FINANCE BILL.

HC Deb 14 July 1908 vol 192 cc626-758

Considered in Committee.

(In the Committee.)

[Mr. EMMOTT (Oldham) in the Chair.]

Clause 1:

MR. KETTLE (Tyrone, E.)

said that he moved to omit the words "or Ireland" because he wished for an opportunity of obtaining relief of a special and preferential character in Ireland. He was sorry that in order to justify his Amendment he would have to draw attention to the existence of the Act of Union, or the Act commonly called by that name. It was a document very little read, and less respected, and whilst they on those benches abused it in argument, its supporters had abused it in practice, and he was prepared to stake his eye that not more than a couple of his Unionist friends representing North East Ulster and other backwood districts of Ireland had ever read a single line of the Act of Union. He would ask the Chancellor of the Exchequer, who was, if he might say so, a fundamentally honest man, in small matters, whether, when he accepted the responsibility for the Finance Bill, he consulted the Act of Union. He would remind the right hon. Gentleman that he was Chancellor of the Exchequer not only for Great Britain but also for Ireland, that his appointment was gazetted not only in the London Gazette, but in the Dublin Gazette, and that in the latter he was called the Chancellor of the Exchequer for Ireland, and, therefore, he should hold an equal hand between the two parties to this bargain. The portion of the Act of Union to which he wished to refer was the bargain which stood on the Statute-book at the end of Section 8, article 7, viz:— And if it shall appear to the Parliament of the United Kingdom that the respective circumstances of the two countries will thenceforward admit of their contributing indiscriminately, by equal taxes imposed on the same articles in cash, to the future expenditure of the United Kingdom, it shall be competent to the Parliament of the United Kingdom to declare that all future expense thenceforth to be incurred, together with the interest and charges on all joint debts contracted previous to such declaration, shall be so defrayed indiscriminately by equal taxes imposed on the same articles in each country, and thenceforth from time to time, as circumstances may require, to impose and apply such taxes accordingly, subject only to such exemptions or abatements in Ireland, and in that part of Great Britain called Scotland, as circumstances may appear from time to time to demand. A portion of that Article had been put into practice and a more important part of it had never been put into practice; and if they bad either a Constitution or a Court of Constitutional Law which stood above this House he was certain that there was not a single Finance Bill which had been passed by the House since the Act of Union that would not have been declared to be null and void in its Irish clauses, and very likely some Irish Chancellors of the Exchequer would have been hanged. But that Article dealt with certain exemptions and abatements which were to be made in the case of Ireland. They always had a certain number of exemptions. For instance, in Ireland they did not pay the stamp duty on patent medicines, and he supposed the theory of that exemption was that Ireland would be so depressed by the present system of government that she would need some patent tonics for the revival of her constitution. Further, they did not pay the Inhabited House Duty, and they did not pay the English Land Tax. Those exemptions conceded the principle for which he was contending. Of course, it was true that the total amount of those exemptions, calculated on the basis of English and Scottish figures, was between £80,000 and £100,000 a year. What he asked for in his Amendment was that in addition to those exemptions there should be abatements, and that the tea duty, which was to be fixed at 5d. in the £ in Great Britain, should be fixed at 2d. in Ireland, and he put them forward on two grounds. If the right hon. Gentleman had read the Act of Union, he was certain he would accept the Amendments. They would reduce the total volume of taxation paid to the Imperial Exchequer by Ireland, and if they took Ireland in relation to herself they would diminish the proportion of indirect to direct taxation in that country. He would like to refer the Committee to the Report of the Financial Relations Commission, which was appointed by the last Liberal Government in 1894. Motions founded on the unanimous Report of that Commission had been moved in that House and supported in the division lobbies by the majority of the Members of the present Cabinet, including, if he was not mistaken, the Chancellor of the Exchequer. The not effect of the Report of that Commission was that they said substantially that the financial theory of the Act of Union was that after the Union, Ireland and Great Britain should contribute to the Imperial Exchequer each in proportion to its capacity, and that they should receive each in proportion to its needs. The Commission further found that at that time the total value of taxation paid by Ireland was one-eleventh of the whole taxation of the United Kingdom, whereas at the very highest estimate, that which was the most unfavourable to Ireland, it should have been one-twentieth. What was the record of the Liberal Government in the matter of Irish taxation since the election of 1905, which they were told at the time was the greatest election of modern times, and returned the greatest Government by the greatest majority, founded upon the most approved moral and democratic principles? Their record for the first year was this. For 1906–7 the total revenue raised in Ireland was £43,000 more than it had been in the last year of reactionary Toryism; in 1906–7 it was £9,490,000, against £9,447,000 in 1905–6, and he was sorry to say he found I himself speculating now as to why he shared in the general rejoicing at the defeat of Toryism at that election. He would apply the findings of the Financial Relations Commission in arguing for a reduction of the total taxation of Ireland. If she had contributed one-twentieth she would have contributed only £7,500,000, as against her actual contribution of £9,500,000; in other words, for 1906–7 she was overtaxed by nearly £2,000,000. If she had contributed on the basis of one-twenty-fifth, which was the estimated ratio of her wealth to that of Great Britain according to a majority of the Commission, she would have contributed only £6,000,000, so chat on that basis she was overtaxed by £3,500,000. If the Finance Bill passed through in its present form, and if they applied to it the unanimous findings of the Financial Relations Commission, Ireland for 1908–9 would, on one of these alternative bases, pay £1,600,000 more than she ought, and on the other £3,100,000 more. He expected the reply to that would be the familiar reply of the hon. Member for Preston, that they must take the taxation per unit of population, and that they would then find that no person in Ireland paid more, but that the tax 1ation per head of the population was rather less than in Great Britain. That was undoubtedly so, and if the hon. Member for Preston, who had already committed himself to that opinion in the previous session in connection with certain questions, took that view, it would not be the first time that he had been brilliantly wrong about financial subjects. Views of that character might be good enough for primitive Radicals, but he did not think they ought to be accepted by the Committee. If they accepted for the moment the unit of population test, and if they complemented it by another test, the test of the taxable capacity of the unit of population in Ireland, they would find? these figures. The average total income per head of the population of Great Britain was about £45 per annum, and in Ireland about £19. If they corrected that by deducting from it the £15 a year which ought to be set down for cost of sub- sistence, they were left with a free taxable income in Great Britain of about £30, and in Ireland of only £4. He submitted that on the basis both of the Act of Union and of common justice, they were left, under the Act of Union, with the theory that they ought to tax according to the capacity of the two parties to the bargain, and according to these figures they were left with an income of only £4 in one case and £30 in the other case. From whom was the tea tax going to be drawn in Ireland? It was a part of that enormous burden of indirect taxation in Ireland which made the financial system of that country absolutely and radically unsound. If there was one principle accepted and acted upon by the Chancellor of the Exchequer in Great Britain, it was to preserve a substantial equality between direct and indirect taxation. At the present time the proportions in Great Britain were practically half and half, but in Ireland the proportions were 72 per cent, indirect and only 27 per cent, direct taxation. Those figures worked out at an average tea tax of about 3d. a week for every family of five persons in Ireland The tax was going to fall on the poor people. They were constantly told that it was because they happened to be poor in Ireland that they suffered from this special burden of taxation; they were told that if they took class for class in Great Britain and Ireland, the burden was no heavier in Ireland. Let them take the most prominent and typical class in Ireland, the class of agricultural labourers. Mr. Wilson Fox, a Board of Trade expert, conducted an inquiry into the relative positions of the agricultural labourers of Great Britain and Ireland three years ago. He found that the average weekly earnings of an agricultural labourer were in Scotland 19s. 3d., in England 18s. 3d., in Wales 17s. 3d., and in Ireland 10s. 11d. He found that in county Mayo, in the centre of the congested district, the average weekly wage of an agricultural labourer was 8s. 9d.; and it was from the Mayo labourer, with 8s. 9d. a week upon which to face the world and rear a family, that the right hon. Gentleman was going to take 3d. a week in the shape of a tea tax. In January this year another Board of Trade inquiry into the relative condition of the industrial classes in the great towns of Great Britain and Ireland was conducted, and the net result of the report was that in every one of the few great cities in Ireland the condition of the labourer was worse, the average wage of trades lower, the housing conditions poorer, and the general outlook blacker, than for the corresponding classes in the great towns of Great Britain. It was these two classes, the poor people in the congested districts and the Irish towns, who were going to pay the tea tax in Ireland. He did not want to labour the point. Anybody who had been in the typical parts of the west and middle-west of Ireland knew what that meant in actual work, but he would venture to read to the Committee a few words expressing the opinion of a Commissioner of the Local Government Board for Ireland, a man whose experience and authority on this subject carried very great weight in Ireland. Mr. Micks, in his evidence before the Royal Commission on Local Taxation, used these expressions— There are two classes in the congested districts mainly—namely, the poor and the destitute; there are no wealthy people, except traders. Nearly all inhabitants are on one dead level of poverty. Their dietary is almost altogether vegetable. They have at one meal a day a little salt fish or a very small piece of some coarse American bacon as a sort of relish with their food—that is, those who can afford it, but the majority of the people have nothing but vegetable diet such as Indian meal or oaten porridge, potatoes and bread leaked by themselves or sometimes by the baker, from flour. They also drink tea to a very large extent.'' The Chancellor of the Exchequer, whatever attitude he assumed on this question, ought to realise that these were the people who were going to be hit by this special clause of the Financial Bill. It was urged before the Financial Relations Commission that there would be enormous adminstrative difficulties resulting from the setting up of a different tea duty between Ireland and Great Britain, but frankly he could not see where the administrative difficulties would come in. There were Customs officials at the three great ports of importation—Belfast, Dublin, and Cork. The total contribution of Ireland to the tea tax in 1906–7 was £552,000, of which no less than £306,000 was actually collected in Ireland as well as contributed there, and the effect of the Amendment would simply be that the whole amount contributed would also be collected in Ireland. He could not for the life of him see the smallest shadow of difficulty in Customs administration. At present if tea imported into Ireland was re-exported to England it would naturally pass through the Customs at the English port of entry without questions asked. The duty would have been paid in Ireland. If they made a distinction between Ireland and Great Britain the effect would simply be that bills of lading would not be a guarantee that the duty had been paid. They could collect the duty on tea re-exported from Ireland as they now collected it on goods re-exported from any other country. Another argument against a reduction of the duty in Ireland was that it would lead to more extended drinking of tea, which would result in the physical deterioration of the population. A great many medical authorities who wrote upon the subject of the growth of tuberculosis and insanity in Ireland ascribed it in some measure to the extending use of tea. If they found an increasing consumption of tea going on side by side with an increase in the statistics of tuberculosis and insanity, it would suggest that perhaps there was-some connection between the two sets of figures. But the amount of tea consumed in Ireland, as shown by the Revenue figures, was not increasing but declining. The Chancellor of the Exchequer got £552,000 from Ireland on a 5d. tea duty in 1906–7. In 1899–1900 he got £12,000 more upon a -id. tea duty. Therefore, the amount of tea consumed in Ireland in 1906 showed a very marked diminution indeed as compared with the amount consumed in the year before the war, when the tea tax was a penny lower than now. If one developed the argument that a reduction of the duty would lead to increased consumption of tea, and that that was not from a physical point of view a desirable thing, he would respectfully put it to the Chancellor of the Exchequer that the fact that a man differed from him on a rather vague and disputable subject was not a sufficient reason for arranging taxation so as to rob. In the matter of tea drinking he preferred to take his stand with Alexander Pope and Dr. Johnson. He remembered that Dr. Johnson was accustomed to consume something like seventeen cups of tea at a sitting, and his intellect was so enlightened by this diet that when he was consulted by a prominent Irishman of the day on the project of a union with Great Britain he said — Let Ireland never unite with Great Britain, for if she does we shall rob her. If the argument of the physical effect of drinking tea was put forward, he hoped it would not be by a Member who had just come from the Terrace, for he would have been ruining his own constitution, which was deplorable, and corrupting his brains, an occupation in which no Member of the House ought to be engaged. The effect of the proposed reduction of tea duty upon the total revenue of Ireland would be very slight and scarcely perceptible. It would leave the Chancellor of the Exchequer his £1,250,000 out of Irish tobacco, and let him say on that point that the small grant and abatement he had made on Irish tobacco appeared infinitesimal in comparison with the general figures of Irish taxation. The reduction of the tea duty, and the abolition of the sugar tax, which he proposed to move later, and which, no doubt, the right hon. Gentleman would accept, had always been accepted by Liberals when in opposition. The effect of the acceptance of the Amendment would be to reduce the yield of the duty by about £300,000 a year. They would not touch the £1,250,000 drawn from Irish tobacco, or the £3,600,000 from alcohol. He hoped the Chancellor of the Exchequer would not only continue to draw it, but would increase the tax on that dangerous commodity. The total effect of accepting this and the other Amendments he proposed to move, and of the right hon. Gentleman's signalising his entrance into office by passing the first Finance Bill founded on the Act of Union, would simply be that in 1908–9, Ireland, instead of paying £3,000,000 more in taxes than she ought, would only pay about £1,900,000 more. The Government had not diminished, but had increased the taxation of Ireland, and he asked them to say whether they accepted or repudiated the findings of the Financial Relations Commission. If they repudiated them, the Committee would be glad to know upon what grounds, and if they accepted them, the Committee would be equally glad to know what they proposed to do about it.

Amendment proposed— In page 1, line 22, to leave out the words 'or Ireland."'—(Mr. Kettle.)

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

THE CHANCELLOR OF THE EXCHEQUER (Mr. LLOYD-GEORGE,) Carnarvon Burghs

said the hon. Member in his witty speech had reminded him that he was Chancellor of the Exchequer for Ireland as well as Great Britain, and referred him to the Dublin, Gazette for confirmation of the statement. He did not think any Chancellor of the Exchequer need take the trouble to peruse the Dublin Gazette in order to realise that he had financial relations with Ireland. Hardly a day passed without a reminder. For every demand that came from Great Britain he thought he could safely say three came from Ireland. He did not think that that was an opportunity for discussing the question of financial relations, and he was certain it was not the best opportunity for redressing it. But he could not quite realise the grievance of the hon. Member. He complained, first of all, that although the tea duty was reduced by one penny a pound, still Ireland was so much more prosperous under a Liberal Government that she returned £43,000 more for revenue. That was not attributable to any increase of taxation. In spite of the decrease of one penny in the pound duty Ireland contributed £43,000 a year more.

MR. KETTLE

said it was an increase of one penny and Ireland paid £12,000 less in tea duty than she paid before the war. She was paying now fivepence, and then she was paying fourpence.

MR. LLOYD-GEORGE

said he did not think any Chancellor of the Exchequer was in danger of forgetting his responsibilities in connection with Ireland. For every demand that came to him from Great Britain it was safe to say three came from Ireland. He did not regard that as a proper occasion for discussing the great issue raised by the Report of the Financial Relations Commission. The hon. Member had complained that, although the tea duty had been reduced by 1d. per lb., Ireland was so much more prosperous under a Liberal Government that £43,000 more revenue was obtained. He would not have thought that a real grievance against the Liberal Government. Ireland had certainly benefited to the extent of the reduction of 1d. made by the Liberal Government when they came into office. They also reduced sugar by 1d., and the circumstances of Ireland were such that whenever relief was given to indirect taxation Ireland benefited to a much larger degree than any other part of the United o Kingdom. Then they were making provisions for old age pensions, and there again Ireland would receive a much larger benefit than any other part of the United Kingdom, for reasons which he need not go into. Therefore, this Government had done something to readjust the financial relations between Great Britain and Ireland in the direction of benefiting Ireland. He was not going to remind the hon. Member of the many demands made upon the Exchequer which they had seen their way to concede, neither would he enter into the whole question of the financial relations between the two countries. It was perfectly clear that if the Government made up their mind to deal with this question of the financial relations the Amendment was not the way to do it. They could not deal with it by having one tea duty in Ireland and a higher one in Great Britain. The inconvenience was obvious, and such a differentiation would lend itself to all possible frauds on the revenue in Great Britain. They would have to set up a costly system of defence against the coasting trade with Ireland. Ireland, he reminded Irish Members, enjoyed certain special benefits in the way of taxation; there were no assessed taxes, no house duty, no land tax; there were three or four separate heads of taxation which did not apply to Ireland at all. In addition to all that, the reductions in taxation which this Government had effected during the last two years had given substantial benefit to Ireland. Of course he admitted that Ireland was a poor country, and, whenever they got a poor district, whether in Ireland or the west coast of Scotland, or in other parts of Great Britain, they would find the poor paving a higher proportion of the cost of government than any other class of the community. It was not so much a problem of two countries as a problem of two classes. As a matter of fact, Ireland had gained more by this Budget, which was the object of attack by Irish Members, not only in taxation, but in beneficial expenditure, than any Budget he could remember. He invited hon. Members from Ireland to challenge that statement. He could not possibly accept this Amendment because he could not afford it. This particular Amendment would cost £220,000, and taken in conjunction with another Amendment which the hon. Member had on the Paper a very considerable sum was involved. This could not be done, and if it could be done this was not the way to do it.

MR. FLYNN (Cork, N.)

said the speech of the Chancellor of the Exchequer was the same old story, for he had told them that this was not the time or opportunity for such a proposal, and this was hardly the place to make it. This question was one which went to the very root of the prosperity of the Irish people. The right hon. Gentleman appeared to have ignored the fundamental distinction upon this question between Ireland and the different parts of Great Britain. In Great Britain there was no Act of Union which differentiated them from other parts of the Kingdom, and consequently there was no binding contract upon them as was the case in Ireland. The figures which his hon. friend had given were very striking indeed. He had alluded to the decreasing contribution of this country to general taxation, and on that point his hon. friend gave some very convincing figures. If they went back for ten years they would find that Ireland had been paying an increased contribution year after year, and by the system of set-offs in regard to expenditure the more money drawn from Ireland the more she had to contribute towards the general taxation or revenue. They might go on debiting Ireland in this way simply by doubling the cost of the police or the salaries of the Judges, to which the majority of the peeple of Ireland were opposed. The tea tax was one of the few ways in which it was possible for an Irish representative not. only to bring the whole question of financial relations before the Committee, but also to show how the tea tax pressed I so much more heavily on Ireland i than on this country. The average wage all the year round of the agricultural labourer in Ireland was nearer 8s. than 10s. a week, and, therefore, if they considered the amount of tea and sugar he consumed he paid taxation enormously out of his proper proportion. The lower they went down the scale the more disproportionate and the more unfair was the system of taxation. He was quite familiar with the arguments put forward by the Chancellor of the Exchequer, which were really a re-echo of the words of the late Sir William Harcourt.

The Chancellor of the Exchequer still considered himself a good Radical. He was old enough to remember that one of the great aims of the Radical Party was "a free breakfast table." He was not sure that Mr. Gladstone did not inscribe it on his banner at one time. [An HON. MEMBER: "It was Chamberlain."] If that were adopted, Ireland would benefit. The Irish were economists, and if the people of this country were not willing to practise economy by the restriction of expenditure, that was their own affair. The reason why the Government could not reduce the taxes on tea and sugar, the breakfast table commodities, was because they were spending so much more than was spent in former times. They did not want such a swollen Budget in Ireland. The people of that country had contributed to the indirect taxation far beyond their means and far beyond what they ought to pay; and the money was drawn from the very poorest of the population. The working classes in this country were very much better off than in Ireland, and they had at their command more of the comforts and luxuries of life. They could use commodities like meat and beer which the poorer classes in Ireland were debarred from using. Those were commodities which the Irish could not afford, especially in the West of Ireland. In the case of a poor Irish family of five the tea duty at the present rate represented an annual charge of 13s. 3d. or 13s. 4d. That was a very large amount to pay in taxation for what had become practically a necessity of life. To the working population of Ireland tea was a necessity and not a luxury, and they had to pay a disproportionate share of the taxation on that commodity. What he meant was that the tax was out of all proportion to the means of those who paid it. The poor of Ireland who were large consumers of tea were the poorest in the three kingdoms making up the so called Union. Provision was made in the Act of Union for special abatements and that fact had been airily treated by the Chancellor of the Exchequer. The right hon. Gentleman had referred to the difficulty of the Customs House. He and his friends could not see where that difficulty arose at all. Tea was moved about in bulk in large quantities, and it would not be suggested that the revenue would suffer by the illicit importation of tea in the same way as it would suffer if ladies were permitted to bring in duty free from the Continent lace and other dutiable commodities. It would not be practicable to injure the revenue in that way. Custom House regulations were now in operation in regard to whisky and other articles, and it would be a simple matter to lay down such regulations as would utterly prevent the smuggling which the Chancellor of the Exchequer apprehended. He thought a strong case had been made out for reducing the tea duty in Ireland and he trusted that a majority of the Committee would recognise that a fair and legitimate claim had been put forward.

*Mr. GWYNN (Galway)

associated himself with the appeal made by his hon. friends for a reduction of the tea duty. He recognised that this was, as the Chancellor of the Exchequer had said, a very good Budget for Ireland, but only because Ireland was poor. If poverty was a qualification the people of Ireland were always well qualified. In Ireland there was only one article that ranked lower in the scale of necessaries than tea, and that was bread. People in Ireland had tea who did not get milk. Meat was a luxury in Ireland. If meat were taxed, there might be a nearer approximation to equality of taxation between the countries. The people of Ireland, so far as the poor were concerned, were not a moat-using people at all. That was why the tea tax was so enormously far reaching in its effect. It reached to the last sixpence of the poor. He did not think the drain on this country was proportionately felt. Ireland being a poor country, the mass of the people never paid anything in taxation except what they paid by indirect taxation. For them taxation at present stood at a war level. The right hon. Gentleman had said that the case was identical in both countries. The poor people in this country were badly hit by the tea tax, but not so much as the poor people in Ireland. The poor people in this country did gain something by the expenditure made by the Government in dockyards and in other ways, but he would like to know how the expenditure of the money raised by the tea tax was going to profit Connemara. What did Connemara stand to gain by it? Connemara was only affected by the Imperial expenditure of America. If the people of that district sought work they flew from the British flag. The Union Jack was of no value to them. This enormous tax was raised to maintain the Union Jack, which was worthless to Ireland. These were the grounds on which they claimed differentiation. The Chancellor of the Exchequer had never heard of the differentiation clauses in the Act of Union. When that Act could be construed to the advantage of Ireland, its clauses were dead letters. They had passed out of English memory altogether. The Act of Union was, nevertheless, a historical document, and it showed what was in the minds of the people who had framed the Union. After all, they were statesmen who recognised that the conditions of Ireland were fundamentally different from those of this country.

MR. HAZLETON (Galway, N.)

said he had listened with very great disappointment to the speech of the Chancellor of the Exchequer, and he was certain that the speech would be received with the same disappointment in Ireland as it had been by his colleagues of the Nationalist Party. The Chancellor of the Exchequer had said that the demands on the Exchequer from Ireland were three times as numerous as from the rest of Great Britain. He did not think that carried the Chancellor of the Exchequer very far, for two reasons. In the first place the money which they had claimed was their own, and in the second place most of the demands they had made had been refused. The right hon. Gentleman said that this was not the way in which to redress the financial grievances under which Ireland was suffering at present, but he had not told them how he proposed to redress the grievances which he and his Government acknowledged to exist. The right hon. Gentleman had stated that this was the best Budget that had been introduced for Ireland during the time he had been in the House, but still the fact remained that the finding of the Royal Commission had not been seriously disputed either by the Government or by their supporters. It was their duty, if they accepted the Report of that Commission, to take some action with respect to it. What he and his friends wanted to know was when the Government were going to put into practice the principles they professed to hold. This was essentially a question which a Liberal Government could deal with, and ought to deal with, without delay, because the House of Lords could make no alteration in a Finance Bill; and as long as the Government allowed this grievance to exist they could not ignore their responsibility. His hon. friend the Member for Galway had said that this was an academic Amendment. He was not quite so sure of that fact. It proposed, to do away with the tea duty in Ireland, but his friend had pointed out that the machinery for doing that practically existed in the hands of the Chancellor of the Exchequer, and that no great difficulty would be encountered in acting on his proposal. The Chancellor of the Exchequer had said that the Amendment would deprive him of more than £200,000, which he could not afford. But he would point out that the Finance Bill had not yet passed through Committee, and there was ample opportunity at a later stage of finding another way to raise the £200,000. The right hon. Gentleman had also referred to the benefit which Ireland was going to receive under the old-age pensions scheme. That was not the time to discuss that measure, but he would point out that if they in Ireland had a Parliament of their own in College Green, Dublin, he did not believe they would spend from £700,000 to £1,000,000 on old-age pensions when there were so many other grave and pressing problems confronting the Irish people. Considering the unsatisfactory reply that they had received from the Chancellor of the Exchequer, he hoped his hon. friend would press his Amendment to a division, and that it would receive the support of all those Members of the Committee who recognised that Ireland had been unfairly treated in this matter.

MR. KETTLE

said that before going to a division he would like to say a brief word in reply to the case made by the Chancellor of the Exchequer. That right hon. Gentleman did not attempt to repudiate the official figures which he had quoted, and the effect of which the right hon. Gentleman did not in any way counter. His hon. friend the Member for Galway had said that this was an academic Amendment. No doubt it was, in the sense that the Government would put up their Whips and defeat it with their usual academic majority. But the Amendment was not introduced for the mere purpose of raising a discussion on the financial position of the Government. That was one of the very few occasions when the House had to put the Second Article of the Act of Union into operation to make an exemption in favour of Ire-land. He wondered if the Chancellor of the Exchequer bore in mind the paragraph in the Report written by the Chairman: of the Financial Commission and adopted by five members— It was never intended that the ratio of contribution or the extent of the exemptions and abatements (as the case might be) should be affected by consideration of the relative cost of administration in each of the three kingdoms. That was precisely the argument used by the Chancellor of the Exchequer that afternoon. It had been said that this was the best Finance Bill which had been brought before the House for many years, and they were told that Ireland would gain by the reduction of the sugar tax the sum of £340,000 or almost precisely according to the proportion of the population of Ireland to Great Britain. But Ireland would gain nothing from the reduction of the sugar tax which the consumer in Great Britain would not also gain; and therefore the relief to the consumer in Great Britain and in Ireland would be absolutely the same. The Chancellor of the Exchequer had said that if he continued to reduce Irish taxation and increased expenditure in Ireland he would soon come to the point in which more money would be spent in Ireland than was received from Ireland. That was the effect of the right hon. Gentleman's argument. All he could say was that the Act of Union was intended to give advantages to a poor country like Ireland for bringing it into association with a rich country like England, and that that was the first occasion on which the representatives from Ireland asked for exemption from the tax on tea, which was an article of general consumption in Ireland. The attitude of the Chancellor of the Exchequer in rejecting the Amendment resulted from the fact that he could not administer the Act of Union in a way that was justifiable.

MR. WILLIAM REDMOND (Clare, E.)

said he wished to support the protest which had been made by the hon. Member for Tyrone against this duty on tea in Ireland. Almost every year without exception for the past quarter of a century the Irish Members had had debates of this kind, but they had invariably got the same reply and they had never been able to carry their views to a successful issue in the division lobbies. Nevertheless, they were bound to continue making their protest. The Chancellor of the Exchequer would be the last man to object to their doing so at the present time. But in any case, whether the right hon. Gentleman objected or not, their protest would continue to be made as long as the Irish Members came to the House. Sometimes they were told very untruly and, he thought, very wickedly, that the consumption of alcohol in Ireland was a great deal more than it should be; but, as a matter of fact, statistics proved that it was considerably less than in England or Scotland. Many hon. Members who came from Ireland thought that the less alcohol that was consumed the better it would be for the people; but what encouragement was it to the Irish people to refrain from using alcoholic beverages when they found that the only substitute of any use whatever for alcohol was so taxed by the British Government that it became one of the dearest articles which they could consume? Even from the point of view of temperance, it was a crying shame to make tea as dear as it was under this tax. The Chancellor of the Exchequer, in a somewhat half-hearted manner, had spoken of the great advantage which Ireland enjoyed because of her connection with Great Britain. They were told that they ought to be extremely grateful because under the, protection of this country, under the British flag, the Union had brought them any amount of benefits. The Union had brought, at any rate, dear tea. Since Great Britain thought fit to go to war with the Boers the poor people of the county of Clare had had to pay a great deal more for their cup of tea. He thought it would be wise to recognise—what every reasonable and common-sense man had recognised—that it was a monstrously unjust proposition to say that anything which the people of this country said ought to be done should also be forced on the people of Ireland. The people there were called upon to pay this tea tax of 5d. per lb. which was more than they paid before the war in South Africa. With that war the Irish people had absolutely nothing to do. Nobody knew better than the present Chief Secretary that the Irish people disapproved of that war at every stage in the House of Commons. He would remember that they sang "Good Old Kruger" with as much gusto as hon. Gentlemen above the gangway sang "God save the King." In those days many hon. Members opposite joined the Irish Members in their protest against the war. The war took place, and they in Ireland found that the necessaries of life were at once rendered a great deal dearer. Now that the war was over they had a relic of it staring them in the face every day, and the poor people of Ireland were called upon to pay more for their tea. Was it unreasonable for the Irish Members to expect that, the war being over and the expenditure upon it at an end, their constituents should pay for such a necessary article as tea the same price as they paid before the war? He knew of no instance which illustrated more completely the disadvantages which Ireland was under, because of the present condition of her connection with this country, than this matter of the tea duty. He hoped his hon. friend would go to a division and that he would receive the support of every Irish Member and of a great many of those in the House who thought that if wars were to be paid for they ought not to be paid for by taxing a necessary article of food. Some people talked as if tea was a luxury. He insisted that tea in Ireland was the most necessary article of diet the people had. They did not drink beer as they did in this country. They could not afford it; and they did not take meat. In Ireland they practically lived on bread and tea. To him it was a most pathetic thing to see, day after day and month after month, on the tables of the small farmers and poor people in the country at every meal little else but dry bread, potatoes and tea. Yet tea was the article that was taxed. A penny per pound might seem very little to rich people, but the hardest thing about the duty was that it fell hardest upon the poor people, who bought their tea by the two pennyworth and three pennyworth at a time. Those people were charged appreciably more directly the duty on tea was increased. He was sorry the Chancellor of the Exchequer could not see his way to meet his hon. friend's demand, because he knew what the right hon. Gentleman must feel and know the justness of the claim that was made. The right hon. Gentleman must understand how very hardly this matter fell upon the poorest people, yet the circumstances by which he was surrounded prevented him from meeting the claim, as he otherwise, would wish to do. Irish Members were bound to make their protest, and did so most strongly, on behalf of the Irish people, against their being called upon at this time to pay for a war in which they had no part.

MR. JOHN O'CONNOR (Kildare, N.)

congratulated the Chancellor of the Exchequer on having so soon acquired the method of the calm and official answer, in which he now equalled his predecessor the right hon. Gentleman the Member for East Worcestershire. One would have thought from the right hon. Gentleman's speech—which, after all, was a very halfhearted speech—that Ireland ought to be this year at least a happy country indeed. One penny had been taken off a war tax on tea, and in consequence Ireland ought to be the happiest of happy countries. He might inform the Committee that the indirect taxation in Ireland, so lightly treated by the right hon. Gentleman, was a very heavy burden on the country, a country which suffered most from indirect taxation. Since ten years ago indirect taxation in Ireland had increased by £1, 622, 225. It would take a very large reduction on tea and other articles of consumption to bring back the indirect taxation of Ireland to what it was then. There was nearly £2,000,000 of increased indirect taxation placed on the people. Of the whole taxation on the people of Ireland, nearly 75 per cent, was obtained by indirect means. Was it any wonder that his hon. friends should raise the question of over-taxation on tea? Tea! The article which above all others supplied the greatest revenue from taxation. In 1893 the revenue from indirect taxation in Ireland amounted to £5,267,676, and the total taxation was £9,000,000 or a little over. Ten years afterwards indirect taxation had risen to £7,000,000. That was to say, seven-ninths of the taxation of Ireland was got by indirect taxation. When that was considered it could not be said that the demand of his hon. friend was too great. His hon. friend had based his demand upon two grounds. He based it first on the Act of Union, the seventh article of which laid it down that when the Exchequers were united, and there was only one Exchequer, in the future there should be not only abatements but exemptions. That had been recognised by the Committee, and he submitted that when his hon. friend based his demand on the Act of Union he was on firm ground. His other ground was that Ireland had been treated as a separate entity. The late Viscount Goschen used the word in 1890 in this House when making some provision for relief of agricultural rates. Viscount Goschen was asked to extend the provision to Wales, and in reply said he was not prepared to regard Wales as a separate entity. He agreed that Scotland and Ireland were separate entities, and from that day to this Ireland had remained a separate entity. The hon. Member for North Tyrone had mentioned one or two articles with regard to which Ireland had been exempted from taxation. One was the carriage tax, a safe exemption, because the people of Ireland could not afford carriages. Neither was there a tax on armorial bearings in Ireland, and there was a slight distinction in the amount of the tax upon dogs as compared with the tax in this country. In this and other matters Ireland had been recognised as a separate entity. In 1895, when the Agricultural Rates Act was introduced, he recollected what was done. A Commission or Committee had considered the subject, and it was j pointed out that prices of agricultural produce in this country had gone down considerably, and the profits of that industry had been diminished by agricultural depression. That was the reason for giving a grant-in-aid. It was just after the late Sir William Harcourt had brought in his new death duties, and a new Government had come into power. Had Sir William Harcourt and his Party remained in power they would no doubt have reduced the tea duty, but a new Party came in and devoted the increase of revenue to the relief of the agricultural rates, and indirectly relieved their own friends the landlords; no less than £1,600,000 was devoted to the relief of rates of this country, and Ireland was exempted from that because it was pointed out by the then Chancellor of the Exchequer that Ireland was a separate entity and outside the exigencies of the, finance. Ireland was a separate entity, but no notice was taken of that when money was to be dragged out of her. His hon. friend was on firm ground when he based his demand on the Act of Union, and also when he; 'said Ireland should be treated as a separate entity. She had different land laws, different ecclesiastical laws, and different legal procedure. In all those respects she was treated in a different manner. Why, therefore, should she not have different treatment where taxation was concerned? There was nothing wonderful in the demand that they were now making for a reduction of the tea duty. Why did his hon. and learned friend select it? Because the taxation upon tea struck at the people who could least bear taxation in Ireland. It was a mistake to suppose that the Irish people drank largely either of whiskey or porter or ale. They were the greatest tea drinkers in the world. It was a very curious and strange fact that the poor people in Ireland had the very greatest difficulty in getting milk for the purposes of their food. There was no place where milk was so scarce as in the rural parts of Ireland. If there was an abundance of milk it would be quite possible to do without tea. In large tracts of Ireland there were no milch cows, but there were ranches where store cattle were kept, which cattle were removed to other parts of the country, brought over here to be fattened. It was not, therefore, a false proposition on the part of his hon. and learned friend when lie said that tea was the only beverage the poor in Ireland had. Hence, they asked for a reduction of the tax on tea, because a tax on that commodity struck at the poorest people in Ireland, who were least able to bear the burden. His hon. and learned friend had brought before the House, not for the first time, the Act of Union. Since 1800 and again in 1817 things had changed, and changed for the worse so far as Ireland was concerned. In the readjustment of taxation between this country and Ireland taxes were placed upon articles of industry and on the importation of raw materials. Taxes were placed upon hundreds of commodities that were now free. In the course of time by their provincial policy they relieved all those articles and all those commodities of taxation, and he submitted this as an economic? proposition that as they relieved industry, and as they took the taxes off those articles one by one, they placed an additional burden upon those who derived no benefit from manufactures at all. As the people in this country were relieved of taxation, the people in Ireland had to bear a greater proportion and they derived no benefit from the relief of taxation on commodities. Not only did they derive no benefit, because they manufactured nothing themselves, but in proportion as one industry or many industries were relieved, a burden was placed upon those who had no industrial occupation at all. He thought that was a sound economic proposition. He submitted that on all grounds his hon. and learned friend had made a good case, that the arguments in support of it were perfectly sound, and that the condition of Ireland demanded a reduction of this particular tax.

*MR. HAROLD COX (Preston)

said the hon. and learned Gentleman had quoted a remark he had made, and he would like to take up the challenge. The proposition he would like to put to him and to the whole Committee was that there was absolutely no reason why the man with 10s. a week should pay a higher rate of taxation if he lived in this country than he would pay if he lived in Ireland.

MR. KETTLE

said there were fewer people with 10s. a week in Ireland than in any part of Great Britain.

*MR. HAROLD COX

said that that might be the case, but a poor man living in a rich neighbourhood was no better able to pay taxes than an equally poor man living in a poor neighbourhood. On the contrary, the argument was the other way. There were so many poor people in Ireland that the general standard of prices was lower, and therefore the 10s. went further than in England. Consequently a poor man in Ireland could afford to pay a higher tax than an equally poor man in England. Yet it was proposed by Members opposite that when a poor Irishman left Ireland and came to England he should pay a higher tax than he had been paying before, even if he earned no more. That was a proposition which hon. Members opposite had never attempted to justify. Instead they fell back on the Report of the Financial Relations Commission. He did not know whether any of them had taken the trouble to read the Report. He had done so when it came out, and very carefully, and he said without the slightest fear of contradiction that there was no authority whatever in that Report for the whole case which Irishmen built up upon it. It was an amalgam of a number of reports by various people. The collective report put forward certain quite anodyne propositions which no one attempted to dispute. It was perfectly true that the taxable capacity of Ireland, treated as an entity, was very much lower than the taxable capacity of other portions of the United Kingdom.

MR. JOHN O'CONNOR

said they had mad the Report, which they knew was concluded with the proposition which the hon. Member had just stated, but it was a false proposition as applied to Ireland.

*Mr. HAROLD COX

said that that summary of the Report gave five points on which the Commissioners were agreed. He would not read them all. The important one was as follows— That while the actual tax revenue of Ireland is about one-eleventh of that of Great Britain, the relative taxable capacity of Ireland is very much smaller, and is not estimated by any of us as exceeding one-twentieth. But Ireland, treated as an entity, did not pay one-twentieth or anything like it. If hon. Members examined the Reports issued every year they would find that the contribution of Ireland was less than 2 per cent.

MR. KETTLE

Of what?

*MR. HAROLD COX

Of the Imperial expenditure.

MR. KETTLE

What is the Imperial expenditure?

*ME. HAROLD COX

The expenditure upon common purposes as distinguished from the expenditure upon purely Irish, or purely English, or purely Scotch purposes.

MR. JOHN O'CONNOR

Will you be good enough to cite the proposition about identity of taxation?

*MR. HAROLD COX

I will read it— That identity of rates of taxation does not necessarily involve equality of burthen. That is one of the propositions.

MR. JOHN O'CONNOR

Why did you not read it.

*MR. HAROLD COX

Because it is purely platitudinous, and therefore not worth reading. The whole point was this: Ireland's taxable capacity was admittedly only one-twentieth of the capacity of Great Britain; but Ireland did not pay according to her taxable capacity; she did not pay even half as much as her taxable capacity; she paid less than 2 per cent., whereas, according to her taxable capacity, she ought to pay 5 per cent. If they treated Ireland as a separate entity she underpaid; if they treated her as she ought to be treated, namely, as consisting of a multitude of separate individuals, then none of them were taxed at a higher rate than they would be in Great Britain. There was no purely Irish grievance. It was a poor man's grievance, because taxes upon the necessaries of life pressed on the poor man more than upon the rich man. The grievance which Ireland had was that of the whole of the United Kingdom, and he thought it was to be regretted that Irishmen should dissociate themselves from those who on the Ministerial side of the House wished to defend poor men in all parts of the Kingdom from an unfair burden of taxation.

MR. WILLIAM RUTHERFORD (Liverpool, West Derby)

said they all recognised that tea was a food, because to the poorest people in Ireland and England tea was a food even to a larger extent than it might be deemed to be the food of workpeople. Another important reason should not be lost sight of, namely, that the duty was per pound and not per value. The poor person's tea, costing 8d. a pound before it paid duty, was taxed exactly the same amount as the tea of the wealthy person, costing 2s. 6d. a pound, perhaps, before it paid duty. The tax was altogether out of proportion in respect of the poorest class of the community, because that class consumed much more tea and, therefore, the tax being per pound instead of ad valorem it was very much heavier in their case. While sympathising with the appeal made to the Chancellor of the Exchequer he must not be deemed as sympathising with it on either of the grounds that had been given by hon. Members below the gangway. To enumerate all these matters had nothing to do with the merits of the question whether in Ireland there should be a diminution of the tax. The Party opposite had for years taken up a distinctive position, and had claimed that they were going to refuse to put new taxes on foods and to remove those that existed. Now that they were in power why did they not proceed with the greatest possible celerity to justify their promises? Those who were not in the happy position of being Members of that Party had consistently taken up the position for many years past that taxes should be taken off food altogether if possible and put upon manufactured articles. It was because he held those views that he supported this appeal to reduce taxation on food in Ireland, and if there was any shortage in taxation let the Chancellor of the Exchequer put it upon those things that could best bear it—foreign manufactures.

MR. KETTLE

said he had hoped the hon. Member for Preston, who had reproduced all the fallacies of the primitive Radical, might have intervened earlier in the debate so that there would be an opportunity of replying to him. He had prophesied that if the hon. Member took part in the discussion he would show himself, not for the first time, brilliantly wrong. He took back the word "brilliantly." He did not dissociate himself from the hon. Member for Blackburn, but proposed to vote with him, and so he should think would all his colleagues. They never heard a word from the hon. Member about the Act of Union or about the rights secured to Ireland by the eighth article.

*MR. HAROLD COX

The bargain made in the Act of Union was undoubtedly a very unfair bargain for Ireland, but it was never enforced, and was revised in 1817 solely in the interests of Ireland. What they were now going upon was the Act of 1817.

MR. KETTLE

said he would be glad to know what was the historical ground for the statement that the revision took place solely in the interests of Ireland.

*MR. HAROLD COX

The Report of the Royal Commission.

MR. KETTLE

said the hon. Gentleman drew strange conclusions from the Report of, the Financial Relations Commission. They took their stand upon the Act of Union, according to which all expenditure was to be treated as common, and, so to speak, Imperial expenditure. The hon. Member had said that Ireland contributed only 2 per cent. of Imperial expenditure. The theory of the Act of Union was that every single penny spent in Ireland on any service was to be treated as the cost of the United Kingdom and the Empire as a whole. While it was true that Ireland paid only 1.92 per cent, to the Army and Navy, her sea-borne commerce was less than 1½per cent, of the sea-borne commerce of Great Britain, so that she gave more to the Empire in that particular department than she got out of it. Let him read the precise text of the unanimous uncontroverted finding of the Financial Relations Commission. It found that— Great Britain and Ireland must, for the purpose of this inquiry, be considered as separate entities, and that the Act of Union imposed upon Ireland a burden which, as events showed, she was unable to bear"— and which, he might point out, was heavily increased in 1853 and had not been diminished since. What really happened in 1817 was that the money spent in bribes to secure the overthrow of the Irish Parliament was charged as a separate debt to the finances of Ireland, and was then carried over so as to make the total debt of Ireland in the proportion of 2 to 17 of the total debt of the United Kingdom, and then the Parliament of the United Kingdom said: "Because your debt has increased both absolutely and proportionately since the Act of Union, therefore, you are able to bear a heavier tax than before the Act of Union." The third finding of the Commission was— That the increase of taxation laid upon Ireland between 1853 and 1860 was not justified by the then existing circumstances. Fourthly, and this disposed of the entire case of the hon. Member, although he said it was platitude—it was better to found Government on platitudes than on paradoxes— That identity of rates of taxation does not necessarily involve equality of burden. The hon. Gentleman said the poor districts of England and Scotland suffered heavily in relation to their richer neighbours—a proposition with which he entirely agreed—but forgot that these poorer districts were not treated as separate entitles in a very solemn statute under which the House was supposed to act, and had not a separate national history running, back to a time when the ancestors of certain Members of that House were wandering about their native wilds. The fifth finding was— That whilst the actual tax revenue of Ireland Was about one-eleventh of that of Great Britain, the relative taxable capacity of Ireland is very much smaller, and is not estimated by any of us as exceeding one-twentieth. Last session he had asked the Secretary to the Treasury what would have been the proportion paid by Ireland in 1905–6 if her tax revenue had been one-twentieth of the tax revenue of Great Britain, and he was told that it would have been £1,800,000

less than was actually paid. On that unanimous finding of the Commission, under this Finance Bill, which he regarded it as a duty of conscience to resist, Ireland was going to pay next year £1,800,000 more than she ought to pay either under the Act of Union or upon the principles of common justice and fair-play.

Question put.

The Committee divided:—Ayes, 307; Noes, 73. (Division List No. 187.)

AYES.
Adkins, W. Ryland D.	Clark, George Smith	Gibbs, G. A. (Bristol, West)
Agar-Robartes, Hon. T. C. R.	Cleland, J. W.	Gill, A. H.
Agnew, George William	Clough, William	Gladstone, Rt. Hn. Herbert John
Allen, Charles P. (Stroud)	Cochrane, Hon. Thos. H. A. E.	Glen-Coats, Sir T. (Renfrew, W.
Armitage, R.	Collins, Stephen (Lambeth)	Glendinning, R. G.
Ashley, W. W.	Collins, Sir. Wm. J. (S. Pancras, W	Goddard, Sir Daniel Ford
Ashton, Thomas Gair	Cooper, G. J.	Gooch, George Peabody (Bath)
Asquith, Rt Hon. Herbert. Henry	Corbett, C. H. (Sussex, E. Grinstd	Goulding, Edward Alfred
Astbury, John Meir	Cornwall, Sir Edwin A.	Greenwood, G. (Peterborough)
Aubrey-Fletcher, Rt. Hn. Sir H.	Cory, Sir Clifford John	Gulland, John W.
Baker, Sir John (Portsmouth)	Cotton, Sir H. J. S.	Gurdon, Rt. Hn. Sir W Brampton
Balfour, Robert (Lanark)	Courthope, G. Loyd	Hall, Frederick
Banbury, Sir Frederick George	Cox, Harold	Harcourt, Rt. Hn. L (Rossendale
Baring, Godfrey (Isle of Wight)	Craig, Herbert J.(Tynemouth)	Harcourt, Robert V.(Montrose
Barker, John	Craik, Sir Henry	Hardy, George A. (Suffolk)
Barlow, Sir John E.(Somerset)	Crosfield, A. H.	Hardy, Laurence (Kent, Ashf'rd
Barry, Redmond J.(Tyrone, N.)	Cross, Alexander	Harmsworth, Cecil B. (Worc'r)
Beach, Hn. Michael Hugh Hicks	Crossley, William J.	Harris, Frederick Leverton
Beale, W. P.	Dalrymple, Viscount	Hart-Davies, T.
Beauchamp, E.	Dalziel, James Henry	Harvey, A. G. C. (Rochdale)
Beaumont, Hon. Hubert	Davies, David (Montgomery Co.	Harvey, W. E. (Derbyshire, N. E.
Beck, A. Cecil	Davies, M. Vaughan- (Cardigan	Harwood, George
Beckett, Hon. Gervase	Davies, Sir W. Howell (Bristol, S.	Haslam, James (Derbyshire)
Benn, W.(T'w'r Hamlets, S. Geo.	Dewar, Arthur (Edinburgh, S.)	Haworth, Arthur A.
Bertram, Julius	Dewar, Sir J. A. (Inverness-sh.)	Hedges, A. Paget
Bethell, Sir J. H. (Essex, Romf'rd	Dickinson, W. H. (St. Pancras, N.	Helme, Norval Watson
Bethell, T. R. (Essex, Maldon)	Dixon-Hartland, Sir Fred. Dixon	Helmsley, Viscount
Birrell, Rt. Hon. Augustine	Dobson, Thomas W.	Hemmerde, Edward George
Black, Arthur W.	Duckworth, James	Henry, Charles S.
Boulton, A. C. F.	Du Cros, Arthur Philip	Herbert, Col. Sir Ivor (Mon., S.)
Bowles, G. Stewart	Duncan, J. H. (York, Otley)	Herbert, T. Arnold (Wycombe)
Branch, James	Dunne, Major E. Martin (Walsall	Higham, John Sharp
Brigg, John	Edwards, Clement (Denbigh)	Hill, Sir Clement
Bright, J. A.	Edwards, Sir Francis (Radnor)	Hobart, Sir Robert
Brocklehurst, W. B.	Ellis, Rt. Hon. John Edward	Hobhouse, Charles E. H.
Brooke, Stopford	Erskine, David C.	Holland, Sir William Henry
Brotherton, Edward Allen	Essex, R. W.	Holt, Richard Durning
Brunner, J. F. L. (Lanes. Leigh)	Esslemont, George Birnie	Hope, James Fitzalan (Sheffield
Brunner, Rt. Hn. Sir J. T (Cheshire	Everett, R. Lacey	Hope, W. Bateman (Somerset, N.
Bryce, J. Annan	Faber, George Denison (York)	Horniman, Emslie John
Burt, Rt. Hon. Thomas	Faber, G. H. (Boston)	Howard, Hon. Geoffrey
Buxton, Rt. Hn. Sydney Charles	Fardell, Sir T. George	Idris, T. H. W.
Cameron, Robert	Fell, Arthur	Jacoby, Sir James Alfred
Carlile, E. Hildred	Fenwick, Charles	Johnson, John (Gateshead)
Carr-Gomm, H. W.	Ferens, T. R.	Johnson, W. (Nuneaton)
Castlereagh, Viscount	Fiennes, Hon. Eustace	Jones, Sir D. Brynmor (Swansea)
Causton, Rt. Hn. Richard Knight	Findlay, Alexander	Jones, Leif (Appleby)
Cave, George	Forster, Henry William	Joynson-Hicks, William
Cawley, Sir Frederick	Freeman-Thomas, Freeman	Kekewich, Sir George
Cecil, Lord R.(Marylebone, E.)	Fuller, John Michael F.	Kerry, Earl of
Channing, Sir Francis Allston	Gardner, Ernest	King, Alfred John (Knutsford)
Cheetham, John Frederick	Gibb, James (Harrow)	King, Sir Henry Seymour(Hull)
Laidlaw, Robert	Pollard, Dr.	Stewart, Halley (Greenock)
Lambton, Hon. Frederick Wm.	Price, C. E. (Edinb'gh, Central)	Stewart-Smith, D. (Kendal)
Lamont, Norman	Price, Sir Robert J (Norfolk, E.)	Strachey, Sir Edward
Lane-Fox, G. R.	Radford, G. H.	Straus, B. S. (Mile End)
Leese, Sir Joseph F.(Accrington	Randles, Sir John Scurrah	Strauss, E. A. (Abingdon)
Lehmann, R. C.	Raphael, Herbert H.	Sutherland, J. E.
Lever A. Levy(Essex, Harwich	Rawlinson, John Frederick Peel	Taylor, Austin (East Toxteth)
Levy, Sir Maurice	Rea, Russell (Gloucester)	Taylor, Theodore C. (Radcliffe)
Lloyd-George, Rt. Hon. David	Rea, Walter Russell (Searboro'	Tennant, Sir Edward(Salisbury
Lockwood, Rt. Hn. Lt. -Col. A. R.	Rees, J. D.	Tennant, H. J. (Berwickshire)
Luttrell, Hugh Fownes	Remnant, James Farquharson	Thomas, Abel (Carmarthen, E.)
Lyell, Charles Henry	Rendall, Athelstan	Thomas, Sir A.(Glamorgan, E.)
Lynch, H. B.	Ridsdale, E. A.	Thomson, W. Mitchell- (Lanark)
Lyttelton, Rt. Hon. Alfred	Roberts, Charles H. (Lincoln)	Thornton, Percy M.
Macdonald, J. M. (Falkirk B'ghs	Roberts, Sir John H.(Denbighs.	Tomkinson, James
Maclean, Donald	Roberts, S.(Sheffield, Ecclesall)	Torrance, Sir A. M.
M'Arthur, Charles	Robertson, Sir GScott (Bradf''rd	Toulmin, George
M'Callum, John M.	Robertson, J. M. (Tyneside)	Trevelyan, Charles Philips
M'Crae, Sir George	Robinson, S.	Verney, F. W.
M'Laren, H. D. (Stafford, W.)	Robson, Sir William Snowdon	Villiers, Ernest Amherst
M'Micking, Major G.	Roe, Sir Thomas	Vivian, Henry
Magnus, Sir Philip	Ronaldshay, Earl of	Walker, H. De R. (Leicester)
Mallet, Charles E.	Ropner, Colonel Sir Robert	Walker, Col. W. H. (Lancashire)
Manfield, Harry (Northants)	Rowlands, J.	Walton, Joseph
Markham, Arthur Basil	Runciman, Rt. Hon. Walter	Warner, Thomas Courtenay T.
Marnham, F. J.	Russell, T. W.	Wason, Rt. Hn. E. (Clackmannan
Mason, James F. (Windsor)	Rutherford, John (Lancashire)	Wason, John Cathcart(Orkney)
Massie, J.	Rutherford, V. H. (Brentford)	Watt, Henry A.
Masterman, C. F. G.	Salter, Arthur Clavell	Wedgwood, Josiah C.
Menzies, Walter	Samuel, Herbert L. (Cleveland)	Weir, James Galloway
Middlebrook, William	Sassoon, Sir Edward Albert	Whitbread Howard
Mildmay, Francis Bingham	Scarisbrick, T. T. L.	White Sir George (Norfolk)
Molteno, Percy Alport	Schwann, C. Duncan (Hyde)	White, J. D. (Dumbartonshire)
Mond, A.	Schwann. Sir C E. (Manchester)	White, Luke (York, E. R.)
Montagu, Hon. E. S.	Scott, A. H. (Ashton under Lyne	Whitley, John Henry(Halifax)
Morgan, J. Lloyd (Carmarthen)	Sears, J. E.	Whittaker, Rt. Hn. Sir Thomas P.
Morpeth, Viscount	Seaverns, J. H.	Wiles, Thomas
Morse, L. L.	Seely, Colonel	Williams, Llewelyn (Carmarth'n
Napier, T. B.	Shackleton, David James	Willoughby de Eresby, Lord
Nicho'son, Charles N. (Doncast'r	Shaw, Rt. Hon. T. (Hawick B.)	Wilson Henry J.(York, W. R.)
Nicho'son, Wm. G. (Petersfield)	Sheffield, Sir Berkeley George D.	Wilson, John (Durham, Mid)
Norton, Capt. Cecil William	Shipman, Dr. John G.	Wilson, J. W. (Worcestersh, N.)
Nuttall, Harry	Smeaton, Donald Mackenzie	Wilson, P. W. (St. Pancras, S)
Oddy, John James	Soames, Arthur Wellesley	Wilson, W. T. (Westhoughton)
O'Donnell, C. J. (Walworth)	Soares, Ernest, J.	Wood, T. M'Kinnon
Parkes, Ebenezer	Spicer, Sir Albert	Wortley, Rt. Hon. C. B. Stuart-
Pearce, Robert (Staffs, Leek)	Stanier, Beville	Younger, George
Pearce, William (Limehouse)	Stanley, Albert (Staffs, N. W.)	Yoxall, James Henry
Percy, Earl	Stanley, Hon. Arthur(Ormskirk
Perks, Sir Robert William	Stanley, Hn. A. Lyulph (Chesh.)	TELLERS FOR THE AYES—Mr. Joseph Pease and Master of Elibank.
Philipps, Owen C. (Pembroke)	Staveley-Hill, Henry (Staff'sh.
Pirie, Duncan V.	Steadman, W. C.
NOES.
Abraham, William (Cork, N. E.	Flynn, James Christopher	Kilbride, Denis
Ambrose, Robert	Fullerton, Hugh	Law, Hugh A. (Donegal, W.)
Bignold, Sir Arthur	Glover, Thomas	Macdonald, J. R. (Leicester)
Boland, John	Gwynn, Stephen Lucius	MacNeill, John Gordon Swift
Bowerman, C. W.	Halpin, J.	Macpherson, J. T.
Burke, E. Haviland-	Hardie, J. Keir (Merthyr Tydvil)	MacVeagh, Jeremiah (Down, S.
Byles, William Pollard	Hay, Hon. Claude George	MacVeigh, Charles (Donegal, E.)
Campbell, Rt. Hon. J. H. M.	Hazleton, Richard	M'Kean, John
Clynes, J. R.	Henderson, Arthur (Durham)	M-Killop, W.
Condon, Thomas Joseph	Hodge, John	Mooney, J. J.
Craig, Charles Curtis (Antrim, S.	Hope, John Deans (Fife, West)	Nannetti, Joseph J.
Crean, Eugene	Hudson, Walter	Nolan, Joseph
Cullinan, J.	Hunt, Rowland	O'Brien, Kendal (Tipperary, Mid
Curran, Peter Francis	Jowett, F. W.	O'Connor, John (Kildare, N.)
Devlin, Joseph	Joyce, Michael	O'Connor, T. P. (Liverpool)
Duncan; C.(Barrow-in-Furness	Kelley, George D.	O'Doherty, Philip
Duncan, Robert(Lanark, Govan	Kettle, Thomas Michael	O'Dowd, John

O'Grady, J.	Richards,T. F. (Wolverh'mpt'n	Walsh, Stephen
O'Kelly, Conor (Mayo, N.)	Roberts, G. H. (Norwich)	Wardle, George J.
O'Malley, William	Roche, John (Galway, East)	Wilkie, Alexander
O'Shaughnessy, P. J.	Rutherford, W. W. (Liverpool)	Wolff, Gustav Wilhelm
Parker, James (Halifax)	Sloan, Thomas Henry
Phillips, John (Longford, S.)	Snowden, P.	TELLERS FOR THE NOES—Captain Donelan and Mr. Patrick O'Brien.
Power, Patrick Joseph	Starkey, John R.
Redmond, John E. (Waterford)	Summerbell, T.
Redmond, William (Clare)	Taylor, John W. (Durham)

*MR. SNOWDEN (Blackburn) moved to reduce the tea duty from 5d. to 3d. He said he would explain why he proposed such a very moderate reduction in the tea duty. The hon. Member for Preston was quite right in surmising that he should support this Amendment on the ground that this particular tax, as well as all forms of indirect taxation, pressed very heavily on the very poor part of the population. He was proposing the Amendment as a step towards the abolition of all forms of indirect taxation. He was opposed to indirect taxation for a great many reasons which were well known. In the first place indirect taxation was opposed to every recognised canon of sound taxation. It was very uncertain in its incidence and it did not tax a man according to his ability to pay, but according to his necessities. The actual reason for taxing articles of any kind was because they were largely consumed by a considerable number of people. If the consumption changed from one article to another, then, of course, the taxes would be transferred to the articles which had newly come into consumption or use. They would find on investigation that all these theoretic injustices which he had mentioned were borne out by actual facts. The amount of indirect taxation imposed during the present financial year through Excise and Customs was £68,000,000, and of this total more than £10,000,000 was raised by taxation upon food. In answer to a question put to the Chancellor of the Exchequer three weeks ago, he was told that in the last financial year the amount of revenue raised by food taxes upon articles such as tea, sugar and cocoa amounted to £13,500,000. Worked out per head of the population that would be equal to an income-tax of 7d. in the £ for at least 2,000,000 of the wage-earning classes of this country. There were in this country more than 2,000,000 families whose incomes were less than £1 a week. Indirect taxation worked out at £6 17s. 6d. per family of five persons, so that with 2,000,000 heads of families, representing a population between 8,000,000 and 10,000,000, indirect taxation laid upon them an annual burden of £6 17s. 6d., and this was levied upon an income of £1 per week, and was equivalent to an income-tax of 2s. 8d. in the £. Confining the calculation to a taxation of articles of food only it worked out in regard to incomes not exceeding £1 a week at 7d. in the £. If they took the higher burden of 2s. 8d. in the £, including all forms of indirect taxation, or if they took the taxation upon absolute necessaries, that was a burden he submitted which was far too oppressive to be borne by the working classes in this country. As a matter of fact a poor man spent as much on taxable articles as a rich man. If they translated into term of income-tax the amount of indirect taxation paid by a well-to-do person in receipt of £2,000 a year, and compared it with the case of a man earning £1 a week, it worked out for the latter at 2s. 8d. in the £, whilst for a man with £2,000 a year unearned income including income-tax it worked out only at 9¾d. in the £. He wished to point out that there was an income which ought not to be taxed at all. He did not think the State had a right to exact taxation from a man when such taxation encroached upon the necessaries of life. They had heard recently a good deal about physical degeneration. Some appalling statistics had been reported to the House in regard to rejections in the Army last year, and physical degeneration was part of a great problem with which they would have to deal. Therefore, it was not a wise policy, it was not social economy, for the State to tax any part of the population if the effect was to prevent them from obtaining what was necessary to maintain themselves in a position of reasonable comfort. So much in regard to the general argument for the relief of the taxation borne by the working classes. As to the particular aspect of the proposed reduction of the tea duty by 2d. in the pound, it would be in the recollection of all the Members of the Committee that two years ago the Chancellor of the Exchequer reduced the tea duty by a 1d. in the pound. At that time he and his friends maintained that the 1d. would not reach the consumer. Twelve months later the Chancellor of the Exchequer altered his mind. He thought that in some respects the then Chancellor of the Exchequer was the most fortunate person who ever occupied that position; the stars in their courses seemed to be working in his favour. Two years ago when he wanted to reduce the tea duty by a 1d. he saw no difficulty in doing it, but twelve months later when he had to meet an appeal for a further reduction he said it was quite impossible to make the concession with the hope that the consumer would benefit. Exactly the same thing happened in connection with the sugar duty. Twelve months ago it was impossible to half the sugar tax, and this year what was impossible twelve months ago was quite possible. There was no doubt that a reduction of 2d. a pound in the tea duty, considering the quantity be light by the working people, would find its way into the pockets of the consumer. There were other reasons which he might mention in support of his proposal, some of which would appeal to all the Members of the Committee, others to special sections of the House. The tax upon tea was the heaviest of all the taxes which were imposed by way of Customs duty. Whereas formerly the tea duty was 25 per cent. of the price of the article, to-day, owing to the fall in price, the tax represented, at all events on the cheaper qualities, something like 120 per cent. on the price of tea. [An HON. MEMBER: More.] His hon. friend said it was more. That showed that he was within the mark. He could not imagine any other article where the same objection to indirect taxation would apply. The duty on tea was 5d., but the article passed through a considerable number of hands between the foreign producer and the consumer, and in each transaction the trader's profit was put, not on the price of the tea only, but on what had been paid in the way of duty, and therefore he did not think he exaggerated when he said that by the time the article reached the consumer the tax had grown until it amounted to 7d. in the pound. We were almost alone of all the nations of the earth in putting such a tax on a prime necessary of life. That reminded him again of how the late Chancellor of the Exchequer could accommodate his opinions to the necessity of the time being. When he proposed a reduction of the tea duty two years ago he described tea as a prime necessary of life. Twelve months ago, in opposing an Amendment for its further reduction, he said that tea was not a necessary of life, but something in the nature of a luxury. No other English-speaking nation taxed tea at all. He believed that the highest tea tax was in Germany, where it was only 4d. in the pound. He was certain that if any argument would appeal to hon. and right hon. Gentlemen on the Tory benches it was that in relation to the Imperial aspect of this question. About 90 per cent, of the tea imported came from our Indian Empire, and he claimed the support of Unionist Members for his proposal on the ground that it would benefit those who lived under the same flag as ourselves. Turning to hon. Members opposite, he reminded them that they were returned pledged to oppose the taxation of the people's food, but he could not draw any distinction, as far as the consumer was concerned, between a tax upon corn and a tax upon tea. He believed tariff reform was making headway in the country. He was a free trader, although he did not defend free trade by the same arguments as hon. Members opposite. It would be very difficult for them in the country to oppose a tax upon manufactured articles when it was proved by their records that they maintained taxes upon tea, sugar, and other articles of consumption. If they wanted one of the strongest arguments in favour of free trade, let them prove by their action that they were not merely free traders in theory but were determined while they had the opportunity at least to recognise what, as long as he could remember, had been the ideal of the Radical Party, in the matter of taxation, namely, a free breakfast table. He had endeavoured on this occasion to be as mild, moderate, and conciliatory in his language as he possibly could, and he had studiously abstained from saying anything that might wound the delicate feelings and refined susceptibilities of the Chancellor of the Exchequer. He had been as gentle as a sucking dove, and he was us sweet as the songs of the right hon. Gentleman's native land. Therefore he ventured to hope that on this occasion the right hon. Gentleman would pass over his manner and give some attention to his matter. It was very much easier to make remarks on a person's manner than to answer facts and arguments. He would await with interest to hear what the Chancellor of the Exchequer had to say on this matter. The right hon. Gentleman might repeat the answer which he had already given, that the Budget had been framed and that it was impossible to make alterations. If that was so, what was the use of Members of Parliament coming there at all? They might as well leave the whole thing to the Executive, and have, instead of human beings, automatic machines or gramophones. He supposed he would not be in order if he suggested sources from which the Chancellor of the Exchequer might recoup himself for what this proposed reduction would involve. He did not think it was necessary to do that. He believed the Chancellor of the Exchequer was as well aware as he himself of the existence of the golden eggs in the hen roosts which he might rob. He was grateful to the right hon. Gentleman for the concessions which he had already made in the way of remissions of taxation, but it was not enough to satisfy him and his friends. It was going to be a long time indeed before they reached the abolition of all indirect taxation if they moved at the rate at which they had been moving for the last two or three years. He wanted something more than that, and he hoped the Chancellor of the Exchequer would do the best he possibly could under the circumstances to use his ingenuity to find some means of raising the necessary revenue of the country by placing taxation on the classes who by their means were very much better able to bear the burden than those on whom the burden was laid at the present moment.

Amendment proposed— In page 1, line 22, to leave out the words 'five pence,' and insert the words 'three pence.'"—(Mr. Snowden.)

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

THE FINANCIAL SECRETARY TO THE TREASURY (Mr. HOBHOUSE,) Bristol, E.

said he did not know whether the hon. Member was to be more congratulated on the manner or on the matter of his speech. At all events, he would say that he had been more moved by the manner than the matter, for this reason. The hon. Member, in his opening sentence, had said that his Amendment proposed a moderate reduction of the tea duty. He really thought that the hon. Member could not have had in his mind what the effect of such a reduction would be. The Committee would remember that the surplus revenue of the year, as calculated in the Budget speech of the Prime Minister, was £245,000. At one fell swoop the hon. Gentleman would reduce the whole of that credit balance and turn it into a deficit of over £2,000,000. The hon. Member did not say—and this was of importance—that his proposal was a step towards the complete abolition of all indirect taxation. Surely in regard to this particular matter the speech of the hon. Gentleman was not so clear as it might have been. The balance as between direct and indirect taxation was growing steadily in favour of indirect taxation. If his memory served him right, we were at a period where direct taxation amounted to something like 52 per cent, of the total, and indirect taxation to 48 per cent. This year there had been a very considerable reduction in the amount of indirect taxation by the reduction of the sugar duty. The hon. Member went on to point out that out of a sum of £68,000,000 of Customs and Excise duties, something like £10,000,000 were raised by taxation on food. He had not verified those figures, but for the moment he accepted them as correct. But what about the taxation placed on what were usually called the accumulations of wealth? The income derivable from the death duties and the income-tax totalled in the year from £52,000,000 to £53,000,000—a very heavy and, he thought, not an unreasonable and, perhaps, not a final charge which might be laid upon wealth as distinguished from articles of necessity, such as food. At all events, these figures showed that we laid as much as it was now possible to lay upon the accumulations of wealth, and as little as was relatively possible upon the necessaries of life of the people. He shared with the hon. Gentleman his feelings when he said that £10,000,000 of taxation on food was an oppressive burden, and particularly on the poorer classes of the community; and he ventured to say that there was no one, inside or outside the House, who would not welcome, if financially possible, a realisation of that political programme which was once known as the "free breakfast table." There had been from time to time reductions or relaxations of taxation on articles of food. The hon. Gentleman at the end of his speech was in a mood which made an appeal to every section of the House. He said something to try to catch the Radicals on that side of the House. He appealed to the tariff reformers; and in turn to those Members who acted with him on the benches below the gangway opposite. He tried to show that there was no greater infringement of the doctrines of free trade in taxing corn than in taxing tea. But there was this essential difference between the two commodities, that tea was not and could not be produced in this country while corn could be produced here and he hoped always would be.

MR. SNOWDEN

said that the hon. Gentleman did not grasp his point. What he said was that so far as the pocket of the consumers was concerned, so far as the financial bearing on the consumer was concerned, there was no difference between corn and tea.

MR. HOBHOUSE

thought there was, because the price at which an article grown in this country could be sold was much more affected by an import duty than the price of an article which was not grown here. That was a commercial fact which the hon. Member had not distinguished. The hon. Member for Blackburn went on to say that the cost to the consumer of a tax on tea was a great deal more than the profit that accrued to the Exchequer. That was true; and it was a hint to tariff reformers. But of all duties—and it was a curious fact that the hon. Gentleman had missed his mark in this particular—there was no article, as he was informed, the duty on which brought in such a large percentage to the Exchequer as tea. The hon. Member for Blackburn had also stated that we alone of all countries taxed tea to so large an extent. That was also true; but the hon. Member omitted to tell the Committee that there was no nation which consumed so much tea as this nation. So that the argument could be made quite easily to cut both ways. All he had to say in conclusion was that if this were merely a question of sentiment, if it were not a question of real finance, of pounds, shillings and pence, it would be easy and pleasant to accept the proposal of the hon. Gentleman. Nobody knew better than the hon. Gentleman the difficulty of the financial situation. The Government had inherited an encumbered estate. They had found burdens laid upon the estate of this country which were not entirely of their own making. [OPPOSITION cries of "Oh."] He thought he would draw hon. and right hon. Gentlemen opposite. They had had burdens laid upon the estate of this country which were not entirely of their own making, and in order to redeem and discharge the mortgages laid upon their property, they had had to continue to inflict that taxation which was as repugnant to them as it could be to anybody else.

MR. AUSTEN CHAMBERLAIN (Worcestershire, E.)

said that the hon. Gentleman had concluded his speech with a statement which had caused him some surprise, because he did not, at first, understand what his allusion was. The hon. Gentleman had said that he and his colleagues inherited from their predecessors an encumbered estate. He was amazed that colleagues in one Government should have so freely criticised the acts of their immediate predecessors. They now learnt that the hon. Gentleman meant to say that he and his colleagues had inherited a burden from the Opposition. What they inherited from the Opposition was not a burden but a surplus. [MINISTERIAL cries of "Oh."] Yes, a surplus of something like £3,000,000, which had gone to make that reduction of Debt for which Gentlemen opposite had so clamorously taken credit. Of course, it was true that every Government and every Chancellor of the Exchequer had to pay interest on debt incurred by their predecessors and by past generations. The National Debt remained, and he did not understand that it was part of the proposals of the present Government to abolish it. On the contrary, they said that the sacrifices they had made in that regard had already exhausted their zeal for the reduction of the debt of the country, and that next year they were going to propose to the House to release the country from the sacrifices they had been making in recent years, in order to spend the money in some other way. Accordingly, the reference of the hon. Member to the financial liabilities of the country had no force whatever. He did not suppose that the Government meant to cease to reduce the Debt altogether. They had come to a point at which they might reduce the fixed charge for the reduction of Debt by lowering the Sinking Fund and resuming control of the money devoted in recent years for that purpose. He would pass from the obiter dictum of the hon. Gentleman which he thought the hon. Member would regret on further consideration, and turn to the speech of the hon. Member for Blackburn. He must join the Secretary to the Treasury in complimenting the hon. Member for Blackburn on the manner of his speech. If the hon. Member would permit him to say so, he thought that when he adopted that tone of sweet reasonableness, he was not less but much more convincing than in his more vitriolic mood, as the Chancellor of the Exchequer had described it, in which he so often discussed financial arrangements. The hon. Member had asked a statement from him as to the course he meant to take. He had often expressed his desire to see a re- duction of the tea duty, at least a reduction of a preferential kind on all tea imported from other portions of His Majesty's Dominions. He would be glad to see that carried out now, and to see this heavy duty, in proportion to the value of the article, still further reduced. It is one of the duties which by reduction, he believed, might be made largely more remunerative, because there was no article that he knew of, the consumption of which responded more quickly to reduction of the duty than that of tea. So that by a considerable and striking reduction of the duty on tea they would find in a very short time they would lose much less than the due proportion of revenue. For what was lost per lb. would be made up largely by the increased number of lbs. consumed in the country. That being so, he had considerable sympathy with a Motion for the reduction of the duty. But he had no sympathy at all with the main ground upon which the hon. Gentleman proposed the reduction. The hon. Gentleman proposed it avowedly as a step towards the abolition of all forms of indirect taxation. What he proposed to substitute for indirect taxation he had not disclosed on that occasion. The hon. Member for Preston had uttered similar views. He also was opposed to all forms of indirect taxation; but then he associated with that the enunciation of another tax which the hon. Member for Blackburn did not propose. The hon. Member for Preston proposed that no man should pay indirect taxation, but that every man should pay direct taxation—in fact an income-tax, now confined to those whose incomes were above a certain sum, on a graduated scale beginning at a rate however small. The proposal of the hon. Member for Blackburn was the very antithesis of the proposal of the hon. Member for Preston. It was that the poor should be exempt from taxation—what limit of income should constitute a poor man for the purpose the hon. Gentleman did not say—and that the necessary balance of revenue to meet the expenditure of the country should be secured by increasing the burdens of the rich. To exclude from taxation the great mass of the people of a country whose policy they controlled was not a safe or honest basis upon which any State could be built. It might be justified in some oligarchy or autocracy where the great mass of the people had no share in the Government; but no sensible man, or indeed, honest politician, who weighed what he said, would commit himself to the doctrine that the great bulk of those who controlled the policy of the country should make no contribution to the cost of its administration. He was antagonistic, therefore, to the main principle of the hon. Gentleman. More than that, he differed from him as to the incidence of taxation as a whole. The hon. Member had complained that indirect taxes pressed unduly upon the poor. Of course, if the Government depended upon nothing but a single tax on tea or a single tax on corn, as the scale of taxation rose so it would press unjustly upon the poor. But the taxation of the country must be considered as a whole, and, therefore, while much of what the hon. Member said would be true if the tax on tea was the only tax, it became untrue when the tea tax was considered in relation to the rest of the fiscal system. It was, no doubt, true that if they had but a small number of indirect taxes, and if they adopted the principle, which this country had adopted for many years, that indirect taxation should be placed—excluding alcohol—on articles of general consumption, none of which were produced here, these indirect taxes would press invidiously upon the poor as compared with the rich. For that there were two remedies. One was to adjust that inequality by the proper use of direct taxation; and the other was to extend the principle of indirect taxation so as to tax not merely the necessities of the poor, but the luxuries of the well-to-do.

MR. SOARES

What luxuries would the right hon. Member tax?

MR. AUSTEN CHAMBERLAIN

said he would tell the hon. Gentleman what taxes he would impose if ever he was Chancellor of the Exchequer again. The idea of the hon. Member asking him, sitting on the Opposition side of the House, what taxes he would propose to impose whilst the Chancellor of the Exchequer had not yet told the House how he proposed to meet the liabilities which the Government had undertaken, was simply preposterous.

MR. SOARES

The right hon. Gentleman said he desired to tax the luxuries of the rich. All those who supported the Government would like to do so wherever it was possible. He therefore asked the right hon. Gentleman what luxuries he would propose to tax.

MR. AUSTEN CHAMBERLAIN

said that if the hon. Gentleman was unable to see the number of luxuries that went untaxed which might be taxed he had a greater poverty of imagination than might be suspected. The hon. Member for Blackburn had contended that the poor man expended as much on these taxed articles of necessity as the rich. That he did not believe. The expenditure in a rich man's establishment on sugar or tea or any other articles of that kind which were taxed was much higher than that of the poor man. The hon. Member for Blackburn did not put it that the poor man paid as much, having regard to the proportion which his expenditure bore to income. He made the definite statement that the poor man took as much of these articles as the rich man. That he did not think was true. The hon. Member was also satirical and suggested that the Prime Minister changed his economic doctrines cm these points to suit the exigencies of the moment—that to use his own words, the right hon. Gentleman always found his conclusions pointing in the direction in which he wished to go. The hon. Member had appealed to tariff reformers for sympathy for his Motion on the ground that 90 per cent. of the present supply of tea came from British Possessions beyond the sea. He would be much more inclined to vote with the hon. Gentleman had he confined his proposed reduction to that 90 per cent. of the supply. He shared the hon. Gentleman's desire to bring the British Possessions into closer connection with this country, but he had not quite the same reason for reducing the tax on the remaining 10 per cent, of supply. The hon. Member appealed to them as tariff reformers, but he had not embodied any proposals as to tariff reform in his Amendment. He appealed to hon. Members supporting the Government on the ground that there was no essential difference between a tax on tea and a tax on corn. He was glad to have that admission from the hon. Gentleman. What a pity it was that the Prime Minister did not hold the same opinion, and what a pity it was that the hon. Member was not present to remind the Prime Minister of that when the right hon. Gentleman was so eloquent on the iniquity of a tax on corn. The distinction which was attempted to be drawn between corn and other articles of general consumption was one of the flimsiest of the many preposterous propositions which had been laid down in the course of recent financial debates. One thing which had astonished him and which he thought had astonished some hon. and right hon. Gentlemen on the Treasury Bench was the argument put forward by the Financial Secretary to the Treasury that the price of an article grown in this country was more affected by a tax than the price of an article which came from abroad and which could not be produced here. He wished the hon. Member had developed that argument. When the whole supply received was taxed it was clear that the whole burden of the tax must be borne by the consumers, together with such additions as were made for outlay and other considerations. But that was not so when a great portion of the supply received was untaxed. The effect of any duty on the price of an article depended upon the proportion which the untaxed supply of the article boreto the whole consumption, and as the proportion of the untaxed supply was large and the taxed supply small, so would the effect of the duty be lightened. But where the whole supply was taxed as in the case of tea, the whole duty was borne by the consumer.

MR. HOBHOUSE

dissented.

MR. AUSTIN CHAMBERLAIN

observed that the Financial Secretary did not agree with him, but he defied the hon. Gentleman to make good the proposition which he had laid down a few moments ago or to find a single economist to support it. He thought the hon. Member for Blackburn might have found a more powerful ground for his appeal to hon. Gentlemen opposite. Many of them had given promises that they would vote for the reduction of the tea duty. So long as the Unionist Party was in power and the Anti-tea Duty League approached them they were naturally anxious to win any votes they could and gave these promises recklessly and proudly. Now was the time for the redemption of these promises. Or was it one more added to the many expectations held out at the general election and disappointed in the course of the present Parliament? One more promise made only to be broken? He did not intend to vote for the Amendment of the hon. Member. He differed from the grounds on which the hon. Gentleman had proceeded; he differed in opinion from him on the subject of taxation. The hon. Gentleman had attempted to win their support by a reference to preference, but he put no preference into his Amendment. Under these circumstances, he would not be surprised if he was not inclined to follow him into the lobby, and he did not suppose the hon. Gentleman would regret it. There was a reason of more general application which prevented his supporting the Amendment. The hon. Gentleman had remarked that the Chancellor of the Exchequer would probably say that the Budget was already framed, and that it was impossible now to make any alteration; and he had replied to that by saying: "If that be so, what is the use of the House of Commons?" In recent proceedings, a good many of them had been inclined to ask that question. But after all, the finances of the matter must be looked at as a whole. He did not think this Budget was a good one; he thought it was a bad one. It was saddled with a liability for which it made no provision; it created a situation which he believed no Chancellor of the Exchequer had ever voluntarily, or with his eyes open, created before. They were light-heartedly imposing upon future years a burden variously estimated at anything from £6,000,000 to £10,000,000 for old-age pensions alone, without regard to the expenditure on the Navy of the sums that would be required for that service, or on the Education Bill, or on any other purpose; and they were doing that without the remotest idea in the minds of the House as to how that vast expenditure was to be met. But that was not all. The Government had chosen this moment actually to reduce the resources which they already possessed. He did not think that there was ever a case of such reckless, such short-sighted finance, and he would be astonished, should the Government remain in power, if they themselves were not the first to regret the reckless use they were making of their opportunities now. Hon. Gentlemen opposite smiled as if he were drawing an exaggerated picture. But what was the Chancellor of the Exchequer's description of himself and the estimation in which they stood? He described himself as a robber, not a potential but an intentional robber, looking about to see whose hen roosts he could open most easily, and where he could steal eggs with the least fear of punishment. He confessed that he regretted to hear the Chancellor of the Exchequer use language of that kind to describe his position and his policy, and he regretted it the more because he was afraid that it exactly corresponded to the truth. But to pass from the position of the Chancellor of the Exchequer to the position of the finances of the country as a whole, what did they find? The Chancellor of the Exchequer said— A stunning deficit, a falling revenue, and a depressed trade. That was as strong language as any lie had himself used. The right hon. Gentleman repeated it, and spoke of other countries being in the same financial distress. He went on— I do not know that this consoles the man at the head of the Treasury who has a great deficit to work off. A great deficit to work off? The Financial Secretary had spoken of a surplus of £245,000. How much of that was left after the legislative prospects of the Government?

MR. HOBHOUSE

said he was speaking of the Budget of this year and of the expenditure for this year, and there remained the surplus to which he had referred.

MR. AUSTEN CHAMBERLAIN

said that the Financial Secretary must go back to the Treasury and get up his facts. There was a surplus of £245,000, but if he looked to old-age pensions, for which they had one quarter in this financial year, and to the extra expenditure on other matters, sanctioned by the Government, he would find that there was no longer £245,000. But the Chancellor of the Exchequer was not speaking of this year; he was looking ahead a little. The great deficit which he had to "work off" was not a deficit which he had inherited from his Unionist predecessor, but a deficit which he had inherited from his predecessor, the Prime Minister, and which he had to work off next year. He said that depression did not console— Men, who have a great deficit to work off; men who have probably in front of them a diminishing revenue, everything falling, estate duties, Customs, Excise, everything diminishing, except the demands on the Treasury. That was the position which the Chancellor of the Exchequer had described, not in that House, but to the bankers and merchants with whom he dined in the City of London. It was a position which nobody could view without anxiety, if not alarm. He could not take the responsibility for himself—he did not profess to speak for his friends who had held the same high office in recent years—and under the circumstances he could not vote for a reduction of the taxes which the Chancellor of the Exchequer still proposed to keep on, unless he had an opportunity of presenting an alternative scheme as a whole. He had to take this Budget as a whole or leave it as a whole. He thought it bad, and that it was framed on wrong lines, but it was not possible for him by means of suggestions in Committee or by any Amendments that a private Member could move, to transform this Budget into such a scheme as he thought would place the finances of the country on a sound foundation. Under these circumstances he would take no part in the division on the reduction of this tax. He would take no responsibility; he must leave the responsibility to the Government for the scheme they had proposed. When the time came to express their opinion on the Budget as a whole, when they came to the Third Reading, he would give his vote against the Bill as being unsound from beginning to end, as not to be recast, and as a measure which must be condemned as a whole because it could not be amended in any particular.

*MR. SOARES (Devonshire, Barnstaple)

said he merely rose to call attention to the right hon. Gentleman's remark that the only alternative to this tea duty was a tax upon luxuries. The right hon. Gentleman was Chancellor of the Exchequer himself only two or three years ago. He presumed that the right hon. Gentleman was then looking out for what objects he could tax, and if he knew of objects of luxury why had he not told them. The fact of the matter was, that, like all other tariff reformers, the right hon. Gentleman always took refuge in vague generalities.

THE CHAIRMAN

I really do not see how this bears on the Question before the Committee.

*MR. SOARES

I agree that it does not, but I wished to deal with, the point raised by the right hon. Gentleman and that was the only reason for my rising.

*MR. KEIR HARDIE (Merthyr Tydvil)

said the Financial Secretary had rather complained that they had not specified the source from which the deficit was to be met if the Amendment was carried. But the hon. Gentleman overlooked the fact that there was an income-tax clause in the Bill which still remained to be discussed, and any deficit that might accrue could be met when they reached that point. In regard to direct taxation, hon. Members on those Benches, if they were called upon to choose between it and indirect taxation upon the poor, would infinitely prefer direct taxes. It was of first importance that people should understand that they were paying taxes, and the money should not be extracted from them by subtle means which they did not comprehend. With direct taxes there would probably be more effective control over the way in which they were spent. The late Chancellor of the Exchequer did not intend to support the Amendment, and the reasons he had given came rather as a surprise. The Labour Party were usually accused of being hard to satisfy, and if anything was taken by them it was said that they took it with a bad grace, and they were lectured for demanding all or nothing. Now, the reason given by the ex-Chancellor of the Exchequer for not supporting the Amendment was that it only proposed to give him 90 per cent, of what he desired to see accomplished. Of the total amount of tea imported 90 per cent. came from countries under the British flag, and only 10 per cent, from foreign countries, but because the 10 per cent, was to be included, therefore the Resolution was to be rejected. Another point which should not be allowed to pass without challenge, was the statement that the rich man paid more in the matter of indirect taxes upon food than the workman. He disputed that statement entirely. The expenditure of the rich man upon his household, his servants, his establishment, was undoubtedly greater than that of the workman in his home, but the amount spent on the servants was part of their wages. Suppose the servants supplied their own food in every case as they did in some cases, there would be no question then of the establishment paying a bigger amount. When food was reckoned as part of the wages the fact that the master of the establishment had to pay the tax upon it was taken into account.

MR. AUSTEN CHAMBERLAIN

Does the hon. Member suggest that wages go up and down as the duty on tea is raised or lowered?

*MR. KEIR HARDIE

said that what fixed wages was the cost of living, and that if the cost of living was high, wages would be correspondingly high. Supposing servants were required to purchase their own food and the cost of food was raised 50 per cent., would they be paid the same wages as before? Certainly not. Therefore, the cost of living regulated the wages paid to servants, though not solely or exclusively, and when the owner of an establishment was paying his indirect tax upon tea, he was paying for himself and his servants, the amount paid for his servants came from their wages, and therefore, the statement that the house of the rich paid no more than the house of the poor was correct. But there was another point of view. Tea was more commonly consumed in the houses of the poor than he understood it to be in the houses of the rich. At dinner, tea, supper, and breakfast, tea, coffee or cocoa was the common dish amongst the poor. Among other classes of society wine and the higher priced liquors were the more common form of beverage. The dining-room of the House of Commons would prove it if there was any dispute about the point. The tax paid upon wine was by comparison with tea, an infinitesimal proportion of the price of the article. The tax upon tea was over 100 per cent, of its value. The tax upon champagne was 20 per cent. The late Chancellor of the Exchequer had said that no sensible politician would seek to exempt the poorer part of the electorate from the payment of taxes. If that were so some very great men of the past could not be regarded as sensible. The only one he would name was the late John Stuart Mill who laid it down as an axiom that taxation should not come from the necessities of life of the poor, but from the surplus income of the well-to-do, and the proposition on the face of it was sound. If the taxation of the country was taken out of the incomes of the very poor they were still further reducing the very low Standard of living which already obtained. If it was imperative that it should be so taken, then they would have to grin and bear it as best they could. But when it was known and was not disputed that there was a surplus income in the nation from which the taxes could be taken without inflicting hardships on a single living individual, it was little short of a crime to put these taxes on the underpaid poor. If it was said that to relieve them of taxes while leaving them political responsibility and power was an anomaly which could not be recognised, his reply was that the remedy lay in the hands of that House. Let legislation be so ordered as to ensure for every worker the means of earning a competency and prevent enormous incomes accumulating which had been extracted out of the misery and suffering of the poor, and then apply the canons of taxation in the way the right hon. Gentleman had suggested. But so long as the law of the land permitted these people to be robbed until they were in a condition of poverty in which they were unable to find the necessaries of life, apart from taxation, every canon of righteousness and of equity demanded that that House should not impose burdens upon those who were already victims of a most unjust and iniquitous system. He hoped and trusted the Committee would show its opinion of this matter by voting for the Amendment. They had no desire to see the basis of taxation broadened in the way that appealed to hon. Members above the gangway. They were seeking to relieve the poor of the burdens of taxation already put upon them. They believed rightly or wrongly that what was covered by the phrase "broadening the basis of taxation" was to relieve the well-to-do of their share of taxes in order to put them on the poor, and because they believed that they would resist to the utmost any attempt to broaden the basis of taxation on the lines suggested by tariff reformers. But the position of free traders would be strengthened if the Government, having the opportunity and the means at its hand, had broadened the basis of taxation by relieving the overburdened backs of the poor and placing the burden on the underweighted backs of those so well able to bear it. Let the Government accept this Amendment, and they would be able to go to the country on it as an alternative to the cry of broadening the basis of taxation, especially if they found the money for the deficit by a graduated tax upon incomes exceeding £10,000 a year. A small fraction would be sufficient to meet the £2,000,000 deficit which the Amendment would create. He hoped the Government not only in the interests of the submerged poor but in the interests of the principles of free trade would agree to the Amendment, and thereby prove that they were free traders not merely in regard to the great articles of commerce but also in regard to the food of the labouring poor.

*MR. REES (Montgomery Boroughs)

said he could not support the Amendment, and if he gave his reasons he could also add that he could not associate himself with the arguments of the hon. Member for Blackburn and the Leader of the Labour Party, who seemed to desire to place all taxes on one class. If these were democratic sentiments he began to think there must be something in the arguments of those who held that the time spent at school in learning Greek was totally wasted. If he understood the meaning of the word it meant something absolutely contrary to that which the two hon. Gentlemen had read into it, and implied the negation of all class legislation. He had made no pledge, or if he had it was to endeavour to get the tea duty reduced, and that he would endeavour to do, but only by what he thought effectual measures to that end. There might be other hon. Members who wished to bring about the same end who might not be able to vote for this Amendment. The fact was that the present high rate of duty should by all possible means be reduced, but it did not follow on that account that one was to vote for this Amendment, nor did it seem to be compatible with anything like elementary consistency for hon. Gentlemen who bombarded the Government with claims for social reforms costing more and more and more to came forward now and to seek to take away from them some of the means which they had to pay for such reforms and to pay their way. The hon. Gentleman who moved this reduction spoke very mildly and moderately, but he thought he could remember I that quite lately he had said he would never be so mean spirited as to thank the Government for the Old-Age Pensions Bill. It was a miserable instalment which he despised. But if they wanted more and more social reforms how could the hon. Member opposite reasonably ask the Government to relinquish ways and means by reducing the tea tax. Hon. Members opposite on the Labour Benches were all calling out for those benefits, but it seemed to him that those who pressed for all those reforms should have the consistency to leave the Government some thing with which to pay the bill. He had, however, some clients himself whose case had not been brought before the House, and who had been described by the right hon. Baronet the Member for the Forest of Dean as "a white oligarchy"—he referred to the planters who produced most of the tea. There was no class more worthy of the sympathy and attention of the House. Planters worked hard in foreign countries where they invested British capital and employed British Indian labour, and they were hard-hit by this very high tea duty, which he wished to see reduced, on account of both the producer and the consumer. Some £40,000,000 of British capital were in - vested in this industry in which some 2,000,000 British subjects were employed. Those planters were the makers of some of the Indian provinces, and were the true friends of the natives. Little had been done for them by the Government, I and their loyalty was taken for granted and i not considered worthy of much purchase. None the less they deserved the sympathy of the House, and their case, as well as that of the consumer, was deserving of attention when this Amendment was before the House. The coal industry only used to pay a tax of 10 per cent., but it came forward and got relieved of it. Sugar used to pay 28 per cent., but those interested set to work until it was reduced to 14 per cent. But that was a very powerful industry. Tea remained at 65 per cent, and that was a great deal too high. The tea industry paid £6,000,000 of duty every year, whilst the alternative temperance drinks brought into the revenue about £500,000, consequently tea stood easily first. He confessed that he did not quite follow the arguments of the Prime Minister when he put sugar so much before tea in respect of claims for reduction, because the tea duty was practically a food tax. It was almost impossible to exaggerate the importance of tea to the poor people, or the boon that would result from a reduction of the tea duty. No less than 93 per cent. of the tea produced in the world was British, whilst 94 per cent. of the sugar produced was foreign. Not long ago he asked the Chancellor of the Exchequer what was the amount of the respective war taxation paid upon tea and sugar, and he replied that tea paid £14,000,000 while sugar paid £41,000,000, but if the ordinary tea duly was added it would be found that tea since the war paid £51,000,000 against £41,000,000 paid by sugar. In other countries they did not find that tea was taxed to such an extent as in this country, where they taxed the product of British capital and industry much more than any other continental country. It was true that, but for the set-back which had occurred in this country by a reduction in the consumption, tea would have had a very successful year, but that was because of the boom in cheap tea and while the producer benefited the consumer suffered. In Russia the consumption had largely increased, and they were reducing their duty, and that was an example which he sincerely hoped the Chancellor of the Exchequer would shortly see his way to imitate. He did not think it was necessary to trouble the Committee with figures or statistics showing how great the burden of taxation was, because that aspect of the case had already been dealt with. He gathered that a poor man could not get a drinkable tea under 1s. 2d. a pound, and that was a great deal too much. He thought the Anti-Tea Duty League and other associations would do well to keep up their agitation in order that the Government might be brought to recognise that tea had quite as much claim upon them as sugar. He was sorry to introduce this jarring note between tea and sugar, because they were two substances which often appeared in an intimate and friendly conjunction in the cup and elsewhere. It was, however, necessary to press the case of tea as compared with sugar because the latter always seemed to get the better of the argument, not on account of the intrinsic merits of the case, but because of the far greater influence with which the sugar case was pushed. Lord St. Aldwyn said that the sugar tax was not only a war tax but a tax necessary to produce a revenue for the general purposes of this country, and tea had a much better claim for reduction than sugar. He was prepared to admit that this had been a prosperous tea year for the trade. He might add that he had personally no interest whatever in the tea trade. But although there had been a prosperous year in tea it had all been in consequence of the high price of low-class tea. The consequence was that the poor people got a poorer quality of tea to drink. The sellers of low quality tea had been doing so well that there had not been that outcry against the duty which would otherwise have occurred, and he hoped the Chancellor of the Exchequer would not take it from that fact that everything was all right with the tea trade. On the contrary the public had suffered. He was afraid that the planters might be tempted by high quotations to pluck chiefly grades of bad tea which would be to the detriment of the people of this country. The trade of; London, too, was affected, and dealers were disposed to prefer Calcutta under existing circumstances. There was another result of this high duty and it was the largely increased consumption of China tea. He was not one of those who spoke ill of everything Chinese, and he had no sympathy whatever with the perpetual denunciation of this nation, to which he was condemned to listen, but having seen the manufacture of tea both in India and China he had no hesitation in saying that it was much better for the people that they should drink cleanly-manufactured Indian tea than the dirty low-class China tea. He did not say that of China tea generally, but the low class of China tea was very dirty. He meant no disparagement whatever of China tea, but only of a certain class of stuff. The tea importers brought into this country a very low class of cheap China tea for blending purposes, and they were obliged to do this to enable them to sell at 1s. or 1s. 2d. a pound. He thought the best thing for Parliament to do was to endeavour to get these taxes reduced gradually, and not press session after session for every kind of expensive reform which made a reduction of the tea duties absolutely impossible. To show his own appreciation of the real position, he would vote against the Amendment, acceptance of which had been rendered impossible, as everyone must recognise, by vast commitments, to which both sides of the House with their eves open had consented.

Mil. HUNT (Shropshire, Ludlow)

said the lion. Member who spoke just now told the House when referring to the tea tax in 1905 that he had long been anxious for a free breakfast table, and that the tax on tea was not defensible because it affected the rich infinitely loss than the poor. He remembered seeing pesters forty years ago calling on the electors to support Liberal candidates who were in favour of a free breakfast table. It was a long time coining. It was now generally admitted that tea was just as necessary as bread itself. The Financial Secretary to the Treasury had stated that the effect of taking 2d. off the tea duty would be to take more than £2,000,000 out of the Exchequer. Most of that money was coming out of the pockets of poor people. This was supposed to be a free trade country, and yet the import duties paid on tea, tobacco, and other commodities used by the working classes amounted to over £20,000,000 a year. The import taxation per head of the population amounted to 15s. 3d., while in Germany, which was supposed to be a protected country, it was 9s. 5d. He could not understand how hon. Gentlemen opposite could pretend that this was free trade. It was not free trade at all. The Secretary to the Treasury preferred to tax tea instead of wheat because the one could not be grown in this country and the other could. One was produced by British labour in this country, and therefore a tax must not be put on the imported article, but a tax might be put on tea because it did not help in any way the labouring people of this country. The poor paid two or three times as much of the tea duty as the rich. If a rich man spent 6s. for two pounds of tea at 3s. per pound, he only paid two fivepences per pound for duty; but if a poor man spent 6s. for six pounds of tea at 1s. per pound, he paid six fivepences for duty. That was supposed to be for the benefit of the working classes of this country. That system of taxation was supported by Liberal and Labour Members. There was an enormous amount of manufactured goods coming into this country which the poor never bought.

*THE CHAIRMAN

The hon. Gentleman is really getting very wide of the subject.

MR. HUNT

said he was sorry he had got over the line altogether. He was only going to refer to sugared articles incidentally. The Chancellor of the Exchequer stated at Manchester that what the people had to pay for sugar they would get back in the shape of old-age pensions. The tea was going to be just in the same position—only more so, because the tax was very much heavier. If the money was to be got out of the working classes for old-age pensions in that way, he would remind the Committee that a great many of them were I not going to get any benefit at all. He wondered how hon. Gentlemen could insist on this heavy taxation of tea and still call themselves free traders. Would someone on the other side get up and state where free trade came in?

MR. CURRAN (Durham, Jarrow)

said that after listening to the clear, logical, and explicit speech of the hon. Member for the Ludlow division of Shropshire the Committee would have no difficulty in making up its mind on the question at issue. The hon. Member for Blackburn had no desire to conceal the fact that this Amendment embodied a fundamental principle, namely, the principle of direct taxation. He and his friends were in favour of direct taxation, and they were also in favour of shifting the burden of taxation from the shoulders of industry to the shoulders of the moneyed. He had the good fortune to be in the United States of America in 1900. During that year the South, African War was raging, and the Americans also had a war all to themselves, called the Philippine War. He was astonished on his arrival in the United States to find that in buying certain commodities he had one cent or two cents extra to pay over and above the normal price, as a war tax. He persuaded those people that he was paying a war tax in his own country, but irrespective of that they made him pay the war tax of the United States on the commodities he purchased. The Americans know how much it was costing. The American workman was able to estimate the direct cost of the Philippine War, and the result so far as he could see, during the three' months it was at its height, was that there were no Mafeking nights in the United States. There was calmness, and a lack of enthusiasm in regard to the prosecution of the war. In his judgment, if the principle of direct taxation was introduced in a similar way in this country, we should have a great many less wars and a good many less Imperialists in that House than were to he found on the occasions when War Estimates were up for discussion. The Secretary for the Treasury had twitted his hon. friend with not laying down any specific method whereby the money could be raised. He had also told the Committee that the present Government was suffering because of a legacy left them in the shape of liabilities by the late Government. They were all well aware of the liabilities which were handed over to the present Government owing to the extravagance of the late Government, but why impose a tax on the poorest classes of the community to make up for that extravaganc? The workers were, practically ground between two millstones. The people who were in receipt of under £1 a week and who had the average family responsibilities were the economic slaves of the employers and they were the economic and agricultural slaves of the landed proprietors. If they contributed the labour part and only received one-third in wages in return as the result of their labour power, in his judgment the people who took the other two-thirds ought to bear the taxation in order that it might be removed from their shoulders. He submitted that the right hon. Gentlemen on the Treasury Bench required to be very careful in regard to the methods of maintaining taxes on tea and sugar. There was a possibility that it might be used against them by hon. Gentlemen like the Member who had just sat down when the next election came round. They, on the Labour Benches, stood for free trade, although they did not speak under the shadow of Richard Cobden and John Bright, both of whom were anti-trade unionists and rigid individualists. There was one living relic of that school in the House—possibly there were others, but they concealed their opinions more judiciously—and that was the hon. Member for Preston. The Labour Members did not take up the attitude which individualistic free traders took up; but they did say that to tax commodities because they came across the ocean or across a frontier was a fictitious tax which the consumer

had to pay. Consequently, they took up the position of propounding international reciprocity without attempting to build around the British nation, or the British Empire, barriers which gave no advantage or privilege to the worker, but afforded capitalists and monopolists an opportunity of rigging the market and charging the highest prices to the consumer. The fact was that if this tax were taken off there were other sources of revenue to which not only the Treasury Bench, but most of their supporters, were practically committed. What about the taxation of land values? That had been discussed in the House repeatedly and the hon. Members who now formed the Government voted for it.

*THE CHAIRMAN

said that the hon. Member could not discuss all other sources of taxation.

MR. CURRAN

said he bowed to the Chairman's ruling, but had only been pointing out that there were other sources of taxation which might be tapped if the reduction of the tea duty was made. In conclusion, he maintained that if the Government were prepared to carry out certain financial reforms to which they were committed, the tea tax would be reduced, and double, aye, quadruple the amount would be made up from other courses of revenue.

MR. LLOYD-GEORGE

appealed to the Committee to bring the discussion to a conclusion, as it was absolutely necessary to go on to other Amendments on the Paper. They had already debated longer and more, fully the tea clause of the Finance Bill than was usual.

Question put.

The Committee divided:—Ayes, 230; Noes, 91. (Division List No. 188.)

AYES.
Adkins, W. Ryland D.	Balfour, Robert (Lanark)	Beck, A. Cecil
Agnew, George William	Barker, John	Benn, W. (T'w'r Hamlets, S. Geo.
Allen, Charles P. (Stroud)	Barlow, Sir John E. (Somerset)	Bethell, Sir J.H. (Essex, Romf'd
Armitage, R.	Barnard, E. B.	Bethell, T. R. (Essex, Maldon)
Astbury, John Meir	Barran, Rowland Hirst	Black, Arthur W.
Atherley-Jones, L.	Barry, Redmond J. (Tyrone, N.)	Boulton, A. C. F.
Baker, Sir John (Portsmouth)	Beach, Hn. Michael Hugh Hicks	Branch, James
Brigg, John	Hobart, Sir Robert	Robertson, J. M. (Tyneside)
Brocklehurst, W. B.	Hobhouse, Charles E. H.	Robinson, S.
Brooke, Stopford	Holland, Sir William Henry	Robson, Sir William Snowdon
Brunner, J. F. L.(Lancs., Leigh)	Holt, Richard Durning	Rogers, F. E. Newman
Bryce, J. Annan	Howard, Hon. Geoffrey	Ropner, Colonel Sir Robert
Buchanan, Thomas Ryburn	Idris, T. H. W.	Runciman, Rt. Hon. Walter
Burns, Rt. Hon. John	Isaacs, Rufus Daniel	Russell, T. W.
Burt, Rt. Hon. Thomas	Jackson, R. S.	Scarisbrick, T. T. L.
Byles, William Pollard	Jacoby, Sir James Alfred	Schwann, C. Duncan (Hyde)
Cameron, Robert	Jardine, Sir J.	Scott, Sir S. (Marylebone, W.)
Carr-Gomm, H. W.	Johnson, W. (Nuneaton)	Sears, J. E.
Causton, Rt. Hn. Richard Knight	Jones, Leif (Appleby)	Seaverns, J. H.
Cawley, Sir Frederick	Kearley, Sir Hudson E.	Seely, Colonel
Cheetham, John Frederick	Kekewich, Sir George	Shaw, Charles Edw. (Stafford)
Churchill, Rt. Hon. Winston S.	King, Alfred John (Knutsford)	Shaw, Rt. Hon. T. (Hawick B.)
Cleland, J. W.	Laidlaw, Robert	Sherwell, Arthur James
Collins, Stephen (Lambeth)	Lambert, George	Shipman, Dr. John G.
Compton-Rickett, Sir J.	Lamont, Norman	Simon, John Allsebrook
Corbett, C. H (Sussex, E. Grinst'd	Leese, Sir Joseph F.(Accrington	Sinclair, Rt. Hon. John
Craig, Herbert J. (Tynemouth)	Lehmann, R. C.	Smeaton, Don ld Mackenzie
Crossley, William J.	Lever, A. Levy (Essex, Harwich	Soares, Ernest J.
Dalziel, James Henry	Levy, Sir Maurice	Spicer, Sir Albert
Davies, David (Montgomery Co.	Lloyd-George, Rt. Hon. David	Stewart, Halley (Greenock)
Davies, Sir W. Howell (Bristol, S.	Lockwood, Rt. Hn. Lt.-Col. A. R.	Strachey, Sir Edward
Dewar, Arthur (Edinburgh, S.)	Luttrell, Hugh Fownes	Straus, B. S. (Mile End)
Dobson, Thomas W.	Lyell, (Charles Henry	Strauss, E. A. (Abingdon)
Duckworth, James	Macdonald, J. M.(Falkirk B'ghs	Stuart, James (Sunderland)
Dunn, A. Edward (Camborne)	McCallum, John M.	Sutherland, J. E.
Dunns, Major E. Martin(Walsall	McCrae, Sir George	Taylor, Theodore C. (Radcliffe)
Edwards, Clement (Denbigh)	McLaren, H. D. (Stafford, W.)	Tennant, Sir Edward(Salisbury
Edwards, Sir Francis (Radnor)	McMicking, Major G.	Tennant, H. J. (Berwickshire)
Erskine, David C.	Mallet, Charles E.	Thomas, Abel (Carmarthen, E.)
Essex, R. W.	Manfield, Harry (Northants)	Thomasson, Franklin
Esslemont, George Birnie	Marks, G. Croydon (Launceston)	Thornton, Percy M.
Evans, Sir Samuel T.	Marnham, F. J.	Tomkinson, James
Everett, R. Lacey	Mason, A. E. W. (Coventry)	Torrance, Sir A. M.
Fell, Arthur	Massie, J.	Toulmin, George
Fenwick, Charles	Masterman, C. F. G.	Trevelyan, diaries Philips
Ferens, T. R.	Menzies, Walter	Verney, F. W.
Ferguson, R. C. Munro	Micklem, Nathaniel	Vivian, Henry
Findlay, Alexander	Middlebrook, William	Walker, H. De R. (Leicester)
Foster, Rt. Hon. Sir Walter	Molteno, Percy Alport	Walters, John Tudor
Fuller, John Michael F.	Mond, A.	Walton, Joseph
Fullerton, Hugh	Montagu, Hon. E. S.	Ward, W. Dudley (S'thampton)
Gardner, Ernest	Morgan, J. Lloyd (Carmarthen)	Warner, Thomas Courtenay T.
Gibb, James (Harrow)	Morse, L. L.	Wason, John Cathcart(Orkney)
Gladstone, Rt. Hn. Herbert John	Morton, Alpheus Cleophas	Waterlow, D. S.
Glendinning, R. G.	Napier, T. B.	Watt, Henry A.
Goddard, Sir Daniel Ford	Newnes, F. (Notts, Bassetlaw)	Wedgwood, Josiah C.
Gooch, George Peabody (Bath)	Nicholson, Charles N.(Doncast'r	Weir, James Galloway
Greenwood, G. (Peterborough)	Nicholson, Wm. G.(Petersfield)	Whitbread, Howard
Grey, Rt. Hon. Sir Edward	Norton, Capt. Cecil William	White, J. D. (Dumbartonshire)
Gulland, John W.	Nussey, Thomas William	White, Luke (York, E. R.)
Gurdon, Rt. Hn Sir W. Brampton	Nuttall, Harry	Whitehead, Rowland
Hall, Frederick	Pearce, Robert (Staffs, Leek)	Whitley, John Henry (Halifax)
Harcourt, Rt. Hn L.(Rossendale	Pearce, William (Limehouse)	Whittaker, Rt. Hn. Sir Thomas P.
Harcourt, Robert V.(Montrose)	Perks, Sir Robert William	Wiles, Thomas
Hardy, George A. (Suffolk)	Pirie, Duncan V.	Williams, Llewelyn (Carmarth'n
Harmsworth, Cecil B. (Wore'r)	Pollard, Dr.	Williamson, A.
Hart-Davies, T.	Pries, C. E. (Edinb'gh, Central)	Wills, Arthur Walters
Harvey, W.E.(Derbyshire, N. E.	Price, Sir Robert J.(Norfolk, E.)	Wilson, Henry J. (York, W.R.)
Harwood, George	Radford, G. H.	Wilson, John (Durham, Mid)
Haslam, James (Derbyshire)	Raphael, Herbert H.	Wilson, J. H. (Middlesbrough)
Haworth, Arthur A.	Rea, Russell (Gloucester)	Wilson, P. W. (St. Pancras, S.)
Hedges, A. Paget	Rea, Walter Russell (Scarboro	Winfrey, R.
Helme, Norval Watson	Rees, J. D.	Wood, T. M'Kinnon
Hemmerde, Edward George	Rendall, Athelstan	Yoxall, James Henry
Henderson, J.M.(Aberdeen, W.)	Ridsdale, E. A.
Henry, Charles S.	Roberts, Charles H. (Lincoln)	TELLERS FOR THE AYES—Mr. Joseph Pease and Master of Elibank.
Herbert, T. Arnold (Wycombe)	Roberts, Sir John H.(Denbighs.
Higham, John Sharp	Robortson, Sir G. Scott (Bradf'rd

NOES.
Abraham, William (Cork, N.E.	Hogan, Michael	Randles, Sir John Scurrah
Ashley, W. W.	Hope, John Deans (Fife, West)	Redmond, John E. (Waterford)
Banner, John S. Harmood-	Houston, Robert Paterson	Redmond, William (Clare)
Barnes, G. N.	Hudson, Walter	Renton, Leslie
Beckett, Hon. Gervase	Hunt, Rowland	Richards, T.F. (Wolverh'mpt'n
Bignold, Sir Arthur	Johnson, John (Gateshead)	Roberts, S. (Sheffield, Ecclesall)
Boland, John	Jowett, F. W.	Roche, John (Galway, East)
Brotherton, Edward Allen	Joyce, Michael	Rutherford, W. W. (Liverpool)
Burke, E. Haviland	Kavanagh, Walter M.	Seddon, J.
Clough, William	Kelley, George D.	Shackleton, David James
Clynes, J. R.	Kettle, Thomas Michael	Sheffield, Sir Berkeley George D.
Cobbold, Felix Thornley	Kilbride, Denis	Sloan, Thomas Henry
Condon, Thomas Joseph	Macdonald, J. R. (Leicester)	Snowden, P.
Courthope, G. Loyd	MacNeill, John Gordon Swift	Stanier, Beville
Cox, Harold	Macpherson, J. T.	Starkey, John R.
Crean, Eugene	MacVeagh, Jeremiah (Down, S.	Staveley-Hill, Henry (Staff'sh.
Crooks, William	MacVeagh, Charles (Donegal, E.)	Steadman, W. C.
Cullinan, J.	M'Kean, John	Summerbell, T.
Curran, Peter Francis	M'Killop, W.	Taylor, John W. (Durham)
Dalrymple, Viscount	Markha, Arthur Basil	Thomson, W. Mitchell-(Lanark)
Devlin, Joseph	Nannetti, Joseph P.	Walsh, Stephen
Donelan, Captain A.	Nield, Herbert	Wardle, George J.
Flynn, James Christopher	Nolan, Joseph	White, Patrick (Meath, North)
Gill, A. H.	O'Brien, Kendal(Tipperary, Mid	Wilkie, Alexander
Glover, Thomas	O'Brien, Patrick (Kilkenny)	Wilson, W. T. (Westhoughton)
Halpin, J.	O'Doherty, Philip	Winterton, Earl
Hardie, J. Keir (Merthyr Tydvil)	O'Grady, J.
Hazleton, Richard	O'Malley, William	TELLERS FOR THE NOES—Mr. George Roberts and Mr. Charles Duncan.
Helmsley, Viscount	O'Shaughnessy, P. J.
Henderson, Arthur (Durham)	Parker, James (Halifax)
Hills, J. W.	Phillips, John (Longford, S.)
Hodge, John	Ponsonby, Arthur A. W. H.

*MB. FELL moved to add to Clause 1: "Except in the ease of tea produced in any country forming part of the British Empire, in which case no duty shall be charged." This was, he said, an Amendment which he had moved last year on the Finance Bill, and he would not have moved it this year if circumstances had not changed, and, if he might say so, if they had not had another Chancellor of the Exchequer. He thought he would be able to show that both these points had a material influence on the action which might be taken in regard to this question. Last year when he moved his Amendment the Prime Minister wag Chancellor of the Exchequer, and that right hon. Gentleman to some extent had pooh-poohed the question of Chinese tea competing with Indian tea in the market. He could not then but acquiesce in the contention of the Prime Minister, for the figures were in his favour. Having regard to the fact that there was now a new Chancellor of the Exchequer and that a material change had taken place in the situation in relation to China and Indian and Ceylon teas he thought he was justified in moving this Resolution. He regretted that the only way of discussing the question at that stage was by moving a reduction. He now moved that there should be a reduction of Id. on the duty on tea produced in the British Possessions and Dependencies, which would mean, if agreed to, a loss of £1,162,000 to the Exchequer, for they could make the estimate from last year's imports. But he would have much preferred that the Chancellor of the Exchequer should recommit this Bill so that an extra Id. could be put on China tea which would give the right hon. Gentleman £150,000 further this year. No doubt the right hon. Gentleman would not object to that, because they had ample evidence that the margin of the Budget was very slender, even if it had not gone the other way. That could be arranged by recommitting the Bill and providing that duty on all tea should be 6d. and that 1d. should be taken off that which was produced in British Possessions and Dependencies beyond the seas. The late Chancellor of the Exchequer last year, in regard to this matter, stated that the latest figures he had showed that the imports from China were only 5,600,000 lbs., whilst from India and Ceylon they were nearly 300,000,000 lbs., so that the import of China tea might be regarded as a negligible quantity and the competition from China was not worth consideration. The imports of China tea were now, however, increasing, and the favoured position of Indian tea might be wholly lost by a wave of popular opinion in favour of China tea. He was not beside the mark in saying that the consumption of China tea was increasing and might grow until China tea would be a very great competitor of that grown in our own Dependencies, as the following figures would show. The figures of the late Chancellor of the Exchequer of 5,600,000 lbs. was the import of China tea for 1905. In 1906 it had grown to 13,500,000 lbs., and in 1907 to 19,000,000 lbs. That it had grown to four times as much in two years pointed a warning to us, and was a very strong argument in favour of this Motion, which sought to give some benefit to Indian and Ceylon tea over that grown in China, Java, and other foreign countries, of the growth of which we had no knowledge, and over which we could have no control, and which we could not test, except in the docks when it arrived. This question not only affected India and Ceylon, but also other British possessions. Natal was now growing tea. In 1906 the export from Natal was 899 lbs., last year it was 576,000 lbs.—a remarkable increase. The value of the first exportation was £38, last year it was £17,000. Next year it might be doubled. At all events it was becoming an important factor in the economy of the Colony of Natal, which we ought to be glad to support. He understood also that tea was to be grown in Uganda, and the Shire highlands, which might in the future form sources of our supply. The reduction would be of immense advantage to them and to the Empire. This was an important question, because both in the Colonies and abroad these teas were becoming better known. In Russia, where at one time China held the field, the consumption of Indian tea was on the increase, as indeed was the case all over the Continent. It was one of the great factors of the world's economy, and India and Ceylon were supplying tea to all parts of the world. He desired by this Amendment to assure the growers of India and Ceylon and our other possessions beyond the seas that the greatest market in the world should be secured to them, and that they should, when they sent their teas here, have some assured benefit over the foreigner—some preference over China teas. Thereby they would be enabled to withstand any fickle change that might take place in the popular taste. There was another side of the question, another way of looking at it. It was a question of preference extended to our own Colonies and Dependencies which would give them some benefit. Although that argument did not meet with any great response last year, except from the Opposition Benches, that night it had met with a response from the hon. Member for Blackburn, who had pointed out in supporting the reduction he moved that those teas came from our Colonies and Dependencies. On that ground he claimed the support of the Opposition, and the support of the hon. Member for Blackburn and his friends. The ground on which support was claimed for this proposal was that we would rather consume teas which came from our Colonies and Dependencies than teas from China, especially when we considered what the countries were from which they came. When we considered the wonderful markets we had for our goods in India and Ceylon and the advantages they gave us in those markets, we should do well if, by reducing this duty in the way he proposed, we conserved the British tea markets for them. He had received many letters from India during the last year thanking him for what he had done. The planters in India might well look for some recognition of the way in which they supported this country. He did not say they did not make money out of tea, but he did not think that they made much on the whole, for they had their ups and downs like most others, and he believed that nothing had had more ups and downs than the tea markets of India. The way these planters supported us during the late war merited some recognition from us, and we could not show it in any way better than by giving them this slight preference. He had shown how it could be done by the Chancellor of the Exchequer without any draft on the Budget. Without going into any question of tariff reform or anything of that kind, he put it that this was an occasion on which they might give this slight benefit to India and Ceylon; it was really a slight one which he hoped that the Committee would admit. Circumstances had changed since he brought the matter forward last year, and the arguments which the Chancellor of the Exchequer then used had not proved sound in the light of events. The right hon. Gentleman thought that China tea was not going to have an increased sale in England, but in that he had proved entirely wrong, and he hoped that the present Chancellor of the Exchequer would look at the matter afresh, and see whether he could give a favourable answer in some way to these people, who were looking to their parent for some recognition of them as devoted and attached children, and he trusted that the opportunity would not be lost.

Amendment proposed— In page 1, line 22, at the end, to add the words 'except in the case of tea produced in any country forming part of the British Empire, in which case the duty shall be charged at the rate of 4d. per pound.'"—(Mr. Fell.)

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

MR. LLOYD-GEORGE

said he did not 'propose to go into the question of colonial preference and those other matters because his reason for refusing the Amendment had no relation to his view upon that particular question. The financial reasons he found amply sufficient without assigning others. He was not sure if he were to speak on its merits that the case put forward by the hon. Gentleman was a strong one. The hon. Gentleman had said that there was a very large increase in the consumption of China tea, and had referred to the fact that there was an increase of 5,000,000 lbs. as compared with last year. But if he would look at the consumption of China tea during the last seven or eight years he would find that there was very little difference indeed. In 1900 it was 21,000,000 lbs., it then went down to 17,000,000 lbs., then it went up again to 27,000,000 lbs., then down to 17,000,000 lbs., 21,000,000 lbs., up again to 27,000,000 lbs., then down it dropped to 15,000,000 lbs., and this last year it was over 18,000,000 lbs.

MR. FELL

It was 19,000,000 lbs.

MR. LLOYD-GEORGE

said it was 18,776,000 lbs., in round figures 19,000,000 lbs. But it had been fluctuating around that figure for the last seven or eight years, while the consumption of Indian and Ceylon tea had run up to something like 280,000,000 lbs. The superiority was so immense that he did not think that a preference would make very much difference. The consumption of China tea was very largely a question of taste, and it would be indulged in without any regard to the extra penny or twopence. There had been a very considerable extension of our trade with China during the last few years; from 1885 to 1907 it had considerably more than doubled, and he did not think that this was a time at all to accept the proposition to put a special tax against the foreigner in favour of our Colonies. He did not think that he ought to do that with China, and if he had any such intention China was the very last country on which he would begin to operate. But he would rather not go into that question. The hon. Gentleman had given his reasons as cogently and as forcibly as possible, but he on his side had reasons amply sufficient of another kind for refusing the Amendment, and he would rather dwell upon them than enter the wider field of controversy to which the hon. Gentleman would like to lead him.

MR. AUSTEN CHAMBERLAIN

said that after the speech which he had made earlier in the afternoon the Committee would know that he was not able to support his hon. friend on that occasion, though he would not on that account be thought unfait ful to the cause of preference. If they took the proposition which his hon. friend had brought forward, and considered the arguments in its favour, he was not sure that there was not a good deal to be said for it, if indeed the arguments in its favour were not overwhelming. They had to look at the situation as a whole and at the Budget as a whole. He could himself conceive a much better Budget. He wished it were in his power to offer a complete scheme in lieu of that for which the right hon. Gentleman was responsible. But he could not propose an alternative Budget under the circumstances, and he was bound to adhere to the resolution to which he had come to leave the responsibility alike of the imposition of taxation and the remission of taxation to the Government, and to take no share of it upon himself. He only desired to say one or two words in reference to what the Chancellor of the Exchequer had said on the question of foreign competition, as to the danger to the Indian and Ceylon trade, and as to the question of preferential duties being of no advantage to our Colonies, As regarded the first question, the importation of China tea was not to be measured wholly by the amount which was sent to this country. No doubt, as the Chancellor of the Exchequer had said, a considerable quantity was imported by people who preferred the plain quality of China tea to that of India and Ceylon, and to whom it was probably rather an article of luxury. Such people would not be deterred from having that which suited their taste by the imposition of a slightly higher duty. To that extent China tea was a luxury. There were, however, importations of China tea of a very low quality indeed, and though they were perhaps small in amount, certainly very small in proportion to the total consumption of tea, he thought that they would injuriously affect the price of Indian and Ceylon teas, and so bring down the consumption of those teas. He, therefore, thought that some differential treatment might be more effective than the right hon. Gentleman supposed. He might add that he himself was disposed to anticipate, though of course he spoke with no skilled knowledge, keener competition in future, not so much from China as from Java, which produced a tea very akin to the Ceylon tea, which was much more likely to be a rival to it in the public taste. The other observation which he wished to make was that even if the result of preference to Indian and Ceylon tea was not to diminish the proportion of foreign tea sold in this country, it might still be a great stimulus to the Indian and Ceylon trade. As he had said earlier, no article operated upon by the Chancellor of the Exchequer more quickly responded to the lowering of the duty than tea; and if they were able to make, not a large, but a sensible reduction, in the duty on Indian and Ceylon teas he thought they would find a rapid increase in the consumption of those teas, even though the consumption of China tea remained stationary. That was to say, the total consumption of the country would be larger in respect of Indian and Ceylon tea, but the amount of China tea consumed would remain about the same, and, therefore, its proportion to the whole would be less. These were the general observations which he wished to make on the Amendment which his hon. friend had moved. He would like to support preference for our Indian and Ceylon fellow subjects in this matter, and he would like to establish a general system of preference; but he did not think that they could conveniently press the matter piecemeal at present, and he must leave to the Government the responsibility of their scheme.

MR. ASHLEY (Lancashire, Blackpool)

said the Chancellor of the Exchequer had answered his hon. friend by saying that as he could not find the money he could not accept this Amendment. Surely that was a confession of very considerable mismanagement of the national finances. Take the question of the Army. More money had been spent on the Army since the present Government had come into office——

*THE DEPUTY-CHAIRMAN

Order, order.

MR. ASHLEY

Am I not entitled to prove that this Amendment would be justified?

*THE DEPUTY-CHAIRMAN

The hon. Member's observations are going too wide of the Amendment.

MR. ASHLEY

Am I not entitled to show that money could be found by economies in other branches of the services?

*THE DEPUTY-CHAIRMAN

The hon. Member has to deal with the Amendment, which is the expediency of giving preferential treatment to the Colonies in the matter of tea The sources, or the economies which might be effected, whence money could be found to meet the deficiency of revenue, are outside of the Amendment.

MR. ASHLEY

said he would pass to the Amendment, which he supported on two grounds: the first being that of Colonial preference. He was sure that in theory most members of the Committee were in favour of giving our own people across the seas some preference over foreigners, and especially, he thought, we should give a perference to our people in India and Ceylon who had had very bad times in the tea trade. He would wish the Committee to consider whether Natal did not deserve some sympathy. The tea industry there was in its infancy, but had shown most remarkable progress in the last two years. A preference would undoubtedly stimulate it. He was informed that Natal tea was nearly as good as Indian tea and of very much the same quality, and would therefore appeal to a large class in this country. Tea-growing was also being taken up in the Shire Highlands and in Uganda, both of which Colonies had been started in the last ten or twenty years by a large expenditure of English capital in the building of railways and opening up the country, and by sending out some of our very best men to administer it. Surely it was unwise to spoil the ship for a ha'p'orth of tar. A preference would be a very great boon to them. He was not convinced last year that the reduction of 1d. would be sufficient to make a substantial reduction in the price of tea, and therefore on that ground he supported the Amendment that it should be 2d. instead of 1d.

MR. HOLT (Northumberland, Hexham)

pointed out that the trade of India and Ceylon had been built up without a preference of any sort. The whole of our imports of tea thirty years ago came from China. To-day nine-tenths came from India and Ceylon, so that it could not be reasonably suggested that they needed assistance. We imported a small quantity of tea from Japan, which was on the point of revising her tariff. Supposing that now we discriminated against Japan in a way which did no real harm, but a thoroughly good theoretical injury, was it not quite certain that in the revised tariff in 1911 we should find British manufactures treated in a worse way than they otherwise would have been? In regard to China, she had never asked to send us tea or to trade with us at all. We went to war with China, and by force of arms backed up by diplomacy we had insisted on China opening her markets to our goods, and it would be a very wrong and immoral action on our part to put any impediment in the way of her sending her goods to us. Our Consul at Hankow wrote in this year's Report that there was a growing feeling of antagonism to foreign traders and that the injustice of protected countries restricting Chinese customs duties to a bare 5 per cent. ad valorem was constantly harped upon in the native newspapers. He believed they would find, if they adopted the policy suggested by the Amendment, a steady opposition to the exportation of British goods into China, which was a market that we had done a great deal to cultivate, which was certainly growing and had responded very well to the efforts which had been made in that direction. India was a very great market for our Manchester goods, but China was the next best market, and it certainly seemed a pity in the efforts to cultivate the best market to strike a great blow at the second best. Holland was a country which almost more than any other country had treated us well. It was a free-trade country and we had been given access into Dutch markets. The Dutch East Indies had thriven rapidly, and given us favourable opportunities. If we acted in a way hostile to goods of Dutch origin we should be putting ourselves in a very foolish position, because we should be starting a tariff war with a nation with whom we had every wish to remain on good terms, and who had treated us always in trade matters extremely well. Holland, after all, had a very peculiar position in Europe and Germany would be only too pleased to incorporate Holland in her dominions.

*THE DEPUTY-CHAIRMAN

The hon. Member cannot go into these questions. They are far outside the question whether preference should be given to tea imported from the Colonies.

MR. HOLT

said that, if we drove Dutch products to find their market in Germany, he could not but help fearing that the consequences might be disastrous in other directions than those of trade. This was a most beauti-

ful illustration of the truth that the doctrine of retaliation was utterly incompatible with the doctrine of Colonial preference. Here was the first suggestion made to establish Colonial preference, and it was aimed at three of our best friends and customers which had treated us as well as any three nations in the world. He hoped the Committee would not listen to the proposal.

Question put.

The Committee divided:—Ayes, 34; Noes, 251. (Division List No. 189.)

AYES.
Bridgeman, W. Clive	Helmsley, Viscount	Pease, Herbert Pike(Darlington
Bull, Sir William James	Hill, Sir Clement	Randles, Sir John Scurrah
Carlile, E. Hildred	Hills, J. W.	Rawlinson, John Frederick Peel
Cave, George	Houston, Robert Paterson	Renton, Leslie
Coates, Major E. F.(Lewisham)	Hunt, Rowland	Rutherford, John (Lancashire)
Collings, Rt. Hn. J.(Birmingh'm	King, Sir Henry Scymour (Hull)	Rutherford, W. W. (Liverpool)
Courthope, G. Loyd	Law, Andrew- Bonar (Dulwich)	Salter, Arthur Clavell
Craik, Sir Henry	Lockwood, Rt. Hn. Lt.-Col. A. R.	Sloan, Thomas Henry
Douglas, Rt. Hon. A. Akers-	Lowe, Sir Francis William	Stanier, Beville
Forster, Henry William	M'Arthur, Charles	Staveley-Hill, Henry (Staff'sh.
Gibbs, G. A. (Bristol, West)	Mason, James F. (Windsor)
Gooch, Henry Cubitt (Peckham)	Nield, Herbert	TELLERS FOR THE AYES—Mr. Fell and Mr. Ashley.
Guinness, Walter Edward	Parkes, Ebenezer
NOES.
Abraham, William (Cork, N.E.)	Burt, Rt. Hon. Thomas	Findlay, Alexander
Agnew, George William	Byles, William Pollard	Flynn, James Christopher
Allen, A. Acland (Christchurch)	Cameron, Robert	Foster, Rt. Hon. Sir Walter
Allen, Charles P. (Stroud)	Carr-Gomm, H. W.	Fuller, John Michael F.
Armitage, R.	Causton, Rt. Hn. Richard Knight	Fullerton, Hugh
Astbury, John Meir	Cawley, Sir Frederick	Gibb, James (Harrow)
Baker, Sir John (Portsmouth)	Cheetham, John Frederick	Gill, A. H.
Balfour, Robert (Lanark)	Clough, William	Glendinning, R. G.
Barker, John	Clynes, J. R.	Goddard, Sir Daniel Ford
Barlow, Sir John E. (Somerset)	Collins, Sir Wm. J.(S. Pancras, W	Gooch, George Peabody (Bath)
Barnard, E. B.	Compton-Rickett, Sir J.	Gulland, John W.
Barnes, G. N.	Condon, Thomas Joseph	Gurdon, Rt. Hn. Sir W. Brampton
Barran, Rowland Hirst	Corbett, C. H (Sussex, E. Grinst'd	Hall, Frederick
Barry, Redmond J.(Tyrone, N.)	Cox, Harold	Halpin, J.
Beale, W. P.	Craig, Herbert J. (Tynemouth)	Harcourt, Rt. Hn. L.(Rossendale
Beauchamp, E.	Crean, Eugene	Harcourt, Robert V.(Montrose)
Beck, A. Cecil	Crooks, William	Hardie, J. Keir (Merthyr Tydvil)
Bell, Richard	Curran, Peter Francis	Hardy, George A. (Suffolk)
Benn, Sir J. Williams(Devonp'rt	Dalziel, James Henry	Harmsworth, Cecil B. (Worc'r)
Benn, W.(T'w'r Hamlets, S. Geo.	Davies, Sir W. Howell (Bristol, S	Hart-Davies, T
Bennett, E. N.	Dewar, Arthur (Edinburgh, S.)	Harvey, W.E.(Derbyshire, N.E.
Berridge, T. H. D.	Dobson, Thomas W.	Harwood, George
Bethell, Sir J. H.(Essex, Romf'rd	Donelan, Captain A.	Haslam, James (Derbyshire)
Bethell, T. R. (Essex, Maldon)	Duckworth, James	Haworth, Arthur A.
Black, Arthur W.	Duncan, C. (Barrow-in-Furness	Hedges, A. Paget
Boland, John	Dunn, A. Edward (Camborne)	Helme, Norval Watson
Branch, James	Edwards, Clement (Denbigh)	Hemmerde, Edward George
Brigg, John	Edwards, Sir Francis (Radnor)	Henderson, Arthur (Durham)
Brooke, Stopford	Essex, R. W.	Henderson, J.M.(Aberdeen, W.)
Brunner, J.F.L. (Lancs., Leigh)	Esslemont, George Birnie	Hobhouse, (Charles E. H.
Bryce, J. Annan	Evans, Sir Samuel T.	Hodge, John
Buchanan, Thomas Ryburn	Everett, R. Lacey	Hogan, Michael
Burke, E. Haviland	Fenwick, Charles	Holland, Sir William Henry
Burns, Rt. Hon. John	Ferens, T. R.	Holt, Richard Dinning
Horniman, Emslie John	Morse, L. L.	Simon, John Allsebrook
Hudson, Walter	Morton, Alpheus Cleophas	Snowden, P.
Idris, T. H. W.	Nannetti, Joseph P.	Soares, Ernest J.
Isaacs, Rufus Daniel	Napier, T. B.	Spicer, Sir Albert
Jackson, R. S.	Nicholson, Charles N.(Doncast'r	Stanley, Albert (Staffs, N.W.)
Jacoby, Sir James Alfred	Nolan, Joseph	Stewart, Halley (Greenock)
Jardine, Sir J.	Norton, Capt. Cecil William	Strachey. Sir Edward
Johnson, John (Gateshead)	Nussey, Thomas Willans	Strauss, E. A. (Abingdon)
Johnson, W. (Nuneaton)	Nuttall, Harry	Stuart, James (Sunderland)
Jones, Sir D. Brynmor(Swansea	O'Brien, Kendal(Tipperary, Mid	Summerbell, T.
Jones, Leif (Appleby)	O'Brien, Patrick (Kilkenny)	Sutherland. J. E.
Joyce, Michael	O'Connor, John (Kildare, N.)	Taylor, John W. (Durham)
Kekewich, Sir George	O'Doherty, Philip	Taylor, Theodore C. (Radcliffe)
Kelley, George D.	O'Malley, William	Thomasson, Franklin
Kilbride, Denis	Parker, James (Halifax)	Tomkinson, James
King, Alfred John (Knutsford)	Partington, Oswald	Torrance, Sir A. M.
Laidlaw, Robert	Pearce, Robert (Staffs, Leek)	Toulmin, George
Lamont, Norman	Pearce, William (Limehouse)	Ure, Alexander
Leese, Sir Joseph F.(Accrington	Perks, Sir Robert William	Verney, F. W.
Lehmann, R. C.	Pollard, Dr.	Vivian, Henry
Lever, A. Levy (Essex, Harwich	Power, Patrick Joseph	Walker, H. De R. (Leicester)
Levy, Sir Maurice	Price, C. E. (Edinb'gh, Central)	Walsh, Stephen
Lloyd-George, Rt. Hon. David	Price, Sir Robert J.(Norfolk, E.)	Walters, John Tudor
Lupton, Arnold	Priestley, Arthur (Grantham)	Wardle, George J.
Luttrell, Hugh Fownes	Radford, G. H.	Wason, John Cathcart (Orkney)
Lyell, Charles Henry	Raphael, Herbert H.	Waterlow. D. S.
Lynch, H. B.	Rea, Russell (Gloucester)	Watt, Henry A.
Macdonald, J. R. (Leicester)	Rea, Walter Russell (Scarboro')	Weir, James Galloway
Macdonald, J.M.(Falkirk B'ghs	Rendall, Athelstan	Whitbread. Howard
Maclean, Donald	Richards, T. F.(Wolverh'mpt'n	White. J. D. (Dumbartonshire)
MacNeill, John Gordon Swift	Ridsdale, E. A.	White, Luke (York, E.R.)
Macpherson, J. T.	Roberts, Charles H. (Lincoln)	Whitehead, Rowland
MacVeagh, Jeremiah (Down, S)	Roberts, G. H. (Norwich)	Whitley, John Henry (Halifax)
MacVeigh, Charles (Donegal, E.)	Robertson, Sir G Scott (Bradf'rd	Whittaker, Rt. Hn. Sir Thomas P.
M'Callum, John M.	Robertson, J. M. (Tyneside)	Wiles, Thomas
M'Crae, Sir George	Robinson, S.	Wilkie, Alexander
M'Laren, H. D. (Stafford. W.)	Robson, Sir William Snowdon	Williamson, A.
M'Micking, Major G.	Roche, John (Galway, East)	Wills, Arthur Walters
Mallet, Charles E.	Rogers, F. E. Newman	Wilson. Henry J. (York, W.R.)
Manfield, Harry (Northants)	Rowlands, J.	Wilson. John (Durham, Mid.)
Markham, Arthur Basil	Runciman, Rt. Hon. Walter	Wilson, J. H. (Middlesbrough)
Marks, G. Croydon (Launceston)	Russell, T. W.	Wilson, J. W. (Worcestersh, N.)
Marnham, F. J.	Schwann, C. Duncan (Hyde)	Wilson, P. W. (St. Pancras, S.)
Masterman, C. F. G.	Seaverns, J. H.	Wilson. W. T. (Westhoughton)
Meehan, Francis E. (Leitrim, N)	Seddon, J.	Winfrey, R.
Menzies, Walter	Seely, Colonel	Wood, T. M'Kinnon
Micklem, Nathaniel	Shackleton, David James	Yoxall, James Henry
Middlebrook, William	Shaw, Charles Edw. (Stafford))
Molteno, Percy Alport	Shaw, Rt. Hon. T. (Hawick, B.)	TELLERS FOR THE NOES—Mr. Joseph Pease and Master of Elibank.
Mond, A.	Sherwell, Arthur James
Montagu, Hon. E. S.	Shipman, Dr. John G.

Clause 1 agreed to.

Clause 2:

MR. KETTLE

said the Amendment he proposed to move gave preferential treatment to Ireland in regard to the sugar duty. He did not want to weary the Committee by a repetition of the case made out on constitutional grounds with; regard to the tea duty. He was aware I that Ireland shared in the benefits from the reduction in the sugar duty, but he did not think the entire case which had been made from the Irish benches had been met by the reply of the Chancellor of the Exchequer. The sugar tax in Ireland produced in 1904 £602,000, and it produced the same amount in the following year. The year before the War it produced £688,000. He thought it would be agreed that every argument which applied to tea would apply with greater force to sugar. Practically speaking, the people of Ireland were buying and using proportionately the same amount of sugar as the people in this country, but they had to pay the tax out of incomes which were about one-third the average income of the rural population of Great Britain. That meant that the people of Ireland were much more heavily hit than the people of Great Britain. The object of the Union was stated to be that if Ireland was associated with England the Irish people would have the advantage of living on the credit of a rich neighbour, and that Irish resources would be developed in a way which would not be possible if Ireland relied upon her own resources. If the terms of the Act of Union had been respected in the Finance Bills of the House, the effect would have been that the entire party above the gangway would be the most ardent and fanatical Home Rulers, because they would have discovered long ago that the government of Ireland was not paying a dividend. With the operation of the old-age pension scheme in Ireland and the comparatively small reduction in the sugar tax; with the decline in other branches in the revenue in Ireland; with the financing of land purchase and the endowment of a University; with the other sundry grants which must be made to sundry other objects; with the impossibility of raising a single fresh tax or making any old tax more fruitful, this country would shortly be confronted with a state of affairs in which the taxation would be much larger than could be got out of the country even by bleeding it white. He supposed that the response of the Government would be the same as was stated in regard to the tea duty Amendment, and consequently he would feel it his duty again to register his objection in the division lobby. He begged to move.

Amendment proposed— In page 2, line 1, after the word 'allowance,' to insert the words 'in the case of Great Britain.'"—(Mr. Kettle.)

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

MR. HOBHOUSE

said the hon. Member had recognised that all the arguments which he advanced in support of his Amendment on the sugar duty had precisely the same weight and tendency us those which he advanced at an earlier stage of their proceedings. If he did not repeat the arguments of the Chancellor of the Exchequer, it was not because he wished any personal discourtesy, but simply because he did not wish to take up the time of the House. While the financial effect of the hon. Member's previous proposal would be very great, the effect of this would also be very serious, because it would abolish revenue to the extent of £300,000.

MR. HAZLETON

said the Committee would understand that if he did not go over the same arguments and the same objections in regard to the decision of the Government in this matter, it was not because those arguments did not apply with equal force. The same arguments and the same objections from an Irish point of view remained with regard to the decision which had just been announced as existed in the earlier case put that evening. The Secretary to the Treasury had stated that this Amendment would mean a loss of £300,000 a year of revenue from Ireland. That was exactly the merit which they saw in the Amendment, and there would be no point at all in proposing it unless it meant a reduction of the taxation derived by this country from Ireland. In his opinion they would never see a reform in the government or in the expenditure of Ireland until Irish expenditure became greater than its income. It was with the view of reducing taxation in Ireland that he supported the Amendment. He hoped it would receive sympathetic treatment.

MR. KETTLE

said there were some facts which he hoped the Secretary to the Treasury would carry in his mind. He and his friends had noticed that since the present Government had been in power there had been a steady attempt on the part of the representatives of the Treasury to depart from the findings of the Royal Commission on the Financial Relations of Great Britain and Ireland, which the Liberal Party accepted when in Opposition. Such relief as would be afforded by the reduction of the sugar duty would be entirely automatic, and that reduction was not granted with a view to give Ireland any advantage. While the protests which Irish Members had made had been without avail, he could assure the Government that people in Ireland were asking what was the difference between Tory finance and Liberal finance, and were coming to the conclusion that when the Tories were in power they expected to be robbed; it seemed in the nature of things; and when the Liberals were in power they had not that expecta-

tion, but nevertheless they had that experience.

Question put.

The Committee divided:—Ayes, 55; Noes, 235. (Division List No. 190.)

AYES.
Abraham, William (Cork, N.E.)	Hope, John Deans (Fife, West)	O'Shaughnessy, P. J.
Barnes, G. N.	Hudson, Walter	Parker, James (Halifax)
Bignold, Sir Arthur	Jowett, F. W.	Power, Patrick Joseph
Boland, John	Joyce, Michael	Redmond, William (Clare)
Burke, E. Haviland-	Kelley, George D.	Richards, T. F.(Wolverh'mpt'n
Clynes, J. R.	Kilbride, Denis	Roberts, G. H. (Norwich)
Collings, Rt. Hn. J.(Birmingh'm	Macdonald, J. R. (Leicester)	Roche, John (Galway, East)
Condon, Thomas Joseph	MacNeill, John Gordon Swift	Shackleton, David James
Crean, Eugene	Macpherson. J. T.	Snowden, P.
Cullinan, J.	MacVeagh, Jeremiah (Down, S)	Summerbell, T.
Curran, Peter Francis	MacVeigh, Charles (Donegal, E.)	Taylor, John W. (Durham)
Duncan, C. (Barrow-in-Furness	Meehan, Francis E. (Leitrim, N)	Walsh, Stephen
Flynn, James Christopher	Mooney, J. J.	Wardle, George J.
Glover, Thomas	Nannetti, Joseph P.	White, Patrick (Meath, North)
Halpin, J.	Nield, Herbert	Wilkie, Alexander
Hardie, J. Keir (Merthyr Tydvil	Nolan, Joseph
Hazleton, Richard	O'Brien, Kendal (Tipperary, Mid	TELLERS FOR THE AYES—Mr. Patrick O'Brien and Mr. Kettle.
Henderson, Arthur (Durham)	O'Connor, John (Kildare, N.)
Hodge, John	O'Doherty, Philip
Hogan, Michael	O'Malley, William
NOES.
Agnew, George William	Cameron, Robert	Fuller, John Michael F.
Allen, A. Acland (Christchurch)	Carlile, E. Hildred	Fullerton, Hugh
Allen, Charles P. (Stroud)	Carr-Gomm, H. W.	Gibb, James (Harrow)
Armitage, R.	Causton, Rt. Hn. Richard Knight	Gibbs, G. A. (Bristol, West)
Ashley, W. W.	Cave, George	Gill, A. H,
Astbury, John Meir	Cawley, Sir Frederick	Glendinning, R. G.
Atherley-Jones, L.	Cecil, Evelyn (Aston Manor)	Goddard, Sir Daniel Ford
Baker, Sir John (Portsmouth)	Cheetham, John Frederick	Gooch, George Peabody (Bath)
Balfour, Robert (Lanark)	Clough, William	Gooch, Henry Cubitt (Peckham)
Banbury, Sir Frederick George	Coates, Major E. F. (Lewisham)	Gretton, John
Barker, John	Collins, Sir Wm. J.(S. Pancras, W	Guinness. Walter Edward
Barlow, Sir John E. (Somerset)	Compton-Rickett, Sir J.	Gulland, John W.
Barran, Rowland Hirst	Corbett, C H (Susssex, E. Grinst'd	Gurdon, Rt. Hn Sir W. Brampton
Barry, Redmond J.(Tyrone, N.)	Cornwall, Sir Edwin A.	Hall, Frederick
Beach, Hn. Michael Hugh Hicks	Courthope, G. Loyd	Harcourt, Rt. Hn L.(Rossendale
Beale, W. P.	Cox, Harold	Harcourt Robert V. (Montrose)
Beauchamp, E.	Craig, Herbert J. (Tynemouth)	Hardy, George A. (Suffolk)
Bell, Richard	Craik, Sir Henry	Harmsworth, Cecil B. (Worc'r)
Benn, Sir J. Williams (Devonp'rt	Crooks, William	Hart-Davies, T.
Benn, W.(T'W''r Hamlets, S. Geo)	Crossley, William J.	Harvey, W.E.(Derbyshire, N. E.
Bennett, E. N.	Dalziel, James Henry	Harwood, George
Berridge, T. H. D.	Davies, David(Montgomery Co)	Haslam, James (Derbyshire)
Bethell, Sir J. H. (Essex, Romf'rd	Davies, Sir W. Howell(Bristol, S	Haworth, Arthur A.
Bethell, T. R. (Essex, Maldon)	Dowar, Arthur (Edinburgh, S.)	Helme, Norval Watson
Black, Arthur W.	Dobson, Thomas W.	Helmsley, Viscount
Bowles, G. Stewart	Duckworth, James	Hemmerde, Edward George
Branch, James	Dunn, A. Edward (Camborne)	Henderson, J. M.(Aberdeen, W.
Bridgeman, W. Clive	Edwards, Sir Francis (Radnor)	Hills, J. W.
Brigg, John	Essex, R. W.	Hobhouse, Charles E. H.
Brooke, Stopford	Esslemont, George Birnie	Holland, Sir William Henry
Brunner, J. F. L.(Lancs., Leigh)	Evans, Sir Samuel T.	Holt, Richard Durning
Bryce, J. Annan	Everett, R. Lacey	Horniman, Emslie John
Buchanan, Thomas Ryburn	Fell, Arthur	Houston, Robert Paterson
Bull, Sir William James	Fenwick, Charles	Idris, T. H. W.
Burns, Rt. Hon. John	Ferens, T. R.	Isaacs, Rufus Daniel
Burt, Rt. Hon. Thomas	Findlay, Alexander	Jackson, R. S.
Byles, William Pollard	Foster, Rt. Hon. Sir Walter	Jacoby, Sir James Alfred
Jardine, Sir J.	Morton, Alpheus Cleophas	Stanier, Beville
Johnson, John (Gateshead)	Napier, T. B.	Stanley, Albert (Staffs, N.W.)
Johnson, W. (Nuneaton)	Nicholson, Charles N.(Doncast'r	Stewart, Halley (Greenock)
Jones, Sir D. Brynmor (Swansea)	Norton, Capt. Cecil William	Strachey, Sir Edward
Jones, Leif (Appleby)	Nussey, Thomas Willans	Strauss, E. A. (Abingdon)
Kekewich, Sir George	Nuttall, Harry	Stuart, James (Sunderland)
King, Alfred John (Knutsford)	Partington, Oswald	Sutherland, J. E.
King, Sir Henry Seymour(Hull)	Pearce, Robert (Staffs, Leek)	Taylor, Theodore C. (Radcliffe)
Laidlaw, Robert	Pearce, William (Limehouse)	Thomasson, Franklin
Lamont, Norman	Perks, Sir Robert William	Tomkinson, James
Leese, Sir Joseph F. (Accrington)	Pollard, Dr.	Torrance, Sir A. M.
Lehmann, R. C.	Price, C. E. (Edinb'gh, Central)	Toulmin, George
Lever, A. Levy (Essex, Harwich	Price, Sir Robert J. (Norfolk, E.)	Ure, Alexander
Levy, Sir Maurice	Priestley, Arthur (Grantham)	Verney, F. W.
Lloyd-George, Rt. Hon. David	Radford, G. H.	Vivian, Henry
Lockwood, Rt. Hn Lt.-Col. A.R.	Raphael, Herbert H.	Walker, H. De R. (Leicester)
Lupton, Arnold	Rawlinson, John Frederick Peel	Walters, John Tudor
Luttrell, Hugh Fownes	Rea, Russell (Gloucester)	Wason, John Cathcart (Orkney)
Lyell, Charles Henry	Rea, Walter Russell (Scarboro')	Waterlow, D. S.
Lynch, H. B.	Rendall, Athelstan	Watt, Henry A.
Macdonald, J. M. (Falkirk B'ghs	Renton, Leslie	Weir, James Galloway
Maclean, Donald	Ridsdale, E. A.	White, J. D. (Dumbartonshire)
M'Arthur, Charles	Roberts, Charles H. (Lincoln)	White, Luke (York, E.R.)
M'Callum, John M.	Roberts, Sir John H.(Denbighs.)	Whitehead, Rowland
M'Crae, Sir George	Robertson, Sir G. Scott(Bradf'rd	Whitley, John Henry (Halifax)
M'Laren. H. D. (Stafford. W.)	Robertson, J. M. (Tyneside)	Whittaker, Rt. Hn Sir Thomas P.
M'Micking, Major G.	Robinson, S.	Wiles, Thomas
Mallet, Charles E.	Rogers, F. E. Newman	Williamson, A.
Manfield, Harry (Northants)	Rowlands, J.	Wills, Arthur Walters
Markham, Arthur Basil	Runciman, Rt. Hon. Walter	Wilson, Henry J. (York, W. R.
Marks, G. Croydon (Launceston)	Russell, T. W.	Wilson, John (Durham, Mid.)
Marnham, F. J.	Rutherford, W. W. (Liverpool)	Wilson, J. H. (Middlesbrough)
Mason, James F. (Windsor)	Salter, Arthur Clavell	Wilson, J. W.(Worcestersh, N.)
Masterman, C. F. G.	Schwann, C. Duncan (Hyde)	Wilson, P. W. (St. Pancras, S.)
Menzies, Walter	Sears, J. E.	Wilson, W. T. (Westhoughton)
Micklem, Nathaniel	Seaverns, J. H.	Winfrey, R.
Middlebrook, William	Seely, Colonel.	Wood, T. M. Kinnon
Middlemore, John Throgmorton	Shaw, Charles Edw. (Stafford)	Yoxall, James Henry
Molteno, Percy Alport	Shaw, Rt. Hon. T. (Hawick B.)
Mond, A.	Shipman, Dr. John G.	TELLERS FOR THE NOES—Mr. Joseph Pease and Master of Elibank.
Montagu, Hon. E. S.	Silcock, Thomas Ball
Morrell, Philip	Soares, Ernest J.
Morse, L. L.	Spicer, Sir Albert

Question put, and agreed to.

*MR. HAROLD COX moved to insert after the word "eight" the words "until the first day of July, 1909, when all duties upon sugar, molasses, glucose, mid saccharine, upon the importation thereof into Great Britain or Ireland shall cease." He would merely explain that the object of this Amendment was to make the sugar tax like the tea duty, an annual instead of a perpetual tax. He was quite sure that that would be approved of by all Liberals. The consequence of it would be that the House would every year have an opportunity of reviewing the tax. His Amendment would have no effect on the Budget, it was purely a matter of Parliamentary convenience; and he thought that the House of Commons should have every year an opportunity of reviewing every tax. He would remind the Committee that when the sugar tax was discussed in 1901, the whole of the Liberal Party was in favour of making it an annual tax. He would be in order in reading some of the names of the gentlemen who supported that proposition:—Sir Henry Campbell-Bannerinan, Mr. Bryce, Mr. Burns——

MR. HOBHOUSE

Is this in order?

*THE DEPUTY-CHAIRMAN

It is not in order to read the names. The constituencies of the hon. Members may be mentioned.

*MR. HAROLD COX

I am reading the names from Hansard.

*THE DEPUTY-CHAIRMAN

You cannot mention the names in the House. You may refer to hon. Members by their office or constituencies.

*MR. HAROLD COX

said he was afraid he did not remember the constituencies of all the hon. Members he wished to refer to; but they included the Secretary of State for War, the President of the Local Government Board, the Postmaster-General, the First Lord of the Admiralty, the Secretary for Scotland, the Parliamentary Secretary to the Admiralty, the Solicitor-General, and the Secretary to the Treasury himself. All these and many other hon. Members were in favour of the very Motion he was now moving, and the Liberal Whips told for it. It seemed to him that under these circumstances the Government must accept this Amendment, and therefore he would not use any arguments in favour of it.

Amendment proposed— In page 2, line 4, after the word 'eight,' to insert the words 'until the first day of July, nineteen hundred and nine, when all duties upon sugar, molasses, glucose, and saccharin, upon the importation thereof into Great Britain or Ireland, shall cease.'"—(Mr. Harold Cox.)

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

MR. HOBHOUSE

said he was greatly obliged to the hon. Gentleman for including his name in the list which he had read out; but he thought the hon. Gentleman would see that the argument in favour of his proposal must be resisted on quite different grounds from those he had stated. [Cries of "Why."] The hon. Member had said there was no money in his proposal. That was quite true, it did not affect this year's Budget. But what the hon. Gentleman wanted to do was to get the Government to disclose what was to happen next year. [Cries of "No."] If the Amendment were agreed to, that after 1st July, 1909, all duties on sugar should cease, it was quite clear that it must carry with it a suggestion of what was to happen to the duty on sugar next year.

MR. HAROLD COX

Let me remind my hon. friend that these are exactly the words we have just passed with regard to the tea tax.

MR. HOBHOUSE

said that he would remind the hon. Gentleman that that must disclose to some extent the intentions of the Government as to what would happen in the case of the sugar tax next year. But it was not his real objection to the Amendment; he based his objection to the proposal on the ground that if it were carried, the importers of sugar would hold up the whole of their imports immediately until 1st July, 1909, on the off chance of the sugar duty not being re-imposed after that date. There would not be merely a great interference with the sugar market—and sugar, as one of the Members for Ireland had stated, was one of the staple foods of the people of this country—but the result would be a great dearth, an absolute famine of sugar. The hon. Gentleman proposed to initiate a sugar famine, to enhance enormously the price of sugar, and indirectly to impose a tax which directly he wished the Government to remove.

MR. STUART (Sunderland)

said that the Financial Secretary to the Treasury seemed to have entirely misunderstood the real meaning, bearing, and significance of the Amendment. It was to put the House in the position that the sugar duty would have, like the tea duty, to be imposed each year. If the clause was not changed by the adoption of the Amendment, and if the Government did not choose to meddle with the sugar duty next year, then it would not be in the power of the House to discuss the question except on a side issue. The Amendment no more said that the sugar duty would not be re-imposed next year than the previous clause said that the tea duty should not be. The wording was somewhat different undoubtedly from the wording of the tea duty clause; but it would be seen that that was necessary because it had to repeal a certain existing law, or part of the law. He would be very glad indeed if anyone could suggest any other means by which they could change the sugar duty from being a permanent duty to one to be imposed each succeeding year. He had supported the right hon. Gentleman's Budget on many points. He felt the propriety of supporting the Government Budget proposals on their vital points, because the Government were doing so well as they were doing; but he sincerely loped that they would not oppose an Amendment which was fair and which would not entangle the Government in their financial proposals in the least.

MR, BOWLES (Lambeth, Norwood)

thought the Committee generally must have shared the surprise of the hon. Member for Sunderland at the really extraordinary character of the reply given by the Secretary to the Treasury. That hon. Gentleman, so far as he understood him, had given two reasons why he could not accept the Amendment. It appeared to him that those reasons had nothing in the world to do with the Amendment. First of all, the hon. Gentleman said that if the Committee adopted this Amendment it would disclose to the whole world the intentions of the Government in regard to the sugar duty next year; but the hon. Gentleman had not told the Committee how they would be disclosed. All that the Amendment did was to make the sugar duty temporary instead of permanent—that it should last only until 1st July 1909, at which date Parliament might have an opportunity which it would not otherwise have of reconsidering the matter. Then the hon. Gentleman said that the Amendment would affect the imports of sugar. He did not see how the hon. Gentleman could seriously suggest that either of these consequences could follow.

MR. HOBHOUSE

Most seriously.

MR. BOWLES

hoped that someone on the Treasury Bench would explain how if this duty only remained in force until 1st July, 1909, it would have any effect whatever on the action of sugar importers. He thought the hon. Member for Preston had rendered a real service in making the suggestion he had done. As the Committee were aware, an enormous proportion of the whole tax revenues of the country was raised automatically every year without any necessity of the intervention or knowledge of the House of Commons. They heard a great deal about Parliamentary control, but there was something like 70 per cent, of the tax revenues raised year by year which no Parliament in our time had sanctioned. That was done under permanent enactment. In the interests of the House he really desired to see that practice done away with. The proposal of the hon. Member for Preston involved no diminution in the amount of money provided for by the Government. It would merely enact that on 1st July, 1909, the House would have necessarily the opportunity of considering the sugar duty again, instead of relegating it to the reconsideration, of the Government of the day. He maintained that the Amendment was entirely reasonable, and, in his humble opinion, the Government would be very well advised to accept it.

*MR. GRETTON (Rutland)

said that there were very serious difficulties in raising discussions on this tax as now imposed on account of the forms of procedure in the House. The Secretary to the Treasury had said that the adoption of the Amendment would produce a sugar famine; but he thought that was perfectly absurd. The well known position which the Government would be in in the next financial year would make it far more probable that the importers of sugar would rather rush to get rid of their stocks than to hold them up. He supported the Amendment because he believed that every tax imposed on the people of the country ought to be under the full control of Parliament.

SIR EDWIN CORNWALL (Bethnal Green, N.E.)

thought the Amendment would have exactly the effect his hon. friend had stated. If hon. Members looked at the words of the Amendment they would see that that was so— When all duties … shall cease. If those words were put into an Act of Parliament, he did not think the Government would possess so free a hand as now.

SIR F. BANBURY

wished to support the Government, but not on the grounds stated by the hon. Member for Sunderland or the Financial Secretary. The hon. Member for Sunderland agreed with the Amendment, but was going to vote against it because the Government had done so well. In his own opinion, the Government could not have done worse, and he proposed to vote for the Government because they had done so badly. The Financial Secretary opposed the Amendment on the worst ground that had ever been advanced in the House, either from the Treasury or any other Bench. He admitted it would not interfere in any way with the Budget I but advanced the startling proposition that importers of sugar would hold back their stocks for a year in order to see what the Government were going to do next year.

MR. HOBHOUSE

denied saying anything so ridiculous. What he said was the sugar would be held back until there was a sugar famine.

SIR F. BANBURY

asked why should people hold back sugar for any time because something was going to happen next year. Why did not the tea dealers hold back tea? The Amendment put sugar in exactly the same position as tea. That was to say the Government in 1909 could review the sugar duty without falling into any of the pit-falls the hon. Gentleman had alluded to. The hon. Gentleman's argument originally did not touch the point, and his statement just now took away any force it previously had. He supported the Government because he wished to be consistent. He believed he was one of those who in 1901 voted for making this tax permanent, and having heard no reason from the Financial Secretary to the Treasury which led him to alter his opinion he should support the Government in this good work.

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

said the Liberal Party had for many years past been advocating a free breakfast table, and therefore he much regretted that the Financial Secretary to the Treasury should have intimated so early in the debate that the Government, would not accept this Amendment. The hon. Member for the City of London had been consistent, and having voted for making this tax permanent now supported the Government; but he would like to see the Financial Secretary to the Treasury consistent too; as in 1901 the hon. Gentleman voted for its being made a temporary tax. It would have been so simple to have put on record that they looked upon this tax as of a merely temporary character.

MR. A. DEWAR (Edinburgh, S.)

expressed the conviction that they all, including the Treasury Bench, desired that the sugar tax should be only temporary, but when the hon. Member for Preston moved an Amendment and the hon. Members opposite congratulated him on having done a public service, and the hon. Member for London supported the Government, he was inclined to be suspicious. What his hon. friend the Member for Preston desired to do was to tie the hands of the Government so that next year they should not have a free choice in regard to the tax. The Government desired to make this a temporary tax, and to abolish it as soon as possible, but they wished to have a free hand in the matter. Having regard to the old-age pensions scheme it was thought better to leave the tax on this year, though next year they hoped it would be off If his hon. friend could not trust the Government he could.

MR. GUINNESS (Bury St. Edmunds)

proposed to amend the Amendment by leaving out all the words after "1909." He thought there was a good deal in the argument of the Financial Secretary that it would cause delay if this tax was going to be taken off finally and completely. If these words were left out it would ensure that the House would have the opportunity of considering the matter on its merits next year. Unless the first part of the Amendment were accepted it would be impossible to consider the matter next year. Most of them on the Opposition side were anxious to see the sugar duty abolished altogether. But that could not be done under the present system of taxation.

MR. HAROLD COX

said he only put the words in to make his meaning clear, and if the Deputy-Chairman would tell him if the Amendment was clear without them, he would accept the Amendment of the hon. Member.

*THE DEPUTY-CHAIRMAN

said he could not make any statement on the merits of the Amendment. He could only say it was quite in order to amend the Amendment by leaving out the words proposed to be left out. The hon. Member must satisfy himself of the effect of the proposed Amendment to his Amendment.

Amendment proposed to the proposed Amendment— To leave out all the words after the word 'nine,'"—(Mr. Guinness.)

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

MR. STUART

said he was very much afraid the effect of the Amendment would be that if no action were taken next year, the tax would go on as before. He did not think that that was what the Committee for a moment desired. He did not wish to prejudge the question at all; he simply wanted to see the tax made an annual tax instead of a permanent one. It seemed to him that the justification of the argument of the Secretary to the Treasury was that he really believed the Amendment would tie the hands of the Government absolutely and require them to undertake to abolish the tax next year. That was not the case at all and he felt there was some misunderstanding on his part. It might be well if they asked some more experienced Member of the Government to consider between now and the Report stage, how the tax could be simply made an annual one. There was a feeling on the part of some Members of the Committee that the words proposed by the hon. Member for Preston would in some way tie the hands of the Government. If that were so, surely some Amendment could be made to carry out the views of the hon. Member without tying the hands of the Government. The matter might be held over till the Report stage when the Government might bring in some phraseology to make the tax an annual one without tying their hands. He did not believe the Amendment to the Amendment would make matters any better.

SIR F. BANBURY

said he desired to point out that the Amendment would have the effect desired. It would make the clause read: "The duties, drawbacks, and allowance in respect of sugar, molasses, glucose, and saccharin set out in the schedule to this Act shall, as from the 18th day of May, 1908, until the first day of July, 1909,when all duties upon sugar, molasses, glucose, and saccharin, upon the importation thereof into Great Britain or Ireland, shall cease, etc." Everything, therefore, was included and would come under review on 1st July, 1909.

MR. HOBHOUSE

said that by the acceptance of the Amendment to the Amendment they would place themselves in the very undesirable position of reestablishing the duty as it existed at the present time. He was quite certain that none of his hon. friends desired that, but it would be the inevitable result of the acceptance of the Amendment to the Amendment.

MR. HAROLD COX

suggested that, instead of the proposal of the hon. Member opposite, they should add at the end of his Amendment the words "unless Parliament otherwise determines." That would make it clear that it was the wish of the House to leave it open till next year.

MR. GUINNESS

asked leave to withdraw his Amendment.

Amendment to the proposed Amendment, by leave, withdrawn.

Another Amendment proposed to the proposed Amendment— At the end, to add the words 'unless Parliament otherwise determine.'"—(Mr. Harold Cox.)

Question, "That those words be there added to the proposed Amendment."

MR. WILLIAM RUTHERFORD

thought that if the Government would accept these words it would get them out of the difficulty. He had consistently supported the idea that the tax should be temporary and that it should be possible for the House of Commons year after year to go into the question as to whether it should be continued or not. The tax was made a. permanent one in 1901, and there was no doubt that that was a very objectionable thing to do. It was a tax upon food, and it was imposed for the specific purpose of the war. There were no grounds which at that time justified its being made a permanent tax. He was not a Member of the House at the time, but he remembered reading how for a whole night the members of the present Government, unanimously supported by the then Opposition, protested against the tax being made a permanent one and thus taken from the yearly review of Parliament. It was now fairly agreed that the Amendment in its altered form would make it clear that the tax was temporary and was one which the Government of the day could put into the Finance Bill and continue, but which the House of Commons would have a right to consider and discuss. That was all they asked; why could not the Government agree? The Secretary to the Treasury had told them that if they made the tax capable of being yearly reviewed, they would bring about a very objectionable state of things in the market; but it would, at any rate, be no worse than the state of things which existed in the tea market. If it was desirable that the tea duty should be annually reviewed, why should not the sugar duty be treated exactly in the same manner? It had been made clear that the Amendment simply intended to put the sugar duty on the same footing as the tea duty. He hoped the Government would admit that taxes on food were not things which should be permanent, and that they would accept the Amendment.

COLONEL LOCKWOOD (Essex, Epping)

said the Secretary to the Treasury had surely seen by this time that the solitary argument which he had advanced against the proposal of the hon. Member for Preston had scarcely that force which they expected arguments from the Treasury Bench to have. He honestly confessed that until the hon. Member moved the addition of the words "unless Parliament otherwise determine" he could not have voted for the Amendment; but surely, now those words were to be added, the principle so dear to the hearts of hon. Gentlemen opposite, that Parliament should have the opportunity of reviewing the taxes yearly, must come home to them. Where could be the danger of an annual revision of the sugar duty the same as the tea duty? The Secretary to the Treasury must by this time have seen the absolute fallacy of the single argument he had advanced against a proposition which really embodied one of the doctrines of the Liberal Party, and which must find acceptance by Liberal Members, who wished that Parliament, the mirror of the nation, should have controlling power over taxes of all description. He could not see that an annual review of the sugar duty could be any more detriment to the Government than the yearly review of the tea duty.

Question proposed, "That the words as amended be there inserted."

MR. SCOTT (Ashton-under-Lyne)

said he wished to support the Amendment. He gathered that members of the Government had pledged themselves repeatedly with regard to the sugar tax, and that they had made stronger prouncements against that tax than against the tea tax. They now argued that Parliament must not be trusted to debate the sugar tax. That was a position which they could not altogether defend. The House would never deny to the Government its support if a tax on sugar was essential, and surely the Government ought not to say that they could not trust Parliament to discuss it every time the Budget came up, and that therefore they must depart from the strong views they held in 1901. It had been suggested that this could be altered on Report, but it was not likely that they would have a Report stage. He appealed to the representative of the Government whether he, could not meet the strong desire expressed by many of their supporters that this should be made an annual and not a permanent tax.

MR. HOBHOUSE

said he could understand that if there was in practice any difficulty in discussing the question of the continuance or the abolition of the sugar tax it would be very undesirable and most unconstitutional to restrict the power of the House of Commons to debate it. But was there in practice any difficulty in doing this? They had always discussed the continuance or abolition of every tax imposed by the Finance Bill, and there was very nearly no restriction at all on the freedom of debate. The hon. Member for Preston had rather taunted certain members of the Government with having voted for the tax, in its original inception, being an annual tax and now continuing it as a permanent tax. If there was any inconsistency in that, position he was quite willing to admit it, but there was a difference in saying when a tax was imposed for the first time, that it was much better that it should be an annual tax, and when they found it a permanent tax continuing it as such while the House had liberty to discuss it as it had done each year since the present Government had been in office. He therefore could not accept the Amendment even as amended.

MR. HAROLD COX

pointed out that there was a very great difference between a clause appearing in the Bill year after year and the necessity of moving a new clause. He raised the question last year, and lived very great difficulty in raising it because he had to wait till the Report

stage to move a new clause. The opportunity did not arise in Committee. If the clause was in the Bill they could automatically deal with it in Committee and it had to come before the House. This was not such a light matter as the hon. Member seemed to think. The whole Liberal Party was in the position of saying they were opposed to the sugar tax when asked for as a war tax. Now they were asked to keep it on as a permanent tax. Every Member who voted with the Government was voting for making the sugar tax permanent, and he wondered how they would reconcile that with what they had said to the country.

MR. HARWOOD (Bolton),

as one who had voted with the Government when the matter was raised before, said he should like to have some better explanation of what was the difference between sugar and tea. Why should sugar be treated differently from tea? Why should one be temporary and the other permanent? He would like to have some explanation; otherwise, he must vote against the Government, and he did not want to do so.

Question put.

The Committee divided:—Ayes, 111; Noes, 213. (Division List No. 191.)

AYES.
Abraham, William (Cork. N.E.)	Crooks, William	Hope, John Deans (Fife, West)
Ashley, W. W.	Curran, Peter Francis	Houston, Robert Paterson
Aubrey-Fletcher, Rt. Hon. Sir H.	Devlin, Joseph	Hudson, Walter
Banner, John S. Harmood-	Doughty, Sir George	Hunt, Rowland
Barnes, G. N.	Du Cros, Arthur Philip	Idris, T. H. W.
Beach, Hn. Michael Hugh Hicks	Duncan, C(Barrow-in-Furness)	Jowett, F. W.
Bignold, Sir Arthur	Faber, George Dension (York)	Joyce, Michael
Boland, John	Fell, Arthur	Kelley, George D.
Bowles, G. Stewart	Flynn, James Christopher	Kennaway, Rt. Hn. Sir John H.
Bridgeman, W. Clive	Gibbs, G. A. (Bristol, West)	Kettle, Thomas Michael
Bull, Sir William James	Gill, A. H.	Lane-Fox, G. R.
Burke, E. Haviland	Glover, Thomas	Lockwood, Rt. Hn. Lt.-Col. A. R.
Carlile, E. Hildred	Gooch, Henry Cubitt (Peckham)	Lowe, Sir Francis William
Cave, George	Gretton, John	Luttrell, Hugh Fownes
Cecil, Evelyn (Aston Manor)	Guinness, Walter Edward	Macdonald, J. R. (Leicester)
Cecil, Lord John P. Joicey-	Hamilton, Marquess of	MacNeill, John Gordon Swift
Cleland, J. W.	Hardie, J. Keir (Merthyr Tydvil)	Macpherson, J. T.
Clive, Percy Archer	Harwood, George	MacVeigh, Charles (Donegal, E.)
Clough, William	Hazleton, Richard	M'Arthur, Charles
Clynes, J. R.	Henderson, Arthur (Durham)	M'Killop, W.
Cooper, G. J.	Hill, Sir Clement	Markham, Arthur Basil
Courthope, G. Loyd	Hills, J. W.	Meehan, Francis E. (Leitrim, N.
Craik, Sir Henry	Hodge, John	Middlemore, John Throgmorton
Crean, Eugene	Hogan, Michael	Mooney, J. J.
Nannetti, Joseph P.	Rawlinson, John Frederick Peel	Stanier, Beville
Nield, Herbert	Redmond, John E. (Waterford	Staveley-Hill, Henry (Staff'sh.)
Nolan, Joseph	Renton, Leslie	Summerbell, T.
O'Brien, Kendal(Tipperary Mid	Richards, T.F.(Wolverh'mpt'n)	Taylor, John W. (Durham)
O'Brien, Patrick (Kilkenny)	Roberts, G. H. (Norwich)	Walker, Col. W.H.(Lancashire)
O'Doherty, Philip	Roche, John (Galway, East)	Walsh, Stephen
O'Malley, William	Ronaldshay, Earl of	Watt, Henry A.
O'Shaughnessy, P. J.	Rowlands, J.	White, Patrick (Meath, North)
Parker, James (Halifax)	Rutherford, John (Lancashire)	Wilkie, Alexander
Parkes, Ebenezer	Rutherford, W. W. (Liverpool)	Wilson, A. Stanley(York, E. R.)
Pease, Herbert Pike(Darlington	Salter, Arthur Clavell	Wilson, W. T. (Westhoughton)
Power, Patrick Joseph	Shackleton, David James
Price, C.E.(Edinburgh, Central)	Sheffield, Sir Berkeley George D.	TELLERS FOR THE AYES—Mr. Harold Cox and Mr. Scott.
Randies, Sir John Scurrah	Snowden, P.
NOES.
Agnew, George William	Duckworth, James	Leese, Sir Joseph F.(Accrington
Alden, Percy	Dunn, A. Edward (Camborne)	Lehmann, R. C.
Allen, A. Acland (Christchurch)	Dunne, Major E. Martin (Walsall	Lever, A. Levy (Essex, Harwich
Allen, Charles P. (Stroud)	Edwards, Sir Francis (Radnor)	Levy, Sir Maurice
Armitage, R.	Erskine, David C.	Lloyd-George, Rt. Hon. David
Astbury, John Meir	Essex, R. W.	Lupton, Arnold
Balfour, Robert (Lanark)	Esslemont, George Birnie	Lyell, Charles Henry
Banbury, Sir Frederick George	Evans, Sir Samuel T.	Macdonald, J. M. (Falkirk B'ghs
Barker, John	Everett, R. Lacey	Maclean Donald
Barlow, Sir John E. (Somerset)	Fenwick, Charles	M'Callum John M.
Barnard, E. B.	Ferens, T. R.	M'Crae, Sir George
Barran, Rowland Hirst	Findlay, Alexander	M'Iver, Sir Lewis
Barry, Redmond J. (Tyrone, N.)	Foster, Rt. Hon. Sir Walter	M'Kenna, Rt. Hon. Reginald
Beale, W. P.	Fuller, John Michael F.	M'Laren, H. D. (Stafford, W.)
Beauchamp, E.	Fullerton, Hugh	M'Micking, Major G.
Bell, Richard	Glendinning, R. G.	Mallett, Charles E.
Benn, Sir J. Williams (Devonp'rt	Goddard, Sir Daniel Ford	Manfield, Harry (Northants)
Benn, W.(T'w'r Hamlets, S. Geo.	Gooch, George Peabody (Bath)	Marnham, F. J.
Bennett, E. N.	Greenwood, Hamar (York)	Massie, J.
Berridge, T. H. D.	Gulland, John W.	Masterman, C. F. G.
Bethell, T. R. (Essex, Maldon)	Gurdon, Rt. Hn. Sir W. Brampton	Menzies, Walter
Black, Arthur W.	Hall, Frederick	Micklem, Nathaniel
Boulton, A. C. F.	Halpin, J.	Middlebrook, William
Bramsdon, T. A.	Harcourt, Robert V. (Montrose	Molteno, Percy Alport
Branch, James	Hardy, George A. (Suffolk)	Mond, A.
Brigg, John	Harmsworth, Cecil B. (Worc'r)	Montagu, Hon. E. S.
Bright, J. A.	Harvey, W. E. (Derbyshire, N.E.	Morgan, J. Lloyd (Carmarthen)
Brocklehurst, W. B.	Haslam, James (Derbyshire)	Morrell, Philip
Brodie, H. C.	Haworth, Arthur A.	Morse, L. L.
Brooks, Stopford	Hazel, Dr. A. E.	Morton, Alpheus Cleophas
Brunner, J. F. L. (Lancs., Leigh)	Hedges, A. Paget	Napier, T. B.
Bryce, J. Annan	Helme, Norval Watson	Nicholson, Charles N. (Doncast'r
Burt, Rt. Hon. Thomas	Hemmerde, Edward George	Norton, Capt. Cecil William
Byles, William Pollard	Henderson, J. M. (Aberdeen, W.)	Nuttall, Harry
Cameron, Robert	Higham, John Sharp	Partington, Oswald
Causton, Rt. Hn. Richard Knight	Hobhouse, Charles E. H.	Pearce, Robert (Staffs, Leek)
Cawley, Sir Frederick	Holland, Sir William Henry	Pearce, William (Limehouse)
Cobbold, Felix Thornley	Holt, Richard Durning	Perks, Sir Robert William
Collings, Rt. Hn. J. (Birm'gham)	Horniman, Emslie John	Pirie, Duncan V.
Collins, Stephen (Lambeth)	Isaacs, Rufus Daniel	Pollard, Dr.
Collins, Sir Wm. J.(S. Pancras, W	Jackson, R. S.	Price, Sir Robert J.(Norfolk, E.)
Compton-Rickett, Sir J.	Jacoby, Sir James Alfred	Priestley, Arthur (Grantham)
Corbett, CH. (Sussex, E. Grinst'd	Jardine, Sir J.	Priestley, W. E. B. (Bradford, E.)
Cornwall, Sir Edwin A.	Johnson, John (Gateshead)	Radford, C. H.
Cory, Sir Clifford John	Johsnson, W. (Nuneaton)	Raphael, Herbert H.
Craig, Herbert J. (Tynemouth)	Jones, Sir D. Brynmor (Swansea)	Rea, Russell (Gloucester)
Crossley, William J.	Jones, Leif (Appleby)	Rea, Walter Russell (Scarboro'
Dalziel, James Henry	Kearley, Sir Hudson E,	Rendall, Athelstan
Davies, David(Montgomery Co.	Kekewich, Sir George	Ridsdale, E. A.
Davies, Sir W. Howell(Bristol, S.	King, Sir Henry Seymour(Hull)	Roberts, Charles H. (Lincoln)
Dewar, Arthur (Edinburgh, S.)	Laidlaw, Robert	Roberts, Sir John H.(Denbighs.)
Dewar, Sir J. A. (Inverness-sh.)	Lambert, George	Robertson, Sir G. Scott (Bradf'rd
Dobson, Thomas W.	Lamont, Norman	Robertson, J. M. (Tyneside)

Robinson, S.	Strachey, Sir Edward	White, J. D. (Dumbartonshire)
Robson, Sir William Snowdon	Strauss, E. A. (Abingdon)	White, Luke (York, E. R.)
Runciman, Rt. Hon. Walter	Stuart, James (Sunderland)	Whitehead, Rowland
Russell, T. W.	Sutherland, J. E.	Whitley, John Henry (Halifax)
Scarisbrick, T. T. L.	Taylor, Theodore C. (Radcliffe)	Whittaker, Rt. Hn. Sir Thomas P.
Schwann, C. Duncan (Hyde)	Tomkinson, James	Wiles, Thomas
Schwann, Sir C.E. (Manchester)	Torrance, Sir A. M.	Williamson, A.
Sears, J. E.	Toulmin, George	Wills, Arthur Walters
Seaverns, J. H.	Trevelyan, Charles Philips	Wilson, John (Durham, Mid)
Seely, Colonel	Ure, Alexander	Wilson, J. H. (Middlesbrough)
Shaw, Charles Edw. (Stafford)	Verney, F. W.	Wilson, J. W.(Worcestersh, N.
Shaw, Rt. Hon. T. (Hawick, B.)	Vivian, Henry	Wilson, P. W. (St. Pancras, S.)
Sherwell, Arthur James	Walker, H. De R. (Leicester)	Wood, T. McKinnon
Shipman, Dr. John G.	Walters, John Tudor	Yoxall, James Henry
Silcock, Thomas Ball	Walton, Joseph
Simon, John Allsebrook	Wardle, George J.	TELLERS FOR THE NOES—Mr. Joseph Pease and Master of Elibank.
Smeaton, Donald Mackenzie	Warner, Thomas Courtenay T.
Soares, Ernest J.	Wason, John Cathcart (Orkney)
Spicer, Sir Albert	Waterlow, D. S.
Stanley, Albert (Staffs, N.W.)	Weir, James Galloway

MR. MCARTHUR (Liverpool, Kirkdale) moved to amend the clause so as to provide for the grant of a rebate on foreign-refined sugar stocks held on 18th May, the day on which the Budget Resolution came into force. He was understood to say that on that day the considerable stocks in possession of importers were depreciated to the extent of the reduction of duty, and they had thereby suffered serious pecuniary loss. That sugar had been bought in the ordinary course of trade. [Interruption.]

THE CHAIRMAN

Order, order.

MR. McARTHUR,

continuing, said those stocks had depreciated to the extent of the reduction of the duty. The Committee would quite understand how that came about. [More interruption.]

MR. WILLIAM RUTHERFORD

said his hon. friend was raising a most important matter touching the interests of a large trading community, and it was impossible, owing to the state of disorder prevailing in the House, for the hon. Member to make himself heard.

MR. MCARTHUR,

resuming, said it was a great injustice to those men to have to suffer such a great pecuniary loss, more especially because it was a loss which they did everything in their power to avoid. They wrote to the Chancellor of the Exchequer pointing out this very danger. They told the right hon. Gentleman that they had heard a report that he was going to reduce the sugar duty, and they asked him if that was his intention to remember their stocks, pointing out that if he did not allow them a rebate they would be great sufferers. The right hon. Gentleman made a guarded reply to those representations, in which he said that their interests should have careful attention, and upon that assurance they had relied. They might have been protected from loss in two ways: either the Chancellor of the Exchequer might have given them sufficient time to dispose of their stocks, or he might have allowed them a rebate. As a matter of fact, he only gave them eleven days to dispose of their stocks, and as two of those days were Sundays the period allowed was practically reduced to nine days, which was quite an insufficient time. If the right hon. Gentleman could afford to take off part of the sugar duty, surely he could afford this small amount. The Chancellor of the Exchequer had all along. under-estimated the amount required for the purpose of rebate; he had put it down at £11,000, the members of the trade, themselves had made careful inquiry and they found that it amounted to no less than £38,399. What happened in connection with the Finance Act of 1903 was a parallel case. At that time the late Lord Ritchie, then Mr. Ritchie, proposed to abolish the duty on corn, and to make a reduction on glucose, and he made provision that all those who had stocks on hand should have a rebate equal to the difference in the duty. He could not understand why that precedent should not be followed on the present occasion. In 1903 there was no party against it; on the contrary the Party opposite supported it and tried to widen it. Why the Government had adopted a different course now it was difficult to understand. He entirely acquitted the Chancellor of the Exchequer personally of any want of consideration, for he would be the last man to be wanting in consideration, but he could only suppose that the right hon. Gentleman was driven by circumstances over which he had no control to take the course he had taken. He hoped that even at the last moment he would reconsider the matter. If the right hon. Gentleman could not undertake to do so, he must appeal to the Committee to consider the case of the people for whom he pleaded. They were not wealthy people, and he did not suppose that they commanded many votes, but he did not see why they should suffer to the extent of £2,000 or £3,000 each through no fault of their own, and simply because the Exchequer had failed to make arrangements which would have obviated this loss. He asked that they should be placed in such a position that this remission of taxation should not be the means of throwing a loss on innocent persons. He begged to move.

Amendment proposed— In page 2, line 7, at end, to insert the words 'and the reduction shall be deemed to have taken effect as respects the duty which has been paid by any person on any sugar molasses, glucose, or saccharin which was in his stock or possession at the close of the eighteenth of May, nineteen hundred and eight, 'provided that the excess duty paid thereon by such person amount in the aggregate to a sum not less than twenty-five pounds.'"—(Mr. McArthur.)

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

MR. LLOYD-GEORGE

said he did not complain that the hon. Member had raised the question, but he thought he was entitled to point out that they had already had several debates on this identical point on the Budget. The hon. Member, representing, as he did, a considerable num- ber of gentlemen in Liverpool who were interested, no doubt, thought that he was bound to make a final protest, and he merely mentioned the matter, not in order to complain, but as an excuse for not going into it himself as fully as he had done on former occasions, when both he and the Prime Minister gave very fully the reasons which prompted the Government to refuse a rebate. There had been several reductions of the sugar duty from time to time, and in no case was a rebate granted. These reductions had been made by Chancellors of the Exchequer belonging to both parties. Mr. Gladstone on three occasions reduced the sugar duties, and never gave a general rebate. He gave short notice exactly as the Government had done on the present occasion. Sir Stafford Northcote did the same thing, and he gave no rebate. The hon. Member had referred to the case of the corn duties, but that was very different. Corn was the principal food of the people, and there was a real danger—indeed, as a matter of fact, corn was being held back for the time that the duty would be taken off—them was a real danger that there would be a scarcity of corn unless arrangments had been made by the Treasury to grant a rebate in order to bring corn into the market at once. That was not done in order to meet pecuniary losses to dealers in corn, but purely in order to meet the general convenience of the public. But there was no danger of that kind in this case, and there had been no real inconvenience. He admitted there must have been some loss to individuals, but, comparatively speaking, it was a small loss. Meantime, speaking of the trade as a whole, they had done very well by the imposition and reduction of the sugar tax. It was true that many individuals had come into the trade since the imposition of the tax, and did not derive any advantage when the tax was put on, but in the main the firms were the same. It was not so many years since the tax was imposed, and the loss, if it were divided among those who had come in since, would not be a very heavy loss, and certainly was not to be compared with the money that was made when the tax was imposed by Lord St. Aldwyn. Then the dealers took very good care to stock their warehouses with about three or four months stocks, while the usual stock was from a fortnight to three weeks, and all three or four months' stock was put upon the market, not at the price at which it would have been sold but for the duty, but at the price plus the duty which had been imposed. All the great dealers were in the business when the tax was imposed, and if the balance of profit and loss were struck it would be found to be enormously to their advantage. The reduction of the duty was such an advantage to the trade as a whole that the comparatively small loss they suffered in respect of the fortnight or three-weeks stock they had in hand was a mere nothing compared with the benefits they had got. A member of the deputation who had waited upon him told him that the duty had cost him a considerable sum par annum which he could not put off on his customers. He saw no real reason for depriving the revenue of the year of som thing like £200,000.

MR. WILLIAM RUTHERFORD

£40,000.

MR. LLOYD-GEORGE

said he was sorry to say that that was not the case. If it had been merely a matter of £40,000 it would not have been worth quarrelling about. Unfortunately, it was a good deal more. There were other sections of the trade which would come forward and say: "If you have granted a rebate to the saccharin and glucose people, why have you not given it to us?" And if they granted it to one, they could not possibly refuse it to another. He had got to deal with all those who were interested in some way or other in the reduction of the sugar duty, and in order to meet the demands of all

those cases he should at least have to find £150,000 to £200,000. He did not think he was justified in doing it, having regard to the fact that this was a reduction and not an increase. Since they were really by this Budget enormously benefiting the trade itself, they ought to take the profit and the loss, seeing especially that the profit was very much larger than the loss.

MR. WILLIAM RUTHERFORD

said In desired, on behalf of a small body of who had been made to suffer in their pockets, to support the Amendment. He had made the most careful inquiry into the amount of stocks held, and he believed that the amount of loss to the Exchequer would not exceed more than £40,000.

MR. LLOYD-GEORGE

For their own particular business.

MR. WILLIAM RUTHERFORD

said that the amount involved in the words of the Amendment before the Committee did not exceed £40,000. The point was considered very carefully in connection with the corn duty, when the House of Commons declined to inflict hardship on a few men in the trade. It was on behalf of the few individuals who had been obliged to carry stock for the purposes of their business that they urged that this small sum should be made good to them.

Question put.

The Committee divided:—Ayes, 53; Noes, 272. (Division List No. 192.)

AYES.
Ashley, W. W.	Coates, Major E. F.(Lewisham)	Gretton, John
Anbrey-Fletcher, Rt. Hn. Sir H.	Collings, Rt. Hn. J.(Birm'gham)	Guinness, Walter Edward
Balcarres, Lord	Courthope, G. Loyd	Hamilton, Marquess of
Beach, Hn. Michael Hugh Hicks	Dalrymple, Viscount	Hardy, Laurence (Kent, Ashf'rd
Beckett, Hon. Gervase	Doughty, Sir George	Houston, Robert Paterson
Bignold, Sir Arthur	Douglas, Rt. Hon. A. Akers-	Kennaway, Rt. Hon. Sir John H.
Bridgeman, W. Clive	Du Cros, Arthur Philip	Kerry, Earl of
Bull, Sir William James	Faber. George Dension (York)	Lane-Fox, G. R.
Carlile, E. Hildred	Faber, Capt. W. V. (Hants, W.)	Long, Rt. Hn. Walter (Dublin, S)
Cave, George	Fell, Arthur	Lowe, Sir Francis William
Cecil, Lord John P. Joicey-	Forster, Henry William	Mason, James F. (Windsor)
Clive, Percy Archer	Gooch, Henry Cubitt (Peckham)	Middlemore, John Throgmorton
Nield, Herbert	Rutherford, W.W.(Liverpool)	Wilson, A. Stanley (York, E. R.)
Parkes, Ebenezer	Sheffield, Sir Berkeley George D.	Younger, George
Randles, Sir John Scurrah	Smeaton, Donald Mackenzie
Rawlinson, John Frederick Peel	Stanier, Beville	TELLERS FOR THE AYES—Mr. M'Arthur and Mr. Harmood- Banner.
Renton, Leslie	Talbot, Lord E.(Chichester)
Ronaldshay, Earl of	Valentia, Viscount
Rutherford, John (Lancashire)	Walker, Col. W. H. (Lancashire
NOES.
Agnew, George William	Crossley, William J.	Jones, Sir D. Brynmor (Swansea
Allen, A. Acland (Christchurch)	Dalziel, James Henry	Jones, Leif (Appleby)
Allen, Charles P. (Stroud)	Davies, David (Montgomery Co.	Jowett, F. W.
Asquith, Rt. Hn. Herbert Henry	Davies, Sir W. Howell(Bristol, S.	Joyce, Michael
Astbury, John Meir	Devlin, Joseph	Kearley, Sir Hudson E.
Balfour, Robert (Lanark)	Dewar, Sir J. A. (Inverness-sh.)	Kekewich, Sir George
Banbury, Sir Frederick George	Dobson, Thomas W.	Kelley, George D.
Barker, John	Duckworth, James	Laidlaw, Robert
Barnes, G. N.	Duncan, C. (Barrow-in-Furness)	Lambert, George
Barran, Rowland Hirst	Dunn, A. Edward (Camborne)	Lamont, Norman
Barry, Redmond J.(Tyrone, N.)	Dunne, Major E. Martin(Walsall	Law, Hugh A. (Donegal, W.)
Beale, W. P.	Edwards, Sir Francis (Radnor)	Leese, Sir Joseph F.(Accrington)
Beauchamp, E.	Erskine, David C.	Lehmann, R. C.
Beck, A. Cecil	Essex, R. W.	Lever, A. Levy(Essex, Harwich)
Bell, Richard	Esslemont, George Birnie	Levy, Sir Maurice
Benn, Sir J. Williams (Devonp'rt	Evans, Sir Samuel T.	Lloyd-George, Rt. Hon. David
Benn, W.(T'w'r Hamlets, S. Geo.	Everett, R. Lacey	Lupton, Arnold
Bennett, E. N.	Fenwick, Charles	Luttrell, Hugh Fownes
Bethell, T. R.(Essex, Maldon)	Ferens, T. R.	Lyell, Charles Henry
Birrell, Rt. Hon. Augustine	Findlay, Alexander	Lynch, H. B.
Black, Arthur W.	Foster, Rt. Hon. Sir Walter	Macdonald. J. R. (Leicester)
Boulton, A. C. F.	Fuller, John Michael F.	Macdonald, M.(Falkirk B'ghs
Bowerman, C W.	Fullerton, Hugh	Maclean, Donald
Bramsdon, T. A.	Gill, A. H.	MacNeill, John Gordon Swift
Branch, James	Glendinning, R. G.	Macpherson, J. T.
Brigg, John	Glover, Thomas	MacVeagh, Jeremiah(Down, S.)
Bright, J. A.	Goddard, Sir Daniel Ford	MacVeigh, Charles (Donegal, E.)
Brocklehurst, W. B.	Gooch, George Peabody (Bath)	M'Callum, John M.
Brodie, H. C.	Gulland, John W.	M'Crae, Sir George
Brooke, Stopford	Gurdon, Rt. Hn. Sir W. Brampton	M'Iver, Sir Lewis
Brunner, J.F.L. (Lancs., Leigh	Hall, Frederick	M'Kenna, Rt. Hon. Reginald
Bryce, J. Annan	Halpin, J.	M'Killop, W.
Buchanan, Thomas Ryburn	Harcourt, Robert V.(Montrose)	M'Laren, Sir C. B. (Leicester)
Burke, E. Haviland-	Hardie, J. Keir (Merthyr Tydvil)	M'Laren, H. D. (Stafford, W.)
Burns, Rt. Hon. John	Hardy, George A. (Suffolk)	M'Micking, Major G.
Burt, Rt. Hon. Thomas	Harmsworth, Cecil B.(Worc'r)	Mallet, Charles E.
Buxton, Rt. Hn. Sydney Charles	Harvey, W.E.(Derbyshire, N. E.	Markham, Arthur Basil
Byles, William Pollard	Haslam, James (Derbyshire)	Marnham, F. J.
Carr-Gomm, H. W.	Haworth, Arthur A.	Massie, J.
Causton, Rt. Hn. Richard Knight	Hazel, Dr. A. E.	Masterman, C. F. G.
Cawley, Sir Frederick	Hedges, A. Paget	Menzies, Walter
Cheetham, John Frederick	Helme, Norval Watson	Micklem, Nathaniel
Churchill, Rt. Hn. Winston S.	Hemmerde, Edward George	Middlebrook, William
Cleland, J. W.	Henderson, Arthur (Durham)	Molteno, Perry Alport
Clough, William	Henderson, J.M. (Aberdeen, W	Mond, A.
Clynes, J. R.	Higham, John Sharp	Montagu, Hon. E. S.
Cobbold, Felix Thornley	Hobart, Sir Robert	Mooney, J. J.
Collins, Stephen (Lambeth)	Hobhouse, Charles E. H.	Morgan, J. Lloyd(Carmarthen)
Collins, Sir Wm. J.(S. Pancras, W.	Hodge, John	Morrell, Philip
Compton-Rickett, Sir J.	Hogan, Michael	Morse, L. L.
Cooper, G. J.	Holland, Sir William Henry	Morton, Alpheus Cleophas
Corbett, C. H (Sussex, E. Grinst'd	Holt, Richard Durning	Nannetti, Joseph P.
Cornwall, Sir Edwin A.	Hope, John Deans (Fife, West)	Napier, T. B.
Cory, Sir Cifford John	Horniman, Emslie John	Nicholson, Charles N.(Doncast'r
Cotton, Sir H. J. S.	Hudson, Walter	Norton, Capt. Cecil William
Cox, Harold	Idris, T. H. W.	Nussey, Thomas Willans
Craig, Herbert J.(Tynemouth)	Jackson, R. S.	Nuttall, Harry
Craik, Sir Henry.	Jacoby, Sir James Alfred	O'Brien, Kendal(Tipperary Mid)
Crean, Eugene	Johnson, John (Gateshead)	O'Brien, Patrick (Kilkenny)
Crooks, William	Johnson, W. (Nuneaton)	O'Connor. John (Kildare, N.)

O'Grady, J.	Rowlands, J.	Ure, Alexander
O'Malley. William	Runciman, Rt. Hon. Walter	Vivian, Henry
O'Shaughnessy, P.J.	Russell, T. W.	Walsh, Stephen
Parker, James (Halifax)	Samuel, Herbert L.(Cleveland)	Walters, John Tudor
Partington, Oswald	Scarisbrick, T. T. L.	Wardle, George J.
Pearce, Robert (Staffs, Leek)	Sehwann, C. Duncan (Hyde)	Warner, Thomas Courtenay T.
Pearce, William (Limehouse)	Schwann, Sir C. E. (Manchester)	Wason, John Cathcart (Orkney
Perks, Sir Robert William	Scott, A. H.(Ashton under Lyne	Waterlow, D. S.
Pirie, Duncan V.	Sears, J. E.	Watt, Henry A.
Pollard, Dr.	Seaverns, J. H.	Weir, James Galloway
Power, Patrick Joseph	Seely, Colonel	Whitbread, Howard
Price, C. E.(Edinburgh, Central)	Shackleton, David James	White, J.D. (Dumbartonshire)
Price, Sir Robert J.(Norfolk, F.)	Shaw, Charles Edw. (Stafford)	White, Luke (York, E.R.)
Priestley, Arthur (Grantham)	Shaw, Rt. Hon. T.(Hawick, B.)	White, Patrick (Meath, North)
Priestley, W.E.B.(Bradford, E.)	Sherwell, Arthur James	Whitehead, Rowland
Radford, G. H.	Shipman, Dr. John G.	Whitley, John Henry (Halifax)
Raphael, Herbert H.	Silcock, Thomas Ball	Whittaker, Rt. Hn. Sir Thomas P.
Rea, Russell (Gloucester)	Simon, John Allsebrook	Wiles, Thomas
Rea, Walter Russell(Scarboro')	Sinclair, Rt. Hon. John	Wilkie, Alexander
Redmond, William (Clare)	Snowden, P.	Williamson, A.
Rendail, Athelstan	Soares, Ernest J.	Wills, Arthur Walters
Richards, T. F.(Wolverh'mpt'n)	Spicer, Sir Albert	Wilson, John (Durham, Mid)
Ridsdale, E. A.	Stanley, Albert (Staffs, N.W.)	Wilson, J. H. (Middlesbrough)
Roberts, Charles H. (Lincoln)	Strache, Sir Edward	Wilson, J. W.(Worcestersh, N.)
Roberts, G. H. (Norwich)	Strauss, E. A. (Abingdon)	Wilson, P.W.(St. Pancras, S.)
Roberts, Sir John H.(Denbighs.	Stuart, James (Sunderland)	Wilson, W.T. (Westhoughton)
Robertson, Sir G. Scott (Bradf'rd	Summerbell, T.	Wood, T. M'Kinnon
Robertson, J. M. (Tyneside)	Sutherland, J. E.	Yoxall, James Henry
Robinson, S.	Taylor, John W. (Durham)
Robson, Sir William Snowdon	Taylor, Theodore C.(Radcliffe)	TELLERS FOR THE NOES—Mr. Joseph Pease and Master of Elibank.
Roche, John (Galway, East)	Thomasson, Franklin
Rogers, F. E. Newman	Toulmin, George

Bill read a third time, and passed.

Motion made, and Question proposed, "That Clause 2 stand part of the Bill."

MR. HICKS BEACH (Gloucestershire, Tewkesbury)

said he presumed that the Government had reduced this duty from ½d. to a ¼d. in the interest of the poor consumer of this country, but it was a moot point as to whether it would be of any benefit to them. When the hon. Member for Preston moved a similar reduction last year, he remembered it was opposed by the Government. The hon. Member then urged that, although this reduction might not at once benefit the consumer of sugar, it must do so ultimately. That view was quoted by the Prime Minister, then the Chancellor of the Exchequer, but the right hon. Gentleman supported it in a rather negative fashion because he declined to accept the Amendment. He argued that sooner or later the small reduction on the sugar duty might get down to the consumer, but that the process would be so slow that the ultimate benefit to the consumer would only be reached after a considerable time. He then went on to argue that a very small reduction of the sugar duty would benefit some of the powerful interests which had been raising considerable agitation to get it reduced or abolished altogether. He also pointed out that the people who would really benefit would be principally the manufacturers of mineral waters and confectioners. The intention of the Government, in moving the reduction of the duty, was to pacify some of their most hearty supporters who last year were placed in a somewhat awkward position. The first year the present Government came in to power they moved a reduction of 1d. in the pound on tea, and the then Chancellor of the Exchequer argued that that reduction would benefit the consumer. When a further reduction of 1d. was moved the next year, the right hon. Gentleman felt quite satisfied that it would not give any material advantage. It was rather hard to reconcile the two attitudes of the right hon. Gentleman. He (Mr. Hicks Beach) ventured to submit to the Committee that the reduction of the sugar duty by one-half would benefit manufacturers of mineral waters and confectioners much more than the humble consumer in the country or big towns. The reduction meant that the duty per lb. instead of being ½d. would be about ¼d. It was very doubtful whether the purchaser of a pound of sugar would get the full benefit of the reduction or any benefit at all. It was quite obvious that the person, who purchased less than a pound would get no benefit at all. He wished now to draw the attention of the Committee to another aspect of the question. When the Government first proposed the reduction, they estimated for an expenditure in the current year on old-age pensions of £1,200,000, the Prime Minister informing them that the scheme would cost about £6,000,000 the first full year, but in the course of the debates on the Bill, the Estimate of the cost in the first full year had risen first to £6,500,000 and finally to between £7,500,000 and £8,000,000. Furthermore, by a curious piece of legislation, they were legislating, not only for this year and next year, but for their possible successors in 1910, and the country would then have to face an expenditure on old-age pensions of between £10,000.000 and £11,000,000. The passage of the Old-Age Pensions Bill, therefore, had put a very different complexion upon the financial affairs of the country. If it-was clear that the cost of the estimated scheme in 1909–1910 had risen from £6,000,000 to £7,500,000 or £8,000,000, it was, he thought, also obvious that the provision of £1,200,000. which the Government had made for this year, would be quite inadequate. It was, therefore, plain that the Government would have to find before the end of the current year more money for the Old-Age Pensions Bill than they were; prepared to find when they introduced the Budget. They had had a most disquieting statement from the Chancellor of the Exchequer. Addressing the Corporation of the City of London at a banquet about a week ago, he announced that he had to face a "stunning deficit, a falling revenue and a declining trade," in the current year. That was a most remarkable statement for the Chancellor of the Exchequer to have made. If he remembered rightly, the Prime Minister and the right hon. Gentleman in the Second Reading debate on the Finance Bill, were careful to explain that although the prospects of increased trade during the current year were not very bright, yet they felt confident that the general trade of the country had passed through its most acute period of depression, and that they might therefore hope for a happy fulfilment of their Budget expectations. It was carious how quickly the opinions of the present Government changed. They had heard that the provisions the right hon. Gentleman had made in the Budget were not likely to he fulfilled and we were this year likely to be faced with a "stunning deficit." He therefore suggested to the right hon. Gentleman that he was not doing right in reducing the sugar duty by half. It was obvious that the right hon. Gentleman had not thought out the means by which he was going to provide money next year to carry out the old-age pensions scheme, because he had said recently he would have to rob someone's hen-roost, but he was not yet certain whose. The Government had left the Committee in a state of grievous uncertainty, and when they framed the Budget had obviously not the slightest idea where they were going to get the money from for old-age pensions. The right hon. Gentleman knew that his old-age pensions scheme would cost him £1,500,000 or £2,000,000 more than he anticipated, and knew he would have to rob a hen-roost next year to pay for it, and therefore he ought not to make a bid for the popular vote by reducing the sugar duty in this way. The reduction could only benefit the confectioners and the mineral water manufacturers and would not benefit the consumer in any way whatever. He submitted that the right hon. Gentleman should not reduce the sugar duty until he saw in what state the country was at the beginning of next year. The Government, by reducing the sugar duty this year, were making a mistake which the right hon. Gentleman would seriously repent when he had to produce his Budget in the coming year. He might be told that the omission of this Cause would entirely upset the Budget and the sugar trade throughout the country, because the reduction came into force on 18th May, so that it had been in force for some two months: but that was no argument at all. The House had a right to complain of the way in which they had been treated with regard to this Budget. It. was now the 14th July, and this was the first opportunity they had had of discussing its individual provisions in Committee. It was the latest date upon which a Budget had ever been discussed in Committee for many years past. He entered his protest against such a proceeding on the part of a Liberal Government, who spoke so loudly at the general election of the care that ought to be taken in examining the Estimates and making provision for the payment. He protested against the discussion on the Estimates being so long delayed in Committee. He opposed the Clause.

MR. AUSTEN CHAMBERLAIN

said that during the discussion connected with the old-age pensions scheme he had more than once supported the extension of the proposals of the Government. When challenged by hon. Gentlemen opposite as to how he would meet the deficit which those proposals would create he had pointed out that the Government had it in their power to extinguish the deficit by retaining in their hands the fiscal facilities they possessed and refusing to reduce the sugar duties. He retained that view. In fact his view went a little beyond that. In view of the great obligations which the Government were incurring it was reckless and dangerous finance to surrender any portion of the present revenue. But if it was wise and the Government thought it wise to count on undisclosed resources in order to provide the revenue required under these proposals, sooner than remit this particular tax they should have amplified their resources by retaining the duty on sugar and made their proposals less unequal, less partial, less unjust, and unfair than they were at present. Upon this question he should adhere to the course which he had already announced he would take. He thought this Bill was inherently bad, and it was not possible to deal with it by detailed Amendments in Committee. What they required was not a change here and there, but an alternative scheme, complete and homogeneous, dealing with the whole financial situation. Under those circumstances, although he sympathised with the views of his hon. friend who opposed the clause, and although he was greatly tempted in the interests of national finance to vote with him in order to preserve their sources of revenue to meet their great and growing liabilities, he should pursue the same course and leave to the Government the whole responsibility for the financial situation which they were creating. As he had refrained from voting for reductions which under other circumstances and with a different Budget he should have gladly supported, so he should refrain from rating for the retention of a tax which he relieved was absolutely necessary on a broader system of national finance.

MR. LLOYD-GEORGE

said that the clause was being opposed in order to protest against a reduction of the sugar duty. The Government had already been pressed from all quarters of the House to abolish the sugar duty altogether. He did not think at the present moment that any good purpose would be served by going into the question of the sugar duty at any great length, because they had already had two or three debates in which the matter had been thoroughly discussed. He thought the Government were thoroughly justified in their action to this reason. Sugar was not merely a food, but the raw material of several very prosperous industries which provided considerable employment for a large number of people, and when a considerable tax was imposed on sugar it must necessarily impair, embarrass, and restrict the operations of those particular industries. To that extent, the Government, by reducing by more than half the tax upon sugar, must encourage and assist those industries. He should have thought that they would have commanded the blessing of the right hon. Gentleman in this attempt to assist British industries. The right hon. Gentleman had dealt at some length with some remarks which he made in the City, and stated that the Chancellor of the Exchequer had informed the bankers that trade was worse than last year, that the revenue was falling, and that he should have a considerable deficit to meet this year. He simply stated on that occasion three undeniable facts. The right hon. Gentleman went on to say that he objected to the reduction of this duty because it would not benefit the consumer. That was not the view of the consumer himself nor of those who do lit with the consumer. The Civil Service Supply Association had published an announcement in a special document in the following terms: "Sugar. Alteration in duty. Reduced prices." That was the view of those who dealt directly with the consumer. Sugar was used largely by the working classes, and they must be benefited because there had been a reduction in the price, and the right hon. Gentleman could find that out for himself if he inquired from his grocer. He did not think any good object could be served by denying that fact. He agreed that if they had simply split the duty by one-half the consumer would not have benefited so much and the reduction might have gone into the pockets of the dealers, but it was a reduction of over one-half, and so it went largely into the pockets of the consumer. They had reduced the taxation on an article which was consumed in the poorest households in the country, which was a necessity of life, and the taxation of which bore rather heavily upon the poorest part of the population. They had reduced taxation upon an article which was a raw material in a number of industries in this country, and which provided excellent employment for scores of thousands of people. He was inclined to think that some of the right hon. Gentleman's constituents would benefit by this reduction, but he knew that all over the country there were industries which would benefit, and it would tend to give employment to British labour. For those reasons he thought the Government were justified in making the reduction.

*MR. SNOWDEN

said he had an Amendment down on the Paper for the rejection of this clause. He should not, however, in view of the terms of the hon. Member's Motion, be able to follow him into the division lobby. The reasons why he had put down his Amendment were those which he had given that afternoon against indirect taxation. He was anxious that something should be done to lessen the very unfair burden of taxation which rested upon the poorest part of the population, and in support of that argument he would like to quote from an authority familiar to hon. Members opposite—he referred to the very useful handbook compiled for the use of Liberal platform men, by the right hon. Gentleman who now occupied the position of Chief Secretary for Ireland— In his 1901 Budget speech Sir M. Hicks-Beach stated that the average consumption of sugar is 56 lb. per head per annum. In a labourer's family the consumption of sugar is a pound a head per week. In a family of six persons a tax of ½d. a pound means an increased weekly expenditure on sugar alone of 3d. a week. The extra cost of jam and other food, of which sugar is a large constituent part, almost certainly raises this extra burden of taxation to 4½d. per week. A tax of 4½d. a week is very little to a rich man; it is very much to a man earning 15s. a week, and there are tens of thousands of families in Great Britain and Ireland where the weekly earnings are even below this figure. It is true that an agricultural labourer pays no income-tax, but nearly half the national revenue from taxation is provided by the taxes which the working classes already pay on tea, coffee, cocoa, dried fruits, beer, spirits, and tobacco. On 15s. a week a tax of 4½d. is the equivalent of an income-tax of 6d. in the £. Under the Bill now before the Committee the sugar tax was to be reduced by a half, but there still remained a tax of from £3,000,000 to £4,000,000 a year. That worked out at 1s. 7d. per head of the population. That meant about 7s. 6d. a year for sugar tax per family. But that did not represent the whole amount taken out of the pockets of the consumers, for there was no allowance made for the trade profits on the tax. The Prime Minister eighteen months ago gave a reason for maintaining the sugar duty which, to his mind, was the most astounding ever put forward; he said that the tax was very remunerative as; it brought in £6,000,000 a year. That was the best reason the right hon. Gentleman could give for its retention. Surely that was an argument which would support the most nefarious taxation ever put on What was wanted was that the righteousness of a tax should be justified, and neither the Prime Minister nor the Chancellor of the Exchequer would be prepared to justify the retention of the tax on its merits. He could quote dozens of statements by the Prime Minister on this point, but he would only give one. The right hon. Gentleman, referring to the sugar tax, said:— The tax is vicious in principle, it is burdensome in its incidence, unequal in its operation as between classes and interests. The late Chancellor of the Exchequer had complained that in his speech on the reduction of the tea duty he had not suggested some compensating source of revenue. He was under the impression that he would not be in order in making such a proposal. A penny in the £ on the income-tax would bring in nearly all the loss which would accrue from the loss of the sugar duty, and at present the people who paid income tax could afford it far better than those who had to pay the sugar duty. It had been said that sugar was not only a necessary of life, but the raw material of a great industry. The consumer was not going to gain in the purchase of the products of that industry, such as jam and sweets, by the reduction which the Government had made. There would be no reduction in the price, but the reduction might benefit the trade. He was not there particularly to champion the trade, but if it was going to benefit the trade, it might also benefit the workpeople who were engaged in it. When the sugar tax was imposed six or seven years ago a striking case came under his own observation. A skilled workman in a confectionery establishment before the imposition of the tax had an average income of £3 a week, but after the tax was imposed he could not earn more than 30s. a week. He had no doubt that that case was typical of a considerable number. Therefore, if the half reduction which the Government now proposed affected the trade to that extent, he welcomed it. The Chancellor of the Exchequer had opposed the suggested repeal of the sugar tax on the ground that next year the Government would require all the revenue they could get to meet their liabilities. He himself wanted the repeal of the sugar tax, because he did not want the Government to get it for the purpose of financing their old-age pension scheme. He objected to people being kept in poverty for fifty years in order to provide money for a scheme of which only a small proportion would derive the benefit. He and his friends wanted the money to be raised, not by taxes on the necessaries of life, but by taxes on those who would. never feel the additional taxation placed on them. Owing to the form in which this Amendment had been moved it would be impossible for him to support it.

Clause agreed to.

MR. WILLIAM REDMOND moved to reduce the duty on tobacco, unmanufactured, grown in Ireland, and containing 10 per cent, or more of moisture, from 2s. 10d. to 2s. 8d. He felt bound to raise this question, because he had been asked to do so by the tobacco-growers of Ireland. He acknowledged the sympathetic way in which the Chancellor of the Exchequer had already dealt with the subject, for there was no doubt that he had gone some way towards meeting their demand. They were very much obliged to him for that. He wished to point out that the Treasury allowance of 2d. on Irish-grown tobacco which had been made was not really an adequate allowance. He hoped his Amendment would be accepted, for while it would only involve a small matter to the revenue in regard to money, it would be a great benefit to the tobacco-growers. He quite admitted what the right hon. Gentleman had done for them, and they were very grateful for it; but he asked the Chancellor of the Exchequer if he could not possibly extend this rebate.

Amendment proposed— In page 2, line 26, to leave out the words 2s. 10d.,' and insert the words '2s. 8d.'"— (Mr. William Redmond.)

Question proposed, "That the word '10' stand part of the clause."

MR. LLOYD-GEORGE

said he had gone a very long way to meet the case presented to him with so much skill, and he thought the hon. Member ought to be satisfied. He trusted that the Amendment would not be pressed.

Amendment, by leave, withdrawn.

MR. WILLIAM REDMOND

said he was sure that when he explained the reasons for his next Amendment he would get some sympathy in the House. The fact was that more than ten years ago he introduced a Bill for the purpose of repealing the law which prohibited tobacco-growing in Ireland. Everyone knew how heart-breaking it was to have a measure in which he was interested opposed year after year, no matter how late he lay in wait at all hours of the night to get it slipped through. At the end of those ten years he had his Bill passed unanimously by the House, and he had gone to the House of Lords to see the Royal Assent given to his little Act. He was delighted to find that the object of that Act was embodied almost word for word in the Finance Bill they were now discussing. He had read it with the greatest possible pleasure—even with exultation,—until he came to the words which repealed "The Irish Tobacco Act, 1907." So that his little Act had hardly breathed, its lungs had hardly been inflated when it was put out of existence! It was a great honour to have it embodied in the Finance Bill; it was a poor thing, but his own; why kill it? Nobody could expect him to sit silent and allow his Act to be repealed; it was the most painful thing that had happened to him since 1885, when he found it necessary to vote for the extinction of his own constituency, the borough of Wexford. He appealed to the right hon. Gentleman to meet him when he moved the Amendment standing in his name.

Amendment proposed— In page 3, line 23, to leave out the words 'and the Irish Tobacco Act, 1907.' "—(Mr. William Redmond.)

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

MR. LLOYD-GEORGE

said he quite appreciated the parental pride and anxiety which the hon. Member had felt about his Act, and the very pathetic appeal with he had made. He would assure the hon. Gentleman that this was not a case of infanticide on his part. The child wan not destroyed, but simply translated into a more exalted and more permanent sphere by being embalmed in the Budget of the year. He would be very happy to respond to the hon. Gentleman's appeal by having something put in on the margin about bringing into force and re-enacting the Irish Tobacco Act of 1907. He hoped that would meet the hon. Gentleman's views.

MR. WILLIAM REDMOND

said that, as a matter of fact, he could not accept the suggestion of the right hon. Gentleman.

MR. AUSTEN CHAMBERLAIN

said it was perfectly clear that tobacco-growing in Ireland would not be arrested, even if this Act were repealed. As he understood the matter, before that Act was passed there was a prohibition of tobacco-growing in Ireland. His friend's Act repealed the prohibition and this Clause in the Finance Bill now proposed to repeal the Act which repealed the prohibition.

MR. WILLIAM REDMOND

said that if the right hon. Gentleman would read subsection (3) he would find that it contained all that his Act prrovided for. If that was not the case he should have a lot more to say.

MR. AUSTEN CHAMBERLAIN

said he thought subsection (4) covered the case.

MR. WILLIAM REDMOND

said that before the matter was departed from he thought he ought in common justice to say that every Chancellor of the Exchequer before whom he had brought the matter, including the present Prime Minister and the late Chancellor of the Exchequer, had given encouragement and support to the matter, and the right hon. Gentleman who had just spoken, he must in fairness acknowledge, met them very favourably.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Clause 4:

*MR. SEARS (Cheltenham) moved an Amendment providing for the consolidation of the Customs and Excise and the Inland Revenue services, which he said would be a measure of real economy and efficiency. He did not think anyone would dispute that there was room for reform, and he would not be exaggerating when he said that reform was more necessary in the Customs than in probably any other branch of the service. He desired that the reform should be in the direction of absorption, rather than of reconstruction, and that the smaller and less efficient Department should be absorbed in the larger and more efficient. The proposal which the Government had brought forward was one which would break up the entire machinery of the Inland Revenue, and it was proposed to construct new machines out of the old parts. Many of these parts would be unfitted for their new positions, and altogether unequal to the new work which they would have to perform. The work of absorption was begun by Mr. Gladstone in 1882. Why should it not be completed on his lines? It would be an infinitely simpler task, and the lines were much sounder than those which were proposed in the present Bill. In the evidence he gave before a Committee of the House in 1888, Mr. Gladstone said he found the traditions of the Board of Customs did not come up to the traditions of Somerset House. The change from the malt duty to the beer duty was promoted by the Board of Inland Revenue. The Board of Customs in dealing with the change in the wine duty never felt they could make any suggestion, and undoubtedly their advice was that they should continue as they were. He was then asked— Then your idea would be that the Customs should be merged with the Inland Revenue Board and not vice versa? And he replied— Undoubtedly; if the amalgamation takes place, I hope to see the Inland Revenue Department continuing to be the dominant element in the compound. That was a clear expression of opinion upon the 1dentical situation to that which was now before them. In answer to a question he had been told that the circumstances to-day were not what they were then, but these words of Mr. Glad- stone's were just as applicable to the present circumstances as when they were uttered. So far as size and efficiency were concerned, there could be no comparison between the Inland Revenue and the Customs. The organisation of the Inland Revenue was spread over the whole country, whereas the Customs was confined to the seaports. It seemed to him that the only course to follow in any amalgamation, and that which would create the least disturbance, was to complete the work of absorption which Mr. Gladstone began in 1882. Another very important point was that the Excise branch of the Inland Revenue had a thorough acquaintance of the work of the Customs and therefore absorption by that branch would be a very simple matter. Besides the warehouses which were under the control of the Excise, forty-two ware-houses were transferred from the Customs to the Inland Revenue by Mr. Gladstone, effecting a saving at that time of £15,000 a year. The Excise officials therefore understood all the important work of the Customs, but, on the other hand, the Customs officials knew nothing about the distinctive work of the Excise. The work of the Excise was infinitely more varied, intricate, and responsible. It required practical and scientific knowledge which could only be acquired as the result of a life's study in the work of the Department. There was not a single Customs officer who knew anything about this important and intricate work of the Excise, who knew anything about distilleries, breweries, rectifying houses, glucose factories, and methylating premises——

*THE CHAIRMAN

I must remind the hon. Member there is a rule in this House against the reading of speeches. He seems to me to be reading every word.

*MR. SEARS

said he had got extensive notes, but he was certainly not reading his speech. The Customs Board was not only incapable so far as the special work of the Excise was concerned. Its general incapacity was pointed out to the House by Mr. Gladstone. Sir Algernon West, in his "Recollections" quoted the opinion of Mr. Gladstone to the following effect: The Customs Board was, and always had been, very behind; he had never had but one suggestion from them in all his long experience, and that was the penny duty on all packages, which he had at once been forced to give up and run away from like a dog with its tail between its legs. He wondered at the cause of the difference in the traditions of the two Departments.

MR. AUSTEN CHAMBERLAIN

What is the date of that?

*MR. SEARS

said it was in 1886. At the time Mr. Gladstone was speaking, all the principal posts in the Inland Revenue were occupied by practical men. The position in the Customs was just the reverse. The Chairman of the Customs then, as now, was not a practical man. The members of the Board had no practical experience of the work, the advisers were in the same position, and the men who occupied the chief outside posts of control were also men without practical training. The other day, in answer to a Question, the Financial Secretary to the Treasury had to admit that only one of the Inspectors of Customs was a practical man, and that there were seven clerical inspectors. That was quite sufficient to explain the condition of things of which Mr. Gladstone complained and which existed now. Nearly all the principal posts in the Customs Department were in the hands of men who had had no practical training. That was quite sufficient to explain the unbusinesslike methods which prevailed throughout the Customs Department. He might give some illustrations. Twenty-six years ago the Customs had the centralised system of clearing goods out of warehouse. If a man wanted to clear his goods out of warehouse he had to go through all the formalities of obtaining an order, and then go to the warehouse one to three miles away. Under the Excise system, on the other hand, the trader had only to go direct to the warehouse, and the officer in charge there was armed with full power to clear his goods. There was no needless waste of time and no unnecessary inconvenience or expense. The Customs Board at that time modified its method and conformed to the better method of the Excise, but they had now lapsed into their old and wasteful methods of twenty-six years ago. He might point to the numerous and unnecessary staff of the Customs and the duplication of work. The warehouse staff had to make three different returns to three different Departments, viz., the book-keepers at clerical centres, the Accountant Controller-General, and the Statistical Department. On the other hand, the Inland Revenue, although they were doing precisely similar work, made return to only one branch. That was a much more simple, cheap, and efficient process. Were these wasteful methods of the Customs to be the standard methods for the entire service if the Excise was transferred to the Customs Department? Their methods of stocktaking were of the loosest. In 1903 the balance sheet of the warehouse transferred to the Inland Revenue showed stock representing £1,200 of duty, but there was not a single package of goods in the warehouse. A very loose and unsatisfactory condition of things therefore prevailed, and he thought a Board with these unbusinesslike methods was not the Board to take over the large and important duties of the Excise. The proposal, it was said, was brought forward on the personal advice of certain distinguished officials, but no inquiry had been held, and the practical men at the head of the Department had not been consulted. He thought there was other and more important advice which they might take. He had already quoted the opinions of Mr. Gladstone, and there was the opinion expressed by practical men. In the Revenue Review for May there appeared an editorial article written by an able, experienced, and well-informed outdoor official. The writer said— With all due respect to the distinguished officials who have had experience of the inner working of the two offices, we may venture to say that they have evidently not advised Mr. Asquith of the huge difficulties in the way of a complete amalgamation of the two Department, and they can have but a faint conception of the extraordinary ramifications of the Excise Department. Was any practical official of the Excise Department consulted? And by practical official we mean not any ornament of the indoor branch, but a man who has learned his duties in passing through all the grades of the outdoor branch, and in doing so, qualified himself to be a real live practical adviser of the Board. Timely consultation with such officials would surely have prevented this catastrophe to the Excise branch of the Inland Revenue, this ill-advised scheme which may, on the face of it, appear to make for economy, but which, when the varied duties now performed by Excise officials are provided for, will scarcely result in such, and will certainly not, so far as the work performed by the Excise Department is concerned, result in greater efficiency. He did not wish to trespass on the patience of the Committee, but, on the other hand, he thought he had made out a clear case. Here was a proposal which, according to the opinion of men who had had practical experience of the service—and they were the only practical men, so far as he knew, who had expressed any opinion on the subject; those with knowledge of the Department had not been consulted—was condemned as one which, instead of making for economy and efficiency, was likely to lead to disorganisation of the important Excise service. He could not, therefore, allow this proposal to pass without entering a protest.

Amendment proposed— In page 3, line 25, to leave out from the word 'transfer,' to end of line 37, and insert the words 'from the Commissioners of Customs to the Commissioners of Inland Revenue the management of any Customs duties which are under the management of the Commissioners of Customs at the time the order is made, and to transfer all the powers and duties of the Commissioners of Customs to the Commissioners of Inland Revenue. (2) If an order is made under this section such order shall include the amalgamation of the Board of Customs with the Board of Inland Revenue and the disposal of the Customs House in Thames Street.' "—(Mr. Sears.)

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

MR. HOBHOUSE

thought the Committee at this late hour would agree with him that he should not weary them with detail raised by his hon. friend. But he would like to make a very brief but clear statement of the reasons for this alteration. The reasons were practical ones, and were dictated by considerations of economy and efficiency. The Committee would remember that the amount of revenue which was raised by the Inland Revenue and Customs jointly came to something like £130,000,000. Up to the present moment the amount of money which had been under the control of the Customs was something like £30,000,000, and that under the Inland Revenue was about £100,000,000. Under the proposed amalgamation the division between the Inland Revenue and the new Board of Customs and Excise would be about £50,000,000, so that the division of money between the two authorities would be about equal. But a much more important division was that of work. Under the new arrangement the Customs and Excise would dial entirely with goods in their collection of revenue, while the Inland Revenue's work would be entirely personal—that was to say, they would deal with the collection of death duties, stamps, etc., whereas the new Board of Customs and Excise would deal entirely with goods which were subject to Customs or Excise duties. At the present moment the duties of the Customs and Excise led them to use bonded warehouses, Customs goods were to be found in Excise warehouses and Excise goods in Customs warehouses. The amalgamation of these two bodies, therefore, would lead to the removal of the present anomalies, and would enable the staff, to be amalgamated, producing economy and despatch of business. He did not think he could go into questions raised by the hon. Gentleman more than to say that the proposed amalgamation so far as he could find was exceedingly popular with the trade. He could quote, if necessary, extracts from trade, journals to say how delighted they were at the proposed alteration, leading, as they thought it would, to the despatch of business and to economy and efficiency which were of the first importance to them. He trusted his explanation would be satisfactory to the Committee.

MR. AUSTEN CHAMBERLAIN

said he did not intend to raise any large question at that period of the sitting. He thought it was difficult for anyone except a responsible Minister to weigh exactly the balance of advantage but he could quite believe there might be advantages in the course the Government had taken. At any rate, he saw no outstanding principle which should prevent such a proposal being accepted, but that question he did not propose to discuss. He rose only to say a sentence which was called for by the speech of the hon. Member for Cheltenham who moved the Amendment. The whole argument of the hon. Member's speech was that the Customs administration was inefficient. So far as he could catch the names of the authorities whom the hon. Gentleman cited they all related to a state of affairs of a generation ago, with which he (Mr. Chamberlain) admitted he was personally unacquainted. But having served in the office of Chancellor of the Exchequer he could not allow to pass without contradiction the statement of the hon. Gentleman that the Customs Department was inefficient or was not likely to discharge its duties with satisfaction to the State or to the trade amongst whom they had to exercise many invidious tasks imposed upon them. He did not say a word in detraction of the officers of Inland Revenue. The same thing applied to them and to the Board of Inland Revenue which presided over them. But in his short experience at the Treasury not only as Chancellor of the Exchequer but as Financial Secretary at a time when Lord St. Aldwyn, who was then Chancellor of the Exchequer, was imposing new taxes, he had had some opportunity of seeing the Board of Customs at work, and of seeing the skill, patience, consideration, and adaptability with which they studied the necessities of the Revenue in raising those new taxes, and, at the same time, the convenience of the traders affected by them. He ventured to say that if the hon. Gentleman consulted the great trades affected by the coal tax, the sugar tax, or the corn tax, and asked them to say whether, granted the necessity for the taxes, the Customs put the taxes in force with consideration for the trade and with skill to avoid unnecessary interference with trade, he would get an answer from every competent man most flattering to the Board of Customs. He would not have spoken at all on this subject, as he was content that the Government should meet their criticisms, had it not been for the grounds on which the hon. Gentleman moved the Amendment. Having held offices he had, and having been greatly indebted to a past Board of Customs and to the Customs officials of the day, he could not allow the criticism to pass without expressing the indebtedness to them not merely of this House for carrying out its wishes, but of the trade for carrying out those wishes in a manner least irksome to that trade.

MR. HARMOOD-BANNER (Liverpool, Everton)

said he should not like a matter of this sort to pass without calling attention to the fact that the proposed transference would mean a very great inconvenience to Liverpool. At present the collection of Customs in Liverpool amounted to the sum of £7,000,000 a year, and the collection was done in a building most unsuitable for the purpose, being far removed from the centre of commerce, and at great detriment to the trade of the Port. Now to that building, so inconvenient and so unsuitable for the collection of £7,000,000, was to be added the collection of this large amount of Excise, without any consideration being given to the wants or necessities of the Port. This was not a new matter, because an application had been made for some time to provide a suitable building for the collection of what was really one-fourth of the whole Customs duties of the country; but the Exchequer could not see their way out of £7,000,000 even to provide £100,000 or £150,000 for this purpose, and yet they proposed to add to that inconvenient Customs-House the additional duties which would come under this section. He would not like the proposal to pass without a protest, and the expression of a hope that the Chancellor of the Exchequer would consider the want of so great a port as Liverpool when looking at the enormous sums of money Liverpool found in Customs and Inland Revenue.

Amendment negatived.

Motion made, and Question proposed, "That Clause 4 stand part of the Bill."

MR. CLAUDE HAY

said he had not been called upon to move the Amendment standing in his name, which was to leave out Clause 4.

*THE DEPUTY-CHAIRMAN

said the Amendments to the clause having all been disposed of he put in regular course the question "that Clause 4 stand part of the Bill." To leave out Clause 4 was not an Amendment. Hon. Members could vote against Clause 4 standing part.

MR. CLAUDE HAY

said he wished to approach the Committee in reference to the statement which had been made by the Secretary to the Treasury in respect of the transference under this clause. That statement lacked essential details. The matter was not one which could be discussed in the light and airy manner shown by the Secretary to the Treasury. He might observe in pacing that, although the hon. Gentleman occupied the port of Secretary to the Treasury, he had not thought fit to say a word in defence of the Customs Department in view of the attack of the hon. Member sitting on the Government side of the House. Such an omission he believed had never characterised the office of Secretary to the Treasury up to that hour. But, having said that, he would invite the hon. Gentleman's earnest attention to the necessity of giving the Committee full information as to the conditions under which more than 3,000 officers of the outdoor Excise staff would be transferred, and, so far as he could make out, and he thought his information was correct, though the indoor staff might benefit by the change contemplated by the Government, the outdoor staff who were a body of men regarded by successive Governments as officers most efficient and most loyal, would probably not benefit, and they had many grievances which they had impressed without undue agitation or publicity upon successive Ministers. Surely it would have been proper, and it would have been considerate of the hon. Gentleman, if when he made his statement a short while ago he had given the Committee some indication as to what was the outlook of this very important body of officers under the changes proposed by the Government. There was a feature in the proposals of the Government which he believed was open to the gravest possible objection, namely, that this amalgamation was to take place by Order in Council, which meant in effect that the House of Commons would have no control and no voice in the carrying oat of so great a change in the machinery by which the taxes were collected. Indeed, it was a curious fact that this procedure should be adopted by a Government which called itself Liberal, but nevertheless, preferred methods which were not only drastic and unbusinesslike, but absolutely undemocratic. Anyone who had given a moment's thought to this matter must be of opinion that it was a subject worth the attention of an Inter-Departmental Committee before the House of Commons should be asked to decide as to the transference. He could not agree with his right hon. friend who had just, spoken that this was a matter which could be left to any Government without control by the House of Commons, because he believed that the duties of these officers and the claims which they had advanced for the reconsideration of their position were considerations of sufficient importance to necessitate a very careful public inquiry before assenting to the matter passing into the hands practically of the Treasury, and, therefore, to an office which was not over-popular in the country and certainly was not popular amongst Civil servants. The Secretary of the Treasury, no doubt, since he held this office, had had laid before him on behalf of more than 3,000 Excise officers a respectful demand that the terms of their service should be reconsidered. He wanted to know on their behalf whether under the proposed agreement any scheme had been prepared by the Government which would improve not only the conditions of their service but the pay attaching to their office. If the hon. Gentleman was able to give any satisfactory information upon the point he believed he would do a great deal to bring about smoothness and contentment in respect of all the details of the amalgamation contemplated in this clause, to promote the efficiency of the staff, and, above all, to make the collection of the taxes and the arrangements under the Old-age Pensions Bill work smoothly. He therefore earnestly hoped that the hon. Gentleman would, even though it was late, give the Committee some adequate statement as to the great changes proposed under this clause, and the almost revolutionary change that was proposed to be brought about in the conditions under which a very efficient and deserving body of public officers worked.

MR. HICKS BEACH

said he quite agreed that it was inconvenient to discuss this important change at that hour, but it was the only opportunity they had, and he thought that before the House actually sanctioned the transference of very great powers from one department of the State to another, they ought to have a little more information than the Secretary of the Treasury seemed to think was necessary. So far as he could gather from the hon. Gentleman's previous statement, it meant the transference of the collection of about £60,000,000 of revenue from the Inland Revenue to the Customs, and he informed the Committee that this change would be of very great advantage to the country at large, because it would produce economy and also efficiency and despatch of business. The hon. Gentleman quoted statements from various trade journals to the effect that the proposed change was viewed with gratitude. They were all agreed that the taxes of the country, however pleasant, they might be to some people, and however unpleasant to others, ought to be collected with as great economy as possible to the Exchequer and as little inconvenience as possible to the trading community. The hon. Gentleman told them very briefly that this change would produce economy in collection, but he gave no reason to show how that economy was going to be produced. If he did, then he was afraid he misunderstood the hon. Gentleman. If the hon. Gentleman could give the Committee in a very few words the reason which led him to make that statement he thought the Committee would be grateful to him. He could only conclude that it would be brought about by some change in the wages of those Excisemen who were to be transferred to the Customs Department. So far as he knew, the wages in the Customs and Excise services were very much the same, but he presumed if the hon. Gentleman was going to produce some economy that those public, servants who were now serving their country in the Excise Department were to suffer some loss of wages, as a result of the transference. He sincerely hoped that was not the case, but he would like some assurance from the hon. Gentleman. He thought that when some sort of change of this sort was going to be carried out, they ought to be told what the views of the two departments were. He did not think it would be at all unconstitutional if the hon. Gentleman told them what were the opinions of the Board of Inland Revenue and of the Chairman and Vice-Chairman of the Board of Customs. Of course, if it was asking for information which it was not the habit of the Government to give, he would not press the point, but he thought it would be a great advantage to the Committee if the hon. Gentleman could say what were the opinions of the heads of the departments with regard to these important changes.

MR. HOBHOUSE

assured the hon. Gentleman who had just sat down that the heads of the Customs Department and the Inland Revenue were very desirous of making the change indicated. He neither knew nor cared whether it was constitutional to state that they were so desirous. The hon. Gentleman ought to know that such a change could not possibly have taken place without their assent. In reply to the hon. Member for Hoxton, it was impossible to say at that moment what the conditions of service would be when the two staffs were amalgamated. They must first of all get the assent of the House to the amalgamation of the staffs; but the hon. Gentleman might rest assured that, as he had already told the officers of both services, the greatest care would be taken for their interests when this change was made.

SEVERAL HON. MEMBERS

Where is the economy?

MR. CLAUDE HAY

said the hon. Gentleman had been appealed to by several hon. Members on the Opposition side of the House to defend what he meant by the economies to be effected under the proposed amalgamation. It was trifling with the House of Commons not to give an indication as to what arrangements would achieve the economy which he described as one of the great objects of the change. It was making a farce of the Committee.

MR. C. DUNCAN (Barrow-in-Furness)

said he did his best a few days ago to raise this question as it affected the men in outdoor employment, and the Secretary of the Treasury was courteous enough to receive a deputation from these men, who were thus enabled to lay their case before him. It seemed utterly unreasonable to expect that the Minister who had charge of the matter could give the result of that interview yet. There had not been time in which to consider the various points put before the official on that occasion. It seemed to him only reasonable to expect that a certain time should be allowed for consideration to be given to the matter put before the hon. Gentleman, and, therefore, it was inopportune for the hon. Member to press for an answer at that moment.

Clause agreed to.

Clause 5:

*SIR CLIFFORD CORY (Cornwall, St. Ives)

said the Amendment which stood in his name if passed would extend the present duty of 1d. in full which was now charged on policies where the premium was 2s. 6d. per cent, or under to all voyage policies, irrespective of the amount of the premium. The mercantile community were grateful to the Chancellor of the Exchequer for the concession he had made in reducing the duty on voyage policies where the premiums exceeded 2s. 6d. percent, from 3d. per cent, to 1d per cent., but it was hoped that the right hon. Gentleman would go a step further and make it 1d. in full on all voyage policies. As the Prime Minister said in his introductory speech, "The vast majority of voyages are quite short—porhapsonly a few days," and practically admitted did not justify a high duty. An ad valorem duty of even 1d. per cent. left this country at a disadvantage compared with other countries where such duties were not charged. The Amendment would secure uniformity if the duty were made 1d. in full on all voyage policies irrespective of the rate of premium, as in cases of fire insurance and every other form of insurance of which there were 41, except life, which had a special character of its own. The loss to the revenue would be inconsiderable if the Amendment were passed. The Prime Minister stated that the loss to the revenue by the reduction from 3d. per cent, to 1d. per cent, amounted to about £80,000, and the further reduction to 1d. in full would not amount to more than £40,000, less the amount which would accrue by the payment of the 1d. for policy, say a not reduction of about £35,000. It was not a very considerable sum, especially when the convenience and saving to the commercial community was considerable, as by making the duty 1d. in full in lieu of the ad valorem system it would mean a considerable saving of labour to the Revenue Department, where the cost of collection would on an ad valorem basis be out of all proportion to the duty received. Furthermore, it would mean a great convenience and saving of labour to insurance companies and brokers, though the commercial community, the principals concerned, and being spared the calculation of duty in their invoices would most of all appreciate the concession, and, therefore, he hoped the Chancellor of the Exchequer would be able to see his way to grant this concession.

Amendment proposed— In page 4, line 10, to leave out the words 'shall be substituted for threepence,' and to insert the words 'in full shall be substituted for threepence ill regret of every full sum of one hundred pounds and also any fractional part of one hundred pounds thereby insured.'"—(Sir Clifford Cory.)

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

MR. LLOYD-GEORGE

said he could not help thinking that his hon. friend's Amendment was a little unreasonable. The Prime Minister when Chancellor of the Exchequer promised to consider the grievances of the commercial community, and he did so by introducing a proposal in the Budget which cost £80,000 to the revenue. Now it was said: "Well, you might as well go on to £120,000." That was what had happened with regard to every concession that had been made, and he did not think it was encouraging to the Chancellor of the. Exchequer that every concession he made should be used as an argument for further concessions. He quite agreed that there was a certain amount of inconvenience, but if his hon. friend would suggest how that inconvenience could be redressed without a further raid on the Exchequer he would consider it. If between this and next year his hon. friend could find some means of not breaking further into the revenue he would be very happy to consider the question of a fixed charge instead of an ad valorem one, but he could not possibly face the contingency of a further loss.

Amendment negatived.

MR. BRIDGEMAN (Shropshire, Oswestry)

said the Amendment that he had put down to substitute 5s. for 10s. as the stamp duty chargeable under Section 9 of the Inland Revenue Act, 1906, was intended to mitigate a very severe and oppressive stump duty which was imposed upon small holders as against large ones. Hon. Gentlemen below the gangway were very fond of talking about the burden of taxes on the poor, and that the poor should be relieved. If they believed in those principles they would support this Amendment. Originally the stamp duty on such things as compensation for unexhausted improvements was an ad valorem one starting at 3d. on sums up to £5, and going up to, he did not know how much, but something like £2, on large sums. In the Budget of 1906, for some reason which was not explained at. great length to the House, and certainly was not clearly understood in the country, the duty was changed to a uniform one of 10s., and the effect of that was if the small holder had an arbitration award made of, say £10, he had to pay a duty of 10s., and if a farmer had an award made of, say £190, he only paid 10s. The object he had in view in putting down the Amendment was to call the attention of the Chancellor of the Exchequer to what he thought was a very great injustice on small holders in this matter. The present duty was so little known that in Whitaker's Almanack the change which was effected in the Budget of 1906 was not even noticed, and the stamp duties that prevailed before were to be found in Whitaker's Almanack of this year. He wished to ask the Chancellor of the Exchequer—and he was sure the right hon. Gentleman would see there was a great deal of reason in what he asked—whether he could not see his way even without losing revenue to effect a change which would do justice to those for whom he was appealing. If the right hon. Gentleman agreed to his proposal in some other form by which he would not lose revenue, he would be perfectly prepared to withdraw the Amendment. He hoped the right hon. Gentleman would consider the question because it was apparently one which affected a number of small people who could ill-afford to pay the duty.

Amendment proposed— In page 4, line 21, at end, to add the words 'and five shillings shall be substituted for ton shillings as the stamp duty chargeable under Section 9 of the Inland Revenue Act, 1906.'"—(Mr. Bridgeman.)

Question proponed, "That those words be there added."

MR. LLOYD-GEORGE

said the hon. Member had put before him the difficult proposition how to reduce duty from 10s. to 5s. without reducing the revenue. The Amendment was only put on the Paper last night.

MR. BRIDGEMAN

I asked a question about the matter some time ago.

MR. LLOYD-GEORGE

said he was not quite sure of that point, but he would promise that if the hon. Gentleman would give him a few illustrations of the kind of cases to which he referred he would give the matter his very careful consideration, with a view to seeing if something could be done. He pointed out that the duty was introduced in 1906 as the result of pressure to reduce a grievance, though he could quite believe that in redressing one grievance they might create other grievances.

Amendment negatived.

Question proposed. "That the clause stand part of the Bill."

MR. AUSTEN CHAMBERLAIN

rose to ask the Government whether, when this clause was disposed of, they would accept a Motion for the adjournment of the debate. He thought the Committee had carried on the discussion in a spirit of which the right hon. Gentleman could I not complain. The time had been occu- pied pretty much in proportion to the membership of the various parties in the House, and in view of the advanced period of the morning and the fact that the next clause raised a question which was causing very considerable interest in the country he hoped that clause might he taken at a time when they were fresh and not wearied by prolonged discussion.

MR. LLOYD-GEORGE

said he had had some hopes that they might be able to add Clause 6, but still he recognised fully what the right hon. Gentleman said. He thought he and the hon. Members who had been acting with him had treated the Government very fairly, and if the right hon. Gentleman made an appeal to the Government that they should not take the next clause to-night he would be perfectly prepared to respond to it. He knew perfectly well, judging by the experience to-day, that the Opposition would not take any unfair advantage to-morrow, but would assist the Government; to got the Bill through in respectable time.

Clause agreed to.

Mr. AUSTEN CHAMBERLAIN moved to report progress. Of course, he said, there were a good many questions to be discussed and they would have to sit after eleven o'clock to-morrow, but he was quite sure that on the Opposition side there would be no desire, to prolong the debate beyond what was necessary in order to put matters properly before the House.

Committee report Progress; to sit again this day.