HC Deb 28 March 1911 vol 23 cc1209-19

In lieu of the Excise Duties payable on tobacco grown within the United Kingdom, which are specified in Part II. of the Fourth Schedule of the Finance (1909–10) Act, 1910, there shall be charged, levied, and paid one-half part of such duties by any person holding an Excise licence to grow tobacco in the United Kingdom, provided that he can establish to the satisfaction of the Commissioners of Customs and Excise that such tobacco is to be used for the manufacture of sheep-dips, insecticides, or for other purely agricultural or horticultural purposes. The Commissioners of Customs and Excise shall have power to make regulations to secure this object similar to the regulations issued under Section eighty-three of the Finance Act, 1910.—[Mr. Laurence Hardy.]

Motion made, and Question proposed, "That the Clause be read a second time."

Mr. WHELER

On behalf of my hon. Friend the Member for the Ashford Division of Kent (Mr. Laurence Hardy) I have to propose this new Clause. It is a very simple one. We wish to reduce by one-half the Excise licence on tobacco grown in the United Kingdom, provided it can be shown to the satisfaction of the Commissioners of Customs and Excise that such tobacco is to be used for the manufacture of sheep-dips, insecticides, or for other purely agricultural or horticultural purposes. I think on reference to Part 2, Schedule 4, of the Finance (1909–10) Act, 1910, it will be found that in one case the duty is to be reduced from 3s. 6d. to 1s. 9d., and in the other case from 3s. 11d. to 1s. 11d. per pound. After all it is only a small concession we are asking for, and I hope the Financial Secretary to the Treasury will be able to grant it. It is a concession which affects a very large number of people who have a licence to grow tobacco in the United Kingdom at the present time.

The CHAIRMAN

I informed the hon. Member earlier in the evening that he would be allowed to move the Clause standing in the name of another hon. Member, but it has since occurred to me that it is rather hard for other hon. Members who are here in their place and ready to move their Clauses that I should allow an hon. Member who has not given notice of this particular Clause to move it before them.

Mr. WHELER

I have given notice of a similar Clause further down.

The CHAIRMAN

Yes, that is the exact point. The hon. Member has given notice further down, and, therefore, he is getting precedence by bringing in the Clause for another hon. Member, instead of waiting for his own turn. It is, perhaps, a new point, but it is a question whether it is fair to hon. Members who are here.

Mr. AUSTEN CHAMBERLAIN

Is there not a clear and definite rule of this House on this subject? I understood that in Committee anybody could move an Amendment or Clause of which notice had been given, but that on the Report stage the Member must be in his place to move his own Clause. I speak on matters of procedure in this House subject to correction and with great diffidence, because I have learnt that however long one sits here one comes to realise that he has not learnt all the rules of the House. But I think it is a clear right of any Member in Committee to move a Clause if notice of it appears on the Paper, and it is only when we come to the Report stage that it is required that the hon. Member in whose name the Clause stands must be present. If that has been the practice of the House without question up to this time I think it might act unfairly if, without notice, that practice was suddenly altered in the course of this Debate. The hon. Member in whose name the Clause stands might very well have gone away, believing that at this stage the subject could be raised by another hon. Member and that it would not be prejudiced by his not actually being in his place. I admit there are great difficulties, and that this is rather a new situation, but I submit, if I am right about the habitual practice of the House, it ought not to be changed without notice.

Sir F. BANBURY

My right hon. Friend is quite right, but he has not gone far enough. My recollection is that in Committee one can move any Clause without notice, but on the Report stage it is absolutely necessary to give notice. In Committee it is not so. Anybody can get up and move a new Clause if it happens to be in order, and, that being so, it follows, as a matter of course, that if a Clause stands in the name of one hon. Member who does not happen to be present any other hon. Member can get up to move it.

Mr. MOUNT

It may not be within your knowledge that the hon. Member in whose name this particular Clause stands was under the impression that the rule is as stated by the right hon. Gentleman the Member for East Worcestershire, and he asked my hon. Friend to move this Clause for him.

The CHAIRMAN

It did occur to me whether it was quite fair to other hon. Members who had later Clauses to call upon the hon. Member for Faversham (Mr. Wheler) to move a Clause of which he did not happen to have given notice at that particular stage, but the right hon. Gentleman the Member for East Worcestershire has put to me the practice of this House. Although I have been over five years in the Chair I do not remember passing over a Clause which another Member desired to move, and that being the case I shall not do so on this occasion. I will ask the hon. Member to proceed to move it.

Mr. WHELER

I may explain that the hon. Member for the Ashford Division wrote to me requesting me to move this Clause. It does not ask a very great concession from the Government, but at the same time it will undoubtedly encourage a considerable number of agriculturists and tobacco-growers in various parts of the United Kingdom. I think we can make it perfectly clear to the satisfaction of the Commissioners that this tobacco, the growth of which we want to see encouraged by a lightening of the duties, is not the sort of tobacco that is used for smoking purposes. It has been proved by experiment that the class of tobacco suitable for smoking should possess but a small percentage of nicotine. The quality of tobacco which is affected by this Clause is such that it will have a high percentage of nicotine. It is a coarse sort of tobacco. It is unsuitable for smoking, but. at the same time, it is valuable for various purposes connected with agriculture. The price of nicotine has risen very high and it has been getting higher and higher. It is very efficient for agricultural purposes, especially for the killing of insects and it is also specially valuable as a wash for the benefit of fruit trees and hop plants. It is the only vegetable product from which this kind of wash can be obtained, and in the case of fruit, hops, and other things of that sort, it is most essential that the wash used as an insecticide should come from a vegetable as distinct from a mineral product. Therefore, anything which can be done by encouraging the cultivation of this cheap coarse tobacco towards cheapening the supply of nicotine will be in the direction of an encouragement to agriculturists generally, and fruit and hop growers. It would also give the farmers a better supply for the purposes of sheep dip. That is my case.

I do not want to take up much time, realising as I do the enormous amount of discussion which will have to take place on the various Clauses to-night, but I would ask the Government to accept this Clause. It is not a very great concession, but it is one which will be very willingly and gratefully accepted by agriculturists and farmers. Experiments have been made in California in reference to the mineral washes, and it has been shown that where various trees have been treated with them the washes have the effect of poisoning the ground and killing the trees. In the case of a wash made from nicotine, however, this is not the case, nor does the foliage suffer, and it has the effect of improving the fruit of the tree as it kills the insects upon it. I ask the right hon. Gentleman, therefore, to accept this new Clause because I am certain that the loss of revenue to the Government would be very small, but on the other hand it would encourage the National Fruit Growers' Association and other kindred societies who are keen on improving our crops of fruit, and especially apples. On behalf of those who wish to see agriculture more prosperous than it is I beg to ask the Government to accept this Clause.

Mr. C. BATHURST

I should like to support this Amendment, being associated with a totally different part of the country to that from which the hon. Member who moved it comes. Living as I do in a fruit-growing district and representing perhaps the most famous sheep raising district in the whole of England, I should like to emphasize the increasing advantages which are shewn to accrue from the use of washes of this sort for spraying trees, and also with the object of preventing what is becoming an increasing curse to this country, namely, sheep scab. As regards fruit trees, it has been found very difficult in the past to discover an insecticide which can be used during the spring and summer months, and which will not have a burning effect upon the foliage mostly owing to these insecticides being of a mineral and a highly corrosive character. Nicotine and other products of tobacco have been found free from these defects, and do not injure the trees while nicotine cures sheep scab more effectively than anything else. The use of nicotine has enabled the New Zealand farmers to eradicate sheep scab from New Zealand. It is known from experiments which have been made in Ireland that it is perfectly easy to grow tobacco in certain parts of this country, particularly in those parts where fruit can most easily and productively be raised. This Amendment does not ask anything of a revolutionary character, because it is open to the Commissioners of Customs and Excise to see definitely whether the sort of tobacco which is being grown is tobacco which can be of any other use than those for which we desire this exemption.

As a matter of fact it is quite possible for the Commissioners or for the Treasury to select certain classes of tobacco which can be grown in Ireland, and presumably could be grown in this country which are wholly unfit for smoking altogether. In addition to that the nicotine which is required for the purposes I have mentioned is produced by a treatment of the leaf which does not involve anything in the nature of curing or fermentation. Therefore it is perfectly easy for the Commissioners to see whether there is any risk to the Excise under the Excise Laws in the use of tobacco for these purposes. I may mention that there is a steadily increasing demand for these purposes for nicotine as compared with other dressings previously used, and for such purposes the scientists are almost unanimous in advocating nicotine as a dressing for fruit trees for the prevention of insect pests. The same thing is the case with regard to the suppression of the insect or organism which brings about sheep scab. For these reasons I do earnestly appeal to the Treasury to make this small concession, especially as it is perfectly easy to discriminate between tobacco used for smoking and that required for these purposes. Owing to the impossibility of growing tobacco in this country because the industry is not permitted under our Excise laws, and owing to the increased demand, the price of nicotine has been going up very much in the last twelve months, during which it has become much more popular. Whereas twelve months ago it cost 12s. a pound, it is now already up to 15s. a pound, and there is evidence that it will go still further in consequence of the advocacy of this particular product by scientific fruit growers in this country. I desire, therefore, to support this Amendment with a strong request to the Secretary to the Treasury to make this small concession.

Mr. EYRES-MONSELL

I desire to say something in support of this Clause on behalf of the fruit-growers of this country. Hon. Gentlemen opposite may think that this proposal is one put down for purposes of obstruction, and they may think it is not very important, but I can assure them that it is of very great importance to a very great number of people in this country. There are about 250,000 acres of land in this country under orchards mainly growing apples, 80,000 under small fruit, and 33,000 under hops, and they are very much subject to destruction by the attacks of insects. The only way to fight these insect pests is to spray with various kinds of insecticides. The winter spray I need not go into, but the summer spray embraces the whole subject of nicotine. The summer spray is of two kinds, one directed to the destruction of the actual insects by contact. This is directed to the pyslla, the aphis, and the red spider. The other kind of spray derives its virtue from its toxic Qualities, and that is used against biting insects, such as the caterpillar and the weevil. Unquestionably it is the fact, and if you ask any fruit grower you will find it is so, that nicotine insecticide is the best for this purpose, because it is the only one which kills both by its contact and by its toxic properties. Consequently you may spray the trees with a wash made from it when they are in full bloom, because it kills the insects without sterilising the pod. I think we are going to have a great boom in English apples, because, after a great number of experiments, the growers have decided the best kind of apples to grow. The chief enemy of apples is the Psylla, and it has been estimated that spraying kills 90 per cent. of them.

If we could get rid of the insect pests which prey upon apples we should it is estimated double the crop in this country. There is an enormous increase in production and when we consider that the large number of a quarter of a million acres is given over to apples there is here a possible source of great profit to the agricultural community. Expense is the only reason why the growers do not use nicotine and the reason for that expense is growth of demand over supply. Nicotine is manufactured out of the refuse of tobacco, and the only material the manufacturers get are the stalks and midribs of the leaf. The price has risen very considerably in the last twelve months, and I am told that that is due to the action of the 1909 Budget, the extra duty on tobacco having forced manufacturers of tobacco to use more of the refuse for the manufacture of the cheaper forms than they did before, and so leaving less refuse for the manufacturers of nicotine. The result is that the growers are using less to spray their crops with in this country, and to the small man the price is absolutely prohibitive. This means that the crop suffers and there is less production. Very often the small man was able to pay his rent if he had a successful crop from even a few apple trees, and, therefore, this question is important. I have been working out the results of experiments at Wye and by Colonel Everard and by myself in the Vale of Evesham, and I think we could produce nicotine at about 3s. per liquid pound instead of 11s., not allowing for cost of extraction. That would be a great benefit to the whole of the fruit-growing industry. I have tried to make out a good case for the real need of the cheap supply of nicotine. It will benefit thousands of men, it will give a great impetus to the whole fruit industry, and particularly to the apple industry, and it would be easy for the Government to devise a system of allowing us to grow this tobacco Excise free, whereby they would not lose a farthing in revenue, and if they did this they would be granting a very real boon to a most worthy industry.

Dr. HILLIER

I think there is every reason to believe that this Clause if adopted by the Government, instead of diminishing the revenue will actually increase it. The stimulus which it would give to the industry of raising this crude form of tobacco would be so substantial that in a very short time the actual revenue would be greater than it is now. It would, moreover, be the means of giving employment to a large number of men engaged in cultivating the land, and it would materially benefit another important industry. On these grounds I urge the right hon. Gentleman to accept this moderate proposal.

Mr. HOBHOUSE

The hon. Gentleman (Mr. Eyres-Monsell) said something about this Clause being regarded as an obstructive Clause. No such thought crossed my mind, nor, as far as I know, the mind of anyone on this side of the House, and I am perfectly certain that his speech was a model of brevity and conciseness, on which I congratulate him. The object of the Clause, as I understand it, is that home-grown tobacco, if used for agricultural or horticultural purposes, should only pay one half the duty which is charged upon foreign-grown tobacco in respect of Customs. The hon. Member went on to say that if he and his friends were only allowed to grow tobacco free there would be an immense reduction in the cost of certain nicotine preparations which are essential to horticultural purposes. I understand the present position to be this. The nicotine manufacturers use, largely, foreign-grown tobacco, and in respect of that tobacco they are allowed a drawback which in practice comes to something like 4s. a pound. The nicotine is made from offal, which in itself comes from the stalk. The stalk, being the heaviest part of the tobacco, pays on an average a rather larger proportion of duty than the ordinary leaf, which comes in at the Customs rate of 3s. 8d. The manufacturer, getting a drawback of about 4s. in the pound upon his offal, practically uses foreign-grown tobacco free of Customs duty. That is the net result of rather a complicated set of transactions. If, therefore, he charges an excessive price to the person who consumes the nicotine portion, he does so, not in respect of any duty upon his raw material, but either because he has a limited competition or because he has a very large market in which he can sell his products, and the action of the Customs Department in no way affects the price at which he retails his commodities to the public.

Mr. WHELER

Nicotine is now manufactured in bond, and they do not pay any duty on the tobacco that goes into the nicotine. They only make it out of the midribs and the stalks, and it is a very limited quantity. I want it to be grown in this country in order that it may be made out of the leaf.

Mr. HOBHOUSE

The proposal of the hon. Members (Mr. Eyres-Monsell and Mr. Wheler) is that they shall be allowed to use home-grown tobacco for the same purpose as foreign-grown tobacco is now used for, only paying one-half of the Customs duty. Under the Tobacco Manufacturing Act of 1863, which I am told is one of the most difficult Acts in the world to construe, and the Amendments to which have rendered it more complicated and almost more unintelligible than any other Act of Parliament, there is nothing in the regulations which prevents the growers of home tobacco from denaturing it in approved premises under Excise restrictions, the tobacco being then issued to the manufacturer duty free. There is nothing to prevent that being done, except that there is no tobacco grown in this country which can be so treated. There is a certain amount of tobacco grown in Ireland and there are one or two experiments being conducted, I believe, in Scotland on a very limited scale, and in this country there is no home-grown tobacco. That is the first difficulty in the way of realising what the hon. Gentleman wishes to do. He has, therefore, first of all to stimulate the growth of tobacco in this country.

Mr. WHELER

Within a few miles of where I live a friend of mine grew a very considerable amount. It was all destroyed after a certain time, but the experiment shows that tobacco could be easily grown.

Mr. HOBHOUSE

Perhaps the hon. Member has forgotten that under the Finance Act of last year and also under the Act for which the hon. Member (Mr. William Redmond) was responsible, tobacco may now be cultivated in this country and sold with the ordinary Excise restrictions, so that the difficulty which existed several years ago no longer exists. What the hon. Member has to do is to persuade his friend to repeat his experi- ments. If he brings his crop to maturity and can cure it, he can take it to approved premises, and it will be there denatured. There is nothing at present to prevent it. The tobacco can then be issued to the manufacturers duty free, and the result will be that if there is any lack of material for these nicotine preparations the difficulty will be with the agriculturists, and I have no doubt if it promises to be a profitable experiment there will be plenty of people who will be prepared to undertake it. But, as a matter of fact, this Clause, as it stands, would impose upon them a penalty which need not exist at the present moment. It would charge them half rates, whereas under the existing regulations there is nothing to prevent them getting their commodity without any payment at all. Therefore, from the point of view of hon. Gentlemen opposite, they had better not try to bring the Clause into operation, because they will defeat the purpose they have in view.

Mr. AUSTEN CHAMBERLAIN

We should be grateful to the right hon. Gentleman if he will give a little more consideration to the subject in consultation with the Excise authorities to see whether they cannot facilitate the object which is desired by everyone who has considered the matter at all. No doubt, subject to various rather difficult arrangements, the tobacco used for the production of nicotine may escape duty. I think where the nicotine is made out of the refuse of tobacco imported in the ordinary way for smoking purposes into large factories and bonded warehouses, and then issuing from those factories where people have to be in close touch with the Excise authorities, it is very simple to comply with the regulations. I think it is much less easy for the individual farmer who does not know anything of the Excise, and does not want to if he can avoid it, and I think it is one of the cases where the Government ought always to lend a ready ear to anyone who complains that their regulations are unnecessarily strict. I only desire to press on the Government, and through them, on the Excise authorities, the necessity for saving the grower and producer from trouble, even if it is going to cost them something. As long as we regarded tobacco as a thing which cannot be grown in this country, of course we had no consideration for the producer. That very restriction itself killed the trade which was in existence at the time, and it was put on purely in the interests of the revenue. I think the revenue has a great deal to make up to the tobacco trade, and they must be more than usually conciliatory in this matter. I agree with the Government that whilst we have had a very useful discussion on this Clause, the Clause would not produce the results that we desire to have produced. I believe that the right hon. Gentleman is right in saying it would in fact tax this home-grown tobacco used for making nicotine, even where it now escapes, and that is certainly not the result that we wish. Everyone in this House wishes that that tobacco should escape in all cases, and that it should be made as easy for it to escape as possible without endangering the revenue. I do not believe that is difficult if the Government will really turn their attention to the matter.

Mr. ROWLANDS

Might I suggest that the best thing to do, seeing that all that is desired can be done under the law, when the tobacco is used for curing purposes, is that the right hon. Gentleman will promise if he receives representations from those interested as to any practical alteration of the existing regulation, to give his earnest consideration to the suggestions of the amendment to the regulations, which will allow the industry to be carried on with greater facilities than at present.

Mr. HOBHOUSE

Certainly. Persons interested in a particular trade have access to Government Departments, and if the hon. Gentleman or any of his Friends interested in the matter care to make representations to me, I shall be very glad to consider what they have to say, and to see what can be done to meet their wishes.

Mr. WHELER

I wish it could be made plainer to agriculturists what position they are in now. I certainly do not understand what they can do, and, if it can be made plain by regulations issued from the Treasury to many agriculturists who want this solely for the purpose of insecticide, it would be a great benefit to agriculturists as a whole.

Mr. HOBHOUSE

Perhaps the hon. Gentleman will take some opportunity of communicating with me, and I will look into the matter.

Motion, by leave, withdrawn.