FINANCE BILL.

HC Deb 21 June 1904 vol 136 cc764-804

Considered in Committee.

(In the Committee.)

[Mr. J. W. LOWTHER (Cumberland, Penrith) in the Chair.]

Clause 1:—

Amendment again proposed— In page l, line 21, after the word 'pound,' to insert the words 'fifty per cent. ad valorem, but not to exceed.'"—(Mr. Kearley.)

Question proposed, "That those words be there inserted."

MR. WHITLEY

said he thought this Amendment was preferable to the one which had been previously moved, and really deserved the attention of the Committee. It was obvious that if they put the tax beyond a certain limit, say 8d. per lb, the tendency would be to invoice a really higher-priced tea at 8d., in order to evade the payment of the tax. In the coal trade coal under six shillings a ton was free of the export duty, and he believed that large quantities of coal worth 7s. or 8s. per ton were returned as just below the value of 6s. per ton. The system opened a way to the seller, not unnaturally and not dishonestly, to evade the tax. He hoped the Chancellor of the Exchequer would accept the Amendment.

MR. J. F. HOPE (Sheffield, Brightside)

said he did not think that anyone, looking at this matter honestly and from an abstract point of view, could come to any other conclusion than that a tax on tea was a bad tax, and only justifiable under present conditions. If anyone were to reconstruct the financial system of England he would come to the conclusion that a tax on tea should be collected in some such way as the Amendment proposed. But personally he was no enthusiast for any tax on tea. A great number of the poorer classes of the community regarded tea as a necessary comfort. He did not doubt for a moment that it would be possible for people to subsist without tea, but if the price of that article was raised beyond the means of the poorer classes of the community, they would lose what was to them practically an indispensable article of daily consumption, and a great deal of cheer would be taken from their lives. That was true also of the moderate use of alcohol. Although in theory a tax on tea was indefensible, even the stricter school of political economists were agreed that, in its application, there was nothing in the nature of the tax which was unorthodox, even when it was not collected by the method proposed in the Amendment. He could not understand the position. Here was a burden which increased the price of a daily comfort to the poorer classes by 100 or 130 per cent.

THE CHAIRMAN

The hon. Member is not entitled to go into that side of the question. The only point before the Committee is whether the tea duty should be a fixed sum or ad valorem.

MR. JOYCE (Limerick)

A forlorn hope.

MR. J. F. HOPE

said that undoubtedly an ad valorem duty would be the fairest if it could be fairly adjusted, because they would pay an amount of duty proportionate to the natural price of the article. But the history of the tea duty showed that the ad valorem system was open to very great objection. The system formerly pursued in this country was not a purely ad valorem one, but a compromise between fixed and ad valorem duties. The result was continual disputes between the merchants and the Customs House officials. The Customs officials naturally said that the tea was of a higher value than the merchants sought to put upon it, and an immense amount of time was consumed in settling the points at issue. Here they had that painful contrast, which was so noticeable in all human affairs, between the ideal and the practical. Undoubtedly the ad valorem system was the ideal, but, alas, experience had proved that in the matter of tea it was not a practical system, and he should greatly deprecate any attempt to revert to that system. The average price of tea at the present time was no more than 7½d. per lb., and if the proposed duty of 8d. per lb. were imposed, the total price would be 1s. 3½d. per lb. These figures he gave on the unquestionable authority of Mr. W. J. Thompson. The hon. Member for Lynn Regis, who had made very short work indeed of the previous Amendment, showed that, looking to the point of view of the revenue, the result of carrying that Amendment would have been to cut off three-fourths of the yield of the tea duty. The hon. Member pointed out that there were luxurious teas worth as much as from 6s. to 8s. per lb., and taking into account that the average price was only 7½d. per lb., it followed that the amount of tea imported at cheap figures was enormously in excess of the amount of the higher-class teas; and the calculation was well within the mark that if this Amendment were carried three fourths of the duty would be lost. The Chancellor of the Exchequer had said that this additional duty of 2d. per lb. was expected to produce £2,000,000 and that he did not anticipate that it would diminish the amount of the imports. The total revenue from tea would be £8,000,000, and therefore if three-fourths of that were knocked off, there would only remain £2,000,000. Now, how could that £6,000,000 of a deficiency in the revenue be made up? Some hon. Gentlemen might say that the deficiency might be met by increased duties on alcohol; but his contention was that the duties on alcohol had ^already reached their maximum. If a duty was put on any article of import or Excise, the demand fell off, and the higher tax operated in the revenue obtaining less money. Therefore, the £6,000,000 could not be made up by additional duties on beer and spirits. He did not think the death duties on realty should be increased, but he should like to see them increased on personalty. He was afraid, howeveT, that the Chancellor of the Exchequer would say that in that event evasion would be practised to such a degree that he wou Id not get more money. Then could the deficiency be got from an increase in the income-tax? That would mean 2½d. additional burden on a very deserving class of the community who had to keep up a good appearance on a very narrow margin of income. From a national point of view, also, it would diminish the great national reserve in case of war. They did not want to hypothecate that reserve to civil expenditure. It must be remembered that the Chancellor of the Exchequer was cribbed, cabined, and confined by the present fiscal system, to which he was sure the right hon. Gentleman in his heart of hearts rose superior. Could the revenue be raised by an extra duty on publicans' licences? These duties were already mortgaged for compensation.

MR. EUGENE WASON (Clackmannan and Kinross)

asked whether the hon. Member was entitled to go into this question of licences when the hon. Member for Dundee was ruled out of order in referring to them.

MR. J. F. HOPE

said he did not want to argue the question.

THE CHAIRMAN

The hon. Member is making a rather wide survey of the fiscal field, and it would be better if he narrowed his comments to the Amendment before the Committee.

MR. J. F. HOPE

said he only wanted to show the effect of this Amendment, if carried, on the poor consumer; and he thought it would have been as well if another means of raising the deficiency had been suggested. After all, one must not exaggerate in a matter like this. He would compare the price of tea now with that in former times. In the year 1852 the average price of tea was 1s. 1½d., but the duty on tea was 2s. 1d. That worked out at 200 per cent, on the natural price, and he did not think that England was then in a miserable or depressed condition. In 1860, which was the year of Mr. Gladstone's great Budget, the duty was 1s. 5d., and the natural price was 1s. 6¾d.; and even in 1884 the price of tea, plus the duty, amounted to 1s. 5¾d., which was 2¼d. more than the price which would obtain if the proposed duty were imposed. He fully believed that the working of the ad valorem system would not be satisfactory either to the consumer or to the revenue. It would be manipulated by the dealers, so that the advantage to the consumer would be lost, and the good relations between the dealers and the Customs would be seriously impaired. There would be no such profits to the public as to compensate for the loss of revenue. He was rather surprised that the hon. Member for West Islington was not yet in his place, but he took it that it would be rather dangerous for him to support the Amendment of the hon. Member for Devonport. It was possible that perhaps in a few years time these hon. Gentlemen would find themselves on that [side of the House. In that case, when the ad valorem question was raised, what would the Chancellor of the Exchequer do? He presumed that the Chancellor of the Exchequer would be either the hon. Member for Devonport or the hon. Member for West Islington. It was even possible that both of them would have to make way to the superior claims of the hon. Member for Oldham. In that event one of the hon. Gentlemen would have to console himself with the office of President of the Board of Trade and the other with the office of Financial Secretary to the Treasury. What would the Cabinet of the day then be able to do in this matter? He assumed that the Leader of the House would be the hon. Member for Mid-Lanark.

THE CHAIRMAN

The hon. Member is looking too far into the future.

MR. J. F. HOPE

said that of course three years time was perhaps too long to look ahead, but he might consider his hypothesis as possible next year. In that event what would be done by the hon. Member for Mid-Lanark, who already controlled the House, when he was Leader of the House. What would he say if his hon. friend the Member for Devonport wished to carry out in practice the principles of the Amendment he had put forward?

MR. RENWICK (Newcastle-on-Tyne)

said he was entirely opposed to the principle of an ad valorem duty in connection with tea. Many tea dealers were also tea growers who imported their tea into this country and lie defied anyone to prove what was the import value of these teas. He could not imagine that the hon. Member for Devonport, fresh from the contest in that constituency, had ventilated this subject there, for, if he had done so, he would have been bound to acknowledge that an alteration of the tea duty, in the direction indicated by the Amendment, would be a tax on the poor. The very fact that there was to be an ad valorem duty would be an incentive to import the lower classes of tea, and no one would say that that would be an advantage to the people of this country. The question, however, should also be looked at from the point of view of the Exchequer. When every Budget was introduced, the Chancellor of the Exchequer was expected to tell the House what he anticipated would be the result of the imposition of certain taxes; but, if an ad valorem duty was imposed, he would be unable to say within a million or two what the revenue from the tea duty would be. An ad valorem duty was, no doubt, in theory correct, but it could not be worked properly in regard to certain articles like tea. The ad valorem system was advocated in the case of the coal duties, and coal below 6s. per ton was free from export duty. The Chancellor of the Exchequer must regret that that was the case, because he must know that there were suspicious circumstances in connection with the declared value of much of the exported coal. In the case of tea many superior qualities would be returned at a very low value, and the wholesale dealers would sell them to the retailers, who, in turn, would often sell them to the public as a special brand of tea at 3s. or 4s. per pound, when only 2d. or 3d. duty per pound had been paid on them. Therefore, he thought that the hon. Member, on due consideration, would find that this Amendment was not one which he ought to ask the House to accept. No hon. Member in the House objected to the tea duty more than he did. He recognised that in many respects it was an unjust tax, and he should like to see it abolished. Throughout his political career he had always denounced it; but he recognised that, owing to the action of hon Gentlemen opposite, they had already exacted a pledge from Ministers that, during the existence of this Parliament, the present fiscal policy of the country would not be interfered with. [OPPOSITION ironical laughter.] Hon. Gentlemen might laugh, but he thought he had heard them denounce any alteration of our fiscal system, and he believed that until we had an entirely new arrangement of our fiscal system—

THE CHAIRMAN

I do not think that the discussion of the fiscal system of the country is in order.

MR. RENWICK

said he did not wish to discuss the re-arrangement of the fiscal system, but there were difficulties in the way of the Chancellor of the Exchequer adopting an ad valorem duty. The tea duty could not be altered in the direction indicated, unless there was an entire alteration of the duties on which the present Budget was based; and he was surprised that hon. Members had put down all these Amendments in respect of the tea duty when they knew that they could not be enforced without a re-arrangement of the whole fiscal system. He thought the Chancellor of the Exchequor was on safe ground when he maintained a uniform duty of 8d. per pound on all teas, and for that reason he should certainly oppose the Amendment.

MR. EUGENE WASON

said that the hon. Member who had just sat down considered the tea duty unjust. He heartily endorsed that sentiment. It was unjust and cruelly hard on poor people; but he believed it would be much less so if the Amendment of the hon. Member for Devonport were accepted, and a higher duty were placed on the higher grades of tea. He was not a tea grower or a tea dealer, but he was a tea drinker. [MINISTERIAL laughter.] Why not? He supported the Amendment because his constituents were strongly interested in the increased price of tea which would be caused by this addition to the duty, and the Amendment of the hon. Member for Devonport, which he cordially supported, would mitigate its harsh incidence.

MR. AUSTEN CHAMBERLAIN

said there was one reason which, under any circumstances, would make it impossible for him to accept the proposal of the hon. Member for Devonport. The acceptance of the Amendment would largely decrease the revenue whch he hoped to obtain from the tax on tea, and would thus destroy the balance of the Budget. The hon. Gentleman himself could give no estimate of the effects of his proposal. The hon. Gentleman, who had special knowledge of the trade, must he aware that the average price of tea sold in bond in this country did not exceed 8d. per pound, and if the duty were arranged so that it would not exceed 50 per cent. of the value of the tea, that would destroy a very large proportion of the revenue which he was seeking to raise. Instead of obtaining an additional £2,000,000 by raising the duty to 8d., the effect of this Amendment would be to give them an even less revenue than was obtained from the present 6d. duty. But that was not by any means the only objection to an ad valorem duty on tea. It he rightly understood the hon. Member's argument, it was that as the percentage which the duty bore to the value of the tea in bond was higher now than it had been in the previous year, therefore the tax was more unjust, that was to say, because the price of the article had fallen the duty ought to fall too. If the hon. Member was logical, it would follow that the higher the cost of an article, even though it might be an article of prime necessity to the people, the higher would be the duty they were justified in putting upon it, and vice versa. That was surely a reductio ad abswdum.

MR. KEAKLEY

said his point was that the right hon. Gentleman was not entitled to put a duty of 130 percent. on an article of daily consumption.

MR. AUSTEN CHAMBERLAIN

said that might have been the object of the hon. Member, but his illustrations would support the logical absurdity he had just indicated. An ad valorem duty in the case of tea was in existence up to the year 1833, when the monopoly of the East India Company came to an end. With the close of that monopoly it at once became practically impossible, without inconvenience and injustice to the trade, to levy an ad valorem duty, and from 1835 onwards there had been a fixed specific duty upon tea irrespective of value. The hon. Gentleman had said that so large a proportion of the tea now imported was sold under public auction that there would be no difficulty in arriving at its value for the purpose of assessing the duty. But the hon. Member would find that some of the biggest importers of tea into this country imported on their own account, and no public sale by auction took place in their case.

MR. KEARLEY

said that 95 per cent. of the tea imported was sold by public auction.

MR. AUSTEN CHAMBERLAIN

said that it was not desirable that in these cases the Committee should be deprived of the power of arriving at the duty that ought to be paid by methods which were just and fair and not give rise to disputes. Some of the biggest importers of tea on their own account also acted as distributers.

MR. KEARLEY

No, no.

MR. AUSTEN CHAMBERLAIN

said he had access to some sources of information which the hon. Gentleman would respect, and he was advised that some of the largest individual importers imported on their own account and their teas would not be sold at public auction. If the hon. Member for Devonport was not satisfied with his authority, he would give him another authority who was more intimately associated with the trade than himself. The hon. Member for West Islington, who had special knowledge on this subject, and who had not spoken on this Amendment, spoke in opposition to a proposal to levy an ad valorem duty a few years ago, and said— If anyone would think for a moment how the tea trade could be carried on with a graduated tax, it would be enough to make him support the Chancellor of the Exchequer. Such a duty would interfere with the immense trade done in tea in bond, because the seller, the second seller, or the third seller would have to produce the original invoice, so that the duty might be paid upon that. Thus he perceived the price that had been paid by all previous purchasers. It would give a most disastrous blow to the distributers of tea in England, and it would, he thought, accomplish the ruin of the grower of tea in India and Ceylon.

MR. KEARLEY

I have converted him since then.

MR. AUSTEN CHAMBERLAIN

said that the hon. Member for West Islington continued— He believed it would be impossible to carry on the trade under the scheme proposed by the Amendment. That Amendment was exactly the Amendment proposed by the hon. Member for Devonport. What, after all, was the object of hon. Gentlemen opposite? The supporters of this Amendment felt that the poor man should not pay as high a duty on his tea AS the rich man paid on his. They assumed that the working classes generally drank the cheap and poor quality of tea, and that they would obtain the benefit of this reduction of duty. He doubted that very much.

MR. EUGENE WASON

said that the poor man did not pay the same price for his tea as the rich man.

MR. AUSTEN CHAMBERLAIN

said he would take his argument back a further stage. A specific duty on tea, so far as it had any effect as between one class of tea and another, favoured the use of a better class where they had an ad valorem duty. The hon. Gentleman assumed that it was the working classes generally who drank the cheaper and poorer qualities of tea, and that they would find the benefit of this reduction of duty. But he did not think it was oeconomically sound to encourage them to drink the poorest qualities of tea, even if the price were cheaper, because when the quality was taken into account he doubted whether they would get better or as good value for their money. His hon. friend the Member for West Islington, whose knowledge of questions of this kind nobody could dispute, in the subsequent course of the debate to which he had alluded, confirmed the view of his right hon. friend the Member for West Bristol, when Chancellor of the Exchequer, that the poor man well knew what was good tea and what was bad tea, and that he was able to purchase good tea, and did purchase good tea. The hon. Member for West Islington then said— The great, difficulty about an ad valorem duty on tea in this country, or on any other article, was that it would put a premium on low qualiy. The object of the Committee ought to lie to pass such laws as would make all producers give to the people the best quality at the lowest possible price. If the Committee adopted the principle of giving a lower tax on a lower quality it would put a premium on the production of a low quality of goods. The Chancellor of the Exchequer said they must not assume that the poor consumed the cheapest quality. His experience confirmed that opinion. The cheapest quality was bought by mean rich people, who gave it to their servants. The poorest people often distinguished themselves by the excellent taste they displayed, so far as tea and, he believed, other articles of consumption were concerned. If they got little, they demanded that it should be good. That was a sound principle to go upon. There was no real economy in bad quality. He did not always accept the authority of the hon. Member for West Islington, but he must agree with him on this question when the hon. Member spoke from wide knowledge and large experience. He did not think it would be in the interests of the consumers in this country to encourage the importation and consumption of the worser qualities of tea. He was certain that if they differentiated the tax on the values of tea they would cause great difficulties in carrying on the trade, and would destroy the revenue for which the tax was proposed. For these reasons he was unable to accept the Amendment.

MR. McKENNA

said that the Chancellor of the Exchequer had made it abundantly clear that there were difficulties in the way of this duty. Nobody would deny that for a moment. But they had to find an alternative. On the one hand it did seem obviously unfair that tea which was sold at 1s. or 2s. per lb. should bear the same tax as tea which was sold at 6d. The Chancellor of the Exchequer seemed to be under the impression that cheap tea was bought by millionaires and dear tea by the poorer classes.

MR. T. W. RUSSELL

said that the Irish peasants drank the most expensive tea.

MR. MCKENNA

said that very often that might be the case, and he accepted the statement of the hon. Member for South Tyrone as true of Ireland. He thought that would have been a very strong reason why the Amendment moved earlier in the day from the Irish Benches should have been accepted. But the hon. Member for Devonport, who was an authority on this subject, gave contrary testimony. That hon. Gentleman had been asked whether he proposed a reduction of the tea lax during the Devonport election. He would tell the Committee that the electors of Devonport were asked whether they wanted "Dear food and cheap Chinaman.' If the consumption remained as at present the statement that there would be loss of revenue would be accurate, but he submitted that as the consumption would enormously increase, the right hon. Gentleman would not suffer the loss that he anticipated. If that were the reason why the right hon. Gentleman objected to the ad valorem duty he might propose one of 100 per cent., which would have the effect of leaving the existing duty of 6d. per lb. exactly where it now stood on cheap tea, and would impose a considerably heavier tax on dear tea, a burden which would be borne by the people in this country who did not trouble whether the price of their tea was increased. If the Amendment were to be accepted in that form, it would get rid of much of the inconvenience existing under the present tax. The Chancellor of the Exchequer had referred to the difficulty in collecting the tax, and had instanced what took place in J1833, but they had been told that 95 per cent, of the present teas were sold in bond by public auction. The objections of the Chancellor of the Exchequer had been disposed of, and there was no real or substantial reason before the Committee why the Amendment should not be accepted.

MR. H. C. RICHARDS (Finsbury, E.)

said he rose to contradict the statement made by the hon. Member for Devonport. In his constituency there were sold millions of pounds of tea by a gentleman who was one of the largest tea traders in the world, and who did not buy his tea by auction, but owned his own tea gardens. "He referred to Sir Thomas Lipton. A report in the Times of the annual meeting of the Tower Tea Company stated that the action of the Chancellor of the Exchequer in raising the duty would in no way affect them or their customers, as they had made provision in the matter. If that statement was accurate, why should different statements be brought into the House? This was not a discussion on the merits of the tea duty, but was simply an attempt to prevent the Chancellor of the Exchequer from getting his Budget Bill through. He had seen tea sold in Ceylon on a dull day at 2½d. per lb., which meant that a very large quantity would be put on this market at 3¾d. per lb. Where would be the revenue if the ad valorem duty were adopted? It would bring into the market the greatest rubbish; it would encourage the impecunious manufacturer to put his goods on the market at the earliest possible period, and this country would be glutted with tea that was utterly unfit for human consumption. It was the policy of the producers to supply the British public with something that would encourage them to purchase from them again. The growers of India were unanimous on the point that the duty imposed should not be an ad valorem one. No argument in favour of that kind of duty had been advanced, and lie trusted that the Committee would not agree with the Amendment.

SIR FREDERICK BANBURY (Camberwell, Peckham)

said he understood that one of the reasons why hon. Members opposite advocated an ad valorem duty was that the great bulk of tea was sold by auction and therefore the Customs officials' duty would be simplified. But what was there to prevent tea growers from sending direct to the seller and sharing the profit, and in that case how would the Customs officials be able to arrive at the actual cost? Again, what was to prevent the sellers in this country purchasing estates in Ceylon and India, and importing their own tea and selling it direct to the consumer? The object of this tax was a revenue object, and therefore the first duty of a Chancellor of the Exchequer was to see how he could raise it without dislocation of the business on which the tax was imposed, and with the least cost to the country. He would point out that the incidence of indirect taxation would be changed if the Amendment were to be carried, and there was no doubt that at the present moment indirect taxation pressed very lightly on those classes who were called upon to bear it, and unless hon. Members opposite could show good reasons for accepting it, he should vote against the Amendment.

SIR JOHN GORST (Cambridge University)

said he rose to make a practical suggestion. They had heard speeches from a number of very sound fiscal reformers, who had proved to demonstration the impossibility of an ad valorem duty. He would suggest that a member of the Tariff Commission should address the Committee and explain how a wholesale system of ad valorem duty could be put into operation.

MR. MARKHAM (Nottinghamshire, Mansfield)

wished, now that the Govern-merit had a majority, to move an Amendment to the Amendment already before the Committee. It was a well-known principle that the equality or inequality of taxation was based solely and wholly on the ability of those who had to bear it. This tax upon tea had been condemned as being a tax on the poorest section of the community, and in his humble opinion it was not a tax with which the Committee ought to agree. Whether it were proposed by a Liberal or a Conservative Government, he should always be opposed to a tax upon tea, bread, or any other necessary of life being levied on the poorest section of the community. He would therefore move to reduce the tax by the sum of eightpence.

THE CHAIRMAN

The object of the hon. Gentleman's Amendment is to reject the whole clause, and that would not be in order as an Amendment.

MR. RUNCIMAN (Dewsbury)

desired to carry the debate a stage further before the Amendment was taken to a division. The proceedings of the Committee would not redound either to the dignity of Parliament or to a speedy passage of the Bill. His hon. friend had proposed an Amendment before the dinner interval with all seriousness. Since then they had had a series of speeches almost entirely from the other side of the House, some being germane to the Amendment and some quite otherwise. He did not wish to refer to the speech of the hon. Member for Peckham, whose views on this subject were so notorious in this House, but he did desire to refer to a remark made by the hon. and learned Member for Finsbury. The hon. and learned Member had informed the House that a great distributer of tea in his constituency (Sir Thomas Lipton) was a man who did not buy tea in the Mincing Lane auction, but grew all the tea he sold. That simply showed how little the hon. and learned Member knew about the tea distributers of his own constituency. As a matter of fact, Sir Thomas Lipton's buyers were in Mincing Lane every day of the week except Sundays.

MR. H. C. RICHARDS

On whose authority do you say that?

MR. KEARLEY

On mine.

MR. RUNCIMAN

On the authority of the hon. Member for Devonport and the hon. Member for West Islington.

MR. H. C. RICHARDS

I deny it.

MR. RUNCIMAN

continuing, said he might inform the hon. Member that probably more than one-half of the tea sold by the firm of Lipton was not grown by Lipton, Limited, but was bought by them in the London auction. But the whole point which had been raised by his hon. friend who moved the Amendment was that a specific duty of 6d. in the lb., or 8d. in the lb. if this clause were passed, was a duty which fell very unfairly upon the cheap tea, which in itself was a great burden to the trade, and which placed those engaged in the trade in considerable difficulties every time the Budget came round. That was a difficulty which had been faced in many countries of the world, especially in the United States of America, and he commended to tariff reformers the example of America, which in all tariff questions they were prepared to follow. In America it had been found that specific duties were unjust, and there had been a general tendency to return to an ad valorem basis. In 1891, for instance, a Congressional Committee which sat upon the subject reported entirely against specific duties and unanimously in favour of levying duties on an ad valorem basis. That example might well be followed by the Chancellor of the Exchequer, but the right hon. Gentleman was understood to be prevented from following the example of America in fiscal matters by a pledge which he and other members of the Government hid given by some vague means to the country. But members of the Opposition were also bound by a pledge not to follow the example of the Government in fiscal matters, and their pledge would forbid them to bind themselves to the principle of levying on the poorest descriptions of tea the same duty as was levied on the more expensive classes, for the simple reason that they held that the poor, if they did not already drink the cheaper teas, should at all events, if the duty was to be increased, have an opportunity of resorting to the cheaper teas in order to escape a portion of the tax. That point of view had been entirely overlooked by the Chancellor of the Exchequer, but it was well worth the attention of the Committee. The disadvantages of the ad valorem basis were certainly very great. He would not attempt to describe the ingenuity which would be shown by tea dealers and importers if an ad valorem basis were adopted, but there would certainly be a great encouragement to them to discover means for getting round the declarations of value in order that they might, to some extent, avail themselves of the graduation for the lower values. Such a basis would also involve a greater cost of collection, and, however far the Mincing Lane auction might be considered reliable, it would be necessary to institute some means by which the Chancellor of the Exchequer and his officials would be enabled to check the values on which the duty was levied. On the other hand, the advantages of the ad valorem basis were great. Importers would know that the imposition of the tax was on an intelligible basis, and that the amount was in proportion to the value of the commodity in which they dealt. He could not see, however, how the simplicity of the specific duty could be secured under an ad valorem system. The ease and cheapness of collection at present was so great that, from the tax-collecting point of view, the adoption of an ad valorem basis would require greater justification than had yet been shown. He suggested that before any further decision was come to on the subject hon. Members should carefully weigh the arguments on both sides, which he had endeavoured impartially to place before the Committee.

MR. MARKHAM

asked whether he was to understand that his Amendment was ruled out of order.

THE CHAIRMAN

Will the hon. Member draft the Amendment 1 If he will do so, I will then consider it. I do not see how he can, but I invite him to do it.

MR. T. W. RUSSELL

said the House was a little fuller than when the discussion on this point began. He had listened to several speeches and heard the extraordinary assertion of the hon. and learned Member for Finsbury that the object of the opposition to this tea duty was to put difficulties in the way of the Chancellor of the Exchequer in carrying the Finance Bill. He thought that that was a very considerable statement in view of what had taken place in the House since nine o'clock. He happened to have been in the House during that time, and had heard speech after speech delivered, the sole object being not to facilitate the passing of the Finance Bill but to delay proceedings in order that the Government majority might be enabled to come down from their dinner before a division was taken. He should not have said anything about the matter; but when an hon. Gentleman on the Government side of the House said that those in opposition to the duty were engaged in the work suggested, he thought it was going a little too far. In the earlier part of the discussion it was asserted that the rich bought the dearer class of tea and the poor the cheaper class. That was the argument for the ad valorem duty. That might be so in England; but the peasant in Donegal, Galway, and other places drank an expensive kind of tea, and the way the ad valorem duty would work in that case would be that the poor would pay double taxation on the tea they consumed. He was against this whole tax, and he was willing to do anything he could to stop it or to reduce it; but he was not willing to vote for an Amendment which would put a heavier duty on the poor in Ireland than that which they now paid. That was the reason why he opposed the Amendment.

MR. SYDNEY BUXTON

thought some note ought to be taken of the proceedings of the last hour and a half. Members of the Opposition for two days had been endeavouring to discuss Amendments to the Budget Bill in a reasonable spirit; and it could not be contended that they had shown any obstructive tendency or desire. But that could hardly be said of the manner in which hon. Members opposite had conducted the proceedings since the dinner recess. Practically the whole time had been occupied by the "Toriest" Members, such as the hon. Members for Peckham, Finsbury, and Sheffield, who had spoken, not for the purpose of debating the merits of the Amendment, but simply to occupy time. [Cries of "Withdraw."] He would at once withdraw all adverse criticism if any of the hon. Members he had named would assure the Committee that they had risen to discuss the merits of the Amendment and not merely to consume time.

THE CHAIRMAN

I think the hon. Member has forgotten the rule of Parliament which forbids hon. Members to impute motives.

MR. SYDNEY BUXTON

said he would at once withdraw the statement and apologise to the three hon. Members re-

ferred to. He was quite sure that the sole object with which they had addressed the I Committee was to convince hon. Members that the Amendment was not one that ought to be accepted. Personally he did not intend to discuss the merits of the Amendment; an observation made by the Chancellor of the Exchequer was quite sufficient to induce him to vote in its favour. The right hon. Gentleman had stated that the Amendment, if carried, would upset the balance of the Budget. That meant that less revenue would be drawn from indirect taxation, and that the deficit would have to be made up by the income-tax payer. That would be entirely in accord with his views as to what ought to have been the finance of the year, and, therefore, he should support the Amendment.

Question put.

The Committee divided:—Ayes, 148; Noes, 194. (Division List, No. 165.)

AYES.
Abraham, William (Cork, N.E.)	Ferguson, R. C. Munro (Leith)	Lundon, W.
Abraham, William (Rhondda)	Fitzmaurice, Lord Edmond	Lyell, Charles Henry
Allen, Charles P.	Flynn, James Christopher	Macnamara, Dr. Thomas J.
Barry, E. (Cork, S.)	Foster, Sir Walter (Derby Co.)	MacVeagh, Jeremiah
Bayley, Thomas (Derbyshire)	Fowler, Rt. Hon. Sir Henry	M'Arthur, William (Cornwall)
Black, Alexander William	Fuller, J. M. F.	M'Crae, George
Boland, John	Furness, Sir Christopher	M'Killop, W. (Sligo, North)
Brigg, John	Gilhooly, James	M'Laren, Sir Charles Benjamin
Broadhurst, Henry	Gladstone, Rt. Hn. Herbert John	Mansfield, Horace Rendall
Buchanan, Thomas Ryburn	Griffith, Ellis J.	Markham, Arthur Basil
Burke, E. Haviland	Gurdon, Sir W. Brampton	Mooney, John J.
Burt, Thomas	Haldane, Rt. Hon. Richard B.	Morgan, J. Lloyd (Carmarthen)
Buxton, Sydney Charles	Hammond, John	Morley, Charles (Breconshire)
Caldwell, James	Hayden, John Patrick	Murphy, John
Cameron, Robert	Helme, Norval Watson	Nannetti, Joseph P.
Campbell, John (Armagh, S.)	Hemphill, Rt. Hon. Charles H.	Nolan, Joseph (Louth, South)
Causton, Richard Knight	Henderson, Arthur (Durham)	O'Brien, K. (Tipperary, Mid.)
Cawley, Frederick	Horniman, Frederick John	O'Brien, Patrick (Kilkenny)
Condon, Thomas Joseph	Humphreys-Owen, Arthur C.	O'Brien, P. J. (Tipperary, N.)
Craig, Robert Hunter (Lanark)	Hutton, Alfred E. (Morley)	O'Connor, James (Wicklow, W.)
Crean, Eugene	Jacoby, James Alfred	O'Donnell, John (Mayo, S.)
Crooks, William	Johnson, John (Gateshead)	O'Donnell, T. (Kerry, W.)
Cullman, J.	Jones, D. Brynmor (Swansea)	O'Kelly, Jas. (Roscommon, N.)
Davies, Alfred (Carmarthen)	Jones, William(Carnarvonshire	O'Malley, William
Davies, M. Vaughan (Cardigan)	Joyce, Michael	O'Shaughnessy, P. J.
Delany, William	Kennedy, Vincent P.(Cavan, W.	O'Shee, James John
Devlin, Chas. Ramsay (Galway	Kilbride, Denis	Parrott, William
Devlin, Joseph (Kilkenny, N.)	Law, Hugh Alex. (Donegal, W.)	Partington, Oswald
Dewar, John A. (Inverness-sh.)	Lawson, Sir Wilfrid (Cornwall)	Pease, J. A. (Saffron Walden)
Dilke, Rt. Hon. Sir Charles	Layland-Barratt, Francis	Pirie, Duncan V.
Donelan, Captain A.	Leamy, Edmund	Power, Patrick Joseph
Doogan, P. C.	Leese, Sir Jos. F. (Accrington)	Priestley, Arthur
Ellice, Capt E.C (S Andrw*s Bghs	Leigh, Sir Joseph	Rea, Russell
Esmonde, Sir Thomas	Leng, Sir John	Redmond, John E. (Waterford)
Evans, Samuel T. (Glamorgan)	Levy, Maurice	Reid, Sir R. Threshie (Dumfries
Eve, Harry Trelawney	Lewis, John Herbert	Roberts, John Bryn (Eifion)
Farrell, James Patrick	Lloyd-George, David	Roberts, John H. (Denbighs.)
Fenwick, Charles	Lough, Thomas	Robertson, Edmund (Dundee)
Robson, William Snowdon	Soares, Ernest J.	White, Luke (York, E.R.)
Roe, Sir Thomas	Spencer, Rt. Hn. C.R (Northants	Whitley, J. H. (Halifax)
Rose, Charles Day	Stanhope, Hon. Philip James	Whittaker, Thomas Palmer
Runciman, Walter	Sullivan, Donal	Wilson, Fred. W. (Norfolk, Mid.
Samuel, Herbert L. (Cleveland)	Taylor, Theodore C. (Radcliffe)	Wilson, Henry J. (York, W.R.)
Samuel, S. M. (Whitechapel)	Thomas, Abel (Carmarthen, E.)	Wilson, John (Durham, Mid.)
Shackleton, David James	Thomas, Sir A.(Glamorgan, E.)	Woodhouse, Sir J.T (Huddersf'd
Shaw, Charles Edw. (Stafford)	Thomas, D. Alfred (Merthyr)	Young, Samuel
Sheehan, Darnel Daniel	Tomkinson, James
Sheehy, David	Toulmin, George	TELLERS FOB THE AYES—Mr.
Shipman, Dr. John G.	Trevelyan, Charles Philips	Kearley and Mr. M'Kenna.
Slack, John Bamford	Wason, Eugene (Clackmannan)
Soames, Arthur Wellesley	Wason, John Cathcart (Orkney)
NOES.
Agg-Gardner, James Tynte	Finch, Rt. Hon. George H.	MacIver, David (Liverpool)
Allhusen, Augustus Henry Eden	Finlay, Sir Robert Bannatyne	Maconochie, A. W.
Arkwright, John Stanhope	Fison, Frederick William	M'Arthur, Charles (Liverpool)
Arrol, Sir William	Fitzroy, Hn. Edward Algernon	M'Iver, Sir Lewis (Edinburgh, W
Atkinson, Rt. Hon. John	Flannery, Sir Fortescue	M'Killop, James (Stirlingshire)
Aubrey-Fletcher, Rt. Hn. Sir H.	Flower, Sir Ernest	Majendie, James A. H.
Bagot, Capt. Josceline Fitz Roy	Forster, Henry William	Manners, Lord Cecil
Bailey, James (Walworth)	Galloway, William Johnson	Martin, Richard Biddulph
Bain, Colonel James Robert	Gardner, Ernest	Milner, Rt. Hn. Sir Frederick G.
Balcarres, Lord	Gordon, Hn. J.E.(Eigin & Nairn)	Milvain, Thomas
Balfour, Rt. Hon. A.J. (Manch'r	Gore, Hn G.R.C. Ormsby-(Salop	Molesworth, Sir Lewis
Balfour, Rt. Hon. G. W. (Leeds	Gorst, Rt. Hon. Sir John Eldon	Montagu, G. (Huntingdon)
Banbury, Sir Frederick George	Goulding, Edward Alfred	Montagu, Hn. J. Scott (Hants.)
Bignold, Arthur	Gray, Ernest (West Ham)	Moon, Edward Robert Pacy
Bigwood, James	Grenfell, William Henry	Morpeth, Viscount
Blundell, Colonel Henry	Gretton, John	Morrison, James Archibald
Boscawen, Arthur Griffith	Greville, Hon. Ronald	Mount, William Arthur
Bousfield, William Robert	Guthrie, Walter Murray	Muntz, Sir Philip A.
Bowles, Lt.-Col. H.F (Middlesex	Hain, Edward	Murray, Charles J. (Coventry)
Brassey, Albert	Hall, Edward Marshall	Newdegate, Francis A. N.
Brodrick, Rt. Hon. St. John	Hardy, L. (Kent, Ashford)	Nicholson, William Graham
Bull, William James	Hare, Thomas Leigh	Palmer, Walter (Salisbury)
Butcher, John George	Harris, F. Leverton (Tynem'th	Parkes, Ebenezer
Carlile, William Walter	Haslett, Sir James Horner	Pease, Herb. Pike (Darlington)
Carson, Rt. Hon. Sir Edw. H.	Hatch, Ernest Frederick Geo.	Percy, Earl
Cautley, Henry Strother	Hay, Hon. Claude George	Piatt, Higgins, Frederick
Cavendish, V.C.W. (Derbyshire	Helder, Augustus	Plummer, Walter R.
Cayzer, Sir Charles William	Henderson, Sir A.(Stafford, W.	Pretyman, Ernest George
Cecil, Evelyn (Aston Manor)	Hermon-Hodge, Sir Robert T.	Pryce-Jones, Lt.-Col. Edward
Cecil, Lord Hugh (Greenwich)	Hickman, Sir Alfred	Pym, C. Guy
Chamberlain, Rt Hn. J.A (Worc.	Hobhouse, Rt Hn H (Somers't, E	Quilter, Sir Cuthbert
Chapman, Edward	Hope, J.F. (Sheffield, Brightside	Randies, John S.
Charrington, Spencer	Hoult, Joseph	Rankin, Sir James
Coates, Edward Feetham	Howard, Jn. (Kent, Faversham	Rasch, Sir Frederic Carne
Cochrane, Hon. Thos. H. A. E.	Howard, J. (Midd., Tottenham)	Ratcliff, R. F.
Corbett, T. L. (Down, North)	Hunt, Rowland	Reid, James (Greenock)
Craig, Charles Curtis (Antrim, S.)	Hutton, John (Yorks., N.R.)	Remnant, James Farquharson
Cripps, Charles Alfred	Jameson, Major J. Eustace	Renwick, George
Cross, Alexander (Glasgow)	Jebb, Sir Richard Claverhouse	Richards, Henry Charles
Crossley, Rt. Hon. Sir Savile	Jeffreys, Rt. Hon. Arthur Fred.	Ridley, Hon. M.W. (Stalybridge
Dalkeith, Earl of	Johnstone, Heywood (Sussex)	Ridley, S. Forde (Bethnal Green
Davenport, William Bromley	Kenyon, Hn. Geo. T. (Denbigh)	Roberts, Samuel (Sheffield)
Denny, Colonel	Kenyon-Slaney, Col. W.(Salop.	Robertson, Herbert (Hackney)
Dickinson, Robert Edmond	Keswick, William	Rolleston, Sir John F. L.
Dickson, Charles Scott	King, Sir Henry Seymour	Rollit, Sir Albert Kaye
Dimsdale, Rt. Hn. Sir Joseph C.	Lambton, Hon. Frederick Wm.	Ropner, Colonel Sir Robert
Disraeli, Coningsby Ralph	Law, Andrew Bonar (Glasgow)	Russell, T. W.
Doughty, George	Lawson, Jn. Grant (Yorks., N.R	Rutherford, John (Lancashire)
Douglas, Rt. Hon. A. Akers	Lee, A. H. (Hants., Fareham)	Rutherford, W. W. (Liverpool)
Doxford, Sir William Theodore	Legge, Col. Hon. Heneage	Sackville, Col. S. G. Stopford
Duke, Henry Edward	Loder, Gerald Walter Erskine	Seely, Charles Hilton (Lincoln)
Durning-Lawrence, Sir Edwin	Long, Rt. Hn. Walter (Bristol, S.	Sharpe, William Edward T.
Dyke, Rt. Hn. Sir William Hart	Lonsdale, John Brownlee	Skewes-Cox, Thomas
Egerton, Hon. A. de Tatton	Lowe, Francis William	Smith, H C (North'mb. Tyneside
Faber, Edmund B. (Hants., W.	Lucas, Col. Francis (Lowestoft)	Smith, James Parker (Lanarks.)
Fielden, Edward Brocklehurst	Macdona, John Cumming	Spear, John Ward

Stanley, Edward Jas. (Somerset	Tritton, Charles Ernest	Wilson, John (Glasgow)
Stanley, Rt. Hon. Lord (Lanes.)	Valentia, Viscount	Wodehouse, Rt. Hn. E.R.(Bath
Stock, James Henry	Vincent, Col. Sir C.E.H (Sheffield	Wolff, Gustav Wilhelm
Stone, Sir Benjamin	Walker, Col. William Hall	Wortley, Rt. Hon. C. B. Stuart
Talbot, Lord E. (Chichester)	Walrond, Rt. Hn. Sir William H.	Wrightson, Sir Thomas
Taylor, Austin (East Toxteth)	Webb, Colonel William George	Younger, William
Thorburn, Sir Walter	Welby, Lt.-Col. A.C.E (Taunton
Thornton, Percy M.	Welby, Sir Charles G.E.(Notts.	TELLERS FOB THE NOES—Sir
Tollemache, Henry James	Wharton, Rt. Hon. John Lloyd	Alexander Acland-Hood
Tomlinson, Sir Win. Edw. M.	Wilson, A. Stanley (York, E.R.	and Mr. Ailwyn Fellowes.

MR. KEARLEY

moved to reduce the tea duty from 8d., as proposed by the Bill, to 4d. He said that before the duty had been raised from 4d. to 6d. the consumption of tea per head of the population had been steadily increasing, but within recent years it had absolutely declined. It was also important to bear in mind the effect this increase in the tea duty was having upon the quality of the tea sold. The production of tea of an inferior quality in countries which had not hitherto produced tea was now being encouraged. Last year the United States produced 5,000,000 lbs. of tea. Nobody would have thought that Germany was a tea-producing country, but it was a fact that last year Germany produced 504,000 lbs. of tea. Canada had also commenced shipping tea to this country. What was the explanation of this? The explanation was that the large increase in the duty had thrown the pressure of the demand upon tea of a very inferior character, which these countries supplied, and England had become the dust-bin of the world for all these cheap teas. Let the Committee consider what had been the effect upon our own dependencies. He could quote figures to show that the imports of tea to this country from Ceylon had enormously fallen off during the last few years. There had, during the same period, been a great increase in our importations from China. At one time China had almost ceased to have any influence upon the tea market, because the Indian and Ceylon tea production was sufficient to supply the demand, but this state of things had been altered. In the year 1901, 9,000,000 lbs. of China tea were imported into this country, but in 1903 our importation of teas from China had increased to 15,000,000 lbs.; whilst during the same period there had been a considerable fall in our importation of tea from Ceylon. That state of things arose from the fact that the tea duty had been increased-On the one hand they had a large diminution in their shipments of tea from Ceylon, and, on the other hand, a large increase in their importations of inferior teas from China. That had been brought about by the pressure of the demand for very low-priced tea, and that was one of the reasons why he wanted the duty on tea restored to the condition it was in before the war.

Why had the consumption of tea fallen off? It was because the wage-earning class had only so much money to spend and no more, and therefore when the price of tea was increased the consumption of that commodity was bound to diminish. When the price of tea went up the poor people had to buy an inferior quality. What had been the effect of this upon British trade? How had it affected the home trade? The Chancellor of the Exchequer seemed to pay no particular attention to this aspect of the question. Every business man knew that these continual alterations in the duty upon tea disorganised the trade. The increasing of such duties as the tea duty involved the locking up of a large amount of additional capital. He was surprised to learn the other day that in regard to the alterations made in the tea and sugars duties alone one firm had to sink £20,000 additional capital in order to carry on their business. It was obvious that this duty ought to be reduced. When the war was on none of them made any very great fuss about the tea duty being raised to 6d. because the Chancellor of the Exchequer told them distinctly that it was only being raised for war expenditure, and he assured them that when the war was over the exta 2d. would be taken off again. Ho had not heard any adequate reasons given by the right hon. Gentleman for placing this tax at so high a figure. He understood that one of the reasons for this tax was that the Chancellor of the Exchequer de sired to finance his Budget in such a way that next March he would have a hand some surplus. He believed the right hon. Gentleman had underestimated the revenue, and that it would be much more than he had budgeted for.

Amendment proposed— In page 1, line 21, to leave out the words 'eight pence,' and insert the words 'four pence.'"—(Mr. Kearley.)

Question proposed, "That the words 'eight pence' stand part of the clause."

MR. AUSTEN CHAMBERLAIN

said the hon. Member suggested that he had not been nearly sanguine enough in his estimates, or that he had concealed the facts from the House with a view to obtaining an abnormal surplus for ulterior motives——

MR. KEARLEY

said the Chairman had ruled that motives must not be imputed; he had never made any such suggestion.

Ms. AUSTEN CHAMBERLAIN

said he was glad to hear that. But the charge that he had not been sanguine enough was in direct contradiction to a good deal of the criticism made on the other side of the House. He had framed estimates, on the best advice, which he thought were not more than prudent; and a very short time ago he had consulted the same authorities, who told him that if he were budgeting at the present moment it would not be wise to estimate for a larger revenue. The hon. Member asked him to forego one-half of the revenue he hoped to raise from tea. If he did that he would be deliberately contemplating a deficit, and that was a course he, for one, would not take, whatever charms it might have for a Chancellor of the Exchequer who was anxious to avoid unpopularity. He was obliged to ask the House to agree to this duty in order to obtain the revenue necessary for the year. There was no doubt that in the last few years there had been a decrease in the importation of Ceylon tea. He thought that was in part due to some decrease in the power of consumption on the part of the people. It was certainly not wholly due to increased taxation. It was well known that a few years ago there was a great over-production in Ceylon, and that this country was supplied with a good deal of inferior tea. That brought down the prices of Ceylon tea, and great injury was done to the tea industry of the island. The planters had been recovering from that position, and it was not unnatural that they should have sought for other markets for their products instead of sending them to this country at ruinous prices. If the increased duty were calculated to affect particularly British-grown tea, he could not understand why it should not have affected Indian tea; but each year onward from 1895 showed a steady increase in the imports of Indian tea cleared for home consumption, and since 1900 the imports of Indian tea had increased by nearly as much as the imports of Ceylon tea had diminished. In 1900 the imports of Indian tea were 138,000,000 lbs., but in 1903 they were 150,000,000 lbs., or an increase of 12,000,000 lbs. He did not think that this extra tax upon tea would be specially injurious to our fellow subjects in India and Ceylon, who were producers of tea. He observed that some of the trade journals had concluded that the consumer would be made to pay this additional duty, but whether that would be so or not his position was that he was obliged to impose new taxation. He could not accept an Amendment which, instead of giving him more money, would take away from what he had.

MR. RUNCIMAN

said he was surprised at hearing the figures read out by the Chancellor of the Exchequer regarding the consumption of tea, because at an earlier stage of the Budget, when he quoted identically the same figures, the right hon. Gentleman described them as being utterly deceptive. But he now found the right hon. Gentleman using the same figures to prove his case. He put down a Question yesterday and the answer repeated the figures as to the decrease in consumption. The Question asked for the average consumption of tea per head in the United Kingdom during the years 1900–1–2–3, and the answer was that the average consumption could only be adduced approximately and that calculations on the quantity of tea on which duty was paid were apt to be misleading because they took no account of the duty paid on stocks in the hands of dealers and grocers. The figures were—1900, 6.07; 1901, 6.16; 1902, 6.06; 1903. 6.03. The explanation given by the Chancellor of the Exchequer for this drop would, he admitted, be valid if it occurred only in one year, but the same tendency occurred in 1903 as in 1902, and it was conceivable there had been a still further reduction per head of consumption in 1904. This seemed to show that the heavy taxation of recent years was having an effect upon the consumption of tea, that indeed for the first time in fifty years the tendency had been downward for two years in succession. The natural inference was not that the nation was reaching the saturation point in regard to tea, but that it was reaching a point at which it would bring a diminishing return to the Exchequer. Therefore, from that point of view, the Treasury would be well advised in refraining from putting on an extra 2d. this year.

How did this tax on tea compare with other countries? With one or two rather notable exceptions the taxation on tea imposed by the right hon. Gentleman was the highest compared with those nations with which they might reasonably compare this country. In Spain, Denmark, Germany, Holland, Belgium, Switzerland, Greece, the United States, and Turkey the taxation upon tea was much less than it was in this country. The taxation of tea was heavier in Russia, whose fiscal system he understood the right hon. Gentleman wished to copy. There the tax varied from 8d. on brick tea to 1s. 11¼d. on Ceylon or Indian tea. In France tea was taxed 9d. per pound when imported directly from a country out of Europe, and 11¾d. when imported from European entrepôts. In Portugal it reached the remarkable figure of 2s., with the result that the tea there was the vilest that human being ever tasted. In Italy it was 11d., and in Austria 9¾d. So that gradually this country had reached during the last few years the standard of being, so far as tea was concerned, a heavily taxed country. The right hon. Gentleman had made reference to the complaint of the Ceylon tea producers. He held in his hand a very powerful speech made by the late Governor of Ceylon, Sir J. West Ridgeway. He did not say that Ceylon producers were well able to bear the tax. What he said was this— We are told that the loss will fall on the consumer, and not on the producer, but we do not accept that statement. We dispute its accuracy; we say that in the future, as in the past, the loss will fall both on producer and consumer. But we are told that the increased duty will not check consumption. This is a strange doctrine; but this is an age of strange doctrines. The Chancellor of the Exchequer had not justified the increase of this tax except on the plea that he wanted money, that he had to obtain it somewhere, and that this was the easiest way to obtain it. If that was the principle which actuated the right hon. Gentleman it was one that he might well revise. He hoped the right hon. Gentleman's action in this matter would not be followed by any of his successors.

MR. AUSTEN CHAMBERLAIN

said he now understood that the reference of the Chairman to the Standing Order against attributing motives was addressed to another hon. Gentleman, and not to the hon. Member for Devonport. He was sorry that he had accused the hon. Member of attributing motives.

MR. LOUGH

said this was perhaps the most important Amendment which had been before the Committee on the tea duty. If any of them had a difficulty in following his hon. friend on the last Amendment, he did not think anyone should have the slightest difficulty in supporting him on this. The proposal was that they should reduce the tax on tea to the amount levied before the war. The effect of carrying the Amendment would be to deprive the Chancellor of the Exchequer of £4,000,000. He was glad to find the hon. Member for Devonport making that proposal because it indicated that, to far as he was concerned, he was willing that there should be a reduction of expenditure to that extent. He was glad to find his hon. friend supporting him in a policy of which he had been the solitary advocate on that Bench for many years. He wished to point out to the Chancellor of the Exchequer that some of the interesting figures he gave on this matter were not quite accurate. The right hon. Gentleman in dealing with the tea exported from Ceylon suggested that, because our consumption of Ceylon tea had diminished, the export had diminished. The fact was, that within the last four years there had been a large increase in the export of Ceylon tea. The exports had increased in four years by 22,000,000, so that although the imports into this country had decreased by 12,000,000, Ceylon had not suffered owing to that. That was all right for Ceylon, but how was it for this country? It meant that Ceylon tea was being shut out of this country on account of taxation. The chief country to which it was going was the United States, which had done exactly what the hon. Member for Devonport wished this House to do now. The United States had a war four years ago, and they raised the tea tax to 5d. in the pound, but when the war was finished it was taken off. It was a most extraordinary thing that during the past few years while every civilised country had been reducing the tea duty this country had not done so, though we had a most vital interest in reducing it. His hon. friend's proposal to return to the tea duty which was levied before the war was not one which should be lightly made by anybody who was not willing to face a reduction of expenditure, and to tell the Chancellor of the Exchequer how he was to get on without the duty. The right hon. Gentleman might consider whether he could not knock off a battleship, or an Army Corps—knock off anything—in order to reduce the tea tax to the point it stood at before the war.

MR. FLYNN

said he desired as an Irish Member to support the Amendment. It was certainly a very strange commentary on the financial policy of the Government that in fours years the duty on a necessary food of the people should be doubled. He found, from an examination of the figures, that it really meant to Ireland an increase of £340,000 to £360,000, and that would be raised from the poorest portion of the population. He had followed the controversy between the Chancellor of the Exchequer and the hon. Member for Devonport with some interest. The figures given by the hon. Member for Dewsbury seemed to corroborate those of the hon. Member for Devonport. In 1901 when the duty was 6d. the revenue amounted to £5,960,000, and for the year 1902–3, when the duty was the same, the revenue fell to £5,680,000, and that seemed to show that an increase in the duty led to a marked decrease in consumption.

MR. RENWICK

said he had with him the latest Returns of foreign import duties for 1904. He found that the duty on tea in the United States was 5d. in the pound. He did think that when they had a statement from an expert like the hon. Member for West Islington it ought to be correct.

MR. LOUGH

said the hon. Member was entirely mistaken. The book the hon. Member quoted from had a blue cover, and on trade matters he was very suspicious of it. There was no duty on tea in the United States. It was removed in 1902.

MR. RENWICK

said he would allow the Committee to draw its own conclusion. The hon. Member had said that other countries were sweeping away the duties on tea and similar articles. In reply to that he would say that he and others who disapproved of the present fiscal policy in this country were willing to do the same thing here if the revenue could be raised in the same way as in other countries, namely, by placing a tax on imported manufactured goods.

MR. GODDARD (Ipswich)

supported the Amendment on the ground that the tax was excessive having regard to the value of the article. The average wholesale price of tea in this country was 7d. per lb. A tax of 8d. per lb. on that value represented 110 per cent. That in itself was enormous. But they must not lose sight of the fact that there was a large quantity of tea of a very low value imported into the country and used especially by the poor. The proportion of taxation on such tea amounted to no less, than 160 per cent., which was altogether an undue proportion. Further he remembered a Report being issued some people called "sophisticators," who took any kind of tea leaves and treated them with all sorts of colouring matter in order to give them the appearance of the genuine article. By that means an absolutely deleterious article was foisted on the public. He feared that if they unduly increased the duty now it would be a direct temptation to the sophisti-cators to again supply the public with an article dangerous to health. He considered that the tax was a gross injustice to the poor. It was raised in the first place for the purposes of the war, and the Chancellor of the Exchequer of that day, in common with everybody else, anticipated that immediately the war was over the tax would be reduced. What had been the result? The income-tax payer had had 3d. in the £1, representing some £7,000,000 taken off his burden, while the poor indirect taxpayer had not only had nothing taken off but was now to have an extra 2d. put on an article which was a necessity. In his view nothing could be more unjust.

MR. SYDNEY BUXTON

said the Chancellor of the Exchequer had stated that he required the revenue. He thought he ought to recall to the recollection of the Committee the circumstances under which the additional duty was originally imposed. The right hon. Gentleman the Member for West Bristol, who was then

Chancellor of the Exchequer, justified the addition of 2d. on the ground that it was purely a war tax—an exceptional tax raised for the purpose of the war. He thought, therefore, that his hon. friend was fully justified in moving that the tax should be reduced to 4d. He quite agreed with what fell from his hon. friend the Member for West Islington that the bottom element of all this was the question of expenditure. This Government had run the country into enormous additional annual expenditure, and so long as they had an extravagant Government the country would have to bear extra taxation. The Chancellor of the Exchequer would have inflicted far less hardship on the community, and far less injury on trade, if instead of increasing the burden of indirect taxation he had raised the additional revenue he required by an increased income-tax.

Question put.

The House divided:—Ayes, 201; Noes, 146. (Division List No. 166.)

AYES.
Agg-Gardner, James Tynte	Cross, Alexander (Glasgow)	Grenfell, William Henry
Agnew, Sir Andrew Noel	Crossley, Rt. Hon. Sir Savile	Gretton, John
Allhusen, Augustus Henry Eden	Dalkeith, Earl of	Greville, Hon. Ronald
Arkwright, John Stanhope	Davenport, William Bromley	Hardy, L. (Kent, Ashford
Arrol, Sir William	Dickinson, Robert Edmond	Hare, Thomas Leigh
Atkinson, Rt. Hon. John	Dickson, Charles Scott	Harris, F. Leverton (Tynem'th
Aubrey-Fletcher, Rt. Hn. Sir H.	Digby, John K. D. Wingfield	Hay, Hon. Claude George
Bagot, Capt. Josceline Fitz Roy	Dimsdale, Rt. Hn. Sir Joseph C.	Heath, James (Staffords., A. W.
Bailey, James (Walworth)	Disraeli, Coningsby Ralph	Heaton, John Henniker
Bain, Colonel James Robert	Doughty, George	Helder, Augustus
Balcarres, Lord	Douglas, Rt. Hon. A. Akers	Henderson, Sir A.(Stafford, W.)
Balfour, Rt. Hon. A.J. (Manch'r	Doxford, Sir William Theodore	Hobhouse, Rt Hn H (Somers't, E
Balfour, Rt. Hon. G. W. (Leeds	Duke, Henry Edward	Hope, J.F. (Sheffield, Brightside
Balfour, Kenneth R. (Christen.	Durning-Lawrence, Sir Edwin	Hoult, Joseph
Banbury, Sir Frederick George	Egerton, Hon. A. de Tatton	Howard, Jn.(Kent, Faversham
Bignold, Arthur	Faber, Edmund B. (Hants., W.)	Hozier, Hn. James Henry Cecil
Bigwood, James	Fergusson, Rt. Hn. Sir J (Manc'r	Hudson, George Bickersteth
Blundell, Colonel Henry	Fielden, Edward Brocklehurst	Hunt, Rowland
Boscawen, Arthur Griffith	Finch, Rt. Hon. George H.	Jameson, Major J. Eustace
Bowles, Lt.-Col. H.F (Mid'lesex	Finlay, Sir Robert Bannatyne	Jeffreys, Rt. Hon. Arthur Fred.
Brassey, Albert	Fison, Frederick William	Jessel, Captain Herbert Merton
Brodrick, Rt. Hon. St. John	FitzGerald, Sir Robert Penrose	Johnstone, Heywood (Sussex) j
Bull, William James	Fitzroy, Hn. Edward Algernon	Kennaway, Rt. Hn. Sir John H.
Burdett-Coutts, W.	Flannery, Sir Fortescue	Kenyon-Slaney, Col. W. (Salop.)
Butcher, John George	Flower, Sir Ernest	Keswick, William
Carson, Rt. Hon. Sir Edw. H.	Forster, Henry William	King, Sir Henry Seymour
Cautley, Henry Strother	Foster, P. S. (Warwick, S.W.)	Law, Andrew Bonar (Glasgow)
Cavendish, V.C.W. (Derbyshire	Galloway, William Johnson	Lawson, Jn. Grant (Yorks., N.R
Chamberlain, Rt Hn. J.A (Worc.	Gardner, Ernest	Lee, A. H. (Hants., Fareham)
Chapman, Edward	Gordon, Hn. J.E. (Elgin & Nairn)	Lees, Sir Elliott (Birkenhead)
Charrington, Spencer	Gore, Hn G.R.C Ormsby-(Salop	Legge, Col. Hon. Heneage
Coates, Edward Feetham	Goulding, Edward Alfred	Leveson-Gower, Frederick N.S.
Cochrane, Hon. Thos. H. A. E.	Graham, Henry Robert	Loder, Gerald Walter Erskine
Colomb, Rt. Hn. Sir John C.	Grav, Ernest (West Ham)	Long, Rt. Hn. Walter (Bristol, S.)
Craig, Charles Curtis (Antrim, S.	Greene, Sir E.W. (B'ry S Edm'nd	Lonsdale, John Brownlee
Cripps, Charles Alfred	Greene, Henry D. (Shrewsbury)	Lowe, Francis William
Lowther, C. (Cumb., Eskdale)	Pryce-Jones, Lt.-Col. Edward	Stanley, Edward Jas.(Somerset
Lucas, Col. Francis (Lowestoft)	Pym, C. Guy	Stanley, Rt. Hon. Lord (Lanes.)
Lucas, Reginald J. (Portsmouth	Quilter, Sir Cuthbert	Stirling-Maxwell, Sir John M.
Lyttelton, Rt. Hon. Alfred	Randles, John S.	Stock, James Henry
Macdona, John Cumming	Rankin, Sir James	Strutt, Hon. Charles Hedley
Maclver, David (Liverpool)	Rasch, Sir Frederic Came	Talbot, Lord E. (Chichester)
Maconochie, A. W.	Ratcliff, R. F.	Taylor, Austin (East Toxteth)
M'Arthur, Charles (Liverpool)	Reid, James (Greenock)	Thorburn, Sir Walter
M'Iver, Sir Lewis (Edinburgh, W	Remnant, James Farquharson	Thornton, Percy M.
M'Killop, James (Stirlingshire)	Renwick, George	Tomlinson, Sir Wm. Edw. M.
Majendie, James A. H.	Ridley, Hon. M.W. (Stalybridge	Tritton, Charles Ernest
Martin, Richard Biddulph	Roberts, Samuel (Sheffield)	Valentia, Viscount
Melville, Beresford Valentine	Robertson, Herbert (Hackney)	Vincent, Col. Sir C.E.H (Sheffield
Milner, Rt. Hn. Sir Frederick G.	Rolleston, Sir John F. L.	Vincent, Sir Edgar (Exeter)
Milvain, Thomas	Ropner, Colonel Sir Robert	Walker, Col. William Hall
Molesworth, Sir Lewis	Round, Rt. Hon. James	Walrond, Rt. Hn. Sir William H.
Moon, Edward Robert Pacy	Royds, Clement Molyneux	Webb, Colonel William George
Morpeth, Viscount	Rutherford, John (Lancashire)	Welby, Lt.-Col. A.C.E (Taunton
Morrison, James Archibald	Rutherford, W. W. (Liverpool)	Welby, Sir Charles G.E.(Notts.
Mount, William Arthur	Sackville, Col. S. G. Stopford	Wharton, Rt. Hon. John Lloyd
Mowbray, Sir Robert Gray C.	Sassoon, Sir Edward Albert	Whitmore, Charles Algernon
Muntz, Sir Philip A.	Scott, Sir S. (Marylebone, W.)	Wilson, A. Stanley(York, E.R.)
Murray, Rt. Hon. A. G. (Bute)	Seely, Charles Hilton (Lincoln)	Wilson, John (Glasgow)
Murray, Charles J. (Coventry)	Seely, Maj. J.E.B. (Isle of Wight	Wodehouse, Rt. Hn. E.R. (Bath
Nicholson, William Graham	Sharpe, William Edward T.	Wortley, Rt. Hon. C. B. Stuart
Palmer, Walter (Salisbury)	Simeon, Sir Basrington	Wrightson, Sir Thomas
Parkes, Ebenezer	Skewes-Cox, Thomas	Younger, William
Pease, Herb. Pike (Darlington)	Smith, Abel H. (Hertford, East)
Peel, Hn. Wm. Robert Wellesley	Smith, H C (North'mb. Tyneside	TELLERS FOB THE AYES—Sir
Percy, Earl	Smith, James Parker(Lanarks.)	Alexander Acland-Hood
Pilkington, Colonel Richard	Smith, Hon. W. F. D. (Strand)	and Mr. Ailwyn Fellowes.
Plummer, Walter R.	Spear, John Ward
Pretyman, Ernest George	Stanley, Hn. Arthur (Ormskirk
NOES.
Abraham, William (Cork, N.E.)	Fenwick, Charles	Levy, Maurice
Abraham, William (Rhondda)	Field, William	Lewis, John Herbert
Ainsworth, John Stirling	Fitzmaurice, Lord Edmond	Lough, Thomas
Allen, Charles P.	Flynn, James Christopher	Lundon, W.
Asher, Alexander	Foster, Sir Walter (Derby Co.)	Lyell, Charles Henry
Asquith, Rt. Hn. Herbert Henry	Freeman-Thomas, Captain F.	Macnamara, Dr. Thomas J.
Barran, Rowland Hirst	Fuller, J. M. F.	MacVeagh, Jeremiah
Barry, E. (Cork, S.)	Gilhooly, James	M'Crae, George
Bayley, Thomas (Derbyshire)	Goddard, Daniel Ford	M'Kenna, Reginald
Beaumont, Wentworth, C. B.	Griffith, Ellis J.	M'Killop, W. (Sligo, North)
Black, Alexander William	Gurdon, Sir W. Brampton	M'Laren, Sir Charles Benjamin
Boland, John	Hammond, John	Mansfield, Horace Rendall
Brigg, John	Harcourt, Lewis V. (Rossendale	Markham, Arthur Basil
Broadhurst, Henry	Harwood, George	Morgan, J. Lloyd (Carmarthen)
Brown, George M. (Edinburgh)	Hayden, John Patrick	Morley, Charles (Breconshire)
Brunner, Sir John Tomlinson	Helme, Norval Watson	Murphy, John
Buchanan, Thomas Ryburn	Hemphill, Rt. Hon. Charles H.	Nannetti, Joseph P.
Burke, E. Haviland	Henderson, Arthur (Durham)	Nolan, Col. John P. (Galway, N.)
Buxton, Sydney Charles	Holland, Sir William Henry	Nolan, Joseph (Louth, South)
Caldwell, James	Horniman, Frederick John	Nussey, Thomas Willans
Campbell, John (Armagh, S.)	Jacoby, James Alfred	O'Brien, K. (Tipperary, Mid.)
Causton, Richard Knight	Johnson, John (Gateshead)	O'Brien, Patrick (Kilkenny)
Cawley, Frederick	Joicey, Sir James	O'Brien, P. J. (Tipperary, N.)
Churchill, Winston Spencer	Jones, D. Brynmor (Swansea)	O'Connor, James (Wicklow, W.
Condon, Thomas Joseph	Jones, William (Carnarvonshire	O'Donnell, John (Mayo, S.)
Crean, Eugene	Joyce, Michael	O'Donnell, T. (Kerry, W.)
Cullinan, J.	Kearley, Hudson E.	O'Kelly, Jas. (Roscommon, N.)
Davies, Alfred (Carmarthen)	Kennedy, Vincent P. (Cavan, W.	O'Malley, William
Delany, William	Kilbride, Denis	O'Shaughnessy, P. J.
Devlin, Chas. Ramsay (Galway	Labouchere, Henry	O'Shee, James John
Devlin, Joseph (Kilkenny, N.) 1	Lambert, George	Partington, Oswald
Dewar, John A. (Inverness-sh.	Law, Hugh Alex. (Donegal, W.)	Pease, J. A. (Saffron Walden)
Donelan, Captain A.	Lawson, Sir Wilfrid (Cornwall)	Pirie, Duncan V.
Doogan, P. C.	Layland-Barratt, Francis	Power, Patrick Joseph
Douglas, Charles M. (Lanark)	Leese, Sir Jos. F. (Accrington)	Priestley, Arthur
Ellice, Capt. E.C (S Andrw's Bghs	Leigh, Sir Joseph	Rea, Russell
Farrell, James Patrick	Leng, Sir John	Redmond, John E. (Waterford)

Rigg, Richard	Shipman, Dr. John G.	Toulmin, George
Roberts, John H. (Denbighs.)	Sinclair, John (Forfarshire)	Wason, Eugene (Clackmannan)
Robson, William Snowdon	Slack, John Bamford	Wason, John Cathcart (Orkney)
Roe, Sir Thomas	Soares, Ernest J.	White, Luke (York, E.R.)
Rose, Charles Day	Spencer, Rt. Hn. C.R (Northants	Whitley, J. H. (Halifax)
Runciman, Walter	Stanhope, Hon. Philip James	Whittaker, Thomas Palmer
Russell, T. W.	Strachey, Sir Edward	Wilson, Henry J. (York, W.R.)
Samuel, Herbert L. (Cleveland)	Sullivan, Donal	Wilson, John (Durham, Mid.)
Samuel, S. M. (Whitechapel)	Taylor, Theodore C. (Radcliffe)	Woodhouse, Sir J.T (Huddersf'd
Shackleton, David James	Tennant, Harold John
Shaw, Charles Edw. (Stafford)	Thomas, Abel (Carmarthen, E.)	TELLERS FOR THE NOES—Mr.
Sheehan, Daniel Daniel	Thomas, D. Alfred (Merthyr)	Herbert Gladstone and Mr.
Sheehy, David	Tomkinson, James	William M'Arthur.

THE CHAIRMAN

The Amendment in the name of the hon. Member for West Islington should appear as a new clause.

MR. LOUGH

said he desired to raise a question which he could not raise on a new clause.

THE CHAIRMAN

This clause does not deal with commission. That is a separate matter.

MR. KEARLEY

said the object of the Amendment which he now desired to move was to prevent merchants paying duty twice over. In 1900 the then Chancellor of the Exchequer was rather annoyed because there was a great amount of forestalment; and, to prevent that, he introduced a special clause in the Finance Bill. Of course, as regarded forestalment, there was speculation every year as to whether the duty on a particular article would be increased or decreased, and there were anticipatory clearances; but he thought the late Chancellor of the Exchequer had himself very much to blame for the forestalment which occurred. Under the Act of 1900, if a duty were paid, and if it were subsequently increased, the Customs levied the new duty again. That was an innovation, and he thought it was only fair that matters should be restored to the position in which they originally were.

Amendment proposed— In page 1, line 21, at end, to add the words 'Provided that the increased duty hereby imposed shall not be levied or paid on any tea lying in a bonded warehouse licensed by His Majesty's Customs upon which the former rate of duty has already been paid.'"—(Mr. Kearley.)

Question proposed, "That these words be there added."

MR. AUSTEN CHAMBERLAIN

said that the object of the Amendment was to repeal Section 9 of the Finance Act of 1900, which was introduced by his right hon. friend the Member for West Bristol, with the object of preventing large anticipatory clearances of dutiable goods, at the last moment, when an increase in the duty was expected. He thought it would be in the recollection of the Committee that in 1900, increased taxation having been anticipated, there were very large anticipatory clearances of dutiable goods in order to escape the new duties. It was perfectly legitimate for a trader to speculate in this manner; and, if he correctly anticipated the course of events, he would make a profit, because other traders who had not speculated would be forced to raise the price of the article because of the increased duty, and the trader who had speculated successfully would, of course, also raise the price to his own profit. They could not stop anticipatory clearances altogether, but he thought the Committee would feel that nominal clearances at the very last moment by payment of the duty without the removal of the goods was not a thing which they should be bound to recognise. The law now said that the duty payable should be deemed to be the duty in force at the date of the actual removal of the goods. Therefore it was not possible for a gentleman to enter the Customs House late on the afternoon of the day of the Budget statement, and clear goods by j merely paying in his cheque, and thereby escape any increased duty that might be imposed. The trader must now be in a position to remove the goods also; and that was some little check on clearances at the last moment.

MR. KEARLEY

said that the clause was inconvenient, and did not do any good to the Exchequer.

MR. AUSTEN CHAMBERLAIN

said that while he admitted that the clause would not prevent a trader clearing goods five or six days before, it would, nevertheless, act as a check against clearances at the last moment. Under no circumstances would he make any statement that would have an injurious effect on the revenue or have the effect that any future Chancellor of the Exchequer would be obliged to prolong his Budget statement in order to talk against time for the sake of the revenue.

MR. LOUGH

said he wanted to suggest that this hurried enactment was not working quite fairly, and that it aimed a blow at a deserving industry. The proposals of the Chancellor of the Exchequer were a reckless interference with business, and were of a character quite unworthy of the Customs. The effect of the clause would be to make traders feel that if they left their goods in a common ware-house they would be subject to the rule of the Chancellor of the Exchequer, but if they moved them to a private warehouse they would be quite safe. The clause put the business of public warehouses at a disadvantage. He did not think it would work well in the interests of the Customs, any more that it would be for the welfare of the trade. He hoped that the Chancellor of the Exchequer would reconsider the matter, and if he found he could do anything to ameliorate the difficulty he would do it.

Amendment, by leave, withdrawn.

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

MR. SOARES

moved to leave out Clause 1. He did not believe in the genesis of the tax conceived, as it was, in the brain of a Protectionist Chancellor of the Exchequer and born to a Government of no settled convictions in fiscal matters. He did not intend, however, to develop that theme or make a speech, as he understood an arrangement had been arrived at to report Progress if the Government were allowed to get Clause 1. The only thing he desired to do was to put a simple question to the Chancellor of the Exchequer, in the expectation that he would receive a plain, straightforward answer. Would the right hon. Gentleman, if he had given no pledge and had a majority on which he could rely, have imposed the tax at the present time? Was this a best or second best tax? In other words, were they being driven down a dangerous road by a coachman who had lost his way?

MR. AINSWORTH (Argyllshire)

asked why it should be considered necessary to spend more money on naval and I military matters this year than was expended before the outbreak of the South African War. He would like to quote the words of Lord Beaconsfield: "Expenditure depends upon policy," and he would ask the right hon. Gentleman the Chancellor of the Exchequer what right he had to say that the working-classes of this country were in any way to blame for that war. It was the policy of the right hon. Gentleman and his friends that brought it about.

He might quote a verse bearing on this question— When times are threatening, and when danger's nigh, 'God and the soldier' is the country's cry; When peace is gained again and wrongs are righted, God is forgotten, and the soldier slighted. By this additional tax the lot of the soldier and his family would be made harder, and the old age of the soldier's mother rendered more arduous and comfortless. That was the return to be made by the Government for all the sacrifices of the soldiers during the late war. The hardship of the tax was that it fell with the greatest severity upon those least able to bear it, and above all, that it was an impost upon a necessary of life. No doubt the Army and the Navy had to be paid for, but surely some means might be found by which the necessary funds could be provided without placing such heavy burdens upon the poorest of the community. It would be well if the Government, before they entered on such enormous expenditure, would consider where the money to provide for it was to come from. He thought that if they realised that it was to come to so large an extent from the poorest of the poor they would be more careful.

MR. TOULMIN (Lancashire, Bury)

said the cause of indirect taxation levied for the purposes of the war being not only continued but increased in a time of peace, was the profligate expenditure of a Government which had lost control of the affairs of the nation. The tax, even to a small amount, could scarcely be defended as a permanent tax, because it was essentially unjust. The poorer a person the more he was penalised by the tax. There were signs, however, that the enormous expenditure was finding opponents even within the Cabinet. The country was engaged mainly in probing that body to see if it had a backbone, and if it was found that any particular Member was supplying the necessary backbone in resisting this policy of expenditure he would receive the gratitude of the people. He objected to Clause 1 not merely because it dealt with the tea tax, but because the tea tax was an important part of the indirect taxation of the country. The Tight hon. Gentleman had claimed credit for restoring the relative proportions of direct and indirect taxation to the position occupied before the war. But those proportions were purely arithmetical; the real standard to go by would be, not the ratio of the total of indirect taxation to the total of direct taxation, but the relation of the respective classes of taxation to the ability of the persons taxed to bear them. The additional tea duty, if persisted in, would leave a sense of injustice until it was removed, and he was convinced that there was nothing that came home more to the poorest of the people than this constantly increasing burden of taxation.

MR. SHACKLETON (Lancashire, Clitheroe)

said he had been surprised to find references to wages of 10s. or 12s. a week received with smiles by hon. Members on the other side of the House.

Many Unionist representatives did not appear to realise that half a day's pocket money to them was a week's wages to hundreds of labourers in the country. Many families were actually paying in the tea duty alone three weeks' wages in the course of the year. What hon. Member opposite would be willing to pay three weeks' share of his annual income towards the expenses of the State in one tax? It was all very well to speak about pounds; they ought to consider the people whose wages were counted in shillings, and the House of Commons when levying taxes to be paid by the nation ought to have regard to the relative severity with which the burdens would press on different classes of the community. Even persons whose sympathies were with the poor scarcely realised the effect an additional twopence on a necessary of life would have upon large masses of the people. It was sometimes said that they should not drink tea, that they should take something less expensive. A family of six, out of a pound of tea at 1s. 8d. could obtain 124 cups of tea. That worked out at .16d. per cup. Where could a cheaper beverage than that be secured? He submitted that the case which had been put forward was one that ought to receive the sympathetic consideration of the Minister in charge of the finances of the country.

Question put.

The Committee divided:—Ayes, 148; Noes, 115. (Division List No. 167.)

AYES.
Agg-Gardner, James Tynte	Charrington, Spencer	Gordon, Hn. J. E. (Elgin & Nairn)
Agnew, Sir Andrew Noel	Coates, Edward Feetham	Gore, Hn G.R.C. Ormsby-(Salop
Allhusen, Augustus Henry Eden	Cochrane, Hon. Thos. H. A. E.	Graham, Henry Robert
Arkwright, John Stanhope	Craig, Charles Curtis (Antrim, S.	Gray, Ernest (West Ham)
Arrol, Sir William	Cross, Alexander (Glasgow)	Greene, Sir E.W (B'ry S Edm'nds
Aubrey-Fletcher, Rt. Hn. Sir H.	Crossley, Rt. Hon. Sir Savile	Grenfell, William Henry
Bain, Colonel James Robert	Dalkeith, Earl of	Gretton, John
Balcarres, Lord	Davenport, William Bromley	Greville, Hon. Ronald
Balfour, Rt. Hon. A.J. (Manch.)	Dickson, Charles Scott	Hardy, L. (Kent, Ashford)
Balfour, Rt. Hon. G. W. (Leeds	Dimsdale, Rt. Hn. Sir Joseph C.	Hare, Thomas Leigh
Balfour, Kenneth R. (Christch.	Disraeli, Coningsby Ralph	Harris, F. Leverton (Tynem'th)
Banbury, Sir Frederick George	Doughty, George	Hay, Hon. Claude George
Bignold, Arthur	Douglas, Rt. Hon. A. Akers-	Heath, James (Staffords., N.W.
Blundell, Colonel Henry	Durning-Lawrence, Sir Edwin	Hope, J.F. (Sheffield, Brightside
Bowles, Lt.-Col. H.F. (Middlesex	Egerton, Hon. A. de Tatton	Howard, Jn. (Kent, Faversham
Brassey, Albert	Faber, Edmund B. (Hants, W.)	Hozier, Hn. James Henry Cecil
Brodrick, Rt. Hon. St. John	Fielden, Edward Brocklehurst	Hunt, Rowland
Burdett-Coutts, W.	Finch, Rt. Hon. George H.	Jeffreys, Rt. Hon. Arthur Fred.
Butcher, John George	Finlay, Sir Robert Bannatyne	Jesse], Captain Herbert Merton
Carson, Rt. Hon. Sir Edw. H.	Fitzroy, Hn. Edward Algernon	Kennaway, Rt. Hn. Sir John H.
Cautley, Henry Strother	Flannery, Sir Fortescue	Kenyon-Slaney, Col. W.(Salop.
Cavendish, V.C.W. (Derbyshire	Forster, Henry William	Keswick, William
Chamberlain, Rt. Hn. J.A (Worc.	Foster, P. S. (Warwick, S.W.)	Law, Andrew Bonar (Glasgow)
Chapman, Edward	Galloway, William Johnson	Lawson, J. Grant (Yorks., N.R.
Lee, A. H. (Hants, Fareham)	Murray, Charles J. (Coventry)	Sharps, William Edward T.
Lees, Sir Elliott (Birkenhead)	Palmer, Walter (Salisbury)	Simeon, Sir Barrington
Legge, Col. Hon. Heneage	Parker, Ebenezer	Skewes-Cox, Thomas
Leveson-Gower, Frederick N.S.	Pease, Herb. Pike (Darlington)	Smith, Abel H. (Hertford, East
Loder, Gerald Walter Erskine	Percy, Earl	Smith, H.C (North'mb. Tyneside
Long, Rt. Hn. Walter (Bristol, S.	Pilkington, Colonel Richard	Smith, James Parker(Lanarks.)
Lowther, C. (Cumb., Eskdale)	Pretyman, Ernest George	Smith, Hon. W. F. D. (Strand)
Lucas, Col. Francis (Lowestoft)	Pryce-Jones, Lt.-Col. Edward	Stanley, Hn. Arthur (Ormskirk)
Lucas, Reginald J. (Portsmouth	Pym, C. Guy	Stanley, Rt. Hon. Lord(Lancs.)
Lyttelton, Rt. Hon. Alfred	Randles, John S.	Stock, James Henry
Macdona, John Cumming	Rankin, Sir James	Strutt, Hon. Charles Hedley
MacIver, David (Liverpool)	Reid, James (Greenock)	Talbot, Lord E. (Chichester)
Macon ochie, A. W.	Remnant, James Farquharson	Taylor, Austin (East Toxteth)
M'Arthur, Charles (Liverpool)	Renwick, George	Tomlinson, Sir Wm. Edw. M.
M'Iver, Sir Lewis (Edinburgh, W	Ridley, Hon. M.W. (Stalybridge	Valentia, Viscount
M'Killop, James (Stirlingshire)	Ridley, S. Forde (Bethnal Green	Walker, Col. William Hall
Majendie, James A. H.	Roberts, Samuel (Sheffield)	Walrond, Rt. Hn. Sir William H.
Martin, Richard Biddulph	Robertson, Herbert (Hackney)	Webb, Colonel William George
Melville, Beresford Valentine	Rolleston, Sir John F. L.	Welby, Sir Charles G.E.(Notts.
Milner, Rt. Hn. Sir Frederick G.	Ropner, Colonel Sir Robert	Wilson, A. Stanley (Yorks, E.R.
Milvain, Thomas	Royds, Clement Molyneux	Wortley, Rt. Hon. C.B. Stuart-
Morpeth, Viscount	Rutherford, John (Lancashire)	Wrightson, Sir Thomas
Morrison, James Archibald	Rutherford, W. W. (Liverpool)
Mount, William Arthur	Sackville, Col. S. G. Stopford-	TELLERS FOR THE AYES—Sir
Mowbray, Sir Robert Gray C.	Sassoon, Sir Edward Albert	Alexander Acland-Hood and
Muntz, Sir Philip A.	Scott, Sir S. (Marylebone, W.)	Mr. Ailwyn Fellowes.
Murray, Rt. Hon. A. G. (Bute)	Seely, Charles Hilton (Lincoln)
NOES.
Abraham, William (Cork, N.E.)	Hayden, John Patrick	Power, Patrick Joseph
Ainsworth, John Stirling	Helme, Norval Watson	Price, Robert John
Allen, Charles P.	Henderson, Arthur (Durham)	Priestley, Arthur
Asher, Alexander	Holland, Sir William Henry	Rea, Russell
Barran, Rowland Hirst	Horniman, Frederick John	Redmond, John E. (Waterford)
Barry, E. (Cork, S.)	Johnson, John (Gateshead)	Rigg, Richard
Bayley, Thomas (Derbyshire)	Joicey, Sir James	Robson, William Snowdon
Beaumont, Wentworth C. B.	Jones, William (Carnarvonshire	Roe, Sir Thomas
Black, Alexander William	Joyce, Michael	Rose, Charles Day
Boland, John	Kennedy, Vincent P. (Cavan, W.	Runciman, Walter
Brigg, John	Kilbride, Denis	Russell, T. W.
Burke, E. Haviland-	Labouchere, Henry	Samuel, Herbert L. (Cleveland)
Buxton, Sydney Charles	Lambert, George	Samuel, S. M. (Whitechapel)
Caldwell, James	Law, Hugh Alex. (Donegal, W.	Shackleton, David James
Campbell, John (Armagh, S.)	Lawson, Sir Wilfrid (Cornwall)	Shaw, Charles Edw. (Stafford)
Causton, Richard Knight	Leigh, Sir Joseph	Sheehan, Daniel Daniel
Condon, Thomas Joseph	Levy, Maurice	Sheehy, David
Crean, Eugene	Lough, Thomas	Sinclair, John (Forfarshire)
Cullinan, J.	Lundon, W.	Slack, John Bamford
Davies, Alfred (Carmarthen)	Lyell, Charles Henry	Soares, Ernest J.
Delany, William	MacVeagh, Jeremiah	Spencer, Rt. Hn. C.R (Northants
Devlin, Joseph (Kilkenny, N.)	M'Crae, George	Stanhope, Hon. Philip James
Donelan, Captain A.	M'Kenna, Reginald	Sullivan, Donal
Doogan, P. C.	M'Killop, W. (Sligo, North)	Taylor, Theodore C. (Radcliffe)
Douglas, Charles M. (Lanark)	Markham, Arthur Basil	Thomas, Abel (Carmarthen, E.)
Elibank, Master of	Murphy, John	Thomas, D. Alfred (Merthyr)
Ellice, Capt E.C (S Andrw's Bghs	Nannetti, Joseph P.	Tomkinson, James
Evans, Samuel T. (Glamorgan)	Nolan, Col. John P. (Galway, N.)	Toulmin, George
Farrell, James Patrick	Nolan, Joseph (Louth, South)	Wason, Eugene (Clackmannan)
Fenwiek, Charles	O'Brien, K. (Tipperary, Mid.)	Wason, John Cathcart (Orkney)
Field, William	O'Brien, Patrick (Kilkenny)	White, Luke (York, E. R.)
Flynn, James Christopher	O'Brien, P. J. (Tipperary, N.)	Whitley, J. H. (Halifax)
Freeman-Thomas, Captain F.	O'Connor, James (Wicklow, W.	Whittaker, Thomas Palmer
Fuller, J. M. F.	O'Donnell, John (Mayo, S.)	Wilson, John (Durham, Mid.)
Gilhooly, James	O'Donnell, T. (Kerry, W.)	Woodhouse, Sir J.T (Huddersf'd
Grey, Rt. Hon. Sir E. (Berwick)	O'Kelly, Jas. (Roscommon, N.)
Griffith, Ellis J.	O'Malley, William	TELLERS FOR THE NOES—Mr.
Guruon, Sir W. Brampton	O'Shee, James John	Herbert Gladstone and Mr.
Hammond, John	Pease, J. A. (Saffron Walden)	William M'Arthur.
Harcourt, Lewis V. (Rossendale)	Pirie, Duncan V.

Committee report Progress; to sit again to-morrow.

Adjourned at one minute before One o'clock.