FINANCE BILL.

HC Deb 22 June 1903 vol 124 cc88-149

Considered in Committee.

(In the Committee.)

MR. J. W. LOWTHER (Cumberland, Penrith)

in the Chair.

Clause 1:—

MR. HARDY (Kent, Ashford)

moved the postponement of Clause 1 (duty on grain, etc., to cease.) He said that hon. Members in bringing forward particular questions were often much hampered by the rules of debate, and of that they had a conspicuous illustration on the Second Reading of the Finance Bill, when every speaker, except perhaps the Prime Minister, dealt with a subject which was not immediately before the House. That day he was hampered in very much the same way. In moving the postponement of the clause he would have to tread very warily, for he could not go in detail into the considerations which had induced him to bring forward the Motion. What he did desire to obtain on general grounds by this step was that the Committee should decide for themselves from what particular source of indirect taxation that relief should be given, which it had been decided by reading the Bill a second time should be given, to the taxpayer this year. If they passed the clause as it stood they would have eaten their cake, and those who were anxious for the relief of the tea or coal duties, or other sources of indirect taxation, would only be able to discuss the matter academically, because the whole of the relief available would have been given away. In parting with this clause they would be parting with an actual source of revenue, whereas in dealing with other taxes they would deal with reductions, the taxes remaining part of the fiscal system to be reduced or extended as might be deemed expedient in the to future. He also thought the House might fairly ask to be given the same selective power as the Chancellor of the Exchequer used when he introduced the Budget. They ought in fact to be allowed to decide between two alternatives. At the time the Budget was introduced they supposed that the Chancellor of the Exchequer spoke for the Cabinet as a whole, but since then the situation had materially altered, and they might well ask if the right hon. Gentleman spoke only for himself. Without desiring to dwell in detail upon this question, he thought it was desirable, now that they had actually got to the discussion of the corn duty itself, that they should bring forward this Motion in order to give the House free liberty of deciding from which source it would take this indirect taxation, and also to give the Chancellor of the Exchequer a further opportunity of saying whether he would not meet the objections of those who desired to retain this tax and reconsider the matter at the last moment. He begged to move.

Motion made and Question proposed— In page 1 to postpone Clause 1."—(Mr. Hardy.)

*THE CHANCELLOR OF THE EXCHEQUER (Mr. RITCHIE,) Croydon

My hon. friend has asked the Government to consent to the postponement of this clause in order that the Committee may have an opportunity to decide what form of relief shall be given to indirect taxation, and he argued that unless the corn tax be postponed and the tea tax comes on first the Committee will not have that opportunity. So far as the form is concerned, the question as between corn and tea was distinctly raised by the Amendment of my right hon. friend the Member for Sleaford when he moved his Amendment to the Second Reading; and certainly the support which my right hon. friend got was hardly sufficient to justify the hon. Member in now asking for a postponement of this clause. I cannot see that the postponement of this clause would effect the purpose he desires. The hon. Member says he desires the Committee to have a free hand and full liberty to decide between the corn tax and the tea duty, or any of the other duties involved. Surely my hon. friend must see that some one tax must come first, and assuming that there is a certain amount to be given away, and no more, where does the liberty of the Committee come in? Whatever tax comes first the decision which the Committee comes to on that particular tax settles the matter. Our view—and it is very much strengthened by what took place on the Second Reading—is that by far the most proper and most important tax to remit is the corn tax. My hon. friend differs from me in that respect, but he can hardly expect me to postpone a tax which we think ought to be taken off in order to give him an opportunity of inducing the House to take off a tax which we do not think ought to be taken off. Under these circumstances I am afraid I cannot consent to the proposal made by my hon. friend.

MR. CHAPLIN (Lincolnshire, Sleaford)

said he was sorry to hear the decision of the right hon. Gentleman, because he thought the appeal of his hon. friend who had moved this Amendment was not at all an unreasonable one. The Government was asked to take a course which they had frequently adopted on other measures of much less importance, and that was to leave it an open question to their supporters on this side of the House and give them a fair opportunity of coming to a decision as to whether the remission of indirect taxation should be made upon one or the other of these two articles—tea on the one hand, and corn on the other. When he placed his Amendment on the Paper, his object was to substitute tea, or some other subject of indirect taxation, for a remission of taxation instead of corn, and he did so because he was aware that a very large number of hon. Members thoroughly shared his opinion on the point. With that view he had placed upon the Paper a series of Amendments, and if this clause had been postponed, he should have moved them in turn. After the speech of the Chancellor of the Exchequer, however, he recognised that this would not be possible, and the only result of moving his series of Amendments would be that his opposition would degenerate into pure obstruction, and he never had and never would adopt that course. As the Chancellor of the Exchequer had refused to make this concession, he should not persevere in his intention of moving his Amendments. At the same time, he must state that there was one question upon which he was absolutely pledged to a vast number of supporters outside, and that was to support the omission of this clause and to endeavour to substitute a remission of the tea duty. He saw no possibility of succeeding with regard to this Amendment, and probably it would be best for them to make their fight when they came to the omission of Clause 1.

MR. JAMES LOWTHER (Kent, Thanet)

said he had not hesitated to declare that the abandonment of the corn duty was a cowardly and disgraceful act on the part of the Government, and the blame must not be attributed to one Minister, because all members of the Cabinet must share the responsibility of an act which would be very much to their disgrace in time to come. Nobody felt the burden of this tax, and the foreigner paid it.

*THE CHAIRMAN

Order, order! The right hon. Gentleman is not entitled to discuss the character of the clause now, we shall reach that question by and by.

MR. JAMES LOWTHER

said he hoped his hon. friend would not press this matter to a division, for they would shortly have a legitimate opportunity of showing how many dissentients there were from what he considered was a highly discreditable course.

LORD HUGH CECIL (Greenwich)

said his right hon. friend had explained that he was not going to move a certain number of Amendments which were on the Paper in his name. It occurred to him as a relevant reason for postponement that perhaps some hon. Members who had not put down Amendments on the Paper might do so if the clause were postponed. He did not know that that would convince him of the propriety of voting for this proposal. Not only in the breast of his right hon. friend but in other protectionist hearts there was a singular trembling, and they seemed to be apprehensive of discussion.

MR. JAMES LOWTHER

We were not allowed to discuss it.

LORD HUGH CECIL

said his right hon. friend had perhaps not noticed an Amendment on the Paper which the hon. Member for Liverpool had not persisted in, and which he had not had the courage to move. No doubt he acted discreetly, because the discussion would not have served his purpose, or the purpose of those who had equally at heart the objects he had in view. He thought the position was a little singular in view of the revolution in their fiscal policy which had been recommended. They had no opportunity of discussing that policy except such an opportunity as necessarily raised a wholly false and different issue to the merits of the question.

MR. HARDY

asked leave to withdraw his Amendment.

Motion, by leave, withdrawn.

MR. PHILIP FOSTER (Warwickshire, Stratford-upon-Avon)

said he desired to move the Amendment standing in his name on the Paper to leave out of line 11 in page 2, "twenty-five" and insert "fifteen." He had hoped that the Chancellor of the Exchequer would have seen his way to reduce this figure, and he asked the right hon. Gentleman some time ago if he could possibly do so. He trusted the right hon. Gentleman would favourably consider his proposal.

Amendment proposed— In page 2, line 11, to leave out the word 'twenty-five' and insert the word 'fifteen.'"—(Mr. Philip Foster.)

Question proposed, "That the word 'twenty-five' stand part of the clause."

*MR. HERBERT SAMUEL (Yorkshire, Cleveland)

trusted that the Chancellor of the Exchequer would be able to accept the Amendment. The point raised was a comparatively small one, but one of considerable importance to a body of traders in this country. Those who had corn in stock above 500 quarters were to receive back the duty paid on that corn, but those traders who had stock somewhat less than that felt that they were being unfairly treated. This Amendment was proposed to safeguard the interests of the small traders, and to enable them to secure the same advantages which were to be given to the large traders. He was informed by the President of the London Grain Trade Association that there were probably 400 or 500 persons affected by the change as proposed. It did seem hard on those small traders that, because they were small traders, they should not receive the same advantages as were to be given to the large traders. If there were two millers or dealers in a town, and one had a stock of 500 quarters, he would get back from the Exchequer £25, but the small man who had only 400 quarters, would not get back the £200 to which he would in any fair principle of equity be entitled. The trade had already suffered much inconvenience through the vacillating policy of the Government by their first imposing, then taking off, and then suggesting that they were going to re-impose the corn duty. He hoped that in view of this inconvenience the right hon. Gentleman would be able to be generous in the matter and accept the Amendment.

*MR. RITCHIE

said that adequate notice of the remission of the tax was given so that stocks might be reduced. The Government at first thought that the notice from the time the Budget was introduced to 30th June was ample to enable holders to reduce their stocks, but it was pointed out to them in some quarters that, so far as the larger dealers were concerned, that notice might lead to a great dearth of grain and flour, because millers would not renew their stocks, nor would the market be able to make contracts for the importation of grain to proceed in the ordinary way. The Government saw that just before the date when the tax was to be remitted there might be something in the nature of a famine of grain in our market with a corresponding rise in price. The present proposal involved a considerable sacrifice, but they felt that it was better that there should be a sacrifice, so far as revenue was concerned, rather than run the risk of the unfortunate condition of things he had described, and so, in order to enable the trade to be carried on continuously and without any break at all, they agreed to pay a rebate up to 30th June on stocks of over 500 quarters which were proved to have paid duty. It was necessary that some limit should be placed on the quantity of stock on which a return of duty should be given. It would be, otherwise, absolutely impossible to prevent considerable loss to the revenue. The hon. Gentleman who moved the Amendment and the Committee would understand that in order to prevent fraud on the revenue there must be a great deal of care, inquiry, and examination, and it was represented to him by the Customs that if they were to go below the proposed limit their difficulty would be enormously increased, and probably fraud would also be increased. After all, the Committee must see that the small men could do that which could not be done by members of the trade who dealt in large quantities. It was perfectly easy for the smaller dealers to reduce their stocks between April and 30th June so as not to involve loss at all. He was informed that it was easy for them in their transactions with the large dealers to arrange to have such quantities up to 30th June as would enable them to carry on business without inconvenience. Under these circumstances he was sorry that he could not agree to the Amendment.

Amendment negatived.

*MR. CHAPLIN

said that in rising to move the omission of the Clause he knew perfectly well that the whole question was merged in the much larger subject which had recently been introduced by the proposals made by the Colonial Secretary. He was also equally well aware that the Chancellor of the Exchequer was in perfect accord—he did not know that he would be right in saying that he was in league—with the whole Opposition against the views which almost universally were professed by his supporters on this side of the House Until last year. Therefore his chance of any success on a division in reversing the decision of the Government at the present moment, with the two sides of the House united in a most unnatural alliance, and one which he ventured to think was destined at no distant time to be fatal to the continued union of one of those Parties, namely, that on this side of the House, was of course perfectly hopeless. Those, however, were considerations which would not deter him this afternoon from doing his best to support the cause which he believed, and indeed knew, to be right, and which, he suspected, were shared, probably by a considerable majority of Gentlemen on this side of the House. He must be content to leave it to the verdict of the constituencies—a verdict which he for one was profoundly convinced could not be deferred for any great length of time—to decide between him and those who would be his opponents to-day. He was happy, however, in one thing, viz., that they had had a very considerable discussion of this question on the Second Reading of the Bill, and it would be needless, therefore, for him to detain the Committee at any great length now. He intended, as far as possible, to confine himself to those points of the controversy which had arisen out of the clause between the Government and himself, and which the Government had either evaded or been unable to meet.

But, before he did this, there was one thing he desired to say for himself, and that was to repeat—he was afraid it would be for the fiftieth or the hundredth time—the stereotyped statements which, he observed, were so constantly made in some portions of the Press, and which had been referred to by his noble friend the Member for Greenwich, as to his supposed protectionist's views and proclivities, that neither now or at any time had he been influenced by motives of protection in any way, and he was at a loss to imagine why these proclivities were attributed to him, for, to the very best of his recollection, he did not believe that he had ever made a protectionist speech, or given a protectionist vote, in the whole course of his political career, unless, it might be said that by speaking and voting for the shilling duty on corn last year, and in opposing its remission this year, he was to be dubbed a protectionist, in which case he was a protectionist last year in company with the right hon. Gentleman the Chancellor of the Exchequer. As a matter of fact, if he ever entertained those views he abandoned them, God knew how many years ago, and for this reason. He had always been greatly interested in the agricultural industry of this kingdom, but he did not believe that by any conceivable duty on corn it was possible to imagine they could ever restore the corn-growing industry to the position it occupied many years ago. It seemed to him only the other day that two gentlemen, well known to Members of the House — noted agriculturists, Mr. Clare Sewell Read and Mr. Albert Pell, whose names were household words in everything connected with agriculture—had been sent by the Royal Commission then sitting on the Depression of Agriculture, known as the Duke of Richmond's Commission, to America to inquire into the Agricultural portions of the United States, and as to the kind of price at which wheat could be sent from that country to England; and they came back with the report that it could probably never be sent over under 40s. a quarter. Now, he had seen wheat quoted at 17s. a quarter since then, and the average price was immeasurably less than 40s. per quarter. If the object of protection were to restore the agricultural interest to its former condition it was not a duty of 1s., 2s., or 5s. that would be required. It would require a duty of 20s. or 25s. to put the corn industry in England on its legs again; and that, of course, was inconceivable and entirely out of the question. While he gladly welcomed any encouragement or help that was given to agriculture, from whatever direction it came, and however small in amount, it had always been on the ground of revenue and revenue alone, upon financial grounds and these alone, that, for twenty years, in and out of office, and in or out of Parliament, he had advocated the restoration of the 1s. duty on grain which, unfortunately, in his opinion, the Government were so foolish as to try and repeal. Having said that, he would pass to the consideration of the clause itself which was now immediately before the Committee, and for which the Chancellor of the Exchequer was primarily responsible.

Now, one of the main objections which he had always urged to the repeal of the duty from the very outset was that it was introduced for permanent purposes. The right hon. Gentleman the Chancellor of the Exchequer on the Second Reading of the Bill denied that; he said that— It was imposed mainly for the purposes of the war, a statement which he might remind him was greeted with loud shouts of "No, no," from all parts of that side of the House. And then the right hon. Gentleman went on to say— Although it was quite true the right hon. Member for Bristol had expressed the hope that it might be permanent as a means of broadening the basis of taxation, …… it could not be considered as permanent, and that there was no inconsistency on his part in repealing it now. Now the best answer he could give to that statement of the right hon. Gentleman was to quote the very words of his right hon. friend the Member for West Bristol, which he had not quoted before to the House, and the Committee could then judge for themselves how much or how little his statement was justified. On 9th June last year the right hon. Gentleman said this:— In my belief such has been the growth of our expenditure during the past few years, and such is likely to be its continued growth under any Administration, that it was absolutely necessary to increase the heads of indirect taxation. The Leader of the Opposition said the other day that it was mainly due to increased armaments, and he intimated pretty clearly his own opinion that we had gone too far in that direction… I do not believe, continued the right hon. Gentleman, that the country is likely to take that view either with regard to the Navy or with regard to the ordinary peace establishment of the Army, and if I wanted confirmation of that view I might quote some words Lord Rosebery recently used in a speech delivered at Leeds. And then he went on:— Did Lord Rosebery condemn it? No, Sir, not a word. All he said was that it might possibly be necessary, … and for all he knew was necessary that ordinary expenditure should have gone up £32,000,000. He asked how it was possible, in the face of a statement like that on the part of his right hon. friend the Member for Bristol, that the Chancellor of the Exchequer could come forward and tell the House that the tax last year was imposed mainly for the purposes of the war, and that it was not intended to be, and could not be, a permanent tax.

*MR. RITCHIE

said he begged the right hon. Gentleman's pardon. He had made some reference to a remark which had fallen from his right hon. friend on an Amendment which had been moved to make the tax for one year only; and he had given some strong arguments why it was not possible for a Chancellor of the Exchequer to impose a tax for one year only. The speech of the right hon. Gentleman the Member for Bristol confirmed the view he took.

*MR. CHAPLIN

said he was perfectly well aware of what the right hon. Gentleman said as to putting on a tax for one year only; but he had got the report of the right hon. Gentleman's speech in which he said that the corn tax could not be permanent, and that he was perfectly consistent in proposing its repeal. He would quote it if he desired it. Very well then! The right hon. Gentleman has at last made the admission, beyond all question or doubt, that the tax was brought in with the intention and for the purpose of being a permanent tax.

Now, that being so, with the permission of the House he would turn to another point. He had complained in the course of his speech that on the faith of that statement made by the right hon. Gentleman, the Member for Bristol, capital had been invested, mills had been re-opened, industries had been restarted, and that all this would now be lost. And what was the answer of the right hon. the Chancellor of the Exchequer? He said— He thought the millers were very rash people, if, because of 1s. duty being imposed upon corn they had largely increased their plant. But it was not the 1s. duty on corn—or to be strictly accurate, the 3d. duty per cwt. on corn—that induced the millers to increase their plant; it was the duty of 5d. per cwt. imposed on flour. What was the rashness in that. As a matter of business, they thought the investment was good, and their opinion was thoroughly justified by the result. Did his right hon. friend mean to say that these millers were rash in believing the statement of the right hon. Member for Bristol that the tax was going to be permanent? If not, he asked him again where was the rashness? If he did, then he took the liberty of entirely disagreeing with his right hon. friend. The right hon. Member for Bristol was the last man in the world to mislead any man in business or connected with trade with whom he had come into any relations in connection with the office he filled when he occupied the position of his right hon. friend. After the explanation given the other night by the Chancellor of the Exchequer, he was sorry to say his opinion had been only strengthened and confirmed in regard to the right hon. Gentleman's present proceedings. They had several indirect taxes before them which were imposed expressly for the purposes of the war. They had one indirect tax—partly for the expenses of one year of the war, and afterwards avowedly for permanent purposes. Among the war taxes was the increased duty on tea. In making his remission of indirect taxation the Chancellor told us that his choice lay between tea and corn; but he had deliberately elected to retain the tax which was specifically imposed for the purposes of the war, and repealed the duty which was avowedly introduced as a permanent tax. He therefore adhered most strongly to the opinion that in the face of the most explicit statements made by his predecessor, his right hon. friend was wholly without justification for the course he had taken, and that those who suffered by that course had the strongest, gravest, and most legitimate ground of complaint. That was his answer also to what the Prime Minister said on this branch of the subject the other night.

But there was another class which suffered in precisely the same manner as the millers—a class which appeared to have escaped the recollection of the Chancellor of the Exchequer altogether, but to whom, in their small way, it was of even greater importance than to the farmers them- selves to be able to get a cheap and abundant supply of offals. That was the class of agricultural labourers. In almost every county with which he was acquainted the agricultural labourer who was at all decently well-off kept a pig. How was it fed? Very largely on offals, when they could be obtained. During recent years, as everybody knew, a vast number of local mills had been closed owing to American competition in flour. Under the duty imposed last year, these local mills had, by degrees, been re-opened and offals had again become cheap, abundant, and easily obtainable by these poor people; and they would have been cheaper and still more abundant in the future had the duty been retained. That meant the labourer would have been able to keep two pigs instead of one—which to him would have been a matter of the greatest importance. That might account for an observation by an agricultural labourer, reported to him by the gentleman to whom it was made, and who repeated it to him. His informant was in daily intercourse with agricultural labourers—nobody saw more of them—and what he told him was this: They were all of them getting their loaves at the same price, of the same quality and same size as before the shilling duty was put on, and that never a word had he heard against it. But one of them talking to him did use an expression which he commended to the consideration of his right hon. friend. He said—and he hoped the Committee would pardon him quoting the words—"It is a damned shame for the Government to take it off." Of course he did not approve of that language, nor did he think for a moment of endorsing it, but at the same time it most forcibly expressed his own sentiments on the subject, and he entirely agreed with the condemnation of the Government so emphatically pronounced. And whenever they went to the country—and that time would come sooner or later—a great many Members who, like himself, represented agricultural constituencies would hear a great deal more of this subject and of the Government of which they had formerly been the strong supporters. On the other hand, he expressed the strongest opinion that if the right hon. Gentleman had proposed to remit the tea duty and keep the duty on corn he would have done something not only for every cottager in the country, and still more for cottagers and labourers in rural districts, which would not be easily forgotten. Now he had given them one of the results of repealing the duty on flour, and to the Government, he fancied, a rather unexpected result too. But the Chancellor of the Exchequer had got his answer ready, in fact he had given his answer on a previous occasion, and he would like to examine it. The right hon. Gentleman could not understand how £2,500,000 could be collected on bread and flour without the consumer feeling it. Most of the Committee could understand that; at all events he could. But whatever might have been the case last year, he could quite see the position of the right hon. Gentleman this year. It would not suit the right hon. Gentleman to understand it in face of the repeal he was proposing to make. So much for the £2,500,000 collectively. But said the right hon. Gentleman— There is one thing I do know. Whatever may be the case with regard to wheat, flour has risen, and that to a large extent.… I am thankful to say that home baking is not an extinct art in this country. I am told in many parts of Lancashire and Yorkshire, and in other districts, home baking exists, both among the agricultural labourers and the mining population. That was true and he was glad to know it was so, and then he went on— And it cannot be alleged that they do not pay on account of the duty. So in regard to the industrial associations which exist throughout the country; no doubt they must have borne this duty which has been paid on flour. Now, what he had to say upon that point was this. That might be all very well, but it was purely and entirely an assumption on the part of the right hon. Gentleman for which no evidence or witnesses, and no proof whatever had been offered to the House. He had made it his business to inquire into this matter and into facts in that part of England, and his information was exactly the opposite. It came, too, from a lifelong resident in the county of Durham, who had been for years in constant association with the mining popula- tion of that county; nor was it in order to reply to the Chancellor of the Exchequer that he obtained it. On the contrary, he had it at the time of the Second Reading, but in the mass of material at his disposal he omitted to use it. He wrote to him fully on the subject, and the pith of that letter he proposed to quote to the Committee— During the last ten days I have made several inquiries from miners' wives, small dealers and grocers and people trading in co-operative societies, and, without exception, I am told that the retail price of flour is the same to-day as it was before the duty was imposed. In one case—a co-operative society—the retail price of the flour is a penny per stone less now.… Among the miners and artisans of Northumberland and Durham, and, I believe, Cumberland too, fully 95 per cent. of the people bake their own bread. Co-operative stores flourish in every village and the baker's cart is unknown.… It will show the extent of household baking when I say that many of those societies, each with 1,000 to 6,000 on their books, do not sell a dozen loaves of bread, except fancy bread, in twelve months.… As regards the whole of the North the question may be summed up as follows: The price of flour with the working man has not been increased, so his bread costs no more than formerly. The system under which bread is sold does not show that the price of the loaf has been increased, so the person who buys bread is paying no more now. As the imposition of the duty has not increased the price paid by the consumer it is safe to say that its repeal will not reduce it, Therefore, the working man gets no benefit by the abolition of the registration fee. That was a tolerably fair answer, at all events, to the statement made by the Chancellor of the Exchequer on the faith of a gentleman long resident in that part of the world and intimately acquainted with the conditions under which the miners live, and he thought the Committee would agree that it destroyed the last plank of the defence on which the right hon. Gentleman rested for the course he had adopted. It was needless, he thought, to say any more. He did not think he need say another word upon that subject, or detain the Committee more than another moment or two. He was aware, in view of the larger proposals now before the country, many Members from the country, both in and outside the House, and on that side of the House were disposed to wait before taking any further action or taking part in any division in this House. Might he remind those who thought with him of the old adage "A bird in the hand is worth two in the bush?" They had got this valuable revenue at the smallest possible ost, without any loss accruing to the taxpayers, and he was most reluctant to abandon it, after advocating its imposition for twenty years. No one could tell when they would see it again. The Corn Laws were not repealed in a day, and although so far as he was individually concerned he had not the slightest doubt as to the ultimate success of the proposals made by the Colonial Secretary which were, as he understood, shared in and adopted by the Prime Minister,—

*THE CHAIRMAN

Order, order! I do not think these matters are strictly relevant to the question, and I hope the right hon. Gentleman will confine himself at the conclusion of his speech within the limits to which he confined himself at the commencement.

*MR. CHAPLIN

regretted that he should have trangressed even by a hands-breadth. He knew there were a great number of Gentlemen on this side of the House from their conversation, and still more from their letters, some of them received only this morning, who entirely agreed with him. But he was also aware of the natural reluctance to vote against the Government of which they were acknowledged supporters, but there were exceptions to every rule, and his experience taught him that this was one of them. It was, however, for them, not for him, to decide. He opposed this clause because the tax was imposed last year as a permanent tax, and with the deliberate and avowed policy of broadening the basis of taxation; he opposed it because at that time it was supported by arguments which had never been answered, and which had been more than justified by the result. He opposed it because it had provided a revenue with less trouble and inconvenience than would be effected by any other tax that could be devised; he opposed it because no one would benefit by its repeal, and they lost the opportunity of giving a real boon to the consumer, and especially to the poorer classes of the country; and, lastly, because the Chancellor of the Exchequer, by this inconsiderate action, had placed the best and most loyal supporters that ever a Government had in a thoroughly false, painful, and humiliating position. Those were the reasons by which he was guided in opposing the repeal of this duty; and whether he was supported by many or by few he intended to take the decision of the House of Commons on the question.

Amendment proposed— In page 1, to leave out Clause 1."—(Mr. Chaplin.)

Question proposed, "That Clause 1 stand part of the Bill."

COLONEL KENYON-SLANEY (Shropshire, Newport)

said that the subject had been so often discussed that it was almost impossible to advance fresh arguments regarding it. He would, however, crave the permission of the Committee to say a few words, as he had not hitherto taken any part in the discussion, or registered any vote in connection with the question. It must be clear to the Chancellor of the Exchequer and to the Government that it was a subject on which, at all events, the rural districts felt very strongly, and upon which they held very decided and distinct views. What was the position in which he found himself as the representative of a rural constituency, and an avowed and hearty supporter of His Majesty's Government? He had, as a supporter of the Government, to attempt the impossible, namely, to reconcile the arguments of the Chancellor of the Exchequer last year with the arguments of the Chancellor of the Exchequer this year. The arguments of the Chancellor of the Exchequer last year were confirmed by the opinion of the great majority of the House; and he failed to see how they had been upset by the counter arguments of the present Chancellor of the Exchequer. His own natural instinct—partly because he was a soldier, and partly because he was a politician—was to follow his leaders; but when he found his leaders in sharp conflict he should take leave to make up his own mind. He did not want to labour the arguments which had been used with reference to the broadening and widening of the basis of taxation. But it surely stood to reason that if the action of the Chancellor of the Exchequer last year had the effect of widening and broadening the basis of taxation, then the counter action of the Chancellor of the Exchequer this year must have the effect of narrowing the basis of taxation. One of the shrewdest Chancellors of the Exchequer of the present generation, Lord Goschen, laid the most emphatic stress on seizing every opportunity of widening the basis of taxation, even if the tax imposed was very small. He himself heartily welcomed the action of the Chancellor of the Exchequer last year; and he heartily regretted the reaction of the Chancellor of the Exchequer this year. That was not all. He was afraid he would have to find fault with the arguments adduced not only by the Chancellor of the Exchequer but also by his right hon. friend the Prime Minister.

The Prime Minister defended the repeal of this tax on the ground that it was imposed because the Government wanted money, and was now to be repealed because the Government did not want any money. It might be perfectly true that money might have been wanted last year more than it was wanted this year, but he did not think it was quite correct to say that money was not wanted now. Who would not be able to tell the Chancellor of the Exchequer and the Prime Minister of the many ways in which they could usefully dispose of revenue. The £2,500,000 which was not apparently needed for any specific purpose could have been used in the reduction of the heavy cost of education, under which the country was now getting a little fidgety and uneasy. There were also many other ways in which the money could be used. Under the Budget proposed by his right hon. friend the Income Taxpayer got considerable relief, to which he was thoroughly entitled, although it had not yet extended as far as he hoped it would. Direct taxation having been relieved, it was right that indirect taxation should also get some relief from the extra burdens for the war. If the proposal of the Chancellor of the Exchequer would help the indirect taxpayer by one single farthing he should be inclined to give every possible credit to his right hon. friend for endeavouring to balance his Budget in that direction; but he could not find that the indirect taxpayer would be benefited. In his own constituency he could not find a man who said that he would be benefited by the remission of the corn duty. Where, therefore, did the balancing of the Budget come in? As far as his own constituency was concerned there was not a man in it who would have any reason whatever to be grateful to the Chancellor of the Exchequer for repealing this tax. Abroad or at home he wondered where the individual was to be found who would thank his right hon. friend. The only person who would benefit would be the American miller. He, at all events, would have reason to thank the Chancellor of the Exchequer. That, however, was not a fortunate position for the Government, or the Party which supported the Government, or the House of Commons, to be in. He regretted that the subject was not inquired into with a view to discovering whether the small agriculturist would or would not be benefited by the retention of the tax, and how his condition might be improved. He thought the arguments of his right hon. friend the Member for Sleaford would be difficult to upset. This £2,500,000 a year was not felt by the taxpayer, and it would be available revenue at the disposal of the Government for the manifold purposes for which it might be used. Surely, to put that revenue on one side was not a very wise or judicious proceeding. He regretted extremely that revenue which had borne so lightly on the taxpayer, and which might have been so extremely well used, should have been put on one side without sufficient cause or adequate reason, and, for his own part, he would give a fair and square vote against what he believed was an absolute mistake.

MR. WINSTON CHURCHILL (Oldham)

said that the hon. and gallant Gentleman who had just spoken had a great reputation for being a strict disciplinarian. He well remembered a little while ago the hon. and gallant Gentleman at a late hour of the night, when a reply was difficult, pouring the vials of his indignation on hon. Members below the gangway who ventured to discuss the military policy of the Government. In those days the hon. and gallant Gentleman happened to agree with the Government; now the circumstances were different. The hon. and gallant Gentleman had entered a kind of agricultural cave under the leadership of his right hon. friend the Member for Sleaford, the avowed object of which was to oppose the financial policy of the Government; and, if he might use the hon. Gentleman's own words, "to chivy the Chancellor of the Exchequer." What an example the hon. and gallant Gentleman was setting younger Members of the House. How could he expect, when he acted in such a manner, that his influence would be as repressive in the future as it had been in the past. His right hon. friend the Member for Sleaford moved to omit the clause which repealed the duty on corn. Personally, he thought that there were several features in the Budget which ought to commend it to the goodwill of the House of Commons, but there was no feature which, in his view, did more to make it satisfactory than the clause remitting the duty on corn. Although last year he voted for the duty and made a speech in its support, he failed to see the slightest inconsistency in this year supporting the Government in their decision to repeal the tax. Last year, when we were at war, it seemed that any taxation proposed by the Government of the day—whether for the expenses of the war, for the heavy expenditure inseparable from its termination, or to meet the great and growing expenditure which our armaments required—had a complete claim upon the support of the followers of that Government, provided that such taxation fulfilled the necessary conditions of yielding a substantial revenue from a large body of the population. The evident objections to a tax upon grain were not denied by most of those who spoke last year from the Government benches in its support; it was admitted that the tax, in so far as there was no countervailing excise, was technically protective; that it was a tax upon the necessities of life, and therefore on a totally different foundation from taxes upon comforts and luxuries; and that it would fall upon the poor and upon the poorest of the poor. Regret was also expressed that it narrowed the free list by adding so many articles to those on which duties were imposed. But while they admitted all this, they did not perhaps properly anticipate the extraordinary impulse this tax would give to the unhealthy appetites of those who were always endeavouring to take advantage of the necessity for raising revenue to advance the interests of some special class with which they sympathised. He frankly confessed that he would have approached the question with more hesitation had the tax been proposed by any Member of the Government other than the right hon. Gentleman the Member for West Bristol, whose fiscal orthodoxy was so well known, and who was to-day the champion of free trade opinion on the Government benches. But when he remembered that last year the choice lay between this tax and further borrowing, he could not think that the Government acted with any want of courage or honesty in imposing the duty, and if the war had been still in progress, or there had been no prospect of any diminution of expenditure, he agreed that no logical case could have been made out for its repeal this year. But to-day the situation was widely different. As the fortunes of the country became over clouded and expenditure rose, the tide of taxation necessarily advanced. First, the luxuries of the rich, then the comforts of the poor, and, lastly, the necessities of life became affected. One after another, alcohol and tobacco, then tea, then sugar, and finally bread itself, vanished from the free list. But when the war was over, when expenditure was reduced, when the storms had passed away and the waters began to abate, one landmark after another came again into view, and naturally the last to be submerged was the first to reappear.

The remark of the Prime Minister that he had never before known anybody to object to the repeal of a tax was very suggestive, because in a free trade country a remission of taxation was always a matter of universal rejoicing, but the moment taxation began to be imposed preferentially, protectively, or retaliatorily, there was a class of persons who would immediately point out what a wicked thing it was to remove a particular tax, and how detrimental its removal would be to the best interests of the country as a whole. It was perfectly natural that those who profited by a tax should object to its removal. He was not very clear, however, as to whether any class had actually profited by the corn tax. Certainly it was not the object of our taxation that any class should derive profit from it. Our object was to get money to carry on the Government of the country, not to advance the interests of any particular class. If there were classes who had profited by this tax, the country must think itself lucky it had found it out so soon, and the classes who had profited must think themselves lucky it had not been discovered before. It was also natural that the repeal of the tax should be objected to by that large class of gentlemen who were attracted by the idea of a "self-contained Empire," and who thought the tax might have been made a stepping-stone thereto. He did not propose to deal with that subject, because, although it was a matter on which he had hoped to make a few observations, he had been bitterly disappointed in the courage of the hon. Member for the Kirkdale Division of Liverpool. It was natural also that the removal of the tax should be objected to by those who implicitly believed that had it remained a permanent part of our fiscal system it would have brought in a great store of unearned wealth, generously provided by the foreigner. The discussion was probably too far advanced for anyone to change his opinion as to the incidence of the tax. Those who believed that import and export duties if jointly imposed might yield a revenue derived wholly or in part from the labour of the foreigner would doubtless adhere to their opinion to the end of the discussion. He, however, could not share that opinion. Although a temporary gain might sometimes be secured by rapid alterations of the fiscal system, yet the obstruction and dislocation of trade, and the uncertainty and probable disproportion of the ultimate re-adjustment, would in the end destroy more than the slender margin of profit, and the weight of the tax would, he firmly believed, come home, directly or indirectly, to our own people—if they were buyers they would pay in quality, quantity, or price; if they were sellers they would suffer in profit, convenience or reserve power. He had always believed that the corn tax was paid by the people of this country. He was not at all influenced in these views by the statement that only a slight rise in the price of bread had resulted from the tax. [Some HON. MEMBERS dissented.] Nor was he affected by the remarks that there had been no rise at all. The consumer paid just as certainly whether he was mulcted in a certain sum by the imposition of a tax or deprived of a benefit which he would otherwise have enjoyed. Such a small tax as that now being repealed, operating over an enormous market, was not in itself sufficiently powerful to affect the price beyond the limits to which it would otherwise go. Freights on the Atlantic, speculation in America, a night of late frost, or a week of unusual sunshine, might cover the operation of such a small tax. But the way in which the tax affected the consumer was that when prices were fluctuating it accelerated the rise and delayed the fall, so that the consumer was certain to bear the burden eventually. This was not a matter of theory only. If the price had not been affected by the tax, how did the right hon. Gentleman the Member for Sleaford explain the fact that the Treasury had thought it necessary to make more than twenty drawbacks on articles in the manufacture of which flour was used? Or how was it that a deputation of millers had recently waited upon the Chancellor of the Exchequer, bitterly complaining that they had in hand large stocks of duty-paid corn which would now come into competition with corn admitted duty-free, and that consequently they would be serious losers?

It had frequently been stated that the tax was paid out of the profits of the trade, and principally out of the profits of the foreigner. It was still the privilege of England to buy in the world's markets the food needed for her people; she purchased not only from America, but from Russia, the Argentine, Egypt, India, and other countries. All the exchanges of the world were connected by the electric telegraph, and the quotations varied to a sixteenth or even a thirty-second. Into this elaborate and complicated process of higgling the market—which he ventured to think was much more likely to ascertain the true price of the commodity than anything else the wit of man could devise—there came the British Government with a demand for two or three millions of money for purposes quite unconnected with trade, and they were solemnly asked to believe that the true price was not arrived at until the British Government entered into this operation. They were told that the buyers had been paying £2,500,000 more than they needed to have paid before the tax was imposed. He was utterly unable to believe that. He held most strongly that the consumer paid this tax, and if he had not paid it all this year it was only because it was on the way, with the certainty that it would ultimately reach him with the arrears. But this, of course, was no argument against indirect taxation, because indirect taxation did not mean the special taxation of the millers or the shippers or any particular class, and he only referred to the point on account of what had been said by others. Indirect taxation was intended to be paid by the consumer and not by a special class. The hon. and gallant Member had spoken about broadening the basis of taxation, but he wished to point out that to go about the country talking about broadening the basis of taxation, and making arrangements 'by which even the poor would contribute something towards the maintenance of the Empire,' was, entirely opposed to, and incompatible with, the theory that the foreigner pays this tax. But if it was no argument against the tax that the consumer paid it, it was never-less pertinent to inquire on which class of consumer did it fall most heavily. That was a point they must consider. He was told, on very good authority, that the average working man who was married spent 10 per cent. of his income in the purchase of bread. The proportion of income which a working man spent in purchasing bread increased as the ladder of poverty was descended. There was this to be urged against a tax on grain, whether it be small or large, that it fell with increasing force in proportion as people became increasingly poor. Poor people actually consumed more bread when they were unable to pay for more expensive articles.

His right hon. friend the Member for Sleaford stood forward as the farmer's friend, but there was one class of those engaged in the cultivation of the soil whom he thought his right hon. friend had insufficiently considered, and that was the agricultural labourer. Of all the classes of working men no class consumed a larger proportion of bread, or spent a larger proportion of their income upon bread, than the agricultural labourer. The right hon. Gentleman could not say that this class would get a countervailing compensation because of better employment or higher wages, because he had repeatedly told them, and only this after- noon, that a shilling duty, or even a five shilling duty, could not possibly be of real assistance to the farmer, and would not bring an acre of corn into cultivation which had not been cultivated before. Undoubtedly the agricultural labourer would bear a larger proportion of any tax, large or small, than any other class of His Majesty's subjects. Would the agricultural labourer get any countervailing advantage of any kind whatever? Bread was the only commodity at present consumed by the working classes the consumption of which was increased by a tax. My noble friend the Member for Greenwich, in an argument last year which was very much misunderstood and somewhat misrepresented, pointed out that the effect of a tax on bread was not necessarily to make the poor labourer more economical in the consumption of bread, but it made him economise in meat and stimulants, and the deficiency of nourishment had to be made up by the consumption of larger quantities of bread. This tax fell with increasing force upon the very poor. He would not try to prove that the tax had been oppressive, burdensome and cruel. He agreed with the right hon. Gentleman the Member for West Bristol that this tax had not been appreciably distinguishable by the very poor, and that the consumer would not be conscious of any direct or tangible relief when it was taken off. Those who were under the strongest pinch of poverty would not understand that the screw had been relaxed just a little, but what he was concerned to establish was that the incidence of this tax, and taxes like it, was a real and unequal incidence, and that if such a tax were to be multiplied two, three, four, five, six, seven, or eight times—and they had no security that this might not be the case—its incidence would be cruel and burdensome, and most severe and detrimental to the well-being of the kingdom. He particularly rejoiced that the right hon. Gentleman had found it possible to take off the tax from the point of view of a Lancashire Member, because anything which tended to increase the cost of living in Lancashire struck a very great blow at the cotton industry, because the export trade in cotton catered for very poor people abroad, and cheapness of production was almost vital to the prosperity of the cotton trade. He had often felt how great was the responsibility devolving upon the rulers of this country when he had travelled through Lancashire, and had seen what a vast number of people were gathered together upon a soil so utterly inadequate to sustain them. What was it that a Minister could give to Lancashire, which sent nearly forty Unionist Members to support the Government, to compensate Lancashire for the cheap and abundant food supply which it at present enjoyed?

They had been told that a tax of one shilling produced £2,500,000, and that they could easily raise the tax instead of having to depend almost entirely upon the income tax, and it was urged that such a tax constituted a reserve in time of war. That was a point which ought to appeal to the right hon. Gentleman the Member for Sleaford, who had very properly interested himself in the question of our food supply. The very first thing that would happen in case of a war with a country which possessed any kind of a navy would be a rise in freights, and consequently a rise in the price of food. The enemy would try to stop getting to this country cheaply, and that was a natural thing for an enemy to do during the operation of war. Was it conceivable that any Government in time of war could possibly impose a tax which would raise the price of food? Why, this tax which they were told was to be such a great reserve to enable them to raise an immense revenue over the whole area of the population would be the very first tax which any Government would have to take off. One would think to hear people talk that the market in England was a matter of no consequence to the people of the United States, and that they were conferring a favour upon us by sending their corn to this country. That was not the way a shopkeeper treated his best customers. If it was important to us to import large quantities of corn from America, our trade was scarcely less important to the people of the United States than to ourselves. He had always thought that it ought to be the main end of English statecraft over a long period of years to cultivate good relations with the United States, and he believed that his hon. and gallant friend the Member for Fareham, who had been in such a hurry to worship the golden calf, did not differ from him in thinking that the friendship of America should be their main aim and they should not allow themselves to be turned from that purpose by gusts of ill humour or bad manners. But surely this great material point was worth considering. In times of peace it was an additional security and in times of war what greater security could they have for the food supply across the Atlantic. This was a point which the Prime Minister himself had recognised—and he was a great free trader out of school hours. What greater security could they have for their food supply in time of war than that the United States should be vitally interested in the preservation of an open English market, and that that should be a matter of supreme consequence to the farmers of the Western States? To recapitulate the arguments which induced him to vote against the Motion of his right hon. friend he would say that as a reserve in time of war this tax would prove a broken reed. That the tax benefited the farmer had been denied by the farmers' friends, and the argument that it was paid by the foreigner was a profound illusion; and as a permanent addition to the revenue it seemed to him to be unsatisfactory in view of the determination of the Party opposite to remove it upon the very first opportunity. The repeal of this tax was proposed by the Chancellor of the Exchequer upon the recommendations of his financial advisers. Its repeal was decided upon by the Cabinet and their decision had been ratified by the House of Commons by an overwhelming majority. This tax was a storm signal marking troublous times and lavish and lamentable expenditure. It was now departing from the House of Commons never, he hoped, to return in the lifetime even of the youngest hon. Member. Let them hope besides that it would carry away with it those unhealthy appetites for privilege, preference, and protection which boded so ill for the continued prosperity of their country.

*MR. JAMES HOPE (Sheffield, Brightside)

said that a question had been asked by the opponents of the duty. Granting, they said, that the tax did not fall on the consumer, at what point of increase would it fall on the consumer? The question whether it fell on the producer or the consumer depended on two factors—the margin of profit of the producers and the keenness of the competition among the producers. Suppose a new tax was put upon any commodity which reduced the profit of the producer from 10 to 5 per cent. If the producer were a monopolist he would put up his price, and in that case the consumer paid the whole; but if he was not a monopolist, and was subject to severe competition, he would reduce the price, and as long as he still sold the article he would bear the burden of the tax and the consumer would get off scot free. Of course the point would come at which it would no longer be profitable for the weak producer to produce at all, and at that point he would retire out of the competition. Then the supply would be lessened, and then, and not until that point was reached, the burden would begin to fall on the consumer. But to ask for a general rule as to exactly when that point would be reached was just as easy as to ask for a rule at what point any other tax would be productive or non-productive. It was a question that could only be answered by arriving at the real facts of the case. Regarding the question of fact, both the late Chancellor of the Exchequer and his predecessor emphatically declared that this tax would not fall on the consumer. It was true that last year when the tax was put on he had a number of protests against it being put on. This year before the Budget came on, though he had representations with regard to the sugar duty, he had no single representation that the corn tax was burdensome and ought to be repealed. He was afraid that next year the Chancellor of the Exchequer would find himself either in need of fresh revenues, or in need of making drastic economies. The uniform practice had been not to economise by looking into the old expenditure and seeing what could be dispensed with, but by refusing new demands. In that way the public service undoubtedly would be weakened There were, however, in the minds of hon. Members larger proposals which he was not allowed to refer to. Whether those were good or bad they ought not to be prejudged. He expected what the noble Lord the Member for Greenwich wanted was not discussion but prejudgment on insufficient data. He regretted that any semblance of prejudgment of the question should be given to the world by the bringing forward of this Amendment, and the right hon. Gentleman the Member for Sleaford would have done better had he reserved his strength and waited for broader issues in a wider field.

LORD WILLOUGHBY DE ERESBY (Lincolnshire, Horncastle)

said that when he was listening to the speech of the hon. Member for Oldham he wondered why he did not deliver that speech last year. He had the pleasure of hearing the speech last year in which the hon. Member argued strongly in support of the tax which he was now so pleased was to be removed. The hon. Member's argument now was that he was not opposed to the tax last year because the war was going on, but that this year he thought it an excellent thing to remove because the war was over. He was now in the position of the Chancellor of the Exchequer and a large number of other Gentlemen on this side of the House who spoke and voted last year in favour of the tax being permanent. Personally, the hon. Member for Oldham might have his own idea of consistency; and perhaps his constituency had ideas of consistency as well, but for his own part he should feel ashamed if, having spoken in favour of the tax being permanent, he now came back and voted exactly the opposite way. There might be certain things which politicians did not value highly, but after all he thought that one thing a politician might value was his self-respect. He felt himself that having strongly supported this tax it would be an inconsistent thing to turn round and say that it was an utterly bad tax which should be immediately abolished. The hon. Member for Oldham—he did not think he was on very safe ground, especially in view of the speech he delivered last year—tried to point out that this tax fell on the consumer, and then in the next passage he endeavoured to correct himself, no doubt thinking of his speech of last session. Those who opposed the repeal of the tax always had held that, although there might be certain cases in which this tax might fall on the consumer, by lessening the duty on tea or sugar far greater relief would be given to the consumer than by abolishing the shilling duty on corn. He, personally, had always considered this corn tax a good tax, and he had no intention of voting for its repeal. It was a good tax because it was easy to collect, it did no injury to trade, it broadened the basis of taxation, and it brought in £2,500,000 of revenue which fell, he believed, very lightly, if at all, on the consumer. He believed that almost always in introducing a Budget every Chancellor of the Exchequer informed the House that the revenue derived from a tax was less and less in proportion to the way in which it was felt, and consequently new subjects of taxation would bring in far greater revenue to the country. He might be permitted to heartily congratulate the right hon. Gentleman the Member for Sleaford for pointing out to the House that they opposed the repeal of this tax on financial grounds. He did not think that in the whole of his speech the right hon. Gentleman ever departed from the argument that the step the Chancellor of the Exchequer was taking this year was economically unsound.

There was one point connected with this tax which he did not believe had been brought out in the course of the debates this session. He would admit for a moment the whole of the contention of hon. Members opposite—he did not know whether it was the contention of the hon. Member for Oldham—that the whole tax fell on the consumer. What was the state of the case? If it did fall on the consumer it brought at present £2,500,000 to the revenue, and that was not all charged against breadstuffs, but on other articles which came into the country. Breadstuffs only bore £1,250,000, so that each person only paid 7½d. a year. That was not a very excessive charge, even if the whole of the tax fell on the consumer. He believed that they would sooner pay that tax when they knew that it was going to benefit somebody in this country than pay a higher price for their tea and sugar, which benefited nobody in this country. The Chancellor of the Exchequer had said as an excuse for taking off the tax that it was liable to misrepresentation. A weaker argument he had never heard before in the House of Commons. Speaking for himself, he was not afraid of misrepresentation. It fact it rather did one good at times. He believed that if the Chancellor of the Exchequer was afraid of losing his seat by being misrepresented on account of this corn tax, his fears were entirely groundless. Anybody could surely show to his constituents that this charge was not a very heavy one on the consumer or on the poorest of the poor. He had often listened to debates in the House, and had noticed that the speeches which were received with the greatest cheering were those of hon. Gentlemen like the Member for Exeter, or the hon. Member for Whitby, who rose in their places and spoke in favour of economy, deplored the enormous expenditure of the country, and insisted that it was high time we turned over a new leaf. He did not say that these hon. Gentlemen did not practice what they preached. He himself had taken part in several contested elections, and he noticed that as the fight got hotter and the question got closer as to what Party was to triumph, pressure was brought to bear on the candidates to support this, that, or the other project, which invariably meant increased national expenditure. There might be demands for increased pay to the postmen, or higher wages for the dockyard employees, or for old-age pensions, or for education, or compensation to publicans, or a hundred other matters which cost money; and he was afraid the candidate's cry for economy then went down the wind. Under these circumstances he could quite understand that these pious sentiments by financial purists which had been received with cheers in the House should dissipate in a closely contested election. The guardians of the public purse had a very easy remedy.

*THE CHAIRMAN

Order, order! The noble Lord must remember that at present we are not discussing the general question of expenditure, but the corn tax.

LORD WILLOUGHBY DE ERESBY

said he was sorry he was transgressing, but only wanted to point out that the corn tax was a good tax, had produced £2,500,000 a year of revenue, was felt as oppressive by nobody, and that it was a great pity to abolish it on the present occasion. He was perfectly certain that the time would not be far distant when the loss of that £2,500,000 would be very much felt. The right hon. Member for Wolverhampton had said that he would not have had the same objection which he had to the shilling duty on corn if there were an excise duty on the home-grown corn. But, after all, did not such an excise duty on home-grown corn exist at the present moment? And it was that which made many of them feel very sore at the abolition of the corn tax. The rates paid by agricultural land took the place of the corn duty. He could not discuss the incidence of the agricultural rates, or whether the landlord or the tenant paid them ultimately. But at all events it was the corn, or wheat, or meat raised on the land which paid the rates. Take the case of an acre which grew four quarters of corn. On that acre 2s. were paid as rates, which was equal to a tax of 6d. per quarter. He considered that that was an excise duty which the farmers at the present time paid, and they considered it a very heavy one indeed. The right hon. Gentleman, the Leader of the Government, said the other day that the reason for dispensing with this tax was that the money was not wanted. He had a suggestion to throw out to the right hon. Gentleman. A new Education Act had come into force, and the education rate was paid by the corn and meat produced in the country. He asked the right hon. Gentleman, even at the last moment, whether he would not retain the corn duty, and give a portion or the whole of it for the education of the people? Another argument for the repeal of the tax was that owing to the duty on flour a certain encouragement had been given to the milling industry of the country. That was an extraordinary reason. Because a few more mills were set a going; because a few hundred more people were given employment, because more offals were produced for the feeding of cattle and other stock, therefore, the tax was to be abolished! All who wished to follow the line which they had adopted in the past, all who had self-respect in regard to principle in this matter, all who had in view the economic state of the country were to vote for the repeal of a tax which yielded a revenue of £2,500,000, and would bring no relief to the consumer! He would vote for the Amendment.

*MR. RITCHIE

said he had dealt at length with this corn tax on the Second Reading of the Finance Bill, and he did not think it would be necessary for him to go very minutely into the questions raised by the various speakers. His right hon. friend the Member for Sleaford commenced his speech by saying that he had always regarded the proposal to abolish the corn tax, not from a protectionist but from a financial point of view. When this question was under discussion at a previous stage he ventured to say that his right hon. friend had advocated the retention of the tax from a different point of view than that of finance. He remembered reading a speech in which the right hon. Member for Sleaford said that one of the effects which he expected from the tax was that it would bring thousands of people back to the land. His right hon. friend denied that he had ever used any language that justified him in making that statement. He had not the report with him at the time, but he had now provided himself with the speech which was made at Lincoln and contained the following passage— We have heard from every part of England and by every post concerning how enormous would be the benefits accruing from the retention of the duty on corn. It would have the effect of providing work and wages for tens of thousands, and bringing back the people to the land.

MR. CHAPLIN

said that he must have been misreported. He never could for a moment have imagined that the imposition of a shilling duty on corn would bring back thousands of people to the land. What he did say was that the duty on flour had resulted in the investment of thousands of pounds of capital in the milling industry and the employment of hundreds of people.

*MR. RITCHIE

said he was glad he had given the opportunity to the right hon. Gentleman to correct the mis-report. He accepted at once the statement of the right hon. Gentleman that he did not use the language he was reported in The Times to have used. The right hon. Gentleman said that he had never supported the tax as a protectionist. Neither had he himself ever given any reason of the kind; he did not believe that it was protective in its incidence. The price of corn grown at home had not, in fact, risen; and one of his strongest arguments for abolishing the tax was that the farmers who expected to get some advantage from the imposition of the tax had actually suffered from it. When this matter was dealt with during the Second Reading debate he quoted a paragraph from a letter he had received from a Farmers' Association at Bolton to the effect that the farmers in that district actually suffered, in their view, from the imposition of the tax. He had also received from the Somerset Dairy Farmers' Association the following unanimous resolution— This Association humbly petition the Chancellor of the Exchequer to consider the tax on imported feeding stuffs that was imposed as a war tax, and pray for its remission now that the war is over, as the tax presses very heavily upon this, a dairy farming county. His right hon. friend had said that one of the advantages which farmers had derived from the imposition of this tax had been that they had been enabled to purchase feeding stuffs more cheaply, and he had alleged that the price of offals had fallen considerably. He had dealt with that question at some length on the Second Reading of the Bill, and showed conclusively that the small additional quantities; of offal that were available in this country could not be compared with the enormous quantity of feeding stuffs that were imported, and that the tax could not have the result which his hon. friend claimed for it. He had received a further letter from the Bolton Association of Dairy Farmers, which stated— Mr. Chaplin and his friends are never tired of informing the farmers that, owing to the slight preference given to the English millers, more flour has been produced, and consequently more offal has been thrown on the market, and at a reduced price. I am a fairly large user myself. I have also inquired from the principal dealers in the district, and we all affirm that the prices are practically the same as they were twelve months ago. In fact, if anything they are a fraction higher. He had a considerable amount of information in the same direction. The Yorkshire Agricultural Society's Journal, dealing with the figures to the close of 1902, said— The tax upon corn and feeding stuffs has, up to now, been decidedly against the farmer.… Feeding stuffs areas a rule £1 per ton dearer. The London Corn Circular for 18th May, 1903 said— On grain for feeding purposes the tax has been paid by the British Stock Farmer, who is admitted to be severely handicapped. That British agricultural interests have been in any way benefited is absolutely disproved by the fact that the price of wheat has declined from 5 per cent. to 10 per cent. since the imposition of the duty. He contended, therefore, that his right hon. friend, in assuming that this tax had in any way benefited the British farmers, was maintaining a position which was not justified by the facts of the case.

It had been said that no one who bought his own flour had suffered, and that flour had not been dearer since the tax than before it was imposed. The price of Minnesota first bakers' flour on 6th April, 1902, was 17s. 9d.; on 8th June, 1903, it was 21s., duty included, per sack of 280 lb. Therefore, that flour had increased by 3s. 3d. per sack of 280 lb. That conclusively proved that the wholesale price of flour had advanced far more than would be justified by the amount of duty which had been imposed upon it. He had in his hand a striking illustration of the fact that the price of flour for baking purposes had increased. Last year the Prisons Commissioners had to come to this House for a supplementary Vote of £12,000, and he was informed that a considerable part of that Vote was due to the additional price which they had to pay for articles affected by this tax. It was quite conceivable that a tax of this kind was not immediately felt, but for any one to tell him that a 4 or 5 per cent. tax upon an article of consumption like this would not ultimately come upon the consumer was to tell him that which he could not by any possibility believe. His hon. friend said that the American millers were the people who were delighted with the taking off of this tax, and that the English millers were the people who did not like its being taken off. Why did not the English millers like its being taken off? It had been said that the difference between the tax on corn and the tax on flour was not protection. If it was not protection, in what way did it benefit the British miller? Then, again, why should the American exporter of flour object to the tax? He had not sent less flour because of the tax, and he had got a much higher price than was justified by the tax. He contended, as he had always contended, that the British farmer lost by this tax. Instead of paying a lower price for his offal in consequence of this tax, he had to pay a higher price for his feeding stuffs, and it would take a good deal to persuade him that the tax of £600,000, which was at present levied upon imported feeding stuffs, and which was now to be taken off, was not a tax which did harm to the farmer, or that its abolition would not do good to the farmer. In his opinion, the consumer paid in one way or another. He could not add anything to the speech of his hon. friend the Member for Oldham on this point.

Although this tax of £2,500,000 was undoubtedly in a sense a broadening of taxation, it could not be called in the best sense broadening of taxation if it fell upon exactly the same class of taxpayers. It was admitted that the tax upon tea fell very largely upon the general consumer, and very largely upon the poor. And so did the corn tax. It had been alleged by hon. Gentlemen that the tax upon corn had not raised the price of bread, and therefore to take the tax off corn would not lower the price of bread During the greater part of the year the wholesale price of tea, notwithstanding the 2d. duty, had been only a halfpenny per pound dearer than it was before the war. The wholesale price of flour had been raised far more than the duty. Therefore it might fairly be contended that to take the tax off tea would not be nearly so beneficial to the poor as to take off the tax on corn. It was right, while remitting a large amount of direct taxation, that they should also remit a portion of indirect taxation, and, after considering carefully which of the articles of consumption they should take for remission, he was perfectly certain that they came to the right conclusion in selecting corn. It had been stated over and over again that the Government had proposed the remission of this tax because they were of opinion that it was capable of misrepresentation. He never used that as an argument. His argument was that the tax pressed most heavily on the very poor, and therefore he proposed to take it off. He did say, incidentally, what must be acknowledged to be true by everybody, that a duty on corn, however slight it might be, was a tax which was very capable of misrepresentation. He made no apology whatever, for having used that term, but he merely wished to say that he never used it as the argument which led him to recommend his colleagues to take off this tax. He would not enter into any of the larger questions which had been adverted to by some of his hon. friends. It was sufficient for him to say that this tax was proposed to be taken off in the Budget upon his recommendation and advice to his colleagues, and it was agreed to unanimously by his colleagues. He hoped the Committee, in coming to a decision on this question, would show clearly that in their opinion the Government had done right in remitting a tax which, as his hon. friend the Member for Oldham had shown, pressed most heavily on those who were most poor. It was the last tax imposed before the conclusion of the war, so it ought to be the first tax taken off now the war was over.

MR. MIDDLEMORE (Birmingham, N.)

said he took it from the cheers that had been given that hon. Gentlemen opposite entirely concurred in the remarks the right hon. Gentleman had made, and would rightly welcome him if he were to cross the floor of the House and join them. He unfortunately had not been able to hear the first half of the speech of the hon. Member for Oldham, but judging from what he heard it must have been a most powerful speech. That speech also was greeted with hearty cheers from the Opposition, and the Opposition only, of which he perhaps had no reason to complain, because he in his humble way had at times drawn cheers from hon. Gentlemen opposite. The hon. Member for Oldham had said that bread was the staple food of the poorest of the poor. On this he was sure the hon. Gentleman did not speak with experience equivalent to that which he himself possessed. In his daily intercourse with the poorest of the poor in the common lodging-houses, he had found that they, more than any other class, ate herrings and bacon, and that bread was not so important an article in their diet as it was in the diet of those who were not so poor. Was it too late to ask the Government to reconsider their position in regard to this tax? At a similar stage in the Education Bill recently they recast that measure, and there were reasons at least as cogent for asking the Government to recast the present measure, but that he knew it would be useless to ask for. He protested against this policy of playing shuttlecock and battledore with the financial policy, undoing one year what had been done in the previous year. It was undignified; it would break up the Unionist Party; some of the arguments in its favour had been pure nonsense; and it would alienate most of the supporters of the Government who valued consistency. This tax was imposed after long debate, after many appeals to political economy, after almost passionate demonstrations from the Front Government benches that the policy of free trade was in no way violated. This tax was imposed as a permanent tax, and it could not be withdrawn without dealing the Unionist Party a blow still more heavy than the blow dealt in the Education Bill. It was like a blow in the wind followed by another in the same spot by the same fist. They were puzzled. They did not know what they were to fight for in the future. They did not know what they were to speak for in the future except a fetish which, whatever might be said to the contrary, the late Chancellor of the Exchequer had discarded, and the present Chancellor of the Exchequer had refound. The noble Lord the Member for Greenwich and many people, both inside the House and out of it, would seem to have raised this doctrine of the unconditioned import of goods into this country to the level of a religion.

*THE CHAIRMAN

said the hon. Member was not entitled to go into the general subject on this occasion, but must confine himself strictly to the matter contained in the first clause.

MR. MIDDLEMORE

said in that cast he would drop the general question of free trade and would simply say that, for the sake of the repeal of this corn tax, there were people in England who would sacrifice everything we had; who would see the people, alienated from the soil from which they had sprung, the restoration of whose manhood and womanhood depended upon their being restored to the soil. The Chancellor of the Exchequer seemed to him to have shown a grave hiatus in his personality, and had shown a great lack of sense of humour. It was better to be non-existent altogether than to be so partially existent as to exist without any sense of humour at all. If the right hon. Gentleman had had any sense of humour at all, even of the burlesque kind, he would have seen the plight to which he was reducing his followers; he would have seen the absurdity of asking them to repudiate all the principles which they had been relying on when making their speeches in regard to this tax, and which they understood were shared by him; he would have understood the absurdity of asking them to appear naked before their constituents, denuded of every rag of principle which they had been proclaiming from the housetops; he would have seen the absurdity of 400 or 500 gentlemen of England falling down on their hands and eating the leek he presented to them. It was a sorry sight, but the sorryness of the sight was swallowed up in the infinite absurdity of the Chancellor of the Exchequer. Fancy the right hon. Gentleman stripping them of all their principles; fancy him doing it to those on whom the life of the Government depended, and whose life depended on the Government. What a perfect comedy of errors! What an absurdity for millions of people to laugh at! What transcendental and ludicrous absurdity, and all propounded by the Chancellor of the Exchequer with a grave face and a long-drawn visage, who saw no fun whatever in the screaming farce of which he was the author. The absurdity and ignominy of their present position was seen if they compared it with their position of last year—a position which had been scientifically defined by the hon. Member for the Blackfriars Division of Glasgow. That hon. Member had argued that the supply of corn on which this country depended would not be restricted by this tax, and that, consequently, the price would not be raised. Experience had demonstrated the truth of both those propositions. It was known, also, that corn freights had been reduced in America to meet the tax, that a portion of the burden, at any rate, was borne by the foreigner, and that the duty producing a revenue last year of £2,500,000, was now being absolutely thrown away. The revenue derived from this tax might have provided a great system of higher education—not much longed for, he feared, on that side of the House; or it might have established a great Imperial University, with postgraduate courses, which would have bound the higher life of the colonies with the higher life of England. [An HON. MEMBER: Old-age pensions.] He was keener on the revitalisation of England than on supplying crutches for the decaying life. What had Lord Goschen said recently?

*THE CHAIRMAN

reminded the hon. Member that he was not entitled to reply to the debates in another place.

MR. MIDDLEMORE

said he desired not to reply to, but to endorse and embrace two declarations of Lord Goschen—viz., that the tax would not enhance the price of bread, and that there were circumstances with which it would be perfectly right to deal in a protectionist sense. As to the relations; of Members to their constitutents, he had found that supporters were very generous to Members who dealt fairly straight with them; they would make every allowance for vagaries, for egotistical independence, and "kicking over the traces," but they did not like pulpiness, emasculation, ignorance of one's own mind, or the abandonment of a position which had been strenuously defended and declared to be impregnable. Nor would they like the shifty policy of the Chancellor of the Exchequer or the passive obedience of his followers, some of whom were ready to lie down like tame wethers and let the right hon. Gentleman shear them. Constituents liked to see some elements of leadership in their leaders, but what elements of leadership could be found in the right hon. Gentleman? What remained for Members on the Government side to do? They had either to sit down quietly or stand up and explain away their previous speeches. They had got to tell their constituents that they did not mean that which they really did mean, that they were not in the future to be taken seriously, that their principles were reversible, and that the chief end of their political life was to be sufficiently flexible to adapt themselves with lightning rapidity to every condition of political affairs. He would be out of order in concluding as he had desired to conclude, but he would say that the physical degeneration of the people had been coincident with the doctrine of the unconditioned Import of food—

*THE CHAIRMAN

said he had already pointed out that the general question of the unconditioned import of food was not the question before the Committee. The hon. Member had been warned twice, and he must ask him to obey his ruling.

MR. MIDDLEMORE

assured the right hon. Gentleman that he had been warned only once.

*THE CHAIRMAN

The hon. Member should be more respectful to the Chair.

MR. MIDDLEMORE

said he wished to be both respectful and pertinent; he had honestly tried, and would continue to try to be both. If he had said anything disrespectful to the Chair he deeply regretted it, and would immediately withdraw it. He desired to say in conclusion that he would have to vote against the Government, but he hoped that at a future day, after the elections, they would meet on happier terms, though he was afraid it would be on the other side of the House.

SIR HARRY SETON-KARR (St. Helens)

agreed with the hon. Member for North Birmingham that there were elements in the situation entirely devoid of humour. He certainly did not like being one of a small minority of twenty-eight, whom he believed to be absolutely in the right, but his convictions were so strong that he would vote against the repeal of this duty, even though he and the right hon. Gentleman the Member for the Sleaford Division were alone in so doing. If the Chancellor of the Exchequer believed the tax was such a bad one, that it was paid by the consumer, and that it ought to be repealed, how came he to be a member of the Government which last year imposed the duty with the object of permanently broadening the basis of taxation? He was absolutely unable to reconcile the position of the right hon. Gentleman last year with his present attitude. His main object in rising was to allude to one point made by his hon. friend the Member for Oldham in the very able speech which he addressed to the House. He pointed out how this tax might or might not affect their food supplies from across the Atlantic. Last year the amount of breadstuffs imported into this country from the United States was just about one-half of their whole consumption, or, in other words, half of their daily bread came from the United States. He thought there was a great element of danger in that, because it meant that if anything interfered with their food supply from the United States they would run the danger of starvation in this country. If the United States exported such a very large amount of breadstuffs to this country, surely, whatever tax was imposed upon corn, they would be willing to pay that duty in order to have the freedom of our markets. In regard to this tax he thought it was absolutely certain that they had paid their share of the corn duty, and no matter how ingenious the arguments of the Chancellor of the Exchequer and the hon. Member for Oldham might be, it was a fact that the price of bread had not gone up in consequence of the tax. In the face of these facts, it was impossible to prove that the consumer had paid the tax. The British market was so important to the United States, that it was absolutely necessary for them to send their commodities to this country, and he believed that they would be willing to pay a higher tax if necessary. They had, by this tax, an opportunity of making the United States contribute to our revenue for the privilege of enjoying the freedom of our market.

It was said that the time was not far distant when the United States would not be able to export so much grain to this country, because the soil was being exhausted by successive wheat crops, and the result would be that the United States of America would probably require the food supplies produced there for domestic use in their own country. But along the borders of the United States for 3,000 miles was one of their most important colonies, which he thought in the past they had treated very badly. Canada had a magnificent wheat area, comprising about 150,000,000 acres of land, and in this tax he saw a splendid opportunity to encourage the cultivation of wheat, which would enable Canada to become the granary of this country. That was why he was so much opposed to the repeal of this tax. Some day the position of affairs would be changed, and America would be using her own supply, and this was an opportunity for accelerating wheat production in Canada. They might have kept this duty on American corn and reduced it in favour of Canadian corn. That would have encouraged the cultivation of Canadian wheat. He was afraid it was too late to move the Government upon this question, but in the last hour he thought they might have left this duty on foreign corn in order to give a preference to colonial corn. By this very simple method they might have encouraged good feeling between this country and the great colony of Canada, which in the past they had neglected, and to some extent ignored. For those reasons he should vote against the repeal of this tax. He entirely differed from his hon. friend the Member for Oldham in what he said about Lancashire feeling. He knew something about Lancashire people, for they were practical men, and they declared that they had not felt this tax. He was not going down to his constituents to try to make them believe that a tax which was imposed for the purpose of broadening the basis of taxation in one year was the right tax to repeal the next year. He believed the hon. Member for Oldham would find the feeling of Lancashire against him upon this point.

MR. CHARLES MCARTHUR (Liverpool, Exchange)

said he did not know how far his hon. friend was to be taken seriously. He did not think the Chancellor of the Exchequer could be accused of inconsistency in maintaining his opinion on this question. He wished to address one or two observations to the Committee upon this tax as to its incidence in the past, because that was the turning-point of the whole discussion. They had been frequently told that this tax was paid entirely by the foreigner. If that were so it appeared to him to be a most foolish thing to repeal a tax which did not fall upon the people of this country, but which was paid by the foreigner. Upon the other hand they had been told that this tax fell almost solely upon the consumer. But what had been the real incidence of this tax? Had it fallen mainly upon the foreigner or upon the consumer? He did not profess himself to be an authority upon this question, but he had endeavoured to make himself acquainted with the view of commercial men in Liverpool who were practically acquainted with the question, and he would read the reply to certain questions he had put to the Directors of the Corn Trade Association of Liverpool. The President of that Association replied as follows— After careful consideration of the points in reference to the Corn Duty upon which you desire information, I was requested to reply:

1. "'(1) That the imposition of the duty last year created considerable disturbance to our trade.
2. "'(2) That the fear that it might be repealed without notice caused great anxiety which threatened to seriously curtail the volume of business.
132
3. "'(3) That its repeal has lead to further trouble and confusion.

'The repeal of the duty is viewed with feelings of great relief, and it is sincerely hoped that the trade may never again be troubled with it.' As to who this tax was paid by he asked them had it been paid by the foreign exporter, by the shipowner in the shape of reduced freights, by the milling merchants, the baker or the consumer. Their reply was— With regard to your other question I am to say that the Directors are of opinion that no part of the duty was borne by the foreign exporter, the shipowner or the merchant. A small part of the tax was borne by the baker, but the main burden fell upon the consumer. He was not quite satisfied with that reply, because it did not appear sufficiently explicit, and he asked them if it fell upon the consumer, how had it fallen upon him and had it fallen upon him in the shape of an increase in the price of bread or in what way? They replied as follows— When the tax was first imposed the merchant and the miller were unable to recover the full increased price from the small dealers, bakers and others, and consequently they had to bear the loss. But after a short time, when price could be properly adjusted, the full duty was added to the price of wheat and flour. In many places the bakers increased the price of bread by ½d. per 4 lbs., and so recovered four times as much as the tax; but in large cities like Liverpool, where competition among bakers is necessarily keen, this could not generally be done, but, to some extent, the quality was lowered, and later when the price of flour was further increased from ordinary market causes the baker was able to advance the price of his bread. He took it that this was correct, coming from persons who did a large trade in corn in this country. He had received letters confirming this position, among others, one from the hon. Secretary of the Liverpool Millers Association. In that letter this gentleman said— The idea that any portion of the tax was paid by the foreign grower or exporter is now entirely given up. When England was almost the only buyer of foreign wheat this might have been the case, but the increase in the importation of foreign grain to the Continent, namely, Italy, Germany, Holland, and Belgium, has, during the last few years, been enormous, until now the Continent is a much larger importer than the United Kingdom, especially during the last twelve months the shipments of foreign grain to the Continent since 1st August last, being 27,000,000 quarters and to the United Kingdom 22,000,000 quarters. He ventured to say that the facts and figures he had quoted fully substantiated the position taken up by the Chancellor of the Exchequer. He believed that the trade was not entirely unanimous on the point. He might say that the London Corn Trade Association did not entirely take this view. They said that some part of the duty had been recovered from the foreign importer. His own opinion was that in the main this duty had been borne by the consumer, and in view of the great interest attaching to any tax on corn, the mainstay of the life of the people, and in view of the fact that any increase in the price of food must impair the vitality of our people and sap the foundation of our trade, he heartily concurred in the removal of this tax, and trusted it would never be reimposed.

MR. DAVID MACIVER (Liverpool, Kirkdale)

said the very effective speech of his hon. friend on his left, the Member for the Exchange Division, would be somewhat impaired when he told the Committee he also had made similar inquiries from the same people with entirely opposite results. He thought the right person to consult was the President of the Liverpool Corn Trade Association in regard to this tax. He wrote to him on the subject, and held his letter in his hand. [Cries of "Date."] The date was the 7th May, 1903.

MR. CHARLES MCARTHUR

My letter is dated the 19th June, 1903.

MR. DAVID MACIVER

said he would like his hon. friend to supplement that by telling the Committee what were the politics of the Gentleman who had written his letter. He did not know the politics of the Gentleman who had written his own. His correspondent said— The tax of 5s. per ton is so small as to be scarcely felt. Five shillings a ton on wheat is 2¾d. per 100 lbs., or cental (the measure by which we sell in Liverpool), equal to 1s. per sack of 280 lbs. of flour. We importers did not feel it, nor the dealer either. It was so small that one in the general grain trade did not perceive it. But the baker did, and for this reason. It requires a rise of 4s. per sack on flour (i.e. 1s. per 100 lbs. on wheat) to be a ½d. on the quartern loaf. Now, during the year that the tax has been on, the price has never advanced to more than 2s. per sack—too little to find its way to the 4lb. loaf and the consumer. The duty has nothing to do with a rise or fall in the market. That fluctuation is caused by the great law of supply and demand. It caused great dislocation when it was imposed, and it is causing more now in the manner of taking it off. The Americans did reduce their freight charges for a while, but it did not affect us. American flour does not make the price of flour here. Prices are rather dearer now than a year ago. But this is not to be attributed to the duty, but rather to supply and demand and to the many cross-currents and wheels within wheels impossible to describe to those outside the trade. He was not an outsider, and he knew that that was correct. He knew that what really did affect the price, notwithstanding what his hon. friend had said, was the great law of supply and demand. When the United States or any other country had a large crop, and was obliged to sell it in a limited market, which was the case generally in the United States, the duty fell upon the man most anxious to do the trade, the man anxious to sell. If this country was very anxious to get wheat, and had no other source of supply, they would have to pay the duty. It was a fact that as regarded wheat, or any other article, the duty was borne, not necessarily by the consumer or producer, but by the man most anxious to get the trade. Where the seller was obliged to sell, the seller would pay the duty; where the buyer was obliged to buy, the buyer would pay the duty; where it is something between the two the duty will be adjusted between them. The hon. Member for St. Helens somewhat exaggerated the importance of the United States supply; he forgot such countries as Russia and the Argentine.

SIR HARRY SETON-KARR

Is the hon. Member aware that Russia has sent us hardly any wheat for the last two years?

MR. DAVID MACIVER

said he would rather confine his observations to the Argentine. A gentleman who knew more about Argentine products than probably anybody else said to him some years ago that he did not know why this country did not tax meat and grain importations, and that that would be better for the Argentine, because they were better able to pay the tax, owing to the good profits of farming, than others were. That gentleman was specially referring to the United States of America. The time was coming when the United States could not send this country so much as she did at present. He had no hesitation in saying that he did not approve of the Chancellor of the Exchequer's proposal. What he had to tell his constituents was that the withdrawal of those grain duties had simply thrown away £2,500,000, which would have to be provided from some other source which they would feel. He did not know how the hon. Member for the Exchange Division was going to get over it, but he would explain that if this tax was repealed they were none of them a halfpenny the better, and that they paid the same for their bread as before. It had not given them old-age pensions and half-a-dozen other things which the Government might have given if they had not thrown away the money. Something ought to be done with respect to the coal duty, for instance. He utterly differed from the Prime Minister in the view that they did not want the money. He did not wish to say anything unkind of the Chancellor of the Exchequer, but if ever he wanted another constituency he had better not go to Liverpool. He was the one member of the Government who was most out of favour with the entire shipping community all over the country. The shilling duty on grain ought to be kept because, amongst other things, it would enable the light dues to be abolished. At present they were protecting foreign ports as against British ports. He had listened with interest to the speech of the hon. Member for Oldham. He knew his father, Lord Randolph Churchill, before the hon. Member for Oldham was born, and he knew his father's views upon that subject The hon. Member for Oldham respected his father's memory, and if he had known what his father thought of that question—

LORD HUGH CECIL

What question?

MR. DAVID MACIVER

And what the noble Lord's father thought of it, his views might be different. The late Lord Randolph Churchill's views were absolutely in accord, not only with the maintenance of that tax, but with the larger question which the Colonial Secretary had introduced.

*THE CHAIRMAN

These references are really not relevant to this matter. Some other time the hon. Gentleman might introduce this.

MR. DAVID MACIVER

said he would not press the matter further except to say that he believed a much larger number of hon. Members sympathised with the views of those who opposed the repeal of the duty than was generally supposed. He would go into the lobby in support of his right hon. friend.

SIR H. CAMPBELL-BANNERMAN (Stirling Burghs)

said they must all sympathise with the hon. Gentleman, who was evidently suffering from being overburdened by the possession of a vast amount of information as to the opinions of other people, which no doubt it would be very instructive for the House to know, but which he was unable to communicate to the Committee because of the narrow scope of the question before it. What a pity, then, it was that the hon. Member did not persevere with the Amendment which stood in his name on the Notice Paper, which would have given him all the opportunity he desired to deliver this information. They had been puzzled to know why it was that the hon. Member, who did not lack courage, and did not even require a sympathetic audience—which was the ordinary inducement to make a speech—on this memorable and important occasion should not only have run away from his Amendment, but should have deliberately withdrawn it from the Paper after he had in so ingenious a way furnished himself with the opportunity he desired. This debate had lasted the whole sitting, and it would be noticed that no Member from that side had made a contribution to it. That they could well understand, but it would have been almost indecent if some one had not risen on that side to take a humble, modest part in this long discussion. They had been enjoying the debate; such a debate as was almost unparalleled in the experience of most of them. In the first place, they had heard all their own arguments on the subject of the corn tax repeated by the Chancellor of the Exchequer and by the hon. Member for Oldham, in a speech which commanded the admiration of the Committee. That in itself was enough to induce them to keep silence, because he thought they could have added nothing to, and they might have detracted something from, the force and cogency of the arguments used. They were their own old familiar arguments, and, therefore, they gave great satisfaction to them. But they were still left in a little doubt. They knew now from the Chancellor of the Exchequer the reasons why he had proposed the withdrawal of the tax, but they did not know quite at this moment why the Government as a Government proposed to withdraw it. He was speaking of the Government as an entity—if it maintained the character of an entity, of which they might entertain some doubt. But they were still as ignorant as they were, of the reasons that induced the Cabinet, who were so strongly unanimous in support of the tax last year, to propose its withdrawal now.

They had seen also in the ranks behind the Government bench a pleasing diversity of opinion. Very strong language had been used, stronger than he had ever heard employed by Members of the House with regard to Ministers whom they supported in authority. [Some MINISTERIAL cries of "No, we don't."] Well, perhaps the hon. Member for Sheffield did not use strong language, and the right hon. Member for Sleaford adopted an ingenious mode of relieving his feelings, for he dressed up an imaginary agricultural labourer, and quoted his language with such unction that they could easily see that it was genuine in its origin. But he was bound to say that the hon. Member for Birmingham went a little beyond what was justified by the circumstances in the way in which he spoke of the Chancellor of the Exchequer. He would not do the Chancellor of the Exchequer the ill turn of supporting him against his own followers, which might lead Members to view him with some suspicion, but he thought in the interest of almost common civilities in the House he must enter some protest against the violent, though humorous, but none the less violent because humorous, objections raised by the hon. Member for Birmingham to the conduct and policy of the right hon. Gentleman. In other quarters also they found a pleasing diversity of opinion. Even Liverpool was divided against itself, not only on the facts and theories, but in the authority of its representatives. They were often on that side supposed to be subject to differences of opinion. [Cries from the MINISTERIAL Benches of "No, no."] He was glad to hear the denial, but could at least assure hon. and right hon. Gentlemen opposite that he had not as yet been able to detect in any quarter of that side of the House any diversity of opinion on the subject now before the Committee. They had arrived, or were about to arrive, at a conclusion of the matter eminently satisfactory to them. They were opposed to the tax last year, not to its intention, because he entirely believed the right hon. Gentleman the Member for Bristol did not anticipate any of those evil results which are now more apparent than they then were. They were opposed to this tax on the assured and settled grounds that it might lead to further extension of protectionist doctrines, that it was a tax on the food of the people, of the poorest people, who ought not to be laid under the burden of it, and they opposed it with other arguments with which the Committee were familiar. They found themselves amply justified that day. They should take part in the division with perfect unanimity and great heartiness, and they hoped they should see the last of a tax injurious to the best interests of the country and oppressive to the people of this country, and they hoped the tax would never be renewed.

MR. CHAPLIN

said he was not at all surprised at the satisfaction of the right hon. Gentleman that all the arguments which had been used by his own side of the House had been repeated by the hon. Members who spoke on that side of the House in support of the remission of the duty. Nor had he any quarrel with anything that had fallen from the right hon. Gentleman, except in one particular point. He could assure the right hon. Gentleman that the agricultural labourer to whom he referred was very far from being imaginary; he was an actual individual, he was a genuine article, and he had used precisely the language quoted. His hon. friend below him had criticised the statement he had made in regard to the result of the tax of last year in producing a cheap and abundant supply of offals. In the deputation which had been so often referred to there were farmers from all parts of the country, and they knew the actual facts in reference to the tax. They knew what they had paid for the articles before the duty was imposed, and what they had paid after. His hon. friend had asked him to reserve his efforts for larger occasions which might occur in the future. He could assure him that when these occasions arose he would not find him backward in any way; he would be at the front; and he hoped to do all in his power to forward a proposal of

which he approved. But he could not respond to his hon. friend's wishes on this occasion, for a reason with which his hon. friend could sympathise. He was pledged to a number of supporters beyond the walls of the House to do all in his power to press this matter to an end, and he had never thrown over a backer yet. He therefore would press the matter to a division, and he hoped his hon. friend would vote with him.

Question put.

The Committee divided:—Ayes, 416; Noes, 32. (Division List No. 125.)

AYES.
Abraham, W. (Cork, N. E.)	Butcher, John George	Dickinson, Robert Edmond
Abraham, William (Rhondda)	Buxton, Sydney Charles	Dickson, Charles Scott
Agg-Gardner, James Tynte	Caldwell, James	Dickson-Poynder, Sir John P.
Agnew, Sir Andrew Noel	Cameron, Robert	Digby, John K. D. Wingfield-
Aird, Sir John	Campbell, Rt. Hn. J. A. (Glasg.)	Dilke, Rt. Hon. Sir Charles
Allan, Sir William (Gateshead)	Campbell, J. H. M. (Dublin Univ	Dillon, John
Allen, Chas. P. (Glos., Stroud)	Campbell-Bannerman, Sir H.	Dunsdale, Rt. Hon. Sir Joseph C.
Allhusen, Aug. Henry Eden	Carew, James Laurence	Donelan, Captain A.
Anson, Sir William Reynell	Carson, Rt. Hon. Sir Edw. H.	Doogan, P. C.
Arkwright, John Stanhope	Causton, Richard Knight	Douglas, Rt. Hon. A. Akers
Arnold-Forster, Hugh O.	Cautley, Henry Strother	Douglas, Charles M. (Lanark)
Arrol, Sir William	Cavendish, R. F. (N. Lancs.)	Doxford, Sir Wm. Theodore
Asher, Alexander	Cavendish, V. C. W. (Derbyshire	Duffy, William J.
Ashton, Thomas Gair	Cawley, Frederick	Dunn, Sir William
Asquith, Rt. Hon. Herbt. Hy.	Cecil, Lord Hugh (Greenwich)	Durning-Lawrence, Sir Edwin
Atkinson, Right Hon. John	Chamberlain, Rt. Hon. J. (Birm	Edwards, Frank
Aubrey Fletcher, Rt. H. Sir H.	Chamberlain, Rt. Hn. J. A. (Worc	Elliot, Hon. A. Ralph Douglas
Bailey, James (Walworth)	Channing, Francis Allston	Ellis, John Edward
Bain, Colonel James Robert	Chapman, Edward	Emmott, Alfred
Balcarres, Lord	Charrington, Spencer	Esmonde, Sir Thomas
Balfour, Rt. Hon. A. J. (Manch'r	Churchill, Winston Spencer	Evans, Sir F. H. (Maidstone)
Banbury, Sir Frederick George	Clancy, John Joseph	Faber, E. B. (Hants, W.)
Barran, Rowland Hirst	Cochrane, Hon. Thos. H. A. E.	Faber, George Denison (York)
Barry, E. (Cork, S.)	Coghill, Douglas Harry	Fardell, Sir T. George
Beach, Rt. Hon. Sir M. Hicks	Cohen, Benjamin Louis	Fellowes, Hon. Ailwyn Edward
Beaumont, Wentworth C. B.	Collings, Right Hon. Jesse	Fenwick, Charles
Beckett, Ernest William	Condon, Thomas Joseph	Ferguson, R. C. Munro (Leith
Bell, Richard	Cook, Sir Frederick Lucas	Fergusson, Rt. Hn. Sir J. (Man'r
Bentinck, Lord Henry C.	Corbett, T. L. (Down, North	Ffrench, Peter
Bhownaggree, Sir M. M.	Cox, Irwin Edwd. Bainbridge	Finlay, Sir Robert Bannatyne
Bignold, Arthur	Craig, Charles Curtis (Antrim S.	Fisher, William Hayes
Bigwood, James	Craig, Robert Hunter (Lanark	FitzGerald, Sir Robert Penrose
Black, Alexander William	Cranborne, Viscount	Fitzmaurice, Lord Edmond
Blake, Edward	Crean, Eugene	Flannery, Sir Fortescue
Blundell, Colonel Henry	Cremer, William Randal	Flavin, Michael Joseph
Bolton, Thomas Dolling	Cripps, Charles Alfred	Flower, Ernest
Bond, Edward	Crombie, John William	Flynn, James Christopher
Bowles, Col. H. F. (Middlesex)	Crooks, William	Forster, Henry William
Bowles, T. G. (Lynn Regis)	Cross, Alexander (Glasgow)	Foster, Sir Michl. (Lond. Univ
Brassey, Albert	Cross, H. Shepherd (Bolton)	Foster, P. S. (Warwick, S. W.
Broadhurst, Henry	Crossley, Sir Savile	Foster, Sir Walter (Derby Co.)
Brodrick, Rt. Hon. St. John	Cubitt, Hon. Henry	Fowler, Rt. Hon. Sir Henry
Brown, Sir Alx. H. (Shropsh.)	Cullinan, J.	Fuller, J. M. F.
Brown, Geo. M. (Edinburgh)	Dalrymple, Sir Charles	Fyler, John Arthur
Bryce, Right Hon. James	Davies, M. Vaughan (Cardig'n	Gardner, Ernest
Buchanan, Thomas Ryburn	Delany, William	Garfit William
Bull, William James	Denny, Colonel	Gibbs, Hn. A. G. H. (City of Lond
Burns, John	Devlin, Chas. Ramsay (Galway)	Gilhooly, James
Burt, Thomas	Dewar, John A. (Inverness-sh.)	Gladstone, Rt. Hn. Herbert J.
Goddard, Daniel Ford	Lewis, John Herbert	Parker, Sir Gilbert
Godson, Sir Augustus Frederick	Lloyd-George, David	Partington, Oswald
Gordon, Hn. J. E. (Elgin & Nairn	Loder, Gerald Walter Erskine	Paulton, James Mellor
Gordon, J. (Londonderry, S.)	Logan, John William	Pease, H. Pike (Darlington)
Gore, Hn. G. R. C. Ormsby-(Salop	Long, Col. Chas. W. (Evesham	Pease, J. A. (Saffron Walden)
Gorst, Rt. Hon. Sir John Eldon	Long, Rt. Hn. Walter (Bristol, S.	Peel, Hn. Wm. R. Wellesley
Goschen, Hon. Geo. Joachim	Lonsdale, John Brownlee	Pemberton, John S. G.
Graham, Henry Robert	Lough, Thomas	Penn, John
Greene, Hy. D. (Shrewsbury)	Lowe, Francis William	Percy, Earl
Gretton, John	Lowther, C. (Cumb. Eskdale)	Philipps, John Wynford
Greville, Hon. Ronald	Lucas, Col. Francis (Lowestoft	Platt-Higgins, Frederick
Grey, Rt. Hn. Sir E. (Berwick	Lucas, Reginald J. (Portsmouth	Powell, Sir Francis Sharp
Guest, Hon. Ivor Churchill	Lundon, W.	Power, Patrick Joseph
Gurdon, Sir W. Brampton	Lyttelton, Hon. Alfred	Pretyman, Ernest George
Hain, Edward	Macdona, John Cumming	Price, Robert John
Haldane, Rt. Hon. Richard B.	Maconochie, A. W.	Pryce-Jones, Lt.-Col. Edward
Hall, Edward Marshall	MacVeagh, Jeremiah	Purvis, Robert
Hambro, Charles Eric	M'Arthur, Charles (Liverpool)	Pym, C. Guy
Hamilton, Rt. Hn. Lord G. (Mid'x	M'Arthur, William (Cornwall)	Rasch, Major Frederic Carne
Hamilton, Marq. of (Londondy	M'Calmont, Colonel James	Rattigan, Sir William Henry
Harmsworth, R. Leicester	M'Crae, George	Reddy, M.
Harwood, George	M'Fadden, Edward	Redmond, Jn. E. (Waterford)
Haslett, Sir James Horner	M'Kenna, Reginald	Redmond, William (Clare)
Hatch, Ernest Frederick G.	M'Laren, Sir Charles Benj.	Reid, James (Greenock)
Hay, Hon. Claude George	Malcolm, Ian	Reid, Sir R. Threshie (Dumfries)
Hayden, John Patrick	Mansfield, Horace Rendall	Remnant, James Farquharson
Hayter, Rt. Hon. Sir Arthur D.	Mappin, Sir Fredk. Thorpe	Renshaw, Sir Charles Bine
Heath, Arthur H. (Hanley)	Markham, Arthur Basil	Rickett, J. Compton
Heath, James (Staffords, N. W.)	Maxwell, W. J. H. (Dumfriessh.	Ridley, Hon. M. W. (Stalybridge)
Helme, Norval Watson	Mellor, Rt. Hn. John William	Rigg, Richard
Hemphill, Rt. Hon. Charles H.	Meysey-Thompson, Sir H. M.	Ritchie, Rt. Hn. C. Thomson
Hickman, Sir Alfred	Milvain, Thomas	Roberts, John Bryn (Eifion)
Hoare, Sir Samuel	Mitchell, Edw. (Fermanagh, N.)	Roberts, John H. (Denbighsh.)
Hobhouse, C. E. H. (Bristl, E.	Mitchell, William (Burnley)	Roberts, Samuel (Sheffield)
Hobhouse, Rt. Hn. H. (Somerset, E.	Molesworth, Sir Lewis	Robertson, Edmund (Dundee)
Hogg, Lindsay	Moon, Edward Robert Pacy	Robertson, Herbert (Hackney)
Hope, John Deans (Fife, West	Mooney, John J.	Robson, William Snowdon
Hornby, Sir William Henry	More, Robt. Jasper (Shropshire)	Roche, John
Houldsworth, Sir Wm. Henry	Morgan, D. J. (Walthamstow)	Rolleston, Sir John F. L.
Hoult, Joseph	Morgan, Hn. F. (Monm'thsh.)	Rollit, Sir Albert Kaye
Houston, Robert Paterson	Morgan, J. Lloyd (Carmarthen)	Royds, Clement Molyneux
Howard, J. (Midd., Tott'ham	Morley, Charles (Breconshire)	Russell, T. W.
Humphreys-Owen, Arthur C.	Morley, Rt. Hn. John (Montrose	Rutherford, John (Lancashire)
Hutchinson, Dr. Charles Fredk.	Morrell, George Herbert	Sadler, Col. Saml. Alexander
Hutton, Alfred E. (Morley)	Morrison, James Archibald	Samuel, Harry S. (Limehouse)
Jacoby, James Alfred	Morton, Arthur H. Aylmer	Samuel, Herbert L. (Cleveland)
Jebb, Sir Richard Claverhouse	Moulton, John Fletcher	Samuel, S. M. (Whitechapel)
Jessel, Capt. Herbert Merton	Mount, William Arthur	Sassoon, Sir Edward Albert
Joicey, Sir James	Muntz, Sir Philip A.	Schwann, Charles E.
Jones, David B. (Swansea.)	Murphy, John	Scott, C. Prestwich (Leigh)
Jones, Wm. (Carnarvonshire)	Murray, Rt. Hn. A. Graham (Bute	Seely, Chas. Hilton (Lincoln)
Jordan, Jeremiah	Murray, Charles J. (Coventry)	Seely, Maj J. E. B. (Isle of Wight
Joyce, Michael	Murray, Col. Wyndham (Bath)	Sharpe, William Edward T.
Kearley, Hudson E.	Nannetti, Joseph P.	Shaw, Charles E. (Stafford)
Kennaway, Rt. Hon. Sir J. H.	Nolan, Joseph (Louth, S.)	Shaw, Thomas (Hawick, B.)
Kennedy, Patrick James	Norman, Henry	Shaw-Stewart, M. H. (Renfrew)
Kilbride, Denis	Norton, Capt. Cecil William	Sheehan, Daniel Daniel
Kitson, Sir James	O'Brien, James F. X. (Cork)	Shipman, Dr. John G.
Labouchere, Henry	O'Brien, Patrick (Kilkenny)	Sinclair, John (Forfarshire)
Lambert, George	O'Brien, P. J. (Tipperary, N.)	Sinclair, Louis (Romford)
Lambton, Hon. Fredk. Wm.	O'Brien, William (Cork)	Sloan, Thomas Henry
Langley, Batty	O'Connor, Jas. (Wicklow, W.)	Smith, Jas. Parker (Lanarks.)
Law, Andrew Bonar (Glasgow	O'Connor, T. P. (Liverpool)	Smith, Hn. W. F. D. (Strand)
Law, H. Alex. (Donegal, W.)	O'Donnell, John (Mayo, S.)	Soames, Arthur Wellesley
Lawson, John Grant (Yorks, N. R.	O'Dowd, John	Spear, John Ward
Lawson, Sir Wilfrid (Cornwall)	O'Kelly, Conor (Mayo, N.)	Stanley, Edw. Jas. (Somerset)
Layland-Barratt, Francis	O'Kelly, J. (Roscommon, N.)	Stanley, Lord (Lancs.)
Leamy, Edmund	O'Malley, William	Stirling-Maxwell, Sir Jn. M.
Lees, Sir Elliott (Birkenhead)	O'Neill, Hon. Robert Torrens	Strachey, Sir Edward
Leese, Sir Jos. F. (Accrington)	O'Shaughnessy, P. J.	Stroyan, John
Legge, Col. Hon. Heneage	O'Shee, James John	Sturt, Hon. Humphry Napier
Leng, Sir John	Palmer Sir C. M. (Durham)	Sullivan, Donal
Leveson-Gower, Fredk. N. S.	Palmer, G. Wm. (Reading)	Talbot, Lord E. (Chichester)
Levy, Maurice	Palmer, Walter (Salisbury)	Talbot, Rt. Hn. J. G. (Oxf'd. Univ.

Taylor, Austin (East Toxteth)	Valentia, Viscount	Wilson, John (Durham, Mid)
Taylor, Theodore C. (Radcliffe	Vincent, Sir Edgar (Exeter)	Wilson, John (Glasgow)
Tennant, Harold John	Walrond, Rt. Hon. Sir W. H.	Wilson, J. W. (Worcester., N.)
Thomas, A. (Carmarthen, E.)	Walton, J. Lawson (Leeds, S.)	Wilson-Todd, W. H. (Yorks.)
Thomas, Sir A. (Glam., E.	Wanklyn, James Leslie	Wodehouse, Rt. Hn. E. R. (Bath
Thomas, David A. (Merthyr)	Wason, Eugene (Clackmannan)	Wolff, Gustav Wilhelm
Thomson, F. W. (York, W. R.)	Wason, J. Cathcart (Orkney)	Woodhouse, Sir J. T. (Huddersf'd
Thorburn, Sir Walter	Weir, James Galloway	Worsley-Taylor, Henry Wilson
Thornton, Percy M.	Welby, Lt-Col. A. C. E. Taunton	Wortley, Rt. Hon. C. B. Stuart
Tomkinson, James	Whiteley, G. (York, W. R.)	Wylie, Alexander
Tomlinson, Sir Wm. Edw. M.	Whiteley, H. (Ashton-u.-Lyne)	Wyndham, Rt. Hon. George
Toulmin, George	Whitley, J. H. (Halifax)	Young, Samuel
Trevelyan, Charles Philips	Whittaker, Thomas Palmer	Yoxall, James Henry
Tritton, Charles Ernest	Williams, O. (Merioneth)
Tufnell, Lieut.-Col. Edward	Wills, Sir Frederick	TELLERS FOR THE AYES—
Tuke, Sir John Batty	Wilson, F. W. (Norfolk, Mid)	Sir Alexander Acland-
Ure, Alexander	Wilson, H. J. (York, W. R.)	Hood and Mr. Anstruther.
NOES.
Balfour, Kenneth R. (Christch	Hardy, Laurence (Kent, Ashfd	Quilter, Sir Cuthbert
Boscawen, Arthur Griffith	Howard, Jn. (Kent Faversham	Round, Rt. Hon. James
Chaplin, Right Hon. Henry	Hudson, George Bickersteth	Warde, Colonel C. E.
Colomb, Sir John Chas. Ready	Kenyon-Slaney, Col. W. (Salop	Welby, Sir Chas. G. E. (Notts)
Colston, Chas. Edw H. Athole	Laurie, Lieut.-General	Wilson, A. Stanley (York, E. R.
Disraeli, Coningsby Ralph	Lawrence, Wm. F. (Liverpool	Younger, William
Egerton, Hon. A. de Tatton	Lee, A. H. (Hants, Fareham)
Finch, Rt. Hon. George H.	Lowther, Rt. Hon. Jas. (Kent)	TELLERS FOR THE NOES—
Fitzroy, Hon. Edw. Algernon	MacIver, David (Liverpool)	Sir Henry Seton-Karr
Gibbs, Hn. Vicary (St. Albans	Maxwell, Rt. Hn. Sir H. E. (Wigt'n	and Lord Willoughby de
Greene, W. Raymond (Cambs	Myers, William Henry	Eresby.
Gunter, Sir Robert	Nicholson, William Graham
Halsey, Rt. Hon. Thomas F.	Pierpoint, Robert

Clause 2:—

*MR. CHANNING (Northamptonshire, E.)

said his object in rising was to move the remission of the extra 2d. on the tea duty which was imposed for the purposes of the war. This question would have to be considered from several points of view. When a tax was placed upon a commodity largely used in the country, a Chancellor of the Exchequer had to take into consideration how far such a tax diminished importation beyond the point at which it was a satisfactory and remunerative tax from the point of revenue. The amount of tea imported during the last three years had shown a very marked decrease. For the five months ending the 31st of May last year, there was a decrease of 9,500,000 lbs. as compared with the corresponding period in 1902, and as compared 1901, there was actually a decrease of 20,000,000 lbs. He was quite aware that since the month of May there had been a slight rally in tea imports, but it was quite plain that during the three years of war during which the extra 2d. was placed upon tea there had been a marked decrease in imports, and these facts ought to be fully considered. He was aware that there was before the two preceding Budgets some forestalments which somewhat disturbed the figures, but there was no doubt that over the whole period there had been a marked diminution in the importation of tea into this country, and a marked increase in the price of tea, a higher price than the extra duty imposed, which pressed most heavily on the working classes. In the opinion of those who knew most of the subject this tax had also tended to the diminution of the production of tea, especially in India and Ceylon. It was high time to consider the revision of this tax from the point of view of revenue and from its results. The relief given on the income tax was a large relief—a much larger relief than many of the income taxpayers expected to receive, and if the facts were looked into with scientific accuracy it would be found that if the right hon. Gentleman the Chancellor of the Exchequer had given a relief of 3d. on the income tax, and distributed the relief of the other penny over other things besides corn he would have more accurately attained the happy mean of the equalisation of the burden on the various classes who contributed to the revenue of this country. With regard to the incidence of taxation on the working classes he had taken considerable trouble to obtain, from the most careful investigation in his division, a series of accurate budgets of working-class families. Taking the percentage of taxation on the three articles, tea, sugar, and corn, and calculating them in the form of an income tax upon the poor, he had found in thirty - nine of these carefully prepared budgets of the working classes, that taking the extra duties imposed for the purposes of the war during the last three years, the result was as follows:—The duty on corn amounted to an income tax of 2.926 of a penny in the £, the extra duty on tea to 1.85 of a penny, and on sugar 3.84 of a penny in the £. He would not deal with the other duties, except as to the total which pressed upon the working classes, which suggested to him that some relief should be given on the duty on tea. Taking the average duty paid by those thirty-nine working-class families in respect to the extra war tax on those three articles of food, and calculating their amounts, interpreted as an income tax, and based on the ad valorem values laid down by the late Chancellor of the Exchequer and other experts, he found that the additional income tax paid indirectly by the working classes through these taxes alone, without touching tobacco or alcohol at all, amounted to 8.61 of a penny in the £. He would ask hon. Members to remember that whereas, so far as these figures gave a reason able presumption of accuracy, the income tax imposed upon the working classes by these taxes was that no less than 8½d., only 7d. in the £ was imposed upon the income tax payer for the purposes of the war. He found from figures supplied by co-operative societies last year that the total income tax of the working classes, as represented by the tax upon dutiable articles consumed, ranged from 1s. to 2s. in the £ on the income which they possessed. Those figures could not be seriously challenged; they were brought before him by some of the most experienced co-operators of the day, who had to deal with the expenditure of thousands of families.

The consideration he had to place before the Committee was, that they had in these war taxes imposed a larger amount upon the poorer classes than they had by the income tax on the wealthier classes. And it was useless to speak of this taxation as voluntary in the same sense as expenditure on tobacco and liquor. It was an expenditure incurred for the necessaries of life. And though the tea duty was not a tax on food in the same sense as the corn duty which touched the vital efficiency of the people, it was a tax which bore heavily on the necessities of the poor. He wished that the Colonial Secretary had been present, because he had desired to invite him to throw some light upon the calculations which the right hon. Gentleman had made in 1885, which were then challenged by hon. Gentlemen on the other side of the House, and by the Economist newspaper, but which were never refuted. The present Colonial Secretary in 1885 made out that if they took into consideration the expenditure upon beer, tobacco, and spirits, the income tax paid by the working classes by means of dutiable articles was about 8 per cent of their income. Those figures had the authority of the Colonial Secretary at that time and were produced for as the basis of his policy of "ransom" of equality of taxation and equality of sacrifice. If the figures of the Colonial Secretary were in any way to be relied on as the income tax paid by the working man in 1885, when they had to pay on nothing except tea at a lower duty than now, coffee, currants, and tobacco and alcoholic liquor, he would ask hon. Gentlemen opposite what Budget the right hon. Gentleman the Colonial Secretary would have to prepare, having regard to the war duties, when the additional indirect taxation for the war amounted to no less than 8½d. in the £. The Colonial Secretary's figures in 1885 showed an income tax of 1s. 11¾d. in the £, and if the additional tea duty and the sugar duty were added, that would mean an income tax of 2s. 5½d. in the £, while, with the corn duty of last year you had an income tax of no less than, 2s. 8½d. in the £. He was astonished that hon. Members, with these sources of information before them, did not recognise the enormous gravity of the inequality of taxation which pressed upon the poorest classes of the community. To those who understand the narrow circumstances and the terrible difficulties of working people, with incomes ranging from 12s. to 30s. per week, it required very strong arguments to justify the retention of a larger proportion of taxation upon the working classes than the higher classes had to bear. Such a course of action was wholly unjust, and in order to give the Chancellor of the Exchequer one more opportunity of enlarging the sphere of relief to those who were at present certainly over-taxed, he begged to move.

Amendment proposed— In page 2, line 28, to leave out the words 'continue to,' and insert the words 'cease and the duty of fourpence the pound on tea shall.'"—(Mr. Channing.)

Question proposed, "That the words 'continue to' stand part of the Clause."

*MR. RITCHIE

said the Amendment, which he was unable to accept, had been urged on the ground that the consumer had been given less in the way of remission of taxation than the income tax payer, and the hon. Member had advocated that a further sum of £2,000,000 a year should be taken from the income tax payer and devoted to the remission of taxation on commodities. In considering the Budget for the year, he went very carefully into the incidence of direct and indirect taxation, and all the figures seemed conclusively to prove that by taking 4d. off the income tax, and £2,500,000 off indirect taxation, an equitable amount was being taken off each, having regard to the sums contributed by the direct and the indirect taxpayers respectively towards the expenses of the war. He also investigated very closely the burden borne by the two classes of taxpayers for some years past. As the Committee were aware, the tendency of late years had been to relieve the indirect taxpayer at the expense of the direct taxpayer, so that whereas in Mr. Gladstone's Budgets the indirect taxpayer contributed about twice as much as the direct taxpayer, the latter now contributed rather more than the former. Moreover, the reduction now being made left matters more favourable to the indirect taxpayer than before the war. He could hardly be expected to do more than that in the present Budget, but he quite recognised that in any further remission of taxation care must be taken so to adjust the burden as to give equivalent redress to both classes of taxpayers. It was hardly necessary to refer again to the importance of not keeping the income tax at a higher rate than was absolutely necessary. It ought to be kept at such a figure, consistently with justice to other taxpayers, that it would be an available reserve in case of emergency, and no one would contend that an income tax of 11d. in the £ was as was as desirable, having regard to the circumstances he had mentioned. He assured the hon. Member he had carefully considered the claim of the working classes, and he was satisfied that in the proposals before the Committee substantial justice was done.

SIR CHARLES MCLAREN (Leicestershire, Bosworth)

said that tea, so far from being a luxury, was really one of the prime necessities of life, and the tax upon tea fell on the poorest and most miserable class of the community. Those who had studied the question had come to the conclusion that if there was one thing more necessary than another to the enjoyment of life by the very poor, it was tea. Thousands of the lowest class of workers practically lived on what they called "tea" and bread and butter. The poorest of women, who sewed or worked in factories—the drudges of civilisation—found in tea the one solace of life, and the one luxury in which their means permitted them to indulge. These were the people who had no voice, and were not likely to have any, in the policy of the nation; they were too poor, ignorant, and weak to have any influence in the policy of a nation such as ours; they ought to be treated rather as children, and the taxation of the better classes ought not to be reduced at their expense. He hoped the Chancellor of the Exchequer, when he considered his Budget next year, would take this class into account. Another point of view from which the tea duty should be regarded was that of the English investor who had put money into the tea plantations of Assam and Ceylon. At a time when we were taking peculiar interest in the prosperity of the colonies, the question might well be considered of whether this taxation of investments in the colonies should go on. Ceylon, in particular, had suffered from a series of bad years. The coffee plantations, in which the English investor originally put his money, were swept away, and tea had been put down in their place. The imports of tea had fallen off in consequence of this tax, and the quality of the tea drunk was much lower than when the tax was lighter. People were thus led to buy lower class China tea, and teas which were not in any sense the product of British capital. The tax on its present footing tended to reduce the value of English investments abroad, and to discourage other men from coming forward to increase the plantations which were now in some places so flourishing. For these reasons he hoped the right hon. Gentleman would give his attention to the matter.

*MR. LEVY (Leicestershire, Loughborough)

said that while the Committee were grateful to the Chancellor of the Exchequer for promising to reconsider this question before the next Budget, there were reasons which might prevent the right hon. Gentleman giving effect next year to any desire he might have to reduce the duty. Many people were disappointed that the tax was not reduced this year. Income taxpayers would have been perfectly satisfied with a reduction of 3d., and the ideal of the Chancellor of the Exchequer of equalising direct and indirect taxation would have been more nearly achieved. Out of £10,500,000 surplus the direct taxpayer received £8,500,000.

*MR. RITCHIE

He has contributed more to the cost of the war.

*MR. LEVY

doubted whether the direct taxpayer had contributed as much as the indirect taxpayer. The right hon. Gentleman had referred to Mr. Gladstone's Budgets. In 1895, under the last Liberal Administration, the taxation on necessaries of life amounted to a little over 4 per cent., whereas now it amounted to 10¾ per cent., so that there was some justification for the demand that a penny less should be taken off the income tax and the tax on tea reduced by twopence.

And, it being half-past Seven of the clock, the Chairman left the Chair to make his Report to the House.

Committee report Progress; to sit again this evening.