HC Deb 01 May 1907 vol 173 cc904-56

7. —"That it is expedient to amend the law relating to the National Debt, Customs, and Inland Revenue."

MR FLETCHER (Hampstead)

moved to substitute 4d. for 5d. as the amount of the tea duty. The Chancellor of the Exchequer said in his Budget speech that he was satisfied that a reduction of 1d. on the tea duty would not benefit the consumer. If that were so why did the right hon. Gentleman take off 1d. last year? The grocer with whom he dealt complained to him last year that to take off only 1d. was not enough, and that it would not affect the retail price; but that if the Chancellor of the Exchequer had reduced the duty from (6d. to 4d., the retail grocers would have been able to grant some advantage to the poor consumer. A great deal was heard at the last general election about the iniquity of taxes on the food of the poor. The hon. Gentleman who represented him in the House of Commons sent him then a very ornamental card with his portrait upon it, and underneath the legend "No taxes on food." He hoped that the Chancellor of the Exchequer would rectify his error in not taking off another 1d. from the tea duty, so that the consumer might get some benefit. He begged to move.

* MR. COURTHOPE (Sussex, Rye),

in seconding, said that last year in introducing his Budget the Chancellor of the Exchequer used those words, according to the Official Report— I have had the percentages taken out of the taxation on the average value of articles of food charged with customs duty, and that on tea is 90 per cent. And if you take the cheaper qualities of tea, the percentage, of course, would be much higher. A reduction, however small, on the tea duty has, as compared with other remissions of taxation, several distinct advantages of its own. In the first place, tea being an article which does not undergo, after importation, more or leas elaborate process of manufacture or manipulation, the lowering of the tax is not intercepted or delayed, but goes almost directly to the consumer. He thought that that statement was very inconsistent with the words used by the Chancellor of the Exchequer the other day. When the Finance Bill was before the House last year, he personally urged a further reduction on, the tea duty, on the ground that a penny reduction would not benefit the poorest consumer; and the Chancellor of the Exchequer used the words he had quoted, in answer to his argument. But, assuming that the Chancellor of the Exchequer was a great authority on the subject, the yon the Opposition side of the House urged him even now to endeavour to take off another 1d. from the tea duty, or to make some readjustment of the tax by which it would fall on the value of the tea and not on the weight, The great bulk of the tea used in this country was consumed by the very poor, and it was in some cases taxed to the extent of 200 per cent. of its value. It was hardly consistent for a Liberal Government to allow that state of things to remain. Last year the Chancellor of the Exchequer held out the hope that this year he would be able to deal with the tea duty in a more satisfactory manner. The right hon. Gentleman shook his head; but although he had not the Budget speech with him: he was sure that the right hon. Gentleman had held out the hope that he would give some relief to the tea consumer this year. It was on that ground that he and his friends felt justified in pressing this Amendment to a division.

Amendment proposed— To leave out the word 'Five,' and insert the word 'Four.'"'—(Mr. Fletcher)

Question proposed, "That the word 'Five," stand part of the said Resolution."


said that he would be very glad to see the tea duty reduced to 4d., though he must confess that, as between the tea duty and the sugar duty, if he had the chance of dealing with indirect taxation at all, he would rather deal with the sugar duty, because tea, if in a sense a necessary of life, was rather on the luxury side of the line, while sugar was a real necessity as well as a raw material for a large number of industries. But he could not ask the House to accept this proposal—in the first place, because he could not afford to sacrifice the revenue; and, in the next place, because a reduction of 1d. in existing circumstances would not appreciably benefit the customer. Last year he gave reasons for the view he then held, and still held with modifications, that a reduction of 1d. on the 6d. duty would go to the consumer, either in diminished price or in improved quality. The reduction had gone to the consumer to a considerable extent in improved quality, though not much in diminished price. But the conditions of the tea trade had altered very much in the course of the year. There had been, for reasons not easy to determine, a large, and, perhaps, an abnormal, increase in the demand for Indian tea from foreign countries, and particularly from Russia, with the result that the wholesale price of tea had gone up, in spite of the reduction of duty, by something like a penny a lb., compared with this time last year. He had taken the trouble to ascertain the opinions of those most conversant with the matter, and he was advised that in the existing state of the trade, with this abnormal demand, a further reduction of a penny would certainly go to the producer or middleman, and very little to the consumer in this country. Weighing all these cumulative considerations, it appeared to him that, although he would like to see the tea duty brought back to the level at which it stood before the war—and it had already been reduced from the war rate of 8d. to 5d. —the proposal would not, in existing conditions, have any satisfactory economic or social result.


said that the right hon. Gentleman's speech illustrated the exceeding fineness of the line which divided necessaries from luxuries when the general articles of consumption by the people were in question. Looked at from the point of view of a medical man suggesting a dietary, sugar was more important than tea. Could any one looking at the ordinary expenditure in a poor household draw a distinction between tea and sugar?If anything could be found in the cupboard at all there would be a little bread, tea, and sugar. It was impossible to make a fiscal distinction by the theoretical line the Chancellor of the Exchequer attempted to; draw. What was the difference in the circumstances which made it likely that a reduction of a penny would reach the consumer last year and not this year? To that question the right hon. Gentleman had given no answer.


said he gave an explicit answer when he referred to the conditions of the trade and an abnormal increase in foreign demands.


said that answer appeared to befatal to the whole body of the free-trade doctrine. The constant burden of the song of the right hon. Gentleman and his supporters was that the burden of a duty must fall on the consumer, never less, and sometimes more. But if a reduction would go to the middleman and grower, was it not equally likely that under certain conditions an increase would be borne by the middleman and producer?


In certain circumstances.


thought the admissions elicited day by day would afford valuable material for argument.


said there was no new admission; he had said over and over again, when referring to the ultimate burden falling on the consumer, that the tendency might be restrained or delayed by other temporary causes.


said, then when hon. Gentlemen opposite said in general terms that any tax raising the price of an article would be borne by the consumer they did not mean that, but that under certain conditions, and in certain temporary circumstances, a great proportion of it would fall on the trade. He was glad to have that admission. He was inclined to say that though in particular cases a reduction of a penny might inure to the benefit of the consumer, a reduction of 2d. would be more likely to do so, and therefore he regretted that the Amendment was not in favour of 2d. The right hon. Gentleman now thought that to some extent the reduction of last year did go to the consumer, a modest phrase compared to that used last year, when, owing to the circumstances of the case, the consumer was to have the whole. What were the particular circumstances? There happened to be in bond at the time a great quantity of inferior tea which the owners had a difficulty in disposing of, but a penny off the duty enabled them to put it on the market with that reduction in price. He did not think that was of much advantage to the consumer, if the Chancellor of the Exchequer's expectations were realised to the letter. There was an illustration this year of a fact known to every one who considered the question, that the incidence of a duty was one of many factors governing the price of the article affected, often the smallest of factors. If the duty was a material factor in fixing the price, then the price must be higher or lower in accordance with the duty. The refusal of the Chancellor of the Exchequer to abate the duty on the ground he had given cut away the whole case upon which he and his friends had been accustomed to argue the question of duties, and introduced a little inconsistency into the arguments. For his own part he believed that a small duty on an article of general consumption supplied in very large quantities in a large market had but a very small effect on price in circumstances generally prevalent, and that the tax in a large measure fell on the producer. He regretted that the proposal was not for a reduction of 2d.; but he would vote for the Amendment as a protest against the narrow limits within which the Chancellor of the Exchequer confined his attempts to raise revenue, and as an expression of his belief that the time had come when they ought to seek for resources in a wider field, where, be believed, they could raise the necessary taxation with less hardship to individuals and to the general welfare of the country.

* MR. REES (Montgomery Boroughs)

said the right hon. Gentleman the Member for East Worcestershire had made this discussion about tea the occasion for a general discussion about fiscal reform and the tariff question. He was reminded of the candidate who learnt up the binomial theorem, and, when it was not asked in the examination paper, began his answers by saying, "Before answering other questions it will be necessary to prove the binomial theorem" The right hon. Gentleman had deplored the fact that the poor people of this country had not got another penny off the tea duty, but he could not help remembering that it was the right hon. Gentleman and his friends who put this tax on, half of which had been remitted by the present Government. He sincerely hoped that when the Chancellor of the Exchequer could see his way to it, the other half would be taken off. There was one question he wished to put to the Chancellor of the Exchequer in reference to this duty. It had been stated that the right hon. Gentleman looked forward to the shilling income-tax and the duty on tea and sugar at their present rates as being permanent. That he knew was not the case, but perhaps the right hon. Gentleman would take the opportunity to say so?


I have said so already.


said he was glad to hear that, because there was undoubtedly an impression in the country that those taxes had been stereotyped at the present rates. He was glad that the Chancellor of the Exchequer had expressly and explicitly disavowed any such idea. It had been said that the poor received no benefit from the remission of a penny on the tea duty, but he submitted that they had received some benefit in the way of getting a better quality of tea. With the causes for present very high prices he had already dealt when the Budget was introduced, and the facts were admitted. There was another class of person who was seldom mentioned in the House who would get a benefit, and that was the tea-planter in India, who worked hard and deserved well of his country. No one indeed deserved better, and by no one had he as much as heard his name mentioned in the House since he himself spoke last year on this subject. In theory he agreed with the hon. Members who moved and seconded the Amendment, but it seemed to him that they were so exceedingly kind that they wanted to give away what they had not got. For this reason, although he was in whole-hearted sympathy with what had been said as to the desirability of a lower duty on tea, feeling that it was not practicable at the present moment, while the Chancellor of the Exchequer's present plans held the field, he should vote against the Amendment before the House. He hoped, however, that the time would come when a further reduction in the tea duty would be possible. He quite sympathised with the view that tea must be regarded almost as a necessity for the poor, just as much as sugar was, and he looked forward to a reduction of the duty on the latter, almost as anxiously as he did for a reduction of the duty on tea. For the Opposition who doubled the duty to censure the Government which was reducing it seemed to him absurd. They said "why take a penny; we would give two pence." And they did twice, but it was each time twopence on, not twopence off, and it was the cost of the war, in part, which now kept the duty up to the present high figure.

SIR F. BANBURY (City of London)

said the hon. Member for Montgomery Boroughs had advanced certain arguments in defence of the Amendment, and then said he was going to vote against it. He did not think that was a consistent course to take. Hon. Gentlemen opposite, as a matter of fact, only a few months ago, had denounced the tea duty throughout the length and breadth of the land but now when a reduction of it was moved they got up in their places and said that they were going to vote against the proposal. For himself he was going to maintain a consistent attitude. The speech of the Chancellor of the Exchequer seemed to him to be so sound that he intended to vote with the right hon. Gentleman and against the Amendment. He had always been in favour of indirect taxation as against direct taxation, whereas hon. Members opposite had always taken the contrary view. The Chancellor of the Exchequer had said he could not assent to a reduction of the tea duty by one penny a pound, because if he did so no benefit would accrue to the purchasing classes who consumed the article. The hon. Member for Montgomery Boroughs had said that if there was no reduction in price in consequence of the remission of the penny last year, there had been an improvement in quality; but how did the hon. Gentleman know that? Had he bought two years ago a sample of tea and compared it with a sample of tea which he had purchased at the present moment? In his opinion the quality of the tea which was being sold now was exactly the same as the quality of that which was sold two years ago, and in his view the retailer was selling the same tea and reaping the additional profit caused by the reduction. He quite agreed with the Chancellor of the Exchequer that small reductions made no difference to the consumer, and he congratulated the right hon. Gentleman on having at last got some glimmering of financial reasoning, and on having shown sufficient courage to oppose the statements made by about 99 per cent. of his followers, to the effect that they would do away with the tea duty if they were returned.

MR. J. F. MASON (Windsor)

observed that the Chancellor of the Exchequer had said that the tea and sugar duties were not permanent and were only maintained now because the expenses of the war were not yet paid off. He would point out that the war debt stood now at £138,000,000, and the Chancellor of the Exchequer could not suggest that the whole of the £20,000,000 of war taxes which were still kept on was for the service of that debt. The right hon Gentleman was really maintaining war taxes to meet the ordinary expenses of the country. As regarded the question of the remission of a penny duty on tea, the Chancellor of the Exchequer had said it was unnecessary to take it off because it would not be reflected in the price which the consumer paid. He thought, however, that the reduction of the duty would have a considerable effect upon the price paid by the consumer. The only conclusion at which he could arrive was that the Chancellor of the Exchequer had considerably modified his view of 1ast year.


said he differed from the hon. Baronet the Member for the City of London in the view he took on this matter, as, so far, he had himself consistently supported such a reduction of the tea duty as would be consistent with the Chancellor of the Exchequer's surplus. He wished to put in a plea for poor people who lived in country places rather than those who lived in large towns. He thought the evidence as to the reduction of 1d. on the tea duty last year tended to show that the poorer classes living in far country places had not benefited from it to any large extent. As was pointed out at the time the reduction was made, the inhabitants of country villages, small farmers and labourers, did not experience any appreciable difference, either in the quality of their tea or its price, as a result of the reduction of the tax by 1d.; whereas, it was held by those best qualified to give an opinion on such a subject, that the reduction of 2d. which meant a third of the tax of 6d. in the £, would certainly be of great benefit to the poorer classes, especially in Ireland. If there was any difficulty in meeting the deficit which might be caused by a further reduction of 1d., it might be some argument against the proposal. The Chancellor of the Exchequer last year, speaking on the subject, said that personally he would be glad if he could reduce the duty by 2d. The intentions of the right hon. Gentleman had not been carried out, either last year or this. The time had come when, in all justice and fairness to those who did not benefit by the reduction of a 1d. last year, the right hon. Gentleman should, carrying out his own wish, and the pledges of a number of his supporters, consider the case of the poorer classes who lived in remote country places, who were not represented to the same extent as those who lived in crowded cities. In certain country districts tea was purchased from porters who went round once or twice a week. There was no competition in those districts such as was to be found between grocers in large towns, and the result was that the trifle taken off the tea duty, although it might benefit to some extent, those who lived in large towns, was not felt in distant rural areas. The deficit which would be caused by a further reduction of the duty by 1d. could be met without disturbing the Budget in any way if some other tax were substituted. There were something like £150,000,000 worth of other taxable commodities, chiefly imported from foreign countries, which were not like tea, the latter being grown to a large extent within our own Empire, notably in Ceylon. These other commodities consisted of frozen meat, salt beef, tinned and preserved meats, bacon, ham, frozen pork, salt pork, and so forth, which came into this country without a penny of taxation. Where the unfortunate inequality arose was that in large cities and commercial and manufacturing centres those very commodities which he had mentioned were consumed in large quantities and were not used at all in country districts, so that they brought to one class of the community free food, while in country districts the people produced and lived upon their own beef and mutton and bacon and enjoyed none of the advantages of dwellers in towns, nor did they receive any benefit from the reduction which had been made on the tea duty last year. If the Chancellor the the Exchequer confined his Budget to the narrow basis on which he was working this year he thought poor people in country districts would receive little relief. Personally he had much pleasure in supporting the Amendment.

MR. ALEXANDER CROSS (Glagow, Camlachie)

was understood to say that he supported the Amendment, though there were two reasons of a somewhat deterrent nature against his doing so. The first was that it was a matter of history that the only certified lunatic who ever voted in that House voted in favour of a reduction of the tea duty—a circumstance which should make it difficult for him to support the Amendment. The next reason was to be found in the speeches delivered from the Front Bench below him and by those around him. The Chancellor of the Exchequer had said that he could not make any further reduction of the tea duty, and that it would have very slight effect if made. The ex-Chancellor of the Exchequer had admitted that there were two or three particular circumstances which went to make up the retail price of an article. There was first the tax. If the reduction of the tax was not sufficient to bring about a fall in the retail price of the article on which the tax was placed, then, of course, the middleman made the profit. If the reduction of the tax was not large enough to effect a reduction of the price charged to the retailer, then there could not be at once a reduction to the consumer. The retail price would probably remain the same, and some other person benefited. But if they dealt with a charge on an article in the form of extra cost, or considered the cost of the article in the form of an extra tax, it was an addition which ultimately the consumer must pay. It had been contended that when a tax was put on an article a rise of price did not take place. That was true in regard to the corn tax, because corn became very plentiful at the time, but there was a rise at first. He was a member of a firm which landed 1,000 quarters of wheat on the quay at Liverpool, and when a 1s. duty was imposed, that corn immediately became 1s. dearer. He might tell the hon. Baronet the Member for the City of London, who represented a great city composed mainly of commercial men, that had the price of corn in America been the same and 1s. was put on the price would have become 1s. dearer. Anything which added to the cost of an article, whether it was duty, freight, or scarcity, in the end must make that article dearer. As to the price of corn not falling when the duty was taken off they all knew that it was only a temporary and local interception, and to found an argument upon that fact was an absurdity. It had been said that the reduction of the tea duty by 1d. last year had not improved the quality to the consumer. The hon. Member who made that statement forgot that there was such a thing as competition. Let a man in any trade endeavour to reduce the quality of an article in order to augment his profit, and although he might succeed for a week or a year—as the tariff reformers succeeded in deceiving certain Members of the Unionist Party for a period—competition would compel him to give the same value in the end as other grocers or otherwise he would be driven out of the trade.


said he was not afraid of being turned out because he was a tariff reformer.


said he proposed to support the Amendment on the plea that there were a great many persons upon whom this tax told most severely. He thought it was the duty of any hon. Member who represented the toilers and moilers whose present burdens were greater than their wages could bear to urge the necessity of the reduction of a tax which pressed so severely upon them. He felt it his duty to use every available opportunity to press upon those in charge of the finances of the country the importance of never losing sight of the fact that this was a tax which pressed very severely upon the poor and that any alleviation would be welcome.

MR. ASHLEY (Lancashire, Blackpool)

thought the Chancellor of the Exchequer had been rather inconsistent on this question. The right hon. Gentleman had said he objected to taking 1d. off the tea duty because it would make no difference to the consumer. He would like to know in that case why 1d. was taken off tea last year, it being then argued that it would make a very considerable difference That was not a very consistent attitude for the Government to adopt. He desired to support the appeal in favour of taking 1d. per pound off Colonial tea.


pointed out that 97 per cent. of the tea consumed in this country came from the Colonies.


said that was all the more reason for encouraging it by giving the Colonies a preference. He thought the present time was an opportune moment for the Government to endeavour to do something for the Colonies, for they would greatly appreciate even the smallest amount of preference. He hoped the Colonial Conference would not be allowed to break up without the Government giving some small concession to the Colonies in regard to the tea duty.

MR. DILLON (Mayo, E.)

said he had been for twenty years a Member of the House of Commons and had taken part in a great many discussions of this character, but until last year and on the present occasion he had never heard of an Amendment to reduce the tea duty coming from the Conservative Party. Irish Members had frequently moved to reduce the tea duty, and so had Radicals below the gangway. He felt it his duty to point out that this Bidget was rather hard upon Ireland. The difficulty they always had to encounter in discussing these proposals was that the Budget was always drawn up—and it was inevitable that it should be so—with a view to the condition of this country. It was almost impossible, for the Irish Members to get a hearing for their view as to the effect upon the Irish people of Budgets drawn up from an English point of view. It had now become almost an accepted axiom that the aim of the Chancellor of Exchequer should be to maintain the balance between direct and indirect taxation. It had become the custom of Chancellors of the Exchequer to boast that they had kept direct taxation a little above indirect, and it had been stated that the proportion was 52 per cent. of direct taxation and 48 per cent. of indirect taxation. He wished to point out that in Ireland the proportion was 75 per cent.of indirect and 25 per cent. of direct taxation. While the proportion in Great Britain of direct taxation to indirect taxation was increasing, in Ireland it was decreasing. That was a melancholy state of things and showed the great evil which might arise from the application of one principle to countries whose social and economic conditions were radically different. That was one of the evils which had led to the over taxation of Ireland, and it was one of the causes of the great poverty existing in that country. He had never alleged that English Members had willingly and knowingly inflicted this great injustice upon Ireland. His opinion was that in many cases they did it unknowingly, because naturally their minds were fixed upon the social and economic condition of their own country. It was impossible to deny that the Budgets of this country were so constructed as to inflict a monstrously heavy burden upon the poor classes in Ireland. That was the reason why Irish Members had for the last twenty years, in season and out of season, resisted indirect taxes upon articles of food. Many years ago a Chancellor of the Exchequer twitted the Irish Party with having allowed two or three sessions to go by without questioning the injustice of the English system of taxation. It was for that reason that he could not allow this discussion to pass without some Irish Member taking part in it. He did not intend to raise the question of the over-taxation of Ireland in detail at the present moment. And why? Because they knew that on Tuesday next a great scheme would be proposed which would probably inflict a totally new system of taxation upon Ireland. At all events, they would reserve their comments until they saw what the present Chancellor of the Exchequer was going to do. He wished to say a word on an aspect of the case which appeared to him to have been lost sight of by hon. Members above the gangway who were supporting the Amendment and still more by the Members of the Labour Party with whom the Nationalist Party generally acted. While he felt bound in the interest of the Irish people to support this Amendment as he had always supported Amendments of a similar character, he, on the other hand, in justice to the Chancellor of the Exchequer, must say that if they in this country were going in for a system of universal old age pensions all classes would have to contribute to it. That was a consideration which appeared to have dropped out of sight. Putting aside for a moment the peculiar position of Ireland, and speaking as if he were an English Member, he was bound to say that the question of old age pensions was a very large one, and that it would involve an enormous expenditure. He thought there was a good deal to be said for the Chancellor of the Exchequer who in introducing the Budget had pointed out that his main motive—he took it that it was his only motive— for not proposing larger reductions of taxation was that he was laying by the resources necessary to commence a system of old age pensions. Looking at the proposal from the general point of view, his own attitude towards the whole question of taxation would be considerably modified if they accepted the principle of old age pensions and laid upon themselves the duty of providing the enormous annual income required there for. Old age pensions would be so enormous a boon to the working classes that the Chancellor of the Exchequer would be justified in asking for some larger contribution from indirect taxation, balanced, of course, by contributions from direct contributions, if any such scheme should be introduced. While he felt bound to support the Amendment he recognised that it was open to the Chancellor of the Exchequer to meet the Irish difficulty at another time, and he and his friends awaited with interest the proposals which he would make. There were two ways of meeting the Irish difficulty.


I think I must remind the hon. Member that I have allowed him a good deal of latitude on the Irish question. After all, this is the question of the tea duty and not of the general system of taxation and I must ask the hon. Member to confine himself to that question as it affects Ireland.


said he was just concluding. It had always been the custom to go into the Irish question on the tea duty. He was sorry to say that the tea duty was a very important Irish question, because it hit Ireland exceedingly unjustly. He was stating why the Nationalist Members were supporting the Amendment, and sparing the House a discussion which on former occasions had occupied the greater part of a night.


said the hon. Member for East Mayo had spoken year after year of the iniquities of the duty on tea. He himself was rather inclined to agree with the hon. Member for the City of London in his disposition to vote with the Government against the proposed reduction, believing that the immemorial proportions as between direct and indirect taxation should be maintained. He asked the Chancellor of the Exchequer to remember that 97½ per cent. of our tea came from India and Ceylon. Upwards of 2,000,000 of Indian natives in eking out a precarious existence were dependent on the cultivation of the plant. He could not but think that it was a most iniquitous proceeding to tax an article which came directly and almost exclusively from India and Ceylon, while we allowed foreign manufactures to come in free. After all, tea was partially a raw material. It had to go through a series of processes before it was fit for use. Personally, he was not going to take part in the division on the Amendment, although he thought the Chancellor of the Exchequer had hardly made out a case for not taking 2d. off the tea duty. The right hon. Gentleman placed himself on the horns of a dilemma when he said that a 1d. off the duty would not reach the ordinary consumer. That was the contention which tariff reformers had been making all over the country. They said that any import duty on an article in which there was a good deal of competition was bound to be borne by the middleman and the exporter. But if 1d. was insufficient, why did not the right hon. Gentleman take 2d. off? The right hon. Gentleman said he and his Party had the mandate of the country not to turn their faces to other sources of revenue. When the Opposition suggested that there were certain manufactured articles coming into this country on which a small duty might be levied, the right hon. Gentleman said the Government had the mandate of the country not to depart from the existing system of taxation. Whence did the Party opposite get their inspiration? What was the basis of their contentions as to this mandate? The House might know that there was an interesting animal called the ornithorhynchus, which had feet like a deer, claws like an owl, fur like a badger, a tail like a rat, and could swim like a fish. The mandates and attributes of the Government reminded him of, that animal. They possessed many and various characteristics. The Government said they had mandates to uphold free trade, to reform the system of education, to deal with licences, and to introduce some form of devolution leading up to Home Rule for Ireland. If they had all those mandates, on what did they base their contention? At any rate he protested against the proposal to reduce the tea duty, and therefore he would refrain from opposing the Government.

SIR C. SCHWANN (Manchester, N.)

agreed with the proposal to maintain the 1s. income-tax, but he thought in regard to the sugar and tea duties the Chancellor of the Exchequer might have done more. He had for many years voted in favour of the reduction of the tea tax. He was in favour of a free breakfast table as far as possible. The present seemed to him an occasion when, with a large surplus, it would have been quite possible for the Chancellor of the Exchequer to have relieved the poorer classes of the community in connection with the tea or sugar duty. In the last few months the price of the lower qualities of tea had risen 2d. or 3d. per pound, or 40 per cent. The fact that the price had so risen meant that a reduction in the duty would have been of advantage to the poorer classes. The Chancellor of the Exchequer had stated that 1d. in the pound off the tea duty would not be felt. Members of the House were aware that in the poorer districts of large cities tea was not always sold in one pound packets. It was also sold in quarter-pound packets, and even in smaller quantities, and, therefore, a difference of 1d. per pound was immediately felt by the poorer classes. He sympathised very much with what had fallen from the hon. Member for East Mayo. There was no doubt that the Irish people consumed largely the high classes of tea, and it seemed rather hard that the one article they consumed in enormous quantities should be so heavily taxed. He hoped the Chancellor of the Exchequer, before he brought in the Bill based on these Resolutions, would consider whether he could not make some reduction on the tea duty. He would follow the example of the hon. Baronet opposite and abstain from supporting in the division Lobby the Party with which he had generally the pleasure of voting.


said that the hon. Member for East Mayo had said that the Members on the Opposition side of the House had suddenly developed an objection to indirect taxation. He did not think that that conclusion was exactly in accordance with fact. They had no objection to indirect taxation; quite the contrary. What they objected to was that as the national expenditure was steadily increasing, the system of taxation was running in a vicious circle, and that if the Chancellor of the Exchequer was to give relief anywhere, he must do so within a very narrow radius or resort to the income-tax. No reduction of the taxation on tea or sugar could accomplish what the Chancellor of the Exchequer desired to meet, the increased national expenditure caused by an increase of population. The right hon. Gentleman, if he did not get his necessary income from sugar and tea, must obtain it from spirits, or a readjustment of the income-tax. The hon. Member for East Mayo opposed a tax on the very poor from a local standpoint. He said that 72 per cent. of the taxation imposed on Ireland was indirect, especially on tea and sugar. It was admitted that the tax on tea was very heavy, and that it pressed on the poor man to the extent of 100 per cent. of the value of the tea. No doubt that was unfair. An hon. Member had suggested that they on the Opposition side of the House had developed a concern for the poor man, the suggestion being that hitherto they had had no sympathy with the poorer classes. What they proposed was the introduction of a different system of taxation, by which there would be a reduction of the tea tax, which would give relief to the poor, and give an opportunity of raising revenue on certain imports. The Chancellor of the Exchequer was a very hard-headed and somewhat hard-fisted business man—he meant as Chancellor of the Exchequer—and he had suggested that the reduction of the tea duty by a penny, if it did not lead to a reduction in the price of the article, would lead to a betterment in in quality. Did anybody believe that if a poor man or woman went into a grocer's shop and insisted on getting a better quality of tea, he or she would be listened to? He did not think that any grocer would be so altruistic as to do that. The advantage would go to the middleman. An hon. Member had suggested that the element of competition ought to be taken into consideration; but did any one believe that the poorer class of people would go from shop to shop and carefully test the quality of the tea offered them. [Cries of "Yes" from the LABOUR Benches.] Then they had more time on their hands than was generally suggested by those who demanded an eight-hours day. His contention was that the Chancellor of the Exchequer had given an entirely wrong interpretation of the situation. The fact was that the right hon. Gentleman was faced with a dilemma. The right hon. Gentleman said that if he took a halfpenny offthe sugar duty it would be of no benefit to the consumer. (MINISTERIAL cries of "A farthing."] Well, let it be a farthing or half-a-farthing. What he, and those who agreed with him, maintained was that if a duty of 1s. per cwt. were put on corn imported into this country, it would not fall on the consumer in the same proportion as a tarthing per pound on tea. The Chancellor of the Exchequer was faced with the protests of his friends that a duty of 1s. per cwt. on corn would ruin the working man; but, in effect, the right hon. Gentleman had admitted that it would really make no difference. He had said that the reduction of 1d. per pound on the duty on tea had not been enjoyed by the consumer, because of temporary causes. He (Sir Gilbert Parker) did not believe that that explanation was satisfactory. He would support the Amendment, first, because he believed that the tax was too high; and secondly, because it was unequal in its incidence, and fell more heavily on the poor who paid 1s. or so per pound for their tea, than on the rich who paid from 2s. 6d. to 4s. 6d. and upwards per pound for their special tea. He also supported the Amendment because he wanted to broaden the basis of taxation so that it would not press heavily on the poor. At any rate, if a duty were put on foreign corn, a preference of some sort would be given to our great and important colonies, to whom it would be of incalculable assistance in the development of their resources. It would, moreover, ultimately cheapen the price of corn in this country. [An HON. MEMBER: Rubbish.] He protested against the discourtesy of the interruption when a great deal of latitude had been allowed to previous speakers. He wished to express the belief that the Chancellor of the Exchequer would be compelled to reduce the taxes on tea and sugar by the pressure of his own Party.

* LORD R. CECIL (Marylebone, E.)

said that the hon. Member for Gravesend had, in course of his interesting speech, spoken about the great advantage of broadening the basis of taxation. With all humility he wished to say that he would be very glad if any one could tell him what was meant by "broadening the basis of taxation." His impression was that, whoever paid a tax in the first instance, ultimately the tax would be spread over the whole body of the population. He was in the fortunate position of being able to take the course of following the lead of the hon. Member for the City of London and would support the Government. He objected to pay taxes himself, but after all the money had to be raised by the Chancellor of the Exchequer somewhere and somehow, and if it was not to be raised from the tea duty, it must be raised in some other direction—say, from the income-tax. They constantly heard comparisons made between direct and indirect taxation. The great merit attributed to direct taxation was that it brought home to the taxpayer any extravagance on the part of the Government of the day. But the direct taxpayers were a very small number compared with the indirect taxpayers, and they did not in fact exercise any very considerable political power. The great mass of power in this country lay in the hands of the working classes, who paid no income-tax. The result was they did not feel the effect of a rise in the income-tax.


said the noble Lord was going far too widely in this matter. He could not go into all these matters which he was now dis- cussing without embarking on a discussion which was out of order.


said it was a little difficult to explain why he objected to any remission of the tea duty without going into these matters. He would not, however, enlarge further. It was enough for him to say that inasmuch as the working classes paid tea duty as much a: any other section of the community it followed that, as the mass of the power in this country lay in the hands of the people of the country, if the tea duty was raised they would feel it at once, and would at once use their power to stop the extravagance that necessitated it. He should, therefore, vote for the Government and against the Amendment.

MR. C.E. PRICE (Edinburgh, Central)

said that had the Amendment been to remit 2d. instead of 1d. he would still have been inclined to support it. The reason for that was that the hon. Member for Nottingham last year, when a reduction of 1d. was being made, read a number of interesting documents showing that while the 1d. taken off would be transferred from one branch of the trade to another, there was no evidence that it would be transferred to the consumer, who would, therefore, obtain no benefit from the remission. If they derived no benefit from the remission last year how could it be said that they would derive a benefit from the remission now proposed. If 2d. had been remitted last year the consumer would have benefited, but to take off 2d. in two bites, as it were, destroyed the benefit they otherwise would receive. There had been some evidence of what the result would be of a remission of 2d. In a great many cases it was the practice of the tea dealers who sold quarter-pound packets of tea to put on those packets when the duty was raised that the price of those packets was increased by ½d. on account of a rise in the tea duty. If 2d. was taken off the same rivalry and competition would have necessitated the tea dealers putting on those packets, "The price of this packet is reduced by ½d.," and the consumer would immediately have got the benefit. As he thought the Chancellor of the Exchequer had made a great mistake in not reducing the tax on tea by 2d. he should support the Amendment. Another reason for his taking that course was that, after he spoke on this subject last year when he strongly advocated a reduction of 2d.,he received no end of letters from members of the trade alleging that no advantage would be derived by the consumer from the reduction of a penny. He desired the Chancellor of the Exchequer to bear in mind in dealing with taxes on food that the reduction of a tax should always be done in such a way that the consumer could force the trade to give them the benefit. Whenever a small reduction was made it was never transferred to the consumer. It should always be sufficiently large to make it worth the while of the middleman to reduce the price of the goods sold over the counter. While they were promised old age pensions next year nothing had been said to show that there would be no change in the duties upon tea and sugar, and he for his part hoped that a substantial reduction would be made in either one or the other or both next year.

MR. HICKS BEACH (Gloucestershire, Tewkesbury)

said he quite agreed that the Chancellor of the Exchequer had made a great mistake in not reducing the tax upon tea by more than 1d. last year. He was inclined to vote for this Amendment because he thought as a result of the double reduction the consumer would benefit. He could not follow the hon. Member who had just sat down. According to the hon. Gentleman if the tax was reduced by 1d. even until it was taken off altogether the consumer would get no benefit. He quite agreed that when the right hon. Gentleman reduced the tax on tea or sugar he should reduce it by such an amount and in such a way that the whole of the benefit should go to the consumer. The right hon. Gentleman had lost a valuable source of revenue in the coal duty which he could have easily devoted to the reduction of the tea duty. The result of remitting that duty had been of advantage to foreign buyers, whilst it had been of the greatest disadvantage to the consumers in this country. The general taxpayers of the country had lost £2,500,000 a year, an amount which might not only have been devoted to the reduction of the tea duty, but also to forming a valuable nucleus for old age pensions. Because he agreed with his hon. friend in reducing this tax, and because he thought the proposed reduction of 1d. would benefit the consumer, he supported the Amendment.

* MR. F. E. SMITH (Liverpool, Walton)

said it was seldom he disagreed with his noble friend the Member for East Marylebone, but on this occasion he could not accept or adopt the argument he had put forward that there was a great deal to be said in favour of retaining the tax in its present form because it was likely to bring home to the working classes a sense of their national responsibility. That was an argument that might equally be addressed either to an increase or a decrease in all indirect taxation. In his opinion indirect taxation upon tea and sugar pressed with undue and disproportionate harshness upon the poorest classes. He desired to make one or two observations on that, and to call attention to the guidance that had been given to us in this matter by the practice in other countries. We were the only English speaking race who imposed any taxation on tea, and if we had regard to foreign countries, in Germany the duty amounted to 1½d., in Sweden 3d. and in Denmark 4d. In this country, where we were inflexibly determined that there should be no taxes on food, we raised a revenue of £6,000,000 upon tea. He did not imagine that any change had taken place in the circumstances of the country during the last twelve months which would entitle anyone to say that the reduction of 1d. this year would not go to the consumer, but that last year it did. The question which he had asked of the right hon. Gentleman last year, and which the right hon. Gentleman necessarily considered before making this proposal, was whether the reduction of 1d. would really reach the consumer. The answer given by the right hon Gentleman was that it would. He asserted that all the arguments used in the House a year ago were applicable to-day. He believed that all hon. Gentlemen opposite eighteen months ago said they were against food taxes. There was not one who contested an election who would not remember the words on the posters, "No food taxes." He therefore trusted he would have the support of all hon. Members who announced eighteen months ago that they were in favour of no food taxes. There were very few who, having announced that they were opposed to all taxes on food, did not also announce themselves as being in favour of oldage pensions, and therefore admitted that the two propositions

were not mutually destructive. If their contention was an honest one, and if they had given attention to the financial circumstances of the country as a whole and were satisfied that it was a practical possibility to give old-age pensions and take off these food taxes they should have no hesitation in joining with him in supporting the Amendment.

Question put.

The House divided:—Ayes, 250; Noes, 146. (Division List No. 152.)

Abraham, William (Rhondda) Churchill, Winston Spencer Haworth, Arthur A.
Acland, Francis Dyke Clarke, C. Goddard (Peckham) Hazel, Dr. A. E.
Adkins, W. Ryland D. Cleland, J. W. Hedges, A. Paget
Agnew, George William Clynes, J. R. Hejme, Norval Watson
Ainsworth, John Stirling Coats, Sir T. Glen (Renfrew, W.) Hemmerde, Edward George
Alden, Percy Cobbold, Felix Thornley Henderson, Arthur (Durham)
Armstrong, W. C. Heaton Collins, Stephen (Lambeth) Henderson, J. M. (Aberdeen, W.)
Asquith. Rt. Hn. Herbert Henry Collins, Sir Wm. J. (S. Pancras, W. Higham, John Sharp
Astbury, John Meir Corbett. C. H. (Sussex, E Grinst'd Hobart, Sir Robert
Atherley, Jones, L. Cornwall, Sir Edwin A. Hobhouse, Charles E. H.
Baker, Sir John (Portsmouth) Cotton, Sir H. J. S. Hodge, John
Baker, Joseph A. (Finsbury, E.) Cox, Harold Holt, Richard Durning
Balfour, Robert (Lanark) Craig, Herbert J. (Tynemouth) Hope, John Deans (Fife, West)
Banbury, Sir Frederick George Cremer, William Randal Hope, W. Bateman(Somerset, N.
Baring, Godfrey (Isle of Wight) Crombie, John William Horridge, Thomas Gardner
Barker, John Crooks, William Howard, Hon. Geoffrey
Barlow, John Emmott(Somerset Crossley, William J. Illingworth, Percy H.
Barlow, Percy (Bedford) Davies, M. Vaughan-(Cardigan) Jackson, R. S.
Barnard, E. B. Davies, Timothy (Fulham) Jacoby, Sir James Alfred
Barry, Redmond J. (Tyrone, N.) Davies, W. Howell (Bristol, S.) Jenkins, J.
Beale, W. P. Dewar, Arthur (Edinburgh, S.) Johnson, John (Gateshead)
Beauchamp, E. Dickinson, W. H. (St. Pancras, N. Johnson, W. (Nuneaton)
Beck, A, Cecil Dickson-Poynder Sir John P. Jones, Sir D. Brynmor(Swansea)
Bell, Richard Dunne, Major E. Martin (Walsall) Jones, Leif (Appleby)
Bellairs, Carlyon Elibank, Master of Kearley, Hudson E.
Bertram, Julius Essex, R. W. King, Alfred John(Knutsford)
Bethell, Sir J. H. (Essex, Romf''rd Esslemont, George Birnie Laidlaw, Robert
Bethell, T. R. (Essex, Maldon) Evans, Samuel T. Lamb, Edmund G. (Leominster
Billson, Alfred Everett, R. Lacey Lambert, George
Birrell, Rt. Hon. Augustine Faber, G. H. (Boston) Lambton, Hon. Frederick Wm.
Boulton, A. C. F. Fenwick, Charles Lamont, Norman
Brace, William Ferguson, R. C. Munro Layland-Barratt, Francis
Brigg, John Fowler, Rt. Hon. Sir Henry Leese, Sir Joseph F. (Accrington
Brocklehurst, W. B. Fuller, John Michael F. Lehmann, R. C.
Brooke, Stopford Furness, Sir Christopher Lever, A. Levy(Essex, Harwich
Brunner. Rt. Hn Sir J. T. (Chesh. Gardner, Col. Alan (Hereford, S.) Lever, W. H. (Cheshire, Wirral)
Bryce, J. Annan Gladstone, Rt. Hon. Herbert J. Levy, Maurice
Buckmaster, Stanley O. Glendinning R. G. Lewis, John Herbert
Burns, Rt, Hon. John Gooch, George Peabody Lloyd-George, Rt. Hon. David
Burt, Rt, Hon. Thomas Grant, Corrie Lough, Thomas
Buxton, Rt. Hn. Sydney Charles Greenwood, G. (Peterborough) Lyell, Charles Henry
Byles, William Pollard Greenwood, Hamar (York) Macdonald, J. M. (FalkirkB'ghs
Cairns, Thomas Grev, Rt. Hon. Sir Edward Mackarness, Frederic C.
Cameron, Robert Griffith, Ellis J. Macnamara, Dr. Thomas J.
Campbell-Bannerman, Sir H. Gulland, John W. M'Callum, John M.
Carr-Gomm, H. W. Gurdon, Sir W. Brampton M'Crae, George
Causton, Rt. Hn. Richard Knight Haldane, Rt. Hon. Richard B. M'Kenna, Rt. Hon. Reginald
Cawley, Sir Frederick Harcourt, Rt. Hon. Lewis M'Micking, Major G.
Cecil, Lord R. (Marylebone, E.) Hardy, George A. (Suffolk) Maddison, Frederick
Chance, Frederick William Harmsworth, Cecil B. (Worc'r) Mallet, Charles E.
Cheetham, John Frederick Harwood, George Manfield, Harry (Northants)
Cherry, Rt. Hon. R. R. Haslam, Lewis (Monmouth) Marks, G. Croydon(Launceston)
Mason, A. E. W. (Coventry) Rutherford, V. H. (Brentford) Vivian, Henry
Menzies, Walter Samuel, Herbert L. (Cleveland Walker, H. De R. (Leicester)
Micklem, Nathaniel Scarisbrick, T. T. L. Walsh, Stephen
Mond, A. Sears, J. E. Waton, Sir John L. (Leeds, S.)
Montagu, E. S. Seaverns, J. H. Ward, John(Stoke upon Trent)
Morgan, G. Hay (Cornwall) Seddon, J. Ward, W. Dudley(Southampton
Morgan, J. Lloyd(Carmarthen) Seely, Major J. B. Waring, Walter
Morley, Rt. Hon. John Shackleton, David James Wason, Eugene(Clackmannan)
Morrell, Phillip Shaw, Charles Edw. (Stafford) Wason, John Cathcart(Orkney)
Morton, Alpheus Cleophas Shaw, Rt. Hon. T. (Hawick B.) Waterlow, D. S.
Napier, T. B. Sherwell, Arthur James Watt, Henry A.
Nicholls, George Shipman, Dr. John G. Wedgwood, Josiah C.
Norton, Capt. Cecil William Sinclair, Rt. Hon. "John Whitbread, Howard
O'Donnell, C. J. (Walworth) Smcaton, Donald Mackenzie White, J. D. (Dumbartonshire)
Partington, Oswald Soames, Arthur Wellesley White, Luke (York, E. R.)
Philipps, Owen C. (Pembroke) Spicer, Sir Albert Whitehead, Rowland
Pirie, Duncan V. Stanley, Hn. A. Lyulph(Chesh.) Whitley, John Henry(Halifax)
Price, C. E. (Edinb'gh, (Central) Steadman, W. C. Whittaker, Sir Thomas Palmer
Price, Robert John(Norfolk, E.) Stewart, Halley (Greenock) Wiles, Thomas
Pullar, Sir Robert Strachey, Sir Edward Wilkie, Alexander
Radford, G. H. Straus, B. S. (Mile End) Williams Llewellyn(Carmarth'n
Rainy, A. Rolland Strauss, E. A. (Abingdon) Wilson, J. H. (Middlesbrough)
Rea, Russell (Gloucester) Stuart, James (Sunderland) Wilson, J. W. (Worcestersh. N.)
Rendall, Athelstan Taylor, Austin (East Toxteth) Wilson, P. W. (St. Pancras, S.)
Richards, Thomas(W. Monm'th Taylor, Theodore C. (Radcliffe) Winfrey, R.
Ridsdale, E. A. Tennant, H. J. (Berwickshire) Wood, T. M'Kinnon
Roberts, Charles H. (Lincoln) Thomas, Abel(Carmarthen, E.) Wortley, Rt. Hon. C. B. Stuart-
Robertson, Rt. Hn. E. (Dundee) Thomas, Sir A. (Glamorgan, E.) Younger, George
Robinson, S. Tomkinson, James
Robson, Sir William Snowdon Torrance, Sir A. M. TELLERS FOR THE AYES —Mr.
Rogers, F. E. Newman Toulmin, George Whiteley and Mr. J. A.
Rowlands, J. Ure, Alexander Pease.
Runciman, Walter Verney, F. W.
Abraham, William(Cork, N. E.) Craig, Captain James(Down, E.) Hornby, Sir William Henry
Acland-Hood, Rt, Hn. Sir Alex. F Crean, Eugene Houston, Robert Paterson
Ambrose, Robert Cross, Alexander Hudson, Walter
Ashley, W. W. Delany, William Hunt, Rowland
Aubrey-Fletcher, Rt. Hn. Sir H. Devlin, Joseph Jowett, F. W.
Balcarres, Lord Dillon, John Joyce, Michael
Baldwin, Alfred Dixon-Hartland, Sir Fred Dixon Kelly, George D.
Balfour Rt Hn. A. J(City Lond.) Donelan, Captain A. Kennaway, Rt Hon. Sir John H.
Balfour, Capt. C. B. (Hornsey) Doughty, Sir George Kettle, Thomas Michael
Banner, John S. Harmood- Douglas, Rt. Hon. A. Akers- Kimber, Sir Henry
Baring, Capt. Hn. G(Winchester Duffy, William J. Lane-Fox, G. R.
Barrie, H. T. (Londonderry N.) Duncan, C. (Barrow-in(Furness Law, Andrew Bonar (Dulwich)
Barry, E. (Cork S.) Esmonde, Sir Thomas Lea, Hugh Cecil(St. Pancras E.)
Beach, Hn. Michael Hugh Hicks Faber, George Denison(York) Lockwood, Rt. Hn. Lt.-Col. A. R.
Becket, Hon. Gervase Faber, Capt. W. V. (Hants, W.) Lowe, Sir Francis William
Bignold, Sir Arthur Fell, Arthur Lundon, W.
Blake, Edward Finch, Rt. Hon. George H. Lyttelton, Rt. Hon. Alfred
Boland, John Flavin, Michael Joseph Macdonald, J. R. (Leicester)
Bowerman, C. W. Flynn, James Christopher MacVeagh, Jeremiah(Down, S.
Bridgeman, W. Clive Forster, Henry William MacVeigh, Charles(Donegal, E.)
Brotherton, Edward Allen Fullerton, Hugh M'Calmont, Colonel James
Burke, E. Haviland- Gardner, Ernest(Berks, East) M'Hugh, Patrick A.
Butcher, Samuel Henry Gill, A. H. M'Kean, John
Carson, Rt. Hon. Sir Edw. H. Ginnell, L. Markham, Arthur Basil
Cave, George Glover, Thomas Mason, James F. (Windsor)
Cavendish, Rt. Hon. Victor C. W. Haddock, George R. Mildmay, Francis Bingham
Cecil, Evelyn(Aston Manor) Halpin, J. Mooney, J. J.
Chamberlain, Rt. Hn. J. A(Worc. Hamilton, Marquess of Moore, William
Clark, George Smith(Belfast, N. Hardy, Laurence(Kent, Ashf'rd Nolan, Joseph
Clough, William Hay, Hon. Claude George O'Brien, Kendal(Tipperary Mid
Collings, Rt. Hn. J. (Birmingham Hayden, John Patrick O'Brien, Patrick (Kilkenny)
Condon, Thomas Joseph Hazelton, Richard O'Connor, John (Kildare, N.)
Corbett, A. Cameron(Glasgow) Helmsley, Viscount O'Connor, T. P. (Liverpool)
Corbett, T. L. (Down, North) Hervey, F. W. F(Bury S Edm'ds O'Donnell, T. (Kerry, W.)
Courthope, G. Loyd Hill, Sir Clement (Shrewsbury) O'Dowd, John
Craig, Charles Curtis(Antrim, S.) Hogan, Michael O'Hare, Patrick
O'Malley, William Roche, John (Galway,-East) Thorne, William
0'Neill, Hon. Robert Torrens Rothschild, Hon. Lionel Walter Thornton, Percy M.
O'Shaughnessy, P. J. Schwann, Sir C. E. (Manchester) Valentia, Viscount
Parker, Sir Gilbert(Gravesend) Scott, A. H. (Ashton under Lyne Walrond, Hon. Lionel
Parker, James (Halifax) Sheehy, David Warde, Col. C. E. (Kent, Mid)
Percy, Earl Smith, F. E. (Liverpool, Walton) Wardle, George J.
Power, Patrick Joseph Smith, Hon. W. F. D. (Strand) White, Patrick (Meath, North)
Ratcliff, Major R. F. Snowden, P. Wilson, W. T. (Westhoughton)
Rawlinson, John Frederick Peel Starkey, John R. Wyntham, Rt. Hon. George
Reddy, M. Staveley-Hill, Henry (Staff'sh. Young, Samuel
Redmond, John E. (Waterford) Stone, Sir Benjamin
Redmond, William (Clare) Talbot, Lord E. (Chichester) TELLERS FOR THE NOES—Mr.
Richards, T. F. (Wolverhampt'n Taylor, John W. (Durham) Fletcher and Sir William
Roberts, G. H. (Norwich) Thomson, W. Mitchell-(Lanark) Bull.

Second Resolution read a second time.

MR. HARMOOD-BANNER (Liverpool, Everton)

moved to strike out the words "until Parliament otherwise determines," and to insert the words, "Until the first day of July, 1908." In previous years he had found that the Resolution invariably ran, "Until the first day of July in the year" succeeding that in which the Resolution was passed. This year, for some reason or another—and they had a right to an explanation—they found that the charge was made a permanent one, and this had been done without any notice, so far as he had been able to gather, having been given to the House or to the trades interested in either tobacco, beer, or spirits. He had no doubt they would hear why it was to be made a permanent tax. It was not mentioned by the right hon. Gentleman in his Budget speech, and as regarded tobacco he was certainly astonished to learn that it was now to become a permanent tax instead of being dealt with from year to year. The manufacture of tobacco was rather a prosperous business, and there was a feeling that these duties ought to be altered so that manufactured tobacco and raw tobacco were put on the same level. At present the duty on manufactured tobacco was comparatively so much higher than the duty on raw tobacco that no manufactured tobacco of any sort or kind came into this country. They who believed in no duty on raw material and a duty on manufactured articles were not able to understand how the Government could consistently levy these taxes as they were now doing. It had no doubt added enormously to the prosperity of manufacturers in Bristol and other places, and it was a distinct preference against the importation of manufactured articles from other places. No doubt, when they advocated their principle of tariff reform they would bring up the fact of the prosperity of this industry, which showed dividends of twenty or thirty per cent. They would be able to illustrate their case by reference to the manufactured tobacco industry, and if the House did not accept the views of tariff reformers, at all events they should accept their own views and put raw tobacco and manufactured tobacco on an equality, so that there should be no preference or difference between them. He wanted to know why the duty was to be made permanent instead of temporary, and why the excise duties on beer and spirits, raised for war purposes, were to be for all time, instead of for the year, when they could be brought up for discussion again another year. He certainly felt called upon to express his surprise that the Resolution was in this form, instead of being annual—a plan which would enable those interested in the trades affected to have questions properly analysed and discussed, so that they might know where they were. He begged to move.


in seconding the Amendment, said the object of his hon. friend was to preserve the opportunity which had existed for the last thirty or forty years, probably longer, in that House, of discussing Resolutions with reference to these particular taxes. These taxes had been raised to the height at which they stood at the present moment because it was necessary to provide funds to carry on the war. They were war taxes, yet not a single farthing had been reduced since the war. It had always been hoped that when the finances of the country permitted, the taxes which were raised during the war would be reduced, if not to their former level, at any rate to a lower limit than that at which they now stood. The only reason that he could see why the Chancellor of the Exchequer sought to make these taxes permanent was either that he saw no hope that the revenue would increase —which did not bear out the statements which he had made in introducing the Budget—or else that he was determined that under no circumstances should these taxes ever be reduced, and therefore made them permanent in the hope that they would be lost sight of by the people who were paying them, and by Members of the House. He could see no reason why this course should be taken. If the taxes in their present form were just, if they were necessary to meet the requirements of the country, why should not the House of Commons have an opportunity of considering them on the Resolutions as it had done from time immemorial? He had little doubt that a great number of Chancellors of the Exchequer would like to have done this had they dared, but he did not believe his right hon. friend below him would have dared, because he would at once have been met by such a protest from the other side of the House. He had great pleasure in seconding the Amendment.

Amendment proposed— To leave out the words 'Parliament otherwise determine,' and insert the words 'the first day of July, nineteen hundred and eight.' "—(Mr. Harmood-Banner.)

Question proposed, "That the words proposed to be left out stand part of the said Resolution."


said the hon. Member opposite was perfectly entitled to raise this question, and he regretted that in compressing his speech, in consideration for the House, as much as he could, he omitted this particular point. No doubt he ought to have referred to it. But it was completely covered by the statement he made, that for the time being these war-taxes ought to be regarded as taxes of a permanent character. But the objection taken by the hon. baronet was a most extraordinary one. He seemed to think that there was something unconstitutional in having a tax for all time until Parliament otherwise inter- fered, and that the proper and normal course was to get taxation renewed annually by the Finance Act of the year. They could not have had a more remarkable illustration than the case now before them. These duties on tobacco, beer and spirits were small extra taxes which were imposed in the year 1900, and not from time immemorial. They were small additional duties put on for the purposes of the war, but the actual duties on beer, spirits and tobacco were permanent duties which never came under the review of Parliament. The right hon. Baronet seemed to think that they were committing a gross infraction of the Constitution in passing these heavy duties once for all, and because he made a change in assimilating these additions with the particular taxes to which they belonged and treating them as part of the general taxation.


said that was one of the great reasons why he objected, because these were duties which were imposed for the purposes of the war, and it was presumed that when the war was over they might be taken off. It was now proposed to make them permanent.


said that these small additional duties on beer, spirits, and tobacco, and on luxuries, were put on at the time of the war, and he did not think that they ought to be exposed to the necessity of every year renewing them for another year, which they did not do in the case of normal taxation, with two exceptions—the tea duty, on which there was a Resolution to enable the House to review the whole of the indirect taxation, and the income-tax Resolution, to enable the House to review the whole of our direct taxation. His proposition was that these small additions to the taxes should take their place as part of the permanent taxation. By taking that course they saved two clauses in the Finance Bill every year. He felt sure that his right hon. predecessor had been subjected to the same temptation as he had been, but that was the advantage, provided that no question of principle was involved. He was sure the ex-Chancellor of the Exchequer would have been very glad to have saved these two clauses, but he would certainly have been exposed to a good deal of opposition and a good deal of criticism from some of his supporters if he had selected these two taxes.


said the Chancellor of the Exchequer had correctly stated the constitutional position. It was necessary that the House should keep a sufficient control, and an annual control, over the taxation of the country, but all that had been required was that enough should be retained under the annual purview to make that annual purview effective. He had expressed his opinion upon this point when he was Financial Secretary to the Treasury, and his view was that that object was sufficiently secured by retaining the tea duty and income-tax as subjects for annual review. It was quite true that the change which the right hon. Gentleman now proposed indicated a confession, or a decision, on his part which had not been avowed by his predecessors. The Chancellor of the Exchequer had stated that he intended these duties and the sugar duty to be permanent, and they were to be enacted once for all without being brought under annual review by the House. The right hon. Gentleman had now stated that he saw no chance of giving any relief from these taxes. It did not necessarily follow that hon. Members need take the same view. As one who had been Chancellor of the Exchequer, and who had experienced the temptation to which the right hon. Gentleman had succumbed, he did not think his present attitude was unreasonable. He had himself expressed a desire for the simplification of their financial procedure, and he did not oppose the alteration which was now being made. He had been Chancellor of the Exchequer for two years when the Budget was treated in a most contentious spirit by the then Opposition, and every opportunity was taken to raise discussions in order to delay progress and extend the length of time occupied by his proposals. The Chancellor of the Exchequer had carried out certain small alterations which he would have been glad to have adopted, but he was prevented from doing so on account of the character of the opposition offered to his proposals. He was glad the Party opposite were now having greater regard for common sense, and were apparently willing to unsay what they said with so much vehemence only a couple of years ago.


said the right hon. Gentleman did not seem to appreciate the importance of the Amendment. In the year 1900 a special and extra tax was put on particular branches of industry, including the tobacco trade, and the spirit duties were also increased. Those engaged in the tobacco trade were prepared to put up with that extra burden as an emergency tax, simply because it was a temporary tax which would come before Parliament year by year. In that way those who objected to it were afforded an opportunity to oppose. He did not, however, intend to raise any objection to this form of taxation being continued, as he quite appreciated the argument which had been used by the Chancellor of the Exchequer. That, however, was not the point of the Amendment. The objection now taken was that they were making this tax into a permanent one instead of its remaining to be considered from year to year. Next year they might have no opportunity of discussing this proposal, or at any rate they would not have the same opportunity. He was aware that it could be raised upon a new clause, but that would be a hopeless way of discussing it. He thought this was a very important point, and the back benches on both sides of the House particularly ought carefully to consider the Amendment as being one which should commend itself to the common sense of the House generally.


protested against the assumption that this tax should be made permanent. It should not be overlooked that a particular trade was being severely and heavily penalised by the extra duty placed upon it for war purposes and for war purposes only. At the present time the tax was operating to the detriment of that trade, and it was proposed to continue the tax without further reference to the House each year. The question had been argued by the trade concerned, and their views had been several times placed before the present Chancellor of the Exchequer. The trade affected thought the present sugar tax pressed very unfairly upon them and upon those who held shares in the companies engaged in the trade. It had been shown that this trade already bore more than its fair share of the burden of taxation. He did not think the Amendment had been fully understood. The words now suggested were "until Parliament shall otherwise determine," and the reason the Amendment was brought forward was that the Chancellor of the Exchequer wished to make this tax a permanent charge. He thought there was good reason for the proposition which had been made, and he would certainly support the Amendment.


said he agreed with the view that this Resolution would undoubtedly have the effect of removing certain duties from the purview of the House. It was for the House to determine whether that was a wise proceeding or not. It might be most desirable from the Chancellor of the Exchequer's point of view that discussion should be limited, but that was not the opinion of the constituencies which sent Members to the House. They were sent there to control the financial business of the country, and if they passed this Resolution, they would put away from their yearly control certain important matters in connection with taxation. When hon. Members opposite were in Opposition they maintained that such questions should be argued as frequently as required. The position remained the same to-day.


The hon. Member is not addressing himself to the question before the House.


said he was endeavouring to show that indirect taxation such as the tea duty should not be removed from the purview of the House. In view of the extreme importance of the matter he asked the Chancellor of the Exchequer to reconsider its bearings. No doubt the right hon. Gentleman had a hard heart and a face of flint in this matter, but he would some day be in Opposition, when he would desire to review the Budget proposals of other Governments. Was it wise by passing this Resolution to shut the door and prevent the opportunity of criticising on all occasions the financial proposals which might come from Governments in the future? They had been threatened with the possibility of tariff duties enacted in the shape of Budget proposals. Were they to be told that those duties were to be relegated into an Act and so removed from the purview and discussion of the House? He appealed to the Chancellor of the Exchequer to yield to those considerations which were urged in a public interest.


said the hon. Member had largely exaggerated the dimensions of the question. There was no question and no possibility of removing the discussion of these things from the purview of the House by making the change now proposed. Next year the hon. Member would be able to discuss these matters first on the general discussion on the Budget Resolutions when everything was in order. He would not be able, it was true, to discuss them on Report, but he would be able to discuss them on the Second Reading, a third time when moving a clause in Committee, a fourth time on Report, and a fifth time on the Third Reading. He would have five distinct opportunities for discussing such matters, even after this revolutionary change had taken place. [An HON. MEMBER: Procedure] He was assuming that things remained as they were. He was more conservative than his hon. friend who interrupted. His hon. friend would have full opportunity of discussing the tariff duties which bulked so largely in his imagination.


said he fully accepted the right hon. Gentleman's assurance that they would be able to discuss all these matters four or five times, supposing that the Government did not bring in a now set of Rules. But it still remained true that even under that assumption they would be discussing these particular taxes as part of the permanent taxes of the country, or what the Chancellor of the Exchequer called the taxes existing for the time being. Under the existing state of affairs they could say, and in his opinion they ought to say, that these were additional taxes put on because of the war and were of an exceptional character because they were war taxes. But if the Amendment was not carried they might next year discuss these taxes four or five times, not as exceptional but as part of the permanent taxation. The case of himself and his friends was that taxes which might be quite appropriate in order to defray the charges of a war were not obviously the best taxes to be continued in time of peace. The Chancellor of the Exchequer the other day said that they must not only consider the taxes imposed in the duration of war, but also in the years that elapsed afterwards, during which they were paying off war debt. The right hon. Gentleman did not seem to have the courage of that opinion. According to his argument they ought to pay a 2s. income-tax. The war taxes had always been chosen in order to bring home to the people of the country the huge responsibility which they incurred when they went to war. They had been exceptional in their character and they ought not to be made permanent. They ought not to be told that they were as proper in time of peace as, he admitted, they were proper in time of war.

MR. LEIF JONES (Westmoreland, Appleby)

said he differed from the view expressed by hon. Gentlemen on the other side of the House. He could not imagine more appropriate taxes than those on spirits and tobacco, and he congratulated the Chancellor of the Exchequer on having made these war taxes a permanent part of the system of taxation. Ho looked to the right hon. Gentleman to say that the duties on drink, even at the present time, had not reached their normal proportion as compared with the period before the war. The amount raised from taxation of drink before the war was 28 per cent of the expenditure of the country.


The question before the House is whether this tax should be made a permanent part of our taxation or be renewed every year.


said he would leave that point. The point he specially wished to make was that there was still £150,000,000 of war debt unpaid, and so long as that remained it seemed to him that these taxes were properly part of taxation. If they were rightly put on at the time of the war, the position now required that they should be continued until the debt was paid off. Seeing that the taxes brought in £2,000,000 a year, about seventy-five years hence would be the time for their successors to consider the question of taking them off.

MR. T. L. CORBETT (Down, N.)

said the Chancellor of the Exchequer began his explanation with a bull. He said the tax was put on permanently for the time being. If he might reply with an Irish bull, he would say that he entirely agreed with the mover of the Amendment, that instead of the tax being permanent for the time being, it ought to be temporary for all time. He agreed with the hon. Member for the Camlachie division that the reason for this change on the part of the Chancellor of the Exchequer was that it was part of the larger policy of muzzling the House of Commons, stifling discussion in the House, absolutely ignoring, wherever possible, the will of the House, except when dictated by Nationalists or Labour Members. He appealed to the Chancellor of the Exchequer to remember that Irish Members had now a special interest in the question of tobacco. Only two days ago the Member for East Clare had introduced an Irish Tobacco Bill. He had the pleasure the other day of smoking an Irish cigarette given to him by the hon. Member, from which he suffered no evil effect. And indeed it had so soothing an influence on him that he could not help feeling that Irish grown tobacco might have far reaching political results. He would ask the Chancellor of the Exchequer to remember that this tobacco question might be—


That is not a proper matter for discussion now. This is a customs duty, not an excise duty.


said he was going to appeal to the Chancellor of the Exchequer not to make permanent a tax which might affect Irish tobacco in future.


said that they all knew, unfortunately, what had happened to the income-tax. It had been increased from 8d. to 1s. 2d., and was now at 1s., although many of them had been hoping that it would have been still further reduced this year. What had happened in regard to the income-tax would happen to the particular tax the House was now discussing if the Amendment of his hon. friend was not carried. They all knew that if an appearance of permanency was given to a tax it was difficult to reduce it afterwards. He joined most heartily in the appeal of his hon. friend that this tax should not be made permanent. The Chancellor of the Exchequer had said that the House had five distinct opportunities of discussing these taxes; but he did not see that it would make much difference if the House was allowed to discuss them a sixth time.


asked the Chancellor of the Exchequer if he would be good enough, when framing his next year's Budget, to bear in mind the promise which the Secretary to the Treasury gave to the Standing Committee on the Irish Tobacco Bill, that arrangements would be made for dealing with the future growth of tobacco

in Ireland, so as to make that measure operative.


having stated that the question of Irish tobacco was a matter of excise and not germane to this resolution,


said that the hon. Gentleman might be quite sure that he would not forget the assurances given by his hon. friend the Secretary to the Treasury.


said that that met his point, and he was much obliged to the right hon. Gentleman.

Question put.

The House divided: —Ayes, 257; Noes, 122. (Division List No. 153.)

Abraham, William (Rhondda) Churchill, Winston Spencer Glover, Thomas
Adkins, W. Ryland D. Clarke, C. Goddard (Peckham) Gooch, George Peabody
Agnew, George William Cleland J. W. Greenwood, G. (Peterborough)
Ainsworth, John Stirling Clough, William Greenwood, Hamar (York)
Asquith, Rt. Hn. Herbert Henry Clynes, J. R. Grey, Rt. Hon. Sir Edward
Astbury, John Meir Coats, Sir D. Glen(Renfrew, W.) Griffith, Ellis J.
Baker, Sir John (Portsmouth) Cobbold, Felix Thornley Gurdon, Sir W. Brampton
Baker, Joseph A.(Finsbury, E.) Corbett, A. Cameron (Glasgow) Haldane, Rt. Hon. Richard B.
Baring, Godfrey (Isle of Wight) Corbett, C. H.(Sussex, E Grinst'd Harcourt, Rt. Hon. Lewis
Barlow, John Emmott(Somerset Cornwall, Sir Edwin A. Hardy, George A. (Suffolk)
Barlow, Percy (Bedford) Cory, Clifford John Harwood, George
Barnes, G. N. Cotton, Sir H. J. S. Haworth, Arthur A.
Barran, Rowland Hirst Cowan, W. H. Hazel, Dr. A. E.
Barry, Redmond J.(Tyrone, N.) Cox, Harold Hedges, A. Paget
Beale, W. P. Craig, Herbert J. (Tynemouth) Helme, Norval Watson
Beauchamp, E. Cremer, William Randal Henderson, Arthur (Durham)
Beck, A. Cecil Crombie, John William Henderson, J. M.(Aberdeen, W.)
Bell, Richard Crooks. William Henry, Charles S.
Benn. Sir J. Williams(Devonp'rt Crossley, William J. Higham, John Sharp
Bertram, Julius Davies, Timothy (Fulham) Hobhouse, Charles E. H.
Bethell, Sir J.H.(Essex, Romf'rd Dewar, Arthur (Edinburgh, S.) Hodge, John
Billson, Alfred Dickinson, W. H.(St. Pancras, N. Holden, E. Hopkinson
Birrell, Rt. Hon. Augustine Dickson-Poynder, Sir John P. Holt, Richard Durning
Boulton, A. C. F. Duckworth, James Hope, W. Bateman(Somerset, N.
Brace, William Duncan, C.(Barrow-in-Furness Horridge, Thomas Gardner
Brigg, John Dunne, Major E. Martin(Walsall) Howard, Hon. Geoffrey
Brocklehurst, W. B. Edwards. Frank (Radnor) Hudson Walter
Brooke. Stopford Elibank, Master of Hyde, Clarendon
Brunner, J. F. L. (Lanes., Leigh) Erskine, David C. Idris, T. H. W.
Brunner Rt. Hn. Sir. J. T.(Chesh. Essex, R. W. Illingworth, Percy H.
Bryce, J. Annan Esslemont, George Birnie Isaacs, Rufus Daniel
Buckmaster, Stanley O. Evans, Samuel T. Jackson, R. S.
Burns, Rt. Hon. John Everett, R. Lacey Jacoby, Sir James Alfred
Burt, Rt. Hon. Thomas Faber, G. H. (Boston) Jenkins, J.
Buxton, Rt. Hn. Sydney Charles Fenwick, Charles Johnson, John (Gateshead)
Byles, William Pollard Ferens, T. R. Jones, Leif (Appleby)
Cairns, Thomas Findlay, Alexander Jones, William(Carnarvonshire
Campbell-Bannerman, Sir H. Fowler, Rt. Hon. Sir Henry Kearley, Hudson E.
Carr-Gomm, H. W. Fuller, John Michael F. Kekewich, Sir George
Causton, Rt. Hn Richard Knight Fullerton, Hugh Kelley, George D.
Cawley, Sir Frederick Gardner, Col. Alan (Hereford, S. King, Alfred John (Knutsford)
Chance, Frederick William Gill, A. H. Laidlaw, Robert
Cheetham, John Frederick Gladstone, Rt. Hn. Herbert John Lamb, Edmund G.(Leominster
Cherry, Rt. Hon. R. R. Glendinning, R. G. Lamb, Ernest H. (Rochester)
Lambert, George Pickersgill, Edward Hare Stuart, James (Sunderland)
Lamont, Norman Pirie, Duncan V. Taylor, Austin (East Toxteth)
Layland-Barratt, Francis Price, C. E. (Edinb'gh Central) Taylor, John W. (Durham)
Lea, Hugh Cecil (St. Pancras E.) Price, Robert John(Norfolk, E.) Taylor, Theodore C. (Radcliffe)
Lever, W. H. (Cheshire, Wirral) Pullar, Sir Robert Tennant, H. J. (Berwickshire)
Levy, Maurice Radford, G. H. Thomas, Abel (Carmarthen. E.)
Lewis, John Herbert Rainy, A. Rolland Thomasson, Franklin
Lloyd-George, Rt. Hon. David Rendall, Athelstan Thompson, J.W. H.(Somerset, E
Lough, Thomas Richards, Thomas(W. Monm'th Tomkinson, James
Lyell, Charles Henry Richards, T.F. (Wolverh'mpt'n Torrance, Sir A. M.
Lynch, H. B. Ridsdale, E. A. Ure, Alexander
Macdonald, J. R. (Leicester) Roberts, Charles H. (Lincoln) Verney, F. W.
Macdonald, J.M.(Falkirk B'ghs Robertson, Rt. Hn. E. (Dundee Vivian, Henry
Mackamess, Frederic C. Robinson, S. Walker. H. De R. (Leicester)
Macnamara, Dr. Thomas J. Robson, Sir William Snowdon Walsh, Stephen
MacVeagh, Jeremiah(Down, S.) Rogers, F. E. Newman Walters, John Tudor
M'Crae, George Rowlands, J. Walton, Joseph (Barnsley)
M'Kenna, Rt. Hon. Reginald Runciman, Walter Ward, John(Stoke-upon-Trent)
M'Laren, H. D. (Stafford, W.) Rutherford, V. H. (Brentford) Wardle, George J.
M'Micking, Major G. Samuel, Herbert L. (Cleveland Waring, Walter
Mallet, Charles E. Scarisbrick, T. T. L. Warner, Thomas Courtenay T.
Mansfield, H. Rendall(Lincoln) Schwann. Sir C.E.(Manchester) Wason, Eugene (Clackmannan)
Markham, Arthur Basil Scott, A.H.(Ashton-under-Lyne Wason, John Cathcart(Orkney)
Mason, A. E. W. (Coventry) Sears, J. E. Waterlow, D. S.
Masterman, C. F. G. Seaverns, J. H. Watt, Henry A.
Menzies, Walter Seddon, J. Whitbread, Howard
Micklem, Nathaniel Seely, Major J. B. White, J. D.(Dumbartonshire)
Montagu, E. S. Shackleton, David James White, Luke (York, E. R.)
Montgomery, H. G. Shaw, Charles Edw. (Stafford) Whitehead, Rowland
Morgan, J. Lloyd (Carmarthen Shaw, Rt. Hon. T. (Hawick B. Whitley, John Henry(Halifax)
Morley, Rt. Hon. John Shipman, Dr. John G. Whittaker. Sir Thomas Palmer
Morse, L. L. Simon, John Allsebrook Wiles. Thomas
Morton, Alpheus Cleophas Sinclair, Rt. Hon. John Wilkie, Alexander
Myer, Horatio Smeaton, Donald Mackenzie Williams Llewelyn(Carmarth'n
Napier, T. B. Snowden, P. Wilson, J. H. (Middlesbrough)
Nicholls, George Soarnes, Arthur Wellesley Wilson, J.W.(Worcestersh, N.)
Norton, Capt. Cecil William Stanger, H. Y. Wilson, P. W. (St. Pancras, S.)
Nuttall, Harry Stanley, Hn. A. Lyulph(Chesh.) Wilson, W. T. (Westhoughton)
O'Donnell, C. J. (Walworth) Steadman, W. C. Wood, T. M'Kinnon
O'Grady, J. Stewart, Halley (Greenock)
Parker, James (Halifax) Strachey, Sir Edward TELLERS FOR THE AYES—Mr.
Partington, Oswald Straus, B. S. (Mile End) Whiteley and Mr. J. A.
Philipps, Owen C. (Pembroke) Strauss, E. A. (Abingdon) Pease.
Abraham, William(Cork N. E.) Clark, George Smith(Belfast, N. Hamilton, Marquess of
Acland-Hood Rt. Hn. Sir Alex F. Collings, Rt. Hn. J. (Birmingh'm Hayden, John Patrick
Ambrose, Robert Condon, Thomas Joseph Helmsley, Viscount
Anson, Sir William Reynell Corbett, T. L. (Down, North) Hervey, F. W. F. (Bury S. Edm'ds
Ashley, W. W. Courthope, G. Loyd Hill, Sir Clement (Shrewsbury)
Aubrey-Fletcher. Rt. Hn. Sir H. Craig. Charles Curtis (Antrim, S.) Hogan, Michael
Balcarres, Lord Craig, Captain James(Down, E.) Houston, Robert Paterson
Baldwin, Alfred Crean, Eugene Hunt, Rowland
Balfour, Capt. C. B. (Hornsey) Cross, Alexander Joyce, Michael
Banbury, Sir Frederick George Delany, William Kennaway, Rt. Hon. Sir John H.
Baring, Capt. Hn. G. (Winchester Devlin, Joseph Kennedy, Vincent Paul
Barnard, E. B. Dillon, John Kettle. Thomas Michael
Barry, E. (Cork, S.) Dixon-Hartland, Sir Fred Dixon Lambton, Hon. Frederick Wm.
Beach, Hn. Michael Hugh Hicks Donelan, Captain A. Lane-Fox, G. R.
Beckett, Hon. Gervase Doughty, Sir George Law, Andrew Bonar (Dulwich)
Bignold, Sir Arthur Douglas Rt. Hon. A. Akers- Lonsdale, John Brownlee
Blake, Edward Duffy, William J. Lowe, Sir Francis William
Boland, John Faber, George Denison (York) Lundon, W.
Bowerman, C. W. Fardell, Sir T. George MacVeigh, Charles(Donegal, E.)
Bridgeman, W. Clive Fell, Arthur M'Calmont, Colonel James
Bull, Sir William James Flavin, Michael Joseph M'Hugh, Patrick A.
Burke, E. Haviland- Flynn, James Christopher M'Kean, John
Cave, George Forster, Henry William M'Killop, W.
Cavendish. Rt. Hon. Victor C. W. Gardner, Ernest (Berks, East Mason, James F. (Windsor)
Cecil, Evelyn (Aston Manor) Ginnell, L. Meagher, Michael
Cecil, Lord John P. Joicey- Haddock, George R. Mildmay, Francis Bingham
Cecil, Lord R. (Marylebone, E.) Halpin, J. Mooney, J. J.
Murphy, John Ratcliff, Major R. F. Talbot, Lord E. (Chichester)
Nolan, Joseph Rawlinson, John Frederick Peel Thomson, W. Mitchell-(Lanark)
0'Brien, Kendal(Tipperary Mid Reddy, M. Thorne, William
O'Brien, Patrick (Kilkenny) Redmond, John E. (Waterford Valentia, Viscount
O'Connor, John (Kildare, N.) Redmond, William (Clare) Vincent, Col. Sir C. E. Howard
O'Connor, T. P. (Liverpool) Roberts, S. (Sheffield, Ecclesall) Walker, Col. W. H. (Lancashire)
O'Donnell, T. (Kerry, W.) Roche, John (Galway, East) Walrond, Hon. Lionel
O'Dowd, John Rothschild, Hon. Lionel Walter White, Patrick (Meath, North)
O'Hare, Patrick Salter, Arthur Clavell Wyndham, Rt. Hon. George
O'Malley, William Sassoon, Sir Edward Albert Young, Samuel
O'Mara, James Sheehy, David Younger, George
O'Neill, Hon. Robert. Torrens Smith, F. E. (Liverpool, Walton)
O'Shaughnessy, P. J. Starkey, John R. TELLERS FOR THENOES—Mr.
Parker. Sir Gilbert(Gravesend) Staveley-Hill, Henry (Staff'sh.) Harmood-Banner and Colonel Lockwood.
Power, Patrick Joseph Stone, Sir Benjamin

Sixth Resolution read a second time.


moved that the words "until Parliament otherwise determine" be omitted in order to insert "until the 4th of July. "He said his object was to draw the attention of the House to the peculiarity of the duty on spirit. The same charge was levied per gallon upon new spirit as upon old, and the amount of the duty depended upon the amount of alcohol present in the spirit per gallon. There was a considerable difference, which was acknowledged, in the spirit, some being fiery and some not. He was quite aware of the medical point of view about mild and matured spirit, but of course the Chancellor of the Exchequer wanted to get all the funds he could from this tax upon whiskey, although, inconsistently enough, the House of Commons was in favour of the reduction of the evils of intoxication.


ruled the hon. Member out of order on the ground that his remarks did not come within the purview of the Resolution.


called attention to the question of the stamp duty upon hire purchase agreements. No doubt the system was capable of many abuses. The right hon. Gentleman the Chancellor of the Exchequer himself had said that these agreements led to a great many abuses.


said the point was a technical one. The truth was that these hire purchase agreements in regard to chattels took various forms, and the question of what stamp they should bear had given rise to great diversity of opinion on that practice. There were three possible categories into which they might fall. The first was that of an agreement relating to the sale of goods, which was exempt from the stamp duty altogether. In the second place, the duty might be treated and had been treated as that upon a deed or covenant, under which it was liable to a high rate of duty; and then it might be treated as an ordinary agreement, which was liable to a sixpenny stamp. What the Government proposed was to establish uniformity of practice, and to have one uniform sixpenny stamp.


said that he understood that under this amendment of the law a hire purchase agreement up to £500 was to be treated as an ordinary agreement.


That is so.


said that in that case he had no objection, as he understood that there was to be no attempt to overrule the law, and no ad valorem duty.

MR. STANLEY WILSON (Yorkshire, E. R., Holderness)

inquired if the change would have any effect upon the revenue.


I cannot say whether it will or will not. It may have, but at any rate it will be very slight.

* MR. COURTHOPE (Sussex, Rye)

asked for some explanation.


thought it would perhaps save time if he volunteered an explanation as far as he was able to give it. The Question arose under Section 21 of the Finance Act of 1896, and in order to understand the situation created by that section, he would remind the House that before Sir William Harcourt's Finance Act of 1894, Mr. Goschen, when he was Chancellor of the Exchequer, by the Finance Act of 1888 increased the succession duties by certain percentages. In 1889, the right hon. Gentleman went a step farther and proposed a further estate duty, the object of which was subsequently carried out by the Act of 1894.These proposals were carried out effectively by the Act of 1894, but the Act of 1896 made them permanent, and prevented overlapping of the two sets of duties. It provided that Goschen's enhancement should not be levied in addition to the Harcourt enhancement. The whole object was that the value should be taken at the present value of the estate.


thanked the right hon. Gentleman for his explanation, which, however, did not cover the point that he wished to raise. So far as he could gather from reading the Act of 1896, the result was that where a man had died setting up a trust by his will, the duty which was paid or payable on his death on the amount of his property which was the subject of that trust was to be deducted from the amount which was paid on the death of the cestui que trust.


said that must be so, because that applied to deaths which took place prior to 1904.


said he took it that under the Finance Act of 1896 the amount deducted was the actual sum paid or payable on the death of the testator. The proposal now before the House would, however, do away with that, and would enact that the amount deducted should be the amount that would have been paid or payable if the assessment had taken place at the time of the second death and not at the time of the first.


At the time when the estate duty becomes payable — yes.


asked whether that might not lead to great hardships.


said it might in some cases, but on the balance of cases he did not think it would. Where one man would lose another man would gain, and it was an advantage to have a fixed date. In this case there would be the very great advantage of knowing exactly what was the date.


said the right hon. Gentleman would admit that there was no doubt as to the amount which was paid or payable on the death of the testator, but now quite a different sum might be deducted on the death of the cestui que trust. In some cases that would lead to great injustice, and he hardly thought it was possible to justify one person receiving less than he ought, or, to put it the other way, paying more than he ought because another man paid less than he ought.


pointed out that the capital value in respect to which they had to make a deduction was a capital value which need not have been valued at the death of the testator, and was therefore speculative. The duty was therefore speculative. They would now know definitely what duty was payable.


said that the amount was not hypothetical, because it was the amount either paid or payable. It must therefore have been assessed at the time of the first death. He still failed to appreciate the right hon. Gentlemen's contention, but the matter was really so technical that he would not discuss it further with him today.


We will discuss it again in Committee.


moved to omit the words "for the current financial year." It was this permanent annual charge that constituted the new sinking fund, and it was fixed with the object of using the balance that remained after paying the interest on the permanent charge for the reduction of the National Debt. It was fixed at a permanent sum in order that any Chancellor of the Exchequer should not be tempted to take away from that amount in times of prosperity anything which might properly go to the reduction of debt. It was true that the amount was changed at the South African War and that a portion of that which ought to have been devoted to the reduction of debt was used for the purposes of the war. But as soon as the war was over the amount was again altered, and the permanent debt charge of £28,000,000 was reinstated. The Chancellor of the Exchequer proposed to increase the charge by £1,500,000. But the advantage of this increase would be lost unless the words to which he had drawn attention- were left out, because unless those words were omitted the Resolution did not make the permanent charge for the service of the Debt £29,500,000; it only made the amount £29,500,000 for this year, and next year they might go back to £28,000,000. That was not the desire of the bulk of the Party opposite. Their object had always been that the permanent burden of debt should be reduced. The right hon. Gentleman himself had said that the war had added £138,000,000 to the Debt, and that that ought to be reduced as soon as possible; and one hon. Gentleman opposite had said that even if taxes had to be imposed for seventy-five years they ought to be imposed until the Debt was reduced. To a certain extent he agreed. He did not contend that they should lay down a hard and fast rule that till that £138,000,000 was paid they should not reduce the sum put aside for the reduction of permanent Debt, but he did say that in times of prosperity the sum put aside might reasonably be increased. The right hon. Gentleman had increased it by £1,500,000, and when that was first known in the city there was a natural feeling that it was going to do something towards the reduction of Debt. But when it was found it was only for a year it became apparent that it was not really an increase that would have any effect on the reduction of debt during the next five or six years. He claimed the support of all hon. Gentlemen on the Ministerial side of the House who had pledged themselves to take steps to rehabilitate the credit of the country. He begged to move.


said he seconded the Amendment for the reason that on the face of the Resolution it appeared to be a permanent annual charge, and to have a "permanent annual charge" for only one year appeared to him to be an anomaly. He objected as strongly as his hon. friend below him to turning this permanent charge into an annual one, because there was no meaning in having a sinking fund of such gigantic magnitude to reduce the indebtedness of the nation if they were called upon to consider whether it should be added to by half a million or a quarter of a million, as the case might be, thus leaving them perpetually in doubt what the permanent annual charge for the Debt was to be. The country should know what the financial ideas of the Treasury really were at all times while the Government was in power; and he thought the House would appreciate very much the right hon. Gentleman's giving an explanation of what was intended on this particular occasion, because this £l,500,000 might be added this year only, and next year be taken away for some other purpose. The right hon. Gentleman should enlighten them as to his reason for putting in the words "for the current financial year." Did it mean that he had ear-marked this £1,500,000 for some definite purpose next year? The House would-be very grateful if he would make some statement as to whether the sum was to be the foundation of a scheme of old-age pensions. It would be a very small foundation. Instead of having to open and reopen this question annually, the Government should make a definite statement of what their intentions were, and in that way relieve any anxiety the House and the country might feel concerning the chopping and changing which he was sorry this suggestion was going to introduce into the permanent annual charges of the country. There was no sounder basis for finance than a settled policy. If this was to be a settled policy, he was sure the right hon. Gentleman would have no objection to accepting his hon. friend's Amendment; if it was not to be a settled policy, at all events the right hon. Gentleman would be able to throw some light on what appeared to be a not very satisfactory innovation.

Amendment proposed — To leave out the words 'for the current financial year'" —(Sir F, Banbury.)

Question proposed, "That the words proposed to be left out stand part of the said Resolution."


said the hon. Gentleman who had just sat down had not done him the honour to listen to or read his Budget speech, which gave explicitly the whole of the information for which he now asked.


said he had read every word of the speech, but he did not think this point had been made as clear as it might have been.


said that at any rate what he stated then and what he stated now was that this £1,500,000 was to be used for the purpose of the new sinking fund, and he explained the ground on which he asked the House to assent to that course, and he also explained what his intentions were with regard to it. The phraseology of this particular clause was, he confessed, open to a certain amount of criticism on the ground of grammar, or at any rate of style. "Permanent annual charge for the current year," seemed rather an incongruous juxtaposition of phrases. The words "permanent annual charge" were taken from the Act of 1875, and the phrase had been used ever since the Customs Acts and Revenue Acts to describe in a compendious way the sum that in any year was set aside for the purposes of interest, management, and new sinking fund. It meant that the sum referred to in the Act of 1875 should, from this year, be the sum of £1,500,000. He hoped that, with this explanation, it would be seen that, having regard to the Act, he could not put it in a different form.

Question put.

The House divided: —Ayes, 291; Noes, 57. (Division List No. 154.)

Abraham, William(Cork, N. E.) Bell, Richard Burns, Rt. Hon. John
Abraham, William (Rhondda) Bellairs, Carlyon Burt, Rt. Hon. Thomas
Adkins, W. Ryland D. Belloc, Hilaire Joseph Peter R. Buxton. Rt. Hn. Sydney Charles)
Agnew, George William Benn, Sir J. Williams(Devonp'rt Byles, William Pollard
Ainsworth, John Stirling Berridge, T. H. D. Cairns, Thomas
Ambrose, Robert Bertram, Julius Causton, Rt. Hn. Richard Knight
Asquith, Rt. Hn. Herbert Henry Bethell, Sir J H(Essex. Romf'rd Cawley, Sir Frederick
Astbury, John Meir Bethell, T. R. (Essex. Maldon) Chance, Frederick William
Baker, Sir John (Portsmouth) Billson, Alfred Cheetham, John Frederick
Baring, Godfrey (Isle of Wight) Blake, Edward Cherry, Rt. Hon. R. R.
Barlow, John Emmott(Somerset Boland, John Clarke, C. Goddard (Peckham)
Barlow, Percy (Bedford) Brace, William Cleland, J. W.
Barnard, E. B. Brigg, John Clough, William
Burnes, G. N. Brocklehurst, W. B. Clynes, J. R.
Barran, Rowland Hirst Brooke, Stopford Coats, Sir T. Glen(Renfrew, W.)
Barry, E. (Cork, S.) Brunner, J. F. L. (Lancs., Leigh) Cobbold, Felix Thornley
Barry. Redmond J.(Tyrone, N.) Brunner, Rt Hn Sir J. T(Cheshire Collins, Sir Wm. J(S. Pancras, W.
Beale, W. P. Bryce, J. Annan Condon, Thomas Joseph
Beauchamp, E. Buckmaster, Stanley O. Corbett, C H(Sussex, E. Grinst'd
Beck, A. Cecil Burke, E. Haviland- Cornwall, Sir Edwin A.
Cotton, Sir H. J. S. Jones, Leif (Appleby) Power, Patrick Joseph
Craig, Herbert J.(Tynemouth) Jones, William (Carnarvonshire Price, C. E. (Edinb'gh, Central)
Crean, Eugene Joyce, Michael Pullar, Sir Robert
Cremer, William Randal Kearley, Hudson E. Radford, G. H.
Crombie, John William Kekewich, Sir George Rainy, A. Rolland
Crooks, William Kelley, George D. Reddy, M.
Crossley, William J. Kennedy, Vincent Paul Redmond, John E.(Waterford)
Davies, David (MontgomeryCo. Kettle, Thomas Michael Redmond, William (Clare)
Davies, Timothy (Fulham) Laidlaw, Robert Rees, J. D.
Delany, William Lamb, Edmund G.(Leominster Rendall, Athelstan
Dillon, John Lamb, Ernest H. (Rochester) Richards, Thomas (W. Monm'th
Donelan, Captain A. Lambert, George Richards, T. F. (WoIverh'mpt'n
Duckworth, James Lamont, Norman Ridsdale, E. A.
Duffy, William J. Law, Hugh A. (Donegal, W.) Roberts, Charles H. (Lincoln)
Duncan, C.(Barrow-in-Furness Lea, HughCecil (St. Pancras, E. Robertson, Rt. Hn. E.(Dundee)
Edwards, Clement (Denbigh) Lever, A. Levy (Essex, Harwich Robinson, S.
Elibank, Master of Lever, W. H (Cheshire, Wirral) Robson, Sir William Snowdon
Erskine, David C Levy, Maurice Roche, John (Galway, East)
Essex, R. W. Lewis, John Herbert Rogers, F. E. Newman
Esslemont, George Birnie Lloyd-George, Rt. Hon. David Rowlands, J.
Evans, Samuel T. Lough, Thomas Runciman, Walter
Everett, R. Lacey Lundon, W. Rutherford, V. H.(Brentford)
Faber, G. H. (Boston) Lupton, Arnold Samuel, Herbert L.(Cleveland)
Fenwick, Charles Lyell, Charles Henry Samuel, S. M. (Whitechapel)
Ferens, T. R. Lynch, H. B. Scarisbrick, T. T. L.
Findlay, Alexander Macdonald, J. R. (Leicester) Schwann, C. Duncan (Hyde)
Flavin, Michael Joseph Macdonald, J. M (Falkirk Bg'hs Scott, A. H.(Ashton underLyne
Flynn, James Christopher Macnamara, Dr. Thomas J. Sears, J. E.
Fuller, John Michael F. MacVeagh, Jeremiah (Down, S. Seaverns, J. H.
Fullerton, Hugh MacVeigh, Charles (Donegal, E. Seddon, J.
Gardner, Col. Alan (Hereford, S. M'Crae, George Seely, Major J. B.
Gill, A. H. M'Hugh, Patrick A. Shackleton, David James
Ginnell, L. M'Kean, John Shaw, Charles Edw. (Stafford)
Gladstone, Rt Hn. Herbert John M'Killop, W. Shaw, Rt. Hon. T.(Hawick B.)
Glendinning, R. G. M'Micking, Major G. Sheehy, David
Glover, Thomas Mallet, Charles E. Shipman, Dr. John G.
Gooch, George Peabody Mansfield, H. Rendall(Lincoln) Simon, John Allsebrook
Greenwood, Hamar(York) Markham, Arthur Basil Sinclair, Rt. Hon. John
Grey, Rt. Hon. Sir Edward Masterman, C. F. G. Smeaton, Donald Mackenzie
Gulland, John W. Meagher, Michael Snowden, P.
Gurdon, Sir W. Brampton Menzies, Walter Stanger, H. Y.
Haldane, Rt. Hon. Richard B. Micklem. Nathaniel Stanley, Hn. A. Lyulph (Chesh.)
Halpin, J. Montagu, E. S. Steadman, W. C.
Harcourt, Rt. Hon. Lewis Montgomery, H. G. Stewart, Halley (Greenock)
Hardy, George A. (Suffolk) Mooney, J. J. Strachey, Sir Edward
Harwood, George Morley, Rt. Hon. John Straus, B. S. (Mile End)
Haworth, Arthur A. Morse, L. L. Strauss, E. A. (Abingdon)
Hayden, John Patrick Morton, Alpheus Cleophas Stuart, James (Sunderland)
Hazel, Dr. A. E. Murphy, John Taylor John W. (Durham)
Hazleton, Richard Myer, Horatio Taylor, Theodore C.(Radcliffe)
Hedges, A. Paget Napier, T. B. Tennant, H. J. (Berwickshire)
Helme, Norval Watson Newnes, F. (Notts, Bassetlaw) Thomas, AbeI (Carmarthen, E.)
Hemmerde, Edward George Nicholls, George Thomasson, Franklin
Henderson, Arthur (Durham) Nolan. Joseph Thompson J. W. H (Somerset, E
Henderson, J. M. (Aberdeen, W.) Norton, Capt. Cecil William Thorne, William
Higham, John Sharp Nuttall, Harry Tillett, Louis John
Hobhouse, Charles E. H. 0'Brien, Kendal (Tipperary Mid Torrance, Sir A. M.
Hodge, John O'Brien, Patrick (Kilkenny) Ure, Alexander
Hogan, Michael O'Connor, John (Kildare, N.) Vivian, Henry
Holden, E. Hopkinson O'Connor, T. P. (Liverpool) Walsh, Stephen
Holt, Richard Durning O'Donnell, C. J. (Walworth) Walters, John Tudor
Hooper, A. G. O'Donnell, T. (Kerry, W.) Walton, Joseph (Barnsley)
Hope, W. Bateman (Somers't N. O'Dowd, John Ward, John(Stoke upon Trent)
Horridge, Thomas Gardner O'Grady, J. Ward, W. Dudley (Southampt'n
Howard, Hon. Geoffrey O'Hare, Patrick Wardle, George J.
Hudson, Walter O'Malley, William Warner, Thomas Courtenay T.
Hyde, Clarendon O'Shaughnessy, P. J. Wason, Eugene (Clackmannan
Idris, T. H. W. Parker, James (Halifax) Wason, John Cathcart (Orkney)
Jackson, R. S. Partington, Oswald Waterlow, D. S.
Jacoby, Sir James Alfred Perks, Robert William Watt, Henry A.
Jenkins, J. Pickersgill, Edward Hare Wedgwood, Josiah C.
Johnson, John (Gateshead) Pirie, Duncan V. Weir, James Galloway
Whitbread, Howard Whittaker, Sir Thomas Palmer Wilson, W. T. (Westhoughton)
White, J. D. (Dumbartonshire) Wiles, Thomas Wood, T. M'Kinnon
White, Luke (York, E. R.) Wilkie, Alexander Young, Samuel
White, Patrick (Meath, North) Williams, Llewelyn(Carmarth'n
Whitehead, Rowland Wilson, J. H. (Middlesbrough) TELLERS FOR THE AYES.—Mr.
Whitley, John Henry (Halifax) Wilson, P. W. (St. Pancras, S.) Whiteley and Mr. J. A.
Acland-Hood, Rt Hn. Sir Alex. F. Corbett, A. Cameron (Glasgow) Lyttelton, Rt. Hon. Alfred
Anson, Sir William Reynell Courthope, G. Loyd M'Calmont, Colonel James
Anstruther-Gray, Major Craig, Charles Curtis(Antrim S. Mason, James F. (Windsor)
Ashley, W. W. Craig, Sir Henry Moore, William
Balcarres, Lord Cross, Alexander Rawlinson, John Frederick Peel
Baldwin, Alfred Faber, George Denison (York) Salter, Arthur Clavell
Banner, John S. Harmood- Fardell, Sir T. George Sloan, Thomas Henry
Barrie, H.T.(Londonderry, N.) Fell, Arthur Stone, Sir Benjamin
Beach, Hn Michael Hugh Hicks Forster, Henry William Talbot, Lord E. (Chichester)
Beckett. Hon. Gervase Gardner, Ernest (Berks, East) Thomson, W. Mitchell-(Lanark)
Bignold, Sir Arthur Haddock, George R. Valentia, Viscount
Bridgeman, W. Clive Hamilton, Marquess of Walker, Col. W. H (Lancashire)
Bull, Sir William James Harrison-Broadley, H. B. Walrond, Hon. Lionel
Carsob, Rt. Hon. Sir Edw. H. Hervey, F.W.F.(Bury S Edm'ds Wolff, Gustav Wilhelm
Cave, George Hill, Sir Clement (Shrewsbury) Younger, George
Cavendish, Rt. Hn. Victor C W. Houston, Robert Paterson
Cecil, Evelyn (Aston Manor) Lane-Fox, G. R. TELLERS FOR THE NOES—
Cecil, Lord R. (Marylebone, E.) Law, Andrew Bonar (Dulwich Sir Frederick Banbury and
Chamberlain, Rt Hn. J. A.(Wore. Lockwood, Rt Hn. Lt.-Col. A. R. Captain Craig.
Clark, George Smith(Belfast, N.) Lonsdale, John Brownlee
Collings, Rt. Hn. J.(Birmingh'm Lowe, Sir Francis William

Motion made, and Question, "That further Consideration of the said Resolution be now adjourned." — (Mr. Whitely)— put, and agreed to.


suggested that at 8.15 they should suspend further proceedings on the Budget Resolutions as far as tonight was concerned, on the understanding that they should take them as the first Order next Wednesday, when he hoped that an hour—he meant a reasonably elastic hour—would be sufficient to dispose of them. The Government proposed to adopt that course. He included, of course, the local taxation Resolution.


said the Opposition would be glad to accept his proposal. He wished to point out, however, that the local taxation Resolution was not put down for to-night, and it was not, therefore, part of the business that could have been proceeded with after eleven o'clock. Although he did not think that proposal would require any prolonged discussion, he knew that one or two hon. Members desired to elicit some further information. He hoped, therefore, that local taxation would not be included within the elastic hour.


said the local taxation Resolution was so generally accepted that there would be no disposition to discuss it at length at this stage. They would, of course, be able to discuss it in the Bill. He would, however, put it down for Wednesday and allow another half hour.


said the right hon. Gentleman had met them in a friendly spirit and he would do his best to co-operate with him in that respect.