FINANCIAL RESOLUTIONS.—TEA.

HC Deb 22 May 1911 vol 26 cc53-91

Resolution reported, "That the Customs Duty charged on tea until the first day of July, nineteen hundred and eleven, shall be charged as from that date until the first day of July, nineteen hundred and twelve, that is to say:—

Tea, the pound … fivepence"—[The Chancellor of the Exchequer.]

Resolution read a second time.

Mr. WHELER

I beg to move after the word "pound" ["Tea, the pound"] to insert the words, "if grown within the British Empire fourpence; if grown without the British Empire."

My Amendment is a very simple one, and its object is to further the great idea of Imperial Preference by giving to tea grown in our Colonies the benefit of a penny less in the pound by way of tax. It will also bring about a decrease in the price of tea, because a considerable por- tion of the tea imported into this country comes from the Colonies. It is therefore reasonable to assume that there will be a reduction to the consumer if not of a penny at least of a substantial kind. The Tea Duty presses very unevenly upon the people of this country, because the same duty is levied upon inferior and low-priced tea—namely, fivepence—as is levied upon the more expensive descriptions. Tea varies in price from 8d. to 5s. in the pound, but a uniform duty is imposed upon all classes of consumers alike, and the man who consumes cheap tea is paying a far higher duty in proportion than the man who buys the higher priced article. Therefore, on the face of it, the duty seems to me to be a very unfair and unjust one, and one which one would like to see alleviated and lightened as soon as possible. We find that last year we received from foreign countries something like thirty-three million pounds of tea, whereas from the British Empire something like two hundred and fifty million pounds came in. If a penny were taken off this latter quantity there would undoubtedly be a considerable reduction in price to the consumers in this country. I am quite aware that I shall be probably met by the statement from the Government that they are not in a position to accept this proposal upon the ground of expense, but there are two replies to that. plea: one is that the tea duty is just as injurious as it was last year, and therefore I am entitled to bring this question forward again, and to try to get something done to remove this injustice; and the second is that only last week we had a most optimistic speech from the Chancellor of Exchequer on the subject of the revenue.

He said the prospect of an advance in trade was excellent, and that the index of the trade barometer was "set fair." Further on he stated he was reckoning on a "sunny year," and all these expressions make me think that it is time that something should be done to relieve the community as a whole from one of the most heavy food taxes which it has to pay. We also know that the Chancellor of the Exchequer was able to make certain concessions with regard to the Cocoa Duties, which I think have been brought about more by party and political considerations than any present need to-day with regard to the trade. I do not think the reduction will have any effect upon the price or benefit the workers in that trade, who are the best housed, the best fed, and the best looked after of any workers in any trade in the country. On these grounds, and as we have a Chancellor of the Exchequer who is so prosperous that he can give the Members of this House a quarter of a million of money, I think it is a fitting time that the community should be relieved from the burden of this tax. That is my reason for moving this Amendment this afternoon. I know we shall be met with the statement that the money cannot be found, but even if the Chancellor cannot accept the actual proposal which I put forward on the ground of its simplicity there might be other ways in which the tax on tea might be modified or graduated so that the person who buys the cheaper tea shall not have to pay the same tax as the person who buys the higher-priced article.

My object in moving this Amendment is because I think that this tax does hit the working community very hardly, as tea is an essential in every household. That is one of my reasons for moving this Amendment, but there is another and a very important one, and that is that it would encourage the principle of Imperial Preference. I think at a time like this, when we know there is about to begin a new Imperial Conference between representatives from our various Dominions in all parts of the world who are assembled here, if the Government can see their way to meet us in this small matter of Colonial Preference it would be a very gracious act and a very beneficial one, which would show that we all desire closer commercial union between every part of our Empire. Those are the two reasons why I venture to move the Amendment this afternoon, and I would appeal very frankly to the Chancellor of the Exchequer and ask him to consider this question, and see if something cannot be done. I do not want to bring forward the questions which we heard so much about at election times, but at the same time we know that there has been and will be much said about food taxes. At the last election we heard as much of the question as ever, and here the right hon. Gentleman has an opportunity of lightening one of our food taxes.

Mr. BARNSTON

I desire very briefly to second the Amendment which my hon. Friend has moved, and I do so for the same reasons which he has brought forward. One is that I think the whole duty on tea as it stands at present is too high, and the other is that I want to establish, even if only in a small way, the principle of Colonial Preference. As my hon. Friend has pointed out, and as this House well knows, the great bulk of the tea which comes in and is consumed in this country, is sent from our own Colonies, and I do not think anyone will suggest that if you take a. penny off Colonial tea and leave the duty as it is in regard to tea which comes from other countries, a benefit will not be given to the consumer, and that the price of tea will not be reduced. To my mind it would really be absurd to suggest that unless at the same time you prove that the area of production cannot be extended and that there is no competition amongst producers, both factors of which, of course, are absent in this particular case. It is quite true that, I think, in 1906, the Prime Minister, who was then Chancellor of the Exchequer, told the House that taking a penny off tea would not be any advantage to the consumer, and I believe the very next year, or at any rate within two years, he himself took a penny off tea. I presume, therefore, the right hon. Gentleman waited and saw and discovered the error which he had previously made. I am sure the right hon. Gentleman opposite realises how very many great objections there are to the tea tax. Tea, as we all know, is a very necessary food of the poor, and a food which we want to encourage the poor to use and, as a matter of fact, the poor to-day spend much more on their tea in proportion to the rich, because the tax is on weight and not ad valorem. I think most people will admit that a great deal more tea is consumed in the cottages of the poor in proportion than in the houses of the rich, and the tax can be of no benefit to anyone, even indirectly, in this country, because we do not produce any tea at home.

I suppose the objections to the tea tax will almost be admitted by hon. Members opposite. I will not refer to election addresses because some hon. Members think that what they leave out is more important than what they put in; but at the last election we had stuck on every gate post: "Tax the luxuries of the rich, and not the necessities of the poor. Do you want cheap food? Then vote for So-and-So, and hands off the people's food." We do not ask the Chancellor of the Exchequer to take his hands off the whole of the people's food, because we know that is impossible, but we ask him to take the tax off one item of the people's food which is very necessary for the poor. We also believe that if you take the tax off tea which comes from the Colonies you will increase the idea of Colonial Preference. I know the application of the idea in this Amendment is very limited in extent, because it can only apply to India and Ceylon, but I believe, even as regards India and Ceylon, we shall find that reductions could be made in their tariffs with advantage if the Governments concerned thought they would get some advantage from us. Whenever we speak of Colonial Preference we are told by hon. Members opposite that we cannot have it because it will increase the cost of the people's food. The argument may be sound or unsound, but the inevitable effect of the Preference which we suggest by this Amendment must be that it will not increase but decrease the cost of the people's food. By taking a penny off the tea which comes from our Colonies you will be taking a penny off tea which is consumed by the working classes. We have in our country a certain proportion—I believe only a small proportion—of China tea, but everyone knows that it is consumed practically only by well-to-do people. It might possibly be argued that, China tea being what I may call a luxury, the people who buy it would possibly still continue to buy it, but if they do not the only result would be that we should take more tea from India and less from China. Surely by doing that you would be increasing a great industry in India, by increasing a great industry in India you would be increasing the purchasing power of India, and by increasing the purchasing power of India you would be increasing the volume of manufactures which they take from us, and indirectly increasing employment and wages for working people here. I hope the right hon. Gentleman will be able to give us some assurance, at any rate as regards the rate of the Tea Tax, and that he will bear in mind this question which so affects the working classes.

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

This is a very hardy annual. In fact, I am not sure I was not the first to move it by way rather of testing the sincerity of the views expressed on the other side of the House then with regard to Colonial Preference. I moved it and secured a seconder from my own side, but could not get anyone to go into the Lobby with me, though there were about 200 Colonial Preferentialists in the House. The reason, no doubt, was that they could not at the moment afford to get rid of the duty. The hon. Members who have moved the Amendment have raised two separate and distinct questions. One is that the duty is too high at present. That I am not prepared to challenge, but if I could afford to take off some part of the duty this is by no means the form in which I should start doing it. I will tell the House the reason why. If you are going to begin Imperial Preference I do not think this at any rate is the best place to start it. It is assumed that all the tea that comes from China is a luxury. As a matter of fact some of the cheapest tea comes from China at present. Of course, there is a trade with a very special class of China tea, but that is a very limited part of the amount. The vast majority of the teas which come from China are exceedingly cheap teas, and you cannot put a higher duty on China tea without interfering with the teas of the poorest people in this country. I have another reason. I am now dealing purely with the preference part of the argument. If you give a preference to India in this respect, what can India do in return? The idea is that you should give a preference and have an arrangement with India? India at present takes about four-fifths of her imported goods from us. On the other hand, we by no means are her best customers. The United States of America is an extraordinarily good customer, and the increase in the trade between the United States and India is enormous year by year.

Mr. AUSTEN CHAMBERLAIN

Are you talking of all trades or of tea only?

Mr. LLOYD GEORGE

Purely of tea. I do not really know what the figures are with regard to other commodities. If you had an arrangement of this kind between this country and India, involving, of course, mutual preference, it must be an arrangement which would be detrimental to the United States. What is proposed is that we, who at present enjoy something like four-fifths, I believe, of the trade of India in imported manufactured goods, should, by means of an arrangement of this kind, compel India to discriminate against some of her very best customers. That is an arrangement which would be exceedingly hard to force upon the population of India. Let us look at it from the point of view of China. The tea we take from China is a very small proportion of the total tea that is imported into this country. We get 18,000,000 pounds of tea from China and from our British possessions 233,000,000 pounds. That is a very small proportion, and to discriminate against, China in a matter where there are only 18,000,000 pounds involved would take away a proportion of the revenue which I could not afford, and would, in addition, discriminate against China in a matter vital to her trade, she being also one of our best customers. A good deal of our trade with China passes through Hong Kong. China buys more of our goods than she buys from any other country in the world. Speaking from memory, I think China buys more of our goods than of the goods of any three European countries put together. Is it really fair, is it good business, that you should discriminate heavily against one of the very best customers we have in the whole world? China and the Argentine are the two countries where we are easily first, where on the whole we have maintained our lead and where we are increasing our business year by year, and therefore I think it is an exceedingly bad thing for business, when we are doing such admirable trade with China, that, purely in order to carry out what is called a principle which in itself would be very unfair to the very country concerned, we should also quarrel with one of our very best customers in the world. If I were an advocate of Imperial Preference I certainly would not begin with tea. Tea would be a very bad business to begin with at any rate. I am now arguing from the standpoint of the hon. Member who moved the Amendment, and I am certain that if he 'were a Chancellor of the Exchequer in a Tariff Reform Administration, and if he began to carry out the principles which he has advocated with such fervour in this House, and I am sure with greater fervour on many platforms in the country, in his own constituency and in others, and evidently with very great effect in his own, he would not begin with tea. It is full of all sorts of difficulties and complications. It involves hitting your best customer and inflicting injury upon the very great British possession which we are supposed to prefer. I shall certainly oppose this Amendment.

Mr. AUSTEN CHAMBERLAIN

The Chancellor of the Exchequer has rightly said that this Amendment is becoming an annual one. It is likely to be an annual Amendment until it finds itself placed upon the Statute Book. The right hon. Gentleman says he himself was the first to move, and that he did not at that time get any support from us who sat on the Government Benches. That is quite true. Rightly or wrongly, in introducing to the notice of our countrymen a great new principle, we thought it was not fair to pledge the House of Commons to the change without any reference to the country, and we had undertaken until we had consulted the country that we would make no change in our fiscal system. We are now free to advocate and support in this House on every possible occasion that change in the fiscal system. The right hon. Gentleman said the subject introduced by my two hon. Friends, in very interesting and able speeches, was, after all, a small thing in itself, and not the point at which you ought to begin Imperial Preference, even if it were within the contemplation of the Government to start that system at once. I frankly admit that I am mainly interested in the Amendment of my hon. Friend as being one more opportunity for putting forward our views in favour of a common Imperial commercial policy, and of the principle of mutual preference for British productions throughout all parts of the British Empire. If the Tea Duty were the first and last means by which we could promote that policy, I think the policy would have comparatively small reasons to support it, and that it would have, even if adopted, a small yield. But that is only part of a very much bigger policy, which I cannot discuss on this occasion. Whenever we put the Tea Duty forward, it must be understood that, whether we are alluding to and arguing the larger question or not, with us it is not the whole policy, but only one portion of a greater and more extensive policy. But even if you take the Tea Duty on its merits, is it open to the objection which the right hon. Gentleman brings against it? He says he cannot afford to give up the present revenue; he cannot afford to empty his pocket unless somebody will fill it up by some other means. We will undertake to fill it up for him if lie will swallow a. little more of our prescription.

The right hon. Gentleman's argument was that the acceptance of the Amendment would be injurious alike to India and Great Britain. Take the case of India first. The Chancellor of the Exchequer said we should be compelling India to discriminate against her best customer, and in a later passage he said, we should be discriminating against our best customer. That is a doctrine which is the peculiar possession of the Government of the day, and it finds no place in the mind of any other civilised Government. The idea that to treat your own people in a better way than we treat strangers is to discriminate in an unjustifiable manner in favour of your own people and against other countries is an idea which is repudiated by every other Government in the world. We are the best customer of America. Do they consider that they are discriminating against us when they give better terms to their oversea Dependencies than they give to us? Does that prevent them from bargaining against us with the island of Cuba? Nothing of the sort. Everywhere else throughout the civilised world the affairs of an Empire within the bounds of the Empire are recognised as the affairs of that Empire alone with which foreign Empires have nothing to do. It is only we who are to be told that, because the seas separate or unite the different parts of our Empire, we should treat the different parts as if they were no nearer and dearer to us than foreign nations, for fear of offending our foreign competitors. I think that is a wrong doctrine. It is a Separatist doctrine, and I wish the Government, whatever policy they adopt, would drop that line of argument and get that preposterous theory out of their minds at once. I wish the right hon. Gentleman to consider the case of India a little more closely. He speaks as the defender of India. On whose behalf does he speak, and who has briefed him? Does he think that if he were to consult the non-official members of the new Council, there would be a majority for the fiscal system this Government has imposed, and which all governments have imposed on the Indian people? No, the fiscal system of India at the present time is imposed from home. The right hon. Gentleman said that if he offered Preference in return for mutual Preference we should be compelling them to do something against their interests. I would rather take the opinion of India than his. I say that we are compelling them to do something at present which they do not wish, and the Viceroy and others are beginning to warn us that native opinion is making itself more clearly heard on the fiscal system of India. I do not say that you can divorce the fiscal system of India from all control from home. As long as our present system of governing India continues the home Government must have a voice in those matters, but I have yet to learn that if you adopt the principles of Tariff Reform in regard to the Tea Duty and other matters you could not give larger fiscal freedom than India now enjoys not only without injury to Imperial trade but with great advantage to it.

Why should not India have that preference? The right hon. Gentleman says that America takes a large proportion of India's annual output of tea. We are not now the only purchaser of India's commodities. We have been her first and most important customer. I would ask the House to look at the interesting despatch sent by Lord Curzon's Government. Hon. Members will find from this document that never was a country more favourably situated to defy retaliation than British India is at the present time. Her exports are in the main exports of raw materials, and they must continue to be so for many years. She is exporting what other countries desire to have. She gets to a large extent free entry for her goods. It is not out of gratitude to her for receiving their goods, but because foreign nations must have those raw materials. I say that although a preference on the Tea Duty is only a small part of a great policy, standing by itself it would be a useful step in the right direction. It would he received in India as a recognition of our interest in her prosperity and welfare, of the common ties which bind us together, and of a desire to help and promote her prosperity. Though I agree with the Chancellor of the Exchequer that you cannot say China tea is all rich men's tea, and that all India tea is poor men's tea, I must say that a. great deal of China tea is the very poorest and worst in the market, and is not very good value for the money spent on it. I think it is used in blending and in making down the quality of India and Ceylon tea. In any case, even if you cannot differentiate between costly tea and cheap tea under the names of China tea and India tea, the distinctions do not coincide. I venture to observe that that is a distinction there is no attempt to make at present. Therefore, you are not introducing a new anomaly, but only continuing an existing one. I would remind the House that it is a great mistake to suppose that poor people always drink cheap tea. Hon. Gentlemen from Ireland often informed me when I was Chancellor of the Exchequer that the poor people in their country drink very good tea. They are accustomed to pay wonderfully high figures for the tea they drink. I remember the right hon. Member for West Islington (Mr. T. Lough), who knows a good deal about the tea trade, often favoured us with his observations on the subject when we were in office. He stated that cheap teas were not bought by poor people, but by rich people to give to their servants. I do not know how much truth there is in that statement. I hope there is not much truth in it. But it is a mistake to suppose that by any graduation of the duties you would necessarily be taxing higher the richer people and letting off the poorer. These are subsidiary questions. On the principle which my Friends have raised, although we cannot carry the matter further than a Division on such an occasion as this, I shall vote with them if they go to a Division in order to pledge myself to the principle the Amendment represents.

Mr. HOLT

I do not mean to follow the argument of the right hon Gentleman opposite. I wish to say a word or two, first of all, as regards China. I think the House must not forget that our trade relations with China arose out of the policy forced upon that empire by war. We forced on the Chinese Free Trade, and our whole moral position is that if we trade with China we cannot treat them in a different manner from what we compelled them to trade with us. I think China is entitled to better treatment from us than any other country. We are particularly bound to be scrupulous in all our dealings with China because of the past history of our dealings with that country. The Chancellor of the Exchequer has pointed out that it is a country in which we hope in future to do a very large trade. There is another country from which we receive a very small quantity of tea, namely, Japan. I would suggest that the adoption of this Amendment would be a breach of the commercial treaty recently concluded between this country and Japan. My recollection is that under that treaty we have pledged ourselves to treat Japanese goods in the same way as those from any other quarter of the globe, including India. This would be an infraction of the terms of that treaty—I think I am right in saying so. Is it right that we should proceed to discriminate against some of the articles which come from that country?

5.0 P.M.

I think the House may take it for granted that we shall never succeed in keeping that treaty if we discriminate against Japanese tea. Tea comes from Java, which is a Dutch possession, in connection with which we get substantially Free Trade. It is also one of the countries which are very prosperous, where trade is increasing very much, and where again if we allow free opportunity of trade with us, we have every reason to hope that their Government will continue to give a similar opportunity to us. We have a very good opening for our goods in their market. Why should we proceed by this particular proposal to discriminate against this Dutch possession? It seems to me an extraordinarily foolish proposition from a business point of view. As the Chancellor of the Exchequer pointed out, the whole thing is absolutely trifling in itself. The British possessions have already got the vast bulk of our trade in this respect. They have hardly any reasonable prospect of benefiting their trade with us by the adoption of this proposal, which necessarily involves hostilities to three of our best customers. You could not have a better illustration than this proposal of the incompatibility between the arguments for Colonial Preference and the arguments put forward in favour of a fighting tariff to induce other countries to treat you well, because this very first proposal of Colonial Preference aims at three of the Powers that have treated us better than many of the others.

Mr. MACKINDER

I admit in supporting this Resolution that we are not dealing with what is intrinsically a very important business, but we who support it are supporting it, not because of its intrinsic importance or unimportance, but because we wish to see introduced into our tariff the principle of preference. If we had any other method of introducing that principle in these discussions, we would adopt that method. As there is not, at this stage, at any rate, of the financial discussions of the year, the Tea Duty is the one opportunity which presents itself. But, apart from that, I would like to deal with one argument of the last hon. Member (Mr. Holt) who spoke. He referred to the treaty which has recently been made between this country and Japan, and thinks that the establishment of such a Preference as this with a penny discrimination against Japan would be a breach of that Treaty. But the real point we have to look at is what would have been the position of this country when that tariff was being negotiated if we had had an opportunity of dealing with Japan upon the basis of preference and discrimination with regard to Tea Duty. I may remind the hon. Member that a year ago when the general tariff of Japan was established which rendered necessary the Treaty recently made, Count Kamura used these words: "As Great Britain is pursuing a Free Trade policy there is no room for a convention with that country." With extraordinary ingenuity the Government has managed to make a convention with Japan, by setting up a bogey, if I may say so, to be knocked down, by dealing in discriminations which we have not established. As I understand that is practically what it comes to. Surely the hon. Member is misinterpreting altogether the policy which we advocate from this side of the House when he sees an incompatibility between imperial preference and giving a favoured treatment to those foreign countries which treat us favourably. Surely the hon. Member is aware that there are three stages in a tariff. You wish to deal both with nations within the Empire and nations without the Empire. You have a general tariff; then you have an intermediate tariff, which you give to nations which treat you well, and then you have a preferential tariff still lower, which you give to countries within the Empire. Had there been any question of Japan dealing with us on that basis for the purpose of negotiating a treaty, then I submit the course would have been open to us to still further reduce our tariff with regard to tea from India, leaving Japan a substantial preference if she would give us a preference in return.

Mr. HOLT

Preference against whom?

Mr. MACKINDER

The position would be practically this. If we had once established the principle of granting a preference on tea, which is our object in moving this Motion, it would have been open to us to have charged a 3d. duty on Indian tea, a 4d. duty on Japanese tea, in return for a preference for our goods going into Japan, and a 5d. duty against other countries not granting us such preference. You could not ask for a more significant utterance than that given within the last few weeks by Lord Minto, who recently returned from the Viceroyalty of India. It has already been referred to by the right hon. Gentleman below me (Mr. Austen Chamberlain). He refers in the first instance to Canada, and mentions that Canada has created manufactures and become strong by artificial aid given to her own industries. Of course India, he says, is not in the same position as Canada. Then he proceeds to argue that if they want to create great industries in India he does not see how they can do so without something like tariffs. That is to say, he in that speech foreshadows what he believes is coming in the East, not only in India, namely, tariff systems set up with a protective object, exactly as tariffs have been set up in Canada. Now I submit that in dealing with China and India, and the contentment of our own fellow-subjects, with our allies Japan, this very article of tea is an important article in regard to which to establish the principle of Preference, because it is inevitable that you will have a demand from India for protective duties with regard to industries, and you will desire, in the interests of Lancashire and of other parts of this country, that basis. You are dealing now with the new Councils on which native opinion will find greater expression than it has hitherto received, and you will have to deal with these authorities far more as authorities with their basis in India and not simply in the Indian office in this country, and in dealing with those you will give satisfaction and contentment in India in proportion as you shall, in return for any advantage given to you when they are establishing a protective tariff, give advantages to them.

I submit therefore that it will be of the greatest advantage to us that we shall have established the principle of preference in regard to this very article of tea, which is one of the most important of exports of Eastern countries, for the purpose of negotiating, as we presently shall have to negotiate, in regard to Indian tariff and Indian industries. I am aware, as the right hon. Gentleman who spoke just now has pointed out, that for a long time to come the greater part of Indian exports will have to be raw materials. But the purpose for which other countries within the Empire have established tariffs is in order to build up, in their infancy, industries, and the object for which tariffs will be established in India, as is inevitable, will be to start, in their infancy, industries, and therefore they will leave untouched the fact that the greater part of the exports from India will be in raw materials. That export will be perfectly safe because other industrial countries must buy the raw materials. So long as India exports raw materials she has nothing to fear if she puts on a duty against other countries for the purpose of protecting her industries. If she seeks, as I believe she will have to seek, and as I believe Lord Minto, a high authority, has expressed it recently, to protect her infant industries, then we shall be in the position that in the interests of our own industries here we shall have to negotiate with the Indian Government, and when we establish here the principle of Preference in regard to tea, we indicate the lines on which we will act in our negotiations which will give the greatest satisfaction to India. We shall have accepted that principle because it will be of the highest advantage that we are prepared to break down our Chinese wall, as it has been described, in our theories of economics, and to go into a business negotiation with India.

But in regard to China I do not think that anyone can fail to see what is happening every day almost at the present time. We are very near the time when we are likely to have to meet a similar demand on the part of Chinese industrial organisations. We have at the present moment enormous undertakings in China in the way of railways and the beginnings of industrial concerns. It is inevitable as the Chinese Government finds itself in competition with the other countries of the East that there will he a demand, as the demand has already come in India, for Protection. When that arrives then I submit that we, with our tariff and the principle of Preference established in that tariff, will be in a position to negotiate with China exactly as we might have negotiated with Japan. As it is, we have negotiated with Japan fundamentally because we have a fleet of warships to help Japan, which makes us valuable allies, and because the quid pro quo which Japan received from us is not in the way of trade but is in the way of taxes paid in this country to maintain our fleet; but I submit that as it has been said just now we have imposed upon China certain trade privileges for our own advantage by force, so it is in regard to Japan. We have been able to make that treaty because we have a great fleet, for which the taxpayer of this country pays, and this is the quid pro quo for Japan not having imposed upon us the disadvantages under a new tariff with which we were for the first time threatened.

I submit in regard to tea, which is the one thing that we can discuss in this Debate, that here you have an Oriental export which must come into negotiations, whether with Japan or China or India, or with Holland in the future—and there are tariff questions even in Holland. We shall then have established a principle, which is all you are asked for in this Debate, and it will be possible for us then by the judicious favour of our friends within the Empire, and also by the favour of our friends without the Empire, to bargain, and arrive at results of the greatest value to the industries of this country, which are manufacturing for export. That seems to me to be the real gist of the matter in this Debate. What we want to do is to establish a principle; but it is a principle which is of the greatest importance, and it is of the greatest importance to signify it as soon as possible to other countries, because, as things stand, we have got fair notice from Japan, through Count Kamura, that as commercial persons we are not worth negotiating with. We cannot hope to negotiate with any other country when we have not the same basis as we had in the case of Japan. I believe it is claimed that we did negotiate with Roumania and arrive at a treaty with them, but in most other cases we have not been successful in making treaties, except with Japan, and in the case of that country the quid pro quo which we are really giving is an alliance based on the Fleet.

We impose on India at the present time a policy of Free Trade. I venture to think it will be impossible in the long run to impose that policy upon India when we do not impose it upon the other portions of the Empire, which have not at all the same significance, from the point of view of population, in the Empire, as India itself. Every change in the Government of India which has been made—and I believe that the time had come for making certain changes—has been in the direction of giving broader and wider play to the voice of India itself. There are hon. Gentlemen sitting below the Gangway on the other side of the House who ask that we should give freer play to the native voice in the Government of India. One thing is quite certain—that in proportion as you do give freer play, so you will be giving scope to a process which you can only counter on this side by a system of preferences established here. The difference between us is this: It seems to me that hon. Gentlemen opposite look hardly beyond their noses; they look at things as they stand to-day. We on this side look forward ten, possibly twenty years; we see that it is essential in these days to build for the future, and it is because of that difference between them and us that we want to make an investment for Tariff Reform—in the nature of an investment for the future, and we do not wish to be consuming the whole products of to-day's prosperity. It is for that reason that we wish to indicate what is possible, and to tell India, as well as the remainder of the world, that we are going to adopt a principle which will make us a practical business nation, ready to bargain and do business, not merely with nations within the Empire, but with nations outside it.

Mr. TOULMIN

I cannot quite agree with the hon. Member who has just sat down that we on this side of the House are unable to see further than our noses. We are willing to take the Free Trade returns up to the present to show how Free Trade has increased and is building up our prosperity. The system which is advocated by hon. Members opposite is one of great complexity. It is to put threepence against India, fourpence against Japan, and five-pence against China. But supposing you had an article more complicated than tea to deal with, many varieties of taxation would have to be calculated for at our ports. It appears, therefore—I can only go into the general argument; this is not a general Tariff Reform debate-that at least the tariff bargaining of other nations has not produced better terms for them with foreign nations than for us, but they have produced tariff wars which have brought to them great evils from which we have been free. As to this particular Motion to discriminate the duty upon tea, it appears to be directed especially against the trade of Lancashire, because those countries from which tea conies are special customers of Lancashire—both India and China, as well as Java. Take the case of India. The right hon. Gentleman the Member for Worcester (Mr. Austen Chamberlain) says that Indian opinion is against the Chancellor of the Exchequer. But I do not believe that the policy which is advocated on the present occasion would make India more content; that is, that we should give a preference to Indian tea in return for a preference given by them to our manufactures. Nay, more, I think it would increase discontent in India, because at the present moment there is a certain amount of equality which can be logically defended; but if we were to in- sist upon India giving us a preference that would still more make her desire that a preference should be given to her own manufactures against us, and not a preference given to us against foreign manufactures. It is not against foreign manufactures that India would wish a preference, but against us, who, by our cotton trade, are the great competitors of the cotton trade of India.

The right hon. Gentleman said that India would be enabled to stimulate her own productions against the competition of others; but seeing that we export to India, or the Indians import from us, by far the largest proportion of manuture which they do import, if they are to have protection it would be protection against us, and thus the Motion immediately would raise that question in a concrete form. Therefore, the whole plan, the whole suggestion, is one which is absolutely unacceptable. We are to penalise Chinese tea, and the Indians are to penalise the manufactures of the United States. What is a more direct answer than that the United States should give a preference to Chinese tea in return for a preference to American cotton. You have there the circuit completed. Hon. Members opposite do not look beyond their own noses; they see one step, but they will not follow trade round the world. If they followed trade round the world they would generally find that this kind of plan first goes to the disadvantage of those who set it in motion, and particularly a nation situated as we are. I oppose this Motion most strongly, because I believe it will upset our present arrangements with India, and cause disturbances which must be disadvantageous to us.

Sir F. BANBURY

The hon. Member opposite said the proposition before the House would upset arrangements with India. Why should it do so? We are going to give a benefit to India. We are going to import her tea.

Mr. TOULMIN

Is there to be no return? Is there not to be a preference given by India to our manufactures? was criticising the whole plan.

Sir F. BANBURY

We have not yet come to that. The proposal is that we should allow India to export her tea to this country at a penny less than foreign countries, and, as far as I can see, I fail to understand how it would upset the arrangements in India. The hon. Gentleman also said that tariff countries are not better off than we are, and that their arrangements with other countries were the same as ours. Are we no better off than they are? That is the whole point. They put a tariff upon goods that are going to their country, and are they in the same position to deal with other countries as we are who put nothing on? We ought to be in a better position, if there is anything in the hon. Member's argument, because we offer greater facilities to other countries.

Mr. TOULMIN

Will the hon. Gentleman give us an example where other countries have got better terms as against us? There ought to be great lists of these countries which have, on account of their tariff, given better terms to our rivals than to us.

Sir F. BANBURY

I understand that there are instances of that character. I was not dealing with that; I was dealing with the hon. Gentleman's argument, which was that tariff countries are in no better position than we are. I say that they ought to be in a very much worse position, because we admit their goods for nothing, while they make a charge which is of benefit to them, and assist their own manufactures. The hon. Gentleman used the rather tu quoque argument that we could not see beyond our noses, but I repeat that the hon. Gentleman's speech proves that he and his friends cannot see beyond their noses. The hon. Member for Hexham (Mr. Holt) said that we should offend China. Hon. Members opposite seem to fear that if we put on a duty every other country in the world would come clown upon us and say, "What do you mean by this?" and that we should then go down on our knees and be obliged to surrender. That is not the experience of the world, of nations, or of individuals. If a man stands up, whether in this House or in any other place, he will do better for himself, but if he takes it lying down he generally gets the worst of it. The hon. Member for Hexham says we have with China substantially Free Trade conditions. I am not quite certain exactly what the conditions are, but I believe there is a low revenue duty on everything imported into China. I do not understand how hon. Members opposite can call that substantially Free Trade. It marks a great advance on their side if they do, and we are very glad that they have made it, because it may be useful later on in other matters; but again I say, if this is right, irrespective of whether China would or would not be offended—and I admit it might have that effect—we ought not to be discouraged from putting it into operation. But China might say, "We do not want this done; we will make a bargain with you; we will reduce some of our tariffs if you will promise not to put this on."

The power to bargain is a very great thing, in my experience, whether in individual or international affairs. The hon. Member for Hexham talked about Japan. If this proposition caused irritation in any way to that Power or interfered with the Treaty we have with Japan, surely that could be remedied, and there is no reason why it should not be done if necessary. In regard to the Amendment, if we are prepared to make a concession to our Colonies and to our British Dominions, of which I am very strongly in favour, I think we ought to get something for it in return. Therefore, the proper way to move is for the Government to make terms with the Colonies and India, and say, "We are prepared to give you an advantage, and you must be prepared to give us an advantage in return." I do not think we should sacrifice somewhere about a million of revenue unless we are to receive some countervailing advantage. My right hon. Friend below me (Mr. Chaplin), who is a great authority on Tariff Reform, will perhaps deal with that question. I understand that my hon. Friend who has brought the subject forward has not put it as an actual cut-and-dried scheme, but as the precursor of that on which they wish to base their arguments, and I am thoroughly in accord with that. I am sorry the Chancellor of the Exchequer is not in the House, because he told us that he himself, not so many years ago, moved a similar Amendment. I did not gather from him whether he denied it or not. I understand he did not deny it, and I think he said that he had a seconder, though apparently he did not go to a division because he could not get anybody to divide with him. I am sorry that the right hon. Gentleman, now that he is in a position of responsibility, should have rounded on the ideas which were in his mind when he occupied the corner seat below the Gangway. I should have thought that having gone so far in those days of greater freedom and less responsibility he would have welcomed the suggestion contained in the Amendment, or would have given some assurance that he would do so when he rearranges his Budget next year. The Chancellor of the Exchequer is not, I think, wholly against the principle, and therefore does not hold the views of his hon. supporter behind him. Perhaps, indeed, the hon. Gentleman behind agrees with me.

Mr. TOULMIN

indicated dissent.

Sir F. BANBURY

I do not know whether my hon. Friends are going to a Division, but if they do I think I shall have to support them on the ground that I wish to emphasise the principle. I cannot support them on the ground that this is a proper way to bring forward the Amendment and the principle. I do not think it is.

Mr. BIGLAND

Why not?

Sir F. BANBURY

Because I think, first of all, we should have made a bargain with the Colonies that we were to get something. My experience is that, if you offer a man a sovereign and ask nothing in return, that he takes the sovereign; and if you ask afterwards for anything in return the man will tell you that you did not make any stipulation at the time you gave the sovereign, and that therefore he is not going to give you anything. I am afraid that if we were to pass a resolution of this sort without making some countervailing proposition the Colonies would say: "You offered us this proposal which was good from our point of view, we shall abide by it, but we shall not give you anything in return." This Amendment is not brought in in a very businesslike manner nor at an opportune moment; but the principle is good, and for that reason I shall support it. I presume the right hon. Gentleman the Chancellor of the Duchy is going to reply. My recollection is that the right hon. Gentleman and the Chancellor of the Exchequer worked very much together in those days when they were below the Gangway. Very possibly he was the person who was the sole supporter of the Chancellor of the Exchequer in this matter. If so perhaps he will also justify the reasons which have impelled him to change his opinion which he once so strongly held.

Mr. EVELYN CECIL

I should very much like to ask quite clearly whether the Government is still as violently against the full principle of Colonial Preference as it was when the Home Secretary talked about banging and barring and bolting the doors against it. I think it is quite material to know that, I think it very desirable that the Government should tell us in view of the Imperial Conference that is about to be held. It is just as well that the Colonial Prime Ministers should be fully aware of the attitude of the Government, and as this Amendment directly raises the question of principle I should very much like a statement from the right hon. Gentleman the Chancellor of the Duchy as to what precisely is the Government attitude upon it. The Chancellor of the Exchequer no doubt dallied with the subject when he moved his Amendment some years ago. I presume, at any rate, at that time that he did not intend to be taken very seriously as an ardent supporter of Colonial Preference, and that he chiefly moved his Amendment in order to hamper the then Government. I think, as in public estimate at any rate, this movement for Colonial Preference is certainly making way, and as there are more persons who fully see the desirability of accepting the Colonial offers which were made to us, for those offers have been most distinctly made, and as there are more people desirous that they should be accepted, then it becomes more than ever important to know what is the attitude of the Government upon the subject. I should also like to emphasise the peculiar diversity of view between certain supporters of the Government and Members of the Front Bench who will not support such an Amendment as this. The supporters of the Government who have spoken during this Debate have almost entirely criticised the Amendment from the point' of view of the fact that we shall be discriminating disadvantageously and unjustifiably against foreign nations. It is true that the Chancellor of the Exchequer seemed to raise this argument, but it was carried much further by the two hon. Gentlemen who have spoken from the Ministerial Benches.

It does seem to me a very peculiar frame of mind why we are always to consider how far we shall discriminate against foreign nations, and not consider how far we can benefit our own Colonies. It is always taken from the point of view of what will foreign nations say? Why should we not take it from the point of view of what will our Colonies say? We know what our Colonies have said over and over again. We have had offers from Colonial Prime Ministers, on behalf of their Governments, that they are willing to give us Colonial Preference, and they give it to us without asking definitely for anything in return. At any rate, that was the case in Canada. But they want it to establish a mutual understanding and mutual incentive to increase the production on both sides. If we gave this Colonial Preference on tea it may be possibly that we discriminate to some extent against China; but, on the other hand, we shall be encouraging the production of tea in India and Ceylon. To say that that is not a business proposition to discriminate against a foreign country because we shall be putting up tariffs against it, and lowering them as regards our own Colonies, seems to me quite unreasonable. It is a perfect business proposition to create a closer commercial union with our Colonies by increasing the production of a particular article in those Colonies. If foreign countries do not produce that article for our benefit, our Colonies will. And if by any terrible misfortune we were at war with a particular foreign country whom we had discriminated against we should be far less hampered from the very fact that we had discriminated against them, because we should have increased the production in our own possessions.

There is nothing unbusinesslike about that. Tariff Reformers naturally repudiate the suggestion that their proposals are unbusinesslike. They believe that every bit as much trade will be created and maintained, only that there will be more production in our own Colonies, and the trade will be more between ourselves and other portions of the Empire, rather than with the foreign countries with which it is at present. From the point of view of unity with the Empire, from the point of view of possible foreign hostilities, surely that is a perfectly business proposition. If, by adopting this Amendment, we begin to establish the principle of Colonial Preference, I think we shall make a material step towards Imperial unity. I hope that the Government will clearly tell us whether they are entirely against that principle or not, and that, I think, will clear the air for the negotiations and discussions at the Imperial Conference.

Mr. BIGLAND

I feel that the Amendment is of the greatest importance because of the answer of the Chancellor of the Exchequer to the effect that he believed that if preference was given to India it might excite trouble with the United States. I am rather amazed at that, because I think he should have been acquainted with what transpired in the United States and at Washington when the last Payne Tariff was discussed. If it is not within his knowledge, I may inform him that in Washington it was attempted to put a maximum tariff against Canada because she gave a preference to other countries more than she gave to the United States at that moment. The question was fought out in Washington, and it was distinctly understood that, so far as the United States was concerned, that any part of one Kingdom or one Empire giving a preference to products of another part of that same Empire should on no consideration be classed in the unfavourable degree of having a maximum tariff put against it. I feel that this discussion is exceptionally important, because, if we establish that one principle, recognised by America in Washington and clearly stated in the Payne tariff, then we establish one of the greatest principles, and one that knocks to pieces entirely the argument of the Chancellor of the Exchequer and that of so many of his Friends when they say that the preference which we intend to give within the Empire could by any country in the world, and at this hour of the day, be seized on as a reason why we should be put on the maximum tariffs scale, or on any scale of tariff which would be hurtful to the trade of this country. I think the hon. Member for the City (Sir F. Banbury) was wrong when he said that this was not an opportune time. I feel that it is a most opportune time to make this change.

I believe the very fact that we give one penny in the £ preference on tea grown within the Empire will, when we come to speak with them on the question of Colonial preference, as it applies from them to us, have the very greatest weight. The hon. Member for Bury (Mr. Toulmin) seemed to have an extraordinary idea on this subject. He thought it would be bad for Lancashire. May I put this question to him. Suppose under the Colonial Preference, or Imperial Preference, that we may come to speak about, that the duty on Lancashire goods instead of being 4 per cent., as it is to-day on calico, was raised to 8 per cent., and that it remains at 4 per cent. for all countries that take the exports of India on the same terms as Great Britain takes them. Then you will have China and Japan friendly with India and they will take her goods because India takes theirs at a low tariff. You will have China and Japan and Batavia taking goods from India on a low basis and you will have mutual reciprocity one with the other. But Germany will not, because Germany will not take the finished goods of India on the same terms as we do. The hon. Member for Bury must know perfectly well with regard to the spinning of jute that Germany would take the raw product, but not the manufactured article. India will now have something to bargain with, and she can say the preference we give will be to all the world that will take the products of India on the same terms as England does. That will be the means of bringing down the tariff walls against the finished product of India. Surely there must be some attempt made by us as the rulers and governors of India to establish equality of opportunity as between the workers of India and the workers of other countries who try to sell products in India. This will be the first step, and if we agree to this there will be a willingness in the minds of 300,000,000 of people when we propose that a preference shall also be given in India not only to Great Britain, but to every country in the world that will take the finished products of Indian workmen on the same terms as we do. I therefore most heartily support the Amendment that has been now proposed, and sincerely trust that the feeling expressed in this House this afternoon will go forth to the country that there is a great principle involved in this small penny which amounts no doubt to a million pounds sterling. The Chancellor of the Exchequer asked whether we would begin with tea. If we were in the position of the Government, it is the very thing we would begin with—for this reason, that it affects the thoughts of 300,000,000 people towards the Mother Country. There can be no argument more absolutely clear than that in regard to tea we ought to wipe the tax off altogether if the tea is grown within the Empire. There are plenty of other articles upon which we can raise the £5,000,000, while at the same time giving the opportunity to the Empire to send us those products. If there is anything whatever in Tariff Reform we would certainly begin by taking not merely £1,000,000, but £4,000,000 or £5,000,000 off tea grown within the Empire.

Mr. CHAPLIN

The hon. Member who has just spoken said that there was a great principle involved in the Amendment. No truer statement could be made, and it is for that reason if my hon. Friends go to a division I shall certainly support them. I do not share the apprehensions expressed by my hon. Friend (Sir F. Banbury) as to what may happen adverse to our interests in consequence of what he thinks is the somewhat unbusinesslike method in which the proposal has been put forward. If we show a friendly disposition as regards India to-day, and are willing to act in what is clearly her interest, as we propose to do, when the time comes, as it will come, when this question is discussed generally and on broader lines than is possible on this Amendment, we shall have every opportunity of making favourable arrangements with India as regards ourselves. Neither do I see the smallest foundation for the fears expressed by hon. Members on this side as to the difficulties with regard to China, India, and the Mother country, with which we should be threatened if this Amendment were carried. The hon. Member for Bury (Mr. Toulmin) asked, "Why we should embark on a policy so hostile to the great system which we have pursued for so long in this country f Under our Free Trade system, our trade has been built up, and is being built in the most remarkable and satisfactory manner." On the other hand, however true that may be, we point to the fact that in spite of the increase under your boasted system of Free Trade—which, by the way, is not Free Trade, and nobody knows it better than the party opposite—we in this country suffer, in regard to that part of the population for whose interests we ought always to have an immense and most careful regard—and that is the answer to all your boasts about Free Trade—from a degree of unemployment which is absolutely unknown in any other civilised country in the world similiar to our own. That there are ups and downs in employment and unemployment nobody knows better than I do; but we have suffered more than any other country, and we are suffering still, though not so largely as we have in the immediate past, from un-unemployment. Unemployment in this country, however, is always accompanied by this special peculiarity, that when there is a change for the better that change always comes more slowly to this country than to others, and we are a longer time than other countries in reaping the benefit of that change.

This is indeed a part of a very great policy, and if this were the occasion I should be only too glad of the opportunity of saying rather more than I have done as to why that policy of Colonial and Imperial Preference presents itself to me in the light it always does. There is the fact of unemployment. I look round in every direction, and ask how are you going to remedy it? I see proposals made by the present Government, and I have seen proposals made by their predecessors. But the real way to deal with this question is by providing other remunerative employment, and I hope the Government will bear that in mind when their proposals come before us again, as I suppose they will before very long. An hon. Member opposite said something about Japan. Japan affords a very remarkable instance of the weakness of this country whenever negotiations are proceeding upon this question of Preference and trade relations with other countries. One of my hon. Friends pointed to the fact that when the Japanese Treaty was first concluded we were pointedly left out, on the ground, avowed by the Foreign Minister in Japan, that it was no use coming to us, because we had no power of negotiation. I wonder if the time will ever come when hon. Members opposite will learn that the want of all power of negotiation places us in an absolutely false position. There could be no better object-lesson than the treaty with Japan as it was first introduced. We were then placed in a position of the greatest difficulty and of the greatest harm in regard to some of the largest of our industries. It is perfectly true that, thanks to the efforts of the Foreign Minister, some mitigations have been made, and we have been placed in a better position than we were in at, first; but, after all, if hon. Members opposite think that we may take great satisfaction in the fact that the duties upon some of our goods are to be increased, even under the amended form of the treaty, by 150 per cent., I differ from them; I cannot see that we have anything to congratulate ourselves upon. I am afraid of trespassing beyond the limits which would be legitimate upon this occasion, although the subject is one which I have very deeply at heart; but I shall certainly give my warmest and most hearty support to my hon. Friends if they go to a Division.

The CHANCELLOR of the DUCHY of LANCASTER (Mr. Joseph Pease)

It is quite true, as was stated by the hon. Baronet (Sir F. Banbury), that in former days, when I sat on the Opposition side of the House, I worked with the Chancellor of the Exchequer in endeavouring to secure reductions of the Tea Duty. I very well recollect advocating the reduction of the duty on the ground that it would materially encourage the cultivation of tea planting in India and Ceylon, and would help our fellow-subjects in that quarter of the globe. To-day I am here to regret that the Government have not seen their way clear to provide a free breakfast table for the people. Many of us on this side have for many years advocated a free breakfast table that is to say, that there should be no taxes on the necessaries of life. I myself have from time to time stated that, of all the taxes imposed on the people, those on the necessaries of life are the most difficult to justify. I can only justify them from this box to-day on the ground that they are necessary to enable us to raise the Revenue required for the year. The Opposition have put forward this Amendment, some Members with a good deal of favour, others with a sort of half-hearted support, in the hope that by advocating a reduction of the duty on tea from India and Ceylon they may get in the thin end of the wedge towards establishing a Tariff Reform system in this country. Our great grumble at the attitude of the Unionist party on the platforms of the country has been that they have never come to close quarters with us in regard to the subjects upon which they would commence their operation of Tariff Reform. They may be fortunate or unfortunate in having selected tea as an illustration of the way in which Tariff Reform would work. I would like to trouble the House with a few figures to show how little benefit this country could possibly derive from the Amendment if it were carried into law. Many of the cheapest teas come from China, and there is a large section of the community who prefer China tea to those teas which come from India. It is certainly true that the poor do not necessarily buy the cheap China tea, but many of them do, and it would be a deplorable thing if we were to restrain the small amount of tea which comes from China. The following are the figures for the year 1910. Our imports from China were 18,974,000 pounds; from India and Ceylon together, 288,000,000 pounds; or, in money, £649,000 from China, and £9,940,000 from India and Ceylon.

Mr. PRETYMAN

Does that include the tax?

6.0 P.M.

Mr. JOSEPH PEASE

Without the tax. It must be obvious to any tariff reformer that if a preferential tax was imposed in favour of India and Ceylon tea, it would probably make very little difference in the encouragement given to the India tea grower, for the reason I have already stated. But it would deprive the revenue at one swoop of a million of money. At the present time we cannot afford to reduce the Tea Duty by a 1d. in the pound. I wish we could. If we give the Preference which is proposed by the Opposition it would mean prejudicing the coming of £649,000 worth of tea from China and the Chinese would retaliate upon us. They import from us about £8,500,000 worth of manufactured goods. The total exports of this country to China is £12,800,000. The total trade between England and China, including Hong Kong, at the present time is £19,282,000. Therefore you are going to offend China if you carry out the proposals, and open the door to China to retaliate upon us, and very likely endanger to a very large extent what we send to that country. The right hon. Gentleman the Member for Wimbledon (Mr. Chaplin) alluded to one or two facts which he thought were accurate, but the accuracy of which facts, as he stated them, I dispute. He alluded to the question of unemployment. He thought it would be a good thing to establish Tariff Reform, to start with tea with a view to encouraging Tariff Reform, because, subsequently, it would tend to diminish unemployment.

Mr. CHAPLIN

I did not say that.

Mr. JOSEPH PEASE

I gathered that.

Mr. CHAPLIN

I said it was all part of the great policy which we wanted to promote.

Mr. JOSEPH PEASE

That all parts of the Unionist party wanted the great policy of Tariff Reform. The right hon. Gentleman thought it would reduce unemployment.

Mr. CHAPLIN

That Preference would.

Mr. JOSEPH PEASE

Preference! Well, I am not going to dispute with the right hon. Gentleman whether Preference should be called Protection, or Retaliation, or by any other name. We on this side of the House remain exactly where we were in regard to this matter. We are Free Traders, and we recognise that the Opposition are Tariff Reformers. We dispute with them the point that Tariff Reform would reduce unemployment. I was looking at the Board of Trade figures recently issued, and I believe I am correct in saying that at the present moment in this country, at the present period of the year, unemployment has never been less than now, so far as our statistics afford any comparison with those which have gone before.

We admit we have no statistics in this country which compare very accurately with the statistics of foreign nations, but, so far as I am able to judge—and I have looked a good deal into these questions, I am satisfied in my own mind that in periods of depression in those countries which have adopted preference and protection the amount of distress and unemployment is very much greater than it has ever been in this country—very much greater in amount—and in periods of inflation we recover far more rapidly than do protected countries. My experience and my study is opposed to that of right hon. and hon. Gentlemen opposite, and I do not think it is right that when two different views are taken on this subject that the one view ought to be stated in this House without that view being challenged from this side. The right hon. Gentleman the Chancellor of the Exchequer argued the matter from a Tariff Reformer's standpoint, and he pointed out how ill they were to advise the commencement of their Tariff Reform system by a preference upon Indian tea. It means a million to the Revenue. It means that our Indian subjects will gain very little advantage. It will only bring about irritation on the part of the Chinese, and on the part of Japan, if such preference as suggested were given. Therefore, the Government are quite unable to accept the Amendment.

Mr. EVELYN CECIL

Will the right hon. Gentleman answer my question as to whether it is still the policy of the Government to bang, bolt, and bar the door against our Colonial brethren?

Mr. JOSEPH PEASE

I have already said that the Government's attitude is exactly what it was. We have not changed. We are Free Traders. We object to either preference, protection, or retaliation.

Mr. G. A. LLOYD

I rise to support in a very few words the Amendment of my hon. Friend in relation to the Tea Duty. I have not had the advantage of listening all through to this Debate, but I heard the right hon. Gentleman the Chancellor of the Exchequer. He began his speech by saying that this seems to be only a game, or words to that effect. I read in the Debates for last year that the right hon. Gentleman again considered it a game that had been going on for some time, and also one which he considered legitimate. It may be so to some Members of the House, and to the leaders of the Liberal party, but at any rate to Unionist reformers on this side of the House the reduction of the Tea Duty is not a game. It is part, and a deliberate part, of Tariff Reform policy. I, for one, resent our attitude in this matter being represented as a party game, or a hardy annual, or any of those terms which may be appropriate to the Chancellor of the Exchequer's own methods in this matter, but are utterly inappropriate to ours on this side of the House. As to what the right hon. Gentleman opposite has just said, I think the most part of his argument was devoted to the fact that there was very little benefit to be derived in taking off this penny from tea. That, at any rate, is not the Prime Minister's view of the matter. The Prime Minister's view last year was entirely opposed to that of the right hon. Gentleman.

Mr. JOSEPH PEASE

The hon. Member was not present when I spoke at first. I said that I believed in the reduction of the Tea Duty, and personally I should like to see it abolished.

Mr. G. A. LLOYD

I beg the right hon. Gentleman's pardon, I think he has mistaken the point. Many of us, perhaps most of us, believe in a reduction of the Tea Duty. But some doubt has been thrown upon the value of taking a penny off the duty, as suggested by this Amendment. At this time last year the matter was debated considerably, and a good deal of doubt was also thrown upon the value of the penny. I should like to read to the House what the Prime Minister said, showing that he thought that there was a very good deal of value in taking off a penny off the consumer. [An HON. MEMBER: "Last year "] The Prime Minister was quoted last year as to what he had said when he was Chancellor of the Exchequer. He said:— 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. I think that disposes this year, as it did last year, of the argument put forward by the right hon. Gentleman opposite that it is of very little value to take the very small sum of a penny off the Tea Duty. But, apart from that not being the Prime Minister's own opinion, it is certainly not the opinion of those whom this will benefit as well as the consumer, namely, the planters of tea in India, who would be very glad to see a preference given to Indian tea over China tea. I do not think anyone to-day would bring forward the argument in this House in favour of there being no value in a slight preference of Indian tea over China tea. The right hon. Gentleman brought forward the familiar and not very convincing argument of the danger of doing anything which might offend China. Really it seems very difficult for us to understand that argument. It has been applied to Germany, and to almost every other Continental Power that imposes large tariffs against us. If there is one country we ought not to be afraid of, it is China, which does not impose very large tariffs against us, and who, from her world-position, is not a very formidable foe at the present time. Why we should sacrifice our own trade because possibly China may not give us very good terms is quite inexplicable to me, and if the right hon. Gentleman had studied the question of Chinese railways, and the advantages that China now gives to England —I suppose because we let her tea in on equal terms with that of India—well, I do not think that he will think that these great benefits are of very much worth.

Quite apart, however, from our point of view, quite apart from our great anxiety to see every kind of preferential principle established with regard to our Imperial trade, and quite apart from our genuine and real desire to see a duty which we consider very burdensome upon the consumer taken off, there is also the political attitude which we cannot ignore. All through the last election and the election before Liberal candidate after Liberal candidate went about the constituency collecting votes by the declaration that he was against this tax, and by giving all those who listened to him—almost all—I think a list of those who did not do it would be extremely short, and so reasonably could be ignored—almost all of these candidates collected votes by giving those who heard them to understand that at the earliest opportunity they would vote for a reduction of the Tea Duty. No food taxes is what we were lead to think the Radical candidate believed in. We on this side do not consider it very honest that year after year we see hon. Gentlemen on the other side remaining in office and steadily voting for the maintenance of a high, extremely onerous, and irksome duty on people's food. If there was no other reason we should still urge, from the political point of view, the necessity, not to say honesty, for doing what you promised to many hundreds and thousands of people in this country you would do. I believe the Chancellor of the Exchequer and the right hon. Gentleman opposite gave us to understand that the Government could not afford to take this duty off. We feel bound to point out that this is not a year in which they ought to plead poverty. They cannot plead poverty after the Chancellor's Budget speech; they cannot plead poverty after voting themselves enormous salaries. They cannot plead poverty after creating armies of new officials who are going to cost the country in the aggregate a very great deal more than the abolition of this Tea Duty would cost. It may be very comfortable and convenient when you are making a Budget speech to say how brilliant has been your administration, how rosy are the prospects of trade, and then when they wish to retain a very burdensome duty for the Government to plead poverty. I do not think such tactics will satisfy a single elector in this country. For the third time a Liberal Government has promised cheap food and no food taxes, but still it steadily votes for the maintenance of this very high tea tax. Let me point out in a last hope of persuading hon. Gentlemen opposite to give some ear to our plea in this matter that the cost of living in this country has steadily gone up, and the cost of real wages has steadily gone down. Is not that a sufficient reason for taking off a tax which the right hon. Gentleman says he dislikes very much, and still likes sufficiently to maintain and defend. I do not know any stronger reason that could be given for asking hon. Gentlemen opposite to come into the same Lobby with us for the abolition of this duty. I earnestly hope this is the last time that a Liberal Government will sit upon the benches opposite to vote for the maintenance of a duty which is fiscally bad and burdensome to all classes of the community.

Mr. LEACH

I am glad to find myself in complete agreement with hon. Gentlemen sitting on the benches opposite in the desire to remove taxes on food, and so far as they are sincere in that desire I heartily join with them. As the hon. Gentleman who has just sat down has said, we did promise at the earliest possible moment to remove taxes on food, and nothing has fallen from the hon. Gentleman in that respect with which everybody on this side cannot agree. We are only waiting for the opportunity to vote for the abolition of all duties, not only upon tea but on every article of food consumed by the people. I want to see these duties taken off, and it has always been my desire to agitate for a free breakfast table, and I hope when the moment comes, and the Chancellor of the Exchequer finds himself able to make such proposals hon. Gentlemen opposite will support him. The history of the party opposite in regard to the Tea Duty is rather remarkable. When they were in power they had an opportunity if they wished to greatly reduce the Tea Duty. What did they do? When they came into office they found the Tea Duty at 5d., but they raised it to 8d.—[An HON. MEMBER: "That was for the war"]—and they left it at 6d. and it remained for the Liberal party when they came into power to reduce it to 5d., and at the very earliest opportunity we shall be only too glad to remove the whole of the 5d. and all other duties on the food of the people.

The proposal which hon. Gentlemen opposite now make is very ill-timed. At the present moment it would be impossible for the Chancellor of the Exchequer to entertain the proposal they make. Millions are required for various purposes, and, after the appeals which have been made to the Chancellor of the Exchequer, it seems rather strange that hon. Gentlemen opposite should have seized this particular moment to propose a reduction of the Tea Duty, and if their Amendment should be pressed to a Division, I shall, although it may make me appear in a false position, vote against it. I shall not vote against a reduction of the Tea Duty but against their proposal to introduce what they call Fair Trade, or Tariff Reform legislation. I must say the moment is very inopportune, and I wonder why hon. Gentlemen should introduce it now.

Mr. JAMES HOPE

Of all the perfunctory answers I ever heard the answer given by the Government this afternoon is the most perfunctory. Can anyone pretend for a moment that we are going to lose our trade with China if we give a pre- ference of 20 per cent. in this small matter? And with regard to Java, Java is not a self-governing colony: it is a Crown colony and Java is affected by the Dutch tariff. At this very moment the Dutch Government are proposing an increase in their tariff, and it is exactly a proposal such as we are now discussing which is necessary to give a hint to the Dutch Government in order to bring about a proper understanding between that country and ourselves. With regard to Japan, if the interpretation of the hon. Member for Hexham be correct, we are debarred from giving any preference to our Colonies which Japan is not to share. Does the Japanese Treaty prevent our entertaining any proposal for Preference to the Colonies unless Japan, at any rate, gets, an equal advantage? If that is so, we have fallen back into the same mistake as in 1860 with regard to the Belgian Treaty, which had to be denounced when Canada wanted to entertain proposals of Preference with us. Why cannot the Government grant this? It is not really in essence against their principle. They are doing no harm to the consumer, which is their usual argument against Preference. On the contrary, it is in favour of the consumer. It is not going to bolster up any interest in this country, because we cannot grow tea in this country. Their reply to many of our proposals is, "You want to protect vested interests in this country." It will be time

enough to advance that argument when anyone proves that we can grow tea in this country. Surely the Chancellor of the Exchequer might find himself able to meet the Colonies in this respect. The Chancellor of the Exchequer is a free giver and a man of generosity, and I desire the right hon. Gentleman the Secretary to the Treasury to tell him from me that it is what the Americans call "real sweet" of him to give me £400 a year, and if he can give that to Members of this House surely he might make this concession also. It would be easy to find the money by putting a tax solely upon the luxuries brought into this country. He would find it by taxing articles like motor-cars and grand pianos and the vintage of Perrier, and Jouet, and Paul Rouget. The Government refuse this concession not because it is impossible or difficult, but because they are bound to a hard and fast theory from which they cannot make up their minds to break away. If they cannot do so, they must be prepared to have unkind things said of them in the country, and it will be said of them that while endowing their own friends they refused to put a tax upon the imported luxuries of the rich, and they make the burden of their taxation fall upon the necessary beverages of the poor.

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

The House divided: Ayes, 147; Noes, 212.

Division No.243.]	AYES.	[6.25p.m.
Acland-Hood, Rt. Hon. Sir Alex. F.	Chamberlain, Rt. Hon. J. A. (Worcr.)	Hall, Marshall (E. Toxteth)
Agg-Gardner, James Tynte	Chambers, James	Hamilton, Lord C. J. (Kensington)
Aitken, William Max	Chaplin, Rt. Hon. Henry	Hamilton, Marquess of (Londonderry)
Amery, L. C. M. S.	Clay, Captain H. H. Spender	Harris, Henry Percy
Anstruther-Gray, Major William	Clive, Captain Percy Archer	Helmsley, Viscount
Ashley, Wilfrid W.	Clyde, James Avon	Hill, Sir Clement L. (Shrewsbury)
Astor, Waldorf	Cooper, Richard Ashmole	Hillier, Dr. A. P.
Bagot, Lieut.-Colonel J.	Craig, Captain James (Down, E.)	Hill-Wood, Samuel
Baird, John Lawrence	Craig, Norman (Kent, Thanet)	Hohler, Gerald Fitzroy
Balcarres, Lord	Crichton-Stuart, Lord Ninian	Hope, Harry (Bute)
Baldwin, Stanley	Cripps, Sir Charles Alfred	Hope, James Fitzalan (Sheffield)
Balfour, Rt. Hon. A. J. (City, Lond.)	Croft, Henry Page	Horne, Wm. E (Surrey, Guildford)
Banbury, Sir Frederick George	Dalzlel, Davison (Brixton)	Horner, Andrew Long
Barrie, H. T. (Londonderry, N.)	Dickson, Rt. Hon. S. C.	Hume-Williams. Wm Ellis
Bathurst, Charles (Wilts., Wilton)	Dixon, Charles Harvey	Hunter, Sir. Charles Rodk. (Bath)
Benn, Arthur Shirley (Plymouth)	Doughty, Sir George	Ingleby, Holcombe
Benn, Ion Hamilton (Greenwich)	Du Cros, Arthur Philip	Jardine, Ernest (Somerset, E.)
Bennett-Goldney, Francis	Faber, Capt. W. V. (Hants, W.)	Kerry, Earl of
Bentinck, Lord Henry Cavendish	Falle, Bertram Godfrey	Kimber, Sir Henry
Bigland, Alfred	Fell, Arthur	Kinloch-Cooke, Sir Clement
Bird, Alfred	Fetherstonhaugh, Godfrey	Kirkwood, John H. M.
Boscawen, Col. A. S. T. Griffith	Fisher, W. Hayes	Law, Andrew Bonar (Bootle, Lancs.)
Boyle, W. Lewis (Norfolk, Mid)	Fitzroy, Hon. Edward A.	Lewisham, Viscount
Boyton, James	Forster, Henry William	Lloyd, George Ambrose
Burn, Col. C. R.	Foster, Philip Staveley	Lockwood, Rt. Hon. Lt.-Col. A. R.
Campbell, Rt. Hon. J. H. M.	Gardner, Ernest	Lonsdale, John Brownlee
Campion, W. R.	Gilmour, Captain John	Lowe, Sir F. W. (Birm., Edgbaston)
Carlile, Edward Hildred	Goldman, Charles Sydney	MacCaw, Wm. J. MacGeagh
Cassel, Felix	Goulding, Edward Alfred	Mackinder, Halford J.
Cator, John	Gwynne, R. S. (Sussex, Eastbourne)	Macmaster, Donald
Cautley, Henry Strother	Haddock, George Bahr	Magnus, Sir Fillip
Cecil, Evelyn (Aston Manor)	Hall, D. B. (Isle of Wight)	Malcolm, Ian
Mills. Hon. Charles Thomas	Pryce-Jones, Col. E.	Talbot, Lord Edmund
Neville, Reginald J. N.	Quilter, W. E. C.	Thompson, Robert (Belfast, North)
Newman, John R. P.	Rawson, Colonel Richard H.	Thomson, W. Mitchell (Down, N.)
Newton, Harry Kottingham	Rice, Hon. Walter Fitz-Uryan	Thynne, Lord Alexander
Nicholson, William G. (Petersfield)	Roberts, (Sheffield, Ecclesall)	Tobin, Alfred Aspinall
Nield, Herbert	Rolleston, Sir John	Touche, George Alexander
Orde-Powlett, Hon. W. G. A.	Ronaldshay, Earl of	Tryon, Captain George Clement
Paget, Almeric Hugh	Rothschild, Lionel de	Valentia, Viscount
Parker, Sir Gilbert (Gravesend)	Royds, Edmund	Walker, Col. William Hall
Parkes, Ebenezer	Salter, Arthur Clavell	Willoughby, Major Hon. Claude
Pease, Herbert Pike (Darlington)	Sanders, Robert Arthur	Wolmer, Viscount
Peel, Capt. R. F. (Woodbridge)	Sanderson, Lancelot	Wood, Hon. E. F. L. (Yorks, Ripon)
Peel, Hon. William R. W. (Taunton)	Scott, Leslie (Liverpool, Exchange)	Wood, John (Stalybridge)
Perkins, Walter Frank	Smith, Harold (Warrington)	Worthington-Evans, L.
Pete, Basil Edward	Stanley, Hon. Arthur (Ormskirk)	Wortley, Rt. Hon. C. B. Stuart-
Pole-Carew, Sir R.	Starkey, John Ralph
Pollock, Ernest Murray	Stewart, Gershom	TELLERS FOR THE AYES.—Mr. Wheler and Mr. Barnston.
Pretyman, Ernest George	Swift, Rigby
NOES
Abraham, William (Dublin Harbour)	Ffrench, Peter	Masterman, C. F. G.
Acland, Francis Dyke	Fiennes, Hon. Eustace Edward	Menzies, Sir Walter
Addison, Dr. C.	Furness, Stephen	Millar, James Duncan
Agnew, Sir George William	Gelder, Sir William Alfred	Molteno, Percy Alpert
Ainsworth, John Stirling	George, Rt. Hon. D. Lloyd	Mond, Sir Alfred M.
Allen, Arthur A. (Dumbarton)	Gibson, Sir James Puckering	Morgan, George Hay
Allen, Charles Peter (Stroud)	Gill, Alfred Henry	Morton, Alpheus Cleophas
Anderson, Andrew Macbeth	Ginnell, Laurence	Muldoon, John
Armitage, Robert	Glanville, Harold James	Munro-Ferguson, Rt. Hon. R. C.
Ashton, Thomas Gair	Greenwood, Granville G. (Peterborough)	Murray, Captain Hon. Arthur C.
Baker, H. T. (Accrington)	Greig, Colonel James William	Needham, Christopher T.
Balfour, Sir Robert (Lanark)	Grey, Rt. Hon. Sir Edward	Neilson, Francis
Baring, Sir Godfrey (Barnstaple)	Guest, Hon. Frederick E. (Dorset, E.)	Nicholson, Charles N. (Doncaster)
Barnes, George N.	Hancock, John George	Nolan, Joseph
Barran, Sir J. N. (Hawick)	Hardie, J. Keir (Merthyr Tyclvll)	Norman, Sir Henry
Barran, Rowland Hurst (Leeds, N.)	Harmsworth, R Leicester	Norton, Captain Cecil W.
Barry, Redmond John (Tyrone, N.)	Harvey, T. E. (Leeds, W.)	O'Brien, Patrick (Kilkenny)
Beale, W. P.	Harvey, W. E. (Derbyshire, N.E.)	O'Connor, John (Kildare, N.)
Beauchamp, Edward	Havelock-Allan, Sir Henry	O'Malley, William
Beck, Arthur Cecil	Haworth, Arthur A.	Parker, James (Halifax)
Benn, W. W. (Tower Hamlets, St. Geo.)	Hayden, John Patrick	Pearce, Robert (Staffs., Leek)
Bethell, Sir John Henry	Helme, Norval Watson	Pease, Rt. Hon. Joseph A. (Rotherham)
Birrell, Rt. Hon. Augustine	Henderson, J. M. (Aberdeen, W.)	Philipps, Col. Ivor (Southampton)
Black, Arthur W.	Henry, Sir Charles S.	Pickersgill, Edward Hare
Boland, John Pius	Higham, John Sharp	Ponsonby, Arthur A. W, H.
Booth, Frederick Handel	Hinds, John	Price, C. E. (Edinburgh, Central)
Bowerman, Charles W.	Hobhouse, Rt. Hon. Charles E. H.	Price, Sir Robert J.
Brady, Patrick Joseph	Holt, Richard Durning	Pringle, William M. H.
Burns, Rt. Hon. John	Horne, Charles Silvester (Ipswich)	Radford, George Heynes
Buxton, Noel (Norfolk, N.)	Howard, Hon. Geoffrey	Rainy, Adam Rolland
Buxton, Rt. Hon. S. C. (Poplar)	Hudson, Walter	Raphael, Sir Herbert H.
Cameron, Robert	Hughes, Spencer Leigh	Rea, Rt. Hon. Russell (South Shields)
Carr-Gomm, H W.	Isaacs, Sir Rufus Daniel	Rea, Walter Russell (Scarborough)
Cawley, Sir Frederick (Prestwich)	Johnsen, William	Reddy, Michael
Chapple, Dr. William Allen	Jones, Edgar (Merthyr Tydvil)	Redmond, John E. (Waterford)
Churchill, Rt. hon. Winston S.	Jones, Henry Haydn (Merioneth)	Richardson, Albion (Peckham)
Clancy, John Joseph	Jones, Leif Stratton (Notts, Rushcliffe)	Richardson, Thomas (Whitehaven)
Clough, William	Jones, William (Carnarvonshire)	Roberts, Charles H. (Lincoln)
Collins, Godfrey P. (Greenock)	Jones, W. S. Glyn- (T. H'mts, Stepney)	Roberts, George H. (Norwich)
Collins, Stephen (Lambeth)	Jewett, Frederick William	Roberts. Sir J. H. (Denbighs.)
Compton-Rickett, Rt. Hon. Sir J.	Joyce, Michael	Robertson, Sir G. Scott (Bradford)
Condon, Thomas Joseph	Keating, Matthew	Robertson, John M. (Tyneside)
Corbett, A. Cameron	Kellaway, Frederick George	Roch, Walter F. (Pembroke)
Cory, Sir Clifford John	Kilbride, Denis	Roche, John (Galway, E.)
Craig, Herbert. J (Tynemouth)	King, Joseph (Somerset, North)	Rose, Sir Charles Day
Crawshay-Williams, Eliot	Lambert, George (Devon, S. Molten)	Runciman, Rt. Hon. Walter
Crooks, William	Lambert, Richard (Wilts, Cricklade)	Samuel, Rt. Hon. H. L. (Cleveland)
Dalziel, Sir James H. (Kirkcaldy)	Lawson, Sir W. (Cumb'rld, Cockerm'th)	Samuel, J. (Stockton-on-Tees)
Davies, David (Montgomery Co.)	Leach, Charles	Scott, A. MacCallum (Glas., Bridgeton)
Davies, Timothy (Lincs., Louth)	Levy, Sir Maurice	Sheehy, David
Dawes, James Arthur	Lewis, John Herbért	Sherwell, Arthur James
Dewar, Sir J. A.	Logan, John William	Shortt, Edward
Dickinson, W. H.	Low, Sir Frederick (Norwich)	Simon, Sir John Allsebrook
Dillon, John	Lundon, Thomas	Smith, Albert (Lancs., Clitheroel)
Doris, William	Lynch, Arthur Alfred	Snowden, Philip
Duffy, William J.	Macdonald, J. R. (Leicester)	Soames, Arthur Wellesley
Duncan, C. (Barrow-in-Furness)	Maclean, Donald	Spicer, Sir Albert
Edwards, Clement (Glamorgan, E.)	Macnamara, Dr. Thomas J.	Strachey, Sir Edward
Edwards, Enoch (Hanley)	M'Callum, John M.	Strauss, Edward A. (Southwark, West)
Edwards, Sir Francis (Radnor)	M'Curdy, Charles Albert	Summers, James Woolley
Edwards, John Hugh (Glamorgan, Mid)	M'Kean, John	Sutherland, John E.
Elibank, Rt. Hon. Master of	M`Laren, H. D. (Leicester)	Taylor, John W. (Durham)
Falconer, James	M'Laren, Walter S. B. (Ches., Crewe)	Taylor, Theodore C. (Radcliffe)
Ferens, Thomas Robinson	Marshall, Arthur Harold	Tennant, Harold John

Thorne, G. R. (Wolverhampton)	Watt, Henry A.	Wilson, J. (Durham, Mid.)
Toulmin, George	Webb, H.	Wilson, W. T. (Westhoughton)
Walsh, Stephen (Lancs., Ince)	White, Sir Luke (Yorks, E.R.)	Wood, T. Mckinnon (Glasgow)
Ward, John (Stoke-upon-Trent)	Whitehouse, John Howard	Young, William (Perth, East)
Ward, W. Dudley (Southampton)	Whittaker, Rt. Hon. Sir Thomas P.
Wardle, George J.	Wiles, Thomas	TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland.
Waring, Walter	Wilkie, Alexander
Wason, John Cathcart (Orkney)	Williams, Llewelyn (Carmarthen)

Resolution agreed to.