate and unequal way in which it bears upon the rich and the poor. It still bears an enormous and an extraordinary disproportion to the value of the commodity. It amounts to at least 50 per cent. upon the average cost price of the tea before the duty is paid. I see from the Returns of one of the largest tea brokers, that of late the average price has been 8d. per lb., although some teas have fetched 9d. A duty of 4d. per lb. is 50 per cent. upon the price of the article—an enormous duty upon an article of necessary consumption. The light hon. Gentleman himself treated it as an article of necessary consumption, because, in urging upon the consumers the desirability of combining in order to obtain the benefit of the duty, he styled it an article of primary necessity. Yet, upon an article of necessity to the very poor, he is content to go on imposing a duty of 50 per cent. Further than that, it is an imposition which falls unequally upon the rich and the poor. The poor buy the cheapest tea they can get—fourpenny tea—and upon that the duty is exactly 100 per cent. What the right hon. Gentleman has endeavoured to make for the dwellers in houses between £20 and £60 a year rent is essentially a middle-class concession—a concession to men of moderate wealth, with incomes ranging from £300 to £500 and £1,000 a year. From sundry passages in the speech of the right hon. Gentleman I had hoped that something very much better might be expected from him. It will be recollected with what earnestness and manifest depth of feeling he dwelt upon the disgraceful fact that at every fresh wave of prosperity the population of this country rush to the beer barrel, the spirit tap, or the wine bottle, in order to attest that prosperity, while he knew that, at the same time, he had to acknowledge a diminution of the amount brought in by the Tea Duty. Some of us formed an inference, from the right hon. Gentleman's remarks, that he was about to propose a great shifting of the financial burdens, from those articles which are a necessity to a sober and decent life, to articles of luxury, such as intoxicating drinks. And he could have done so. He could have made an immense revolutionary change in the incidence of the burdens of the people, for he had a surplus of £3,4 59,000, to which he has rightly added an additional duty of 6d. upon spirits, which he expects to yield £500,000, and if he retains, for Imperial purposes, the extra duty upon beer of £350,000, he would have a surplus of nearly £4,500,000, which would have been sufficient to give us a free breakfast table. That would have been a bold stroke of finance, and would have been extremely popular to all sections of the people, while the right hon. Gentleman would have conferred a special benefit upon the most needy and the greatest number. Instead of that, the right hon. Gentleman has frittered away his surplus by dividing it among burdens the relief of which will be very little felt indeed. Take the House Duty; a man living in a £60 house will have to pay less by 15s. a year. What gratitude can the right hon. Gentleman expect for relief on that account? People do not scrutinise so very minutely the rate bills which come in from time to time. The cause of annoyance is that any rate bills come in at all, but a difference of 15s. between one year and another will not excite a fervid burst of gratitude in the breast of a man who is living in a £60 house, whereas, if every man's tea had been put into his house free of any duty whatever, all would feel the benefit. In his Budget Speech last year, the right hon. Gentleman used these remarkable words: "I admit that the Tea Duty is a Poll Tax on a very low scale." We all admit that of all taxes a Poll Tax is the most unjust. It takes no notice of a man's means, but presses with iron uniformity upon all alike. This tax presses more heavily upon the tea of the very poor than it does upon the tea drunk by the rich, and therefore, it is even worse than a Poll Tax. I do not believe that any one who takes a sound view of what is good for the prosperity of the country can ever support the plundering of the poor by a heavy tax, like this, upon what the right hon. Gentleman himself treats as an article of primary necessity to life. Then, again, let me consider another aspect of the matter. The right hon. Gentleman just now, in answering a question put to him from this side of the House, referred to the amount of confusion wrought in business transactions by the uncertainty of the amount of duty paid.


Temporary uncertainty.


But the right hon. Gentleman in his speech also told us that one reason of the diminution of Revenue from this source was that for some time past people have been speculating on the reduction or abolition of the duty, and, therefore, that there has been much less doing in the tea market. Will not the same thing occur again this year? In no case can we suppose that a duty of 4d. can hold on very long, and this is one of the evils of Customs Duties imposed on articles of this kind. They always have an unsettling effect upon the market at particular seasons of the year, and when once it is felt, as it is now, that the duty is doomed, the uncertainty will increase and be felt painfully every year when we approach Budget day. I think the right hon. Gentleman would have been doing a better thing for the trade if, once for all, he had settled the question by sweeping the duty away altogether. He has not done quite justice to the great Empire of India in the manner in which he has dealt with this question. I, for one, would be the very last to suggest that a protective difference should be made in charging the tea which comes from India less than the tea which comes from China. I object to all such differential duties, on principle, but, looking at the very rapid and conspicuous growth of the tea trade from India, surely the right hon. Gentleman ought to recognise that it is most important to encourage, as far as possible, this source of prosperity to our great Dependency. I do not think that it is treating India as an integral part of the Empire to charge duties on goods—especially goods of this character—that are sent to us from its shores. I hope that this point will be fully considered in regard to future Budgets. One word more in regard to the time for making this change. We all credit the right hon. Gentleman with a sincere anxiety to cause as little trouble as possible to the markets. I have been strongly urged by my constituents interested in the question to secure from him, if it is at all possible, some little delay in making the change. I trust that he will carefully weigh all the addresses which will be made to him from different parts of the country, and that he will do his best to satisfy the wishes of those who have a substantial interest in the matter. I hope that what he will hear as to the trouble occasioned by these constant changes will convince him, in future, that it is his first duty to make use of what surplus may be assured to him to sweep away, once and for over, a burden upon an article of primary necessity.

*(3.10.) MR. GOSCHEN

It would scarcely be thought that the duty which has been denounced by the hon. Member who has just sat down is one which has existed for 25 years at the amount of 6d., and that no serious attempt has been made during those years to diminish the duty. I have the good fortune to be the first Chancellor of the Exchequer who has been able to deal with this question by reducing the duty by 33 per cent., and I ought not, therefore, to be the Chancellor of the Exchequer who should be singled out by the hon. Member for maintaining part of the duty, while no attempt at the reduction or abolition of the duty has been made during the reign of previous Chancellors of the Exchequer. The hon. Member wishes to persuade me that the duty ought to be swept away altogether, and charges me with having called it a Poll Tax, for the retention of which there is no justification. When I called it a Poll Tax, I meant that it was a Poll Tax, in the sense that it was borne by nearly every member of the community. This small tax is the only one of the Imperial taxes which rests upon the greater portion of the community, and if it were repealed a great number of persons would contribute not one single shilling to the Revenue. It has always been held that representation and taxation ought to go together. But, if so, the reverse is true also, namely, that taxation and representation should be combined, and that every person who exercises the franchise should contribute in some degree to the Revenue. I do not know whether hon. Members think that portion of the working classes who do not smoke and do not drink should contribute nothing to the Revenue. [Cries of "Hear, hear !"from the Irish Members.] If that is the view of hon. Members I am sure it is not the view of the working classes of this country. On the contrary, I believe it to be the general opinion that some small portion of every man's earnings should be contributed to the maintenance of the country. I would defend that principle before any working class audience. A very large question is opened up, but I wish to protest against the view that this tax ought to be entirely swept away, because it is a tax which rests, to a certain extent, on the working classes, and upon those who are in straitened circumstances. The hon. Member rather complained that the consumer will not gain by the 2d., but really his argument would almost go to the point that the consumer would gain very little indeed, even though the duty were taken off altogether.


My argument is that we have no coin which represents half a farthing.


The hon. Member made a mistake of supreme importance in this connection. Tea is not always sold by weight at all, but by the packet. In Whitechapel an enormous quantity of tea, is sold in ha'porths. The customer asks for a ha'porth and gets a certain amount of tea for the halfpenny. If the tea costs so much less the customer ought to get so much more in quantity for his halfpenny. I do not say that that will be so. It rests entirely with the good faith of dealers whether they get honest quantity and quality. I think the argument that the remission of 2d. will not benefit the consumer may be pushed a great deal too far, because, if it were well founded, it would almost go to show that you could never make reductions in articles of consumption. Wherever a reduction is made in the duty upon an article of general consumption, it should certainly go to the benefit of the consumers, and consequently they ought to feel the full benefit of this reduction of 2d. I believe that, where competition is good and effective, the consumers will get the benefit, and I have heard already, from many parts of the country, that grocers have advertised that the price of tea of the same quality has even now been reduced by 2d. per lb. In a vast number of places, the 2d. will distinctly go to the working classes and to the purchasers of tea; and where tea is sold not by weight, but by packet, it is possible to give the working classes immediately and easily the full benefit, and I hope it will be done. Now, I owe an apology to a portion of the tea trade, who think themselves aggrieved by certain words which I used the other day. I said that tea could be bought at 11d. and 1s., and that it was sold in certain villages at 2s., and even 3s. I have received vast numbers of communications from grocers and others on the subject, and I have to express my regret if I have, even unintentionally, in any way exaggerated the situation. But there is a large quantity of tea that is dealt with in this way; it is bought at 6d. or 7d., being separated into two qualities, of which the inferior would only cost 5d. or 6d., at most. That tea is sold somewhere. Is it sold to the better classes who are paying 1s. 6d. for their tea? While I express my regret to those to whom it is due, I am bound to say that I had in my mind dealers in distant villages, where there is no sufficient competition, and I know, as a fact, that in many such villages tea of no good quality, which ought not to cost more than 11d. originally, is sold at 3s. per lb. The Committee will forgive me if I dwell upon this matter for a moment. I think the tea dealers have a right to ask for an explanation on my part, and the Committee also have a right to an explanation how the working classes are to get the benefit of the 2d. This is no new question, but for years past I have thought that the organisations of distribution are too imperfect, and that the consumers generally do not get sufficiently the value when prices are cut down. I attach less importance to letters which I have received couched in identic language, than to some other letters, which are evidently genuine. I have not had time to make an inquiry as to what the facts are in regard to distant villages, but I have made inquiries, since yesterday, as to how tea is sold in parts of East London. An officer connected with the Customs went round to 24 different places, in order to see how the article is sold, and at what price. He bought a halfpenny worth of tea in each place, and it has been weighed since, and the samples work out at the following prices per lb. Sample No. I weighed .49 of an ounce, and it worked out at 2s. 8½d. per lb. The other samples worked out 3s. 9d., 3s. 7d., 3s. 11d., 2s. 11d., 2s. 10d., 3s. 7d., and so on. One of the common facts of the system is that the dealers refuse to sell half-an-ounce. They say "We cannot give half-an-ounce, but here is a packet for a halfpenny." Now, I say, that that is a very unsatisfactory system. Of course, there must be a large profit when an article is sold in these small quantities; but when we find that tea which is not worth 1s. per lb., or even if it be worth more than 1s., say 1s. 3d. or 1s. 4d., costs the retail consumer 3s. per lb., I say that that is not a satisfactory state of things. What I want to call attention to is this, that by the system of selling so much for a given sum dealers have it in their power to take the whole of the concession from the working classes. With regard to the House Duty, I entirely differ from the hon. Member. He seems to think that the benefit of the relief will not be appreciated, but that is because he takes a grandiose view of relief and of income. I know, from communications I have received, that the reduction measured by the hon. Member at 15s. a year, is a matter of considerable personal importance to persons occupying houses between £20 and £40 a year.


Fifteen shillings a year would be the reduction to a man occupying a house at £60 a year.


It is not only the question of the amount of the tax, but of other burdens in addition. If we add together the whole amount of duties paid by this class, it will be found that they are very heavy compared with those paid by the wealthy, and they feel that this 15s. is given to them as an acknowledgment of the principle that they should not be taxed more than is proportionate to their means. I have endeavoured, in constructing the Budget, to consider, as fairly as I could, the claims of every class of taxpayer. I have endeavoured, not only to consider the absolute pecuniary relief that can be afforded, but also the claims of classes of taxpayers all round, and the hon. Member is unjust in calling this a class Budget. I have endeavoured to lighten the burdens of taxation as far as I fairly could, and I believe that considerable gain will accrue to the working classes from the reduction of the Tea Duty.

(3.28.) SIR W. HARCOIJRT (Derby)

I do not rise for the purpose of discussing the Budget generally, but one observation made by the Chancellor of the Exchequer is so important that it ought not to be passed over without notice. It is one which, as a principle of finance, may have a large and extensive future operation. The right hon. Gentleman spoke with reference to the House Duty, and said that he attached value to it. as establishing the principle of graduation in taxation. He has said that it is not merely the money he considers, but the fact that the rate at which the tax should be levied should be less in the case of persons with small incomes. That is a very important principle of finance, and is the one which the Chancellor of the Exchequer has adopted as his basis in dealing with the Inhabited House Duty. This may be only a small beginning, but it opens up a large prospect in the future. I believe that it is a sound principle of finance, and it is one which I am not sorry the right hon. Gentlemen should have adopted as the principle upon which he is, more or less, constructing his Budget. I thought it necessary to take notice of this because the principle itself is far more important than the application of it the Chancellor of the Ex- chequer is making to-day. I am glad that the right hon. Gentleman has given an explanation of his statement the other day in reference to the dealers in tea. I have myself received a large number of telegrams from dealers in tea, complaining very much of what was said the other night. They seem to have taken amiss what the right hon. Gentleman said, but I hope now that they will prove themselves in no way open to the imputation they supposed the Chancellor of the Exchequer cast upon them, by giving the consumers full advantage of the concession made in the Budget proposal. We shall have an opportunity, upon the Customs and Inland Revenue Bill, of referring to the Budget as a whole, and I do not wish to enter on the subject now; the only criticism I am now disposed to make as to the Budget is that there are rather too many bites to too many cherries. I would rather there had been a larger dealing with fewer subjects. I am sure we must all feel that this Tea Duty cannot remain upon its present footing. In reference to the Inhabited House Duty I am not sure that I can quite agree with my hon. Friend below the Gangway. I believe that a larger dealing with it would have been a great relief. The duty is unequal in itself, and is felt to be extremely hard. On small houses the duty is levied to the full value of the house, but we know that on large houses, large country houses especially, the assessment is ludicrously below the value. A man who lives in a house of £50 or £100 has his house valued to the full extent, but a man who lives in what, practically, is a palace is assessed at £300 or £400. This inequality is in itself a great objection to the tax; the highest value bears the lowest burden of taxation. I do not know that this can be redressed except by getting rid of the tax altogether. I know that there have been strong desires expressed for the remission of a penny from the Income Tax; but it should be observed that the remission of the whole of the Inhabited House Duty would amount to less than the remission of a penny on the Income Tax. Of course the remission of a penny on the Income Tax would be the greater boon to the richer classes.


Order, order! We are now engaged with a particular Resolution having reference to the Tea Duty, and it would be against the usual practice to discuss the general effect of the Resolutions, as may be done when the Bill itself is before the House.


The Income Tax Resolution comes next.


I bow to your decision, Sir; but my excuse must be that I was following the example of the Chancellor of the Exchequer.


A reference by way of illustration in a general way may be permitted, but not entrance into a subject beyond the scope of the Resolution.

MR. CRAIG (Newcastle-on-Tyne)

Before we pass from the subject, I should like to ask the Chancellor of the Exchequer whether it is possible to introduce a measure to compel the sale of tea by weight whenever a purchaser demands it?

MR. HOWARD (Middlesex, Tottenham)

I should be glad to learn on what date the reduction of the duty is proposed.

(3.40.) MR. HANDEL COSSHAM. (Bristol, E.)

There is this disadvantage in taking off part of a duty, that the cost of collection remains the same whether the duty is 6d. or 4d. I rejoice in the fact of the reduction, for I believe that in a short time the Tea Duty will have to go altogether. I am one of those who would gladly see the duty taken off. I do not think that the right hon. Gentleman need have any fear, if the duty is abolished, that some portion of the community will eseape their portion of taxation. I do not quite see how a man can do that unless he is a very exceptional person indeed. I would remind the Committee that those who pay the largest share of this tax are the poorest people among taxpayers. Our system lays the greatest burden on the weakest shoulders. If the Chancellor of the Exchequer could see his way to abolishing the Tea Duty, and adding something in the shape of a regulation of the Death Duties, he would do something to remedy this mistake, and I hope this view will be accepted in the future. A. successful Government will endeavour to make the path of the poor smoother, and certainly any proposal to lighten the burdens of the poor will have our support. For the reductions the right hon. Gentleman has made I thank him, though I wish he had been a little bolder. I hope future Chancellors will continue the work he has begun.

*(3.42.) SIR ROBERT FOWLER (London)

I only rise to confirm the statement of my hon. Friend the Member for Tottenham (Mr. Howard), as to the feeling of the retail tea traders. I wish to express my regret that the Chancellor of the Exchequer has dealt with the Tea Duty instead of the Income Tax, and I differ entirely from the view expressed by the hon. Member for Bristol.

MR. HALLEY STEWART (Lincolnshire, Spalding)

We have wandered away somewhat from the incidence of the duty before us. I wish to point out how the duty works in the per centage paid. Tea at 4d. per lb. has, I believe, been sold for years past in the London market, and recently I saw tea siftings quoted at 2d. per lb. Yet this equally pays the duty with the high-priced teas. The new duty on the tea at 2d. will be 200 per cent., while on tea at 2s. 7½d. it will be only 20 per cent. Whatever may be said in favour of or against an ad valorem duty, this at least must be allowed, that the richer classes escape the burden of taxation to an extraordinary degree. I should like to say a word or two in vindication of the poorer dealers in tea. I do not think anyone who knows the circumstances of the poorer class of shopkeepers in London, those who retail to the poorer classes, will think their lot at all an enviable one. In this one article of tea, that which is represented as the sale of 11b. means the weighing and wrapping of, perhaps, 32 ½ oz. parcels and 32 payments. It is hardly fair, and does not help us to a right judgment, to tabulate this as the sale of 11b. in one parcel. You must take into consideration these conditions in contrasting the prices charged to small consumers with the prime cost of the article.

(3.44.) SIR GEORGE CAMPBELL) (Kirkcaldy, &c

It seems tome were engaged in the somewhat ungracious task of looking a gift horse in the mouth. Now, in my view, if the Chancellor of the Exchequer did not see his way to give us a free breakfast table, he has made a great mistake in not giving us free education, which has been almost promised by the Government, and which we are bound to have. It is a great mistake to make a remission in a way that is not sufficiently felt; the right hon. Gentleman might have given it in a manner that would have been thoroughly felt throughout the length and breadth of the land. I disclaim all sympathy with the view of the hon. Baronet opposite in reference to the Income Tax, and I was struck with the remarks in the speech of the Chancellor of the Exchequer in respect to the effect of taxation on the richer and poorer classes. I am not sorry to hear the defence of the grocers, and I admit their difficulties; still I hope the observations of the Chancellor of the Exchequer will be appreciated, and that their effect will be to assist the consumers to obtain the benefit of remissions of taxation.

*(3.46.) MR.GOSCHEN

As to the time when we propose this reduction shall take effect I mentioned, at an earlier period, that I am making every inquiry to find what would cause the least disturbance in the trade. While, on the one hand, I have had many desires expressed that the change shall not take place at a very early period, on the other hand I have had remonstrances against delay. My answer to either must be the same, that I hope to give the information within the next couple of days. In reply to what has been said by the hon. Gentleman opposite (Mr. Halley Stewart) I have to say that I did not intend to make any charge against grocers and others. I have been charged with exaggerating the difference between the cost price of tea and the price at which it is sold to the consumers, and I produced the figures to show that, from whatever cause it may arise, I attached no blame to anybody; the difference is extremely wide; it is for the Committee and for the public to judge if they consider the difference was exaggerated at all.


There seems to be an impression that I have an objection to the reduction of the Inhabited House Duty, but that is not so. As between the two I prefer the abolition of the Tea Duty.


The right hon. Gentleman has overlooked the question I addressed to him, whether it is within the power of the Government to provide for the sale of ten, by weight in the same way as the retail sale of coal is regulated?


That is a matter upon which I cannot answer off-hand; it requires some consideration, and is not without difficulty. There is the convenience of the small consumers to be considered, and the question of interfering with the progress of the trade. It is, however, a matter worthy of attention, and this it shall have.

Question put, and agreed to.

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