§ The duty of Customs payable on tea until the first day of July, nineteen hundred and eleven, under the Finance Act, 1910, shall be deemed to have been continued as from that date and shall continue to be charged, levied, and paid until the first day of July, nineteen hundred 1927 and twelve, on the importation thereof into Great Britain or Ireland (that is to say):—
|Tea, the pound||…||…||fivepence|
§ The CHAIRMAN
The Amendment in the name of the hon. Member for Ludlow (Mr. Hunt)—
To leave out all the words of the Clause from the word "shall" ["Finance Act, 1910, shall"], and to insert instead thereof the words,cease, and from that date the duty of Customs payable on tea shall be three pence per pound from all foreign countries. On tea grown within the British Empire one penny per pound."—and that in the name of the hon. Member for Yarmouth (Mr. Fell)—
At the end of the Clause to add the words,Tea grown within the British Empire, the pound fourpence,cannot, I think, be taken here. The same point was raised in connection with the same Bill on the Report of the Ways and Means Resolution, and the House came to a decision on the matter. I think I should not be doing my duty if I allowed the same matter to be raised again.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. FELL
This is the only opportunity I shall have of raising this matter. I believe some years ago I raised it in Committee on the Bill after it had been raised on Report of the Resolution, and we had a Division upon it. Of course, if we cannot do that I must on the Question, "That the Clause stand part of the Bill," beg leave to make a few remarks. I am extremely sorry it cannot be put in the way in which we have previously discussed this.
§ The CHAIRMAN
If the hon. Member puts that to me as a point of Order, I have taken the opportunity of looking the matter up. No less than thirty-five columns of the OFFICIAL REPORT were occupied with the discussion on the occasion to which I refer.
§ Mr. AUSTEN CHAMBERLAIN
I rise also to a point of Order. May I ask whether it has not been the annual practice of the House in connection with these Money Resolutions on all Budget Bills, and I think I might say on almost all Bills, to repeat, if the Committee thought fit, and to raise again in Com- 1928 mittee on the Bill questions which have been discussed upon the Resolution, and has it not been repeatedly stated by Ministers and ruled from the Chair that the decision on the Resolution is not in any way binding upon the Committee on the Bill, but that the object of the Resolution is to set a limit to the charge which can be imposed upon the taxpayer, and that it is not in the least to fetter the liberty of the Committee to deal with that charge as it pleases within the limits so set down? If I may venture to say so, I remember certainly in several Budgets with which I have been connected either as defender or critic, and particularly those of which I was the defender, exactly the same questions were raised in Committee on the Bill as had been raised on the Resolutions. They were raised again on the Report stage, and even the same question was discussed again, both in Committee and on the Report stage, as well as on the Resolution, on a succesion of Clauses.
§ Mr. LLOYD GEORGE
On that point of Order may I suggest that this is a very different point which the right hon. Gentleman is raising. It is true that on a Resolution founding a Bill there is a general discussion which covers the whole ground, but this is a different matter. Here a specific issue was raised, and the decision of the House obtained. I would point out it is very unusual for that to be done in Committee. I remember when in opposition to the right hon. Gentleman criticising his Budget, but we never in Committee on the Resolution challenged a specific issue, although we had a general discussion.
§ Mr. AUSTEN CHAMBERLAIN
The right hon. Gentleman is mistaken. Specific reductions were proposed on the Resolution, and were repeated afterwards in Committee of the House.
§ Mr. SNOWDEN
I wish to raise the same point as the right hon. Gentleman the Member for East Worcestershire. My own recollection entirely corroborates what the right hon. Gentleman has said, that Motions of this nature have been made in Committee of Ways and Means, and repeated on the Committee stage of the Bill.
§ Sir F. BANBURY
Has it not always been the custom of the House when a stage of a Bill is taken and an Amendment is in order on that stage to accept it quite irrespective of the fact of whether it has been discussed at previous stages? For 1929 instance, in Committee stage of a Bill an Amendment may be moved to do something or other, and then when we come to the Report stage that Amendment may be repeated. I certainly think that that has been the case in the past, and my recollection is that when a decision has been taken on Report of a Resolution in Ways and Means that has not hitherto prevented the same Amendment being moved in Committee stage of the Bill. I cannot give a concrete instance at the moment, but my recollection is that that has always been the case. I understand the ruling to be that, as this Amendment was raised on the Report stage of the Resolution, it cannot be raised in Committee on the Bill.
§ The CHAIRMAN
I have allowed this point of Order to be raised, although I have already put the Question, "That this Clause stand part of the Bill." I am, of course, most unwilling that there should be any idea that I am not ready to explain any decision I have come to in a matter of this kind. The right hon. Gentleman the Member for East Worcestershire will be aware that the practice of moving Amendments on a Resolution in Ways and Means is quite a recent one. Therefore, when I saw this Amendment on the Paper I had to take into account the fact that there was no precedent to guide me in the matter. But it seems to me that when a matter has been discussed in so long a Debate as one occupying thirty-five columns of the OFFICIAL REPORT, and the House itself, which is a superior body to the Committee, has come a decision upon it and negatived it, I should certainly not be doing my duty if I allowed, in connection with the same Bill, a re-discussion and, possibly, re-decision of the same question. I think I am acting in the interests of the Committee in giving that ruling, in order that the time may be devoted to other subjects.
§ Mr. AUSTEN CHAMBERLAIN
I think the Committee is placed in a great difficulty. This decision undoubtedly does curtail privileges which the Committee has practised for some years past, and it curtails them to a serious extent. I would ask whether you feel it possible to make a ruling of this kind without any order of the House upon it?
§ The CHAIRMAN
I do not think there are precedents to the contrary, except perhaps in a single case. I admit, of course, that the House has power to review a decision of the Committee, that is on the 1930 Report stage as compared with the Committee stage, but this would be reversing a decision come to by the House.
§ Mr. AUSTEN CHAMBERLAIN
This is a very important matter, and I should like for our future guidance to see exactly what is your ruling. I understand you to rule that if a Committee of Ways and Means rejects a particular Amendment to a Resolution, and that Amendment is not moved again on Report it may be moved in Committee when we come to the Bill. But if the House on Report of the Resolution has rejected that Amendment then that Amendment is not permissible on the Committee stage of the Bill. I shall be very much obliged if it can be stated whether I have correctly interpreted the meaning of your present ruling.
§ The CHAIRMAN
I quite understand, but the right hon. Gentleman is inviting me to go rather further than the point I have dealt with on the present occasion. This is a case of a decision of the House on the Report stage of a Resolution and the subsequent revival of the Amendment in Committee on the Bill. I would rather not, without further consideration, deal with any question comparing Committees of Ways and Means with Committees on the Bill itself.
§ Mr. MAURICE HEALY
Suppose a Division is taken in Committee on a Resolution and the Committee affirm the Resolution, does that preclude it being discussed afterwards?
§ The CHAIRMAN
This is only a case of my objecting to an Amendment being moved in connection with a subject twice over.
§ Sir F. BANBURY
This is an extremely important ruling. As I understand it, there is no precedent for it. While of course the Committee accepts the decision, I would ask whether we may be allowed, if we can find certain precedents the other way, to raise the question again later on. This is going to make a very important alteration in the procedure of the House of Commons, and I feel certain the Chairman would not desire to prevent the question being reconsidered should we, on looking into the matter further, think it desirable to do so.
§ The CHAIRMAN
Certainly, when a similar question again arises the hon. Baronet will be perfectly entitled to raise the question.
§ Mr. FELL
This is a Clause to impose a duty of 5d. in the lb. on tea. I wish it had been possible for me to move the Amendment which stands in my name, and which would have relieved the tea-growing parts of the Empire from paying such a high duty. I put this Amendment down in July last. Usually the Committee stage of this Bill has been taken in May or June; now we are dealing with it just before Christmas, towards the end of a very arduous Autumn Session, and, in the short time which is being devoted to it, we are losing one of our privileges. [HON. MEMBERS: "No, no."] I feel confident that on more than one occasion I have moved an Amendment on the Committee stage to reduce this duty in the same way as I am doing to-day. I cannot say whether it had been previously discussed on the Resolution, but I certainly have been allowed to move it in Committee on the Bill. I wish, however, to make a few remarks on the Tea Duty itself. It is, I am sorry to say, comparatively speaking, a stationary duty, and I think, on a whole, when the country is enjoying a period of great prosperity such as this country has enjoyed for the last three or four years—I do not deny that there is a boom at the present time—when you find on an important item such as tea the consumption remaining nearly stationary then one is driven to the conclusion that there is something wrong, perhaps, in the duty laid upon it which prevents it showing that automatic increase which usually accompanies an increase in the population and wealth of a country. Apparently the Tea Duty does not respond to this influence as it should do, and I presume that is very much to the regret of the Chancellor of the Exchequer. It is all the more strange that it does not do so when we take into account the fact that the consumption of alcohol has greatly decreased. One would have expected that to have tended towards an increase in the consumption of tea.
As a matter of fact the increase has been very small. The figures are not easily obtainable, because the returns usually show the total imports of tea into the country, and then it is necessary to ascertain the quantity exported, as it is only that which is retained in the country for home consumption that has to pay duty. Now, in 1910, the imports from India and Ceylon amounted to 244,000,000 lbs., and in 1911 the total was 255,000,000 lbs., an increase of 11,000,000 lbs., whereas the imports from China in 1910 were 8,000,000 lbs., and in 1911 12,000,000 lbs. The imports 1932 from Java remained stationary, about 20,000,000 lbs. each year. If you put those figures into percentages you will find that while the consumption of tea grown in India and Ceylon increased 5 per cent. the increase in the case of China tea was 50 per cent. I do not say that that increase is normal, but one may draw the inference that the consumption of China tea is fast increasing in this country, and that the duty put upon tea is having a prejudicial effect on the importation of Indian and Ceylon tea. I thing that is a very unfortunate circumstance. The suggestion that China tea is being imported into this country in steadily increasing quantities has been more than once denied by the present Chancellor of the Exchequer, as well as by the Prime Minister, when he was Chancellor of the Exchequer, and it has been suggested that the increase was quite accidental. But undoubtedly there has occurred a change in the taste for tea, and that change has affected Chinese tea to a very appreciable extent. There are a certain number of people nowadays who always desire to have China tea, and wherever one goes he is usually asked which he prefers. I know that in many households a supply of both kinds of tea is placed on the breakfast-table for the guests. That clearly proves that amongst certain classes the consumption of China tea is growing rapidly. It may not be so among the larger mass at the present moment, but you never know how tastes may change, or how soon they may change. It would be a pity if by this flat tax all round on all tea we should tend in any way to encourage the growing of tea in foreign lands when we can get it from our own countries. I cannot enlarge upon that topic. It is one which would be covered by the Amendment which I am very sorry I cannot move.
As to the question whether the tax is at too high a rate, I believe the Labour party do consider it too high. The hon. Member for Blackburn (Mr. Snowden) has himself proposed the reduction of 2d. in the pound on tea. I do not say whether or not I agree with that, but it shows that the Labour party consider the Tea Duty excessively high at the present time. As to the Irish party, they have on more than one occasion declared in eloquent language that it is their earnest desire to see the duty on tea reduced materially. In 1898 they brought forward an Amendment of their own, and made the most powerful speeches, telling us that in Ireland tea was 1933 not only the luxury of the poor but an absolute necessity to them, and they did their utmost to get the duty reduced. I hope, therefore, that to-day we shall have the support of the whole of the Irish party, because I know they consider the duty on tea is too high, and that it should be materially reduced. I do not know whether my suggestion that it should be a penny for our own tea will commend itself to them. That would have affected the Budget to the extent of about £1,000,000. We must remember, however, that half the year has already gone by, and that any change made in the tax on tea would only affect half the year's imports, so that instead of being £1,000,000, the only loss sustained by the Treasury would be £500,000. In addition, we have to remember that any reduction in the duty on tea, or on any other article of general consumption, increases that consumption materially, and it may happen, as it did in the palmy days of Liberal finance thirty years ago, when they reduced the duties on various items, that the reduced rate will bring in more than the increased rate did previously, because the consumption of the taxed article did increase. I do not know what the effect would be with a decreased duty on tea, but I believe it would increase to a remarkable extent the consumption of tea in this country. The Chancellor of the Exchequer may remember that an hon. Member called attention to the fact, in the Debate in 1898, that the reduction of a penny a pound on tea had so increased the consumption of tea in Ireland that the reduced duty brought in £47,000 more revenue than the increased duty had done before. That is a most remarkable tribute to the benefit of reducing the tax upon an item of general consumption, such as tea. I do not know whether the reduction would have a similar effect in Ireland. I do not think it would. The Treasury must know better than we do how far reduction stimulates consumption, and what would be the loss supposing the duty were reduced by a penny. I believe the reduction would be nothing like that anticipated, because the consumption would be very much stimulated. If the Chancellor of the Exchequer says that his Budget would be very much upset by this, my answer to that is that I do not think one penny would alter it by £300,000 or £400,000, or just about the amount we have lost this year on the land taxes.
§ Mr. FELL
About £300,000 or £400,000. I think that is the difference, comparing what we have got in and the cost of getting it in. Another point in favour of reducing the tax is that we shall get a partially freer breakfast-table, and we should be without all these inspectors. I feel myself very much hampered by the fact that I am not in order in referring to the Colonies and the preference which I wish to give them in this matter. The duty I consider to be higher than is necessary, and I should have proposed a method by which it could be reduced to the benefit both of this country and of the Empire; but if I cannot go into that question now, I must reserve it for some future occasion. All I can do now on the Question that the Clause stand part is to enter the strongest protest that the duty is unnecessarily high, and that it might well be reduced.
§ Mr. CROFT
There is one point which the House will agree is very important with regard to whether this question should be discussed again or not. It is that conditions are changing so rapidly in regard to the position of the working man, upon whom, after all, this duty falls most, that they ought to be considered afresh not yearly, but, with the present kind of legislation, monthly. I think the Chancellor of the Exchequer will admit that the price of food is rising enormously in this country. I think he will admit that the process has been continuous since 1900, and that wages have been practically stationary. Real wages have been decreasing in the last ten years. When real wages are rising there is some justification for keeping a duty of this description upon the food of the poorest people in the country. But we know for a fact that the lot of the working class is getting worse year by year, and it is a time when a generous Chancellor of the Exchequer at least ought to try to do something to meet the needs of those of whom he professes to be the champion. In addition to the fact that food prices have gone up so enormously, we in this House must remember that, while the weekly budget is so difficult for the working classes to negotiate, the working man has now to pay an additional 4d. a week under the Insurance Bill, and even the Chancellor of the Exchequer will not endeavour to tell him that he is going to have 9d. to pay for his tea because the 4d. is imposed upon him by that Bill. The lot of the working man is going to be dearer, whatever may be the benefits he will gain in years to I come from recent measures. I know that 1935 the party opposite have liked to be regarded for some time as the people's champions. When we consider the protestations at the last three elections with regard to the breakfast-table, it is time that they began to show some move in the direction of improving the lot of the working classes in this connection. This Tea Duty falls far heavier upon the poor in this country than it does upon the rich.
On the one hand we are being taught that it is criminal for a man to take alcoholic drinks of every description. Those who sit on the Treasury Bench are endeavouring to prevent their access to reasonable alcoholic drinks such as we have in this country. Now, on the other hand, we find this burden being placed upon the tea consumers also. The consequence is that even if a man desires to be temperate he still finds himself taxed in this connection higher than on any other commodity. It is said that on the present price the working man is being taxed to the extent of 5d. on every 8d. worth of tea. The Chancellor of the Exchequer once said, "blessed be he that considereth the poor." If he is going to allow this tax to continue when he sees the increasing burdens on the poor all round, we are inclined to think that his motto is "blessed is he that taxes the poorest in the land." Tea is the most heavily taxed of all foods. The cheapest descriptions of tea are grown in the Empire. Here we are on the one hand pressing heavy duties on India which are very difficult to justify, and on the other hand refusing to give any remission on a commodity which these British subjects are able to produce. This is a question which affects labour. The duty of 5d. does nothing whatever for labour, and a tariff of this description can only be justified if you are finding employment by means of it. In India there are 500,000 British subjects employed in producing tea, and anything we do in the direction of lowering the duty will be a distinct benefit to them since, as we cannot produce tea, we have at the present time to pay the whole tax upon it. That was admitted by the Financial Secretary to the Treasury last year when he was speaking on this subject. There is no doubt whatever that the people of this country have to pay the whole of the tax. I maintain that it is high time the Government considered some better means of raising money than by taxing the tea producers in this Empire.
1936 5.0 P.M.
This is a levy of the worst description. Tea is an article of universal consumption, and cannot be described as a luxury. The people who are taxed heaviest are Empire producers. I know the Labour party are extremely anxious to see the Tea Duty reduced if it is possible. I think they will be the first to admit that, even if we must keep the duty on China tea in the future, it is essential that we should reduce it on a cheaper description of tea, so that there may be greater facilities for purchasing among the poorest in the land. China tea is a luxury; it is not essential, and at the same time I think the argument of my hon. Friend (Mr. Fell) is true, that, if you were to reduce this duty, you would have a greater consumption of tea all round. With regard to the comparative value of China or Indian tea, I think we ought to realise that even if we keep a higher duty on the Chinaman, he is so busily engaged at the present moment that he will not be likely to want to retaliate against us. Every Chinaman who is thrown out of work in this particular direction would mean another British subject coming into work in India. I hope the Government are going to announce, before this Clause is carried, that they have changed their minds. I presume it is impossible to get a Division on this subject under your ruling, Sir, except on the Clause as a whole, but I hope that the Chancellor of the Exchequer, who has in the last two or three weeks probably realised the enormously increased burden he is putting on the poorest in the country, will at any rate promise to do something in the near future. Of course, it is a farce about the Budget not being completed at this time of the year. It does not much matter this year, though it did last year. There is another point the Chancellor of the Exchequer might consider. At the present moment millions of our subjects in India are proclaiming the King-Emperor, and it would be a fitting opportunity if he could tell the House he was prepared to do something for those natives for whom this country does very little, taking it altogether, in order to show that they appreciate the fact that they are citizens of a British Empire.
§ Mr. C. E. PRICE
We, on this side of the House, are more than delighted to find that hon. Members opposite are greatly concerned about these taxes on tea. I recollect that during the time they were in office they raised the tax on tea from 1937 3d. to 8d. We welcome this new-born zeal very sincerely. It is very gratifying to find that at last they have realised that it is a serious matter to do anything to increase the taxes on food. The hon. Member (Mr. Fell) has referred to the fact that the taste for China tea is changing. If people prefer China tea, why not let them have it? There is no doubt this tax upon tea is a legacy from the old days when it was the common thing to derive the great bulk of the taxes from food, and I regret very much that more has not been done to reduce this tax, because the party is pledged up to the hilt to remove all taxes upon food. I remember in my early days the great gospel we preached was to abolish all taxes upon food and to have a free breakfast table. I am extremely sorry we have only made a reduction of 1d. in the tax on tea since we came into office. I would rather see an increased tax upon land than have this tax upon tea continued. Hon. Members opposite complained that the result of the taxes on land has brought in so little, so that if you double the tax you would please them. It would at least show some justification for the trouble you took in passing the Budget. It is an extraordinary fact that from 1901 to 1905 there was actually a reduction in the consumption of tea in this country. That was owing to the increased duty. On the other hand the moment we took off the tax there was an increase in the consumption of no less than 4,000,000 lbs. I regretted that the Government did not take off 2d. instead of 1d., and whenever they come to make a change they will please bear that in mind. Again I notice that in connection with the Insurance Bill the right hon. Gentleman said he could not take 1d. from those whose wages were 9s. and under. I wonder whether the right hon. Gentleman is aware that there are some people who are so poor that they are unable to buy ordinary tea, and buy what is called tea dust, for which they pay 1s. a lb.? Out of every 1s. these poor people spend 5d. is taken as a tax which goes to the Government. That is equal to an Income Tax of 8s. 4d. in the £. That is a positive scandal. These are the poorest of the poor, the people who live in some cases actually upon their old age pension, and tea is the only comfort they have. Every year since I have been in the House of Commons I have voted for this tax with the greatest regret, and I am sure I am expressing the feelings of a great many Members when I say that unless we do some- 1938 thing before a General Election comes——[HON. MEMBERS: "Hear, hear."] Those cheers show that hon. Members opposite are pledged, if they get into office, to put no taxes upon food. I should like the right hon. Gentleman very seriously to take into consideration the advisability of taking this tax off tea, because a great many Members on this side are very greatly concerned to see the great increase which has taken place in the cost of living.
§ Mr. LLOYD GEORGE
I need hardly say I am in full sympathy with my hon. Friend. I have repeatedly taken part in discussions on the Tea Duty, and my only regret is that I have not yet had an opportunity of carrying into operation the wishes I expressed when I was in opposition. The hon. Gentleman (Mr. Croft) seems to consider that it was I who put these taxes upon the poor of the country. When the present Government came into office we found a duty of 6d., and at least we have taken 1d. off. That is the extent of our interference with the Tea Duty.
§ Mr. LLOYD GEORGE
The hon. Gentleman is now opening up a very wide subject which took about fifty days to discuss, and the Opposition expressed the view that the limitation of time was most oppressive. So far from being a burden the insurance premium is a very considerable relief. At any rate that is the view which the Government take of that scheme. The Motion now before the House is an absolutely impossible one for any Chancellor of the Exchequer, and the hon. Gentleman quite realises it. I should have to find £6,000,000 somewhere else if the Clause were omitted. I could not possibly at present see my way to do that without a very considerable readjustment of the various burdens which are now cast on the different classes of the community. I am not defending the Tea Duty at all. I am not sure that there are not other and better means of levying contributions on people with small means, but they have to be thought out very carefully. I am not one of those who think that anybody who is earning anything ought to escape altogether from contribution. I think everyone ought to contribute his mite, as it were, towards the National Revenue, but the method of raising 1939 that money is a matter which I think well worth the while of those who are interested in the finance of the country taking a much greater concern about. On the Continent there are other methods of raising contribution from people with small means. In Saxony the Income Tax is brought down to £45 a year. That means that practically all the working classes there pay Income Tax, and there are still other duties which fall heavily on the class which does not earn £45. We can discover, in the administration of the old age pensions, that the poorer the people are the larger in proportion is their consumption of tea, and therefore the Tea Duty is an impost very largely on the poorest classes of the community. But if the Tea Duty is to be abolished there must be some other method of levying contributions—I mean direct contributions—upon all sections of the community. The hon. Gentleman has in his mind some sort of scheme whereby you can tax something outside the limits of the United Kingdom altogether. I will not debate that, but even assuming it could be done, I do not think it would be a good thing that you should put your impost upon others and leave a large section of the community without any sense of contributing anything to the common stock. I am sure it would be a bad thing from the point of view of real interest in the national well-being if there was not a real sense of responsibility for the expenditure of the year. That has got to be distributed over the whole population.
I have never had any sympathy with the idea that someone has got to be exempt because he is earning a small amount. It ought to be more or less the sort of principle which you have in a place of worship, where everyone is supposed to contribute something, however trifling, because they feel they have a kind of interest in the common work that is going on, and there ought to be the same common interest in the work of the Empire, and one way of realising that is to get every section of the community to contribute. The only principle I would lay down would be that they ought to contribute in proportion to their means. As far as tea is concerned, for the moment I can think of no more effective method of revenue unless you bring down your Income Tax to a £50 limit or charge a poll tax. Chancellors of the Exchequer have been driven to indirect taxation because any attempt at raising anything in the nature of a poll tax from people earn- 1940 ing weekly wages has generally ended in disaster. Those who are raising money for local purposes are experiencing the same difficulty. You cannot get your rates as a rule from people earning a weekly wage, and therefore it is merged in the rent, and the money is collected from the landlord, and it is really for the same reason. There is a good deal to be said on the other side, but the balance of convenience, up to the present, undoubtedly has been in favour of the indirect method of taxation. Whether tea is the best method of doing it is another question. There is one advantage which tea has, it is an article of general consumption; it is an article of almost universal consumption. It enables the Chancellor of the Exchequer to get at the teetotaler as well as the beer and spirit drinker. There is hardly any class of the community who do not drink tea, but there are probably hundreds of thousands who do not smoke. You have got, I do not know how many male adults. [An HON. MEMBER: "Seven millions."] Well, I think that is putting it rather high. At any rate, there is a considerable proportion of the male adults of the country who do not contribute to taxation through tobacco or other excisable articles. But almost the whole of these people drink tea, cocoa, or coffee. Therefore, this is the one duty whereby we do get into every household. That seems to be one advantage which you get by putting a duty upon tea. It is the only method I can think of except direct taxation, and I am perfectly certain that no Chancellor of the Exchequer would get up and say that he was willing to face the responsibility of reducing the Income Tax limit to £40 or £50. The cost of collection, and, I think, the political difficulties, would be so great that you could not face it. Having started with a low Income Tax limit in Germany, they can stick to it, but we, having started with the £120 limit, have been driven upwards instead of pressed downwards. Political economists, though their opinions may be sound upon the question as to where the tax ought to commence, have not been able to give much practical guidance on the subject of collection. They do not know anything of the difficulties of the men who have to put their theories into actual practice. You must find a tax that brings everybody into contribution, and for the moment I cannot think of anything better than the Tea Duty. The Insurance Bill does it by a sort of indirect tax on wages. These are the only two methods 1941 which bring everybody in to contribute towards a common purpose. As to the suggestion of the hon. Member for Yarmouth (Mr. Fell), he seems to think that we would only lose £300,000 if we reduced the duty by a penny in respect of tea grown within the British Empire.
§ Mr. LLOYD GEORGE
I am not so sure that that would be the result. I am only collecting now upon the Resolution of the House of Commons. What does that mean?
§ Mr. LLOYD GEORGE
Let me show the hon. Gentleman what that means. In order to make a loss to the revenue merely of £300,000, the consumption of tea would have to go up enormously. That is one reason why we have not been able to discriminate between India and China tea. The proportion of tea that comes from outside our own possessions is trivial from the point of view of the revenue. The hon. Gentleman says that there is a considerable increase in the consumption of China tea. There is really no appreciable increase in the consumption of China tea. In 1907 the import from China was rather higher than it was last year. There is a great deal of fluctuation in the consumption. It depends largely on the fashion of the hour, and on the harvest in India. But in the main China tea consumption is largely a matter of fancy. If you were to put an extra 2d. or 3d. on a pound of China tea, I have no doubt that the people who use it now would still buy it, but that would not help India at all, for the reason that the people who buy China tea would still use it. They are not the sort of people who would discontinue buying China tea because the cost was 2d. or 3d. extra. Although I have a good deal of sympathy with what has been said about India tea, I cannot see my way to face the enormous loss of revenue which the differentation proposed by the hon. Gentleman would involve.
§ Mr. AUSTEN CHAMBERLAIN
My hon. Friend was unable, owing to the procedure of the House, to raise the question he wanted on this Clause, but I can at least congratulate him on having drawn from the Chancellor of the Exchequer a most interesting contribution to the consideration of our fiscal system. I am not 1942 now referring to the concluding passages of the Chancellor of the Exchequer's speech. I do not desire to criticise these passages on the present occasion. I am referring to the survey of the principles of taxation with which he opened his observations, and which, indeed, formed the staple part of his speech. I heard these remarks from him with peculiar satisfaction. I have myself, both in office and in Opposition, given expression to the same sentiments, but I remember that one, at least, of the right hon. Gentleman's colleagues pointed to what would be an ideal system which was very far removed from that of the Chancellor of the Exchequer. I refer to a speech delivered by the First Lord of the Admiralty (Mr. McKenna), in which he pointed to the time when there should be no taxation, or practically none, on the working classes, except in respect of luxuries or amusements, which, of course, are in one sense another form of luxury. The Chancellor of the Exchequer laid it down—and I associate myself with what he said—that everybody in a free country like ours ought to contribute something to the expenses of the State of which he is a citizen. He added that the contribution of a man ought to be proportionate to his means, and again I associate myself with the principle he laid down. He says that it is the general acceptance of these principles by past Chancellors of the Exchequer, coupled with the inherent difficulties with respect to other forms of taxation, which have led to our adoption of such duties as those upon tea or sugar in order to levy the poor man's proportion of the taxation of the country.
§ Mr. AUSTEN CHAMBERLAIN
Yes, the man below the Income Tax limit. Of course, that includes many whom we do not habitually speak of as the poor in the sense of their being just on the margin of subsistence. My hon. Friend has taken the Tea Duty, and examined it by itself, and he has brought against it a charge which the Chancellor of the Exchequer finds proved. If you look at the Tea Duty alone, undoubtedly it does not secure contributions proportionate to their means from those who pay. In the first place, there is no proportion between the amount of the duty and the prime cost of the article. An expensive tea pays only the same duty as a cheap tea. I should not be popular with tea drinkers if I suggested a proportionate duty. When I held the office of Chancellor 1943 of the Exchequer I found that there were people who regarded the Tea Duty as very harsh, because such a large proportion of the revenue it yields was derived from duty on the cheapest forms of tea. [An HON. MEMBER: "It is the same with tobacco."] When replying to one of the deputations that waited upon me from the tea merchants, I said that if it would suit them better, I would graduate the duty according to value. Their faces fell when I said that. The duty is not proportionate to the value of the tea, nor is it proportionate to the incomes of the persons who pay it. If you had this Tea Tax as a single tax, it would be grossly unjust and unfair, and it only begins to become fair when its inequalities are compensated and made up by other taxes. Hon. Members when discussing the Tea Tax must bear in mind that it is only one of many taxes, and, so far as workmen are concerned, if they pay too much in proportion to their means on their tea, the difference is made good in many other ways. The difference between the amounts paid in Tea Duty by the poor and the well-to-do is compensated to the poor by other taxes. Bread, sugar, and tea are what you find in all the poorest houses, if you find anything at all. I think that is an argument not for doing away with the Tea Duty altogether, but an argument against our present system. I believe in a canon of finance which is anathema to right hon. and hon. Gentlemen opposite, but it is one which was often propounded by the late Leader of the Opposition on this side of the House (Mr. Balfour), namely, that it would be much better to have a greater number of low duties than only to have a small number of duties and to keep these very high.
Then the right hon. Gentleman said that you must have some tax which falls upon general articles of consumption, or else you must have an Income Tax extending downwards to a very low point indeed, to include the ordinary working man. I thought, in the earlier part of his observations, that he was favourably inclined to that course, but he made it perfectly clear before he finished that he thought that such a course was impossible, not unjust, but impracticable, on broad political and administrative grounds. I agree with him, but I would add this, that those who urge the extension of the Income Tax downwards do so with the object of bringing the influence of the mass of people to bear in checking taxation of that kind. It would have that effect if you could 1944 make it a law which no future House of Parliament can break, that whenever there was addition at any point in the scale there should be proportionate addition throughout the whole of the scale; but when you do, as we have done lately, reduce the tax at some points of the scale and leave it unaltered at others, while you add very much to the burden of a small number of Income Tax payers then the Income Tax itself ceases altogether to have that particular merit. This is not a criticism—at the moment I do not stop for that purpose—of what the Chancellor of the Exchequer has done with the Income Tax, but is an answer to those who think that merely by extending the Income Tax downwards they would check all future increases in expenditure, and the propensity of those who do not contribute directly to spend freely the taxes paid by other people. You cannot do that unless you make a law that no future House of Commons can increase the Income Tax at a higher point without increasing the proportion at the lower point. Unless you can do that I think that the very merits which would cause some people to overlook the administrative inconvenience and the expense of collection, and even to risk the political disadvantage, would escape your grasp, and you would not be rewarded, by security, for all the trouble and difficulty you had undertaken. If that is so—so far I occupy common ground with the Chancellor of the Exchequer—then I agree that you must have resort to indirect taxation. But putting aside for the moment the contribution which by a wide revision of our Customs Duty you would obtain in a much larger proportion from the rich than you do now, and considering the question of relieving the poor, to have a wider range of duties with duties at a lower rate would be much fairer than to have the very few duties at very high rates which we now have.
§ Mr. HUNT
The right hon. Gentleman (Mr. Lloyd George) says that everybody ought to contribute according to his means, and he cites the tea tax as a fair tax. As a matter of fact it is the very reverse. By means of it you impose on the very poor a tax which is double or treble proportionately the tax on the rich. The rich man who buys a pound of tea at 3s. has to pay 5d. taxation. The very poor person who buys 3lbs. of tea for the same money has to pay three times that amount of duty I cannot understand how hon. Gentlemen 1945 can have the cheek to sit over there on that side of the House and call themselves free traders. It always did beat me. They sit there and I believe they think they are free traders. Trade is exchange and Free Trade may be called free exchange. Where does the freedom come in when you tax the tea of the very poor? Then you say it is the best thing for the working people of this country. There is no tax on tea in America, and yet you call America a protected country. You get all your import taxation practically in this country off food, drink, and tobacco. They are tremendously taxed, and yet you say this is a free country. Look at the difference in the case of America. The taxation per head there is about the same. In America they get about £45,000,000 a year in Import Duties on the luxuries of the rich, while here, where we call ourselves free traders, we get about £32,000,000 a year from food, drink, and tobacco, the greater part of which is paid by the working classes. Then you say, "No, we must not tax any of the luxuries of the rich because we might be able to make them help, and it might give our people more employment and better wages." Is there any answer to that? Is not it true that when you tax tea the whole of the import tax has to be paid by the people of this country? Hon. Gentlemen must see that this enormous taxation of tea is a frightful burden on the poor people of this country. The Chancellor of the Exchequer said that it was a very dangerous thing to put a poll tax on the working people, and that it generally ended in disaster. But that is exactly what you have done by the Insurance Bill, under which you have put a poll tax on the people, and yet you cannot put ½d. on any of the luxuries of the rich
§ coming in here, except alcohol and tobacco, because it would tax the rich people and it certainly would help the poor and make the foreigner pay a fair share towards keeping up our markets. I think that the people in this country are beginning to find out what a frightful humbug is the policy which hon. Gentlemen are pleased to call Free Trade. I do not know what the Labour Members are going to do. I do not know whether they will go down to their constituencies and say, "We voted to tax your tea about 100 per cent."
§ Mr. HUNT
There is really nothing whatever to be said in favour of this tax. There is no tax on tea in any of our great Colonies nor in America, because they have got sense enough to tax the things that the rich require. If you had a fair system of taxation in this country you ought to be able to do away with the tea tax altogether.
§ Question put, "That the Clause stand part of the Bill."
§ The Committee divided: Ayes, 158; Noes, 98.1947
|Division No. 436.]||AYES.||[5.45 p.m.|
|Abraham, William (Dublin Harbour)||Bryce, J. Annan||Falconer, James|
|Addison, Dr. C.||Burns, Rt. Hon. John||Ferens, T. R.|
|Agar-Robartes, Hon. T. C. R.||Burt, Rt. Hon. Thomas||Ffrench, Peter|
|Ainsworth, John Stirling||Byles, Sir William Pollard||France, G. A.|
|Alden, Percy||Carr-Gomm, H. W.||Furness, Stephen|
|Atherley-Jones, Llewellyn A.||Cawley, Harold T. (Heywood)||Gelder, Sir W. A.|
|Baker, H. T. (Accrington)||Chancellor, H. G.||George, Rt. Hon. David Lloyd|
|Baker, Joseph A. (Finsbury, E.)||Chapple, Dr. W. A.||Gladstone, W. G. C.|
|Balfour, Sir Robert (Lanark)||Collins, G. P. (Greenock)||Glanville, H. J.|
|Banbury, Sir Frederick George||Collins, Stephen (Lambeth)||Goddard, Sir Daniel Ford|
|Baring, Sir Godfrey (Barnstaple)||Compton-Rickett, Rt. Hon. Sir J.||Greig, Colonel James William|
|Barlow, Sir John Emmot (Somerset)||Condon, Thomas Joseph||Hackett, J.|
|Beauchamp, Sir Edward||Cotton, William Francis||Hall, Frederick (Normanton)|
|Beck, Arthur Cecil||Crumley, Patrick||Hamilton, Lord C. J. (Kensington)|
|Benn, W. (T. Hamlets, S. George)||Davies, E. William (Eifion)||Harcourt, Rt. Hon. Lewis (Rossendale)|
|Bentham, G. J.||Dawes, J. A.||Harcourt, Robert V. (Montrose)|
|Bentinck, Lord H. Cavendish-||Doris, William||Harmsworth, Cecil (Luton, Beds.)|
|Bethell, Sir J. H.||Duncan, C. (Barrow-in-Furness)||Harvey, W. E. (Derbyshire, N. E.)|
|Birrell, Rt. Hon. Augustine||Edwards, Sir Francis (Radnor)||Haslam, Lewis (Monmouth)|
|Black, Arthur W.||Edwards, John Hugh (Glamorgan, Mid)||Havelock-Allan, Sir Henry|
|Boland, John Pius||Elibank, Rt. Hon. Master of||Haworth, Sir Arthur A.|
|Bowerman, C. W.||Esmonde, Sir Thomas (Wexford, N.)||Hayden, John Patrick|
|Brady, Patrick Joseph||Esslemont, George Birnie||Hayward, Evan|
|Henry, Sir Charles||Morton, Alpheus Cleophas||Roche, Walter F. (Pembroke)|
|Horne, Charles Silvester (Ipswich)||Munro, R.||Rose, Sir Charles Day|
|Howard, Hon. Geoffrey||Murray, Capt. Hon. A. C.||Rowlands, James|
|Isaacs, Rt. Hon. Sir Rufus||Nannetti, Joseph P.||Rowntree, Arnold|
|Jones, Edgar (Merthyr Tydvil)||Nicholson, Charles N. (Doncaster)||Samuel, Rt. Hon. H. L. (Cleveland)|
|Jones, H. Haydn (Merioneth)||Nolan, Joseph||Scanlan, Thomas|
|Jones, Leif Stratten (Notts, Rushcliffe)||Norton, Captain Cecil W.||Shortt, Edward|
|Jones, William (Carnarvonshire)||O'Brien, Patrick (Kilkenny)||Simon, Sir John Allsebrook|
|Jones, W. S. Glyn- (Stepney)||O'Connor, John (Kildare, N.)||Spicer, Sir Albert|
|Keating, M.||O'Connor, T. P. (Liverpool)||Strauss, Edward A. (Southwark, West)|
|Kellaway, Frederick George||O'Doherty, Philip||Tennant, Harold John|
|Kennedy, Vincent Paul||O'Dowd, John||Thorne, G. R. (Wolverhampton)|
|King, J. (Somerset, N.)||O'Malley, William||Toulmin, Sir George|
|Lambert, George (Devon, S. Molton)||O'Shee, James John||Trevelyan, Charles Philips|
|Levy, Sir Maurice||Palmer, Godfrey||Wadsworth, John|
|Lough, Rt. Hon. Thomas||Pearce, Robert (Staffs, Leek)||Ward, W. Dudley (Southampton)|
|Lundon, T.||Pearce, William (Limehouse)||Wason, Rt. Hon. E. (Clackmannan)|
|Lynch, A. A.||Pease, Rt. Hon. Joseph A. (Rotherham)||Wason, John Cathcart (Orkney)|
|Macdonald, J. M. (Falkirk Burghs)||Pollard, Sir George H.||Watt, Henry A.|
|Macpherson, James Ian||Power, Patrick Joseph||Webb, H.|
|M'Callum, John M.||Primrose, Hon. Neil James||White, J. (Glasgow, Tradeston)|
|M'Curdy, Charles Albert||Radford, George Heynes||White, Patrick (Meath, North)|
|M'Laren, Hon. F. W. S. (Lincs, Spalding)||Raphael, Sir Herbert Henry||Whittaker, Rt. Hon. Sir Thomas P.|
|M'Micking, Major Gilbert||Rea, Walter Russell (Scarborough)||Wiles, Thomas|
|Martin, Joseph||Reddy, M.||Williams, Llewelyn (Carmarthen)|
|Mason, David M. (Coventry)||Redmond, John E. (Waterford)||Wilson, Hon. G. G. (Hull, W.)|
|Masterman, C. F. G.||Richardson, Albion (Peckham)||Wood, Rt. Hon. T. McKinnon (Glas.)|
|Meehan, Francis E. (Leitrim, N.)||Roberts, Charles H. (Lincoln)|
|Meehan, Patrick A. (Queen's Co.)||Roberts, Sir J. H. (Denbighs.)||TELLERS FOR THE AYES.—Mr. Illingworth and Mr. Gulland.|
|Menzies, Sir Walter||Robertson, Sir G. Scott (Bradford)|
|Molteno, Percy Alport||Robinson, J. M. (Tyneside)|
|Agg-Gardner, James Tynte||Hardie, J. Keir||Price, C. E. (Edinburgh, Central)|
|Aitken, Sir William Max||Harrison-Broadley, H. B.||Pryce-Jones, Col. E. (M'tgom'y B'ghs)|
|Amery, L. C. M. S.||Haslam, James (Derbyshire)||Remnant, James Farquharson|
|Anstruther-Gray, Major William||Henderson, Arthur (Durham)||Richardson, Thomas (Whitehaven)|
|Archer-Shee, Major Martin||Henderson, Major H. (Berks, Abingdon)||Roberts, S. (Sheffield, Ecclesall)|
|Ashley, W. W.||Herbert, Hon. A. (Somerset, S.)||Samuel, Sir Harry (Norwood)|
|Benn, Arthur Shirley (Plymouth)||Hill-Wood, Samuel||Sanderson, Lancelot|
|Boscawen, Sir Arthur S. T. Griffith-||Hope, Harry (Bute)||Sandys, G. J. (Somerset, Wells)|
|Boyton, J.||Hope, James Fitzalan (Sheffield)||Smith, Albert (Lancs., Clitheroe)|
|Bull, Sir William James||Houston, Robert Paterson||Smith, Rt. Hon. F. E. (L'p'l, Walton)|
|Burn, Colonel C. R.||Hume-Williams, William Ellis||Smith, Harold (Warrington)|
|Campbell, Rt. Hon. J. H. M.||Hunt, Rowland||Snowden, Philip|
|Campion, W. R.||Jardine, E. (Somerset, E.)||Stanier, Beville|
|Carlile, Sir Edward Hildred||Jowett, F. W.||Stewart, Gershom|
|Carson, Rt. Hon. Sir Edward H.||Kerry, Earl of||Swift, Rigby|
|Cassel, Felix||Kirkwood, J. H. M.||Sykes, Mark (Hull, Central)|
|Castlereagh, Viscount||Lansbury, George||Taylor, John W. (Durham)|
|Chaloner, Col. R. G. W.||Locker-Lampson, G. (Salisbury)||Terrell, Henry (Gloucester)|
|Clough, William||Locker-Lampson, O. (Ramsey)||Thompson, Robert (Belfast, North)|
|Clynes, J. R.||Lockwood, Rt. Hon. Lt.-Col. A. R.||Thorne, William (West Ham)|
|Cooper, Richard Ashmole||Lonsdale, Sir John Brownlee||Tobin, Alfred Aspinall|
|Crooks, William||Lowther, Claude (Cumberland, Eskdale)||Touche, George Alexander|
|Doughty, Sir George||MacCaw, Wm. J. MacGeagh||Tryon, Captain George Clement|
|Du Cros, Arthur Philip||Macdonald, J. R. (Leicester)||Warde, Col. C. E. (Kent, Mid.)|
|Falle, B. G.||Macmaster, Donald||Wedgwood, Josiah C.|
|Fletcher, John Samuel (Hampstead)||Magnus, Sir Philip||Willoughby, Major Hon. Claud|
|Foster, Philip Staveley||Malcolm, Ian||Wilson, A. Stanley (York, E. R.)|
|Gilhooly, James||Newton, Harry Kottingham||Wilson, W. T. (Westhoughton)|
|Gill, A. H.||Nield, Herbert||Wolmer, Viscount|
|Goulding, Edward Alfred||O'Brien, William (Cork)||Yate, Col. C. E.|
|Greene, Walter Raymond||Paget, Almeric Hugh|
|Gretton, John||Parkes, Ebenezer||TELLERS FOR THE NOES.—Mr. Fell and Mr. Croft.|
|Guiney, Patrick||Pease, Herbert Pike (Darlington)|
|Hall, D. B. (Isle of Wight)||Peel, Capt. R. F. (Woodbridge)|