DUTY ON COCOA. (Hansard, 9 July 1896)

§ MR. LOUGH
said that his hostility to this new clause was not abated by the fact that the right hon. Gentleman had changed the duty from 2d. to 1d. If the principle was wrong with regard to 2d. it was equally wrong with regard to 1d. He regretted that the Chancellor of the Exchequer had not given the Committee a fuller explanation of the reason for this duty. Very few persons seemed to know what butter was, where the cocoa ended and the butter began. He believed that there was a tax on cocoa in this country because it was a drink which might compete with tea or coffee; but cocoa butter was not a drink and could not be used as such. [Ironical laughter.] There was, therefore, no principle on which they ought to tax this product in this country. Cocoa butter was a by-product obtained from cocoa, and he believed it was used in the manufacture 1172 of confectionery, and to a large extent it took the place of sugar. He believed it was also used for the hair—(laughter)—and the manufacture of medicines. It had been suggested that the object of the proposed duty was to protect British trade.

§ *THE CHANCELLOR OF THE EXCHEQUER
I said it was to avoid protecting anybody.

§ MR. LOUGH
said that was exactly the same thing. It struck at the root of the fiscal system of this country. It was contrary to the principle of Free Trade to impose duties on articles where it could be asserted that foreigners benefited by the admission of these articles duty free. Hon. Gentlemen who had any belief in the principle of Free Trade should resist this subtle attack on that principle. They were not by this proposal taxing the foreigner, but the English consumer. So far as he could make out, about 100 tons of cocoa butter were imported into this country, and the duty would amount to about £900. It could not, therefore, be said that the proposal was made in the interest of the Exchequer. He believed it was made in the interest of the firm of Cadbury, who would probably get about £9,000 as a result of this duty. Referring to a paper circulated to Members on the subject, he said it contained the statement that if English makers were to establish works in Holland they could import the whole of the butter extracted into England, whereas if they made it in England, duty would have to be paid on it. That was not a full statement of case, because importers had to pay 2d. a pound duty when they sent to England a commodity which produced 50 per cent. powder and 50 per cent. butter, while the English manufacturer paid a penny on all. He could not see that the foreigner got any advantage at all. The next statement that was made was that there was an import duty on the butter in France and America, but these were both Pro- 1173 tectionist countries, whereas we were a Free Trade country. In reference to the next statement he pointed out that probably not more than one-fifth of the cocoa butter was imported into England. What they wanted was the broad principle. In the first place, the foreigner had no advantage; in the second place, the proposal was against our whole fiscal policy; and in the third place they ought not hastily in that Committee to adopt anything which was contrary to that policy.

*THE CHANCELLOR OF THE EXCHEQER
said he had not attempted in this matter to do anything contrary to the fiscal policy of the country. Since the last statement which he made to the House on the subject he had put himself in communication with Messrs. Fry and other firms who had objected to the duty, and he had now their authority to say they agreed to the imposition of a penny duty—["Hear, hear!"]—and they did so on the following grounds. Raw cocoa, as the Committee was aware, paid a duty of a penny a pound upon importation into this country, and any manufacture of cocoa, other than cocoa butter, paid a duty of 2d. Cocoa butter, for some mysterious reason, was not considered by those whoso duty it was to interpret the law as coming within the terms of a "manufacture of cocoa" in the existing Act. There was reason to believe that its importation was likely considerably to increase. Out of 86 pounds of marketable produce, the manufacturer would get, he was informed, 50 pounds of cocoa butter, and if there was no duty proposed on the importation of cocoa butter into England it would be sent here by the foreign manufacturer free of duty, while the English manufacturer would have to pay duty. It was a very small matter, but he thought that it was unfair, and they had therefore brought forward this clause.

§ DR. CLARK
thought the right hon. Gentleman had to a large extent met the 1174 objections which had been urged. It was true that there was nearly 50 per cent. of cocoa butter in the cocoa bean, but as a matter of fact, by means of high pressure they could only take away about 30 or 35 per cent. of it. By extracting the cocoa butter they made a lighter and more wholesome beverage. Messrs. Fry & Co. used the cocoa butter for the purpose of producing confections which they could not do without cocoa butter and cheap sugar. The consequence was that, under the present law, they were enabled to cut out the French and German confections, which were handicapped by the expensive sugar which they had to use. If the Government were going to protect the cocoa manufacturers, they ought to go a step further and protect our other industries from foreign competition.