§ Considered in Committee.
§ (In the Committee.)
§ [Mr. EMMOTT (Oldham) in the Chair.]
§ Clause 1.
*MR. COURTHOPE (Sussex, Rye) moved to reduce the duty on tea to 4d. He said it was an outrageous thing that tea should be taxed to the extent it was. The duty was economically undefensible. In 1905 the consumption of tea in these islands was roughly 260,000,000 lbs.—or 6 lbs. per head of population, and he did not think he in any way exaggerated the facts when he described tea as an article of universal necessity. In 1901 the consumption was as high as 6.16 lbs. per head of population, but owing to the heavy tax it had since fallen. The wholesale price of the tea which the poor drank ranged from 2½d. per lb. upwards, so that on this tea there was actually an ad valorem duty of 350 per cent. No other article of food—no other commodity in use in this country—was taxed to that extent. We raised a revenue of some £7,000,000 by thus oppressing our poorer brethren, and it was quite time another protest was made against this tax. All other English-speaking countries admitted tea duty free, while as to the continent of Europe, Germany only charged 1½d., Sweden 3d. and Denmark 4d. We had the highest tea duty in the world, and it was time that tea drinkers received more consideration at the hands of the Government. He might be reminded that the duty was increased by the Conservative party. No doubt
it was, but the justification for that was to be found in the extraordinarily narrow limits of taxation which had hitherto been looked upon as open. But that did not alter the fact that the duty was an indefensible one. We got seven-eighths of our tea from India and Ceylon. A very large proportion of our tea was grown by British subjects, and therefore it mattered not, for the sake of his argument, who paid the tax, whether the producer or the consumer, as it fell on British subjects. Therefore, to his mind, it was indefensible. Another argument that would be used was that a penny had been given, and that half a loaf was better than no bread. Yes, when they got that half loaf themselves, but not when somebody else ate it. Although this penny reduction might benefit a certain number, particularly those who bought their tea in comparatively large quantities, it would not benefit a great many of those who bought their tea in extremely small quantities. A reduction of a penny in the lb. could not possibly benefit those who bought their tea in two-ounce packets, for which they now paid l¼d., and they would continue to pay that amount. If, however, there had been 2d. reduction a farthing would have been knocked off, and that would make a considerable difference to the poor women who did their marketing in very small quantities. The Chancellor of the Exchequer on the Second Reading had argued that although they would not gain in quantity they would gain in quality. He was sorry the right hon. Gentleman had so poor an opinion of the intelligence of this House as to use an argument of that kind. There were vast quantities of tea in bond. They could not change the quality of the poorer nature of tea. Poor tea must be grown and would be grown, and it was absolutely certain that if it were grown it would be put on the market, and the people who bought it would get no advantage in quality, quantity, or price from this reduction of the tax. Then it would be said that the right hon. Gentleman could not afford to reduce the tax by 2d. He contended that they ought to be able to afford it by widening and enlarging the basis of taxation and by trying to make the foreigner pay a part of our taxation, as he made us pay a part of his. The other alternative he would suggest was that the 2d. should be taken off tea and the coal duty left as it
was. Whatever might be the merits of the coal duty, whatever the incidence of its burden, it was quite certain that the coal duty had been taken off in favour of a comparatively small class, while the tea duty affected everyone in these islands. He thought it was the hon. Member for North Paddington who calculated that 38,000,000 of the inhabitants of these islands might be classed as poor, and these 38,000,000 were more deserving of consideration—they had more claim to a 2d. reduction— than the class of coalowners and coalminers had for the abolition of the duty on coal. Then he dared say another argument would be used that tea was bad for one. He was not going to argue whether it was bad or good. He knew quite well that if it was allowed to stew it must be bad, but that was not the point. Whether it was bad or good it would be drunk regularly by almost every inhabitant of these islands, and one had to take that into consideration, and not to argue whether they had better drink something else. On all these grounds he thought tea drinkers had a good claim for the reduction by 2d. of the existing duty, and he hoped a great section of the Committee would support this Amendment. He intended to push it to a division, and he would like, though he did it with some reluctance, to remind a great many hon. Members that they had heard a great deal during this session of mandates and so on. He would like to remind them of what they had said—of the pledges they had given in regard to tea, of the tea posters which were all over many of the constitutencies, and of the opinions that they had expressed as to the value of those posters to them. He had here an expression of opinion that the posters of the Anti-Tea Duty League rendered very great service to the President of the Local Government Board. That was only one of many. Now they had an opportunity of showing their gratitude for the assistance given them at the elections by those societies which advocated the prompt abolition of the 2d. war tax on tea. In conclusion he would quote a sentence used two years ago by the President of the Board of Trade. Had the right hon. Gentleman been present he would have invited him to give effect to his words. He said—
The House of Commons has got to take the Chancellor of the Exchequer by the throat in a
Parliamentary sense and tell him that they cannot continue these burdens year by year.
He was exceedingly sorry the right hon. Gentleman was not present to put the pressure on now which he advocated so strongly two years ago, but he hoped he would do so when the time came for a division.
In page 1, line 20, to leave out the word 'five,' and insert the word 'four.'"—(Mr. Courthope.)
§ "Question put," That the word 'five' stand part of the clause."
§ MR. REES (Montgomery Boroughs)
said the only really relevant part of the speech of the hon. Gentleman who had just sat down was that which came at the end. This was not the occasion for discussing the whole question of the tea duty. The question before the Committee was whether it should be 5d. or 4d. Nor was this the time for making a speech upon the fiscal question. It was the case that during the last general election many Members urged that the tax on tea was much too high and should be reduced. Many Members, including himself, expressed their intention of using their utmost efforts to get the duty reduced. What had happened? The Chancellor of the Exchequer had given half of his surplus to the reduction of the tea duty. Was it not the part of the practical man to accept that half for the present, instead of refusing the penny if they could not have the twopence? It was very easy to propose an impracticable Motion like this from the other side, and to invite Members on the Government side to vote for it. But few would walk into such a very open trap. They had to draw the line somewhere. Otherwise, why should they not knock off a shilling from the income-tax, reduce the Army by 10,000 or 20,000 men, and the Navy by a dozen battleships, and claim to be the greatest financial reformers of modern times? The hon. Gentleman knew that his proposal was not practical, but he also knew that it would give him and his friends some opportunity of posing as greater friends of the poor than those who had in reality done more towards the reduction of the tea duty than the hon. Member and his friends. The hon. Gentleman had 305 said that tea drinkers would not profit by the reduction at all. He would join issue with the hon. Member on that ground. The penny had already led to a reduction in many instances. He did not see why such an Amendment as this should be moved at all, because it meant absolutely nothing, and no benefit could accrue from it. There was nothing to recommend it to the Committee, and he hoped it would be rejected. The hon. mover was like a Parliamentary cuckoo, who laid an egg in the Liberal nest, and invited every one to come and see how much larger it was than the eggs of the lawful proprietor.
§ MR. FLETCHER (Hampstead)
said that when an alteration was suggested some other alternative should be put forward. In this case he thought the money could be best obtained by leaving the coal duty as it was. They all hoped for great things from having a strong man as Chancellor of the Exchequer, but he was very much surprised at his giving way to the pressure put upon him by wealthy coal owners and tea planters in the way he had done, because there were such strong arguments against adopting that course. He might have said that the consumer did not pay the duty, because the exports of coal since the tax had increased, and there was no doubt that the foreigner paid the tax.
§ MR. FLETCHER
said there was the Anti-Tea Tax Association, which was supported by the hon. Member for Montgomery Boroughs, who was probably a subscriber. The strong probability was that the members of that association would profit by this reduction on the tea duty, because it would go into the pockets of the wholesale tea dealers and the planters. The Chancellor of the Exchequer might have told the tea trade that they had their turn last year; they might very well have waited another year, and had 2d. taken off later on. He thought that course would have been much more agreeable to the trade.
§ *MR. ASHLEY (Lancashire, Blackpool)
said that as one who in his election 306 address favoured the principle, as far as possible, of a free breakfast table, he could consistently support this Amendment. When hon. Members sitting on the Government Benches were in opposition they spent a great many hours abusing the Government of the day because they did not reduce what they called this iniquitous tea tax, but now they were not at all enthusiastic to carry out the pledges they gave before and during the election. This tax fell heavily upon the poorer classes, who had in consequence either to reduce their consumption of tea or buy tea of an inferior quality. But why should they tax tea, which was a product of our own colonies? Why should they not tax something which was produced outside this Empire? All taxes on the necessaries of life should be avoided as much as possible. There were occasions when for specific purposes it was necessary to put a tax on the necessaries of life, but the taxation of necessaries was wrong in principle. The tea tax produced about £5,500,000 every year. Having suggested that the few duty should be abolished altogether by was only right to suggest how the money raised by it should be replaced. He would suggest that a tax should be placed upon imported goods. He understood that chiefly the blenders would benefit by this reduction.
§ MR. FLAVIN
said there was as keen competition between the blenders as growers, and he must well to the retailer at a penny per pound us.
§ *MR. ASHLEY
said his information did not agree with that view. He understood that the blenders would benefit to the extent of one halfpenny, the grocer to the extent of one farthing, and the consumer to the extent of a farthing, but he contended the people who could afford to buy only small packets would get no benefit at all. He thought it would have been better to have left the duty as it was until the Chancellor of the Exchequer was able, as he said he hoped to be, to take off another penny next year.
§ *MR. ASHLEY
said he thought it would have been better to have waited till the autumn and then to have taken off twopence in order to obviate the disorganisation to trade by two changes in one year. In view of the pledges given by the Ministerialists at the election he looked to them to support the reduction in the division lobby.
§ MR. ASQUITH
said it was remarkable to see on the other side of the Committee a wonderful unanimity in favour of a reduction of the tea duty to which they had not been accustomed in past years. To the general considerations advanced, the objections to the duty in itself, and the desirability of reducing it as much and as soon as possible he entirely assented. Tea was a necessary of life, and a tax upon it was injurious to producer and consumer. Of the supply, 95 per cent. was produced by our fellow-subjects, and there were good reasons why a Chancellor of the Exchequer should desire to avoid the tax. His predecessor in office—whom he was glad to see back in his place in auspicious circumstances upon which he was sure the right hon. Gentleman would receive universal congratulation—last year used unanswerable arguments on the same lines as those which had been addressed to the Committee. The only question of dispute was as to the reduction of the duty by a penny. Personally he would have been glad to reduce the duty by 2d., but the Committee must look at the financial arrangements of the year as a whole; and he had to look at the amount of money at his disposal. His choice, therefore, lay between a reduction of 1d. or of 2d. He found that, after making adequate provision for a further reduction of the Debt, and if he had to get rid of the coal duty, he had not enough money left, and the hon. Member could not now suggest a supply to enable him to make a reduction of the tea duty by more than 1d. Hon. Members must say, therefore, that he had either given too much to the Debt or that he ought not to have dealt with the coal tax. If hon. Members said that, they were in a logical position. The question which he asked his advisers at the Treasury, and which he anxiously considered before making this proposal, was whether a reduction of a penny, which was without precedent, would really 308 reach the consumer. No Chancellor of the Exchequer would wish to put money into the pockets of the trade; what he desired was to secure that the benefit of the remission should go to the person by whom the article was consumed. He made inquiries whether or not the effect of a remission of a penny would reach the consumer, and he was assured by all the information he could gather that in an article like tea, where a duty of sixpence represented something like 100 per cent. on the actual value of the imported raw material, a reduction of a penny, or 15 per cent., where there were no intermediate processes of manipulation, in the course of which the reduction might be either delayed, intercepted, or neutralised, must speedily reach the consumer. What had happened? The hon. Member had quoted from information that had been given to him that the reduction had gone into the pockets of the blenders. He would like to read a few words from The Times Commercial Supplement, which all must agree was a most admirable and very impartial summary of what went on in the commercial world. On 21st May, under the heading of "Tea," The Times Commercial Supplement said—When Mr. Asquith announced the reduction of 1d. in the tea duty (from 6d. per lb. to 5d.) it was asserted in trade circles that this would make no difference in the price charged to the consumer, as the reduction was too small to allow of its being split up into fractional parts. It is, however, already apparent that competition among retailers may have the effect of reducing the prices—as regards the cheapest qualities especially—even to a greater extent than 1d. a lb., notwithstanding a decision of a number of large distributors to keep up quotations and 'improve the quality,' a euphemism for retaining most of the reduction in duty for themselves. It happens that the market value of the cheapest tea is 1d. per lb. less than it was a year ago, and there is an immense quantity of it at present in the bonded warehouses worth from 3½d. to 4d. per lb. With the 5d. duty this tea can be retailed at 10d. per lb., as compared with the hitherto lowest quotation of 1s. per lb. The reduction of 2d. is made up by the 1d. duty and the fall in market value of 1d. Until this large stock is so retailed at a price to stimulate consumption by the poorest classes it will remain in bond. Our market reports show how difficult it is to dispose of this cheap tea, except at such a reduction in price. Retail vendors have in many places already shown their appreciation of the possibility of attracting trade by a cut in prices.According to this authority, which was not prejudiced in favour of the 309 Government, the effect of the reduction had already been felt, and the consumer was receiving it in a reduced price of 2d., or he was paying 10d. now for what he formerly paid 1s. The advice that he had acted upon, therefore, was well-founded, for this reduction of the tea duty was going into the pockets of the consumers. To his hon. friends who might have given pledges to reduce the tea duty, he said that the Government were doing their best to carry this reduction out. They must look in a matter of this kind, however, not to see what was ideally desirable, but what was practically attainable; and, having regard to the whole of the financial arrangements, he asked the Committee without hesitation to believe that the reduction proposed was a reduction which would benefit the consumer.
§ MR. AUSTEN CHAMBERLAIN (Worcestershire, E.)
thanked the right hon. Gentleman for the kindly references he had made during his absence from the House at the time of the Budget statement, and now the right hon. Gentleman had added to his obligations by the congratulations so kindly offered that afternoon. He regretted that he was not able to be present at the most interesting occasion of the Budget statement, and he had lost by his absence the opportunity of making a complete survey of the right hon. Gentleman's finance proposals. But this clause was, in a certain sense, the key to the right hon. Gentleman's scheme of finance for the year, and he thought that it illustrated the basis on which he had proceeded and the defects of the arrangements he had proposed. The debate had a strange familiarity to those who had been in the habit of sitting through Budget discussions in recent years. On this occasion, however, he missed some familiar voices that had never been absent from earlier debates on the tea duty, and without them a tea duty debate seemed scarcely to be complete. He wished that the Chancellor of the Exchequer, who had such experts on the tea duty among his colleagues, had called them into his counsel, and had caused them to appear on the front bench opposite to give their candid opinion of the present proposal, as they undoubtedly would have done had the proposal come from the late Chancellor of the Exchequer. Their 310 appearance in the discussion how would have added to the merriment of the Committee. Were the premisses on which the right hon. Gentleman had based his argument for the penny reduction correct? He was inclined to doubt it. The right hon. Gentleman had said that in the circumstances of to-day he had only a limited amount of money to distribute, and, unless the Committee were prepared to say that he ought not to have contributed a sum to the Debt or repealed the coal duty, hon. Members could not in logic condemn him for not having reduced the tea duty by more than a penny. But he doubted very much whether the Chancellor of the Exchequer had not, if he had chosen to make use of them, greater resources at his command than he had disclosed to the Committee. He had studied the right hon. Gentleman's speeches, and he was well aware from his own experience at the Treasury how rash it was for anyone outside that Department, and without access to the sources of information possessed by the Chancellor of the Exchequer, to prophesy as to what the future had in store for the country, or to hesitate as to the accuracy of the right hon. Gentleman's prophesies. Yet with that preface and excuse he could not help saying that the right hon. Gentleman had apparently taken an unduly moderate view of what he might reasonably and fairly expect to obtain from taxation during the present year. There had been a moderate, but marked, improvement in the closing months of the last calendar year. That improvement had continued, and was emphasised, in the first months of the present calendar year; and it was to that improvement the right hon. Gentleman owed the surplus with which the last financial year ended. With these signs of revival before him the right hon. Gentleman was entitled to anticipate a larger income from existing taxes than that upon which he counted from the financial clearances. He thought that when the financial year closed it would be found that if the right hon. Gentleman had been a little bolder he would not have found his hopes falsified, but would have had money enough to do something more than he had done in other directions. But was the reduction of the Debt and the repeal of the coal tax the best use to make of the money available? He was not one who would criticise the 311 right hon. Gentleman for having increased the provision for the reduction of debt. On the contrary, his criticism would be that the provision made was "the least that could be described as plausible," and something less than a hopeful expectation. A Finance Minister who during his electoral campaign talked with such gravity of the state of the Debt and the national finances, and then, having a realised surplus of £3,000,000 and a prospective surplus of £3,000,000 more, could, provide nothing more out of taxation than a beggarly half-million was not giving even plausible fulfilment of the hopes and expectations which he had held out.
§ MR. AUSTEN CHAMBERLAIN
said that that had nothing to do with the amount of provision made out of taxation for debt reduction. The right hon. Gentleman had not treated him ungenerously, and he hoped he would not be accused of egotism if he said that, if the right hon. Gentleman was reducing the Debt by a large amount, it was because his predecessor in times of greater difficulty increased the provision not by a half but by a whole million; because the right hon. Gentleman was left with a surplus of £3,000,000, and because he got a windfall in the repayment by China of a debt which had been allocated by every pledge of two successive Chancellors of the Exchequer to the extinction of debt.
§ MR. ASQUITH
The right hon. Gentleman has forgotten that he got a windfall of £1,250,000 from South Africa.
§ MR. AUSTEN CHAMBERLAIN
said he did not complain of that reference to South Africa. After elaborate negotiations £1,250,000 was obtained from South Africa, and it was applied to the reduction of debt. In fact it was practically a repayment. But he did not see how that affected the provision which he or the right hon. Gentleman had made out of taxation for the reduction of debt. The Chancellor of the Exchequer had talked on this subject as if we were on the verge of financial disaster. he had painted the picture in colours which were far darker than could be justified, and yet he had 312 made this paltry contribution to an end which he set so high. He ought to have given, not half a million, but one million, or nearer two millions. If the right hon. Gentleman had asked the country to bear its present burdens for a year longer and had devoted the whole of the money to the reduction of debt, he would have taken a bold and strong course, and he would have supported the right hon. Gentleman in it.
said he was anxious to allow every latitude to the right hon. Gentleman under the present circumstances, but he thought he was now going beyond what was allowable on the Amendment.
§ MR. AUSTEN CHAMBERLAIN
said he claimed no latitude in discussing this matter, but the Chancellor of the Exchequer had challenged him on a point of logic. He did not blame the right hon. Gentleman for having dealt with the Debt; but the coal tax stood on an exceptional footing, being unlike any other tax in our financial system. It needed close watching, and in his opinion it could not permanently remain a part of our financial system. But that was not to say that when there was a limited sum of money available the coal tax, which affected the smallest number of British subjects, should have first consideration, and that a tax which affected every British subject should be placed second to it. As to the tea duty, in spite of what the right hon. Gentleman had said, he found a special reason for saying that if the tea duty were to be touched at all it ought to have been reduced by 2d. The hon. Member for Montgomery seemed to think that the reduction of the tea duty had always been the work of Liberal Governments. But it was Lord Goschen who brought the tax down to 4d., a point to which no Liberal Government had ever brought it down. Everyone wished to see the tea duty reduced, but wished above all that the advantage should go to the consumer. It was particularly easy to achieve that result in the case of tea, while in the case of most other taxable articles it was difficult to know how much of the reduction would reach the consumer and how long it would be in reaching him. Subject to one condition, the relief to the consumer of tea was immediate and complete; and 313 that condition was that the reduction should be such as was capable of being expressed in terms of the price of those small packets in which tea was sold to the very poor. The right hon. Gentleman did not pretend that the poor consumer of tea in two ozs. packets would get any advantage in price, but that he would get an improvement in quality. If the poor consumer would take his tea to the distinguished Government analyst at Somerset House, he might find a chemical appreciation in the quality of his tea, but that would be the limit of his benefit. The Chancellor of the Exchequer had said that there was an enormous quantity of very cheap tea of the poorest quality in stock—so poor in quality that it could not be sold at all, except at some reduction of the present lowest prices. As long as that stock of poor tea remained unexhausted, said the right hon. Gentleman, there was hope for the consumer. He had only to buy tea which certain of the right hon. Gentleman's colleagues who had expert knowledge of the subject had often described as poison, and he would get some advantage out of the reduction of duty which the right hon. Gentleman had made. He was of opinion that the Chancellor of the Exchequer had frittered away the money at his disposal. He might have done a big thing with the Debt; he might have done something for the income-tax payer, who, patient and long-suffering as he was, had become a little tired of his burden; or he might have done something substantial for the great mass of the consumers by giving a sensible reduction in the tea duty. For one reason or another—of his own choice, or to conciliate different sections of opinion—the right hon. Gentleman had attempted to do a little of many things, and he had not succeeded in doing any of them well. In these circumstances he had no hesitation in voting for the Amendment.
§ MR. RICHARDSON (Nottingham, S.)
said two statements regarding the tea duty had been made over and over again in the Committee, both of which he would attempt to disprove. The first was that the penny reduction in the tea duty was retained by the blender, and the second was that the very poor would not get the benefit of the reduction. In reply to the first of these statements he would read certain details from the advertisements 314 that appeared in The Grocer, the principal organ of the tea trade, on May 12th, a week after the penny duty came off tea. He would take the advertisements of the four principal houses in the trade, each of which sold £500,000 sterling worth of tea a year. The first one showed that the price of the dearest tea on May 5th was 2s. 2d., and on May 12th 2s. 1d. The intermediate prices between that and the lowest were each reduced a penny, and the lowest priced tea which was on the earlier date 10½d. was on May 12th 9½d. So that the penny did not go into that blender's pocket. In regard to the second dealer, the highest priced tea on May 5th was 2s. 4d. and on May 12th 2s. 3d., the intermediate prices were reduced a penny, and the lowest grades were 10¼d. on May 5th and 9¼d. on May 12th. So that the penny did not go into that blender's pocket. In the case of the third dealer, the highest price on May 5th was 2s., on May 12th 1s. 11d.; lowest price on May 5th 10½d., on May 12th 9½d. So that the penny did not go into that blender's pocket. The fourth dealer's highest price was on May 5th 1s. 5½d., on May 12th 1s. 4½d.; lowest price on May 5th, 11d. on May 12th 10d. So that the penny did not go into that blender's pocket. Thus the whole of the penny in the cases of the four principal tea houses did not go into the blender's pocket. Now he would deal with another class of trade and one which would be admitted to indicate the working class consumption of tea. The best packet tea of the Manchester Wholesale Co-operative Society was sold on May 5th at 2s. 8d. and on May 12th at 2s. 7d.; the lowest price packet tea at 1s. 3½d. on May 5th and 1s. 2½d. on May 12th. That Society's bulk or loose teas were 2s. 6d. and 1s. respectively on May 5th and 2s. 5d. and 11d. respectively on May 12th. So that as far as the Manchester Co-operative Society, which distributed tea among working people, was concerned the penny did not go into the pockets of that society. Then where did the penny go to? The output of the Wholesale Cooperative Society of Manchester last year amounted to 18,401,593 pounds avoirdupois or 8,214 tons, and the amount paid in duty was £460,039 16s. 6d. And so by the reduction of the penny which he had shown did not go into the pockets of the blender, the working men them selves connected with that Society saved 315 by the induction of the tax £76,673 6s. 1d. Coming to the point as to whether the poorer classes got the benefit of the reduction, he thought the best proof of this would be found by an examination of the consumption of lowest-priced teas since the penny duty came off three weeks ago. He had made very careful inquiry among the great tea blenders, and he found that during the three months previous to the reduction the shilling tea sold amounted to 1 per cent of the whole of the tea sold. During the last three weeks the amount of shilling tea sold as compared with all kinds of tea sold had gone up from 1 per cent, to 5 per cent. In other words since the penny duty had been taken off tea the increase in the sale of shilling tea had gone up 450 per cent. By giving these figures he hoped he had at least proved to the satisfaction of the Committee that the penny had not gone into the pockets of the tea blenders and that the poorer classes were receiving the full benefit.
§ *MR. STUART WORTLEY (Sheffield, Hallam)
thought the Chancellor of the Exchequer had received valuable assistance of which he stood much in need in the speech of the hon. Gentleman who had just sat down. He did not want to go into the branch of the subject to which the hon. Member had referred, but merely wished to say that on this occasion he intended to pursue the patriotic course of supporting His Majesty's Government. They could not expect a great reduction of this tax from a Liberal Government, because it was one of the facts that stared out from history that no Liberal Government up to the present had had the tea tax below sixpence, and that the beginning and the end of Liberal finance was what was intended to be done by the late Mr. Gladstone. What were the facts about that? The late Mr. Gladstone had a most magnificent opportunity for abolishing the tea tax and he deliberately abstained from doing it, and proposed to give relief to the income-tax and the income-taxpayer alone. They were all pledged to reduce one tax or another, but he felt a difficulty in supporting this reduction of the tea tax, because he was perfectly willing to adopt the logical position taken up by the Chancellor of the Exchequer. As to the coal tax, he had a predilection in favour of cheapening anything which cheapened raw material to the home producers 316 of manufactured goods. For the same reason he was also impelled to point out the differences between tea on the one hand and sugar on the other. He thought that the reduction of the tax on sugar ought to come before the reduction of the tax upon tea, because sugar was an article which formed the raw material of British manufactures. As mere food, sugar was much better for the human frame than tea. A reduction in the tea duty now would be an obstacle to a reduction of the sugar duty hereafter.
§ MR. H. H. MARKS (Kent, Thanet)
said they were all pleased to hear the information communicated by the hon. Member for South Nottingham, and if his information was correct, to the effect that there had been a reduction in the price of tea by 1d. on the pound all round since the reduction of the tax, they would be delighted. But it was a significant and remarkable fact that the process which the hon. Member described appeared to have been going on for some time before the reduction of the tax. This would seem to indicate that the operation had been going on for weeks, whereas the reduced duty had not been in operation for more than a fortnight. These facts would seem to indicate either that there had been a self-denying ordinance on the part of those who might have benefited by the tea duty, or that there had been the fall in prices to which the Chancellor of the Exchequer had alluded. There was no doubt that the tea duty was a harsh, extraordinary, not to say a paradoxical, duty, and there was a general consensus of opinion that it was very much too high, and ought to be reduced, and so far as the Chancellor of the Exchequer had endeavoured to reduce it they accorded him their gratitude. The question was between a reduction of 1d. or 2d., and the Chancellor of the Exchequer had said they had reduced it as much as they could. The question was, did this proposal have the effect of reducing the duty as much as possible? Would it not have been possible to have reduced the duty not by a penny but by 2d., so as to give the consumer an undoubted benefit and an unmistakable measure of relief? There could be no doubt it would have been quite possible to have done that by applying the available balance in the hands of the Chancellor of the Exchequer to the 317 reduction of tea, instead of dividing it and applying one part to the reduction of tea and the other to the abolition of the coal duty. The effect of dealing with it in that way had been to make in appearance a reduction in the duty of tea avowedly and ostensibly for the benefit of the consumer of tea, and also a reduction in coal for the benefit of the consumer of coal. But in practice neither thing had happened. Tea was no cheaper on the one hand and coal was no cheaper on the other. He knew that there were certain figures published in the trade papers, and that certain statements were made by experts as to the effect of this reduction of the duty on tea. But in London during the last few days a very representative meeting of the great tea firms of the country had been held, and that meeting passed a unanimous resolution declaring that the reduction of the tea duty would not enable them to make any reduction in the price of tea. It had been suggested that there would be an improvement in the quality of the cheapest kinds of tea. He had no general knowledge of the question, and he had not heard of any demand for improved quality in the tea, but he had a general knowledge of a general demand for a reduction in the price. A reduction in the price had been asked for, but that had not been achieved. The ideal thing of course would be the abolition of the tea duty, and that apparently could not be realised. But if they could not realise the ideal, could they not endeavour to idealise the real? He thought they could, and that they should have gone a great way in that direction if, instead of splitting what might have been a real gift to the tea consumers and giving them a reduction of a penny, the right hon. Gentleman had given a reduction of 2d. It was for that reason he hoped this Amendment would be pressed to a division. If it were he should have great pleasure in supporting it.
§ MR. T. L. CORBETT (Down, N)
said that as representing a large working-class constituency who felt very keenly the high tax on tea, he desired cordially to support the Amendment. There were always plenty of arguments to be found against the revision of taxation. It was part of the duty of the Chancellor of the Exchequer to defend himself from any arguments in favour of the reduction 318 of taxation, and there never was a more eloquent or ingenious Chancellor of the Exchequer than the present occupant of that office. But they wanted to get him and the Liberal Party to go back to their high ideals of the past. One of those ideals which they used to put most commonly before the country was the free breakfast table. Where was the free breakfast table now? This Budget, owing to the careful and cautious Estimates of the late Chancellor of the Exchequer, who framed them in no electioneering spirit, gave the Liberal Party an opportunity of once more unfurling the old banner of a free breakfast table; but unfortunately the Chancellor of the Exchequer, notwithstanding the large surplus at his disposal, had failed to realise this old ideal and tradition of the Liberal Party. He had introduced what he called a humdrum Budget, but so far as the tea duty was concerned he (Mr. Corbett) ventured to think it was a very foolish Budget. They were told by experts when the Budget was introduced that this reduction of a penny would do no good to the consumer. Experts were sometimes mistaken; but in this case they were not, for the price of tea had not been reduced, and the consumer had not benefited at all, the only gainers from the reduction of the tax being the tea merchants. They had to regard this matter from the point of view of the poorest consumers, and so far as their case was concerned they were no better off after this reduction than they were before. If hon. Members once realised that the poorer classes used tea three times a day, it would be seen that even a duty of a penny on the pound would press very hardly upon them. He should certainly vote in favour of the Amendment.
§ SIR GILBERT PARKER (Gravesend)
said he did not desire to detain the Committee long, but he thought some of the statements that had been made were worth traversing. The statements of the hon. Member for Nottingham, if entirely correct, were very serious indeed, and destroyed any argument that might be advanced concerning the tax on tea. But he ventured to question the accuracy of the figures. Another hon. Member had suggested that the reduction in the price of tea took place before the reduced tax came into operation. The Chancellor of 319 the Exchequer was probably aware that the generally accepted figure for low-priced teas during the last ten years had been 4¾d. or 5d. a lb. The right hon. Gentleman had said that the price of this large stock of low-priced tea was reckoned at 3¾d. to 4d. If there had been that reduction in the price of tea since the duty was taken off, then his hon. friend behind him was quite right in saying the reduction in the price of these teas was due not to the reduction of the tax, but to the fact that there was a very large stock of low-priced teas on the market. He did not think in the history of the tea trade there had ever been so large a stock of low-priced teas, and he thought when the right hon. Gentleman came to examine the question he would find that the reduction of price was due to that, and not to the penny he had taken off the duty. These phenomena occurred in every trade, and it was quite possible that in regard to the tea trade it had synchronised with the penny being taken off the duty. It had been pointed out, and with truth, that this tax fell much more heavily upon the poor than on the rich man. The most careful calculations showed that the consumer of the high-priced tea paid only 20 per cent. duty on the value of the tea, but the consumer who bought the cheap tea sold at 1s. per lb. paid a duty equal to 160 per cent. of its value. This was the largest tea-consuming country in the world, and the tea was largely consumed by the poor classes. Every penny put on the tea duty struck the poor man in his tea basket. He thought the Chancellor of the Exchequer would receive plenty of assurances from people in the City and the poor buyers throughout the country that the price of tea had not been reduced at the little village store. The Manchester Co-operative Store had probably done a good stroke of business, but they were premature in putting forward their advertisements, and they got their reward, because tea was placed at a lower price by virtue of the fact that there was an immense amount of cheap tea on the market. This had made tea 1d. per lb. cheaper, and therefore the Chancellor of the Exchequer was able to say that the price of tea had gone down. He thought some other way ought to be found of raising the revenue than that of putting a tax upon the one necessary of the poor man's breakfast table. [An HON. MEMBER: Who put the tax on?] 320 He agreed that both Parties were responsible for the tea tax, but he had always been opposed to high taxes upon the necessaries of life. He would much prefer an income tax from top to bottom, applied to the man who earned £30 a year and the man who had £14,000 a year. Such a tax would be much fairer than a tax upon the necessaries of life. The view he was putting forward on this question he had always held, and he had expressed it before in the House. When they made appeals to hon. Members to support an Amendment of this kind it was not because they wanted the support of the Labour Party. If the Chancellor of the Exchequer would reduce the tea duty by 2d. next year there was not a single Member sitting on the Opposition Benches who would not support him, although he could not promise their support to the proposals which the right hon. Gentleman might make for transferring the burden of taxation.
§ MR. ASQUITH
said he had listened with great pleasure to the speech of the hon. Member for Gravesend, because it proceeded entirely upon an assumption which he shared, namely, that a tax of this kind fell almost entirely upon the consumer. If this were not the case the hon. Member's impassioned appeal to get rid of the tax would be beside the point. His hon. friend had appealed to him as if he was putting something on instead of reducing the burden of the tea duty. He regretted very much that he was not able to reduce it more. It might be perfectly true that there happened to be an unusually large supply of cheap tea on the market, but the opinion of the expert which he had read, and other evidence, showed that the concurrent causes of the reduction were the abundance of the supply and the penny reduction. His object in intervening was to ask the Committee to allow them now to proceed to a decision upon this point.
§ *CAPTAIN CRAIG (Down, E.)
said that the present reduction of a penny would never be felt by the poorer labouring classes. In the large centres, such as London, Liverpool, and Manchester, where competition was keen, he had no doubt that with the present reduction a difference would be felt, but he did not think the question, as it affected the more distant parts of the country, 321 had been taken fully into consideration. If the Chancellor of the Exchequer had reduced the tax by 2d. instead of 1d. he would have earned the gratitude of those least able to voice their views in that Committee. The Committee was perfectly well aware that there were an enormous number of commodities necessary for life brought into the various large cities from abroad, and he contended that if the Chancellor of the Exchequer was at a loss for a corresponding tax to take the place of that upon tea, and one which would be spread more evenly over all breakfast-tables, he had an immense choice among these foreign imported commodities. He would call attention to the fact that the breakfast-tables of Britain involved an expenditure of something like £146,000,000 upon foreign imported meat, frozen beef, mutton, etc., upon which no tax was paid, whereas if but a tax of only 1 per cent. was levied upon these articles it would not only have the effect of allowing the Chancellor of the Exchequer to reduce the tea tax another penny, but would also afford protection to those agricultural classes which he represented in the distant parts of the country. He was perfectly convinced that if the tax upon tea were reduced by 2d. all classes would benefit. He would be delighted if the Chancellor of the Exchequer would assure them that the pledges of hon. Members on the Ministerial side were going at last to be considered by the Government. He hoped the right hon. Gentlemen would try and give them a free breakfast-table. It had been said that the price of tea to the consumer had actually been reduced to the extent of the penny which had been taken off. He would remind the Committee, however, that they had been face to face with similar reductions before, and it was only natural that those chiefly interested should compete with each other in trying to get the largest number of sales. A very trifling alteration in the quality would make up the whole difference of this penny reduction in taxation. Even if they took the figures which had been given as applying to the large towns as correct, he still contended that the benefit of the reduction of 1d. failed to reach those consumers of tea in the distant parts of the country, more especially in Ireland. In order to voice the sentiments of those of the 322 agricultural class who lived away in the remote counties of Ireland, he had called attention to the question to show that they would not benefit by the reduction, although he was perfectly convinced that 2d. was a real reduction that would be felt by the poor people, who would benefit by it as much as those who lived in the large towns. He hoped a sufficient number of hon. Members would support the Amendment in the lobby to enable them to take this small step in the direction of a free breakfast-table.
§ MR. DUNN (Cornwall, Camborne)
said he did not go back one stop from the pledges he had given; he was absolutely opposed to all taxes upon the food of the people, and he would do his utmost to bring about an abolition of the tea duty. The question, however, to be considered was the best way in which this abolition might be brought about. He contended that the Amendment, coming as it did from the opposite side of the Committee, must arouse suspicion in view of the past experience they had had of the way in which the Unionist Government had dealt with the question. He was asked to support an Amendment to reduce the tax from 5d. to 4d., but he felt that if he did he should be false to the pledges he had given. They laughed, but it was so. He was asked to vote against the Government and so defeat the present proposals of the Chancellor of the Exchequer. They were asked to destroy the present Budget, and that meant practically that they would place in power Gentlemen who had already dealt with the tea duty in a somewhat remarkable manner. It was because he believed that they would eventually reach the goal at which they were aiming by keeping in power a Chancellor of the Exchequer who was pledged to reduction that he should certainly vote against the Amendment.
§ MR. WILLIAM RUTHERFORD (Liverpool, West Derby)
said he could not understand why the Government, being pledged to abolish the tea duty, came down to the Committee and gave the absurd reason put forward by the Chancellor of the Exchequer for breaking their pledges. He was going to vote for this Amendment because he believed the duty upon tea was a tax upon food. It 323 was not only a tax upon food, but a tax upon one of the poorest sections of the people. It was a tax which from its very nature fell with very great hardship upon the poorest section of the people. He believed from the figures which had been given that it would not be impossible to take the 2d. off tea at once. The hon. Member for South Nottingham had stated that in the last three months there had been an increase in the quantity of shilling tea sold—that instead of being 1 per cent. of the total, as it was three months ago, it had risen to 5 per cent. There was a perfectly reasonable explanation of these figures. It was well known that during the two months before the introduction of the Budget very little was done in the way of taking cheap tea out of bond. Tea merchants knew that the duty could not be increased, and that it might be reduced. After the Budget they filled up their stocks, and the consequence was that there was a very much increased demand. That accounted for the whole difference in the figures given by the hon. Member. In the higher qualities of tea the amount of the duty made little or no difference. He believed the arguments deduced from the figures given by the hon. Member to be entirely fallacious. The Chancellor of the Exchequer commenced his business with a very handsome legacy secured for him by his predecessor, and he had proceeded to make a mess of it by producing a Budget which did the country no good. It gave relief to practically no portion of the taxpayers. In dealing with the tea duty the important thing to keep in mind was the unit of payment in the coins of the realm. Therefore, in order to get the benefit of a reduction in the tea duty the buyer had to take at least half a pound. Poor people did not deal in half-pounds of tea, and it was impossible for them to get any advantage from this supposed relief of taxation. He was not going to suggest to-day—it would not be in order on this Amendment—that the whole of the revenue from tea should be got from a tax on automobiles, but he thought that would be a better way of raising the money. Supposing it were decided to take £1,000,000 off tea, the proper way to do it would be to divide the commodity into two qualities—the better class half, and the lower class half—and to leave the 324 duty alone on the higher class half which paid a comparatively small portion of the tax in relation to its value, while taking 2d. off the cheap tea of the poor people if the tax could not be taken off altogether. The tea tax was one of the most unjust taxes, for while the poor man paid 150 per cent., the rich man only paid 20 per cent, on the value of the article. The tax in the case of the cheaper qualities of tea was altogether out of proportion to its value.
§ MR. CARLILE (Hertfordshire, St. Albans)
said he hoped the time would come when the tea duty, if they were still to have it, would be treated in a totally different way from that which obtained at present. He did not see why there should not be an ad valorem duty on tea instead of the present rule of thumb specific duty with all its want of logic, and all its burden on the working people of the country. A large quantity of the tea consumed by the working classes was tea dust, the value of which was 1½d. per pound. The tax on that tea was 5d. per pound, and the tax was just the same on the tea worth 3s. per pound, which was consumed by the well-to-do classes. It was an abominable outrage committed on the poor people of this country. He did not think it ought to pass the wit of man to devise a more equitable method of taxation. There was no difficulty in finding other articles on which to place taxes. Why should not the Chancellor of the Exchequer tax diamonds? They came in free at present, and surely they could bear a tax. Why should not the right hon. Gentleman tax some of the multitude of foreign manufactured goods which came into the country, competing with our own products and destroying the employment of our people? He hoped the hon. Gentlemen opposite who had given pledges to their constituents in favour of reducing this heavy burden on the food of the people would march into the lobby in support of the Amendment.
§ MR. HUNT (Shropshire, Ludlow)
said the tax on tea fell much more heavily on the poor than on the rich, from the fact that the duty was the same on all qualities of tea, irrespective of the price. There were plenty of 325 luxuries used by the rich which could very well be taxed. The taxes would be paid by the rich, and the foreigner would pay some of the revenue so raised.
§ Question put.
§ The Committee divided:—Ayes, 255; Noes, 150. (Division List, No. 104.)329
|Abraham, William (Rhondda)||Crossley, William J.||Laidlaw, Robert|
|Acland, Francis Dyke||Davies, D. (Montgomery Co.||Lamb, Ernest H. (Rochester)|
|Adkins, W. Ryland||Davies, Timothy (Fulham)||Lambert, George|
|Agar-Robartes, Hon. T. C.||Davies, W. Howell (Bristol, S.||Lambton, Hon. Frederick Wm.|
|Agnew, George William||Dewar, Arthur (Edinburgh, S.||Lamont, Norman|
|Ainsworth, John Stirling||Dickinson, W.H. (S. Pancras, N||Lawson, Sir Wilfrid|
|Alden, Percy||Dickson-Poynder, Sir John P.||Layland-Barratt, Francis|
|Allen, Charles P. (Stroud)||Dodd, W. H.||Leese, Sir Joseph F.(Accringt'n|
|Armitage, R.||Dunn, A. Edward (Camborne)||Lehmann, R. C.|
|Ashton, Thomas Gair||Dunne, Major E. M. (Walsall)||Lever, A. Levy (Essex, Harwich|
|Asquith, Rt. Hn. Herbert Henry||Edwards, Enoch (Hanley)||Lever, W.H. (Cheshire, Wirral)|
|Astbury, John Meir||Elibank, Master of||Levy, Maurice|
|Baker, Sir John (Portsmouth)||Ellis, Rt. Hon. John Edward||Lewis, John Herbert|
|Balfour, Robert (Lanark)||Erskine, David C.||Lloyd-George, Rt. Hon. David|
|Baring, Godfrey (Isle of Wight)||Essex, R. W.||Lough, Thomas|
|Barker, John||Evans, Samuel T.||Lupton, Arnold|
|Barlow, John Emmott (Somerset||Everett, R. Lacey||Lyell, Charles Henry|
|Barlow, Percy (Bedford)||Faber, G. H. (Boston)||Lynch, H. B.|
|Barnard, E. B.||Ferens, T. R.||Macdonald, J.M. (Falkirk B'ghs|
|Barran, Rowland Hirst||Findlay, Alexander||Mackarness, Frederic C.|
|Beale, W. P||Foster, Rt. Hon. Sir Walter||M'Arthur, William|
|Beauchamp, E.||Fowler, Rt. Hon. Sir Henry||M'Callum, John M.|
|Beaumont, W. C. B. (Hexham)||Fuller, John Michael F.||M'Crae, George|
|Beck, A. Cecil||Fullerton, Hugh||M'Kenna, Reginald|
|Bellairs, Carylon||Gibb, James (Harrow)||M'Micking, Major G.|
|Benn, J. Williams (Dovonp'rt)||Gladstone, Rt. Hn. Herbert Jn.||Maddison, Frederick|
|Benn, W.(T'w'r Hamlets, S. Geo||Goddard, Daniel Ford||Mallet, Charles E.|
|Berridge, T. H. D.||Gooch, George Peabody||Manfield, Harry (Northants)|
|Bethell, J.H. (Essex, Romford)||Grant, Corrie||Marks, G. Croydon (Launceston|
|Bethell, T. R. (Essex, Maldon)||Grey, Rt. Hon. Sir Edward||Marnham, F. J.|
|Billson, Alfred||Griffith, Ellis J.||Mason, A. E. W. (Coventry)|
|Birrell, Rt. Hon. Augustine||Gulland, John W.||Massie, J.|
|Black, Alexander Wm. (Banff)||Gurdon, Sir W. Brampton||Menzies, Walter|
|Bolton, T.D. (Derbyshire, N.E.)||Hall, Frederick||Micklem, Nathaniel|
|Boulton, A. C. F. (Ramsey)||Harcourt, Rt. Hon. Lewis||Molteno, Percy Alport|
|Bramsdon, T. A.||Hardy, George A. (Suffolk)||Mond, A.|
|Bright, J. A.||Harvey, A. G. C. (Rochdale)||Montgomery, H. H.|
|Brodie, H. C.||Harwood, George||Morgan, G. Hay (Cornwall)|
|Brooke, Stopford||Haslam, James (Derbyshire)||Morgan, J. Lloyd (Carmarthen)|
|Brunner, J.F.L. (Lanes., Leigh)||Haworth, Arthur A.||Morley, Rt. Hon. John|
|Bryce, Rt. Hn. James (Aberd'n||Hazel, Dr. A. E.||Morrell, Phillip|
|Bryce, J. A. (Inverness Burghs)||Hedges, A. Paget||Morse, L. L.|
|Buchanan, Thomas Ryburn||Helme, Norval Watson||Murray, James|
|Buckmaster, Stanley O.||Henderson, J. M. (Aberdeen, W.||Napier, T. B.|
|Burnyeat, J. D. W.||Herbert, Colonel Ivor (Hon., S.||Newnes, F. (Notts Bassetlaw)|
|Burt, Rt. Hon. Thomas||Higham, John Sharp||Newnes, Sir George Swansea)|
|Buxton, Rt. Hn. Sydney Chas.||Hobart, Sir Robert||Nicholls, George|
|Cairns, Thomas||Hobhouse, Charles E. H.||Nicholson, Chas. N. (Doncast'r|
|Carr-Gomm, H. W.||Holden, E. Hopkinson||Norton, Capt. Cecil william|
|Cawley, Frederick||Holland, Sir William Henry||Nuttall, Harry|
|Chance, Frederick William||Hooper, A. G.||Paul, Herbert|
|Channing, Francis Allston||Hope, W. Bateman (Somerset N||Perks, Robert William.|
|Cherry, Rt. Hon. R. R.||Horridge, Thomas Gardner||Philipps, Owen C. (Pembroke)|
|Clarke, C. Goddard (Peckham)||Howard, Hon. Geoffrey||Pollard, Dr.|
|Coats, Sir T. Glen (Renfrew, W.)||Hyde, Clarendon||Price, C.E. (Edinb'gh, Central)|
|Cobbold, Felix Thornley||Isaacs, Rufus Daniel||Price, Robert Jn. (Norfolk, E.)|
|Collins, Stephen (Lambeth)||Jacoby, James Alfred||Radford, G. H.|
|Collins, Sir W. J. (S. Pancras, W||Johnson, John (Gateshead)||Rainy, A. Rolland|
|Corbett, C H (Sussex, E. Grinst'd||Johnson, W. (Nuneaton)||Raphael, Herbert H.|
|Cory, Clifford John||Jones, D. Brynmor (Swansea)||Rea, Russell (Gloucester)|
|Cotton, Sir H. J. S.||Jones, William (Carnarvonshire||Rea, Walter Russell, (Scarboro '|
|Craig, Herbert S. (Tynemouth)||Kearley, Hudson E.||Rees, J. D.|
|Cremer, William Randal||King, Alfred John (Knutsford)||Renton, Major Leslie|
|Crosfield, A. H.||Kitson, Sir James||Richardson, A.|
|Ridsdale, E. A.||Stanger, H. Y.||Ward, W. Dudley (Southamptn|
|Roberts, Charles H. (Lincoln)||Stanley, Hn. A. Lyulph (Chesh.||Wason, Jn. Cathcart (Orkney|
|Roberts, John H. (Denbighs.)||Stewart, Halley (Greenock)||Watt, H. Anderson|
|Robertson, Rt. Hn. E.(Dundee||Strachey, Sir Edward||Wedgwood, Josiah C.|
|Robertson, Sir G. Scott (Bradf'rd||Straus, B. S. (Mile End)||Weir, James Galloway|
|Robertson, J. M. (Tyneside)||Strauss, E. A. (Abingdon)||Whitbread, Howard|
|Robson, Sir William Snowdon||Taylor, Austin (East Toxeth)||White, George (Norfolk)|
|Roe, Sir Thomas||Taylor, Theodore C. (Radcliffe)||White, J. D. (Dumbartonshire)|
|Rogers, F. E. Newman||Tennant, E. P. (Salisbury)||Whitehead, Rowland|
|Rose, Charles Day||Tennant, H. J. (Berwickshire)||Whitley, J. H. (Halifax)|
|Rowlands, J.||Thomas, Sir A. (Glamorgan, E.)||Whittaker, Thomas Palmer|
|Runciman, Walter||Thomas, D. Alfred (Merthyr)||Williams, W. L. (Carmarthen)|
|Russell, T. W.||Tillett, Louis John||Williamson, A.(Elgin and Nairn|
|Samuel, Herbert L. (Cleveland)||Tomkinson, James||Wilson, Henry J. (York, W.R.)|
|Schwann, Chas. E. (Manchest'r)||Torrance, A. M.||Wilson, John (Durham, Mid)|
|Sears, J. E.||Toulmin, George||Wilson, J. W. (Worcestersh, N.|
|Seaverns, J. H.||Trevelyan, Charles Philips||Yoxall, James Henry|
|Seely, Major J. B.||Verney, F. W.|
|Shaw, Charles Edw. (Stafford)||Vivian, Henry||TELLERS FOR THE AYES—Mr. Whiteley and Mr. J. A. Pease.|
|Shaw, Rt. Hon. T. (Hawick B.)||Walker, H. De R. (Leicester)|
|Sinclair, Rt. Hon. John||Wallace, Robert|
|Smeaton, Donald Mackenzie||Walters, John Tudor|
|Spicer, Albert||Walton, Sir John L. (Leeds, S.)|
|Abraham, William (Cork, N.E.)||Ffrench, Peter||Meysey-Thompson, E. C.|
|Acland-Hood, Rt Hn. Sir Alex F.||Fletcher, J. S.||Mooney, J. J.|
|Anson, Sir William Reynell||Forster, Henry William||Morpeth, Viscount|
|Anstruther-Gray, Major||Gardner, Ernest (Berks, East)||Murphy, John|
|Aubrey-Fletcher, Rt. Hn. Sir H||Gill, A. H.||Nannetti, Joseph P.|
|Balcarres, Lord||Ginnell, L.||Nicholson, Win. G. (Petersfield|
|Balfour, Rt. Hn A J.(City Lond.)||Glover, Thomas||Nolan, Joseph|
|Balfour, Capt. C. B. (Hornsey)||Gordon, J. (Londonderry, S.)||O'Brien, Kendal (Tipperary Mid|
|Banner, John S. Harmood-||Hamilton, Marquess of||O'Brien, Patrick (Kilkenny)|
|Baring, Hon. Guy (Winchester)||Hardie, J. Keir (Merthyr Tydvil||O'Connor, James (Wicklow, W.|
|Barrie, H. T. (Londonderry, N.||Hardy, Laurence (Kent, Ashf'rd||O'Connor, T. P. (Liverpool)|
|Beach, Hn. Michael Hugh Hicks||Harrison-Broadley, Col. H. B.||O'Grady, J.|
|Beckett, Hon. Gervase||Hayden, John Patrick||O'Hare, Patrick|
|Bignold, Sir Arthur||Hazleton, Richard||O'Malley, William|
|Black, Arthur W.(Bedfordshire||Healy, Timothy Michael||O'Neill, Hon. Robert Torrens|
|Boland, John||Helmsley, Viscount||Parket, Sir Gilbert (Gravesend)|
|Boyle, Sir Edward||Henderson, Arthur (Durham)||Parker, James (Halifax)|
|Brace, William||Hervey, F. W. P.(Bury S. Edm'ds||Pease, Herbert Pike(Darlington|
|Bridgeman, W. Clive||Hill, Sir Clement (Shrewsbury)||Percy, Earl|
|Butcher, Samuel Henry||Hill, Henry Staveley (Staff'sh.)||Powell, Sir Francis Sharp|
|Carlile, E. Hildred||Hodge, John||Reddy, M.|
|Cave, George||Houston, Robert Paterson||Redmond, John E. (Waterford)|
|Cavendish, Rt. Hn. Victor C.W||Hudson, Walter||Richards, Thomas (W. Monm'th|
|Cecil, Evelyn (Aston Manor)||Hunt, Rowland||Richards, T. F. (Wolverh'mpt'n|
|Cecil, Lord John P. Joicey-||Jackson, R. K.||Roberts, G. H. (Norwich)|
|Chamberlain, Rt. Hn. J. (Birm.||Jenkins, J.||Roberts, S. (Sheffield, Ecclesall)|
|Chamberlain, Rt. Hn J A(Worc.||Jowett, F. W.||Royner, Colonel Sir Robert|
|Clancy, John Joseph||Joyce, Michael||Rothschild, Hon. Lionel Walter|
|Clarke, Sir Edward (City Lond.||Kennedy, Vincent Paul||Rutherford, W. W. (Liverpool)|
|Clough, W.||Kenyon-Slaney, Rt. Hn. Col. W||Salter, Arthur Clavell|
|Clynes, J. R.||Law, Andrew Bonar (Dulwich)||Sassoon, Sir Edward Albert|
|Cochrane, Hon. Thos. H.A.E.||Lee, Arthur H.(Hants., Fareh'm||Scott, AH (Ashton under Lyne)|
|Condon, Thomas Joseph||Liddell, Henry||Shackleton, David James|
|Cooper, G. J.||Long, Col. Chas. W. (Evesham)||Sloan, Thomas Henry|
|Corbett, T. L. (Down, North)||Lowe, Sir Francis William||Smith, Abel H. (Hertford, East|
|Cowan, W. H.||Lundon, W.||Smith, F.E.(Liverpool, Walton|
|Craig, Capt. James (Down, E.)||Lutterell, Hugh Fownes||Snowden, P.|
|Delany, William||Macdonald, J. R. (Leicester)||Starkey, John R.|
|Devlin, Chas. Ramsay (Galway||MacNeill, John Gordon Swift||Steadman, W. C.|
|Dixon-Hartland, Sir Fred Dixon||MacVeagh, Jeremiah (Down, S.||Sullivan, Donal|
|Dolan, Charles Joseph||MacVeigh, Chas. (Donegal, E.)||Summerbell, T.|
|Doughtly, Sir George||M'Calmont, Colonel James||Talbot, Rt. Hn. J. G.(Oxf'd Univ.|
|Du Cros, Harvey||M'Killop, W.||Thomas, W. Mitchell-(Lanark)|
|Duncan, C. (Barrow-in-Furness||Magnus, Sir Philip||Thorne, William|
|Fell, Arthur||Marks, H. H. (Kent)||Valentia, Viscount|
|Fetherstonhaugh, Godfrey||Mason, James F. (Windsor)||Walker, Col. W. H. (Lancashire)|
|Walsh, Stephen||Willoughby de Eresby, Lord||Wyndham, Rt. Hon. George|
|Wardle, George J.||Wilson, A. Stanley (York, E.R.||Young, Samuel|
|White, Patrick (Meath, North)||Wlison, J. H. (Middlesbrough)|
|Wilkie, Alexander||Wilson, W. T. (Westhoughton)||TELLERS FOR THE NOES—Mr. Courthope and Mr. Ashley.|
|Williams, J. (Glamorgan)||Wolff, Gustav Wilhelm|
§ Clause 1 agreed to.
§ Motion made and Question proposed, "That Clause 2 stand part of the Bill."
§ *MR. COURTHOPE
said that the clause dealt with the tobacco duties, and he proposed to move to omit it. There was no doubt that the differentiation of duty between tobacco leaf and stripped tobacco had done no harm to the consumer, and had provided a good deal of employment for the British workman. They had it in the words of the Chancellor of the Exchequer himself that since this duty on stripped tobacco was imposed that tobacco had come in more and more in a raw condition and less and less in the condition of stripped tobacco. The figures for the last three years were rather extraordinary. During the year ended March 31st, 1904, we imported 53,000,000 lbs. of stripped tobacco, and 33,000,000 lbs. of leaf. During the following year, that was after the differentiation, we imported 21,500,000 lbs. of stripped, and 82,000,000 lbs. of the raw leaf, and in the year that had just concluded we only imported 12,000,000 lbs. of stripped and 76,000,000 of the raw leaf. The computation made by his right hon. friend the Member for West Birmingham was not disputed that on an average a man stripped 5,000 lbs. a year. Calculating on this basis, we find that the leaf imported last year found continuous employment for 15,000 people in England. The employment of people during the two years that the differentiation existed had more than doubled. The increase was 110 per cont. in the amount of employment given to British workpeople who were engaged in stripping tobacco. One was led to inquire under these circumstances why was this duty being taken off? One looked naturally to the utterances of the right hon. Gentleman who was responsible for the Finance Bill, and they found that one of his reasons was that the stripping industry in this country was carried on under very bad conditions. Why not improve the conditions instead of killing the industry? The remedy of the Chancellor of the Exchequer was like cutting off a man's legs in 330 order to prevent his feet getting wet.. Another reason was that this duty violates the sacred shibboleth of our policy of free imports, but what had happened in this case was a standing proof of the fallacy of that policy. The only effect of the change would be, not to benefit the revenue or the consumer, but to throw thousands of British workmen out of work and to give the work they were now doing to the foreigner. Those who bought tobacco were bound to pay something for the price of stripping, and surely it was more satisfactory that the tobacco purchaser in this country should pay the wages for stripping tobacco into British pockets rather than into foreign pockets. He hoped the Committee would vote against Clause 2.
§ MR. FELL (Great Yarmouth)
joined in the hope expressed by the hon. Member for Rye. The policy of transferring the stripping trade which, had now been secured by the British manufacturer to the foreigner was one to which he gave the most determined opposition. Tobacco leaf, like cabbage leaf, had a stalk, and the question was whether tobacco leaf should be sent over here unstripped or whether it should be stripped in America or elsewhere and sent over here in a state fit to be used in manufacture. The duty upon stripped tobacco had almost entirely transferred this work of stripping the leaves to England, instead of leaving it to be done in the United States and other countries whence the tobacco came. The duty upon stripped tobacco had had a most remarkable result, and this result had taken place much more quickly than those who advocated a change in our fiscal policy would have anticipated. Three years ago 5,000 people were employed in stripping tobacco in England, but in consequence of the slight change in duty there were now 15,000 people engaged in that industry. These 15,000 people were earning a livelihood; it might be a poor one, but still it was a livelihood. It was said that this was not a high class process of manufacture, and that therefore 331 it ought not to be encouraged, but he did not think the Committee should look only after the high-class manufacturers and the highly paid artisans of this country, and not think of the poor manufacturer and the more poorly paid artisan. It was true that they might be engaged in a sweated industry, but if they took away from those people this work, they took away the only work which they were engaged in doing, and the only industry which they had the chance of performing. It was true that it was a badly-paid industry, and that the work was performed under bad conditions, but it seemed to him that the Government ought rather to see that those conditions were improved, and the wages increased, than to take away the work from English people and place it in the hands of foreigners. It was obvious that if the differentiation was abolished the foreigners would get this work which now employed an additional 10,000 people, although the same profits, if not larger profits, would be made by the tobacco magnates of this country. The tobacco kings of Bristol were making out of tobacco the most enormous profits. The profits which they earned, indeed, were startling, and amounted to hundreds of thousands of pounds. It might even be that the change now proposed might slightly increase those profits, but it was the interest of the Committee to look after the men engaged in the industry, and to see that the work they were engaged upon was not sent abroad. If the duty was taken off stripped tobacco, the Americans would get the work, and although there might be a slight benefit gained by the tobacco monopoly, there would be no benefit gained by the consumer, and these ten or fifteen thousand people would lose their work. On these grounds he would certainly vote that this change should not be made, because, as he had said, it would rob these people of their work and their pay.
§ MR. AUSTEN CHAMBERLAIN
invited the Chancellor of the Exchequer to explain his reasons for making the proposed change, as to which he avowed himself entirely in the dark. The history of the duty, which he himself put on when in office, was very simple. When, two years ago, he had to frame his first Budget, with a deficit of four 332 millions to meet, he did not think it worth while to consider any additional taxation which would not bring in at least a million a year. When he had met the deficit he found he had not the working margin necessary for safety, and he then said to his advisors that now they had come to the day of small things; if they had a change to propose which would bring in half a million a year that would be exactly what he wanted. They advised him that he would find such a change in the tobacco duties, and they expressed the opinion on grounds of justice and equity that that change should have long ago been made. He agreed with the proposal, with the result that he was able to obtain substantially the money he expected. Now the Chancellor of the Exchequer proposed to upset that arrangement. Why did the right hon. Gentleman make the change at all? Granting that it had, as was alleged, some protective effect, was that a sufficient reason for throwing the trade into confusion again, and reopening the whole question? Did hon. Gentlemen opposite think that the other duties on manufactured tobacco should also be taken off? The present scale of tobacco duties was so protective that it had practically eliminated all foreign competition in manufactured tobacco in the home market, and when the great American trust attempted to invade that market, the home manufacturers formed a trust of their own, and beat their rivals out of the field. His first question, then, to the Chancellor of the Exchequer was, why did he strain at a gnat and swallow a camel, why did he trouble about this small matter between strips and leaf while he re-enacted the substantial and widespread protection which existed in the whole scale of the tobacco duties? His second question was, why, having decided on altering the rate of differentiation between strips and leaf, had the right hon. Gentleman fixed upon a halfpenny as the exact measure of differentiation which justice and equity demanded? When his right hon. friend the Member for West Birmingham asked the right hon. Gentleman to state in a Return his reasons for the change, the right hon. Gentleman gave the most extraordinary answer that a Chancellor of the Exchequer had ever offered to the House, namely, that he could not do it, because all his calculations were in his own head.
§ MR. ASQUITH
If the right hon. Gentleman read my next sentence he would find that I said the whole of the material was contained in the Report of the Departmental Committee which the right hon. Gentleman himself appointed.
§ MR. AUSTEN CHAMBERLAIN
said he was aware of that. When he imposed that differentiation his first consideration, and he frankly admitted it, was to obtain the sum of money his financial necessities demanded. But he was advised by members of that Committee and by his own financial advisers I that the differentiation was not unfair, and it surprised him and awakened a legitimate curiosity on his part to hear the right hon. Gentleman the Chancellor of the Exchequer say that in the Report of that same Committee ho (Mr. A. Chamberlain) would find all the materials which would prove to him that this differentiation should have been3½d. Hestudied the Report very carefully two years ago, and had some recollection still of what was in it, and the right hon. Gentleman would not deny that there was a great deal of information there relating to tobacco, and that several varieties of tobacco were dealt with in the Report. But there were many other varieties known to the market which were not dealt with in the Report, and for the right hon. Gentleman to refer the Committee to the labours of that Committee for information was like setting them to search for a needle in a haystack, and he did not think that the needle was there after all. He would ask the right hon. Gentleman to unlock the recesses of his mind and lay bare to the Committee the process of logical digestion by which he had converted the details of that Report into an argument for his differentiation of ½d. He rejoiced that after all that had been said during the last two years, and after all the stress of the contests in these debates, the right hon. Gentleman the Chancellor of the Exchequer, however much he desired to upset the decision of his predecessors upon this point, had himself been forced to the conclusion that a differentiation was needed and that nothing less than a differentiation would be satisfactory. When he had heard the observations which the right hon. Gentleman would, he hoped, make upon this matter, he might have himself some further obser- 334 vations to address to the Committee, but as he was at this time merely a searcher after truth he would detain the Committee no longer.
§ THE FINANCIAL SECRETARY OF THE TREASURY (Mr. MCKENNA,) Monmouthshire, N.
said perhaps the right hon. Gentleman would not mind his replying on this occasion as it was a question which had been a matter of controversy between them before. If the right hon. Gentleman asked why the differentiation between leaf and strips was put at ½d., the answer was contained in the obvervation just made by him that his first consideration in 1904 in imposing a differentiation in duty of 3d. was to obtain money. The first consideration of his right hon. friend the Chancellor of the Exchequer in making this differentiation of ½d. instead of 3d. was that he wished to have a duty productive of revenue instead of a duty which, while it had been very disagreeable to the trade, did not bring in any revenue. In 1904 the right hon. Gentleman opposite, then Chancellor of the Exchequer, was warned that the duty of 3d. would not bring in revenue when the existing stock of strips was exhausted. There were then in stock 142,000,000 lbs. of strip?. And it was quite true that while that stock was in existence the right hon. Gentleman could get this extra duty of 3d.
§ MR. MCKENNA
Yes, but at what a price. It involved a loss of 3d. a lb. to the owners of those stocks. They had to enter into competition with owners of new imported leaf upon which there was no differential duty of 3d., and the result was that this duty of 3d. was charged on the stock of strips. In the course of the debate when the right hon. Gentleman reduced the differential duty of 3d. to 1½d. he was again warned that such a duty would be destructive of the importation of strips. The reply to that was that it was rather a beneficial thing to put an end to the importation of strips, because it would enable the stripping to be done in this country. They had now to consider the question of revenue. The reason why this differential 335 duty had been reduced to ½d. was that they wanted revenue, and it had been fixed at ½d. because it was believed that such a duty would be productive of revenue. The next point put by the right hon. Gentleman was why the sum of ½d. was fixed by, not 1d. or 1½d. Well, they had had experience since 1904, they had seen that the duty of 3d. had been absolutely non - productive of revenue, and they had seen the operation of the differential duty of 1½d. which was subsequently placed upon the stocks in bond. They had seen as the effect of that, that the amount of strips taken out of bond had steadily declined, and that the amount of leaf taken out of bond had steadily increased. They had to remember that the strips taken out of bond were strips which were held in this country in bond at the time of the Finance Act of 1904. There was no market in the world for strips except the British market, and, there being no market for these strips which were in bond in 1904, unless they had been taken out of bond and sold they would have rotted in the bonded warehouses. Consequently the owners had to sell them, but in spite of the urgent compulsion upon the owners to sell these strips they had not been able to do so in competition with other owners of strips with a differential duty of 1½d., and the result was that in the experience of the revenue authorities the drawback on that stock was seriously increased. The right hon. Gentleman when supporting his differentiation of duty in 1904 gave to the Committee an example. He took four specimens of leaf and strips which had been tested for sand and moisture for the purpose of estimating the duty upon strips and leaf respectively. He showed by those samples that there was more sand and moisture in the leaf than in the strips, and he concluded that the duty cost on a given quantity of loaf was 3d. per lb. higher than on the same quantity of strips. The right hon. Gentleman chose samples of a particular kind of tobacco, that of "Bright Virginia;" but if he had taken another kind of tobacco, that known as "Western Leaf," which was a stouter plant, and the sand in which was of a muddier kind than that in "Bright Virginia," he would have shown, not that the duty cost on leaf was higher than on strips, but that it was practically equal. They 336 had to look at tobacco as a whole, and, on the whole range of tobacco, the Drawback Committee found that stalks were generally 1 or 2 per cent, moister than the rest of the leaf. They took, not four samples as did the right hon. Gentleman, but a very large number of analyses of sand in different kinds of tobacco, and, working from those figures and from the statements of the Drawback Committee, they found that some differentiation was justified. It was almost impossible to settle a figure of equality; but looking at the result of these calculations and taking them as a guide, they came to the conclusion that, on balance, some slight, but very slight, differentiation might be made in favour of strips as against leaf. The Chancellor of the Exchequer had made such a difference—namely, ½d.—as would ensure that the existing holders of leaf would be able to find a market, for their goods without suffering loss.
§ MR. AUSTEN CHAMBERLAIN
asked whether the right hon. Gentleman suggested that the ½d. should be removed as soon as they had disposed, of their stocks, and what was the revenue that it was estimated would be received, from the differential duty.
§ MR. McKENNA
said it was not intended to remove the ½d. It was hoped this would be a final settlement of the tobacco question. The right hon. Gentleman had spoken of the disturbance and; dislocation of trade; but the testimony of the trade, so far as it had reached the Treasury, had not been indicative of disturbance, but of complete satisfaction. As to the second Question of the right hon. Gentleman, the total amount of raw tobacco taken out of bond before consumption was, roughly speaking, about 88,000,000 lb. in the course of the year, and it was estimated that somewhere between 40,000,000 lb. and 50,000,000 lb. would be taken out in the form of strips this year. These were rough estimates. It was impossible to give any exact estimates because it was not known what amount of strips would be in the market. No more strips would come into the market until the new crop at the end of the year, and it was not known how much would be available to be taken out at the end of the year.
§ MR. HARMOOD-BANNER (Liverpool, Everton)
said they were accustomed on the Opposition side to look to the Party opposite for light and leading on all questions relating to taxation, for they held themselves up to be—and the country at the general election rather accepted them as—the great authorities on the principles of Customs duties. But what was the case now as regarded tobacco? The duty on raw tobacco was 3s., and that on manufactured tobacco 3s. 10d. The Customs Returns of last year showed as clearly as possible that the extra duty on manufactured tobacco had absolutely stopped the importation of manufactured tobacco, and the whole of the tobacco at present came in under the head of raw tobacco. It was said that the reason of the reduction to ½d. was that it might be productive of revenue, but if they looked At the result since Mr. Gladstone brought the tax into existence, they would find it had been practically to destroy the revenue which used to be derived from the importation of manufactured tobacco. Instead, the raw tobacco came into this country in larger quantities at the lower rate of 3s., and a great industry had been created in Bristol, Liverpool, and other cities of this country which would not have sprung up had there been an equal duty upon raw and manufactured tobacco coming into the country. Yet it was curious to note that the directors of the Imperial Tobacco Company, who benefited by this protective duty, sat on the Ministerial side of the House in support of free trade, and he could not understand how the Chancellor of the Exchequer could reconcile his strict notions about free trade with the maintenance of this protective duty. While the right hon. Gentleman and his friends were consistent when it came to suggestions as to changes, they would not make changes that would bring their practice into agreement with their principles. There was exactly the same thing in chocolate. All manufactured chocolate coming from abroad paid a differential duty of ½d. Surely if it were wrong to put a duty on manufactured articles there should be no duty on manufactured tobacco or on manufactured chocolate. Yet they allowed these duties to continue and at the same time accused others of being false to their principles in desiring 338 that there should be some duty on manufactured articles to preserve the industries of this country.
said his hon. friend had dealt with the main question with such admirable lucidity and cogency that he should not take up time by attempting to add, even if he could, anything to his exposition of the subject. Experiments had shown that there was a difference between strips and leaf, and ½d. appeared to them to be approximately the measure of that difference. The effect of the duty of 3d. had been to exclude strips altogether from this market, and from the point of view of obtaining revenue it was useless. Under a duty of ½d. strips would come in, and an appreciable revenue would be derived from them. He did not deny that there was a protective element, though not to a large extent, in the scale of tobacco duties. Mr. Gladstone found a scale of highly protective duties, and he reduced that scale as much as he thought the trade could bear. He said what every Minister of finance had said, that when a trade had grown up under the shadow of protection a vast number of vested interests were engendered, and however strong their desire might be for free trade, the y could not at once, without enormous injustice, get rid of that system. That was why he retained to an extent, which had been very much exaggerated, a protective element in duties which had been highly protective before. But the right hon. Gentleman opposite introduced in 1904 for the first time a new protective element which no one had dreamt of before. They had, at any rate, got rid of that. No one in the trade wanted to retain it, and it was unproductive to the revenue. And yet they were accused of being inconsistent because they had not reduced the whole scale of tobacco duties which had been in existence for years. They were told that an artificial and fostered industry, which had no natural roots in the soil of the country, had come into existence during the two years that this duty had existed. Could there be a stronger argument in favour of dealing with this matter without delay? The effect of this reduction would not be felt for two years, and there was, therefore, ample time for the trade to adjust itself to the 339 new conditions, and he hoped and believed it would be to the benefit of the revenue itself. That was a perfectly logical and consistent position to take up.
§ MR. AUSTEN CHAMBERLAIN
said he was very much obliged for the very fair answer that had been given to his questions. When, however, the right hon. Gentleman asked him to admit that the action of the Government was logical or consistent, he was making a greater demand upon him than he felt prepared to grant. They might take it from the admission of the Secretary of the Treasury that up to the time of the differentiation of the duty there was protection, not for a home industry, but for the foreign stripping of leaf. The hon. Gentleman hoped that a halfpenny would put strips and the whole leaf on an equality. His recollection of the tables in the report, he was sorry to say, was two years old, and he should not under the circumstances be disposed to enter upon so technical an argument as would be necessary in order to attempt to confound the hon. Gentleman's reasoning upon the point. He would only record his opinion that differentiation of a halfpenny would restore to the foreign stripping industry some portion of the protection which it had before he differentiated between the two sorts of tobacco.
§ MR. AUSTEN CHAMBERLAIN
said he took that into account, and without attempting to argue it he would merely express his opinion that the halfpenny which the Chancellor of the Exchequer and the Secretary of the Treasury after, he thought, tossing up, had come to the
§ conclusion was about a fair sum, was really not adequate to the purpose which they admitted justice and equity required. He came to the more interesting side of the question. Was it worth while to make this small change in the tobacco duty unless they were prepared to remove from the whole of the tobacco-duties all taint of protection? Was it not absurd to tinker at this little question of strips while leaving the big question untouched? The right hon. Gentleman had said that Mr. Gladstone found the-tobacco duties highly protective and that he reduced them as much as he thought the trade could bear. That was rather a singular principle to go upon. What meaning did the right hon. Gentleman attach to the words "as much as the trade could bear." At the time of the greatest triumph of free trade the great Ministry of free trade hesitated to take off all the protective duties, but stopped short at the stripped tobacco. Was it worth while to sacrifice the stripping industry which had grown up in this country and the subsidary trades which it had stimulated?' Why did the people accept it? It was because they could not find better work to do, and without a thought the Government swept away their employment for a mere economic pedantry. It was not worth while to make this change. It would deprive our people of some employment they might fairly have had, and it was hypercritical and ridiculous to make this fuss about one small point while leaving the greater block of duties untouched and unaltered.
§ Question put.
§ The Committee divided:—Ayes 266; Noes 44. (Division List No. 105.)343
|Abraham, William (Cork, N.E.)||Balfour, Robert (Lanark)||Bethell, T. R. (Essex, Maldon)|
|Abraham, William (Rhondda)||Baring, Godfrey (Isle of Wight)||Billson, Alfred|
|Acland, Francis Dyke||Barlow, Jn. Emmott (Somerset||Birrell, Rt. Hon. Augustine|
|Adkins, W. Ryland||Barlow, Percy (Bedford)||Black, Alexander Wm. (Banff)|
|Agnew, George William||Barnard, E. B.||Black, Arthur W.(Bedfordshire|
|Ainsworth, John Stirling||Barnes, G. N.||Boland, John|
|Alden, Percy||Barran, Rowland Hirst||Bolton, T.D. (Derbyshire, N.E.|
|Allen, Charles P. (Stroud)||Beale, W. P.||Boulton, A. C. F. (Ramsey)|
|Armitage, R.||Beauchamp, E.||Brace, William|
|Ashton, Thomas Gair||Beaumont, W. C. B. (Hexham)||Bramsdon, T. A.|
|Asquith, Rt. Hn. Herbert Henry||Beck, A. Cecil||Brodie, H. C.|
|Astbury, John Meir||Bellairs, Carylon||Brooke, Stopford|
|Baker, Sir John (Portsmouth)||Benn, W.(T'wr Hamlets, S. Geo.)||Brunner, J.F.L. (Lancs., Leigh)|
|Baker Joseph A. (Finsbury, E.)||Berridge, T. H. D.||Bryce, Rt. Hn. James (Aberd'n|
|Bryce, J.A. (Inverness Burghs)||Henry, Charles S.||O'Malley, William|
|Buckmaster, Stanley O.||Herbert, Col. Ivor (Mon., S.)||O'Mara, James|
|Burns, Rt. Hon. John||Higham, John Sharp||Parker, James (Halifax)|
|Burnyeat, J. D. W.||Hobart, Sir Robert||Paul, Herbert|
|Buxton, Rt. Hn. Sydney Chas.||Hodge, John||Pickersgill, Edward Hare|
|Byles, William Pollard||Horden, E. Hopkinson||Pollard, Dr.|
|Cairns, Thomas||Holland, Sir William Henry||Price, C. E. (Edinb'gh, Central)|
|Carr-Gomm, H. W.||Hooper, A. G.||Radford, G. H.|
|Cawley, Frederick||Hope, W. Bateman (Somers't, N||Rainy, A. Rolland|
|Channing, Francis Allston||Hudson, Walter||Raphael, Herbert H.|
|Cheetham, John Frederick||Jackson, R. S.||Redmond, John E. (Waterford)|
|Cherry, Rt. Hon. R. R.||Jenkins, J.||Rendall, Athelstan|
|Clarke, C. Goddard (Peckham)||Johnson, John (Gateshead)||Richards, Thomas (W. Monm'th|
|Clough, W.||Johnson, W. (Nuneaton)||Richards, T. F. (Wolverh'mptn|
|Collins, Stephen (Lambeth)||Jones, David Brynmor(Swansea||Richardson, A.|
|Corbett.CH (Sussex. E. Grinst'd||Jowett, F. W.||Ridsdale, E. A.|
|Cornwall, Sir Edwin A.||Joyce, Michael||Roberts, G. H. (Norwich)|
|Cotton, Sir H. J. S.||Kearley, Hudson E.||Roberts, John H. (Denbighs.)|
|Cowan, W. H.||Kekewich, Sir George||Robertson, Sir G. Scott(Bradf'rd|
|Cox, Harold||Kennedy, Vincent Paul||Robertson, J. M. (Tyneside)|
|Craig, Herbert J. (Tynemouth)||Laidlaw, Robert||Robson, Sir William Snowdon|
|Cremer, William Randal||Lambert, George||Roe, Sir Thomas|
|Crooks, William||Lamont, Norman||Rogers, F. E. Newman|
|Crossley, William J.||Lawson, Sir Wilfrid||Rowlands, J.|
|Davies, Timothy (Fulham)||Layland-Barratt, Francis||Runciman, Walter|
|Davies, W. Howell (Bristol, S.)||Leese, Sir Joseph (F.(Accringt'n||Russell, T. W.|
|Delany, William||Lehmann, R. C.||Rutherford, W. W. (Liverpool)|
|Devlin, Chas. Ramsay (Galway||Lever A. Levy (Essex, Harwich||Samuel, Herbert L. (Cleveland)|
|Dewar, Arthur (Edinburgh, S.)||Lever, W.H. (Cheshire, Wirral||Sears, J. E.|
|Dilke, Rt. Hon. Sir Charles||Levy, Maurice||Seaverns, J. H.|
|Dodd, W. H.||Lewis, John Herbert||Seely, Major J. B.|
|Dolan, Charles Joseph||Lough, Thomas||Shackleton, David James|
|Duncan, C. (Barrow-in-Furness||Lupton, Arnold||Shaw, Charles Edw. (Stafford)|
|Dunn, A. Edwards (Camborne)||Lyell, Charles Henry||Shaw, Rt. Hon. T. (Hawick B.)|
|Dunne, Major E. M. (Walsall)||Macdonald, J. R. (Leicester)||Silcock, Thomas Ball|
|Edwards, Enoch (Hanley)||Macdonald, J.M.(Falkirk Bghs||Simon, John Allsebrook|
|Elibank, Master of||Macnamara, Dr. Thomas J.||Smeaton, Donald Mackenzie|
|Ellis, Rt. Hon. John Edward||MacVeigh, Jeremiah (Down, S||Snowden, P.|
|Essex, R. W.||MacVeigh, Chas. (Donegal, E.)||Spicer, Albert|
|Evans, Samuel T.||M'Callum, John M.||Stanger, H. Y.|
|Eve, Harry Trelawney||M'Crae, George||Stanley, Hn. A. Lyulph(Chesh.)|
|Everett, R. Lacey||M'Kenna, Reginald||Steadman, W. C.|
|Faber, G. H. (Boston)||M'Killop, W.||Stewart, Halley (Greenock)|
|Ferens, T. R.||M'Laren, H. D. (Stafford, W.)||Strachey, Sir Edward|
|Ffrench, Pete||M'Micking, Major G.||Strauss, E. A. (Abingdon)|
|Findlay, Alexander||Maddison, Frederick||Sullivan, Donal|
|Fuller, John Michael F.||Marks, G. Croydon (Launcest'n||Summerbell, T.|
|Fullerton, Hugh||Marnham, F. J.||Taylor, John W. (Durham)|
|Gill, A. H.||Massie, J.||Taylor, Theodore C (Radcliffe)|
|Ginnell, L.||Micklem, Nathaniel||Thomas, David Alfred(Merthyr|
|Gladstone, Rt. Hn Herbert Jn.||Mond, A.||Thompson, J. W.H.(Somerset, E|
|Glover, Thomas||Money, L. G. Chiozza||Tillett, Louis John|
|Goddard, Daniel Ford||Morgan, G. Hay (Cornwall)||Torrance, A. M.|
|Gooch, George Peabody||Morrell, Philip||Trevelyan, Charles Philips|
|Grey, Rt. Hon. Sir Edward||Morse, L. L.||Verney, F. W.|
|Guest, Hon. Ivor Churchill||Murphy, John||Vivian, Henry|
|Gulland, John W.||Slyer, Horatio||Walker, H. De R, (Leicester)|
|Hall, Frederick||Nannetti, Joseph P.||Walsh, Stephen|
|Harcourt, Rt. Hon. Lewis||Napier, T. B.||Walton, Sir John L. (Leeds, S.)|
|Hardie, J Keir (Merthyr Tydvil)||Newnes, F. (Notts, Bassetlaw)||Wardle, George J.|
|Hardy, George A. (Suffolk)||Newnes, Sir George (Swansea)||Wason, John Cathcart (Orkney|
|Harvey, A. G. C. (Rochdale)||Nicholls, George||Waterlow, D. S.|
|Harwood, George||Nolan, Joseph||Watt, H. Anderson|
|Haslam, James (Derbyshire)||Norman, Henry||Weir, James Galloway|
|Haslam, Lewis (Monmouth)||Norton, Capt. Cecil William|
|Haworth, Arthur A.||Nuttall, Harry||White, George (Norfolk)|
|Hazleton, Richard||O'Brien, Kendal(Tipperary Mid||White, J. D. (Dumbartonshire)|
|Healy, Timothy Michael||O'Brien, Patrick (Kilkenny)||White, Patrick (Meath, North)|
|Hedges, A. Paget||O'Connor, James (Wicklow, W.||Whitehead, Rowland|
|Helme, Norval Watson||O'Connor, John (Kildare, N.)||Whitley, J. H. (Halifax)|
|Henderson, Arthur (Durham)||O'Grady, J.||Whittaker, Thomas Palmer|
|Henderson, J.M. (Aberdeen, W.||O'Hare, Patrick||Wilkie, Alexander|
|Williams, J. (Glamorgan)||Wilson, John (Durham, Mid)||TELLERS FOR THE AYES— Mr. Whiteley and Mr. J. A. Pease.|
|Williams, Osmond (Merioneth)||Wilson, J. H. (Middlesbrough)|
|Williamson, A.(Elgin and Nairn||Wilson, W. T. (Westhoughton)|
|Wilson, Hon. C.H.W.(Hull, W.)||Young, Samuel|
|Wilson, Henry J.(York, W. R.)||Yoxall, James Henry|
|Acland-Hood, Rt. Hn. Sir Alex. F||Corbett, T. L. (Down, North)||Meysey-Thompson, E. C.|
|Balcarres, Lord||Craig, Captain James (Down, E.||Morpeth, Viscount|
|Balfour, Rt. Hn. A. J.(City Lond.||Fell, Arthur||Muntz, Sir Philip A.|
|Banner, John S. Harmood-||Fetherstonhaugh, Godfrey||Parkes, Ebenezer|
|Barrie, H. T. (Londonderry, N.||Finch, Rt. Hon. George H.||Pease, Herbert Pike(Darlington|
|Beach, Hn. Michael Hugh Hicks||Fletcher, J. S.||Percy, Earl|
|Bowles, G. Stewart||Forster, Henry William||Rawlinson, John Frederick P.|
|Boyle, Sir Edward||Gardner, Ernest (Berks, East)||Ropner, Colonel Sir Robert|
|Butcher, Samuel Henry||Haddock, George R.||Starkey, John R.|
|Carlile, E. Hildred||Harrison-Broadley, Col. H. B.||Thomson, W. Mitchell (Lanark)|
|Cave, George||Hill, Sir Clement (Shrewsbury)||Thornton, Percy M.|
|Cavendish, Rt. Hn. Victor C.W.||Houston, Robert Paterson||Wyndham, Rt. Hon. George|
|Cecil, Evelyn (Aston Manor)||Hunt, Rowland|
|Chamberlain, Rt. Hn J.A.(Worc||Kennaway, Rt. Hn. Sir John H.||TELLERS FOR THE NOES—|
|Coates, E. Feetham (Lewisham||Kenyon-Slaney, Rt. Hn. Col. W||Mr. Courthope and Mr. Bridgeman.|
|Cochrane, Hon. Thos. H. A. E.||Law, Andrew Bonar (Dulwich)|
Question put, and agreed to.
§ Motion made, and Question proposed, "That Clause 3 stand part of the Bill."
§ MR. HARWOOD (Bolton)
said that he rose to oppose this clause, as he had done for several years past. He had the responsibility for some time of suggesting this tax, and now that it had been practically thrown over by both Parties in the House he wished to justify the responsible position he had taken up. He would like to say to the Chancellor of the Exchequer that he did not think he had ever answered the arguments in favour of this coal tax. There was no single tax, he contended, which could raise £2,000,000 a year with as little drawback to the prosperity of the country as this one. Ho would not say who paid the tax; but he thought the Chancellor of the Exchequer himself rather believed that the foreigner paid it, especially in regard to steam coal. [Cries of "No."] He insisted that that was the case in regard to Welsh smokeless coal, because all the navies of the world must have it. He knew something about the coal trade and of the Westphalian trade, which was the only competitor with the Welsh coal trade, and he could assert that at least one-half of the coal tax fell upon the foreigner. We had much more of a monopoly in our coal than any other country and we ought to take advantage of it. The Chancellor of the Exchequer had seemed to suggest that we were afraid that the coal of this 344 country would run out, and he had referred to the opinion of the late Professor Stanley Jevons as an argument in his favour. Personally he had never argued that the coal ought to be kept in this country because our supplies would run out very soon. The Royal Commission had established that it would not, although that might be taken with a grain of salt. But let those supplies be as large as anyone liked to imagine, he put it that to abandon this duty was to abandon the fundamental principle of democratic policy. Coal was a gift from Providence and did not come within the same rules as manufactured products. He was a land-nationaliser and on that ground alone he insisted that the Chancellor of the Exchequer had, by remitting this tax, deserted the fundamental principles of that Party. The coal and all the mineral wealth of the country belonged to the nation, and when any part of that property was parted with there should be a quid pro quo. What happened in regard to export coal? The landlord got his royalty, the miner his wages, the shipowner his freights, but where did the nation come in? He insisted that this coal export duty was the assertion of the nation's property in the coal, and was a means of getting some return from it. The real value of coal lay in its use, and if, say, forty tons were raised for consumption in this country it would give employment to so many people; but if exported it would afford no benefit to any one in this country. He had listened to all the debates on this 345 question and had beard weeping millionaires objecting to the tax, and claiming sympathy for the industrial classes. But now that the Labour movement had come to the front, the Committee must remember that Toryism was class legislation. It was just as much Toryism if the legislation was for the landlord classes as for the working classes. Liberalism was legislation for the nation as a whole. He objected to part with this tax which was part of the national property and belonged to himself and every citizen of the nation. The proposal to abolish it was bad economics, unjust to the citizen and a contradiction of the fundamental conditions of Radicalism.
§ *MR. BRACE (Glamorganshire, S.)
said he had listened with great attention to the extraordinary speech of the hon. Member—a speech which clearly showed how little the speaker knew of the subject he was dealing with. He had said that Welsh coal had a monopoly, but that was not true. It was true that they had a monopoly of Welsh smokeless coal, but the total output of that coal was very little taken in comparison with the total output of Wales. As a matter of fact when the hon. Member stated that the navies of the world were bound to buy Welsh coal he stated that which was absolutely alien to the truth. The French Navy used none in time of peace, and the Welsh collier must live in time of peace as well as in time of war. It was true that they might make a good deal of money in time of war, but war was, speaking broadly, a disadvantage to us as a nation, and if it came about it brought corresponding disadvantages to the Welsh collier in return for the advantages he reaped. The hon. Member did not seem to appreciate that this export tax upon coal had had a very serious effect upon the Welsh coal-producing counties. This was so much the case that in West Wales thousands of men had been thrown out of employment and many collieries had been closed or partially closed down. It was a fact which the Committee should remember that the people in other countries who bought our coal even for preference encouraged the importation of coal from competing countries; so that by having a choice of coals to select from, leaving outside altogether the question of quality, or what coal best suited them, 346 they secured, by the competition created between British and other countries' coals, a lever to keep prices down to a lower point than they could expect, had they only one source of supply to draw upon. The result was that a coal tax was a tax upon our competing power. He believed he was the only member of the Royal Commission on Coal Supplies present, which Commission, after a long and careful inquiry, unanimously reported against the continuation of the coal tax. The hon. Member said ho had been in Holland, but when he was there did he make any inquiries about the coal tax? If he had he would have found that in consequence of that tax Welsh coal had been driven altogether out of the Dutch market and that the Germans had captured the trade. Not only that, we had been deprived of our monopoly in the Mediterranean. No country liked to be dependent upon another for its supply of a particular article, and therefore they started with this handicap, that if they wished to sell coal to France, France would encourage other countries to come in and compete. This surely was a sufficiently heavy handicap without having an export tax added to it. There were Members who thought that there ought to be five times the amount of the tax placed upon exported coal; but it was because of the evidence given that the conviction was borne in upon the minds of the Commissioners that an export tax was not only unfair in its incidence but unfair and ruinous to the export industry of the country. He was speaking not for millionaire coal owners, but for the working man whose wages were reduced by the coal tax. When the coal tax came into operation coal owners sold their coal, say, at ten shillings plus one shilling tax; the selling rate of coal was an effective factor in determining the rate of wages, and that one shilling tax had the effect of reducing the wages of coal workers in the South Wales and other coal fields by eight and three quarters per cent. If this matter only concerned the interests of the coal owners he should not say a word against the tax, but it was because he was convinced that it affected the wages of the collier that he thanked the Chancellor of the Exchequer for taking the duty off. The Royal Commission on Coal Supplies unanimously resolved that this tax was disadvantageous 347 to the interests of the country, although several of the Commissioners started with a strong feeling in its favour. If when this country was in competition with Germany, America, France, and Belgium, and we were endeavouring to hold our own in the markets of the world, a tax of this kind was imposed, it really was a tax upon industry, and the only persons who gained any advantage were the foreigners, because they got cheaper coal elsewhere. He thought the unanimous decision of the Commission should have attention paid to it, and that the Chancellor of the Exchequer was right in adopting the course which he had done. He was extremely obliged to the right hon. Gentleman for taking off this tax, and in the interests of the workman he thought they were justified in asking the Committee to affirm his decision.
§ *MR. HICKS BEACH (Gloucestershire, Tewkesbury)
considered that the Committee ought to have had a little further explanation from the Chancellor of the Exchequer as to the reasons for repealing this tax. He had told them that the Liberal Party were bound by their pledges to their constituents, and he supposed that j that meant that this policy was adopted in consequence of another mandate to the Liberal Party. No doubt one of the reasons for taking off this tax was that the Chancellor of the Exchequer might otherwise have received a mandate from East Fife not to go back there again. The general opinion of the country was strongly opposed to the abolition of the tax, which brought in an increasing revenue, and which, according to the right hon. Gentleman's admission, was paid by the foreigner.
§ *MR. HICKS BEACH
said that the right hon. Gentleman had refrained from abolishing the tax before November, because he said there were clauses in all contracts to the effect that, if the tax were taken off, the foreigner was to have the benefit. It had been predicted that the tax would ruin the coal trade and the mine-owners. But the total export of coal had increased from 58,405,000 tons in 1900, to 67,100,000 tons in 1905. Moreover, 348 while the percentage of exports to the total output in 1900 was 25.93 per cent, in 1905 the percentage was 28.4 percent. Then it was urged that the export of the more valuable coal had decreased and that of the small coal had increased. But while the quantity of coal, the value of which did not exceed 5s. a ton, exported during 1902 was 785,369 tons, and had increased by about 1,000,000 tons in 1905; and while the quantity exceeding 8s. a ton, which in 1902 amounted to 36,762,554 tons, had decreased by about 3,000,000 tons in 1905; yet the exports of coal which exceeded in value 7s. per ton but not 8s., the coal which bore most of the tax, had very much increased. For in 1902 the total exports of this class of coal were 2,304,000 tons, and in 1905 they had increased to 8,132,000 tons. That was to say, the exports in that class of coal had increased far more in proportion than in the coal which did not bear the tax at all. The reason which chiefly accounted for the decrease of the export of coal which exceeded 8s. a ton in value was that since the imposition of this tax the price of coal had very greatly decreased. The hon. Member for South Glamorganshire had said that as a result of this tax a great many collieries in. South Wales had been shut down, and that the production of this class of coal had decreased. Was it really true that any colliery was shut down as a. result of this export duty? If they had been closed it was owing to the general fall in the prices of coal and not owing to the effects of this duty. He did not think that any hon. Member had adduced any argument to shew that the imposition of this tax had done any harm to the home consumer. But if, as a result of its abolition, the export of coal greatly increased, what would be the effect upon the consumers in this country? He already knew of an instance of a railway company in the Metropolis which consumed a large amount of Welsh smokeless coal, and which had placed large orders for this class of coal in South Wales where the contractor tendering for further orders wrote to the company, saying that owing to the expected great increase in the export of this class of coal as the result of the abolition of the tax, he would have to increase the price to the company by 1s. a ton after August 1st, which showed that if by the abolition of this tax the price of 349 coal was to be raised to the home consumers considerable damage was going to be done to them, and it was obvious that it would have a very prejudical effect upon the large industries of this country, they being the greatest consumers. The Chancellor of the Exchequer thought that a great improvement would result in the export trade from the abolition of the tax, but it was obvious what the result would be to the home consumer. He objected to the abolition because he thought the Chancellor of the Exchequer ought not to judge of the position by the coal trade at this moment. It might be said that it was an immoral tax, but it produced a large revenue and did not hurt any people in this country. The Chancellor of the Exchequer had admitted that it was impossible to justify an income-tax of 1s. in the £, declaring that it was a burden on the industry of the country, which affected not only profits but wages. By taking off the coal tax the right hon. Gentleman had deprived himself not only of an opportunity of reducing the income-tax by 1d. in the £ this year, but also of doing anything of the kind next year.
§ *MR. JOHN WILSON (Durham, Mid.)
said that if the arguments of his hon. friend the Member for Bolton had been sound they would have convinced every Member of the Committee, but the facts adduced and the arguments founded upon them derived their fallacies from the rhetoric his hon. friend had employed. There was a wide difference between rhetoric and reason. He himself was a pronounced land nationaliser, and if his hon. friend would say that not only the coal but the surface should belong to the people he would be in entire agreement with him. But if his hon. friend desired to make the coal a monopoly and place a prohibitive tax upon it in order to keep it within the confines of this country, then the effect would be to starve the workmen. The hon. Member for Tewkesbury would retain the coal tax for the purpose of taking 1d. off the income-tax. It would be observed that there was nothing selfish in the hon. Member. The workmen's wages since 1900 had been reduced far and away beyond the burden from which the income-tax payer suffered. He was stating words of truth and soberness, and spoke of facts which had 350 come within the purview of his experience, and he said that the workmen of the county of Durham had had thirty percent, taken off their wages since 1900 when this tax was imposed.
§ *MR. HICKS BEACH
Surely the hon. Gentleman does not infer that that thirty per cent, reduction was due to this 1s. tax.
§ *MR. JOHN WILSON
said he did not know that it could be mathematically demonstrated that that was so, but he brought it forward as a very strong and, strange coincidence, and if the hon. Member denied it the burden of proof lay upon him. This question had been argued many times on the floor of the House, and he thought that by their continued wearying of the late Government they last year forced the then Chancellor of the Exchequer to admit that this was an unfair tax. Much had been made by the hon. Member for Tewkesbury of the fact that the volume of the trade had increased in spite of the tax, but surely it was likely to increase through the general progress of trade. Was a country prosperous whose trade stagnated? Did he not know that there were three stages of a country's history—the progressive, the stationary, and the retrogressive? John Stuart Mill had said that as soon as a nation touched the point where its trade stagnated, it retrograded. There were 800,000 men and boys working in the mines of this country every day, and about 2,000,000 or 3,000,000 of people were dependent on their earnings. The coal tax had been the means of developing the coal fields of Westphalia and Germany, and it had created competition by foreigners which but for the tax this country would never have had. In Northumberland 90 per cent, of the coal was exported, and in the two northern counties they regulated their wages as near as they could by the selling price of coal. If they put a shilling tax upon the coalfields of this country, and remembered that nine out of every ten tons had to be exported to keep the Northumberland coal mines going, they would see immediately what effect it would have upon their wages. There was another point of view, namely, that it induced. 351 competition, in this country between one coal field and another. It had been said that mines had been stopped. Of that he was confident. It had been said that batches of workmen had been discharged. That he well knew. Villages tad been made desolate by the tax. He spoke for the whole of the mining community when he declared that they were prepared to pay every national tax. They did not want class legislation. This tax was imposed as a war tax. It was put on to meet an emergency of the hour. He added his word of thanks to the Chancellor of the Exchequer who, bringing in a Budget which was only one-fourth his, had faced the situation and removed the coal tax. He was confident the light hon. Gentleman would receive the gratitude of the whole of the mining population of the country.
§ *CAPTAIN CRAIG (Down, E.)
said he supported the Amendment most heartily. It seemed to be rather an anomaly that at one period of the discussion they should have to plead with the right hon. Gentleman the Chancellor of the Exchequer to do what he possibly could to stretch a point in the interests of some of the poorer classes in Ireland and take another penny off tea, and that a little later in the evening they should have to oppose the right hon. Gentleman's proposal to do away with a tax which brought in such a substantial amount of revenue per annum. He disagreed with the hon. Gentleman who had just sat down: The continuity of taxation, especially when it broadened the basis of taxation, appeared to him to be invaluable. They seemed to be constantly going back to the taxation of tea, sugar, and other table necessities for the working classes, and he could not be convinced that greater benefits would not accrue to the great mass of people if the tea duty were reduced, and the coal duty kept on. He trusted before the debate had proceeded much further they would have some remarks from the hon. Member for the Rhondda Valley, because they wanted all the information possible from those who were in closest touch with the trade. This debate had elicited the important point that the export from the mines had increased 7,000,000 tons in 1905 as compared with 352 1902. The hon. Member for Mid Durham had said that wages in his particular locality had fallen 30 percent. If the extra exportation of this commodity meant that wages fell, then ho would certainly be prepared to withdraw all opposition to the Government's proposal; but he could not conceive the idea of a 30 per cent, fall in wages being attributed to the extra output of 7,000,000 tons. For these reasons he felt that the Chancellor of the Exchequer was not only relegating £2,000,000 to oblivion, but he was also narrowing the basis of taxation, which a large number of them felt ought to be extended. The right hon. Gentleman had adopted the old cut and dried methods of imposing taxation upon breakfast commodities. The hon. Member for Bolton had put his case very clearly and concisely in favour of this tax being kept on, but he (Captain Craig) supported it on other grounds. Had hon. Members opposite considered where the coal exported from this country found a market? It went to foreign markets, to foreign navies, and it fed furnaces which were competing with the manufacturers in this country. The Chancellor of the Exchequer might have applied the two millions to the reduction of the tea duty which was borne directly by the working classes. He appealed to the Committee to support the Amendment.
§ MR. ASQUITH
said he wished to point out in a few words the grounds on which the Government proposed that this tax should no longer form part of our fiscal system. It was not in the interest of this or that class of employers or of employed, but in the interest of the community as a whole that it was removed. The tax had almost every vice. In the first place it was the solitary export duty in the whole of our fiscal system. Although it purported to be a tax on coal, it was only a tax on that part of the coal which was exported, and, therefore, fell with unjust and uneven incidence on the coal industry. Whatever theorists might say, he could entertain no doubt that in the long run and in the main it had been paid, not by the foreign consumer, but by the producer, for this reason—that the British coal which 353 was sent to foreign markets was in active competition there with coal produced in other countries, with the result that a person in those markets could dispense with the British supply; or, in other words, that the price ruling in those markets was not regulated by, but was independent of, the export duty with which we charged our industry. He did not believe it was possible to get a better practical illustration in the whole range of fiscal experience of how, by an ill-devised duty such as this, a burden might be thrown on our own industry in markets where that industry was most exposed to the competition of foreigners. If any further arguments were needed they would be found in the fact that this tax had been unanimously condemned by a Royal Commission composed of persons of the most diverse opinions, and that, as they had been informed, it was intended to be abandoned by the late Chancellor of the Exchequer. With this consensus of argument, of experience, and of authority, it appeared to him that the Government would not be justified in maintaining the tax a moment longer.
§ MR. T. L. CORBETT
said that notwithstanding the arguments of the Chancellor of the Exchequer he could not help regretting the determination to repeal this tax; many of them felt that more information was wanted to warrant the Committee taking this course. An hon. Member who had spoken with great spirit and eloquence early in the debate in support of the retention of the tax had called the mineowners weeping millionaires.
§ MR. T. L. CORBETT
said it was not the hon. Member he referred to. He was speaking of an eloquent and stirring speech delivered earlier in the debate. He contended that if this tax had any effect at all it tended to preserve our supplies of coal, which were of such great importance to the Empire, and also to cheapen coal to the home consumers. Hon. Members opposite had said that the foreigner did not pay the duty and that the tax crippled and limited our own trade. What, then, 354 became of the free trade argument that the tax fell upon the receiving and not the producing nation? That had always been the argument against the imposition of a duty upon wheat. If it was argued that the duty fell upon the people of this country, then it was clear the producer paid it and not the consumer. He felt that the decision to remit this tax was unwise, and he should support the independent Members on the Government side who pressed for its retention. He did not hope to convince hon. Members opposite, but he thought the analogy he had just used was a sound and logical one, and he should like to hear the Chancellor of the Exchequer's answer to it. He deeply regretted that the Government had decided to repeal the coal tax. He felt that it was an unwise thing for the country, and he would gladly join the independent Members who had spoken against the decision.
§ MR. FELL (Great Yarmouth)
said the taxpayers of the country welcomed the export tax: on coal when it was imposed, because it contributed a large amount of money to the Exchequer without their feeling the tax. He was confident that no ordinary consumer of coal in the country knew when the tax was put on, or would know when it was taken off. It would not make a penny of difference to nine-teen-twentieths of the people of the country. The effect of the tax had surprised two or three Chancellors of the Exchequer. [An HON. MEMBER: The coal exporters felt it.] The interruption did not come from a Member who could speak on behalf of the people to whom he was referring, namely, those who paid £5, £10, or £20 a year for coal. When they were considering a tax they did not go to the people interested in the trade to learn what should be done about it. Anybody on whom a tax pressed naturally wished that it should be done away with. Could the Chancellor of the Exchequer point out in any way in which £1,000,000 could be obtained more easily than by this tax? The Germans had shown their desire to secure a supply of steam coal from Wales by purchasing coal fields there. That matter had already been discussed in 355 this House. The company, though registered as an English company, was, he believed, controlled by German capital. It was practically a German concern. Anthracite coal was greatly sought after by other nations, and no matter whether we put a duty on it or not, they must have it. More coal had been exported since the shilling duty was put on than before, and therefore the only complaint the colliery or the workers could have was that on account of the tax the exports were not so large as they otherwise would have been. He regretted that the tax had been repealed.
§ MR. HUNT (Shropshire, Ludlow)
said the Chancellor of the Exchequer had pointed out that the consumer paid the tea tax, and yet he had stated also that he took off the coal tax because of foreign competition. It had been said that the effect of the coal tax was to lower wages. It appeared to him, therefore, that all taxes levied by foreign countries on British goods which competed with an untaxed supply must have the effect of lowering British wages. He thought that the best Welsh coal, with which there was no competition, could very well bear a tax, because it would be paid by the foreigner. The other kinds, which came into competition with French and German coal, could have been exported free from the export tax.
§ Clause 4:—
§ Motion made, and Question put, "That the Clause stand part of the Bill." The Committee proceeded to a Division.
Mr. WHITELEY and Mr. JOSEPH PEASE
were appointed Tellers for the Ayes; but no Member being willing to act as Teller for the Noes, the Chairman declared that the Ayes had it.
§ Clauses 4 and 5 agreed to.
§ Clause 6:—
§ MR. KEIR HARDIE (Merthyr Tydvil)
had an Amendment on the Paper—In page 3, line 8, after 'charged' to insert the words 'upon male persons only.'
§ THE DEPUTY CHAIRMAN (Mr. CALDWELL,) Lanarkshire, Mid.
said that the Amendment was outside the scope of the Bill, and therefore out of order.
§ *MR. HAROLD COX (Preston)
said he proposed to move the reduction of the income-tax from 1s. to 11d. in the £, not, however, because he believed that, in the present state of the national finance, such a reduction was possible or desirable, but to comply with the forms of the House, and to enable himself and others to advocate such reforms as would make the tax universal and not partial in its application. His main object in advocating these reforms was that they would enable the Chancellor of the Exchequer at some future date to get rid of the taxes on tea and sugar which pressed most hardly on the poorest portion of the population. He had got figures to show what was the common consumption of tea and sugar by poor people. A labourer's family consumed weekly six pounds of sugar, and half a pound of tea, with perhaps two or three pounds of jam. What was the taxation on that?
§ THE DEPUTY CHAIRMAN
said that the Amendment of the hon. Member on the Paper was to move the reduction of the income-tax from 1s. to 11d.; and the hon. Member must confine himself to that.
§ *MR. HAROLD COX
asked whether he would not be in order, in moving that Amendment, to explain why he wished the proposed reduction.
§ THE DEPUTY CHAIRMAN
said that the hon. Member was quite entitled to argue that the income-tax should be reduced from 1s. to 11d., but he was not entitled to enter into a discussion of questions altogether outside of that.
§ MR. VICTOR CAVENDISH (Derbyshire, W.)
asked on a point of order whether the hon. Member for Preston 357 would be in order in raising the point to which he desired to direct attention on the question that the Clause stand part of the Bill.
§ Motion made, and Question proposed, "That Clause 6 stand part of the Bill."
§ *MR. HAROLD COX
said that what he wanted to argue was that an income-tax should be universal, and in order to support that argument he wished to explain that under the present system of taxation the poorest people who did not pay income - tax really paid more by reason of the duties on tea and sugar in proportion to income than many who did pay income-tax. For instance, a labourer with only 15s. a week income paid through the duties on tea and sugar an income-tax at the rate of 8d. per £, whereas a man with an income of £320 a year really paid income-tax only at the rate of 7d. per £. Again, a first class artisan who earned £3 a week paid through the tea and sugar duties an income-tax of only 2d. in the £, or a fourth of the income-tax paid by the agricultural labourer. He maintained that that was an injustice which affected millions of people in the country, and a grievance which ought to be redressed.
§ MR. WALSH (Lancashire, Ince)
, on a point of order, asked whether the hon. Member for Preston was entitled to go into the general incidence of taxation.
§ MR. HAROLD COX
said he would confine himself to arguing why he was justified in saying that the income-tax should be universal. It would be unfair to exempt any incomes, however small. For example, a working man might be earning only a very small income because he preferred to work for only three days in the week. He hoped it might be possible to combine universal payment of income-tax with registration 358 of voters for Parliamentary elections. The objection to making the income-tax universal was the cost of collection.
§ THE DEPUTY CHAIRMAN
said that the resolution before the Committee enabled the income-tax to be levied on certain specified classes, and the hon. Member was going outside that resolution in speaking of a tax upon people to whom the resolution did not apply. The hon. Member was therefore obviously out of order.
§ THE DEPUTY CHAIRMAN
said that a reference might be made to that point, but the hon. Member was not entitled to found an argument upon it at length.
§ *MR. HAROLD COX
said he would conclude by saying that until the tax was universal the inequalities of taxation could not be redressed, and the responsibilities of citizenship could not be brought home to the electors.
§ THE DEPUTY CHAIRMAN
said that upon the question that Clause 6 stand part of the Bill no one could move an Amendment. No one came forward before he put that Question, and that being so an Amendment could not now be moved.
§ MR. KEIR HARDIE moved to leave out Clause 6. He said the point which the hon. Member had raised was a very important one. He objected to this method of levying the income-tax upon certain persons only. He thought there would be greater economy in our spending departments if all taxes were levied directly instead of partly directly and partly indirectly as they were at the present time. He objected also to the present system of levying income-tax, on the ground that it violated that which in his opinion should be a canon 359 of taxation, that it should be levied in proportion to the benefit obtained. A person receiving £50,000 a year should pay on a higher scale than a person receiving £1,000 a year. The tax, moreover, applied equally to men and women, and to this he also objected, as taxation and representation should go together, and women were not allowed to vote. He begged to move the omission of Clause 6.
§ THE DEPUTY CHAIRMAN
said that that did not require an Amendment, as it was purely a negative to the clause.
§ MR. FELL
said the income-tax was really a war tax, and he objected to its being maintained at 1s. in the £ in a time of profound peace. In the war time it had gone up as high as 1s. 4d. and although it had gone down to 1s. 2d. and then to 1s. it still remained at the latter figure. He believed that the income-tax had always been regarded as the means by which this country could raise money in the event of war or other emergency. It had provided the money for the Soudan and the Abyssinian Wars, but to keep it as high as 1s. in the £ in time of peace deprived it of its elasticity. He believed it had been decided that the utmost limit of the tax was 1s. 6d. in the £, and to keep it at its present limit in time of peace was, he thought, dangerous. Mr. Gladstone gradually got the tax down to 3d. in the £, and at the Greenwich election promised if he were returned to abolish it altogether. He was not, however, returned, and so the opportunity was lost. That great financier held that in time of profound peace it was unnecessary to continue the tax, but in the present state of things we were a very long way from acting up to his maxims. It was frequently stated in the newspapers that there were only 2,600,000 income-tax payers, but that was an extraordinarily inaccurate statement, as it left out of sight the hundreds of income-tax payers whose tax was deducted before they received their dividends. He protested against the income-tax being maintained at 1s. in the £ in a time of profound peace, because it destroyed the elasticity of the tax in times of emergency.
§ MR. ASQUITH
said he had listened with attention to the hon. Member, I but he was bound to admit that even now he had not the faintest notion whether the hon. Member was going to vote for or against this. Clause. If the clause were rejected he would be deprived of not less than £30,200,000 of his expected revenue in the ensuing year, or, in other words,, the finances of the country would be-stranded. The questions of a universal income-tax, and the excepting of women from the income-tax because they were not directly represented in the House, were subjects upon which, at the proper time, a great deal might be said; and if he did not deal with them it was not because he had not his opinions about them, but because he did not think them relevant to the question whether Clause 6 should stand part of the Bill. He looked upon the present form, manner, and imposition of the income-tax with, considerable dissatisfaction. He was glad to know that the Committee appointed to consider the differentiation and graduation of the tax were collecting a volume of most interesting evidence which had not hitherto been available, and he should look forward to the conclusions of the Committee with the expectation of guidance for the future. He asked the Committee to accept the tax as it stood, but that would not preclude them from dealing with it with riper judgment in the fture.
§ MR. VICTOR CAVENDISH
complained that owing to the startling rapidity with which this Motion was put from the Chair by Mr. Deputy Chairman it had been impossible for hon. Members to discuss the many questions in relation to the income-tax in which they were very much interested. He did not wish to cast any reflection whatever upon the Deputy Chairman, but he did say that when the Opposition were raising a point of order and before a decision had been given upon it they suddenly heard this Motion put to the Committee.
§ MR. VICTOR CAVENDISH
said he had no desire to do that. He only desired to point out that there were some questions that they were anxious to raise on this clause which they were precluded from raising by the startling rapidity with which events had moved within the last half hour. In considering the Budget as a whole, he did not think sufficient attention, had been paid to the claims of the income-tax payers, and the question which the Opposition desired to raise was whether in the surplus which the right hon. Gentleman had at his command, further consideration should not have been given by the Government to the income-tax payers. There was no doubt that the income-tax should be reduced. Of course it was absurd to suppose that they could vote against the Clause; that was dimply impossible. Everyone knew that the Chancellor of the Exchequer must have the money, that it was necessary that a large portion of the money should be raised by means of the income-tax; but the point they were anxious to deal with was the distribution of the surplus in the hands of the right hon. Gentleman, their view being that he ought to have given further consideration to the claims of the income-tax payers.
§ MR. RAWLINSON (Cambridge University)
asked the Chancellor of the Exchequer to give consideration to the case of the professional classes, such as doctors and solicitors in a small way of business, and country clergymen, whose salaries ranged from £300 to £900, and on whom the income-tax bore very harshly. He urged that the joint income of a married couple, where it ringed between £300 and £800, should be treated for the purposes of exemption as the income of two people and not as the income of one person, as at present, and that incomes derived from the Colonies should not be taxed here as well as in the Colonies. He understood that the Chancellor of the Exchequer was anxious, when the opportunity occurred, to lighten the incidence of the income-tax upon business people, and he would, therefore, not press the point beyond saying that 362 at present it militated against business enterprise at every turn.
§ *MR. CHIOZZA MONEY (Paddington, N.)
said it had not been his intention to intervene in this debate, but there were one or two remarks which had been made to which he felt it incumbent upon him to reply. It had been said that a 1s. income-tax in a time of profound peace was too large, and he submitted that this proposition did not bear examination. What were the facts of the case? The income-tax payers of this country were not a large number, and fully three-fourths of them did not pay anything like 1s. in the £ income-tax. Up to £700 per annum income-tax ranged from 1d. in the £ up to 1s. Yet they were told that this burden was an intolerable one. And what became of the principle; of graduation if graduation had to be effected within such small limits? In Prussia the income-tax began at incomes of £45 per annum, which might be compared with incomes of £00 in this country and was graduated up to incomes of £5,000 a year. In Prussia an income amounting to some thousands a year would pay a direct income-tax of 4 percent., a supplementary income-tax of 1¼ per cent., in addition to which dividends on investments were taxed at their source, which in some cases amounted practically to double taxation. In Saxony dividends were taxed twice, first at the source and then directly. If they laid down the proposition that a 1s. income-tax was an intolerable thing in time of peace, they might as well shut up their Committee upstairs and give up all idea of graduation. He believed that they could well graduate the income-tax from 2d. up to 2s. in time of peace, and in time of war they could then impose a higher or patriotic tax, although, for himself, he would rather apply the term "patriotic" to peace than to war taxes. In conclusion he submitted that the income-tax should be graduated with due regard to the distribution of the wealth of the nation.
§ Clause agreed to.
§ Clauses 7 and 8 added to the Bill363
MR. BRIDGEMAN (Shropshire, Oswestry) moved to add the following new-clause—
The excess duty of 15s. for every hackney carriage, as defined in Clause 4 of the Customs and Inland Revenue Act of 1888, shall be and is hereby repealed.
Members of the Committee were not, perhaps, aware of the very heavy charges upon the owners, and consequently upon the drivers, of hackney carriages. For the plate bearing the number of the cab the owner had to pay £2 to the Home Office. The cabdriver bore on his breast a medal for which he had to pay 5s. to the Home, Office, and the Department a short time ago tried to raise the amount to 7s. 6d. In addition, the driver had to pay a licence of 15s. a year to the Inland Revenue. Few people had so heavy a charge placed upon their industry, and there were hardly any other people engaged in trade who were so completely under public control and so completely tied and bound with restrictions. He was aware that a large portion of the money raised by these licences came from companies, but those who deserved their consideration most were the small owners with one or two cabs, who were being rapidly driven out of existence by the taxes and other difficulties with which they had to cope. In this matter there was something to be learnt from Ireland, as was the case in many other matters. In Ireland the owner of a car had to pay no licence at all, and he did not know whether they could attribute the proverbial hilarity and light-heartedness of the Irish cab-driver to the fact that he was not bound down, as was the English cab-driver, by oppressive taxation. It was a sign that a tax ought to be taken off when the revenue from it was beginning to decline. The last year for which the Inland Revenue return gave figures showed a falling off of 2,000 licences from the previous year and the year before. The amount received from these licences was £98,600, but he should think a considerable part of that sum must be spent in the collection of the duty. Therefore, in view of that, and of the fact that the number of licences was diminishing, it was a very good time to consider the desirability of abolishing the tax altogether. It was true that the produce
of the tax went to the Local Taxation Account, and objection might be taken to his proposal on the ground that ratepayers would be deprived of some advantages. But the Chancellor of the Exchequer had something like £400,000 for contingencies, and out of that he might recoup the local ratepayers for what they would lose by the withdrawal of the hackney carriage licences. There was no taint of protection in his proposal. No question could be raised as to whether the producer or the consumer paid the licence. The cab-driver, compared with other trades, seemed to be very hardly treated. Tradesmen's carts and vans were not liable to the tax, nor were the drivers required to learn how to drive as were cab-drivers. If to tax a grocer's cart was wrong because it would interfere with his trade, it was still more wrong to tax a cab-driver, because his cab was the whole of his trade. He appealed to the Chancellor of the Exchequer to relieve this class of this unjust burden, and perhaps he could see his way to make good the loss to localities by a grant out of the fund reserved by the Treasury for contingencies.
§ Question proposed, "That this clause be read now a second time."
§ MR. ASQUITH
said he had considerable sympathy with the proposal. The tax upon coaches and carriages of pleasure was a very old tax, and was un-undoubtedly intended as a very legitimate form of sumptuary tax. But it did not originally apply to hackney carriages; it was extended to them in a bad time, under Lord North's Administration, in order to help to meet the expenses of the American War. The carriages to which the hon. Member referred were really instruments by which a business was carried on, and, being a tax on locomotion, in his opinion, erred against sound fiscal principles. He must ask the hon. Gentleman to be content with that expression of sympathy, 365 however, as the tax was one of those which under our present system of finance was handed over to the local authorities, the Imperial revenue deriving no benefit of any sort or kind from it. The only effect of adopting the clause would he to deprive the local authorities of a source of revenue for the next twelve months, an arrangement of which they would no doubt complain very much. He suggested that the matter should be deferred, and he would give it his careful consideration when they took up the question of the general relation between local and Imperial taxation under the present system. He assured the hon. Gentleman that when they got all the taxes where they ought to be he should be most ready to accede to his wishes and remit this tax on hackney carriages.
§ MR. BRIDGEMAN
said that after the sympathetic speech of the Chancellor of the Exchequer he did not feel that he ought to press his Motion to a division. He thought, however, that the right hon. Gentleman had postponed their hopes on this question to rather a distant and uncertain period. He would ask leave to withdraw his Motion.
§ Motion, by leave, withdrawn.
§ Bill reported, without Amendment; to he read the third time upon Monday, June 11th.