§ THE CHANCELLOR OF THE EXCHEQUER (Sir M. HICKS BEACH,) Bristol, W.The Committee will remember that in the Budget resolutions as now embodied in the Finance Bill it was proposed to impose a duty of 2s. per cwt. on molasses and all sugar and extracts from sugar that cannot be tested by the polariscope, and 1s. 8d. per cwt. on glucose. Well, since those resolutions were passed we have been able, of course, to investigate the nature and quality of the articles comprised under those two heads much more exhaustively than was possible before the resolutions were proposed; and I am quite satisfied that the duties imposed by these resolutions on molasses and glucose were not sufficient to guard the sugar revenue, and were not fair to manufacturers here with reference to certain kinds of molasses and glucose, while, on the other hand, they were too high with regard to unexhausted molasses. Among the extracts of sugar which are classed together with molasses in the Bill as it now stands are invert sugar and 1476 other kinds of extracts which contain as much as 80 per cent., I think, of sweetening matter, and which are not at all by-products of raw sugar, as are molasses, but are obtained from raw sugar of a high quality, polarising at from 90 deg. to 93 deg., which would itself pay a duty of 3s. 1d. to 3s. 2d. Therefore it is clear, I think, that to impose a duty of not more than 2s. a cwt. upon articles of that class would result in a very considerable loss to the Revenue, and would also place the foreign producer of such articles in a position of preference to the extent of something like 9d. per cwt., as compared with the manufacturer of such articles here. On the other hand, there is a kind of molasses of very poor quality, largely exhausted in the process of manufacture, which contains a comparatively small amount of sweetening matter, and is used to the extent of 20,000 or 30,000 tons a year for cattle feeding, and also to some extent in the manufacture of blacking, dyes, and other articles. Two shillings per cwt. was too high a rate for any article of that sort. The matter has been brought under my notice from both Scotland and Liverpool, which are interested in these imports. Therefore, in place of the duty on molasses as now proposed in the Finance Bill, I propose that molasses and all sugar and extracts from sugar which cannot be tested by the polariscope, if containing 70 per cent. or more of sweetening matter, shall pay 2s. 9d. per cwt.; if containing less than 70 per cent. and more than 50 per cent. of sweetening matter, 2s. per cwt., as at present in the Bill. That relates, I think, to certain syrups which are largely consumed by the poorer classes. If containing not more than 50 per cent. of sweetening matter, 1s. per cwt. only.
With regard to glucose, also, it is necessary to make an alterations The duty of 1s. 8d. on glucose was based on the assumption that glucose contained about 40 per cent. of sweetening matter. We have ascertained that there are two kinds of glucose, one of which, the solid glucose, contains a very much larger amount of sweetening matter than that. It is largely used for brewing purposes, and it is equal in sweetening power to something like 80 per cent. of sugar; and, therefore, solid glucose ought to pay a corresponding duty of about. 2s. 9d. 1477 Liquid glucose has a higher sweetening power than I supposed, varying from 45 to 55 per cent., and therefore I think the duty on that should be 2s. instead of 1s. 8d., as proposed in the Bill. I may say that we have had practical proof that the glucose duty as it now stands in the Finance Bill is insufficient to guard the sugar revenue, because, since the duty was enacted, it is a very remarkable fact that the import of glucose from abroad has been of a much higher sweetening power than that which was formerly sent into this country, so that it is perfectly obvious that it is competing unfairly in the market with sugar. I propose that these duties should commence from to-morrow, and that a similar Excise duty should be levied on molasses and glucose, to take effect also from to-morrow. When the duties on molasses and glucose were originally proposed, it was impossible to propose that the Excise duty should come into force on the same day as the Customs duty, because, as the Committee are aware, in order to levy an Excise duty it is necessary to make arrangements for the manner in which it shall be levied. This can only be done after careful communication with the manufacturers of the article on which the duty is to be levied. That could not take place before the introduction of the Budget; but the matter has now been entirely arranged, and the Inland Revenue authorities inform me that they are prepared to levy the Excise duty on glucose and molasses as from to-morrow, so that both the manufacturers here and abroad will be from that day placed on precisely the same footing. I trust the Committee will be willing to make these alterations in the resolutions, which are, of course, only preliminary to my proposing Amendments to the Finance Bill In order to carry them into effect.
§ Motion made, and Question proposed, "That there shall be charged on and after the eleventh day of June nineteen hundred and one the following Customs duties:—
§ Molasses and all sugar and extracts from sugar which cannot be tested by the polariscope—
| If containing 70 per cent. or more of sweetening matter the cwt. | s. | d. |
| 2 | 9 |
| If containing less than 70 per cent. and more than 50 per cent. of sweetening matter | the cwt. | 2 | 0 |
| If containing not more than 50 per cent. of sweetening matter | the cwt. | 1 | 0 |
| Glucose: | |||
| Solid | the cwt. | 2 | 9 |
| Liquid | the cwt. | 2 | 0 |
§ And that there shall be charged on and after the same date on glucose Excise duties equivalent to the Customs duties charged on that article."—(Mr. Chancellor of the Exchequer.)
§ MR. LOUGH (Islington, W.)said he thought the House ought to give a little attention to the action which was now being taken by the Chancellor of the Exchequer. To his mind the proposals of the Finance Bill had not received the consideration which they ought to have done. They were witnessing that afternoon what he might call the first scene in the new drama of Protection which had been set up in this country. They had a graduated scheme under which these new duties were established. It was a subtle scheme of Protection. The Chancellor of the Exchequer had told them that there was no opportunity before the Budget was introduced of inquiry as to the imposition of the Excise duty now proposed but he maintained that they were driven into the difficulties which had necessitated these alterations, because they had accepted the principle of a graduated duty. He believed that it was not until after the introduction of the Budget that the idea of an Excise duty cropped up. He saw no reason, if they were to have one, why it should not have been enforced ever since the 19th April.
§ SIR M. HICKS BEACHI have explained that it was impossible to arrange the details before.
§ MR. LOUGHsaid he desired to call attention to the inconvenience which had been inflicted on a very important trade for two or three months, and which he believed would fall upon the general public in consequence of the complicated system which it had taken the Treasury so long to incubate. He 1479 would like to make an appeal to the leaders of the party to which he belonged to be warned by what was going on that afternoon, and to take a little more interest in the matter. He regretted exceedingly that there was no one on the Front Opposition Bench to say one word of protest against the system which the Chancellor of the Exchequer embodied in the Budget and which he had enlarged that evening. The right hon. Gentlemen the Members for East Wolverhampton, West Monmouth, East Fife, and Montrose Burghs had all given the sugar duty away. The one crumb of comfort he had got was that the right hon. Gentleman the Leader of the Opposition had not committed himself yet. That was the right hon. Gentleman's great virtue. He waited, with regard to these complicated matters, until he saw the whole plan of the Chancellor of the Exchequer unfolded. They had been told by the right hon. Gentleman the Member for East Wolverhampton that Mr. Gladstone and Sir George Cornewall Lewis had both imposed a sugar duty. But the circumstances were not altogether analogous. It was a terrible thing for this country, after twenty-five years of freedom from a duty of this nature, to have it reimposed, especially under the complicated conditions now suggested, conditions which, in view of the enormous consumption of the article taxed, must cause great inconvenience. Mr. Gladstone and Sir George Cornewall Lewis had not had to act after a period of twenty-five years freedom from the duty; they only varied it, in fact, and he therefore appealed to the Leader of the Opposition, who, as he had pointed out, had not yet committed himself, to closely watch the proceedings of the Chancellor of the Exchequer. There were great issues involved which must inevitably lead to considerable discussion.
MR. GIBSON BOWLES (Lynn Regis)said that, as he understood the Chancellor of the Exchequer's proposal, the effect was to put glucose on the same footing as sugar.
§ SIR M. HICKS BEACHYes.
MR. GIBSON BOWLESsaid that, in that case, the right hon. Gentleman's 1480 resolution was a very proper one. But it appeared to him that an element was being introduced as a subject of taxation which was not proposed to be taxed by the Finance Bill. That was sweetening matter. He would like to ask the Chancellor of the Exchequer what he meant by sweetening matter, and how the amount of sweetening; matter was to be ascertained. He wished it to be understood that he was not complaining of the right hon. Gentleman's proposal.
§ SIR M. HICKS BEACHsaid that in the Finance Bill, as it now stood, under the head of "molasses" other articles were included in the words "and all sugar and extracts from sugar which cannot be tested by the polariscope." The polariscope could not be applied to these articles, and they were grouped together as one thing, so that a certain duty might be levied upon them. It had been discovered that they varied very much in their sweetening matter, and obviously it was necessary to make a difference between them in order to protect the sugar revenue.
§ MR. DILLON (Mayo, E.)said the Chancellor of the Exchequer had now proposed a radical change in the resolution which was formerly brought forward. He had announced that if the Bill were passed in the shape in which it was drafted, they would be unwittingly putting on a large protective duty with regard to glucose and certain forms of molasses. That was a very good illustration of the effect of putting a tax on an article which entered largely into the manufactures of the country. If, when the Government brought in the Bill, the two or three Members on the Opposition side of the House who had taken an interest in the question had brought Forward the theory which the Chancellor of the Exchequer now stated, they would have been laughed at. If the Chancellor of the Exchequer had not made this proposal now the result would have been that a protective measure would have been passed without perhaps more than ten Members knowing what was being done. The Chancellor of the Exchequer told them now that the resolution would prevent this being a protective measure. 1481 How were they to know that? They had simply the Chancellor of the Exchequer's statement. How many members of the Committee were in a position to say that they understood what was meant by Copeland's test, by which it was proposed to ascertain the amount of sweetening matter in sugar and molasses? They were going blindly in this matter on the word of the Chancellor of the Exchequer, who admitted that he did not understand the subject. Unless the right hon. Gentleman was able to give a fuller explanation of the method by which the sweetening power of those various substances was to be tested, it was preposterous to ask the House of Commons to pass a measure which might be a protective measure. The Chancellor of the Exchequer had at this stage introduced for the first time the expression "sweetening matter." What was sweetening matter? The Committee had received no definition. It was not sugar, and if the right hon. Gentleman meant the power of certain articles to impart sweetness, then he ought to draw a distinction between beetroot sugar and cane sugar. Cane sugar had greater sweetening power than an equal quantity of beetroot sugar. The Chancellor of the Exchequer had drafted and introduced the Finance Bill in blank ignorance as to the relative sweetening powers of liquid and solid glucose. What difficulty was there in getting that information as to the difference earlier from the chemists or experts on whose advice he relied? He must have had at his command confidential men at Somerset House, who could have told him the difference between liquid and solid glucose. The hon. Member did not see the slightest ground for the position taken up now by the Chancellor of the Exchequer, seeing that he was in a position to make inquiry and to get the information before he introduced the resolution. Surely it was not beyond the ingenuity of modern chemists to liquefy solid glucose, and if that were done the whole structure of the new financial resolution would be knocked on the head. He thought it was the most extraordinary doctrine ever introduced in the House of Commons that a most complicated financial provision 1482 should be based on the assumption that the present relations between the sweetening powers of solid and liquid glucose would remain unchanged. This was only a proof of the vicious character of the tax. An extraordinary revolution was being introduced in the financial system of the country. He had watched with amazement the docility with which the House of Commons had accepted this extraordinary change. It was a tax, in his opinion, which combined in itself every possible objection to a tax. It was a tax on an essential and most valuable article of the food of the people. Already the price of blacking and biscuits had been raised. He was informed that Huntley and Palmer had raised the price of their biscuits, and even of those which contained no sugar at all. [Laughter.] Hon. Members laughed, but that was a fact. Peek, Frean, and Company had sent out a circular stating that they had been compelled to raise the price of all their biscuits without reference to the question whether they contained sugar or not. The tax would be very costly to levy, and it would be impossible, at least for several years, to be quite certain whether or not it was discriminating against the manufacturers of this country and in favour of manufacturers abroad. It was a tax which sinned against all the great canons by which the financiers of the last fifty years had been guided in bringing the finance of this country to a state of perfection which had made it the envy of every expert throughout the world. On these grounds he would resist the tax at every possible stage.
§ MR. CHAPLIN (Lincolnshire, Sleaford)said the hon. Member for East Mayo had charged the Chancellor of the Exchequer with desiring to impose a graded duty on sugar. It appeared to him that the object of the Chancellor of the Exchequer was to place glucose and sugar of different qualities upon an entirely equal footing so far as he could. It was impossible for obvious reasons that the Chancellor of the Exchequer should make exhaustive inquiries into this subject before bringing forward the proposal. If, of course, the right hon. Gentleman had made such inquiries everybody would have known what one of the principal 1483 features of the Budget was to be before the time came for explaining it. The hon. Member for East Mayo complained that he did not understand all the details of the chemical tests on this question. How many Members would be able to understand them unless they had some special chemical education? The Chancellor of the Exchequer had at his command the advice of able and experienced experts, and he had taken their opinion. It was no doubt on their advice that the changes he now proposed were made. The hon. Member for East Mayo wanted to know how many Members of the House of Commons had even the beginnings of an understanding of the question, and went on to say that he did not believe half a dozen did. He thought the hon. Member was perfectly right, and that the hon. Member himself could not be included in the number. The inference he drew from the statement was, what a blessing it would be if a few Members could recognise their want of information on certain subjects, and that they were not qualified, although ready, to talk on all possible occasions. After all, the speech of the hon. Member was an attack more than anything else on the sugar duty branch of the Budget; but whether it was right or wrong to impose a duty on sugar, at any rate that duty had already been agreed to by the House.
§ SIR H. CAMPBELL-BANNERMAN (Stirling Burghs)The objects proposed by the right hon. Gentleman are of an exceedingly technical and complicated character, and he will not expect, I am sure, the ordinary Member of Parliament to be able either to follow exactly what he said or to appreciate the rights and the wrongs of any question which might be raised in the matter. All I can say is that it will be the duty of us all to get such information as we can as to the general effect of the duty which the right hon. Gentleman proposes, which seems to me, roughly speaking, in the direction of that equal treatment of these different commodities which certainly ought to be the object which we should seek to obtain. I think that some of us should look at the question very closely, not from the general point of view of the 1484 sugar duty, which is hardly before the Committee to-day, but from the point of view of the effect of its details upon Protection, and the consequences that may follow to different branches of the trade of this country from the duties that are proposed. Now, there is one matter to which my attention has been called, and which, as represented to me, seems highly deserving of attention, namely, the duty charged upon the sugar in canned fruits. The duty has been, I believe, imposed on the sugar in canned fruits far exceeding the proportion of duty that ought to have fallen upon it, and in that way a considerable industry is injuriously affected and a protective effect is created, and it will lead, no doubt, to a considerable increase in the price to the consumer in this country. In a matter so diffused as this, the use of sugar in manufactures, where there are so many developments of industry and ingenuity in the employment of sugar in various commodities, I think we may be sure that there will be cases of this sort which will require the attention of the Committee. I do not know whether the right hon. Gentleman's attention has been particularly called to the point to which I refer, nor do I know that it would require to be dealt with in Committee, but I hope he will be able to give a satisfactory explanation of the circumstance to which I have referred. For the present moment, I think we are hardly in a position to say "Aye" or "No" to the detailed changes which the right hon. Gentleman has intimated to us, but it will be our duty to press inquiry before we get out of Committee on the Finance Bill.
§ SIR MARK STEWART (Kirkcudbrightshire)said that, however much the proposal of the right hon. Gentleman the Chancellor of the Exchequer might be criticised from a hostile point of view by hon. Gentlemen opposite, it would meet with great acceptance from agriculturists generally. He spoke with some knowledge on this subject. He had been somewhat startled by the fact that by the first resolution brought into the House the tax on molasses would have amounted to 2s. a cwt., or 12s. a barrel, which seemed to him a particularly heavy tax on a valuable cattle food. 1485 He, however, did not intend to enlarge on the topic, but he simply wished to thank his right hon. friend the Chancellor of the Exchequer for looking into this matter, and bringing this new resolution before the House.
§ MR. E. J. C. MORTON (Devonport)said he could not avoid protesting against what he regarded as the utter unsound ness of the whole financial scheme of the present Government, and he would take every opportunity of pro testing against each detail of it. They knew that the Chancellor of the Ex chequer had consistently asserted that the proposals in regard to the sugar duty were not protective. As a matter of fact, whether the tax on molasses as originally introduced was or was not protective, it could not be denied that the right hon. Gentleman was now proposing to introduce a graduated tax on molasses; in fact, the right hon. Gentleman was now proposing three taxes for one. He was perfectly well aware that, technically speaking, the proposal of the Chancellor of the Exchequer could not be described as protective, simply because the right hon. Gentleman proposed to put on an Excise duty corresponding to the Customs duties. But he maintained that the evils which would result from these proposals were similar to the evils arising from protection pure and simple. He would point out that during the last twenty-four or twenty-six years sugar had not only become a staple article of the food of the people, but the raw material on which several small trades had been founded. Therefore to tax the raw material of these trades was to produce the very evils of which they complained from a purely protective tax. He would point out that foreign countries which gave bounties on the exports of sugar made a pure present to this country of so much sugar, and it was owing to that present that these small industries had been started. These small industries depended for their prosperity essentially on the cheapness of sugar, and that cheapness of sugar again depended on the sugar being admitted duty free. Take, for instance, the jam trade, which now employed five times the number of people that had been employed by all the sugar refineries in the country. More- 1486 over, we were able to make a profit out of the very foreign countries who made us a present of this sugar through their export bounties, and we were exporting large quantities of jam abroad.
THE CHAIRMANOrder, order! All that the hon. Gentleman can discuss on this resolution is the variation caused by the proposed changes in the duties on sugar substitutes and molasses.
§ MR. E. J. C. MORTONsaid he would endeavour not to transgress the Chairman's ruling. He would put his point in a slightly different way. The Chancellor of the Exchequer's proposal, he maintained, would still further increase the price of sugar, and thereby produce an increased evil of the character he had indicated—an evil which existed to a small extent in the original proposals of the Budget. He would like, if he might, inasmuch as the question had been mentioned in debate, to refer to the assertion of the right hon. Gentleman the Member for East Wolverhampton and the right hon. Gentleman the Chancellor of the Exchequer that they claimed the authority of Mr. Gladstone in regard to an increased tax on sugar.
THE CHAIRMANNo authority was claimed in regard to the increase of the tax on sugar, but in regard to the imposition of a tax on sugar. The hon. Member is now trying to get round the ruling I have given.
§ MR. E. J. C. MORTONsaid he was under the impression that the analogy was that Mr. Gladstone had increased the tax on sugar, not that he had imposed it. But he would leave that point, and only remark in conclusion that he trusted the leaders on that side of the House would endeavour to rid themselves of one particular attitude of mind in regard to the proposal of the Chancellor of the Exchequer, that there were those who supported the sugar tax as bad finance merely because bad finance would punish those who took a different view from them in regard to the war.
§ MR. CHARLES McARTHUR (Liverpool, Exchange)said he was glad that the Chancellor of the Exchequer had 1487 intimated his intention of reducing the duty on the lower class of molasses. Treacle was largely imported for making feeding cakes for cattle, and if the duty on that treacle had been left at the very high figure in the original Budget resolution it would have practically stopped the trade and been detrimental to agriculture. He would have liked to have seen molasses not used for human food exempted from the duty altogether; but as that was impossible he thanked the Chancellor of the Exchequer for making the reduction he had done.
§ MR. KEARLEY (Devonport)said that the Chancellor of the Exchequer had been very slow to convince as to the necessity of maintaining this tax on glucose. The right hon. Gentleman had disregarded the information brought to his notice in the House; and it seemed extraordinary that there should not have been some inquiry on his part as to the incidence of the duty. He should like to point out to the right hon. Gentleman that his proposal would not fully meet the case in regard to glucose. He was perfectly certain that unless the right hon. Gentleman imposed the full sugar duty on glucose it would lead to the Chancellor of the Exchequer being defrauded by foreign firms, and most assuredly it would lead to the consumer being defrauded. He would give proof of what he had stated. In the first place, the brewer would always show a great preference for the cheap article. Now that there was a differentiation between the duties on sugar and glucose he would show a greater preference than ever for the cheaper and less desirable article. But it must not be forgotten that the brewer paid a beer duty on the specific gravity of the liquid, that was to say, on the wort; and the specific gravity of the liquid produced from glucose and the specific gravity of the liquid produced from sugar was exactly the same. The result would inevitably be that we should have beer less pure than before; it would be a glucose beverage altogether; and the Chancellor of the Exchequer would not receive from the brewer the amount of taxation to which he was justly entitled. The Conservative party had always been regarded as the friends of "the trade" as it was called, and in re-arranging 1488 the burden the Chancellor of the Exchequer should consider the differentiation between the duties on sugar and glucose. What was the effect on the consumer? When the consumer purchased an article containing sugar he expected to get pure sugar, but the result of the differentiation between the duties on glucose and sugar would be that the manufacturer would displace pure sugar and put in this impure article that was already rapidly taking place, and the Chancellor of the Exchequer was encouraging this. The right hon. Gentleman showed a lamentable lack of knowledge in this matter. He admitted that glucose was largely used, and when questions were put to him as to whether it was or was not adulteration, he said he did not appear to know much about it.
§ SIR M. HICKS BEACHI said it was illegal.
§ MR. KEARLEYsaid the right hon. Gentleman said it had been appealed against, but he did not appear to know that the judgment of the court of first instance had been upheld on that appeal. We did not want to be in a state of glucose saturation; we had to drink glucose beer; we did not want glucose in everything. He strongly urged that the duty on glucose should be put up to a level with the highest sugar duty, and he hoped the Chancellor of the Exchequer would give some consideration to that matter in his reply.
§ MR. GODDARD (Ipswich)said he did not understand from the speech of the Chancellor of the Exchequer what would be the result of this change in the duty so far as the Exchequer was concerned, or what would be the result so far as the revenue was concerned. When he replied the Chancellor of the Exchequer would perhaps give some consideration to that point.
§ MR. TAYLOR (Lancashire, Radcliffe)said the very fact that the Chancellor of the Exchequer proposed to increased one tax by over 60 per cent. and to reduce another by 50 per cent. was a lesson to the House as to the difficulties and dangers of meddling with subjects with which, not only the Chancellor of the 1489 Exchequer, but certainly the House at large were not qualified to deal. He did not for a moment believe that the Chancellor of the Exchequer meant to do any harm to the commercial interests of the country; but the fact that within two months of the passing of taxes of this importance it was found necessary to impose such a great change should be a warning to the House not to embark in this particular form of taxation.
§ MR. STEVENSON (Suffolk, Eye)disclaimed any desire to embark upon a discussion of the taxation of molasses, which was a technical subject with which he was not prepared to deal. No doubt the reduction of the tax upon molasses would by some be considered a boon to the agricultural classes, but he considered if it were it was of a very qualified nature, as the particular kind of molasses affected made more fat than meat, when used as feeding stuffs. With regard to glucose and other sweetening substances akin to sugar, they should not pay a less duty than sugar, and the only question was whether this particular rise in the duty of glucose was calculated to meet that object. If a particular tax was imposed upon sugar a tax, at least equal in amount, ought to be imposed on articles of food akin to sugar. Whether such a thing would be done by this tax was extremely doubtful. He trusted that when this matter was more fully considered in Committee the Chancellor of the Exchequer would be open to conviction and amenable to such suggestions as were offered, and that he would see his way to mete out to glucose and other substances used in place of sugar the same treatment as he meted out to sugar itself.
§ SIR M. HICKS BEACHIt is my desire that, so far as the sweetening powers of sugar on one side and of glucose on the other are concerned, the duty should be equal. But my mind is absolutely open with regard to the further discuss on of the matter in Committee. I have made this proposal to the Committee, which, despite the remarks of the hon. Member for Devonport, is a very large increase in the duty on glucose, in the belief that practically sugar and solid glucose will be put on an equality. 1490 As to the effect of the changes on the revenue, the duty is increased to a large extent on solid glucose, and to a lesser extent on liquid glucose, but with regard to a very considerable part of molasses and other kinds of sugar the duty is largely lowered, and though I should think that on the whole there will be some increase on the total yield of the duties on molasses and glucose, I do not, think it will be a very large one.
§ Question put, and agreed to.
§ Resolution to be reported to-morrow; Committee to sit again upon Wednesday.