CUSTOMS DUTY ON TEA.

HC Deb 25 July 1910 vol 19 cc1767-841

"That the Customs Duty now charged on Tea shall continue to be charged until the first day of July, nineteen hundred and eleven, that is to say:—

"Tea, the pound … fivepence."

Mr. JAMES HOPE

I beg to move to insert, after the word "pound," the words, "if grown within the British Empire four-pence, or if grown without the British Empire."

The effect of this Amendment is to give a preference of 1d., or 20 per cent., to Colonial tea, and I move it for two reasons. In the first place, I think the whole duty on tea is excessive. It amounts to a tax on the average value of tea of no less than 62 per cent., taking the average value at 8d., as it appears from last year's Returns; but with cheaper sorts of tea, since the tax is on weight, and not ad valorem, it amounts in some cases to something very nearly 100 per cent. That is a tax which cannot be justified on any rational scheme of taxation, and certainly under no scheme of fiscal reform would it be possible to adhere to such a tax; nor if the Government of this country had to construct a fiscal system de novo would they propose any such tax. My Amendment is not directed to the whole bulk of the tea coming into this country, and I may be reminded of the old maxim that if you put a partial tax on an article coming into the country you raise the value of the whole commodity. That is a dogma which ought to be too much for anyone's credulity in the present day. Take this particular instance of tea. The whole bulk of the tea coming into this country on last year's Returns is 290,000,000 lbs. Of that 262,000,000 lbs. comes from the Colonies, and only 27,000,000 lbs. comes from foreign countries, and I suggest that if you levy the extra 1d. on the 27,000,000 lbs., while taking it off the 262,000,000 lbs., it is beyond conception that the price can remain where it is. Those who assert that it will must postulate two things—first of all, that the area of production cannot be extended, and, secondly, that there is no competition among the other producers. But, of course, in a case like this the area of production in the Colonies has not reached its full development yet, and, of course, there would be competition among the producers. But if that argument was not sufficient I would add another, that the tax would not be on the same article, because the tea coming from China is, as a matter of fact, a different article, and suited to different customers from that which comes from the Colonies. I think it may fairly be alleged that to take off this 1d., although only on Colonial tea, would, as a matter of fact, bring the price down, if indeed a reduction of 1d. in the pound will ever bring the price down. It certainly would if only applied to Colonial tea, just as much as if it were applied to the whole volume of the 290,000,000 lbs., as against the 27,000,000 lbs.

4.0 P.M.

My second object is to establish the principle of Colonial Preference. I quite admit that in the present instance the effect of the proposal would be limited. It would be limited because it does not apply to self-governing Colonies. Except for 500,000 lbs., which come from I do not know where, the whole of the 262,000,000 lbs. come either from India or Ceylon, from whom we can only expect to obtain, from the nature of their existing tariffs, limited advantages. Of course, I am quite aware that apart from this question there is not the same problem in dealing with Dependencies that there is in dealing with self-governing Colonies, because, of course, we can in the end enforce a lower tariff on those countries, just as we very unfairly, many years ago, enforced an Excise upon India against the consent of the Indian Government. But I think no Government in this country would wish, except in the last resort, to enforce a reduction of tariffs upon either the Government of India or the Government of Ceylon, so that I think, as far as the present argument goes, I am fairly treating the Home Government, the Indian Government, and the Ceylon Government as separate bargaining powers. I do not think that in a matter like this we can, or ought, in the present stage, at any rate, to rely upon the reserve power of the Crown. I think that on examining the Indian tariff and the Ceylon tariff we should be able to find that there are many items in both which could be reduced with advantage to this country, and which the Governments concerned would reduce if they were safe in believing that they would obtain some return from us. I think that would be especially the case with Ceylon. Ceylon has a protective tariff, and the duties are very high for various classes of goods. I think that certainly on cotton goods we could get a substantial preference from Ceylon. Speaking about Ceylon, I wonder if the House realises what the tariff is on certain articles of prime necessity in that Crown Colony. There is really a protective tariff on articles which she produces. First of all, there is the duty, for instance, on tea itself. China tea coming into Ceylon pays a duty of 25 cents, or 4d., which is equal to 50 per cent. on the average price of that commodity. There is a duty on flour of one rupee, which, I am informed, works out at 3s. 4d. per sack on the English denomination. Then wheat and rice also pay an import duty of 50 cents, which works out at 2s. 8d. a quarter. I am sorry the Chancellor of the Exchequer is not present, for I was going to ask him how he can reconcile these duties with his conscience, but in the absence of the right hon. Gentleman, I ask the Under-Secretary for the Colonies, and I have reason to suppose that he has got a conscience.

Mr. SPEAKER

We are not now concerned with the tariffs imposed by the Colonies. The question we are now discussing is our own tariff in respect of tea.

Mr. JAMES HOPE

I was arguing that rebates might be obtained on various articles which we send to Ceylon. Taking the whole of the Ceylon tariff, I think we would undoubtedly obtain rebates. I put it to the right hon. Gentleman opposite how can he, in his conscience, sustain a system like that when they talk as they do about all these things being ruinous to people at home? In the case of manufactured goods we should be able to negotiate with Ceylon for rebates. Hon. Members talk about Free Trade in this country, but at the same time they seem to approve of imposing these burdens upon the Cingalese and Tamil peasants of Ceylon.

I make this proposal as an experimental proposal. No doubt it does not go very far, but it gives a response to the Colonial demand. At the last Colonial Conference a resolution was passed asking for preference not merely in accordance with a general scheme to be adopted in the future but on all taxes imposed at the present time. Although this would not apply to the self-governing Dominions, I am sure they would welcome in the spirit of the demand they have made this preference to Ceylon as a token of goodwill on the part of the Home Government. I venture to say this would not be and ought not to be regarded as opposed to the principles of the present Government. First of all, it is absolutely and solely on the existing basis. Nothing new need be imposed at all. I know that the Prime Minister the other day said in the course of his argument that he could not entertain this idea of preference until a scheme had been worked out applying to all the Colonies and Dependencies of the Crown. He further said that we had no right to press forward this matter unless we were prepared with a scheme. I think, although that was rhetorically adroit, it was really an unfair demand, for this reason, that to carry out proposals further than those relating to existing taxation would of course mean the construction of a new Budget, and no one can now forecast a Budget of the future. It is absolutely impossible for any Chancellor of the Exchequer to do so. He cannot state the Budget he may have to bring in next year. If he attempted to forecast next year's Budget he might find that circumstances were so very adverse that he could not bring it in. Therefore, from that point of view I think the Prime Minister's demand is unfair. It is quite impossible for a Chancellor of the Exchequer to commit himself and others to put on particular taxes or to give any preference unless he knows whether he will get any return. In suggesting this penny reduction on tea I am only asking for it as an experiment, and I am willing that it should be withdrawn if no corresponding advantages accrue next year. To ask for this penny to be taken off tea is very different from asking the Government to pledge itself to any vast fiscal scheme which could only be carried after negotiation with all the different parties concerned. The Prime Minister suggested that anything of the kind must extend uniformly through all the Colonies. That I absolutely deny. A Zollverein is a grand political ideal, but I do not think we need wait for that before negotiating in respect of certain specified articles with the different Governments of the Empire.

I would add another consideration why this proposal of mine might be assented to without any departure from the principles of the Government. Very often when new import duties are proposed the Government and hon. Members who sit. behind them reject them because they may possibly do some home producer some benefit. That seems to be the test applied. You may suggest a duty, but if it can be shown that one little producer in this country is benefited by it then it becomes heretical and cannot be passed—[An HON. MEMBER: "Cocoa"]—with one solitary exception which is within the knowledge of the House. I do not make my proposal in hostility to the principles of the Government. If it is accepted it will be an indulgence to Colonial sentiment and Imperial sentiment, but it will not do the slightest good to any home producer. Therefore I think the Under-Secretary for the Colonies (Colonel Seely) and the Treasury may take it upon themselves to accept my proposal. After all, it will be an earnest on the part of the Government of a desire to help them in this matter. It will be an earnest that they can yield something to Colonial sentiment, and that they are willing to do it; it will not invalidate or prejudice Free Trade, and so far from increasing the burden of undue taxation, it will tend to reduce it. If the tax on tea from India and Ceylon is reduced it will be a benefit to both the home consumers and the Colonial producers. I am sorry the Chancellor of the Exchequer is not here, for I was going to make an appeal to his genial and expansive nature. The Chancellor of the Exchequer is not like other Chancellors of the Exchequer. I do not think I should have cared to make this appeal to Lord St. Aldwyn or even to have approached him privately in the Lobby on the subject. I think I know the kind of answer I would have received. But the present Chancellor of the Exchequer is not troubled by the traditions of his predecessors. He is not bound down by those old, hard, parsimonious considerations as to limiting expenditure and reducing debt. He takes quite a different position. Someone says "Roads," and he replies, "Let them have half a million." Another says "Development," and again he says, "Let them have half a million, too," and he ladles the money out like the generous soul that he is. My proposal is a modest one. I only ask a penny—only a copper. It is really a matter of disappointment to me that I cannot say these things to the right hon. Gentleman in his presence. If he says that these coppers will mount up to a large sum, which he cannot afford, then I offer an alternative—namely, that he should put an extra penny on China tea. If it should be said that that would impose a new burden on the consumer, I would ask the Secretary to the Treasury to consider whether he could not put an extra duty on China tea, accompanied by a scale for an ad valorem duty? It may be said that it is not easy to apply an ad valorem duty. I do not think it would be impossible. It was said that it would be difficult to apply graduation of the Income Tax, but it has been done to a large degree. If the Chancellor of the Exchequer would adopt the principle of giving a penny preference on Colonial tea, with a penny extra on foreign tea, and a graduated scale, I believe he would be able to work out a result which would give a substantial Colonial Preference and also an advantage to the consumers. Surely the best way of raising money is to impose taxation on imported luxuries. If you put on direct taxes, these will find their way down to the poor; but if you impose taxes on imported luxuries, they will fall either on the rich consumers or the foreign producer. If an Income Tax of an undue amount is imposed, those who are called upon to pay think of economies, and they discharge a servant so as to reduce the amount they spend on labour. The same considerations do not weigh with regard to luxuries got in from abroad. I do not say luxuries which are manufactured at home, but those which come in from abroad. In that case the rich, if they continue to consume the luxuries, would pay for them, and if they did not, then it would not be the labour of those at home, but the labour of those abroad which would suffer. Though it is a comparatively small matter, I ask whether the Chancellor of the Exchequer cannot accept the principle of a preferential tax accompanied by an ad valorem duty on tea? There are enormous differences in the quality of tea. I know an old lady who never drinks tea at under 8s. per pound. These are the people who ought to be taxed. I am sure the demand which I make will not in any way conflict with the principles of the Government. If the right hon. Gentleman cannot adopt the proposal as it appears on the Paper I would ask him to adopt the alternative proposal which will bring in a great amount of revenue, do something to meet the aspirations of the Colonies, and draw revenue from the luxuries of the well-to-do.

EARL of RONALDSHAY

I beg to second the Amendment. I think my hon. Friend has made out a case for his pro- posal on the ground that it is one which is not open to the objection which is sometimes brought against proposals of taxation, namely, that they will impose taxes on the food of the people. It is a proposal which would have the opposite effect, and therefore no doubt would appeal to the warm hearts of hon. Gentlemen opposite. There is a fairly wide margin for giving a preference to our Colonies and especially to our dependencies on this particular commodity. During the five years ended 1908–9 the amount of tea which we imported from foreign countries aggregated 180,000,000 lbs. in weight, which produced £5,750,000 sterling, that is an average of 36,000,000 lbs. in weight per annum, and an average of £1,156,000 in money. That shows that after all we can give a preference of considerable value to various parts of our Empire. But I confess for my own part that I think the political advantages which would accrue from the adoption of this proposal would be enormously greater than the actual economic advantages.

Everybody knows that India to-day is the source from which we draw the great bulk of the tea which we consume in this country, and in India Free Trade has long been dead. The high priests of Free Trade in that country mumble their somewhat musty incantations at wholly discredited shrines. Perhaps I might sum up the views of the people of India on that question in the words of one of their own representatives. These words were spoken by a Member of the Viceroy's Council as recently as this year, and he was voicing the sentiments of his fellow representatives. He said, "My Lord, nowadays we heard a great deal of Tariff Reform. This is a swinging back of the pendulum in Free Trade England. Why could not the people of this country hope for a share in that reform when it comes? There is a general feeling in favour of Protection in this country—a judicious protective tariff dominated by an intelligent public opinion in the interests of our undeveloped industries. Can the Government disregard this opinion any longer without injustice and without disadvantage?" I have quoted that expression of opinion on the part of a representative of the Indian Government, for this reason: that only so recently as last year the Government at that time proposed an Act which had for its object the giving to the natives of India a greater share in the government of the country; and what I ask the Government is, having done that, are they or are they not prepared to listen to the representations which are made by the natives of India? Obviously, if they are not prepared to do so the whole Act passed last year becomes a pure farce and becomes valueless. Obviously the policy of the Government of the country ought to be, if they are indeed prepared to listen to the representations made by the natives of India, to endeavour to turn what is at present I am afraid a purely national protective movement—that is to say, the movement in favour of protection of Indian industries only—into an Imperial movement, that is to say, a movement for the protection of the whole of the Empire against foreign countries. I know it is sometimes argued that a Memorandum issued by the Government of India upon this particular question is wholly unfavourable to a system of Imperial Preference between India and this country. It was admitted in that Memorandum that we in this country certainly could give a preference to India on certain commodities, among which, of course, was tea, as well as tobacco and various other commodities, which I shall not mention because they might be outside the particular Motion under discussion, but as a matter of fact the conclusions of the Government of India contained in that Memorandum were not wholly hostile to a system of Imperial Preference between the Dominion and this country. All that the Government of India were really afraid of was this, that if a hard and fast scheme of Imperial Preference was going to be hastily adopted in this country, the representations of Indian opinion would not receive adequate or proper consideration from the other parts of the Empire, and in this connection the House will remember that the interests of India have invariably been subordinated in the matter of tariff policy to the interests of particular sections of trade in this country. The hon. Member who moved this Motion referred to the fact that some years ago we insisted upon the Indians imposing an Excise duty upon the cotton industry——

Mr. SPEAKER

This speech will be more suitable for delivery to-morrow if the Noble Lord wishes to refer to cotton. This Motion relates to the duty to be imposed upon tea.

EARL of RONALDSHAY

I entirely bow to your ruling, only I would like to ask, on a point of Order, am I not entitled to develop my argument? My argument is that for political reasons it is most necessary we should do what we can at the present time to grant some concession to Indians in the matter of tariff. One of my main reasons for wishing to give such concessions is that in the past we have treated India very badly in the matter of tariff. Am I not entitled to refer to the way in which we have overridden Indian sentiment in the past in order to show how necessary it is that we should do something to make up for it in the present?

Mr. SPEAKER

To-morrow the position of India as regards this country will be considered. The Noble Lord must not expect to repeat his speech to-morrow.

EARL of RONALDSHAY

Then I understand that I may refer to my main reason for establishing this principle of preference for India? Everybody knows who is in touch with Indian opinion that the Excise imposed by Lancashire opinion on India was greatly resented, and very largely caused that strong development of Indian sentiment in favour of national protection which exists at the present time. What I want to urge is that if the Government will only accept the Motion which is before the House they will be accepting the principle that they are prepared to treat the Dominions with some consideration on these questions of tariff. My hon. Friend may say, "It is not possible for us to accept this Motion to-day. If we were to do so we would be upsetting the whole of our Budget for the present year." If that is the answer I would like the hon. Gentleman the Under-Secretary for the Colonies to say, is that the sole reason for refusing this Motion, or are we to understand that in addition to the fact that it might slightly alter the Budget they are so hide-bound by the chains of an economic dogma that they cannot even concede the principle of granting the smallest preference between one part of the Empire and another.

The UNDER-SECRETARY for the COLONIES (Colonel Seely)

The proposal which has been moved by the hon. Gentleman the Member for Sheffield (Mr. James Hope), and seconded by the Noble Lord opposite, is not new to this House. It has been made on several previous occasions, and has been supported on various grounds, from various quarters in this House. I am sorry that the Chancellor of the Exchequer cannot be present, as he would have been glad to hear the encomiums passed upon him by the hon. Gentleman the Member for Sheffield, but he regrets he cannot be here owing to a public engagement of much importance. In any case, he would have asked me to reply, as the Debate has assumed a Colonial aspect, and it is on that aspect that both the hon. Gentleman and the Noble Lord worked. The first observation made by the hon. Gentleman opposite was in opposition to the whole of the tea tax. He said that if we started a system of taxation de novo no such heavy tax would be imposed upon tea. I think that is very likely so, but if we started our system of taxation de novo I think he would agree that there would be very divergent propositions put forward. For one thing, he and his friends would propose to revert to an entirely novel system, so far as we are concerned nowadays, the system of protective duties.

Mr. JAMES HOPE

No.

Colonel SEELY

I understand that the hon. Gentleman would. I have always understood so.

Mr. JAMES HOPE

Certainly not. I always draw the line at protective duties except for the purpose of fiscal retaliation.

Colonel SEELY

I am sorry I misinterpreted the hon. Gentleman. Hitherto I understood he belonged to what are termed the "whole-hoggers," but now I understand he belongs to what I may call the denomination of "little-piggers."

Mr. JAMES HOPE

I cannot let that pass. The whole point of those who are associated with this Amendment is not to put on protective duties at all.

Colonel SEELY

Then I am to understand that it is not proposed that this is in any sense to be a protective duty?

Mr. JAMES HOPE

That is a matter of definition.

Colonel SEELY

I think we had better not pursue the subject. I think the hon. Gentleman has not seen the full effect of his proposal. On the question of the tea tariff, it is quite true there is a very heavy impost upon tea, amounting to a very large percentage of its value; but, on the other hand, the amount which is levied by the Tea Tax has been very greatly reduced. In 1904, if I am rightly informed the duty was 8d. It is now reduced to 5d. That is a very great reduction. So on the general question of the Tea Tax I think that the Government can claim to have made a great step forward towards meeting the wishes of the hon. Gentleman and the Noble Lord for the reduction of the Tea Duty as a whole. But now we come to the proposal to go further, and take a penny off Colonial tea, while retaining the whole 5d. upon teas from foreign countries. I do not know that the hon. Gentleman realises how small a percentage of the tea that we get comes from foreign countries and especially from China. The figures that he gave do not tally with the figures with which I have been furnished by the Treasury and the Colonial Office. So far as I have been able to ascertain our total imports of tea for last year amounted to something over 341,000,000 lbs.

Mr. JAMES HOPE

That includes the re-exports.

Colonel SEELY

I am not quite certain. In any case, that is the total. Our total altogether from foreign countries comes to about 40,000,000 lbs. Of that, roughly, 17,000,000 comes from China. So that the tea from China is almost, but not quite, one-twentieth of our total import of tea.

Mr. BONAR LAW

As a matter of information, can the right hon. Gentleman tell us how much comes from Java and what it has been in the last few years?

Colonel SEELY

Yes; I have all the figures here, and shall be glad to give them to the hon. Gentleman if he wishes to have them. From Java itself, exported direct here, the imports in 1909 were 14,000,000 lbs. They have risen by slow degrees from 11,000,000 in 1905. There was a considerable increase of 12,000,000 in 1906, and a drop in 1907, since which it has risen to 14,300,000. I notice that there is nearly 7,500,000 from the Netherlands, but how much comes from Java and how much from other sources I do not know exactly. The House will see that the total of our imports from British possessions is enormously greater than from foreign countries. There were 341,000,000 altogether, of which 301,000,000 are from British possessions and only 40,000,000 from other sources. Therefore it will be seen that if we were to adopt this proposal there would be a loss of over £1,000,000 to the Treasury. What steps does the hon. Gentleman propose to take in order to make good that loss? We estimate to receive, I think, about £6,000,000 from the duty this year. The loss from this proposal would be between £1,000,000 to £1,250,000 to the Treasury. That is a loss which we cannot possibly face even if we thought by so doing we should placate that feeling in India and our Crown Colonies which the Noble Lord opposite seems to think it is desirable we should placate. Even if it were so we could not face this loss unless we could find the money. How is that to be done? The hon. Gentleman suggested that we should put a penny on China tea. But China tea only forms one-twentieth of the total imports.

Mr. JAMES HOPE

I said as an alternative that we might put 1d. on China tea; but my suggestion was to leave the duty as it is, and that a system of graduation should be adopted for the dearer classes of tea.

Colonel SEELY

A penny on China tea would, of course, be of no use to raise £1,250,000. I have said we collect altogether £6,000,000 from the duty, and as China tea only represents one-twentieth of the £6,000,000, the hon. Gentleman will see that 1d. is not a very large proportion of the total amount, and would not amount to one-sixth of the loss his proposal would entail. The calculation I have made, I think, is approximately accurate. This proposal to put extra taxation on China tea, unless it were adopted on a very large scale, would not meet the case. Really these two teas are quite different. People who drink China tea would not consider a penny or so in the price. It is not like Colonial and foreign corn, in which there is practically no difference. China tea and Indian tea are quite different things, as every hon. Member of this House, I am sure, appreciates. I believe, so far as the Members of this House are concerned, they prefer China tea—so I am informed in the Refreshment Department—and it is apparently in very great vogue. But it is not a proposal which we can accept on financial grounds. How is it proposed to raise the £1,250,000 which would be lost? Where is it to come from? Are we to put another halfpenny on tobacco, are we to put more taxation on whisky, or another halfpenny on the Income Tax, which would about provide the necessary sum? No such proposition would meet with approval in this House, for hon. Gentlemen opposite state that taxation is very high. If that be so, if taxation has already reached the limit, as we are told it has, how could the Chancellor of the Exchequer adopt the suggestion of the hon. Member and the Noble Lord opposite and make this remission, causing so important a loss of revenue? The only possible justification would be that it would be the first step towards Colonial Preference. But this proposal would not have, it appears to me, any relation whatever to the proposal for Colonial Preference, which was debated the other day.

Mr. ALFRED LYTTELTON

The right hon. Gentleman seems to misunderstand my right hon. Friend behind me, who proposed that the existing taxation on Ceylon tea should remain the same and an extra penny put on China tea.

Colonel SEELY

It does not matter very much which way you do it. The proposal on the Paper is what I am discussing: that the existing taxation should remain the same, and a penny taken off Ceylon and Indian tea. The hon. Member submits the alternative now. The proposal on the Paper is what I have stated, but I repeat that it bears no relation to the ordinary proposal with which we have become familiar, that of cementing the Empire by giving Colonial Preference. That proposal is one to which the Government, of course, do not agree. It has been urged with great effect by hon. and right hon. Gentlemen opposite that we should get a certain trade advantage from semi-independent communities, though wholly independent as regards their fiscal system, by making concessions to them. That is not the proposal here, however, because, after all, Ceylon is not in any sense an independent fiscal community. The Estimates of Ceylon are submitted to the Secretary of State each year. We review them, and where it is thought necessary for the safety of the Empire that some alteration in the fiscal system should be made, we can effect that alteration. If right hon. Gentlemen opposite ask why we do not do it, we could not answer by saying we have not the power, for we have the power. We are not, therefore, dealing here with a proposition such as that with which we are familiar. I do not myself see what possible advantage can accrue from giving this preference to Ceylon and India. It seems to have been assumed by the Noble Lord that it would give universal satisfaction. I am not at all sure that this would be so. It is very dangerous to assume that any fiscal proposition will be received with gratitude by the Dominions across the sea unless you are quite sure of your ground. Only the other day we had a discussion on this system of giving preference to our great self-governing Colonies, which are more accurately described as "Dominions." At the very moment we were discussing the subject here, and every hon. and right hon. Gentleman opposite was assuming that the proposal which they put forward was one which would commend itself to Canada there was, as we read in the newspapers, an official deputation of farmers which waited upon the Prime Minister in Canada urging him to have nothing whatever to do with the scheme. Anything more dramatic than that coincidence I myself have never seen. Is it not a warning against attempting to secure greater loyalty from any part of the Empire, whether self-governing or not, by any of these systems of taxation? Every hon. Gentleman opposite thought that what he was proposing the other day, whether fiscally wise or unwise, was at least popular in the Dominion of Canada. In the next morning's paper we saw that the very people whom you wished to benefit were against it. The same thing would happen again and again if you attempt, by tariff-mongering, to add to the stability of the Empire. There seems to be a theory that you cannot get co-operation unless you buy it under a system of tariffs—"If you will not give us a preference on our beef we will not fight your battles." We are supposed to imagine that not a single contingent would advance unless we put a penny on foreign beef. His Majesty's Government reject this proposal first of all as financially inxpedient, and, secondly, because we would lose so much money. We take up the challenge which has been thrown down, and we do not believe that we would be cementing the Empire by means of tariffs. For these reasons we cannot accept the proposal of the hon. Gentleman and of the Noble Lord opposite, though they brought it forward with great moderation and fairness, and we listened to them with much interest.

Mr. LYTTELTON

We have had a short and I must say a remarkable speech, considering it proceeds from the right hon. Gentleman who sits on the Liberal Benches. He argues that because we have the power of remitting and putting on taxation in Ceylon that this has no relevance to the matter. Surely any Liberal will admit that even if we have the power—as we have undoubtedly over each of the Crown Colonies—either to impose or remit taxation, we should not exercise that power without considering the wishes and sentiments of the inhabitants.

Colonel SEELY

I did not say it had no relevance to the Amendment. I said it was a totally different proposition. In the one case we have no power at all and in the other case we have absolute power, although we exercise it as far as we can in accordance with the wishes of the Crown Colonies.

Mr. LYTTELTON

I am afraid I misunderstood the right hon. Gentleman, but, after his correction, I do not see the object of his observations at all. I do not suppose there is any Member of the House who is not aware that there is a substantial difference between the self-governing Dominions and the Crown Colonies. The right hon. Gentleman referred to the Debate which took place last week, and said that on that very day there was a deputation in Canada to the Prime Minister, and he represented that there were some people in the West of the Dominion who were opposed to Colonial Preference. Has the right hon. Gentleman the boldness seriously to place that deputation against the opinion of representatives of Canada expressed, I think, at five different Conferences, and which only repeated representations which have been made, as shown on former occasions, for more than sixty years? This proposal was brought forward by my hon. Friend and by the Noble Lord, to whom I am very grateful for having done it, and as the right hon. Gentleman says, they submitted it with great moderation. Neither of them pretended that the financial aspect of this particular case was a very pressing one, and both of them admitted—my Noble Friend behind me especially—that the object was political. It is perfectly true that a large proportion of tea which is imported into this country comes from our Colonies, a very large proportion, but there is no less than forty million pounds coming from foreign sources. The right hon. Gentleman admitted that it came directly or indirectly from Java.

Colonel SEELY

And China.

Mr. LYTTELTON

But chiefly Java. The amount imported from Java is increasing, and I may go so far as to say that the competition from China, which has been increasing in a very serious measure already during the last few years, will still continue to increase and become a formidable rival to Ceylon and India. We are confronted, as the right hon. Gentleman reminded us, and as we usually are on these occasions, not upon the arguments, or upon the merits of the particular case, but upon general considerations which right hon. Gentlemen opposite seem to think preclude them altogether from entertaining any of these applications. The very mention of Colonial Preference seems, if I may put it without offence, to lead to a suspension of their intellectual faculties. It produces at once from the Prime Minister, and I must add, though in a less degree, from the Chancellor of the Exchequer, a thought-saving apparatus which grinds out, rather like a gramophone, familiar sounds and inevitable formula, with scarcely, as these various occasions arise, a change of inflection in the voice.

It would not be in order to go into any details in this matter, but we have had the same thing on Thursday last as the right hon. Gentleman has given to-day. We have the same old formulas from the Prime Minister: "We cannot tax food," "Will you tax food? If we have to give preference we must act equally all round." Equipped with those two formulas the Government deems itself absolved from all consideration whatever of the changing circumstances of occasions and of time, and consider that those two formulas justify them in their stolid immobility. I venture to say that that is a deplorable attitude. We must not go into details, but it is deplorable when, as was shown only a few days ago, Canada, and in fact all the Colonies, have now asserted, and asserted by the consent of this country, the right to make independent treaties—it surely is deplorable that the Government never even refer to this revolution in our relations with the self-governing Dominions, and continue to treat this question precisely as if it was unchanged from former occasions. Those two formulas, and I put this to the Chancellor of the Exchequer, are supposed to cover, and that is what makes them relevant to this Debate, the case of the Crown Colonies as well as of the Dominion, and it is worth while therefore very briefly to examine it. The food tax is always put forward as an absolute objection. Although it does not behove me to say necessarily that food taxes would be imposed under Colonial Preference, I fully admit, and always have admitted to the Chancellor of the Exchequer on several occasions, that it is highly probable that it would be necessary, and the whole of this party have absolutely faced the situation that it may be necessary. Any way, I think right hon. Gentlemen are entitled to this admission from me, that for the purpose of this Debate, at any rate, I will assume that a small food tax is necessary. Why should that not be compensated for by something given to the class which is to be, as they say, burdened by such a food tax?

The Chancellor of the Exchequer has himself in many Debates in my own hearing this Session and last Session justified putting heavy burdens upon Irish peasants by saying, "Though I have done this with one hand, yet have I given you old age pensions with the other." The Chancellor of the Exchequer cheers that, but why in the world if that is so, and if you can compensate the Irish peasant for putting a burden upon him by giving a fiscal advantage elsewhere, what is to prevent us for great and Imperial objects if a small tax be placed on food, making that good to the persons who have to pay that tax by some other means? What is the objection? I believe that cannot possibly be answered. There can be no objection to doing it when the whole faith of this party, and the good faith of this party, is staked if food taxes were put on, upon redressing the balance by some advantage to the class who have to pay it. Not merely is our good faith embarked on that, but there is the most vital motive of self-interests not to impose such a tax without some compensation. The most terrible retribution would inevitably fall on any party that would put a duty on wheat, however small, accompanying the expression of that intention with the promise to make some compensating grant in exchange—the most tremendous retribution would fall on any party which did not speedily and immediately fulfil such a promise when it was made. There is the question of discrimination to which the Prime Minister referred again and again, and, of course, if his argument is sound with regard to the Dominions it is sound with regard to the Crown Colonies. He has said again and again that you cannot possibly give Colonial Preference without discriminating as between one Colony and another. He really seems to think, and hon. Gentlemen opposite, that that is a formidable, or indeed a conclusive, objection, and I see by their cheers they agree. I really find it difficult to speak very respectfully of such an argument. Hon. Gentlemen must know perfectly well that there is no scientific tariff that is made in any country in the world which does not recognise that raw materials must not be taxed. That is the basis, of course, of every scientific tariff which exists.

If commodities which exist in one Colony and which are imported here are entirely raw materials how could you propose to tax them against our own declaration, and against the practice of everyone who makes a scientific tariff. What is the difficulty? Why should this uncertainty be imputed to our Colonial friends? Why should it not be competent for any Englishman to say, supposing representations were made by Australia that Canada was getting some preference on wheat, and were to ask themselves for such preference on wool, what is the difficulty of explaining to the Australian that that is a tax upon raw material, and that every statesman in this country has always exempted that from taxation, just as it is exempted by the scientific tariff of every nation in the world? If that is so, surely Australia would recognise with regard to wool or any other raw material as outside the case for Colonial Preference, because we are éstopped by our own principles, and by the necessities of the case from granting preference in such cases. If that is so, what possible grievance would their be. The Crown Colonies have two distinguishing characteristics which, I think, entitle them in principle to some preference. It requires no fresh taxation to be put on, and the existing tariff and the existing taxes may be so modelled and so arranged so as to give the preference which we now ask, and which my hon. Friends behind me ask. Here again we are up against principles which have been laid down by the Government—or supposed principles—which prevent them even entertaining such a demand. The Chancellor of the Exchequer will remember that at the last Colonial Conference Dr. Jameson brought forward the case of Cape Colony, and and asked that there should be some preference shown where taxes were actually existing, and that where no new taxes would be involved some preference should be shown to our own friends as distinguished from others. What position was taken up by the now Prime Minister? He said:— This is as to preference on present dutiable articles. I am not going to take up any time. You understand our position in the matter. We think it would concede the principle without doing any substantial good. When he is pressed and questioned further, he goes on:— But it means that we are to consider the question whether we shall treat the foreigners and the Colonies, as it were, differently, and that, we conceive, we are not able to do. Was there ever such a humiliating conclusion to come to, that you could not treat foreigners and your own people differently in fiscal matters? That is the position taken up every time we press them on this matter. It is, I must say, not unnatural that when this saddening conclusion and, as I would say, humiliating conclusion was given, namely, that the Government cannot treat foreigners differently from their own Colonies, that Dr. Jameson said:— I would like to put it to the Conference. Sir Joseph Ward: I will support that. Mr. F. R. Moor: I support it. Sir Robert Bond: Yes, I support it. And the chairman, Lord Elgin, said:— We do not; we dissent from it. Therefore you have the position taken up, no matter what political object may be in view, no matter what the demands may be from the Colonies, no matter how pressing or how urgent the situation may be on many other grounds than fiscal, that this great country is unable to treat our own Colonies any differently than they are able in the treatment they accord to foreigners. I say that that is a lamentable state of things. It can only be justified, apart from so-called principles, if the situation was as described by the Prime Minister. Hon. Gentlemen opposite are really ignorant of the principle which they imagine they are defending.

5.0 P.M.

Colonial Preference has long ago been accorded in principle to the Crown Colonies. What is the commercial system which exists now between this country and the Crown Colonies? The Crown Agents are the bankers of all the Crown Colonies. They raise loans for them upon infinitely more advantageous terms than the Crown Colonies could possibly do on their own behalf. That is the service performed by us for them. What reciprocating advantage do they give us? The system for years has been that all commodities which they cannot grow within their own shores and which they cannot provide for themselves must be contracted for by the Crown Agents here. The result is that you have a system by which, on the one side, the Colonies have the advantage of the financial credit of this country, while on the other our manufacturers have the immense advantage of a preferential opportunity of contracting for or making many articles which the Crown Colonies require.

Colonel SEELY dissented.

Mr. LYTTELTON

The right hon. Gentleman says it is not so. I know perfectly well that it is so. I say without fear of contradiction that a preference is given to the manufacturers of this country as regards the supply to the Crown Colonies of commodities which they themselves cannot produce. I say that, in the first place, it is the practice for Crown Colony loans to be issued here, by which the Crown Colonies get a great advantage; and, in the second place, it is the practice, and has been for many years, the Crown Agents to indent or contract in this country for all articles required by the Crown Colonies which they themselves cannot produce. I challenge the right hon. Gentleman to deny that that has been the practice for many years.

Colonel SEELY

The system is very much altered now.

Mr. LYTTELTON

In what way?

Colonel SEELY

The right hon. Gentleman assumes that I know nothing about it. I may be very ignorant; but it so happens that I was Chairman of a Committee which sat for a great many months considering this question. The system is not as the right hon. Gentleman has described it.

Mr. LYTTELTON

What is it? The right hon. Gentleman knows all about it, and thinks that I am wrong. Will he tell me in what respect I have erred?

Colonel SEELY

If the right hon. Gentleman will read the Report of the Committee on this subject he will find that the system does not really bear the aspect at all which he has put to the House. It has no relation to it. As a matter of fact, there is no preference whatsoever to this country.

Mr. LYTTELTON

The right hon. Gentleman, having been Chairman of a Committee which inquired into this subject, and being unable to point out in what respect I have erred, I think I may assume that I have not erred. Once more I assert, notwithstanding what the right hon. Gentleman has said, that when a Crown Agent finds that a Crown Colony cannot produce a commodity itself, it is the duty of the Crown Agent first to endeavour to obtain tenders from manufacturers in this country, and to give our manufacturers the preference. If that is so, and I believe it to be so, we have already, most happily, notwithstanding the efforts of the right hon. Gentleman, a system in which the foreigner is placed at some disadvantage as regards the Crown Colonies. That being so, what objection is there to somewhat enlarging, in the cautious and tentative manner suggested by my hon. Friends, for a political object by no means unimportant, a system which has already a definite basis? I shall be glad for this House and the country to know that the Government, not only decline to make any change whatever in favour of the Dominions—that is bad enough indeed—but that, notwithstanding new facts of greatly increasing importance which have been established, they have again assumed that attitude of total inability to alter or vary their system, no matter how strong the case adduced for it.

Mr. GIBSON BOWLES

As to the question of fact which has arisen at the end of the right hon. Gentleman's speech, I believe him to be wrong in the suggestion that there is a bargain or anything resembling a bargain that the Crown Agents should buy all they want in England. As far as I know, there is no system of bargaining binding the Crown Agents to buy in England what they want for the Crown Colonies. I go further, and I say that they constantly buy in other countries articles which could be produced in England.

Mr. LYTTELTON

I never said there was a bargain; I said a system which had existed for many years.

Mr. GIBSON BOWLES

If there is no bargain the argument falls to the ground; there is nothing in it. No doubt what they can get best in England they buy here; but what they can get better elsewhere they buy there. There is no bargain and no preference; that is the point. If there is no bargain certainly there is no preference. This proposal, coming from distinguished Tariff Reformers, is a most remarkable departure from the original faith as preached in Birmingham. It is either a departure from it or a great development of it, because in the original faith the principal point was a total and complete neglect of everything except the self-governing Colonies. It was one of the reproaches addressed to the Tariff Reform policy as it was then elaborated and stated, not only in principle, but in every detail, by its great prophet, that while it pretended to bind together the whole of the Empire, it left totally out of account that nine-tenths of the Empire which is represented by India.

Mr. LYTTELTON

Are we to learn nothing?

Mr. GIBSON BOWLES

I do not think you have learned much—not even the original faith as preached by the original prophet. When the great scheme of a scientific tariff was first put forward one of the first occurrences was that Sir M. Bhownaggree, who was then a Member of this House, wrote to the Member for West Birmingham asking how it was he had left India out of account, to which the right hon. Gentleman replied, "I have left India aside purposely and advisedly." I think he had done so inevitably, for the sole reason that whatever advantage you got from your Crown Colonies in return for a preference which you gave to them it would be an increased export of your goods to them through a diminution of their existing duties. You could get no such advantage from India. India does not levy any heavy duties; she does not levy 30 per cent. on your woollens, as Canada does; she does not levy high duties, nor does she exclude your citizens, as Australia does. There are none of the—I would call them "oppressions" that the self-governing Colonies constantly place upon our trade to be got rid of in the case of India. India is practically a Free Trade country; her duties are extraordinarily small and light; her duties on manufactured and other articles sent from this country are insignificant. Therefore, whatever preference you give to India in the way of remission of duty on her tea, she has nothing to give you in return. That was why the original prophet of this crazy faith left India out of account purposely and advisedly, and it has never been brought in until to-day. It has been brought in, I think, upon an entire misapprehension of the situation. As for the hon. Member who proposed the Amendment (Mr. James Hope), I think he has misconceived the situation altogether. He reminds me of what Dryden said: "The second son shall be a false prophet, with wit enough to found a new religion, but too much wit to die a martyr to it." Do hon. Gentlemen opposite really mean to abandon the faith originally preached from Birmingham, stated in detail in Glasgow in 1903, and subsequently explained to Sir M. Bhownaggree, who was almost Member for India, so as to take in what the original prophet left out, and to pretend to give to India the sort of preference which was originally entirely denied to her? If they do, they will have to reconsider the whole position. Above all, they will have to ask themselves what we are to get from India in return. There is something to be said for Colonial Preference in the case of the Crown Colonies when they impose heavy duties upon our manufactured and other articles; because, if you could impose a duty on food—I believe you never will be able to—but if you could, those Colonies which produce food might perfectly well in return diminish something of their 20 or 30 per cent. duties which they now impose. But what are you going to get from India? I ask for a reply to that. Will hon. Gentlemen opposite apply their great minds to this question, and tell me simply: If we are going to give Indian tea a preference in this country by a diminution of the duty, what are we going to get from India in return? What you could get from the self-governing Colonies I understand; but what you could get from India for the life of me I cannot see.

As to the Chancellor of the Exchequer's argument, which was used by the Under-Secretary for the Colonies, I confess I have no sympathy with it. He says that he would lose a great deal of money. It would be a great deal of money. Since nine-tenths of our tea comes from India you would, by giving up one-fifth of the duty, give up one-fifth of nine-tenths of the revenue from tea. Broadly speaking, I suppose it would amount to £1,000,000. That is serious, but it is not so serious to the minds of hon. Members on this side as to the minds of hon. Members opposite, who are always pressing for more "Dreadnoughts." By giving up this revenue of £1,000,000 a year you would be giving up half a "Dreadnought." That is a very strong argument; but if the case were a good one I would pay no attention at all to the Chancellor of the Exchequer's argument, especially when used by the Under-Secretary for the Colonies, because I think in that respect the right hon. Gentleman was travelling somewhat outside his Department, and I should not be surprised if the Chancellor of the Exchequer himself, with more knowledge of finance and perhaps a larger imagination, if he thought it worth while, were able to replace even this £1,000,000 of revenue. Why should we remit duty on tea? Our principle is always to levy duties not because we love them nor for political purposes, but because we want revenue. Why, then, are you to forego £1,000,000 of revenue because it falls upon the Colonies instead of upon the foreigner. Here let me take notice of what the hon. Gentleman opposite says. He says, "If you remit this duty it will bring the price down." Oh, then the foreigner does not pay that part of the duty?

Mr. JAMES HOPE

He does not pay the duty at first.

Mr. GIBSON BOWLES

Oh, if you take some of the duty off, the price falls thereafter, and he does not pay that part of the duty. I am obliged to the hon. Gentleman. I am very glad to get that. It will help to clear the ground for future Debates on Tariff Reform. I congratulate, in passing, the hon. Gentleman as a very unfaithful follower of the right hon. Gentleman the Leader of the Opposition, because he does not think that. He thinks the foreigner will pay the duty. He says so.

Mr. JAMES HOPE

Of course, when you have a very high duty the consumer does pay the greater part of it, but our contention, by figures which have been calculated, is that at the beginning anything between 6 and 12 per cent. will fall upon the producer.

Mr. GIBSON BOWLES

What! Then there is a duty which will be paid by the consumer, and there is another duty which will not? The line is 12 per cent. levy 5 per cent., 6, 7, 8, and it is the wicked foreigner that pays. When once you reach the magical line of 12 per cent. it is the unfortunate British consumer who is the victim!

Mr. JAMES HOPE

The producer will pay at first. As to where the exact line will be drawn will depend upon the amount of competition. Probably when you get to 12 per cent. Everything over that probably will fall—of course, nobody can give a general rule to apply always, or specify the exact line.

Mr. GIBSON BOWLES

I am extremely obliged to my hon. Friend for his explanation, for it is exactly the way I myself have explained it, though, of course, I did not use language of such clearness. But I think it is very notable that in the first place there has been a complete departure from the original doctrine of Preference and Tariff Reform as laid down, for that doctrine did not include India. It expressly excluded India, and it excluded India upon consideration and for adequate reasons. Secondly there is an admission that up till 12 per cent. the foreigner pays the duty, and it is suggested that over 12 per cent, or some such figure—[HON. MEMBERS: "No, no."] I will not quarrel about the figure—it can be 2 or 3 per cent. either way—we will call it up to 15 if you like, but above a certain figure the consumer pays. It is a very considerable admission from one of the great advocates of Tariff Reform. I shall take note of it, and dwell upon it in any further Debate that may come on this most afflicting subject. One other remark. My right hon. Friend who sits opposite, and who has just sat down, has told us that it is a capital doctrine even among Tariff Reformers, that raw materials shall not be taxed.

Mr. LYTTELTON assented.

Mr. GIBSON BOWLES

I am glad the right hon. Gentleman assents to it. Is wood a raw material? What does he say?

Mr. SPEAKER

The hon. Gentleman is going a long way from tea.

Mr. GIBSON BOWLES

I admit, Sir, that tea is only a shrub. I will depart from it. Let me say this: If this proposal was carried, the whole result would be that the revenue would lose cash, the Indian would not be encouraged, and there would be no Colonial Preference, for we should get nothing for it. You would have lost a good deal of revenue, without producing any effect—political or material. One last word. The right hon. Gentleman says you may perfectly Well assume a fiscal burden in order to produce a political effect. I entirely agree with that. I think it might be conceivable, if you were certain of a very considerable political result—say if there was a further strengthening of the Empire—that you might impose upon yourselves a certain fiscal burden. As a general doctrine there is nothing to be said against that, but I have never yet seen anything to show that for the very great burdens that Tariff Reform will impose any corresponding political result will be achieved. I believe, on the contrary, that, so far as the self-governing Colonies are concerned—and I will include India if you like—it is not the small profit on trade that binds the Empire together, it is the remembrance of a common history, a common faith, of common glories. It is sentiment that binds the Colonies to the Mother Country, and not the small profits that we should gain from any system of preference.

Viscount CASTLEREAGH

The discussion on the Amendment has turned on the question of preference. The right hon. Gentleman the Under-Secretary for the Colonies has told us that the import of foreign teas is of so small a character that the only tea we have to deal with for the moment was Colonial and Crown Colony tea. The object of my Amendment a little lower down on the Paper is a reduction in the tax. The object of my hon. Friends who proposed and seconded the Resolution appeared to be purely political. The question of the tax is one which, I think, is of vital importance. I think that it is perhaps a tax which of all others calls for a reduction. The history of the tax in recent years has been that it was raised in 1900. It was raised again in 1904. It was reduced by 2d. in 1905, and by a further 1d. by the Prime Minister in 1906. We are asking that the Government should again reduce it by 1d. The proposition that 1d. should be taken off Colonial tea is, I think, a Resolution which most hon. Members of all sections of this House can willingly subscribe to. I am only sorry that the hon. Gentleman the Member for Sheffield (Mr. James Hope) has moved his Amendment instead of mine, because there is an excuse for hon. Members opposite to introduce the "shibboleth" of preference, which will frighten a great many Members in various parts of the House. They will be able by that excuse to get out of the pledges given to their constituents during those strenuous times of election, when it was a requisite for them to offer something to gain the assistance of their supporters. That is the reason I am sorry that the hon. Gentleman moved this Amendment, because when the Division is taken hon. Gentlemen who sit behind the Chancellor of the Exchequer, and those who sit on the Labour Benches, and possibly hon. Gentlemen too who come from Ireland, will all say, "This savours of preference; it is a most dangerous principle, and we cannot redeem those pledges which we have given at election times with regard to the Tea Duty." The Tea Duty is a subject which has been made use of many times in the past for the purpose of belabouring a tottering Ministry. That is not my object this afternoon. My object is to urge a reduction in the Tea Duty because I think it is a matter of vital importance to this country. If I had probed deeply into "Hansard" I have no doubt I could find utterances from most right hon. and hon. Gentlemen opposite giving forth pious opinions as to how and why they believe that the Tea Duty has been deleterious, and must certainly be taken off. The right hon. Gentleman the Under-Secretary for the Colonies in his interesting speech told us that there is very little hope, in fact no hope at all, that this Tea Duty will be taken off. After the manner of his colleagues he appealed to this side of the House to give him suggestions as to how the money likely to be lost by the revision of the Tea Duty shall be replaced. It is the duty of the Government to make suggestions of this sort, and not that of the Opposition. They receive, perhaps, a not insignificant remuneration for doing so. But they do receive gratuitous suggestions from the hon. Gentleman the Member for Hackney (Mr. Bottomley), by which the money which will be lost by the remission of the Tea Duty will be amply replaced.

Let me quote from a speech by the Prime Minister made in 1909. The right hon. Gentleman then said:— It was the duty of the Chancellor of the Exchequer to set to work at once to effect, as I believe he might very well effect, such reductions in the expenditure of the country as will enable him to withdraw, with the shortest possible delay, one-third of the Tea Duty, which was always intended to be of a temporary character. Nineteen hundred and ten has arrived. There is no reduction of the Tea Duty. The reason I put forward as to why the Tea Duty should be reduced is that in its present larger proportion it is the remnant of the war tax. I should like to see it reduced a great deal more than at present; indeed to its proportions previous to the war. There is another reason why a penny should be taken off the Tea Duty at the present moment. It is that a penny was taken off in the year 1906, and that it is a necessary corrollary of the Tea Duty with the altered price in this country that the tax should be reduced 2d., because it is impossible to alter the price if it is only reduced by 1d. The hon. Gentleman who has just sat down has spoken of the consumer paying the tax. Although my Tariff Reform sentiments are not so violently in the direction of Protection as are those of some hon. Gentlemen in this House, still I have always understood that when a commodity has a monopoly and comes into a country without any competition and is to be consumed by the people of this country that the tax falls entirely on the consumer. In the face of such an efficient student of trade as the hon. Gentleman, I, however, will not enter into discussion on that point at present. There are, of course, advantages in the Tea Duty. There is one advantage that I do not think hon. Gentlemen on the Labour Benches will, perhaps, subscribe to. That advantage is that it is a tax which falls on almost every individual in the community. We are told nowadays that the rich should be taxed, and that the poor should escape altogether. That is not quite my view. I should like to see an entirely graduated system of taxation, so that the poorest of the poor should contribute something. I do certainly agree with what was said by my hon. Friend who moved this Amendment—that if we had a graduated Tea Duty it would partly answer the purposes of taxation from a fiscal standpoint.

I should really like to urge upon the right hon. Gentleman the necessity, if possible, of reducing the Tea Duty by 1d. That would really be a redemption of the pledge which it is incumbent on the Government to redeem. We are told that there is no money forthcoming. If there is a surplus it is, to my mind, the duty of the Government to use it in the way I suggest before they begin schemes which they have told us of, but the objects of which we are uncertain. If the right hon. Gentleman the Chancellor of the Exchequer wishes to go down to posterity as an efficient Chancellor, as one who had the interests of his country and all sections of it at heart, I say that the Tea Duty is one that he will reduce at the present time. The Tea Duty was levied ostensibly for the purposes of war. That is the case with the Tea Duty. I do not know whether I shall be able to move my Amendment which is on the Paper when I come to it. I should like to move it if I have an opportunity, if it was only for the purpose of giving hon. Gentlemen in all quarters of this House, who talk a great deal about the Tea Duty at electioneering time, but who when they come into this House subserviently follow the Government. I shall vote for the Amendment of my hon. Friend, which combines the question of preference, which I desire to see given effect to.

Mr. LOUGH

The Noble Lord, who has just sat down, has delivered a most interesting speech, and has in the most polite language possible thrown over his friend behind him. Instead of defending the principle of Colonial Preference, the Noble Lord has made a general speech upon the reduction of the Tea Duty. I, speaking from the opposite side of the House, often advocated the same principle, and if anyone can suggest a practical method by which the Tea Duty could be reduced, I think that appeal would not fall upon deaf ears so far as the Treasury Bench is concerned. But, in order that we may appreciate the difficulties of such a step at the present moment, we ought to examine the arguments submitted by the Noble Lord in his very interesting speech. He said the tax was a War Tax, and for that reason the extra penny on tea which was put on for war purposes should now be removed. Many of us thought that was so, but what is the reason the Government are not in a position to reduce that tax? It is because of the huge extravagant war expenditure pressed upon them from the other side of the House. Millions extra are demanded for the Navy, and, therefore, the revenue which is expended on these kind of things has to be supplied by taxes which cannot, therefore, be taken up. The Noble Lord spoke of the desirability of a graduated Tea Tax in order that it might fall more equitably upon the poor. I do not believe that any principle of graduation can be carried into effect, and certainly it could not be made beneficial to the poor. The suggestion of graduation of the Tea Tax is based upon the assumption that the poor buy cheap and bad tea and that the rich buy dear and good tea. That is not true at all. An immense number of rich people buy the poorest qualities of tea, while the poor, to whom tea is an article of food, especially in Ireland and other places also, look most carefully to the quality of the tea they purchase. The whole principle of graduation is impracticable. I do not think the Noble Lord is serious in putting forward his suggestions for the reduction of the Tea Tax. If he is anxious on that score, and if he really wishes to see the Tea Tax reduced, there is a very convenient course open to him, and that is to keep the Front Bench opposite from pressing for more expenditure upon armaments. In any happy moment of that kind he will find me a strong advocate of such principles.

The real question we have to discuss is the question of Colonial Preference, and it is highly interesting, because when we get a precise case submitted to us the House should try and look at it upon its merits and see if such a form of finance were put into operation what effect it would have upon our commercial and friendly relations with other Powers. The figures were given in a very interesting speech by the Under-Secretary of State for the Colonies. The first place we would hit in regard to tea would be China. Why should we endeavour to hit China? Has she not been a very good friend of this country? I know this country in past years spent a vast sum of money in keeping the Free Trade door open in China. Why should we now for some paltry consideration strike a blow at China? Let us look at the case from the broad point of view. There was a time when this country depended upon China for the tea we consumed. We got as much as 200,000,000 lbs. of tea from China; that consumption has fallen to 17,000,000 lbs. How did that come about? It came about under Free Trade. We copied China; she taught us to grow tea, and we grew it ourselves in our own country, with the terrible result, that we took away a vast portion of her trade. Might not the Noble Lord feel satisfied with that. Is it not a mean thing to say, "Let us now stab her in the back, and for the purpose of cutting a trifle off these 17,000,000 lbs. let us give a preferential duty to Colonial tea"? I think it would be a mean and cowardly thing to do that. Its effect would be to reduce our exports to China; to shut that door, and to that extent to do a great deal of harm to our own commerce.

There is another country to which we might do harm, and that is Holland, which has developed a splendid trade in tea in Java, that most fertile island. A great deal of tea comes to us from Java and from Amsterdam. Are not the Dutch good friends of ours? They sent us a king once, and they send us large quantities of interesting things now. The Dutch are the most nearly Free Trade people of any of the countries of Europe, and here we are asked to strike at these friendly countries—China abroad and Holland amongst the neighbouring countries—to carry out this mean and paltry policy, which would be of no advantage to anybody. I believe from the financial point of view there would be an immense loss to the revenue of nearly £1,000,000 a year. Look at the convulsion of trade that would occur; the blow that would be given to friendly countries in Europe and abroad; and if looked at from that standpoint Colonial Preference in this instance would be found to be totally impracticable. It would bring no advantage, but it would impose burdens that would fall upon the backs of our countrymen, and I cannot see the slightest advantage to be derived.

Mr. MACKINDER

I should like to refer for a moment to an argument advanced by the Under-Secretary for the Colonies. It was an argument upon general grounds referring only indirectly, I take it, to this question of granting a preference on tea, but it was an argument which ought to be dealt with, because the Under-Secretary when he used it was repeating an argument advanced in journalistic haste the other day by one of his chief supporters in the Press. It was the argument of that dramatic coincidence with reference to the deputation to Sir Wilfrid Laurier from certain farmers in Manitoba. It seems to me that the right hon. Gentleman and his supporters in the Press are grasping at a straw in their anxiety by taking a mere telegraphic account of what must have been a meeting of considerable length, and twisting that into an argument in favour of their case. I find that the short account in "The Times" newspaper included these two sentences:— The farmers said they looked with disfavour on any fiscal or preferential tariff tending to enhance the cost of living to British artisans and labourers. If hon. Members opposite accept that as equivalent to a free trade statement by the meeting they beg the whole question, because we deny that a preferential duty would have that effect. Let us take the next sentence:— They desired every possible facility for the free exchange of their food products, for products of the congested factory districts of Great Britain. I suggest that when the report of that meeting is examined at length it will be found that these farmers do not assume that these preferential duties would put any burden upon the artisans and labourers of this country. I submit that a telegraphic epitome does not entitle you to assume that these farmers were demanding that there should be no preferential duties given to this country. But that is a side issue, and I only refer to it because the right hon. Gentleman, following an influential organ in the Press, had been assuming a little too much. If he wanted a dramatic coincidence he might have referred at the same time to Count Komura, who said:— As Great Britain is pursuing a Free Trade policy there is no room for a convention with that country. I would ask hon. Gentlemen to remember that only two or three days before the telegram from Canada there was another telegram in which Sir Wilfrid Laurier said emphatically to the farmers that the preferential policy with Great Britain could not be departed from. The right hon. Gentleman brought forward his case in order to show that Canadian opinion was not with us. Sir Wilfrid Laurier practically stated that the deputation only represented a minority, and that Canada on the whole differed from them.

In reference to what was said just now by the Noble Lord (Viscount Castlereagh) that the effect of lowering the duty on tea produced in the Empire would to a certain extent be to give a graduated Tea Duty. I should like to say, though I have not examined the case of the Java tea, I have that of the China tea, and I find on the average of prices on the declared valuation of tea imported into this country China tea is ½d. per lb. dearer than Indian tea. My experience would show that tea, contrary to the assertion made by another hon. Member (Mr. Lough), of the cheaper class is consumed by the poorer people. I doubt whether any very large amount of China tea, which is notoriously the dearer tea, is consumed by the poor. The evidence which the figures published afford is that China teas are dearer than teas that come from India and Ceylon, and therefore it would be on cheaper tea you would be granting a Preference. I have not gone into all the figures, but in the case of Chinese tea that is so. We have been told that the sole effect of this proposal will be to damage our trade with China. I do not believe it would have that effect, because those who demand China teas will have them, no matter whether they are a little dearer or not. China tea is a speciality, and is used to meet the taste of certain people, and I do not think because there is a slight increase in its cost those people will cease to demand that particular kind of tea from China. China tea is a luxury, and it will be paid for by those who demand it, even if the price is a little higher. But even if I grant the case made out by the hon. Member that you would damage the China tea trade, it should not be forgotten that the result would be that you would take more tea from India. You would increase in that way your Indian trade, and if there is any philanthrophy, it ought to be for our fellow-subjects. I believe the total trade done by this country will not be diminished, and will only be slightly altered in its character by the proposal suggested. We heard the hon. Member opposite criticise the case originally put forward by what he called "the great prophet of the preferential idea." He said it had reference only to the free governing communities within the Empire, and not to India, and he stated that only in this Debate had the case of India been put forward. I would remind the hon. Member that so seriously has the Indian side of the question been put forward that the Indian Government found it necessary to send a despatch to the Home Government at the time of the last Imperial Conference in order to deal with that idea. Consequently it is clear that four years ago, in a despatch sent in anticipation of the Conference, this question of India sharing a preferential system was distinctly before the country. I would also remind the hon. Member that there is a most curious history connected with that despatch. It was a Free Trade despatch, based upon a memorandum written by the Financial Member of the Council, and there was much more Free Trade in the despatch than in the original memorandum. The opinion of this responsible Financial Adviser of the Viceroy's Council was very much more in our direction than is assumed. Of course his opinions were watered down in the epitome that was made of them for consumption in this country, and they were watered and biassed by the direction of the Government in power in the despatch that was sent over to this country. If the hon. Member requires a basis on which preference could be arranged he will find it more fairly stated in the original document, and not in the diluted document circulated here for election purposes. The hon. Member for King's Lynn said that the policy of holding the Empire together was to be found in our common history. May I point out that the United States had a common history with us, and it was the imposition of a duty that first began the diversion of that national sentiment which was as strong as is the sentiment now in the case of our Colonies. We want to remit a duty. I am content to leave that historical fact to speak for itself. I venture to say that historically we are far more accurate in our view than the hon. Member opposite.

Mr. F. G. HINDLE

The right hon. Gentleman who last addressed the House from the Front Opposition Bench admitted very frankly that if, in pursuance of the policy of Colonial Preference, preferential duties were imposed which operated very harshly on certain classes, it would be necessary for some compensation to be given to those classes either by remission of taxation or in some other way. But not only will certain classes who use goods be affected, but certain industries will be more heavily hit if a preferential system is introduced. I should like to know what compensation is to be given to those industries? I am speaking on behalf of a Lancashire constituency which depends for its existence upon the cotton trade, and I should like to know in what way it is proposed that some compensation should be given to that trade in the event of a policy being adopted which would undoubtedly necessitate the taxing of a great deal of the raw materials of that industry. I know perfectly well that it is said that it is not proposed to tax the raw materials of any industry, but the very article which was mentioned by the right hon. Gentleman happens to be actually one of the raw materials largely used in Lancashire. It would be impossible to set up any system of taxation to give Colonial Preference which would not hit many of the raw materials of this industry. It must be remembered that the cotton industry is one of the greatest industries in the country. Its exports amount to £100,000,000, and it employs several hundred thousand workpeople. The distinction I draw in this matter is that the cotton industry needs no protection——

Mr. SPEAKER

We are not talking about cotton. I must ask the hon. Member to come back to tea.

Mr. HINDLE

It would be impossible to grant compensation not only to the cotton trade but to many important industries in this country if duties are placed upon the articles which they largely use. That is the real difficulty which lies in the way of those who advocate Colonial Preference. The gentlemen who waited upon the Prime Minister of Canada, and the farmers of Canada themselves pointed out that they were sufferers from the taxation of articles which they used in their industries, and they emphatically stated that they did not wish in any way to be compensated for that disadvantage by the taxation of corn in their favour. Until an answer is given to the question as to how Colonial Preference will provide compensation for the industries it will injure, I cannot see how this House can fairly be asked to adopt such a policy.

Mr. R. A. COOPER

The hon. Member for King's Lynn put a question to us to-day in regard to this policy, and insisted upon having an answer. The hon. Member asks if this tax is remitted especially in favour of India as is intended, what are we going to get from India? I think this question marks the different spectacles through which we on these benches, together with the Colonial Premiers, look at this question of preference as compared with hon. Members opposite. We do not look at it from the point of view of the sordid question: "What are we going to get out of it?" [HON. MEMBERS: "Oh, oh."] At any rate, the speeches and writings of prominent advocates of preference will show that first and foremost we are desirous of housing both our people at home and our Colonial kinsmen across the seas. I would also like to point out as an answer to this question that when Canada gave a preference to this country she did not send over a Commission to confer with the Government or the traders of this country to ask, "What are we going to get out of you?" She readily and freely gave us that preference because she recognised that she was doing a service to the manufacturers of Great Britain. The hon. Member for King's Lynn tried to get from those sitting on these benches something definite in the way of showing how the foreigner will pay the tax. The hon. Member must be perfectly well aware that it is not a question of what the size of the tax may be. It does not matter whether it be one or 50 or 80 per cent. The point to be considered is, if you impose a tax what competition the articles taxed are subjected to. Upon that depends whether the foreigner pays the whole of the tax, or whether it is shared between the consumer and the foreigner, or whether the consumer pays the whole of the tax, as in the case of tea. It has been admitted that if this Amendment is accepted the Treasury would lose something like £1,250,000 sterling, and we are asked, "Where are you going to get this money from?" We are asked, "Are you going to put an additional tax on tobacco or whisky or another halfpenny on the Income Tax?" May I point out that there are thousands of articles besides tea, whisky and tobacco which are not taxed at the present time. We imported into this country £12,000,000 worth of silk, which comes in absolutely free.

6.0 P.M.

The Colonial Secretary asks whether, if you lose this £1,500,000, you are going to put it on whisky or tobacco, both of which are consumed comparatively more by the poor people of the country than by the rich. He also asks whether you are going to put a halfpenny on the Income Tax, because, if not, as he told us quite frankly, the Government must maintain this tax of 5d. on Colonial as well as on foreign produced tea. What does that amount to? Simply that their policy requires that the tax which the Amendment asks should be remitted in the case of the Colonies shall be kept on an article of first importance to the poor people of this country. Hon. Members opposite have learnt to-night from the Colonial Secretary that Colonial Preference does not of necessity mean a tax on the food of the people, as they have placarded it all over Great Britain. Here is a case where it means a tax off the food of the people. Surely, from that point of view it should have appealed to the best instincts of hon. Gentlemen opposite. Those of us who are sincere in desiring to do what is for the ultimate good of the country would take pleasure in seeing a test of this description so that we might not either on these benches or on the benches opposite be continually hoodwinking the people as to whether Tariff Reform or Free Trade is good for the country. I should think it would be of enormous advantage to the House and to the country for that, if no other, reason if the Government could see their way to accept the Amendment before the House.

Mr. OGDEN

A few of the speeches which have been delivered from the other side of the House appear to me to be most illuminating to those of us who hold rather strong views on the subject of Colonial Preference. The right hon. Gentleman on the Front Opposition Bench condemned the attitude which we take on all questions affecting Colonial Preference because of what he called two formulas, but, whilst he poured ridicule on those two formulas, he carefully abstained from any attempt to deal with them or to disprove them. The right hon. Gentleman said that in scientific taxation, which appears to me as much a formula in the mouths of hon. Members opposite as any phrase which is in the mouths of hon. Members on this side of the House—and nobody has yet accurately defined scientific taxation—nobody would for a moment propose to tax raw materials coming into the country. Why not? I should like the right hon. Gentleman to answer that question.

Mr. SPEAKER

I would remind the hon. Member that he is travelling rather far from the subject before the House, and I hope he will see his way to confine himself to the Tea Duty.

Mr. OGDEN

I am a new Member and not quite familiar with all the Rules of the House, but I did understand it was competent for one hon. Member to deal with a statement made by another hon. Member.

Mr. SPEAKER

That altogether depends upon how the first statement was introduced. If it was simply introduced as a matter of illustration, and if every hon. Member who subsequently spoke insisted on following it up, we should never approach the real question. The Amendment is that moved by the hon. Member for Sheffield, and, if the hon. Member had listened to the Debate, he would have heard that I have been endeavouring very hard to get hon. Members to confine themselves to that topic, and not to go back to the Debate we had last week. I hope the hon. Member will not follow the bad example set him by his predecessor.

Mr. OGDEN

It appears to me, whether it is adopted piecemeal, as is suggested by the Amendment, or whether it becomes part of a more comprehensive plan of the fiscal system of this country, Colonial Preference involves, not the harmony of the Empire, but discord and a very great deal of friction between the different parts of the Empire. The illustration the right hon. Gentleman himself employed shows how liable you would be under a system of Colonial Preference to promote discord between the different parts of the Empire. He asked in the event of preference having been given to Canada what would prevent Australia complaining that we did not give them a preference on their raw material. It appears to me if you are going to have one great self-governing Colony in the Empire complaining that they are not fairly and equally treated with other self-governing Colonies, you are not by that means going to promote that harmony and peace which are the vital elements in the endurance and prosperity of the British Empire. The right hon. Gentleman said he had himself heard the Chancellor of the Exchequer over and over again, when the Irish Members complained of the taxation upon Ireland, justify the taxes he was imposing by saying that, although he was putting an additional tax upon them in one direction, he was at least giving them a compensating advantage in the way of old age pensions and other concessions embodied in the Government's proposals. The right hon. Gentleman opposite could not for the life of him see why, applying the same principle, we could not give an equivalent to people who would suffer by the taxation of food in this country. How could an equivalent possibly be given to working men in receipt of about 25s. per week to compensate them for what they would suffer by having the necessities of life taxed under a system of Colonial Preference? Would you propose a remission of the tax on tobacco, or beer, or whisky, as in any way compensating for a burden like that? Is that to be argued and seriously put forward as an alternative to food taxes? Even if it were put forward, it appears to me it would be perfectly reasonable for working men to say, "We cannot accept social reform at the price of food taxes, because social reform is already due to us. We ought to have social reform, and we ought not to be burdened with food taxes as the price for it." Therefore, it seems to me, notwithstanding the ridicule which has been poured upon the formulas, which, after all, are the great bulwarks of Free Trade and which must be maintained until they can be disproved by the advocates of the other system, we cannot afford to introduce the principle of Colonial Preference at such a cost.

Mr. HENRY TERRELL

This Debate has disclosed in a very remarkable way the peculiar feature of what I may call the Free Trade mind. We are endeavouring to reduce a tax upon a necessary article of food; a tax, moreover, which is paid in very great measure by the poor classes of the country, and hon. Members opposite oppose that remission. The hon. Member for Islington said that, if you reduced the tax on Indian tea and left the tax on the China and Java tea, you would injure the Chinaman and the Dutchman. That may be true, but what concern have we with the Chinaman and the Dutchman as compared with the interests of the Englishman? We are not going to maintain taxes upon the people of this country for the benefit of the Chinaman and the Dutchman. Why should the poor people in this country pay a tax upon their food simply because it will benefit the foreigner? That is one of the principles on which Tariff Reformers go. Our first concern is the benefit of our people and not the benefit of the foreigner; whilst hon. gentlemen opposite, whenever this question is introduced, seem to consider, "How will you injure the foreigner?" and not "How will you benefit the Englishman?"

During the course of the Debate an hon. Member on the other side has asked what benefit India and Lancashire would get out of it. If that hon. Member had read the speeches of the High Priest of Free Trade, Mr. Richard Cobden, he would have seen the answer to that question. If we reduce our tariff on the tea coming from India and leave the high tariff on the tea coming from China, the result must be that more tea will be imported from India and less will come from China and other foreign countries. That must increase the prosperity of India, and, if you increase the growth of tea in India—that important industry in India—you increase the purchasing capacity of India, and therefore the amount purchased from Lancashire. You thus increase the prosperity of Lancashire. If you work out the problem, it is simple enough. It will be seen that the more you increase, by means of taxation, the purchasing power of those countries which are connected with us, either as Dominions or Colonies, or Crown possessions, the more you increase the prosperity of those countries which desire to deal with England rather than with a foreign country. This is essentially part and parcel of the principle advocated throughout the country by Tariff Reformers. Take off the taxes upon those articles which we do not produce ourselves and reduce the taxes, so far as we can, on all articles of food. If you do that, and, at the same time, put taxes on other articles which we can manufacture at home, you will thereby increase our prosperity, increase the prosperity of our Colonies, and do that which we have always preached—i.e., minimise as far as possible, the evils of unemployment in this country.

Mr. BARNES

I am not in the least concerned as to the chances of favouritism for Dutchmen or Chinese, as compared with men within the Empire. It seems to me that this particular proposition lies within a very small compass. I want to put the two little points before this House which induce me to give my vote against this particular proposal. Unlike the hon. Member who spoke a little while ago from the other side of the House, I look at this matter entirely from the view of how it will affect the working people of this country, and all these other considerations about Empire building, preference, unemployment, and so on, are matters, to my mind, more or less in the air. If I thought that the working people of this country would get the full benefit of this remission of taxation, I should vote for it. I should not be concerned very much about the millions this duty gives to the Government. It is the duty of the Government to find the money, but, if I thought the working people would get the full benefit of the remission, I should vote for it. It appeared to me at first sight that inasmuch as the great bulk of the tea comes from within the Empire, the remission of the tax upon that part of the tea imported might determine the price to the whole of the nation, and that the working people would get the benefit of it, but a little consideration has rather knocked the bottom out of that idea. If you remit that taxation upon tea coming from within the Empire, and leave the taxes on tea coming from China and elsewhere, you will prevent the free trade in that commodity now going on with various foreign countries, and by that means you might increase the price to a far greater extent. The abolition of free competition between the countries who now supply us with tea would act to our disadvantage, and prices might be sent up again to their original level. I would suggest to hon. Members opposite that this point might be met by Tariff Reformers in this matter. The other argument, to my mind, is equally strong. I want to abolish the Tea Duty. I want to take off the duty of one penny so far as tea that comes from within the Empire is concerned; in fact, I want to abolish the duty altogether. But I do not want to do anything that will stand in the way of the abolition of the whole duty. If you once begin to differentiate between the tea of one country and another you will, in my opinion, be doing something to perpetuate the tax. If you were to pass this Motion now, you would impose a tax in future of 4d. or 5d. upon tea coming into this country. You will also be setting up vested interests. You will have to make arrangements with foreign Powers. The difficulty of knocking off this 2d. would be much accentuated by the complication that would be introduced into the trade by this differential basis. I am, therefore, in favour of retaining the tax of 5d. all round. I notice there is another Motion on the Notice Paper in favour of knocking a penny off altogether on the tea coming from India, and if anyone can persuade me that the consumer in this country is going to get the benefit of that penny. I shall be prepared to vote for it, irrespective of the Government in power. But I am going to vote against this proposal because I believe it will lead to the creation of vested interests, and make more difficult the eventual total abolition of the Tea Duty.

Mr. A. St. G. HAMERSLEY

One finds it difficult to see why he should not vote for this penny reduction all round, as a step in the direction we wish—the total abolition of the Tea Duty. I presume, if financial arrangements could be made, both sides of the House would be prepared to abolish the whole duty, and the real reason why it is not abolished is because the Chancellor of the Exchequer cannot find the money elsewhere. But surely the right hon. Gentleman knows that a reduction of one penny this year would help towards a reduction of one penny next year, so that, in a few years, it would be possible to abolish the duty altogether, and it would give the Chancellor of the Exchequer time to provide the money from other sources. It surely would be better for him to agree to the penny reduction now in the hope that he will be able to do better another year. I listened with great interest to the remarks of the Under-Secretary for the Colonies, in opposition to the Motion of my hon. Friend. The financial side of the question which he raised has, of course, been dealt with over and over again. I think we have fairly shown that if the duty was taken off Colonial or Empire produce other articles on which duty could be put could be found to make good the loss to the Exchequer. The one point I wish to make a few remarks upon was that raised last Thursday which was put forward as one of the chief objections by the Under-Secretary for the Colonies, who said that if we granted Colonial Preference to one portion of the Empire we should very likely find other portions of the Empire demanding it, and that would create dissension in the future. That was the burden of his song last Thursday as well as to-day. But I would remind the hon. Gentleman that in different parts of the Empire this process has already been gone through to a very large extent. A beginning has been made in the cases of Canada, Australia, and Africa, where each province and each State has entirely different financial arrangements and an entirely different fiscal policy. All these different fiscal policies have had to be subordinated to the general interest. Both in the case of Canada and the Commonwealth of Australia this has been done. So we say that in this case of Empire for the sake of forming one fiscal policy for the whole Empire we can sink our differences. The Dominions are willing to sink their differences in order to secure the benefit of the whole. Is it likely that for one moment Africa will be offended by any preference given to Canada, or that Canada will be offended by any preference given to Africa? If this Motion is passed to-day does the right hon. Gentleman think for a moment we shall hear tomorrow or at any other time complaints from any one of our Dominions over the sea that we have taken off the 1d. duty on Empire-produced tea? I think they would only welcome it; they would not say a word about it. They would welcome it as the beginning of what they have asked for over and over again. I have taken part in deputations to Sir Wilfrid Laurier on questions of this kind, and I think when the Under-Secretary sees the full report of those deputations he will find they were very different to what was represented by the short extracts that were sent over to this country by cable. One of those deputations to the Premier of Canada (Sir Wilfrid Laurier) asked him to take off the duty on lumber coming from Canada for the sake of the Canadian trade, and the reply was that with a scientific tariff in this country they would not put any duty on lumber coming in from America. I have no doubt, when the full report of the deputation is received, it will be found what they applied for and what they wished to prevent was not any question of Colonial Preference or duty upon wood, but preventing any duty being put on lumber coming into the country. The whole burden of the arguments on the opposite side have been, as far as I have been able to understand, to the effect, Why should we help our people in our own Empire rather than the foreigners, and why should we do anything that would create any disturbance in the Empire? I hope and trust in the few remarks I have made I have shown that this is not a question of creating distrust or trouble in the Empire, and as far as the foreigner is concerned, we on this side of the House wish to do everything under our policy of Tariff Reform or Colonial Preference to build up as far as we possibly can the industries and the manufactures which exist in our own Empire, and to let the foreigner look after himself. That is the sole object of our policy as far as that is concerned, and my earnest hope is that before long this House will agree with it on both sides of the House, and will see that it is the true policy for this Empire to follow, because we look to the rest of our Empire for our markets in the future, and we cannot maintain those markets unless we support them by this policy of Colonial Preference.

Mr. TOULMIN

We have been several times requested by Mr. Speaker to come back to tea, and I will not go deeply into the speech which has been delivered by the hon. Member who has just sat down. But I would point out to him that many of his arguments rather go to support a system of Imperial Free Trade and not one of preference. If tariffs can be absolutely removed, as they were in the interior of Canada, or in the interior of Australia, that is quite a different proposition to the system of modified hostile tariffs which the system of preference would still leave. Lancashire cottons would still be subject to the 25 per cent. duty of Canada, and the payment for that would be that we should pay rather more for our corn—not a very good bargain for Lancashire. But I wish to take the House to the effect of this proposal to give a preference against China and Java in connection with this Tea Duty. China and Java are, both of them, great customers of Lancashire. From China we take a considerable amount of tea, and China has taken and still takes a great deal of cotton. The amount of tea which we have been able to take from China has, as has been pointed out by previous speakers, considerably decreased. America takes more China tea, and America is one of our great rivals in China in the cotton trade. Wherever you have a preference you have a victim, and it has been pointed out you are going to make your victims in this case China and Java. Victims sometimes retort, and suppose China says, "You are victimising our tea; where can we strike back?" Why, the easiest thing in the world for China, if she wishes to strike back, is to strike at our cotton trade—to tax Lancashire cottons and not American cottons. She now imports Lancashire cotton instead of American cotton. You have there a very simple answer to this preference, to which, as far as I can see, we should have no argument to give in reply. It very frequently happens that the persons who argue in favour of policies of this kind look only at one side. They look only at its possible action without looking to the possible reaction. It is said, "You will have your reward in India." We have at present a vast share of the Indian cotton trade, but, in my opinion, more harm will be done to our trade in China than we can possibly receive benefit in India. And there is another aspect. There is a certain amount of demand on the part of the capitalists engaged in the Indian cotton trade that the equality which Lancashire now has should be removed, and that India should be permitted to take off the internal duties on cotton, and thereby the Indian producers of cotton goods should have a preference against Lancashire. If you are going to adopt a policy of preference, how can you say that if the producers of tea in India are favoured, the producers of cotton shall not be favoured. If once you break down the line of equality in India I think your position will be much less strong than it is at present with regard to the cotton industry.

If preference is to be begun, where is it to be begun? One speaker said that we were not to look at the sordid question of what we are to get out of it, but it is one bundle of sordid questions, and you would have the whole of the Dominions considering the sordid question of how they should levy a tariff so that they should have some little pull, and we should be considering how we should get some little pull in some line of trade to give to one part of our traders or the other. But here you are suggesting that you should begin, not with somewhere where there is a preference, such as Canada, but with another part of the Empire. The hon. Member for Walsall (Mr. R. A. Cooper) laid down a proposition which I do not think he can prove exactly, and that is that whether the consumer pays the tax or not varies according to the amount of competition. I do not think that is a mathematical proposition at all. It does not vary according to the amount of the competition. A very small amount of competition may bring prices down much more than a corresponding or proportionate amount. That is well known in an instance which is familiar to the whole of the House in regard to the French corn trade, where there is extremely little introduced. But because there is a duty, the price of the whole of the corn in France is very greatly raised, and in this case I feel very much inclined to believe that, suppose the House were to adopt this preference, the shutting out of a certain amount of competition would mean that, while the revenue would lose the whole of the £1,000,000 which is suggested, the consumer would not get that £1,000,000, but it would go as a bonus to the producers of Indian teas, and the price would not be reduced. My main reason for objecting to this, while I do hope the House will reject it by an overwhelming majority, is its effect upon China, where it would induce the Chinamen to show themselves very hostile to the Lancashire cotton trade.

Mr. PAGE CROFT

With regard to the remarks of the last hon. Member we are used on this side of the House to hearing arguments in favour of the foreigner. The argument is now in favour of the Chinaman, fear being expressed whether he may not retaliate upon some particular industry in the constituency which is represented by the hon. Gentleman who has just sat down. I venture to think that there is a vaster and bigger outlook in regard to this question than has perhaps been considered by hon. Gentlemen on the other side, as we have here a possibility, without violating any one of the strongly held principles of His Majesty's Government, of showing an act of friendship to our own people in the British Empire. An hon. Gentleman who addressed the House from those benches told us that they could not accept social reform at the price of food taxation, but I would remark that at the present time the food taxation and other taxation of the working classes is practically the mainstay of what small attempts at social reforms the Government have introduced hitherto. But what specially interested me were the remarks of the hon. Member for the Blackfriars Division (Mr. Barnes), who said, quite frankly, that he did not care for Empire building.

Mr. BARNES

I said nothing of the kind. I said that this particular proposal, in my view, had no connection with Empire building, unemployment, and many other subjects.

Mr. PAGE CROFT

I am quite prepared to accept what the hon. Gentleman says with regard to that, but I think he said all these questions were in the air. It is quite a sufficient explanation which he has given, and what I would point out is that preference is the means of more employment. Once you establish the principle of preference in this country you have the chance of doing something which the hon. Gentleman is unable to understand at the present moment—something for his fellow-workmen. In this connection perhaps he was not in the House when the right hon. Gentleman the President of the Board of Trade, in reply to my question, told us that in the case of the preference in Canada British trade in Canada had increased from five odd millions to fifteen odd millions. (An HON. MEMBER: "Increase of population."] Increase of population has nothing whatever to do with it, because the trade was going down year by year until preference was introduced, and the hon. Member for Blackfriars was not aware that in that particular case the preference in Canada, amounted to five millions of wages to the workers in this country in consequence of it. In the case of the Tea Duty he gives us the interesting information that we shall increase the price of tea by taking part of the duty off. I am connected with a business of a somewhat similar character under the same kind of competition, and I cannot follow the hon. Gentleman's argument. It seems to me, if you take part of the duty off an article the tendency must be in the other direction if it moves at all, but I am willing to assume in some cases the price may not move. I should like, however, to know how you can prevent competition by lowering the price of one part of the commodity on the market. That was the interesting problem put by the hon. Gentleman. I do not see how this is possible as a business argument. If you lower the duty on a certain commodity, I think that everybody who has been connected with business will agree that the lowest-priced commodity, if it is of the same quality, will in future rule the price of the article in the world market. In my business I may buy one kind of article, and I find in consequence of some natural advantage that I can offer my goods at a cheaper rate, and in consequence my competitors have all to come down to that price. It is the cheaper article which always dictates the price with regard to these kinds of commodities. Then my hon. Friend said it was difficult to take off the 2d. Of course it is; it always is difficult. All Free Traders are going to take off the whole of the duty, but up to the present it had never been possible, but it is said it is difficult to take off the 2d., and if we give this advantage or preference to one, you must give a preference all round.

My hon. Friend pointed out, however, that at least hon. Members would have a real opportunity of taking duty off the working man's tea and putting it on articles which are not produced by labour in this country and which are luxuries. So they will be able to do it that way, even though they hesitate to put the duty on articles which we can produce, and which will give more employment to those whom they are supposed to represent. China tea is a luxury, so that every part of this remission of duty would go to the workers of this country, and those who desire to have the luxury of China tea can afford to pay the extra penny. There is no real question of competition at all. It simply means that you are going to put a slight imposition on tea which is more of a luxury than Indian tea, and therefore the rich will have to pay a little more than the working man does. But here you have a remission of duty, and the whole advantage would go to the working classes. It will have nothing to do with how the hon. Member will vote on the next Amendment, because he is perfectly well aware that that cannot be considered. Here is a chance of taking a penny off nine-tenths of the taxed tea, and I cannot understand their reluctance to do something in the direction of bringing down this food tax, which they are always so ready to condemn on the platform but which they do nothing to reduce in this House. But I think there is a bigger question than any of those which have been considered sordid bonds on the other side. I believe the other parts of the Empire would rejoice to see that we, for the first time, have really done something to show that we prefer to give better terms to our own people within the British Empire than to those outside, and I hope the Government will take this opportunity of reducing this duty on the working man's tea, and at the same time do something to bring close together, by the only ties which can possibly be lasting—namely, commercial ones—this great heart of the British Empire with its other members.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse)

The hon. Gentleman who has just spoken differed profoundly from the right hon. Gentleman (Mr. Lyttelton) in that whatever may be the strength or the weakness of his arguments, he, at all events, has his eyes upon the people who reside in these Islands, and he is not concerned, as the right hon. Gentleman was wholly concerned, not with the welfare of the people of this country, but with what might happen to the people in the Colonies. The whole of the right hon. Gentleman's speech was to this effect, "What can we do to prove to our Colonial Empire that we are ready to make sacrifices for them?" He never dwelt for a moment on the fact that the sacrifices which must be made, if they are to be made at all, for the benefit of the Colonials must be made at the expense of the people of this country by increasing the prices which they must pay for what they buy. But that was not at all the argument of the hon. Member. He had in his mind the idea that you could take a penny off tea and thereby give a certain amount of employment to the people of this country and reduce the price which was to be paid for the tea. But unfortunately for the hon. Gentleman this Debate has taken place not for the first time in this House, and it has been agreed by every Chancellor of the Exchequer that I can recall and by every Government that I can remember, that it is not the slightest good from the point of view of the consumer to take a single penny off tea. If you take only a penny off the whole of the profit goes not to the consumer but either to the purchaser or the middleman who is dealing in the commodity. Therefore as far as tea alone is concerned, if we are to reduce the duty at all it must be reduced not by a penny but by twopence. Do hon. Gentlemen opposite think you could reduce the duty by twopence this year, and that under the conditions of the present moment you could find the £2,500,000 from some other source which might go to replace the revenue which the duty produces? We do not know any other source from which at this moment that sum could be found. Therefore from the pecuniary point of view we are unable to accept this proposal.

It was pointed out earlier in the discussion that this is the first time that the question of India had been introduced into these Debates. What would be the effect upon India of giving this preference? It is worth while to recollect what we buy from India and what India buys from other countries. India at present buys from us something like £50,000,000 worth of goods. The effect of this remission of duty might be to influence trade to the extent of a few hundred thousand pounds. I think the 17,000,000 lbs. of China tea which is brought into this country represents something like £300,000 or £400,000. That is the extent of the benefit which India would derive from the acceptance of this remission. Take the question of Java. Java exports, I think, 14,000,000 lbs.

Mr. BONAR LAW

21,000,000 lbs.

Mr. HOBHOUSE

That includes 7,000,000 lbs. which come from Holland. You do not know where it comes from. I challenge the hon. Gentleman to say how much of that 7,000,000 lbs. he can definitely say comes from Java. Is there no trade between India and Holland or between China and Holland? I do not think the hon. Gentleman will assert that proposition. For the purpose of the argument of Java pure and simple we must adopt the figures of 14,000.000 lbs. There again you get something like £200,000 or £300,000, which might be diverted under all possible circumstances to India. But there are other things than duties and prices which prevail in the purchase of goods. The question of taste and of sentiment comes in as well. If you are accustomed to buy a particular article you will go on buying it if you can afford to do so, though you may have to pay 1d. or 2d. a pound more. You will not divert trade from China or from Java to Ceylon or India simply because there is 1d., or something of that sort, increase in the price of that particular article. A person who is accustomed to buying from a particular source will continue to buy from it in spite of this small difference which is proposed under the Amendment. But there is one point with regard to this Amendment which is well worth notice. The hon. Member (Mr. Hope) moved it in the form that tea produced in the British Empire should pay a duty of 4d., but he said he was not very much wedded to that proposal, and he was quite prepared to drop it at a moment's notice, to reverse the whole of his arguments, and to suggest, not indeed that the tea which is grown within the British Empire should be reduced, but that the duty on tea grown outside the Empire should be increased to 6d. That is an entirely different proposition, and it will increase very considerably the tax upon a very large proportion of the tea which comes into this country. The two proposals would have very different effects.

Mr. JAMES HOPE

I suggested graduation, which would not increase the total burden.

Mr. HOBHOUSE

I understand that the right hon. Gentleman (Mr. Lyttelton) accepted the substituted Amendment. I do not know which horse they are going to ride, but it is quite certain that they cannot ride both at the same time, and I am certain that either one or the other will give them a fall before they have done with it. Therefore we come to this, that India can take no particular advantage from this proposal, that the United Kingdom can take no particular advantage from it, and it then comes down to the question of the Crown Colonies. The right hon. Gentleman administered quite unnecessarily and unjustifiably a lecture to the right hon. Gentleman (Colonel Seely) on the work of the Crown agents. The right hon. Gentleman was entirely wrong in what he said. He said the Crown agents gave a preference, and that that was a reason why this preference should be adopted in the financial treatment of the Crown Colonies. But they do nothing of the sort.

Mr. LYTTELTON

I said nothing of the kind. I said the Crown agents first issued the loan for the Crown Colonies, and in return for that the practice for many years was that they gave English manufacturers the first chance of contracting for manufactured goods which the Colonies themselves could not produce.

Mr. HOBHOUSE

I am in the recollection of every Member who is in the House, and the right hon. Gentleman gave, as a reason for giving to the Crown Colonies a preference in this respect, the fact that they already received preferential treatment through the agency of the Crown Colonies.

Mr. LYTTELTON

Preferential treatment to our manufacturers.

Mr. HOBHOUSE

I will accept both, financial and commercial. I think if the right hon. Gentleman will refer to the OFFICIAL REPORT to-morrow he will find that I am right. I have made inquiries as to what happens in regard to the operations of the Crown agents, and I am not content to rest my case upon what happens now, since the right hon. Gentleman has left the Colonial Office, because, of course, he could not necessarily be acquainted with the present practice. I am content to found myself on what took place in the past, and I find that in the case of every loan which is proposed to be issued under the authority of the Crown agent the prospectus clearly states that the Imperial credit is not any way pledged either with regard to the repayment of interest or of principal, and all that the Crown agents do is what can be done and is done by many private banks in this country. They act as the bankers in this particular transaction, and there is therefore no preferential treatment in that respect. It is a mere commercial transaction which might be done by any bank, and is done by some banks without any preferential financial treatment at all. Now I come to the question of the commercial preference. Colonial Regulation 379, which the right hon. Gentleman has possibly forgotten, and to which I should not have alluded had he not been so severe on my right hon. Friend, says:— All requisitions from the Colonies for stores required from the United Kingdom or from countries not being adjacent to the particular Colony. Where is the preferential commercial treatment there?

Mr. LYTTELTON

Will the right hon. Gentleman say it is not the duty of the Crown agents first to offer the business to manufacturers in this country before they go abroad? I say it is.

7.0 P.M.

Mr. HOBHOUSE

The right hon. Gentleman challenged me as to whether it is not the duty of the Crown agents to give to merchants in this country the first offer of orders for goods required for the Colonies. That is the proposition. I am informed, on the authority of——

Mr. LYTTELTON

made a remark which did not reach the Reporters.

Mr. HOBHOUSE

The right hon. Gentleman should not be again too premature in his interruption. I do not know that I interrupted the right hon. Gentleman. I think I am entitled to make my own remarks. They are civil, and I think they are polite, even if the right hon. Gentleman does not think so. I am told it is not the case that the Crown Agents should act in the way suggested. My right hon. Friend denies that it is the case and more than that, if the right hon. Gentleman opposite (Mr. Lyttelton) will refer to the Report of the Crown agents, he will see that the treatment accorded to merchants by the Crown agents of the Colonies is identical with that of the Indian Stores Department, with which I am more familiar. The Indian Stores Department do not give preferential treatment to merchants in this country. Their object is to buy the best article at the lowest sum at which they can procure it in the markets of the world. That, and that only, is their object. There is none of this preferential treatment to which the right hon. Gentleman refers. [AN HON. MEMBER: "Shame!"] I confess I do not think it is a shame to give the same treatment for the people on behalf of whom you are dealing as you give to yourself—namely, to buy the best possible article in the cheapest possible market. That is a business sentiment which appeals to Gentlemen in this House in their private capacity. Therefore we come to this fact: that we are considering a new proposal, from which neither the Colonials, in the case of merchants resident in Ceylon or India, nor our own people at home, would derive any benefit at all. The Noble Lord opposite was the only person who argued this question on the basis on which I think it ought to be argued in regard to a fiscal resolution of this sort—namely, that a reduction should be made purely and simply from the point of view of taxation on the people of this country. It cannot be denied that every Member of this House when he finds himself in Opposition votes against this tax, and when he finds himself on the side of the Government votes in favour of it. Hon. Gentlemen opposite who are going to vote against it to-day have supported the tax when a Unionist Government was in office. The real fact of the matter is that revenue has to be raised, and, speaking entirely for myself and not for my colleagues, I say that while food taxation of any sort is undesirable, yet if the working classes are to take, as they are entitled to take, a great share in the government and control of this country, it is not unfair that some burden should be placed upon them corresponding to their share in the government. If that revenue is to be raised, it may he necessary, undesirable though it be, to raise a portion of it by means of taxation on some article of food. That is the proposition which I laid before my Constituents before they elected me to this House, and they knew well that I would support this tax. I propose to do so to-day. We have reduced not only the burden of taxation by a considerable amount, but we have substantially relieved during our term of office the burdens which lie upon the poor people of the country, both directly and indirectly. We refuse, both on practical and theoretical grounds, to yield to the proposal which has been made. If it were possible to get rid of food taxation, I believe both parties and Governments would be delighted to do so; but it is not possible. The proposal now made would not relieve the consumer in this country, and it would enable the middleman and the producer abroad to impose further taxation on the tax-payers of this country, which they could ill-afford to bear.

Mr. BONAR LAW

The right hon. Gentleman (Mr. Hobhouse) made what I might call the pièce de résistance of his speech an examination of the incidental illustration given by my right hon. Friend the Member for St. George's, Hanover Square (Mr. Lyttelton). My right hon. Friend stated as a matter of fact in regard to the business done by the Crown agents in this country that two things happened—first, that the different Crown Colonies, instead of raising the amounts of their loans on the credit in every sense of the word of the particular Colonies, raised them by means of the agents as a whole, and therefore got the benefit of the credit which results from the transactions. What does the right hon. Gentleman say? He says it is specially stated in these loans that the Government of Great Britain it not responsible. Does anybody in this House, or out of it, say that anyone ever suggested that they were? Does the right hon. Gentleman say that, in the issue of any loan or in the raising of money in any shape or form, the issuing house is not a thing which tells with the public and therefore has a distinct influence with the lending public? My right hon. Friend said that if they have raised money, the Colonies, in so far as articles have to be bought which are not produced in the Colonies, do give a preference to British manufacturers in the supply of them. That is his statement. He did not say it was due to any written law. He said that during all the time he was at the Colonial Office, and previously, that had been the fact. What does the right hon. Gentleman opposite say? He says, "He is all wrong. I was Chairman of a Committee and I know all about it." My right hon. Friend and I have both looked carefully through the Report of the Committee of which he was Chairman, and there is not a word to indicate that there has been any change in that respect. I challenge the right hon. Gentleman to say that there is any indication in the Report of any change. But there is more than that. From a party point of view I ask nothing better than that this House and this country should realise that our Government have given the Colonies all the assistance they can get in the raising of money; that up to now, in return, we have got work for our people in connection with our manufactures, and that the first thing this Government does is to say, "We are going to turn round and treat all countries alike." I believe I am right in saying that there is not a word to indicate that they have made that change. They have not only taken that trade away from our manufacturers, but they have done it clandestinely.

Colonel SEELY

Perhaps the hon. Gentleman will allow me to clear up what appears to be a mystery. The right hon. Gentleman opposite assumed that I had no knowledge of the working of the Crown agents. I do understand them, for I have been Chairman of a Committee examining into the work of the Crown agents for many months. We have examined a great number of witnesses, and, in point of fact, it has always been the rule, so far as I am aware, that the Crown agents should get the best article in the cheapest market.

Mr. BONAR LAW

The House seems to be satisfied with that statement. Either the right hon. Gentleman was right in his correction or he was wrong. I am willing to leave the interruption and the speech of the right hon. Gentleman to the judgment of the House. Then the right hon. Gentleman, in the course of his speech, brought in another allusion which I thought was especially interesting. He said every Chancellor of the Exchequer, without exception, has stated that there is no use taking off merely a penny of the Tea Duty, and that to get any advantage for the consumer you must take off 2d. I am not certain at all about every Chancellor of the Exchequer. That statement is quite untrue. The present Prime Minister when Chancellor of the Exchequer did make the statement in one year—I think it was in 1906—and I thought it was one of the most ridiculous statements I had ever heard from anyone in his position. The same Chancellor of the Exchequer came down to the House next year and took off a penny, and that, forsooth! is the ground on which the Financial Secretary tells us there is no good in taking off a penny. I am perfectly willing and ready to admit that the principle of Colonial Preference within the Empire has not its strongest illustration in the case we are now putting before the House, but I do think it is not entirely devoid of strength from that point of view. It is perfectly true that the great bulk of our tea comes from countries within the Empire, and that we cannot do more than change the duty on a small part of our total import. But. I remember being told in this House—I think it was by the Member for West Islington (Mr. T. Lough)—that there is an immense increase in the growth of Java tea. It was for that reason I asked the Under-Secretary for the Colonies what the figures were. The figures show most clearly that there is no doubt there has been a very rapid expansion in the production of tea in Java. When we remember the fact, which is within the knowledge of every one of us, that the tea trade has changed within a very short space of time from China to India, is it unreasonable to say that if this tea production in Java grows up the trade may not within a very short time be a serious competitor with India, even in our market? I wish to point out that from the point of view of the effect of a preference, whatever it is, the advantage is very often far greater in preventing a competing trade from growing up, than in giving a benefit to an existing trade after it is in full growth and in full competition with the tea trade. The Under-Secretary for the Colonies says this policy of preference is political. Well, so it is. The right hon. Gentleman (Mr. Hobhouse) said the hon. Member who moved the Amendment wished to get a preference on tea grown in the British Empire by a reduction of the duty or by imposing an extra duty on foreign tea. He asked, "Which horse do you ride?" I do not care a fig. Both policies mean Colonial Preference, and I am prepared to see either horse put on the racecourse and got to the goal. I say that the ground on which we desire this preference is political. The effect it will have will be to increase the trade of the Empire, and we believe to improve the relations of the different parts of the Empire. I wish to bring before the House two great tendencies which have been referred to as having occurred in the last two or three years. I am sure there is no Member on either side of the House who does not realise the immense change in the last few years which has taken place in the possibilities of preference within the Empire. For instance, at the Colonial Conference in 1907 the Prime Minister of Cape Colony, I think, pointed to the intermediate tariff of Canada, and to the effect it might have in preventing preference within the Empire, and he pointed specially to what that effect would be if such an arrangement were made between Canada and the United States. Sir Wilfrid Laurier actually interrupted the Prime Minister of Cape Colony—remember, Sir Wilfrid Laurier is himself the strongest advocate of Colonial Preference, and, indeed, I should not like to let an opportunity pass without saying that I think all people in this country, whatever side in politics they belong to, owe a deep debt of gratitude to Sir Wilfrid Laurier and his financial Minister, Mr. Fielding, who, I understand, is in this country now, for having been the very first to start a system which, as the present Chancellor of the Exchequer has told us, has been of enormous advantage to our trade, and now has been extended throughout most of the Dependencies of our Empire—Sir Wilfrid Laurier actually got up and said, "Do you think it probable we would be transferred to the United States?" He said it by way of sarcasm, and referred to it again and said this, "Once we did desire reciprocity with the United States, but our aim was rejected. We have turned our back on that trade now, and look forward to the British Empire for the expansion of our trade." That was only three years ago, and yet the very contingency which Sir Wilfrid Laurier then laughed at is the contingency that is now taking place, and the treaty probably on these lines will, within a few months, be negotiated between the United States and Canada. Another point which was referred to by my right hon. Friend the Leader of the Opposition was, as he said, that without any exception all the Colonies had always urged a question of Colonial Preference.

Colonel SEELY indicated dissent.

Mr. BONAR LAW

Let the right hon. Gentleman the Under-Secretary for the Colonies make quite sure that what he advocates is in the interests of the Colonies and is really desired by the Colonies. What greater proof can we possibly give of a universal, a practically unanimous, feeling that persistently and with patience the Colonies, without any exception and whatever party is in power, have held to the demand for a Colonial Preference, and it is because they steadily press——

Colonel SEELY indicated dissent.

Mr. BONAR LAW

What is the good of the right hon. Gentleman shaking his head? He brings up here, as against the representatives of the Governments of these Colonies, some ridiculous deputation of which he sees a telegram in the Press. If some body of English traders sent a deputation to the Chancellor of the Exchequer urging a duty on some commodity in this country, will the representatives of the Government in Canada at once say to you, "England is all against Free Trade and in favour of Tariff Reform"? If ever there was a subject in this world upon which the Colonies have shown unanimity it is this. From the first Colonial Conference in 1887, and at every subsequent conference without exception——

Colonel SEELY

indicated dissent.

Mr. BONAR LAW

I do wish that the Under-Secretary for the Colonies would inform himself a little more upon the matter. Without a single exception at every Colonial Conference practically the same resolution has been put forward, and it has been put forward in this form:—

"We, the Prime Ministers of these Colonies, will urge our Dominions to give a preference to the United Kingdom, and in return we urge the United Kingdom to give a preference to us on any duties which now exist or any duties which may be subsequently imposed." That has been the universal wish, and if the right hon. Gentleman really denies it, it only shows something that I will not describe. At the last Conference—and that is why it is peculiarly relevant to this Debate—the Prime Ministers of these Colonies pressed upon the Government that they would deal with preference on existing duties. even if they could get nothing more. It was a demand which was very difficult for the Government not to yield, and it seems to me that even the present Government admittedly had only two alternatives before them as to the way in which that demand of the Prime Ministers should be met. They could not, of course, as we should have done, say, "We sympathise with you, and we will give you preference not only on existing duties, but so far as we can do it without injuring our own people, and we believe we can do it without injuring our own people, we shall adjust our taxation in order to give you the highest possible amount of preference, in return for the preference which you have given and which you have promised to give." I admit that the Government could not do that, but they had another alternative. They could have said, "We see that you representatives of all these Dominions are urging us to give a preference on existing duties. They are very small. They will not do you any good. We believe that the whole thing is economically unsound, and that you are mistaken; but you have pressed it upon us so persistently that we wish at least to show that we have a feeling of sympathy with you, and we wish at least to show that we are not going to hold off from advancing in that direction on the ground of economic pedantry alone. We will meet you alone where we can meet you without injuring our own trade." That was one possible policy. There was another. There was a policy of meeting the demand of the Colonial Prime Ministers by saying, "We will slam, bar, and bolt the door against you." These were the only two alternatives which I think were open to His Majesty's Government. The first one to which I have referred would have been the policy of statesmen, whatever their views on fiscal questions. The second was the policy of His Majesty's Government.

I must say that the Prime Minister who had to meet the arguments of the Colonial Premiers at the Conference was in a position which I did not envy when I read the account of the proceedings. He was asked: "Why do you refuse to do this? It is not against your principles to reduce existing duties; at the worst it can only mean a little loss of revenue, and it is not against your principles to do that." The Prime Minister said: "It will do you no good. The thing is too small." "Oh," the Prime Ministers answered, "we think it will do us good, and we ought to be the best judges." Then that argument of the Prime Minister goes. Then he turned to the other that has actually been put forward to-day by both right hon. Gentlemen on that bench. They say: "We cannot give a preference of this kind without discriminating against one Colony in favour of another." That argument was dwelt on at length last Thursday by the Prime Minister. I think he said it is a question to which he had never had an answer. He has a peculiar method of viewing the subject. The Prime Minister makes a speech and never dreams of reading what people say in reply to it, and then says that he put a question and never got an answer. He has got an answer dozens of times even in this House when he was not perhaps present. But I quite admit he has a right if he pleases to ignore our answers or our attempts at answers, and to think that they are not answers at all. But he got an answer at the Colonial Conference which he has no right to treat in such a way. He put that argument before the Conference. Dr. Jameson, the Prime Minister of Cape Colony, interrupted him, and said, "Ought not the Colonies to be the best judges of that?" The Prime Minister was undaunted. He went on still with his argument, and pointed out that South Africa was one of the Colonies which would suffer by this discrimination. The Prime Minister of South Africa interrupted him again, and said to him, "Really, do you suppose that we will be injured because Canada gets a benefit on something which we do not export? Are we to be such dogs in the manger that we will refuse to allow Canada to get a benefit because we do not get it ourselves?" That is the answer, the complete answer, given by those who are best able to judge, to that unanswerable conundrum of the Prime Minister. He was driven, therefore, from that position, and what was his answer? Only the words which were contained in the speech read by my right hon. Friend. He said: "We cannot do that because it will involve the principle of treating our Colonies differently from foreign countries." There it is. There is the whole point at issue between us. There may be a difference about the economic side of the business, but I say without the smallest hesitation that if the people of this country understand it, that if they realise that on the question of preference on existing duties the only argument left to these gentlemen is, "We will not treat our Colonies better than foreign countries," they would not be allowed for a day to sit upon that bench.

Mr. VIVIAN

I rise to offer a few observations concerning the speech of the hon. Gentleman who has just sat down. gather that we have been travelling rather wide of the question that is before the House, but I trust that I may be pardoned if I say a word or two in reply to the observations made by the hon. Member who has just spoken. With regard to the problem of the tax on tea imported from the Indian Empire I think it is admitted on both sides that that is just a political move made by each party in turn when in opposition, and, therefore, I think I can treat it with the contempt which it deserves. Whenever I read the speeches of succeeding Oppositions on this subject I see that the game is played by every Opposition, and I do not propose to treat it seriously except to say this, with regard to the suggestion that we are making additional work for our own people by giving a preference to Indian tea, that it passes my comprehension, because I presume even the Chinaman engages in commerce in order to be paid for his tea, just as the Indian would, and all you really do is to transfer your business arrangements from one country to another. You do not really add to the volume of your trade by that particular arrangement. Therefore the argument that you are adding to the volume of your employment really has no foundation in fact. In regard to the suggestion that we should attempt to use our Colonial Office, or the policy of this Government, in order to divert the trade of this country, I say that the answer given from the Government Benches, to me at any rate, is perfectly satisfactory. I do not think we have any right to use the power of our Government to compel or even to press upon the Colonies to buy goods that they require from other than the most satisfactory markets. There is a large number of Gentlemen on that side of the House who defend this principle who would never have been in this House if they would have conducted their business upon that principle. Indeed, I should he surprised if they were not in the bankruptcy court or the workhouse. Indeed, I am not at all sure that it is in accordance with any decent standard of ethics for hon. Members to come down to this House, and press upon the Government or any Government Department a standard of conduct in relation to its business which they absolutely repudiate in the conduct of their own business. I regard it as my duty in every matter in which a Government Department is concerned when dealing with public money to act in precisely the same spirit as I should in dealing with my own private affairs, and if I have a pound of public money to spend on behalf of the public I think it is my duty to see that I get the best value for that sovereign.

I support the Government in their declaration that they will not act contrary to that spirit when dealing with the Colonies. After all, the really important issue at stake is the proposal of a Colonial Preference which has been introduced into this discussion. It is a proposal which would fundamentally change the economic relations, and ultimately, I submit, the political relations of the Mother Country and the Colonies. I have never heard a proposal affecting such vast interests defended with such feeble arguments as those advanced by the hon. Gentleman who has just sat down. What does this proposal of Colonial Preference really mean? Take Canada, which is the most brilliant and remarkable of our Colonies, and probably that which has the greatest career. What will happen if we seriously attempt to introduce preference in connection with Canada? How are you going to impose a tax on imports from the United States, and to take from Canada similar goods free of duty? I ask hon. Gentlemen opposite to realise that they would at once and straightway put Canada into the cockpit of the struggle between the United States and the Mother Country. You will at once compel the United States, with a population of 90,000,000, and growing to 100,000,000, and with all her vast resources, to set about bargaining with Canada as against the attempt of the Mother Country to get a monopoly in the Canadian market. Does anybody believe that the United States will take it lying down? Does anybody believe that, with the enormous frontier of Canada and the United States, where there are interests jostling with one another, and where it is sometimes almost impossible to distinguish between the two territories, or between the two types of citizens there, relations are so close that the United States will really take an attempt of that kind lying down? Straightway, you will at once have a continuous series of bargains attempted between the United States and Canada which would beat anything that we could offer. We are only able in this country to offer a market with a population of 40,000,000. In the case of the United States, they have a population of from 90,000,000 to 100,000,000, and it is increasing at an enormous rate. It is a population which has a large number of attachments with Canada over the borders, because there is an enormous ebb and flow of population as between the two countries. If you put the case, from the point of view of the relations of the United States with Canada in regard to this kind of preference, side by side with anything that we in England can offer, I mean to say that, in the long run, instead of making for the unity of Canada with the Mother Country, it would, as a matter of fact, stimulate in Canada and in the United States, those particular parties who aim at the annexation of Canada to the United States.

Mr. SPEAKER

I think the hon. Gentleman ought to confine his observations to the question before the House. Because some other Members have wandered out of the right path, I hope the hon. Gentleman will not continue to follow them.

Mr. VIVIAN

Then I have very little more to say on the point. In regard to the question of bargaining, it would create conditions which, in the long run, would deprive this House itself, and the country, of control over its own system of taxation, because you would set up interests, whether in India, in Canada, or in Australia, which you would bolster up by means of your system of preference. When you have done that you will have brought capital and labour on to what is called the virgin soil of Canada. Much capital and labour would be bound to flow there, and the profit upon it would be the additional price derived from the taxation on the imports paid by the consumers in this country. When these interests have come into being you will have thousands of farmers, manufacturers, and workmen whose wages and profits will be derived from the inflated prices paid by the consumers in this country. I am now assuming that Tariff Reformers are in power, and that there will be a great Free Trade campaign carried on. When the

Free Trade Government comes into power again the Chancellor of the Exchequer will have a mandate to remove those taxes in the market places of the country, because the Free Trade party in power have pledged themselves to the work-people that they would take them off. The Chancellor of the Exchequer will stand at that Table and bring in his Budget, and amongst his proposals would be one to remove taxes that have been imposed under a system of preference. Look at what would take place in the outer parts of our Empire. There will be businesses all over the Empire bolstered up by these taxes, and directly the news goes across that our Chancellor of the Exchequer proposes to remove the profits which they derive by taking away preference, then it will be seen that you have introduced a force that will not make for the unity of the Empire, and, indeed, I should be astonished if the Empire stood for five years the strain of this method of raising revenue. Those engaged in the businesses would at once send their demands to their Colonial Governments, and bankruptcy would ensue in all directions. I am as proud of our Empire as are hon. Gentlemen opposite, and they have no right to set up as monopolists of admiration for it. I admire our Empire as much as they do, but I say that the only way in which it can be kept together is by allowing those great nations which are growing up overseas—Canada, Australia, and the other Colonies—complete freedom in raising revenue, leaving us complete freedom to do the same, so that the population in this country may not have to pay more for their loaf or more for any commodity in order to purchase the unity of Empire, nor capitalists or workmen in our Colonies be made bankrupt because of any action of the Chancellor of the Exchequer. It is only on these lines I believe that we can keep the Empire together.

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

The House divided: Ayes, 145; Noes, 188.

Division No. 129.]	AYES.	[7.42 p.m.
Adam, Major W. A.	Balfour, Rt. Hon. A. J. (City, Lond.)	Bridgeman, W. Clive
Arbuthnot, Gerald A.	Baring, Captain Hon. G.	Brotherton, E. A.
Archer-Shee, Major M.	Barnston, H.	Bull, Sir William James
Ashley, W. W.	Bathurst, Hon. A. B. (Glouc., E.)	Butcher, J. G. (York)
Attenborough, W. A.	Beach, Hon. Michael Hugh Hicks	Carlile, E. Hildred
Baird, J. L.	Benn, Ian Hamilton (Greenwich)	Carson, Rt. Hon. Sir Edward H.
Baker, Sir R. L. (Dorset, N.)	Boyle, W. Lewis (Norfolk, Mid)	Castlereagh, Viscount
Balcarres, Lord	Boyton, James	Cautley, Henry Strother
Baldwin, Stanley	Brackenbury, H. L	Cave, George
Cecil, Evelyn (Aston Manor)	Hamilton, Lord C. J. (Kensington, S.)	Rice, Hon. Walter F.
Chaloner, Colonel R. G. W.	Hamilton, Marquess of (Londonderry)	Ridley, Samuel Forde
Chamberlain, Rt. Hon. J. A. (Worc'r.)	Harrison-Broadley, H. B.	Roberts, S. (Sheffield, Ecclesall)
Chaplin, Rt. Hon. Henry	Healy, Timothy Michael (Louth)	Rolleston, Sir John
Clay, Captain H. H. Spender	Heath, Col. A. H.	Ronaldshay, Earl of
Clyde, J. Avon	Hohler, G. F.	Royds, Edmund
Cooper, Capt. Bryan (Dublin, S.)	Hope, James Fitzalan (Sheffield)	Salter, Arthur Clavell
Cooper, R. A. (Walsall)	Hume Williams, W. E.	Samuel, Sir Harry (Norwood)
Craig, Charles Curtis (Antrim, S.)	Hunt, Rowland	Sanders, Robert A.
Craig, Norman (Kent, Thanet)	Jackson, Sir J. (Devonport)	Sanderson, Lancelot
Craik, Sir Henry	Jardine, E. (Somerset, E.)	Sandys, G. J. (Somerset, Wells)
Croft, H. P.	Kerr-Smiley, Peter Kerr	Stanler, Beville
Dairymple, Viscount	Keswick, William	Stanley, Hon. G. F. (Preston)
Dalziel, D. (Brixton)	King, Sir Henry Seymour (Hull)	Starkey, John R.
Dickson, Rt. Hon. C. Scott	Knight, Capt. E. A.	Stewart, Sir M'T. (Kirkc'dbr'tch.)
Dixon, C. H.	Law, Andrew Bonar (Dulwich)	Strauss, A.
Douglas, Rt. Hon. A. Akers-	Lawson, Hon. Harry	Sykes, Alan John
Du Cros, Arthur P. (Hastings)	Llewelyn, Venables	Talbot, Lord E.
Duke, H. E.	Lloyd, G. A.	Terrell, H. (Gloucester)
Duncannon, Viscount	Locker-Lampson, G. (Salisbury)	Thomson, W. Mitchell (Dawn, North)
Faber, George Denison (Clapham)	Lockwood, Rt. Hon. Lt.-Col. A. R.	Thorne, William (West Ham)
Faber, Capt. W. V. (Hants, W.)	Lonsdale, John Brownlee	Thynne, Lord Alexander
Falle, Bertram Godfray	Lowe, Sir F. W. (Birm., Edgbaston)	Tobin, Alfred Aspinall
Fell, Arthur	Lyttelton, Rt. Hon. A. (Hanover Sq.)	Tryon, Capt. George Clement
Fisher, W. Hayes	MacCaw, Wm. J. MacGeagh	Twist, Henry
Fitzroy, Hon. E. A	Mackinder, Halford J.	Verrall, George Henry
Flannery, Sir J. Fortescue	Mallaby-Deeley, Harry	Walker, Col. W. H. (Lancashire)
Fleming, Valentine	Middlemore, John Throgmorton	Ward, Arnold (Herts, Watford)
Fletcher, J. S.	Mitchell, William Foot	Warde, Col. C. E. (Kent, Mid.)
Foster, H. S. (Suffolk, N.)	Morpeth, Viscount	Wheler, Granville C. H.
Gardner, Ernest	Mount, William Arthur	White, Major G. D. (Lancs., Southport)
Gastrell, Major W. H.	Newdegate, F. A.	Willoughby, Major Hon. Claude
Gibbs, G. A.	Newton, Harry Kottingham	Wood, John (Stalybridge)
Gilmour, Captain J.	Nield, Herbert	Worthington-Evans, L.
Gooch, Henry Cubitt	Orde-Powlett, Hon. W. G. A.	Wortley, Rt. Hon. C. B. Stuart-
Goulding, E. A.	Paget, Almeric Hugh	Wyndham, Rt. Hon. George
Grant, J. A.	Peel, Hon. W. R. W. (Taunton)
Gwynne, R. S. (Sussex, Eastbourne)	Pollock, Ernest Murray
Haddock, George Bahr	Quilter, William Eley C.	TELLERS FOR THE AYES.—Sir A. Acland-Hood and Viscount Valentia.
Hall, D. B. (Isle of Wight)	Randles, Sir John Scurrah
Hamersley, A. St. George	Remnant, James Farquharson
NOES.
Abraham, William (Dublin Harbour)	Cowan, W. H.	Horne, C. Silvester (Ipswich)
Adkins, W. Ryland D.	Crawshay-Williams, Eliot	Howard, Hon. Geoffrey
Alden, Percy	Cullinan, J.	Hudson, Walter
Allen, Charles P.	Dawes, J. A.	Hughes, S. L.
Ashton, Thomas Gair	Denman, Hon. R. D.	Illingworth, Percy H.
Asquith, Rt. Hon. Herbert Henry	Devlin, Joseph	Isaacs, Sir Rufus Daniel
Baker, H. T. (Accrington)	Dickinson, W. H. (St. Pancras, N.)	Jardine, Sir J. (Roxburgh)
Baker, Joseph A. (Finsbury, E.)	Dilke, Rt. Hon. Sir Charles	Johnson, W.
Balfour, Robert (Lanark)	Dillon, John	Jones, H. Haydn (Merioneth)
Barclay, Sir T.	Doris, W.	Jones, William (Carnarvonshire)
Barlow, Sir John E.	Duncan, C. (Barrow-in-Furness)	Jowett, F. W.
Barnes, G. N.	Elverston, H.	Joyce, Michael
Barry, Redmond J. (Tyrone, N.)	Falconer, J.	Keating, M.
Barton, William	Fenwick, Charles	Lambert, George
Benn, W. (Tower Hamlets, St. Geo.)	Ferens, T. R	Leach, Charles
Bethell, Sir J. H.	Ferguson, Rt. Hon. R. C. Munro	Lehmann, R. C.
Bowles, T. Gibson	Gelder, Sir W. A.	Levy, Sir Maurice
Brace, William	George, Rt. Hon. D. Lloyd	Lewis, John Herbert
Brady, P. J.	Glanville, H. J.	Lincoln, Ignatius T. T.
Brocklehurst, W. B.	Goddard, Sir Daniel Ford	Lough, Rt. Hon. Thomas
Brunner, J. F. L.	Grey, Rt. Hon. Sir Edward	Luttrell, Hugh Fownes
Bryce, J. Annan	Hackett, J.	Lyell, Charles Henry
Burns, Rt. Hon. John	Haldane, Rt. Hon. Richard B.	Macdonald, J. R. (Leicester)
Burt, Rt. Hon. Thomas	Hall, Frederick (Normanton)	Macdonald, J. M. (Falkirk Burghs)
Buxton, C. R. (Devon, Mid)	Harcourt, Rt. Hon. Lewis (Rossendale)	M'Callum, John M.
Buxton, Noel (Norfolk, N.)	Harcourt, Robert V. (Montrose)	M'Curdy, C. A.
Buxton, Rt. Hon. Sydney C. (Poplar)	Harvey, T. E. (Leeds, W.)	M'Laren, F. W. S. (Lincs., Spalding)
Chancellor, H. G.	Havelock-Allan, Sir Henry	Mallet, Charles E.
Chapple, Dr. William Allen	Haworth, Arthur A.	Meehan, Francis E. (Leitrim, N.)
Churchill, Rt. Hon. Winston S.	Hazleton, Richard	Menzies, Sir Walter
Clough, William	Hemmerde, Edward George	Millar, J. D.
Clynes, J. R.	Henderson, J. McD. (Aberdeen, w.)	Molteno, Percy Alport
Collins, G. P. (Greenock)	Henry, Charles S.	Mooney, J. J.
Collins, Stephen (Lambeth)	Higham, John Sharp	Morgan, G. Hay (Cornwall)
Collins, Sir Wm. J. (St. Pancras, W.)	Hindle, F. G.	Morgan, J. Lloyd (Carmarthen)
Compton-Rickett, Sir J.	Hobhouse, Rt. Hon. Charles E. H.	Morton, Alpheus Cleophas
Condon, Thomas Joseph	Hogan, Michael	Munro, R.
Corbett, A. Cameron	Hooper, A. G.	Murray, Capt. Hon. A. C.
Cornwall, Sir Edwin A.	Hope, John Deans (Fife, West)	Neilson, Francis

Nicholson, Charles N. (Doncaster)	Roberts, George H. (Norwich)	Walker, H. De R.(Leicester)
Nolan, Joseph	Robertson, Sir G. Scott (Bradford)	Walton, Sir Joseph
Norton, Captain Cecil W.	Robertson, J. M. (Tyneside)	Ward, W. Dudley (Southampton)
O'Brien, Patrick (Kilkenny)	Robinson, S.	Wardle, George J.
O'Connor, John (Kildare, N.)	Roch, Walter F. (Pembroke)	Wason, John Cathcart (Orkney)
O'Connor, T. P. (Liverpool)	Runciman, Rt. Hon. Walter	Waterlow, D. S.
O'Dowd, John	Samuel, Rt. Hon. H. L. (Cleveland)	Watt, Henry A.
Ogden, Fred	Seely, Col. Right Hon. J. E. B.	Wedgwood, Josiah C.
O'Kelly, James (Roscommon, N.)	Sherwell, Arthur James	White, Sir Luke (York, E.R.)
O'Malley, William	Soares, Ernest J.	Whyte, A. F. (Perth)
Palmer, Godfrey Mark	Spicer, Sir Albert	Wiles, Thomas
Parker, James (Halifax)	Sutherland, J. E.	Wilkie, Alexander
Pearce, William	Taylor, John W. (Durham)	Williams, J. (Glamorgan)
Pease, Rt. Hon. Joseph A.	Taylor, Theodore C. (Radcliffe)	Williams, P.(Middlesbrough)
Philipps, Col. Ivor (Southampton)	Tennant, Harold John	Wilson, Hon. G. G. (Hull, W.)
Philipps, Sir Owen C. (Pembroke)	Thomas, Sir A. (Glamorgan, E.)	Wilson, T. F. (Lanark, N.E.)
Pickersgill, Edward Hare	Thomas, D. A. (Cardiff)	Winfrey, Richard
Pointer, Joseph	Thomas, J. H. (Derby)	Wing, Thomas
Ponsonby, A. W. H.	Thorne, G. R. (Wolverhampton)	Wood, T. M'Kinnon (Glasgow)
Pringle, William M. R.	Toulmin, George	Young, W. (Perthshire, E.)
Raffan, Peter Wilson	Trevelyan, Charles Philips	Yoxall, Sir James Henry
Rea, Walter Russell	Ure, Rt. Hon. Alexander
Reddy, M.	Verney, F. W.	TELLERS FOR THE NOES.—Master of Elibank and Mr. Gulland.
Redmond, John E. (Waterford)	Vivian, Henry
Roberts, Charles H. (Lincoln)	Wadsworth, J.

Viscount CASTLEREAGH

I beg to move to leave out the word "five" ["Tea the pound…. five pence"] and to insert instead thereof the word "four."

I move this Amendment with all the greater confidence because I do not think that in the Aye Lobby in the last Division there were any of the hon. Gentlemen who sit on the Labour Benches or on the benches behind me. I should like to assure those hon. Gentlemen that there is no taint whatever of preference about this Amendment. My proposal is that the Tea Duty should be reduced by one penny all round, whether it comes from the Colonies or the Crown Colonies or from foreign countries. This is a matter on which most hon. Gentlemen in all parts of the House have addressed their constituents at some considerable length, and they have held out hopes that they will do whatever they can to reduce the present taxation on the food of the people of this country. There is no one who will deny that tea is a very important item of consumption amongst all families in this country, and particularly an important article of consumption in the families of the poorer classes of the community. I really would venture to appeal to hon. Gentlemen in all sections of this House to give some sign of a desire to redeem the pledges which they are so willing and so anxious to give at election times, and which when they come into this House they seem to ignore altogether.

Mr. H. S. FOSTER

I beg to second the Amendment. I do so with pleasure and with the greater emphasis because, like many of my hon. Friends around me, I remember that one of the most striking placards made use of by my political oppoments at the last election was:— Tax the luxuries of the rich and not the necessities of the poor. That is a very good sentiment, and now we shall have a practical opportunity of seeing how far hon. Members believe in that sentiment, and how far their votes are in accord with the professions made on platforms. No one in this House will deny that tea is one of the necessities of the poor, and that the great bulk of the tax upon tea falls upon the poor, and that the poor are taxed more heavily than the rich for the tea they drink because the tax is not an ad valorem tax, but a tax on quantity, and is therefore much heavier on cheap tea than on dear tea, amounting in some cases to practically 100 per cent. increase in the cost of that tea to the price it would be if it came in duty free. That is an object lesson of the methods by which we are levying our taxation to-day in contrast to that of every other civilised nation in the world except Turkey. We tax, and tax heavily, not only the necessities of the poor, but we tax those things which we cannot ourselves produce, and the taxation of which, therefore, is not of the slightest benefit to any single person in this country, man, woman or child, while by the very methods by which we raise those taxes we compel them to fall on the consumer because there is no competitive article in this market against which they are sold. I welcome the opportunity of voting for a reduction of this tax, and I say that until this House adopts, as I believe it will adopt in the next Parliament, Tariff Reform, we shall still have a continuation of those unjust burdens on the necessities of the poor, and we shall still insist on thrusting the whole burden of taxation on the shoulders of our own people instead of compelling other people outside to bear their proportion of it.

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

I really should like to accept this Amendment, and I hope that pretty soon the Government will be in a position to announce that our finances are in a position to enable us to take off those taxes which are taxes on the food of the people. It is exceedingly desirable that they should come off. I shall be very glad to be in a position to do so, but after all, we must consider what we are able to do, and the Noble Lord did not tell me how I was to get this penny.

Viscount CASTLEREAGH

made an observation which was inaudible to the Official Reporters.

Mr. LLOYD GEORGE

I am very glad the hon. Member for Hackney has at last got an ally, and that the Noble Lord belongs to that party. I think they stand alone as a party. There is very little new in a proposal of this sort. The Seconder of the Amendment said that it could be done by means of Tariff Reform. I will not enter into that beyond saying that the proceeds of Tariff Reform have been promised for many things. There is a sum of five to six millions for the reduction on tea, and it is to finance old age pensions and is to finance the British Navy.

Mr. MacVEAGH

The same cure for everything.

Mr. LLOYD GEORGE

There is no real use in making this proposition without any reference at all to the financial condition of the country. There are many taxes one would like to see off and to see reduced, but all those things have got to be done by stages, and at the present moment we are not in a position to do so. In voting for a reduction of the Tea Duty we have got to upset the whole scheme of finance for the time being. I trust hon. Friends of mine, who are just as keen as I am for the reduction of the Tea Duty will not at the present moment play the very legitimate game of the Opposition, the sort of game I would have played myself years ago, Taking the whole of these circumstances into account, I hope my hon. Friends will know perfectly well that the way not to reduce the Tea Duty is by voting for an Amendment of this kind. By voting for it would be to embarrass the Government, and to make it impossible to carry out a difficult scheme of social form, and, in my judgment would make it difficult for any Chancellor of the Exchequer to remove these taxes on food, and would be entirely in the interests of the Tariff Reform policy, the policy of taxing food, and entirely in the interests of a policy the main feature of which, and the only striking feature of which is the taxation of food.

Mr. H. S. FOSTER

That is not a fair statement of the right hon. Gentleman.

Mr. LLOYD GEORGE

I am taking the statement of the hon. Gentleman as to Tariff Reform. The only part of Tariff Reform that would produce money is the taxation of food. It is practically the only revenue-producing item that Germany can depend on. Therefore I trust my hon. friends will not enter into this conspiracy for the taxation of food.

Mr. AUSTEN CHAMBERLAIN

I had no intention of taking part in this Debate, and I was hesitating how my vote should be given. The Chancellor of the Exchequer has made up my mind for me both as to participation in the Debate and as to my vote. I am not going to follow him into the wide theme he opened up, but I venture to say he was singularly remote from the truth, and from the fact in the statement that the only revenue-producing part of Tariff Reform was the tax on food. The experience of every other country which has a tariff on manufactured goods has proved the statement which he has made to be without foundation. He alluded to Germany, but he is not correct in his statement. Germany has collected a very considerable revenue from manufactured goods even though the tariff is in so many cases prohibitive, and with a more moderate scale of duties even a greater revenue could be derived. If the defence of the Chancellor of the Exchequer is the best defence that can be made, I think I have no option but to vote against him.

8.0 P.M.

Mr. J. G. BUTCHER

I am glad the Chancellor of the Exchequer has on this public occasion announced that he is a food taxer, although no doubt he says he is an unwilling one. At the last election there was no more popular cry on Radical platforms than that we were food taxers. The party opposite forgot to mention that they were food taxers to the extent of £11,000,000 or £12,000,000 a year. An opportunity is now given them of showing some faith in their denunciation of their opponents and of proving that they are willing to remove a portion of one of the food taxes. It is a somewhat crucial test, but I hope that some hon. Members opposite, by going into the Lobby in support of the Amendment, will show that they were sincere in the contentions put forward on Radical platforms, not merely at the last election, but in 1906.

Mr. F. W. JOWETT

The Secretary to the Treasury, in the discussion on the last Amendment, said that all Chancellors of the Exchequer for many years past had had to consider the effect of a penny reduction on the Tea Duty, and had come to the conclusion that such a reduction would not reach the consumer. I find, however, that the present Prime Minister, when Chancellor of the Exchequer, was responsible for a penny reduction on tea, and that in justifying it he made it as clear as language could do, that, in his view, the penny reduction would reach the consumer. These were his words:— A reduction, however small—and the Committee will see that any reduction I propose must be small—in the Tea Duty has, as compared with other remissions of taxation, several distinct advantages of its own. In the first place, tea being an article which does not undergo, as tobacco does, after importation more or less elaborate processes of manufacture and manipulation, the lowering of the tax is not intercepted, but goes almost direct to the consumer. He gets the benefit at once or almost at once, either in a lower price, or, what is often of greater importance, in an improved quality of the article. These arguments are used on the one side or the other, according to the Government responsible for the time being, and the propositions themselves that are made from time to time lack that sincerity which I think ought to characterise them. Even the Chancellor of the Exchequer himself, speaking just now, acknowledged the game of definitely moving a Motion, not on its merits, but for the sake of embarrassing the Government of the day. I am prepared to make one of any group, large or small, to endeavour to destroy once for all that system of conducting the business of this House. As far as I am concerned, I am prepared to vote on the merits of the question, and I shall go into the Lobby in favour of the penny reduction on the Tea Duty.

Mr. F. W. VERNEY

It is perfectly true that many of us are pledged to the reduction of the taxes on the necessary food of the poor. That I certainly admit. These taxes, particularly on tea, sugar, and many other articles, are taxes which no one can be glad to see imposed on the poor, and many of us will welcome the opportunity when it comes, not only of reducing them, but of entirely removing them. But those of us who are really in earnest in this matter desire that these reforms should be brought forward in such a way that they can be carried out without mischief to the cause which we have at heart. The Chancellor of the Exchequer has stated very clearly what the real facts are. The Liberal party has no defence whatever for taxes on necessary articles of food, which press more heavily on the poor than on the rich. Speaking for myself, I do not consider that we can properly bring forward such a Motion as this, if it is to be successful, without its forming part of a scheme for reform of taxation on a large scale. A piecemeal reform of this kind, which would result in a tremendous loss to the revenue, could not possibly be brought forward without so dislocating the taxation of the country as to involve great hardship on many people and to wreck any properly considered scheme of reform. In voting against this Amendment nobody on this side can he accused of defending taxes on food. I give that as my view, as one who has on many platforms expressed the strongest desire to see these taxes removed. The Prime Minister himself has expressed the same desire, and there are no people in this country more eager and more resolute than those who sit on the Treasury Bench to bring forward these reforms the moment it can be done with success and without such injury to the revenue as would lead to embarrassment in many directions. It is quite impossible to take one particular tax and deal with it without regard to its effect on other taxation. Such reforms have never been brought forward successfully in that way, and never will. Those of us who have watched the taxation of the country for many years, and perhaps have had an opportunity of watching from the Gallery the great masters of finance when they brought forward their various proposals, must have been struck by the fact that every kind of taxation has been introduced as part of a great plan, and all remissions of taxation must be brought forward in the same way if they are to succeed. The Chancellor of the Exchequer, in dealing with the taxation of the country, has done what none of his predecessors have been able to do. He has brought forward a great scheme of social reform——

Mr. SPEAKER

The general discussion is not open at this stage. The hon. Member must confine himself to the particular Amendment before the House.

Mr. VERNEY

Of course, I bow to your ruling, Sir, but I thought that hon. Members opposite had practically opened up the question of Tariff Reform.

Mr. SPEAKER

It has been done by the hon. Member's Friends; it was not opened on the other side.

Mr. VERNEY

Then I will come to the Amendment. Does anyone consider that such a reduction will really relieve the poor to any considerable extent? If the proposal was to take off the whole duty I could understand its being supported by all Members who desire the poor to be made richer, but to say that they will be made richer by a reduction of one penny on the Tea Duty is, I think, such an absurdity that no one will really support the Amendment on that ground. To bring forward a Motion like this, which is merely intended to embarrass the Government,

and would have no real effect upon the misery or poverty of the poor, is obviously a piece of tactics, and nothing else.

Viscount CASTLEREAGH

rose in his place and claimed to move "That the Question be now put," but Mr. Speaker withheld his assent and declined then to put that Question.

Mr. VERNEY

Therefore I strongly oppose this proposal, and I think the House will do well to hesitate before it concedes a point like this, which has been raised for a mere tactical purpose, and will do no good whatever in the direction in which those who propose it appear to hope it will.

Mr. H. S. FOSTER

rose in his place and claimed to move, "That the Question be now put."

Question, "That the Question be now put," put, and agreed to.

Question put, "That the word 'five' stand part of the Resolution."

The House divided: Ayes, 162; Noes, 99.

Mr. LLOYD GEORGE

claimed "That the main Question be now put."

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.

And it being a Quarter-past Eight of the Clock, and there being Private Business set down by direction of the Chairman of Ways and Means, under Standing Order No. 8, further Proceeding was postponed without Question put.