HC Deb 05 August 1912 vol 41 cc2839-45

(1) The duties of customs payable on unmanufactured tobacco imported into Great Britain or Ireland containing ten pounds or more of moisture in every one hundred pounds weight thereof shall, as from the thirty-first day of March, nineteen hundred and twelve, be reduced in the case of tobacco containing fourteen pounds or more of moisture in every one hundred pounds weight thereof by one halfpenny per pound of tobacco in respect of every pound of such excess of moisture.

(2) The amount of moisture in any tobacco for the purposes of this Section shall be ascertained in the same manner in all respects as the amount of moisture in tobacco for the purposes of drawback is ascertained by virtue of any enactment, applicable thereto.

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

Lord H. CAVENDISH - BENTINCK

In moving the Second Reading of this Clause, I wish to say that it will remove, if accepted by the Committee, a very substantial grievance under which manufacturers at Nottingham, Leicester, and Rugby are suffering. The manufacturer of pipe and cigarette tobacco can dry tobacco down to ten per cent. of moisture, but the cigar manufacturer cannot do that, because to dry the tobacco down spoils its flavour for his purpose. Therefore he is obliged to import tobacco in a wet state, and he is penalised on that account. In fact, the maker of cigars has to pay as much as 3s. or 4s. more than the Finance Act intended he should do.

1.0 A.M.

All we ask is that when the manufacturer has more than ten per cent. of moisture in his tobacco he should have the right to have a sample taken, and should have returned to him one halfpenny per pound of tobacco in respect of every pound over fourteen per cent. of moisture. The Chancellor of the Exchequer may say that this is an impossible and cumbrous arrangement, but, after all, it is only what the manufacturer of tobacco does, it is a right he has, when he wishes to export tobacco. We ask that the procedure should be similar for import as for export. Manufacturers of Leicester, Nottingham, and Kugby have often been to the Chancellor of the Exchequer or his representatives, by deputation, in order to get grievances remedied, and we have always had a very sympathetic hearing. But when we come to raise the question in this House, we always find the Chancellor adopts a non possumus attitude. I submit that the right hon. Gentleman has not got a leg to stand upon. It is a monstrous grievance that manufacturers should have to pay duty on water and not on tobacco at all. We are told that Free Trade finance does not put a burden upon industry and does not encourage the formation of trusts, but here is a case in which it does both of these things. I hope the Chancellor of the Exchequer will see his way to make this concession.

The FINANCIAL SECRETARY to the TREASURY (Mr. Masterman)

Like some of my predecessors, I have gone as fully as possible into this question, and have received deputations on the subject. Although I agree there are some grievances that should be met, this Amendment cannot meet those grievances, and I have never yet been able to find any practical manner in which these grievances could be met. Against this particular Amendment there are two, as I think, conclusive arguments. The first is the necessary reduction of revenue it would entail for which we make no provision this year. The second is that I am advised that this Amendment would not have the effect the Noble Lord suggests; it would not have any effect upon what he calls "trust tobacco," and the only result, if it were practicable, would be to make a special concession to luxury in the shape of the very expensive tobacco rather than to the less expensive tobacco. If a concession is made at all, it should be for the less expensive tobacco. Then it would be quite impossible to make the various grades the Noble Lord suggests in the practical working of the Customs. In the manner in which tobacco is imported in comparative large packets, the percentage of moisture varies in the packets, and it is almost impossible, except with an immense staff such as we have not got, to carry out the Noble Lord's suggestion. I hope, however, that he will not take this as a final answer, or conclude that nothing can be done in the future. I acknowledge that small tobacco manufacturers have a grievance at present, and if there is some method by which they can be put upon a level with the large ones, and if the cheaper rather than the more expensive tobacco can be relieved, I am quite prepared to consider the matter on some future occasion. It would be quite impossible to collect the duty under the system the Noble Lord proposes.

Mr. BAIRD

I am sorry that, in spite of the conciliatory attitude adopted by the Secretary to the Treasury, I cannot accept his answer as satisfactory on behalf of those in Rugby interested in this question. When he speaks of the revenue not being able to stand the reduction entailed by the alteration proposed in the Amendment, that seems to me the strongest possible condemnation of the line he has taken up. He does not deny that the revenue is derived from taxes on water instead of on tobacco. If you tax water when you pretend to be taxing tobacco you should take some steps to remedy the injustice. If the right hon. Gentleman says that he has been advised that the Amendment would not have the effect that my Noble Friend desires, that depends upon his direction and advice; those interested in the trade and those who give employment in the trade are of opinion that this Amendment does meet the case, and that if it were carried the cigar manufacturers of the country would be enabled to supply cheap cigars very much better than they can at present—the cigars looked forward to by the poor on Saturday night. It is perfectly justifiable and it ought to be the business of the Government to secure that that kind of luxury is relieved—any cigar is, of course, a luxury, but it is a luxury which to a hard-worked man comes to be a necessity, it is a luxury to which he is entitled at the end of a hard week's work.

There is another point to which I should like to call attention. The right hon. Gentleman said we must not consider his answer as final. But when are we to get a final answer? We have been on numberless deputations to him; we have always been received with great civility on these occasions, but we have not received any answer worth twopence. We are now told that we are not to consider his answer as final. I hope we may look to receive some support from the hon. Member for Leicester (Mr. Ramsay Macdonald) who has been on these deputations and who has more Constituents than either the Noble Lord or myself interested in this business. I hope he will find himself in a position to bring pressure upon the Government which will be more effective than any pressure from this side of the House. This is a question which affects a great many employers and the daily wage of a large number of people who depend upon the cigar manufacturing industry of this country. There is all the difference in the world between those large concerns, which, on account of the capital at their disposal are in a position to have tobacco dried at a very short distance from home,

in Holland and other countries, and those other concerns equally deserving.

On behalf of the small concerns I trust the Government will see their way to reconsider their decision in this matter. In my own particular case the reason why I support this Amendment is that there is a tobacco factory in my division which employs not a large number of people, but which is very hard hit by the fact that they have to pay duty not on tobacco but on water. They rightly consider that an injustice. There is no denying that if you put in your schedule a duty of so much on tobacco, and then charge duty on water, there is something wrong somewhere. It is to remedy that grievance that I venture, most respectfully, to invite the right hon. Gentleman to reconsider his decision. He cannot expect people to accept the non-final answer that he gives us both when we go on deputations to him and now in the House. Surely the people at his disposal in his Department have the means of ascertaining some method of meeting this grievance. He does not deny that it is a grievance. He says that our proposals do not meet the grievance. Very well, then, it is his business to find some means for meeting the grievance. We cannot be expected year after year to be put off with a conciliatory, civil and obliging answer, but which has no more substance in it than the words of the right hon. Gentleman to-night. I hope the hon. Member for Leicester may see his way to support this Amendment.

Question put, "That the Clause be read a second time."

The Committee divided: Ayes, 119; Noes, 168.