HC Deb 15 May 1912 vol 38 cc1212-33

I beg to move, "That, in the opinion of this House, the continued imposition of a Sugar Duty is inexpedient and unjust, and ought to cease even if it involves an increase of other taxation."

It will be within the recollection of the House that when this tax was imposed, or I should say reimposed, in 1901, it was ostensibly as a war tax to meet the exceptional expenses of the South African war. It was reimposed then after an interval of twenty-seven or twenty-eight years, because the original Sugar Duty was abolished by Mr. Gladstone in 1872. The reimposition of the tax in 1901 by the party opposite was rightly opposed by Members now sitting on this side of the House. The special necessity for this tax has passed away, and I think the time has come when the Liberal Government should sweep away the remainder. It is true that in 1908 the tax was reduced from 4s. 2d. to 1s. l0d. a cwt., but even the remainder of the tax is equally unjust with the tax as originally imposed. It is even more important that the remainder of the tax should be removed, because, although the revenue now received from the Sugar Duty is half that which it was in 1901, yet the cost of collecting the tax is the same, as also is the extra cost to the consumer, due to incidental charges, and to the extra profit which the manufacturer requires in order to meet the expense of paying the tax before he gets his money from the retailer. Let me remind the House what the tax at present is. It is a tax of 1s. 10d. per hundredweight on sugar, which during the first few months of this year averages, roughly, 15s. 4½d. a hundredweight. Therefore it is a tax of about 14 per cent, on the value of the sugar. The tax brings in about £3,500,000 a year. It is a bad tax, because it is a tax both on food and on the raw material of a great many industries in the country. I shall leave to my Seconder, the hon. Member for the Sowerby Division (Mr. Higham), the chief argument against the tax as a tax on raw material, but I should like to point out what it means as a tax on the food of the people. The tax amounts to about 1s. 6d. per annum per head of the population of this country. For an average family of, say, seven members the tax will be nearly 10s. a year upon the wage earner—not a big tax, it is true, but one which falls with increasing severity the poorer the man is and the smaller his wage. After all, even a rich man cannot eat much more sugar than a poor man, and a man who has a large family has undoubtedly to pay far more of this tax than a man with an equal income and a smaller family, and still more than a rich man who is a bachelor, and has no one to support but himself. Fran the point of view of a tax on food, the tax on sugar is unjust, and it is particularly inexpedient, because sugar forms one of the most important foodstuffs for the children of the country. Sugar is recognised by all doctors to be a very valuable foodstuff for children for building them up and making them healthy and strong. Therefore, of all food taxes I think the tax on sugar is the worst.

The collecting of all taxes is difficult; the collecting of import duties is particularly difficult, and of all import duties the collecting of the duty on sugar is the most difficult of all, because sugar enters into so many manufactured products imported into this country. It is not merely that we have to impose the tax on raw sugar as it comes into the country. There are between thirty and forty articles into the composition of which sugar enters, with the result that the Customs House officials have to examine all those compounded articles, and the Treasury have to impose the tax upon them. Sugar enters into a very large number of articles either of food or of common use imported into this country, which articles have of necessity to be taxed simply and solely because sugar forms part of their composition. If you did away with the tax on sugar you would do away with all the difficulties which arose last, year over the question of the tax on cocoa and chocolate. You would at the same time relieve our Customs House officials and system of a great deal of the present Customs House work. The tax on sugar is a bad tax, therefore, because it is a tax on a raw material, not only of the sugar refining trade, but also of the confectionery: trade, the jam trade, and all those allied trades which cooperate with the jam-making and confectionery trades to put their articles before the public. It is bad, not only because it is a tax on raw material, but because it is a tax on food which is felt most severely by the poorest classes, and of the poorest classes, most severely by the children. It is bad because it is a costly tax to collect, because it makes necessary a scrutiny of so large an amount of the imports of the country, and because the cost of collection is out of proportion to the amount collected. I want also to refer to one other way in which this tax, and, indeed, all indirect taxes upon food are bad. It is not true to say, as so many Free Traders do say, that in the case of a tax upon sugar the whole proceeds go into the Treasury, and none into the pockets of the protected manufacturers. It is true that none of the proceeds of the tax go into the pockets of the protected manufacturers, unless, indeed, the hon. Gentleman the Member for Rye (Mr. Courthope) introduces his beet-sugar growing, and manages to escape Excise Duty.

It is not true, nevertheless, that the whole proceeds of the. tax go into the Treasury, because the importers have to pay duty on the sugar that comes into the country, and cannot expect to recoup themselves till they are paid by the retailers, to whom, naturally, they must grant a certain amount of credit; and therefore all the middlemen and the merchants who import sugar have to invest larger amounts of capital in the business than otherwise they would do, and have to secure during the period between the date upon which they paid duty and the date upon which they are paid by the retailers, a legitimate rate of interest on the money that is lying idle. Therefore you and that the Government halved the duty in 1908 so far as the public as a whole were concerned, yet so far as the revenue was concerned of this country they dropped the tax, not from 4s. 2d. per cwt. to 2s. 1d., but from 43. 2d. to 1s. 10d. Actually the Revenue Tax fell by more than one-half, still the public only got exactly one-half of the original duty. Therefore in all these indirect taxes you must remember that you are taxing the community by more than that which goes into the Treasury, because the middleman has to secure larger profits to cover the rate of interest on capital that is lying idle, or, rather, capital which he has to employ in financing the period during which he does not get a return for his money. That is the minor injustice of all indirect taxation.

I want the House to bear with me for a little while, while I deal with the fundamental injustice of such taxes as this tax on sugar. Hon. Gentlemen opposite are always great sticklers—and rightly so—for the sanctity of property. Of all forms of property, what is there more sacred than the wage a man takes home at the end of his week's work? Every penny of it is obviously and patently earned. He takes home, it may be, 30s. as a reward of his week's labour. That property ought surely to be sacred if any property in the world is! He hands that money over to his wife, and she goes out to do the week's shopping. She buys half a pound of sugar from the grocer, and the Government come along and take from that half a pound of sugar as a tax a fraction of a penny—that out of the absolute property of that working man. Surely there is interference with the rights of property! The wife buys half a pound of tea. Again the Government come along and compulsorily take part of that hard-earned 30s. as a tax. You have in all those indirect duties State robbery. It is perfectly true that the majority may have voted in favour of this tax, or taxes; still it is only State-sanctioned robbery, for the State has no right to take that man's property.

Taxes of this sort are unjust because they are a tax upon labour, and yet they are often justified on the ground that they are taxes which the poor pay. Hon. Gentlemen opposite have said over and over again that without taxes of this kind the poor would contribute nothing to taxation. I wonder whether they have ever thought who pays; who really does contribute to the taxation of this country. It is true that the Chancellor of the Exchequer or any Chancellor of the Exchequer may take wealth in taxation in the first place from the rich, but the people who created that wealth were the poor workers of this country. Taxation in the long run comes from the workers of the country. It may come to other people first, but in no case can I conceive of a State where a tax does not come out of the workers of the country. The people who create the wealth are the only people from whom you can in the long run take the wealth. Therefore I do not think it is a valid argument to say that if you abolish the Sugar Duty or any other tax falling upon labour that you thereby exempt labour from all taxation. No; labour will still be taxed, will still pass on the wealth which it creates, it may be through a series of hands, to the State in order to fill the State coffers. The arguments of hon. Gentlemen opposite aught to be, and very often are, put on a different footing from that. They do not say that labour would contribute nothing to the taxation of the, country if this tax is taken off; rather they say that it is necessary that the workers should recognise that they are paying part of the taxation; that then it is so obviously before his mind whenever the taxes are increased or reduced that he feels he is a participator in the advantages or disadvantages of changes of taxation. If that is so I do not think that the Sugar Duty brings it home to him very well. It would be better to have some other form of taxation which indicated to him more directly that he was contributing to the upkeep of the country, that he was vitally interested as a taxpayer in the expenditure or the economy of the government of the country.

The Sugar Duty is an indirect tax—the most efficient way of plucking the goose. If you want the poor workers of this country to recognise the absolute truth, which we all know to be true, that they do pay the taxes, that they are vitally affected by every change of taxation, why then make a direct tax; levy a tax upon them; but I would urge that that tax should be a just tax, and no robbery. You can make a perfectly just tax by levying upon all who use land a tax equal to the economic rent of the land which they use. That would be a perfectly just tax, because the community is not depriving a man of the fruits of his labour. He is merely paying to the community a sum equal to the advantage which he gets from the community. This direct tax I offer to hon. Members opposite as the best fitted to render absolutely clear to every man in the country—for every man must use land—that he is a participator in the country's affairs, and that he is vitally affected and interested in the expenditure of the Government of the country. The arguments against this tax have been stayed over and over again in this House. They have been stated by all the hon. Members in the Government at the present time. They have been stated by hon. Members opposite. More wonderful still, they have even been stated by the hon. Member who used to sit in the seat below me, Mr. Harold Cox. I do not believe that even the hon. Member for Rye, who has an Amendment to this Motion, would defend the tax on sugar per se. It is universally admitted that this tax is unjust and inexpedient. The time must come when we must carry out what is a just and expedient course, and unite in asking the Government to take this tax off. I move this Resolution to-night, because it is perfectly well known to hon. Members that when the Budget, the Finance Bill, of the year is before the House, when tins Sugar Duty is in its place, that then it is extremely difficult for any hon. Member on this side of the House to move that that duty be deleted.

The Government have then made their plans, their whole Budget has been arranged, and to cut out the Sugar Duty then would be to leave them with a deficit of £3,500,000 on the year's working. To vote against the Government on such an occasion would be a vote of want of confidence. It is extremely difficult to get such a reduction in the duty carried knowing as everybody does the ardour with which we support the Government at the present time. The difficulties on such an occasion are immense, but the difficulties on a Resolution such as this are by no means so great. Liberal Members may vote for a Resolution which urges that the Sugar Duty should be removed without endangering the existence of the Government in any way. They can vote for it knowing perfectly well that the carrying of that Resolution, although it may inconvenience the Government for a while, will in the long run induce the Government to take that duty off. I bring forward this Resolution to-night because I want this Sugar Duty taken off. I believe that nine-tenths of Members of the Government, and 99 out of every 100 of their supporters, want that duty taken off. Some of us may want it off for small party reasons, but the continued imposition of the Sugar Duty is one of the best arguments of hon. Members opposite for Tariff Reform. I have left that argument entirely out of account. I do not think it is worth while bringing it before the House; it is quite sufficient for me to know that this tax is an unjust tax and is inexpedient, and I hope that before this Debate closes we shall have a promise from the Government that within the next two years, either in the Budget of next year or the year after, they will see the need for taking off this relic of the war tax which was imposed by hon. Members opposite in 1901. I quote the words used by the Chancellor of the Exchequer in 1909, when this tax was brought forward, when he said:— Perhaps there is no tax, even the tax on bread, on which there may be so much said to justify its total repeal as the duty upon sugar. And I would also quote what was said by the right hon. Gentleman the Leader of the Opposition, who was no less emphatic in his opposition to the Sugar Duty. He said:— This tax is open to many great disadvantages. And the Secretary to the Treasury actually voted in favour of Mr. Harold Cox's Amendment to the Finance Bill upon this question, and did so on an occasion when it was far more difficult to vote for the abolition of the Sugar Duty than it is to-night upon a mere Resolution which does not bind the Government to immediate action and gives them time to go into the question.


Was that before the tax was reduced?


It was, and I suppose it was the vote of the hon. Gentleman that ultimately forced the Government to reduce the duty to half in the next year. The position we are in to-night is, we want this duty abolished. We see, in the passing of a Resolution by this House to-night, a chance of getting it abolished without inconvenience to the Government if the Government mean to abolish it. To move the abolition of this duty when the Finance Bill is before the House is a very different thing to asking the Government by this Resolution to abolish it within the next year or two, and I hope that we shall either get a promise from the Government to-night that they will wipe out the remains of this duty, in 1913 or 1914, or that otherwise we shall, by putting this Resolution upon the Journals of the House, make it imperative that they should do so.

I wish to say one or two words with respect to the Amendment on the Paper in the name of the hon. Member for the Rye Division. The hon. Member for the Rye Division wishes to retain this tax upon sugar in order to build up the beet-growing industry of this country. If the hon. Member really wants to build up the beet - growing industry there are other ways than by retaining this most unjust tax upon the food of the people of this country. There is always the bounty system, as an alternative to this indirect tax upon the people. This tax hits the poorest people; it hits the people with large families much harder than those who can make both ends meet more easily. If the only object of the hon. Member for Rye is to build up the beet-growing industry let him act in a matter more conducive to the interests of the whole community by collecting the money necessary for the building up of that industry from those better able to bear the contribution required by the State. Let him ask for bounties equivalent in value to the protection which they get, or hope to get, from the retention of this tariff, and for the absence of an Excise Duty. If he asks for a bounty it will be exactly the same for the growers, but it will be a very different thing for the poorest people of this country. You can take your bounties from all sources, but you can only take a protective tariff from the mouths of the people and from their children. Therefore I hope he will not press this Amendment to a Division, but will look forward to the time when his party comes into power to build up this industry if he wishes to build it up, at the expense of those best able to bear it, and not at the expense of the stomachs of the people. I hope the Chancellor of the Exchequer will give us some promise to-night that we shall have this tax removed. It is now absolutely in his power to see that this tax is taken off. If you want to make the poor understand that they are contributing to the taxation of the country an indirect tax such as a tax upon sugar, is not a tax that makes them see it very clearly. If you want to make the poor recognise that they are vitally interested in economy the sugar-tax is not a good one to make them see that; it is an indirect tax paid almost without knowing it. If you want to make the poor recognise that they are sharing in the expenditure of the country make it a direct tax upon them; make it a tax upon the whole of the land they live upon whose value is created by the community, and should go by right of the community.


I desire to second the Resolution which has been moved by my hon. Friend. I do so for the reasons which he has given and for reasons which I shall put before the House. He says that the Sugar Duty was first put on as one of the War Taxes in 1901. It was one of three taxes, the Corn Tax, the Coal Tax, and this one. The Corn Tax soon went, and the Coal Tax did not long survive, and this Sugar Duty is the sole remnant of that policy. In looking up the speech of the then Chancellor of the Exchequer, Lord St. Aldwyn, I find he gave a special reason for this tax. He said:— It is our opinion that in the true interests of pence and economy the labouring classes is well as other classes should know that they hear the burden of the cost of war and the preparations for war. When I read that I thought that I had never read a more unjust sentence upon the working classes of this country. I think hon. Members will acknowledge that the labouring classes have very little to do with controlling the foreign policy of this country. When they do ultimately throw in their lot and their shouts upon the side of war, it is in every case the result of their being inflamed by the newspapers. The labourng classes of this country are no more responsible for war than the labouring classes of any other country are responsible for our wars. That was the reason given by Lord St. Aldwyn, but he also gave a palliative. He said that this Sugar Duty might have very little effect upon the people, because the country giving the bounty encourages the production of sugar within its own borders and at the same time does its best to restrict the consumption by every possible means, so that the result is that there is an enormous amount of sugar which must find a foreign market.

That was his strongest argument after stating that the labouring classes ought to pay. It was a strong argument to use, because I wish to show how the effect of the Sugar Duty was made doubly vicious by the abolition of the bounty, of which we were really the cause, a year or two later. We took part in the Brussels Convention, and every advantage recorded in the Chancellor of the Exchequer's speech in that year the Government of that day deliberately threw away by going to the Brussels Convention. My hon. Friend, in moving this Resolution, has referred to the influence of the Sugar Duty upon trade. I think there is no duty upon a raw material which can affect so many industries and which can affect so many people engaged in industry. It affects those who deal in the manufacture of commodities contained in that raw material. The duty was one halfpenny; it was put on in the year 1901. At that time on the Continent they were giving a bounty which included the cartel arrangement, which practically came to another halfpenny per pound, and the duty was then estimated at 5s. per cwt. The bounty is part of a protective system, but, as far as this country is concerned, a tariff on the Continent lessens the trade we can do with the country which imposes the tariff. But it gives an indirect advantage, in so far as it increases the cost of producing other articles in that country, and therefore we can compete with them more successfully. But the bounty has a different effect. A bounty given in those Continental countries enables them to keep up the price to the consumers in their own country and make them pay extra there, and you make it worse for them to compete with our manufacturers here, and we get an advantage in the lower price of sugar coming into this country.

It was calculated by the largest user of sugar in this country that under the bounty system we were getting an advantage of £4 per ton. We use 1,500,000 tons of sugar a year, and therefore the Conservative Government threw away £6,000,000 a year by going to the Brussels Convention and joining in the decision to abolish those bounties. In other words, the consumers of sugar had to pay another £6,000,000 a year to our Government, and it had to come out of the sugar industries and the users of sugar. Take, for instance, the trades which engage in using sugar. The biggest trade is the brewing industry, and then there are the makers of preserves, jams, cocoa, chocolate, sweets, aerated waters, and an immense number of small employers of labour, who were heavily hit because there were so many articles which were sold at one penny and twopence each upon which they could not increase the charge either in the wholesale or the retail list, and consequently these people were heavily hit by the Sugar Duty. I would like hon. Members to compare the price of sugar on the Continent and here as showing the effect of bounties. In 1902 sugar could be bought in any retail shop in London at l½d. per pound, including the duty. If there had been no duty it would have been very little over a penny per pound. In Paris at that very time sugar was 4¼d. per pound, and the chocolate manufacturers in Paris could not buy their sugar under 3½d. per pound. In Berlin the price was a halfpenny per pound cheaper than in Paris. Later we put the tax on our own people, and we went into the Brussels Convention and struck out the bounty, which was equivalent to another halfpenny per pound. The following year the price went up one farthing per pound in Paris, and in Berlin the price remained the same. In the years 1906, 1907, and 1908, the price in London was 2d. per pound; in Paris it was 3d., and in Berlin it was 3½d., or exactly what Lord St. Aldwyn foresaw in his speech. The abolition of those bounties put up the price of sugar against the people of this country by £d. and brought it down all over Europe—France, Germany, Austria, and Italy—by a sum varying from 1d. to 1½d. a pound. It brought it down to Continental manufacturers by £12 per ton all over Europe, and it put it up to our manufacturers £4 per ton. That is an extra reason why the Chancellor of the Exchequer should to-day take into his most careful consideration the question how soon he can help the industries of this country by taking this tax off the raw material they are using. I know we have the sympathy of every Member of the Government. The Prime Minister, when he was Chancellor of the Exchequer, said in May, 1908:— This was one of the most objectionable of all our indirect taxes. It was a tax on food and it was a tax on raw material. Perhaps the most attractive reason given for going into the Convention was that of helping our West Indian Colonies, a reason as fallacious as the reason advanced by the hon. Gentleman opposite in putting down his Amendment. To take a huge hammer for the purpose of cracking a nut is not in it with the reason given for entering into this Convention or for the Amendment to-night. We use one and a half million tons of sugar per year, and we have never in the biggest year of our trade with the West Indian Colonies bought from them more than 5 per cent, of our consumption, and in several recent years it has gone down to 2½ per cent. We are actually taxing ourselves £4 per ton on a consumption of one and a half million tons in order to help the West Indian Colonies to increase their sales to us from 42,000 tons per year. In 1900 we bought 42,000 tons from them, in 1901 42,000 tons, and in succeeding years 50,000 tons, 42,000 tons, 58,000 tons, 61,000 tons, 60,000 tons, 40,000 tons, 61,000 tons, and 79,000 tons. In the biggest year we did not buy 5 per cent, of our consumption, and we put all that burden upon ourselves for the sake of that amount of purchase. If you take the production of the Colonies, it has been of no more help to them than to us, because while in 1900 they produced 238,000 tons, in 1902, before the Convention came into force, they produced 302,000 tons, and in 1910 220,000 tons, so hon. Members will see again that while the Convention put that enormous tax upon us it did not help one iota the West Indian Colonies in their competition with beet sugar or in their exports to us. Take another result. We in this country had to go cap in hand to that Convention asking them to allow the exportation of Russian sugar lying idle in that country.

9.0 P.M.

Mr. DEPUTY-SPEAKER (Mr. J. H. Whitley)

The hon. Member is getting rather wide of the Motion. The Brussels Sugar Convention only arises so far as it has any relation to the Motion which the hon. Member is seconding. I cannot rule out allusions to it, but it must not be entered into in detail.


I wish to show how the Convention has emphasised the mischief which the duty itself has done. Last year there were in Russia 1,000,000 tons of sugar to spare, but we were debarred from having that sugar by the Convention. Perhaps the greatest trouble these industries using sugar have is that every Spring they wonder whether the duty is going to be taken off or not, and every shopkeeper and merchant using sugar in his trade has to bring his stocks down to the smallest possible limit, so that he may not be landed with large stocks of sugar if the tax is taken off. The tax is a great burden upon these industries, but there is in addition this annual upset in their business. Famine years and plenty, failures of harvest and speculation they are quite prepared to face, but the narrowing of the markets by the levelling of a duty makes those difficulties doubly hard to bear. One has to remember that while in olden times sugar was very high in price a tremendous reduction in the price encouraged these industries to go ahead, and now they have to face the highest prices of sugar which have ranged since 1882. In 1882 sugar was 27s. per ton. It then dropped to 20s., and in the early part of this year it was higher than any price since 1882. The industries are prepared to face high prices, but they do ask that they should not be handicapped in their business by a duty which presses upon them so severely as this duty does. I am sure the House is sympathetic on this subject, and I desire to press the Chancellor of the Exchequer to give us an assurance that the matter will have his most careful consideration, and, if possible, to hold out some hope to us of releasing these industries from a burden which has been pressing upon them now for the last twelve years.

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

The House has listened to two very able speeches upon the Resolution which has just been moved, and I am sure they have contained some very admirable figures which must have made a great impression on those who heard them. I wish I could refer to them and could follow the hon. Members into the discussion about the Sugar Convention, but I am afraid that the Rules of Order will not permit of my doing so. I sympathise with the hon. Member in this general case and I especially sympathise with him in his particular case. I do not think that anyone who has followed the working of the Convention can come to any other conclusion than that it was a great business blunder on our part to enter into it. I was one of those, and I believe my hon. Friend the Member for East Mayo (Mr. Dillon) was also one of those, who protested very strongly at the time. We predicted that the effect would be to put up prices of sugar in this country, and to give an advantage to our trade rivals by depressing the prices to them while increasing them in this country, thereby seriously affecting an industry which we had ourselves built up, and in which we had got the real mastery of the world, so far as this particular trade was concerned. I regret I cannot follow the hon. Member into that subject. The only observation I make is this: that if we have suffered more from that tax than from any other tax which the late Government put upon this commodity we, at any rate, have done something to reduce it.

I regret I am not in a position to accept this Motion. If I accepted it I should regard it as a pledge to deal with the matter. I am not in a position to do that, and, therefore, I am certain the House will not ask me, on a Motion of this kind, to undertake what, after all, is a very considerable fiscal change, after the plans for the year had been submitted by the Government to the House of Commons. But my hon. Friend may depend upon it that whenever there is a possibility of our dealing with this matter we consider ourselves pledged to deal with it. It is part of the duties of food and raw material in this country which on every principle we are bound to do our very best to remove from among the taxes of the country. We shall therefore take it into account when dealing with the finances of the year. We could not do it this year, for reasons which I explained at the time I made my annual statement. We were then not in a position to reduce taxation. All I have to say is this, that since the present Government came into power we have reduced the burden of taxation upon sugar from £6,186,000 to £3,250,000; that is, a reduction of £3,000,000 upon this very important commodity which plays such an essential part in the food of the people. That, in itself, is a guarantee that we take these pledges seriously as an obligation cast upon us as a party. It is as far as we can go at present. We regret that we cannot see our way now to go further, but we do not regard our obligations as discharged by a reduction of £3,000,000 a year.

I would like to remind my hon. Friends of what really has been done during the few years we have been in office in the matter of readjusting the relations of direct and indirect taxation. When we came into office, in the year 1905, the percentage of indirect taxation was 49.7, as compared with 50.3 of direct taxation— roughly speaking, half and half. Last year the percentage of indirect taxation was 42.7 and of direct taxation 57.3. The taxation upon pure luxuries, like alcohol and tobacco, has been increased by 10 per cent. The taxation upon the necessaries of life —tea and sugar—not forgetting coal—we have decreased by about 25 per cent. I am only quoting these percentages to show that it has not been merely lip-service that we have given to the principles so clearly enunciated by my hon. Friend in moving this Resolution. We have gone some way, at any rate, towards redeeming the promises we made when we entered office. It will be interesting to the House to know how we compare with foreign countries in the matter of the Sugar Duty. When we entered office the Sugar Duty in this country was 4s. 2d. per cwt.; it has now been reduced to 1s. 10d. In Germany it is 9s. 5d. per cwt. Customs and 7s. Excise, so that the duty in Germany on homegrown sugar, and I commend this fact to the hon. Member who is about to move an Amendment—the duty on beet-grown sugar in Germany is 7s. per cwt., while in France it is 10s. In Germany the duty on tea is 5½d. In France it ranges from 9d. to 11½d. On cheese in Germany the duty ranges from 7s. 6d. to 15s. per cwt., and in France from 4s. 10d. to 8s. 1d. The duty on butter is 10s. per cwt. in Germany and 8s. 6d. in France. The duty on meat imported into Germany runs from 13s. 1d. to 17s. 6d. per cwt. and in France from 10s. 2d. to 14s. 3d. The duty on wheat is very heavy in Germany, and still heavier in France. If you go through the whole category of the necessaries of life you will find the duty abroad is exceedingly high, and, in this respect, when we compare what we are doing with some of the great Continental Powers, I submit that our record is an exceedingly good one. I want my hon. Friend to bear in mind that it means that in a country like Germany, which is becoming more and more industrialised, these high duties mean that the cost of living is going up year by year accordingly as more money has to be spent upon imports. I do not think that at the present stage there is anything more I can usefully say. My hon. Friends have very fairly stated, indeed, they have put in their Resolution, and the Mover, with his usual courage, has not shirked, the natural result of doing away with the Sugar Duty. He said, "Very well, put on some other tax." I think he will agree with me that it is desirable that every class in a community should contribute something towards the expense of the State.


I said the working classes contribute more than any other class.


That opens up a very abstruse economic problem, into which I am not prepared to follow my hon. Friend. If he includes all those who labour, so that the working classes include everybody who works with muscle or brain, then I agree with him. Those who do not work contribute nothing, and it is an absurd theory to say that they do. If my hon. Friend makes it a comprehensive definition of the working classes, I agree with him. What I mean is, that taking the working classes in the most comprehensive sense, I think everybody should be brought in to contribute something towards the expenses of the State. I cannot conceive a worse system—I have often said this before—than a system whereby the expenditure of the country is borne by one class numerically, perhaps, small, and where the policy is directed by everybody. I think it was a very bad principle. I think everybody ought to feel that he has got a responsibility, even a financial responsibility, for running the country.


If the right hon. Gentleman will be good enough to read my speech, he will see that I dealt with that point. The right hon. Gentleman was not present when I spoke of it.


I am very sorry I was not present at the time. I do not know whether my hon. Friend suggested any alternative tax.


A tax on land values. I urge that as a tax which everybody would pay.


I am sure my hon. Friend woud not make a speech without bringing in at the beginning, or the middle, or the end the question of the Land Value Duty. I cannot imagine him delivering a speech on any subject without, at any rate, dwelling upon the merits of the taxation of ground values. I do not altogether disagree with him about the desirability of taxing land values, but that does not dispose of the argument which I was putting forward.


Yes, it does. Everybody puts it forward.


Apparently I am in for a very long argument. Luckily it is an irrelevant one. I will just resume the topic I started with. My hon. Friend said it does not follow that a Sugar Tax is the best method of securing the contribution. There I agree with him. It does not follow that if you have got to call upon everybody in the community to contribute, that the taxation of sugar is the best method of arriving at a contribution of that kind. I do not think that it is. There is only one thing to be said. I should be sorry for the Chancellor of the Exchequer who tries to substitute another method. Every Chancellor of the Exchequer who initiates new taxation has his difficulties. The difficulties which I had with the one or two new taxes which I initiated three or four years ago would be nothing to the tribulation that would fall upon the Chancellor of the Exchequer who tried to remove this taxation from the working classes by substituting other indirect taxes. Every Chancellor of the Exchequer will eschew that very invidious task. For the moment we are not in a position to contemplate it. It is true that on the working of last year we had a very considerable surplus, but anybody who looks at the finance of the present year will see that it is a surplus which is not capable of repetition, for the simple reason that-half of it is attributable to the saving of expenditure, which is very largely due to labour troubles and matters of that kind, in consequence of which the Admiralty did not spend its quota upon construction; and the other half of it is more than absorbed by the increased expenditure this year upon the programme the Liberal party has adopted. Therefore there is no other source available for expenditure except new taxation if the Sugar Duty is finally abolished. For that reason I could not possibly contemplate any action of that kind.

I have simply to point out, as every Chancellor of the Exchequer up to the present has pointed out, that, the only way of reducing taxation is by reducing expenditure. So long as expenditure is increasing taxes cannot be taken off—expenditure sometimes upon matters which the House of Commons presses upon the Government, expenditure which is sometimes productive and useful, and sometimes for causes which everybody roust deplore, however much we may all feel the necessity for that expenditure. At any rate, that is the only method of reducing taxes and getting rid of some things I should be glad to see blotted out of every Budget. I think my hon. Friend has rendered good service in raising a discussion upon this subject. It is desirable that we should be reminded of it, that we should have a Debate upon it, and that we should realise the importance of a proposal of this kind to the working classes of this country when we are in a position to carry it into effect. I very much regret that at the present stage it is not possible for me to go beyond that.


I do not think the Mover of this Resolution has got very much comfort from the Chancellor of the Exchequer. So far as I can see he has said nothing that will give us any hope of his ever taking the tax off this year, or in any future year. That is my opinion anyhow.


The hon. Baronet has no right to say that a Minister has defended a tax unless he is prepared to quote some passage. I deprecated the tax, and the only defence I made was that I was not in a position to take it off.


If the right hon. Gentleman says he did not do it I will take his word for it. I was going on to say that he did somewhat defend the tax, because he compared this country with other countries, and showed that the taxation of other countries on sugar and other things is greater than in this country. He might have gone further. IIe might have shown that other countries put taxes on manufactured goods and that we do not. I wish to see this tax abolished, because I have pledged myself on the platform time after time to vote for its abolition, and I believe almost every Member of the Liberal party in this House at one time or another has pledged himself. I am not sure whether Ministers, including even the Chancellor himself, have not gone a long way in this direction, but all we have to-night is sweet words to say that it cannot be done. I wish to see it abolished because it is a tax on the food of the people and on the children of the very poor as well as a tax on raw material. The Chancellor of the Exchequer, when speaking on the Insurance Bill is always very eloquent on the maternity benefit. I believe in the Insurance Bill, but it must be remembered that for every child that a man has he pays more in taxation by this tax. It is computed that a man earnings 21s. a week pays 6s. 3d. per annum through the Sugar Tax, and he would pay very much more if he had a large family. The wages of agricultural labourers are very low. It is often said that they have gardens in which they can grow fruit and things which are food for the children, but these things cannot possibly be made palatable unless sugar is used with them. You are by this tax making it very hard for the agricultural labourer to use the produce of his own garden, because you are taxing the sugar which makes that produce palatable. I object to the tax because it falls on the manufacturers of articles which are used by the very poor in the shape of jams and the cheapest kind of sweets. Of course, the tax falls on the consumer, and the consumer of these articles are the very poorest part of the community. In the manufacture of confectionery sugar forms 75 per cent, to 85 per cent., and in the manufacture of jam it forms something like 65 per cent. People hardly realise the enormous amount of jam used by the poor of this country. Between 1901 and 1911 the sugar consumers of this country have paid £53,150,000 in taxation, and last year the Wholesale Co-operative Society, who really supply indirectly the working class consumers, had to pay £270,355 for sugar. Sugar is the raw material of an enormous business which is not confined to one part of the country. Confectionery works are all over the Kingdom, in almost every town, and it has this advantage perhaps that in many cases the works are right in the country, they are carried on under the best conditions as regards the people they employ, and it is a very healthy business. For the ten years previous to 1901 this was perhaps one of the most prosperous businesses in the country. It was employing more hands year after year, and no trade was doing more for the employment of the working classes, but since the Sugar Convention it has not increased in anything like the ratio that it did before, and so much has it been affected by the Sugar Convention, which raised the price, that there have been more failures in it than in almost any trade in England during the last five years. That is due to some extent to the tax, which I deprecate very strongly. I have pledged myself to vote for its abolition, and I have no wish to get out of any pledge I have ever made. The Chancellor of the Exchequer has given no sort of indication that he has any intention of taking off the tax, and if it is pressed to a Division I shall vote for the Resolution.


I beg to move as an Amendment to leave out all after the word "That," in order to insert instead thereof the words "owing to the rapidly increasing consumption of sugar throughout the world, and to the limited area of suitable land available for sugar-beet cultivation in Europe, it is advisable that the introduction of the beet-sugar industry into the United Kingdom should be encouraged and that the existing Customs Duty on sugar should be maintained during the costly experimental period incidental to the establishment of this industry."

The allusion which the Mover and Seconder of the Motion have made to my proposed Amendment and the words which fell from the Chancellor of the Exchequer entirely failed to touch the object or purpose of the Amendment. My immediate motive in moving it is practically the same as the motive which appeared to underlie the speeches of the Mover and Seconder and of the hon. Baronet (Sir F. Cawley). They have all said that sugar is an important food, that it is of the utmost importance to the poor, and that we must try to keep it cheap, but they have entirely overlooked the fact that in order that it may continue cheap, or that it may resume the general grade of cheapness to which we have been accustomed during recent years, you have to ensure that the supply of sugar is going to be at least equal to the demand—that the production will always meet the consumption. They have overlooked the fact that in country after country sugar is now apparently for the first time becoming an article of popular diet, that owing to the inclusion of sugar in the Army rations of some Continental nations the taste for sugar has been spreading not only among the troops but among the homes of the peasants throughout great districts where previously sugar was almost unknown, and that the sugar-producing countries of Europe are becoming less and less able to supply other than their own demand for beet sugar. I shall have a word or two to say in a moment about cane sugar. The hon. Gentlemen who moved and seconded the Motion seemed to assume that the future production of sugar could be absolutely unlimited, that therefore they had nothing to think of at all except the objectionable nature of the tax from their point of view—in many ways I agree with them—and that all they have to do for the sake of the consumer is to get the tax taken off.

Before going into details of my justification for asserting that the consumption of sugar throughout the world is overtaking the production, and that, therefore, if we are to get a plentiful supply of cheap sugar, we must increase the area of production in future, I wish to say that one or two arguments have been used already to which I should like to refer, because they have been more or less in the form of questions directly addressed to myself. The hon. Member who moved the Motion (Mr. Wedgwood) suggested that instead of asking for a temporary continuation of the Customs Duty on sugar during the costly experimental period incidental to the establishment of a new industry, I should ask the House to grant a bounty to the producer of British sugar equivalent in amount, and so get the money for the bounty from those who could better afford to pay it. He twice refuted his own argument—once in the course of his speech and once in an interruption of the Chancellor of the Exchequer—by stating that it is the poor who contribute the whole burden of all taxation. If they do, I would like to suggest to him that they will contribute the funds for the bounty equal to the Customs Duty to which he so much objects. I should like also to repudiate the suggestion which he made that one of my motives for wishing to retain the Customs Duty for the present is that we should make the poor man like the rich man feel a practical interest in the rise and fall of taxation. I agree with him that sugar is the very last kind of tax one would select for that purpose, but I agree with the Chancellor of the Exchequer that the principle is a good and sound one for economical government. The hon. Member who seconded the Motion (Sir F. Cawley) spent practically the whole of his able speech in making an attack upon the Brussels Convention and the motives which led this country to become a signatory to the Convention.

Notice taken that forty Members were not present; House counted, and forty Members not being present,

The House was adjourned at Seventeen minutes before Ten o'clock till to-morrow (.Thursday).