§ In lieu of the present Customs duties, drawbacks and allowance in respect of sugar, molasses, glucose and saccharin, there shall, as from the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged, levied, and paid the duties specified in the first column of the table set out in Part I. of the First Schedule to this Act, and there shall be paid and allowed the drawbacks and allowance set out in Part II. of that Schedule.
§ This provision shall not affect the continuance after the first day of August, nineteen hundred and sixteen, of the duties, drawbacks, and allowance existing before the twenty-second day of September, nineteen hundred and fifteen.
§ Mr. THEODORE C. TAYLOR
I beg to move to leave out the words "first column of the" ["specified in the first column of the table set out in Part I. of the First Schedule"].
The object of this Amendment is to raise the point whether we are now going to establish as statutory law the principle of a wide differential charge between the home product and the imported product. That is a very vital point. I do not want to labour it, certainly not from the point of view of Free Trade versus Protection, but I want to point out that this is the first item in the Bill which lays down the principle of Protection for the home industry. I remember that the Chancellor of the Exchequer, when on the Opposition Bench, very much distinguished himself on the great question of stripped tobacco. I derived a great amount of instruction from his Free Trade speeches in those Debates, and I little thought that I should live to see him introducing a 1668 Budget with such marked Protectionist features in it as this has. I know, of course, that there is already a Customs Duty on sugar. There would not have been any Customs Duty on sugar if I had been Chancellor of the Exchequer. I remember that the first speech I made in this House was against the Sugar Duty altogether. I believe it is a bad duty. The Chancellor of the Exchequer quite agrees with me, but he wants to make it a little worse. It is a bad duty because it is a duty on raw material and a duty on life. It is almost like having a duty on bread. I think that of the substances that the poor consume to build up their health and strength, next to bread, possibly, sugar is the most important of our foods. Milk, of course, for children, but next to bread, sugar has, I believe, in small compass and at comparatively small cost, the elements of life and strength and the building up of a strong frame, and if we are taxing sugar, whether it is effectively done or done on any lines whatever, with or without preference to some productions, I look on a tax on sugar as a very bad one. We are making it worse by this Budget. I have an Amendment to omit the second column of the First Schedule, relating to sugar, but since then I have sent in another Amendment to omit the first of those two columns. The object of my present Amendment is to assimilate the Excise to the Customs Duty. If, later on, one proposed to omit the second column, that Amendment would be out of order, because, in the first place, it would be taxing the home industry more than the Chancellor of the Exchequer now proposes to tax it, say at 9s. 4d. a cwt. for sugar of a polarisation exceeding 90 degrees instead of 7s. The distinction drawn is a distinction of 2s. 4d. a cwt.—a ¼d. a lb. That is to say at present the sugar that comes into the country is to be taxed exactly a 1d. a lb. under the Finance Bill, and the sugar that is made at home is to be taxed ¾d. a lb.
I always took objection to the tax on sugar before, when it was 1s. 10d. The Prime Minister reminded some of us the other day that he lowered the duty from 4s. 2d. to 1s. 10d. That was done in 1908. There was a difference therefore between imported sugar and sugar manufactured at home of 1s. 10d. a cwt., but the present Chancellor of the Exchequer proposes to increase that to 2s. 4d. a cwt., or a ¼d. a lb. In other words, if it was 1669 a mischievous thing before to tax a foreign product and not to tax the home product, which all Free Traders must hold, the mischief is aggravated by the proposal of the Chancellor of the Exchequer. It is, and has been, a root principle of our finance for very many years that all the products of an increase of price of any commodity that is caused by legislation should go into the hands of the Government—into the pocket of the Exchequer—less, of course, the expenses of collection. That is one of the very foundation principles of our finance in this country, and if we pass this Finance Bill as it is, without the Amendment I am proposing, assimilating the Excise and Customs Duties, we are giving up one of the foundation principles of finance, and one which is absolutely necessary for honest finance, because if we are going to put a bonus of ¼d. a pound into the pockets of those who produce one article, why should there not be something put into the pockets of those who produce another article? The only line of principle to be drawn is between having Excise and Customs to balance each other, as they are supposed to do in the case of spirits and beer, and having a departure more or less from that principle. This is not only a departure from that principle but it is a very considerable departure. The difference between taxing home-produced sugar ¾d. a lb., and imported sugar 1d. a pound is a very large percentage of the average value of the sugar, though, the present price of sugar being high, the percentage is not so great. The retail price of granulated sugar is 4d., or 3½d., and lump sugar 6d. Of course a ¼d. a lb. may be said to be not very much, but at 4d. it is a sixteenth. That is something like 6¼ per cent.—a very considerable increase in the cost of sugar—and I am reckoning nothing for the profit of the wholesale and retail trade. It is a very considerable difference. It may be said it is only ¼d. a lb., but why is the difference made? I should be very delighted if the Chancellor can bring some information on the carpet—I have never heard it yet—and show us that this difference is necessary owing to some process of manufacture or something of that sort. I have never heard that contended yet. If it is a bonus to home production, it is as much Protection only being ¼d. a lb., as if it were 1d. a lb. The principle is there and I strongly object to it, and I cannot support this beginning of Protection. What applies to this article will apply to every other article.
§ Mr. McKENNA
My hon. Friend has made it quite clear that, however he may dislike a different rate of Customs and Excise Duties, there is nothing new in it. He is thoroughly familiar with the fact that this is only a reproduction on a slightly different scale of an existing difference between Customs and Excise.
§ Mr. McKENNA
I do not understand that. My hon. Friend is quite aware that at the present time there is a Customs Duty of 1s. 10d. on sugar, and there is no Excise Duty. Therefore it is already a recognition by the law of a different rate of Customs and Excise Duty on sugar. He is not entitled, therefore, to regard this as the beginning of a new principle. Clearly it is not. The only difference we have to consider now is the difference between the present proposal and what existed before, which was that whereas there was a Customs Duty of 1s. 10d. and no Excise Duty, there is now proposed a Customs Duty of 9s. 4d. and an Excise Duty of 7s. That is the whole difference now.
§ Mr. TAYLOR
We have always been told previously, when we have mentioned this thing, that it is so slight that Chancellors of the Exchequers have never recognised this small sugar growth and have applied the principle de minimis non curat lex. It has really been overlooked as a thing which was not worth legislating upon. No Liberal Chancellor of the Exchequer has ever told us that he approved of this.
§ Mr. McKENNA
I should be perfectly willing to regard this as a matter de minimis non curat lex, and I should be quite willing to have omitted the Excise Duty altogether. The whole production of sugar in this country is so trifling that to found a principle upon it is to my mind straining at a gnat.
§ Mr. McKENNA
My hon. Friend accepted the statement in the past that sugar production in this country was so trifling that to leave out the imposition of Excise was quite a possible procedure. The sugar development in this country is to-day no greater than it was. It still remains, I believe, something like 3,000 tons a year, or little over the consumption of half a day, out of a total consumption of anything between 1,700,000 and 1,800,000 tons. In the past it has not been thought worth while to impose any Excise Duty upon a trade which was so insignificant. It was not worth it. It is still true to say it is not worth it. I am unfortunately bound by the conditions of the Brussels Convention, under which a duty cannot be imposed upon the import of sugar greater than 2s. 6d. in excess of the Excise Duty, and I was therefore bound to impose an Excise Duty. My hon. Friend says, "If you are bound now to impose an Excise Duty under the Brussels Convention, why do you not make it the same duty as the Import Duty?" A very reasonable and proper argument, but there is a very reasonable and proper answer. People who have been conducting this experiment—it is nothing more—have been conducting it under great difficulties, and with no very large profit. If we impose the same Excise now as the Customs Duty we destroy the experiment absolutely in a moment. Is that a wise thing to do? I am not dealing now with general principles for all time of taxation by Customs and by Excise. I am dealing with the conditions of this moment under the circumstances of the War, and I am bound to say it would not seem to me a wise and prudent proceeding at this moment to destroy an experiment in which a great deal of money has been spent and which is producing a certain modicum of sugar. For that reason I propose to the Committee that there should be an Excise Duty as much lower than the Customs Duty as the Brussels Convention will allow me to impose, but on general grounds the whole industry is so insignificant, the whole production is so small, that if we were free to do so I should be disposed to recommend to the House to take no notice of it. I have to propose an Excise Duty; therefore I propose 7s.
§ Sir G. YOUNGER
There is another consideration which I think the right hon. Gentleman has probably omitted in dealing with the home manufacture of sugar. 1672 I presume these manufacturers are placed under very strict Excise regulations.
§ Sir G. YOUNGER
And exactly as the distiller receives a bonus in cases of this sort, so should they be entitled to receive the same.
§ Mr. McKENNA
I did not go into that because I thought it might be misleading. With this charge of 2s. 4d. they would not have anything like as much, though quite a substantial amount.
§ Sir G. YOUNGER
I thought, as the right hon. Gentleman did not mention the fact, I would do so, because I know of a case. The question which I desire to bring before the attention of the right hon. Gentleman is the unfairness of placing this new tax on the sugar used in brewing. [HON. MEMBERS laugh.] It is all very well for hon. Gentlemen to laugh, but in November last year the Beer Tax was trebled; it was raised from 7s. 9d. to 23s. 3d. or something like that. It was taken to the extremest possible point which I believe it ever can stand. When the duty was taken from malt to beer in the old days, one of the great arguments of Mr. Gladstone, who made the change, was that while he knew he was imposing a larger differential duty than that which had existed before he was going to free the mesh tub and allow all sorts of ingredients to be used in the manufacture of beer. There we come up against the pure beer people. However, that was one of the strong arguments he made for the change in the tax. I know that the right hon. Gentleman will not agree to make any difference in the duty.
§ The DEPUTY-CHAIRMAN (Mr. Maclean)
The hon Baronet's remarks had better be reserved until the general discussion that the Clause stand part.
§ Sir A. MOND
The Chancellor of the Exchequer's speech has afforded us an example of how easy it is to depart from the right course, and how impossible it is to get back. We remember that when this question first arose in the House we were assured the matter was so small that we need not trouble about it; that the infant industry was only a baby and probably would never survive its infantile diseases. Now we are having the position regularised, and that is what the hon. Member for Ratcliffe (Mr. T. C. Taylor) 1673 objects to. The regular position, from the point of view of principle, is as objectionable as the irregular position. It is obvious that the right hon. Gentleman is setting a precedent, and it is a very dangerous precedent. We know that the industry is still small. I do not say that in the present year it will develop much, although considerable efforts are being made in various parts of the country, such as Hampshire, to promote the laudable object of growing beet sugar. Does the right hon. Gentleman really suggest to us that this 2s. 4d. is going to come off again at some future date, and that the experiment if it does not develop is going to be slaughtered by some more merciless person than himself? Of course it will not. We shall all have seen it grow, and I suppose we shall say, "Two and fourpence is not enough; let us put on another shilling." That is the way in which all these things have happened. My right hon. Friend once knew these things, but now he finds it convenient to ignore them. He knows them as well as I do. He knows perfectly well that Tariff principles do not spring up complete like Minerva from the brain of Jove. They grow up slowly.
§ Mr. McKENNA made a remark which was not audible in the Reporters' Gallery.
§ Sir A. MOND
The right hon. Gentleman says it is only 3,000 tons. I know how typical that argument is; he denounced it himself some time ago. Of course it is only 3,000 tons. If it were 300,000 tons a year the right hon. Gentleman would find it impossible to deal with it. If the industry was spread throughout the counties—I do not care to what politics any hon. Member belonged—his constituents would prevent him from taking this duty off in the interests of agriculture. I do not say the right hon. Gentleman will change it. His attitude is an illuminating instance, which I hope will be taken due note of, not only here but elsewhere, of how easy it is to leave the straight path. What I complain about is this, that if you are going to give a bonus to beet sugar, why not say so? I am quite ready to consider such a proposal on its merits, with a perfectly open mind. What I object to is that we are told these things do not matter and that nothing will happen. We are asked to swallow this soothing syrup without having any idea as to the direction in which we are going. Let the House realise that this is really subsidising beet sugar. Do not 1674 try to persuade us that when you are establishing in your Finance Bill a subsidy for beet sugar grown in this country you are not doing anything of the kind. You are. We all know you are. I hope the right hon. Gentleman will frankly admit that. If he thinks it is important at this juncture to subsidise beet sugar, let him say so, and then we shall know where we are. He says that he is bound by the Brussels Convention. I was under the impression that the Brussels Convention had been denounced some time ago. I will not be certain on the point, but my recollection is that it was denounced some time ago, and that we are no longer bound by it in any way. Of course, the right hon. Gentleman may have expert and official information on the subject, but I think he will find that the Brussels Convention was either denounced or very much modified some time ago. I must once more enter my protest against this and other points of this Finance Bill, and I can only repeat that if you once begin it is very much easier to descend than ascend. Although the right hon. Gentleman may not accept the very sensible Amendment of the hon. Member for Radcliffe, I think at a future date he will certainly regret that he did not adopt that course.
§ Mr. OUTHWAITE
I wish to support the view expressed by the right hon. Gentleman the Member for Swansea (Sir A. Mond) that the Chancellor of the Exchequer should make it quite plain and acknowledge the obvious fact that in these taxes, without any equivalent Excise, he is introducing Protection, or extending protection to the sugar-growing industry. It would be far better for him to admit it. We can see in this duty, and others to follow, that the Chancellor of the Exchequer is selling the Free Trade past, and getting precious little for the sale. [HON. MEMBERS indicated dissent.] Yes, he is doing it, and it is no use trying to deny it. The Free Trade past is being sold by a late Free Trade Member of this House. At the present time I do not know what the right hon. Gentleman's fiscal views are, but I should think they are very much in doubt. He probably does not know himself what they are. He tries to justify Tariff Reform measures by Free Trade arguments, and he suggests that this duty does not matter because it is only a question of 3,000 tons. That argument carries no weight whatever with me. Tariffs are always introduced as small measures first. A Continental gentleman once told me 1675 that Sweden started with a tax on poultry, and also, I think, with a tax on artificial flowers. Of course, it was only a small thing, but the principle was there. If you have protection for sugar, why not have protection for tobacco grown in Ireland, which has already been demanded, and so gradually extend it. This protection for sugar is particularly dangerous, because we know that so far as the Continent is concerned, and also so far as America and Australia are concerned, this protection of sugar has been the chief source of corruption in some of these countries. If I wanted to start a system of Protection, sugar would be the last thing that I would choose, because it is one of the essentials of the life of the people. You introduce this principle of Protection, and later on vested interests will be created, and the landlords will get higher rent for land for the production of sugar beet, and we shall have a demand for the maintenance of the Sugar Tax in order to maintain the protection of this particular industry. I wish the Chancellor of the Exchequer would not try to conceal the obvious fact, which is so clear to us who are Free Traders, that this is a surrender of Free Trade policy, and a surrender at a time of party truce, without any possibility of preventing it taking effect.
§ Mr. PETO
If I thought that this was a subject, as some hon. Members try to make out, of a Debate between Free Trade and Tariff Reform or tariffs, I would not have risen to take any part in it. I rise to thank the right hon. Gentleman that he has not allowed economic bigotry to divert him from his purpose and to destroy what is admitted even by the right hon. Gentleman the hon. Member for Swansea (Sir A. Mond) to be the laudable efforts, which he rather sneered at, of the people who in this country are trying to do something to improve agriculture and to produce food here which ought to be a part of our regular food production. The Chancellor of the Exchequer said that at the one factory in this country only some 3,000 tons of sugar are produced in a year. I wish the Committee to know that that figure which he quoted is absolutely the proof of the struggle which is going on to keep this industry going at all in this country, because it is not an economic unit on which the factory could possibly make a profit. It ought to be turning out, if it had anything like the supply of roots necessary, about 1676 double that amount. The right hon. Gentleman (Sir A. Mond) talked about these laudable efforts, but I notice that he did it in a manner which was rather sneering. He is one of those who, so far as his economic principles are concerned, would infinitely have preferred this Finance Bill to have been framed on such lines as to make it quite impossible that industry should be successfully started in this country. I would like to call the attention of the right hon. Gentleman, and of hon. Members opposite who support his views, to the fact that we have had from time to time, and only two or three days ago, in the newspapers, some very interesting comparisons between the rise in the cost of food supplies in this country and Germany during the War. In the very last returns published in the Press sugar is the only article of the dietary of the poor in Germany which, far from rising in price, has positively decreased by 3 per cent, since the beginning of the War. According to the economic principles of hon. Members opposite, who desire so much the success of their own peculiar views on this subject, they would deliberately permit a policy which would make it impossible for us, either in war or in peace time, to provide this article of food, which Germany so successfully provides that she has been able positively to reduce the cost during the fourteen or fifteen months that this terrible War has been waged. I am very glad that the Chancellor of the Exchequer has taken a sane and common-sense view, quite apart from any economic theories on this subject, which, though it is small, has certainly got great potentialities and is vital to the interests of the country.
Mr. LLEWELYN WILLIAMS
The speech to which we have just listened justifies all that we Free Traders have said. The hon. Gentleman who has just sat down says that he is in favour of this differentiation because it will increase the growth of food in this country, and he looks upon that as a good argument. If this tax is put on in this way in order to increase the growth of sugar, and therefore of food, in this country, there would be far more reason for doing such a thing in regard to wheat. The hon. Gentleman has adopted the argument that the price of sugar has not increased in Germany since the War began. Everybody knows why. It is the British Fleet, which has prevented Germany from importing the beet sugar which she used to send to this country before the War.
She grew it not because she wanted to keep it within her own shores, but because she wanted to sell it to other countries. What the hon. Gentleman refers to is the result of the very effective blockade of Germany by our invincible Fleet, and he uses that as an argument in favour of Tariff Reform. The hon. Gentleman used one of the stock arguments of the Tariff Reformer, but I was somewhat aghast to find two of the ordinary arguments of Tariff Reformers used by the Chancellor of the Exchequer. How did he defend this? First of all he said that this tax is really such a small thing that it is not worth troubling about. That is exactly the argument used in every Protectionist country in favour of the beginning of the Protectionist system. During the American Civil War, when the protective system of the United States was started, the duties were commended to the people of the United States because they were so small. They grew, as all these protective duties do grow. My right hon. Friend went on to what I myself thought was, on the other hand, a warning of the perils of this procedure, because he said that the reason for keeping up this differentiation between Excise and Customs was because there had grown up in this country already, in spite of the smallness in differentiation, a certain industry. That is exactly the course that is taken by the makers of every protective tariff in every Protectionist country. Therefore we are, for the first time in this country, face to face with the danger of tariffs. I confess that, until I heard my right hon. Friend's speech, I did not think that the peril was so near. I hope that my right hon. Friend will go to a Division, because I think that this is far more perilous than Clause 12, and if he does so, I, for one, shall be very glad to go into the Lobby with him.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu)
I venture to suggest to my hon. Friend who spoke last that he is not quite accurate in his view on this matter. When we were discussing Clause 12, we were told that this is how America began during the War. Now, when we come to this so-called fiscal heresy, we are told that this is a small matter, and that tariff heresies always begin with small matters. The facts are that there has always been a Customs Duty on sugar for many years past, and 1678 there has been no Excise Duty on it practically. There has been a small industry, a little struggling experiment to demonstrate the possibility of making sugar in this country, and the Legislature has never thought up to now, with the existing Customs Duty on sugar, that it was worth while bothering at present about Excise Duty. Under the existing protection which the sugar-beet industry in this country has had during the time in which I have been at the Treasury, there have been constant appeals to allow grants from the Development Grant to companies who wanted to make sugar from homegrown beet, and we have been unable to do so, and suggestions have been made that we should ask Parliament for powers to give Grants to companies trading for a profit. At the present moment, whatever may be its position later on, the cultivation of sugar beet for the manufacture of sugar in this country is not worth considering; but if it was not considered before the War worth while to impose an Excise duty nobody would suggest that we should take the opportunity of this War Budget to consider the excising of it for the first time. Then, why this Clause? It is merely because of the Brussels Sugar Convention. The right hon. Gentleman opposite said that he thought that we had left that Sugar Convention. We have; but when we left we undertook to continue to adhere to the condition not to give a bounty to homegrown sugar. The bounty was considered to be a duty, I think, of 2s. 5¼d. per cwt. Therefore, we have carefully put on an Excise Duty to conform with that undertaking. If we had not done it, any country abroad, a party to the Convention, would have a right to contend that our sugar-containing goods, made in this country, might have been made from bounty fed sugar, and to have penalised our exports. It was in order to avoid that, and not with a view to dealing with the small sugar-beet experiment, that this Clause was placed in the Bill. I do suggest, that there is very little new fiscal heresy in this. On the other hand, there is a considerable amount of fiscal orthodoxy.
§ Mr. HUNT
As the right hon. Member for Swansea has come back, I should like to point out, with reference to what he called his mournful protest against the 2s. 6d. on sugar, that he seems to have forgotten, according to his own account, that he has got, not only 2s. 6d., but practically a monopoly of his own markets, in 1679 his own production; and when he was tackled with it he had to admit that he put the interest of his shareholders before his Free Trade policy. All I have got to say is that I think that proper Free Traders ought to practise what they preach.
§ Mr. LOUGH
I did not intend to take part in the Debate on the question of this tariff, but I have been shocked by what the Secretary to the Treasury has said, and I am sure that the Committee will be shocked by it. I cannot refrain from asking whether the Brussels Sugar Convention is still alive—that monstrous enactment, that arrangement made with our enemies, Austria and Germany, which has cost this country millions of money. The right hon. Gentleman has suddenly come down, by way of salving our consciences and hastening the Debate, to tell us that the Convention is alive and going strong, and that it is in order to fulfil our duties to Germany, France, and Austria under this Convention that we are putting on this duty. I would ask the Committee, Did they ever hear a more malapropos confession made by a Minister? If my right hon. Friend had kept these Ministerial secrets to himself we might have thought that the promise which we got from the Government, that the Convention was ended, had really been carried out; but my right hon. Friend has confessed that it is not at an end at all, and here we are to-day putting on other duties in order to fulfil our obligations under it to Germany and Austria. The argument was that we were bound to do it. How can we be bound to do it? A fortnight ago, three months ago, we were only levying 1s. 10d. as an Excise Duty. We were not bound then to 2s. 4d. or 2s. 5d. The iniquity was sufficiently maintained by 1s. 10d. Why should it be increased to 2s. 4d.? My right hon. Friend does not agree with that at all. In fact he has made every slip which it is possible for a Minister to make. Before we entered into the sugar taxes we were a Free Trade country. There is a special Clause in the Brussels Sugar Convention enabling us to give up the Convention without putting on any Excise Duty of any kind whatever. The right hon. Gentleman has said that there is really no substance in this preference so far as its effects are concerned, and if it had any substance it would arouse the alarm of all my Free Trade Friends, who thought that this thing was finally ended. But when men get wrong on this question of 1680 Free Trade it is very hard for them to get out of the mire into which they have put themselves, and so we have the argument, that this wretched Convention should still go on for the benefit of Austria and Germany, put forward by a Minister as a reason why we should take another dose of Protection.
§ Mr. CHAPLIN
We have had various views expressed by Free Traders in the family quarrel which has developed in the course of this discussion, including the mournful protests made by the hon. Baronet and others against the departure from the straight path. What is the straight path of Free Trade? And where is Free Trade to be found? So far as we are concerned, what a farce it is in these days, in a discussion of this kind, to be told how mournful it is to see a great party departing from the faith which they have always practised in this respect, when as a fact every one of us knows that we have not got Free Trade in this country, or anything approaching it, and that we have never had it either! An hon. Gentleman contradicts me. If I am wrong, will he be kind enough to tell me with what single country in the world have we got Free Trade to-day? Why does he not tell me? Because he knows, just as well as I know, that what I am saying is perfectly true. We have not got Free Trade. We are not departing from Free Trade, and all these mournful protests that have been made are perfectly ridiculous, because everyone on that side of the House who professes Free Trade knows that I speak nothing but the truth when I say that in this country we have not got Free Trade, and that we have never had it, or anything approaching it since that absurd policy was first adopted at the behest of Mr. Cobden. We are engaged in the greatest War in which this country has ever had to struggle for its life, yet, in many of our Debates during this Session, we have found whenever hon. Gentlemen opposite—I say it in perfect good humour, I hope—begin to quarrel among themselves, as to some of their own particular fads, they almost seem to forget altogether for the moment the enormous struggle in which we are engaged, and become so deeply engaged in controversy with each other that they think, not of the War, which is the great object, and ought to be the one and only object in view at the present moment.
I can remember more wars than most hon. Members, but we all know that in 1681 the case of war taxes have always to be proposed, and must be proposed, for the sake of getting in the unusual revenue that is absolutely necessary for the War. What is this tax of which you are complaining except a war tax, and who are complaining? It is only the Free Traders themselves that are complaining. It was stated in this House not very long ago—I remember it perfectly well—that the Advisory Committee of the Board of Agriculture recommended to the President of that Department that the Government should spend £200,000 or £300,000, I think it was, in creating sugar manufactories in certain districts of this country which were at that moment growing any amount of beet sugar. The hon. Gentleman who has just sat down said that the question of sugar-beet growing had not been considered in this country, but, to my knowledge, years ago companies were formed for the express purpose of growing sugar beet and nothing else. It had been found, after numerous experiments that, in spite of the want of sun in this country, we here in England could grow sugar beet as well as, or better than, any other country of the whole Continent of Europe. All that was wanted was a little encouragement of one of the greatest and oldest industries in the Kingdom, as it is still, remember, for it employs more capital and more labour than any other single industry in the country at the present time. And why should you not encourage it? What could you have done on this occasion if you had given that industry the smallest encouragement?
We heard a good deal about eighteen million pounds' worth of sugar that was bought by His Majesty's Government. Would it not have been a great deal better to grow it in our own country? I believe that for the outlay which was requested for the creation of those manufactories the whole eighteen million pounds' worth of sugar, or a very large part of it, could have been grown here—grown in your own land. More food could be produced here, which is what you and your Board of Agriculture are always clamouring for day after day in the Press of the country; yet you never will, any one of you, do any real thing which is needed to encourage the growth of food here, and which could be grown in this country as largely and extensively as it was grown many years ago, when the land supplied three-fourths of the whole population—[An HON. MEMBER: "The population was smaller."]—at prices 1682 which were remunerative. And that is all that is wanted. Instead of that, the Free Trade Government said, "Oh, no; we cannot have any indirect encouragement of sugar or anything else; it is contrary to all our principles; it is a departure from the straight path; that is a thing we never could agree to." And yet, what happens? The position arises when you want the sugar. You go and buy eighteen million pounds' worth, and then because you very soon find that you have made a bad bargain, and that the price of sugar is beginning to fall, what is the attitude of this Free Trade party and this Free Trade Government? They go and prohibit the importation of sugar altogether in order to save their own skins and prevent that fall in the price of sugar that they themselves feared. I had no intention whatever of taking part in this Debate, but I have been led to speak by what I believed to be a very fair opening. I shall not say another word on the subject, and perhaps the best and wisest thing will be for the Committee to go to a Division as soon as possible.
§ Mr. PRINGLE
I think Members on all sides of the House will congratulate the right hon. Gentleman opposite on the fair use he has made of the opening which was afforded, and I think they will agree also that the right hon. Gentleman is really in his wrong place on this occasion, and that instead of being the official and ostensible Leader of the Opposition, he should be Chancellor of the Exchequer piloting this Protectionist Budget through the House of Commons. Certainly his speech shows the true line of support for this Budget. There was in it none of that hedging to which we have been accustomed on the part both of the Chancellor of the Exchequer and the Financial Secretary to the Treasury. He did not do lip service to what are called Free Trade principles, which, I agree with him, are now entirely absent from the practice of the present Government. The right hon. Gentleman frankly admitted that he supported these duties because they are Protective duties, and that he only approved of them in so far as they protected British agriculture in a new experiment. I think both Protectionists and Free Traders in this House, and all Free Traders who are not members of His Majesty's Government, will agree with the right hon. Gentleman. In these circumstances, I think we will be justified in accepting the challenge of the right hon. Gentleman to take the oppor- 1683 tunity thus given to all those who remain faithful to Free Trade principles of at least making a formal protest against their abandonment on this occasion.
§ Question put, "That the words proposed to be left out stand part of the Clause."
§ The Committee divided: Ayes, 166; Noes, 36.1683
|Division No. 11.]||AYES.||[6.8 p.m.|
|Agg-Gardner, James Tynte||Gardner, Ernest||Pennefather, De Fonblanque|
|Agnew, Sir George William||Gordon, John||Perkins, Walter F.|
|Ainsworth, John Stirling||Goulding, Sir Edward Alfred||Peto, Basil Edward|
|Baird, John Lawrence||Graham, Edward John||Phillips, John (Longford, S.)|
|Baldwin, Stanley||Greenwood, Granville G. (Peterborough)||Pollock, Ernest Murray|
|Balfour, Sir Robert (Lanark)||Greig, Colonel James Wilson||Priestley, Sir W. E. B. (Bradford, E.)|
|Banbury, Sir Frederick George||Guinness, Hon. Rupert (Essex, S.E.)||Prothero, Rowland Edmund|
|Banner, Sir John S. Harmood-||Hackett, John||Pryce-Jones, Colonel E.|
|Barran, Rowland Hurst (Leeds, N.)||Hall, D. B. (Isle of Wight)||Rawlinson, John Frederick Peel|
|Beauchamp, Sir Edward||Hamilton, Lord C. J. (Kensington, S.)||Rea, Walter Russell (Scarborough)|
|Beck, Arthur Cecil||Harmsworth, Cecil (Luton, Beds)||Reddy, Michael|
|Bellairs, Commander C. W.||Harmsworth, R. L. (Caithness-shire)||Roberts, Charles H. (Lincoln)|
|Bennett-Goldney, Francis||Harris, Henry Percy (Paddington, S.)||Roberts, S. (Sheffield, Ecclesall)|
|Bentham, G. J.||Haslam, Lewis (Monmouth)||Robertson, Rt. Hon. John M.|
|Boland, John Pius||Helme, Sir Norval Watson||Robinson, Sidney|
|Boscawen, Sir Arthur S. T. Griffith-||Henderson, Sir A. (St. Geo., Han. Sq.)||Rolleston, Sir John|
|Bowden, G. R. Harland||Henry, Sir Charles||Rothschild, Lionel de|
|Boyton, James||Hewins, William Albert Samuel||Rowlands, James|
|Brace, William||Higham, John Sharp||Rutherford, Watson (L'pool, W. Derby)|
|Bridgeman, William Clive||Hope, James Fitzalan (Sheffield)||Salter, Arthur Clavell|
|Burt, Rt. Hon. Thomas||Horne, Edgar||Samuel, Rt. Hon. H. L. (Cleveland)|
|Butcher, John George||Howard, Hon. Geoffrey||Samuel, Samuel (Wandsworth)|
|Carlile, Sir Edward Hildred||Hume-Williams, William Ellis||Shortt, Edward|
|Cator, John||Hunt, Rowland||Smith, Harold (Warrington)|
|Cautley, H. S.||Jones, William S. Glyn- (Stepney)||Soames, Arthur Wellesley|
|Cave, Rt. Hon. George||Joyce, Michael||Spicer, Rt. Hon. Sir Albert|
|Cecil, Evelyn (Aston Manor)||Keating, Matthew||Stewart, Gershom|
|Chaloner, Colonel R. G. W.||Lambert, Rt. Hon G. (Devon,S.Molton)||Strauss, Arthur (Paddington, North)|
|Chaplin, Rt. Hon. Henry||Larmor, Sir J.||Sykes, Alan John (Ches., Knutsford)|
|Chapple, Dr. William Allen||Levy, Sir Maurice||Taylor, John W. (Durham)|
|Cornwall, Sir Edwin A.||Lewis, Rt. Hon. John Herbert||Thomas-Stanford, Charles|
|Cory, Sir Clifford John||Lockwood, Rt. Hon. Lt.-Colonel A. R.||Thynne, Lord Alexander|
|Cosgrave, James||Lonsdale, Sir John Brownlee||Tickler, T. G.|
|Cowan, W. H.||Lowe, Sir F. W. (Birm., Edgbaston)||Touche, George Alexander|
|Craik, Sir Henry||Lundon, Thomas||Tryon, Captain George Clement|
|Crumley, Patrick||Lynch, Arthur Alfred||Turton, Edmund Russborough|
|Currie, George W.||Mackinder, H. J.||Valentia, Viscount|
|Dalrymple, Hon. H. H.||Macleod, John Mackintosh||Walker, Colonel William Hall|
|Dalziel, Davison (Brixton)||MacVeagh, Jeremiah||Walton, Sir Joseph|
|Davies, Timothy (Lincs., Louth)||McKenna, Rt. Hon. Reginald||Wardle, George J.|
|Davies, Sir W. Howell (Bristol, S.)||M'Neill, Ronald (Kent, St. Augustine's)||Wason, John Cathcart (Orkney)|
|Dawes, James Arthur||Mason, James F. (Windsor)||Watson, Hon. W.|
|Denniss, E. R. B.||Molloy, Michael||Weston, Colonel J. W.|
|Dickinson, Rt. Hon. Willoughby H.||Molteno, Percy Alport||Whittaker. Rt. Hon. Sir Thomas P.|
|Donelan, Captain A.||Montagu, Rt. Hon. E. S.||Williamson, Sir Archibald|
|Doris, William||Morgan, George Hay||Wilson. A. Stanley (Yorks, Ripon)|
|Dougherty, Right Hon. Sir J. B.||Morton, Alpheus Cleophas||Winfrey, Sir Richard|
|Duke, Rt. Hon. Henry Edward||Mount, William Arthur||Wolmer, Viscount|
|Duncan, Sir J. Hastings (Yorks, Otley)||Newdegate, F. A.||Wood, John (Stalybridge)|
|Fell, Arthur||Nolan, Joseph||Yate, Colonel Charles Edward|
|Fenwick, Rt. Hon. Charles||O'Brien, Patrick (Kilkenny)||Yeo, Alfred William|
|Ferens, Rt. Hon. Thomas Robinson||O'Connor, John (Kildare, N.)||Younger, Sir George|
|Field, William||O'Doherty, Philip||Yoxall, Sir James Henry|
|Fisher, Rt. Hon. W. Hayes||O'Dowd, John|
|Fletcher, John Samuel||Parkes, Ebenezer||TELLERS FOR THE AYES.—Lord E. Talbot and Mr. Gulland.|
|Galbraith, Samuel||Pearce, Sir William (Limehouse)|
|Adamson, William||Jones, H. Haydn (Merioneth)||Radford, George Heynes|
|Anderson, W. C.||Jones, J. Towyn (Carmarthen, East)||Smith, H. B. Lees (Northampton)|
|Arnold, Sydney||Jowett, Frederick William||Snowden, Philip|
|Bowerman, Charles W.||King, Joseph||Thomas, J. H.|
|Bryce, J. Annan||Lambert, Richard (Wilts, Cricklade)||Thorne, William (West Ham)|
|Byles, Sir William Pollard||Lough, Rt. Hon. Thomas||Trevelyan, Charles Philips|
|Clough, William||Mason, David M. (Coventry)||Watt, Henry A.|
|Davies, Ellis William (Eifion)||Mond, Rt. Hon. Sir Alfred||White, J. Dundas (Glasgow, Tradeston)|
|Glanville, Harold James||Outhwaite, R. L.||Young, William (Perthshire, East)|
|Goldstone, Frank||Parker, Sir Gilbert (Gravesend)|
|Hogge, James Myles||Pearce, Robert (Staffs, Leek)||TELLERS FOR THE NOES.—Mr. Llewelyn Williams and Mr. T. C. Taylor.|
|Holt, Richard Durning||Pratt, J. W.|
|Hudson, Walter||Price, C. E. (Edinburgh, Central)|
|John, Edward Thomas||Pringle, William M. R.|
§ Mr. GOLDSTONE
I beg to move, to leave out the Clause.
The effect of that would be to leave the Sugar Tax what it is now, 1s. 10d. per cwt., instead of sanctioning its increase to 9s. 4d. The Chancellor in his Budget speech indicated that the effect of the increase to this enormous extent would be to add about £11,700,000 to the revenue from this source. That involves a tax of something like £9,500,000 from working-class families alone. The general assumption is that four-fifths of indirect taxation is borne by the working classes, and hence my estimate of £9,500,000. That sum amounts to about £1 per family per year, or about fivepence per family per week, which is a very considerable increase indeed, and which, compared with other taxes, is far too heavy. Coffee and other articles have been increased by 50 per cent., but sugar is to be increased about 400 per cent. Such an increase as that, borne in the main by the poorest section of the community, is far too excessive. The Chancellor may say, and I think the argument is reasonable, that every section of the community must contribute its fair quota to the War. I do not think anyone will demur to that, as we are, with few exceptions, united in our view that the War must be prosecuted to a successful issue, but I would point out that by putting his new tax on wages he does get directly at the working classes who can afford to pay any considerable part of their earnings to the National Exchequer. May I say a word of commendation as to the way the tax is applied, as it seems to point to a more general application of the particular method adopted in the case of the Sugar Tax. By that method practically every penny of the new taxation will come into the coffers of the Treasury. Under present conditions practically the whole of the tax of 1s. 10d. comes into the pocket of the Chancellor of the Exchequer for national purposes, but when we find that the 1s. 10d. becomes this enormous sum of 9s. 4d. we have reason, in my view, to register our protest against it going through to-night.
I would point out that by making an increase of this nature the Chancellor is practically responsible for claims which are put forward from time to time for war bonuses. By restraining his ardour in the direction of sugar taxation he could have led the movement towards lower prices, but by fixing a tax of this nature he heads the movement in the opposite direction, 1686 and he gives a basis of argument to those who express a desire, and a reasonable desire, for a war bonus. Though we may not go to a Division to-night on this particular Clause, it is not because we do not feel acutely on the matter, but we have taken the opportunity of registering our protest on tea as showing our feeling on these food taxes generally. Therefore I hope it will not be assumed, because we do not trouble the House to go to a Division, that our feeling on this question of sugar taxation is not as acute as it is on tea. In fact, if I may gauge the feeling by those who have spoken to me, I may say that the feeling engendered by the successive taxation on sugar is much more acute than that which the tax on tea has engendered. It is felt much more directly than the tax on tea, and it is also felt that the possibility of removal is remote, so that when the purchasing power of wages is down we shall have these direct and heavy charges on articles of food being retained possibly at a time when working-class circumstances are much more adverse than they are to-day.
§ Mr. OUTHWAITE
I wish to enter my protest also against these further taxes on food. I would like the Chancellor of the Exchequer to be good enough to explain on what principle this tax is levied for war purposes. Why should a man who has a large family pay more towards the War than the man with a small family? I can see no principle whatever in this method of taxation. I think the Chancellor should have taken his courage more fully into both hands, and he would have been able to find some other means of taxation in which there would have been some principle. Those with the greatest possessions and material wealth should pay in accordance with those possessions, especially with the country in danger. I would be sorry if this tax does not go to a Division, but I now wish to register my protest against it, because I think the Chancellor should have found a more just method of raising taxation.
§ Sir G. YOUNGER
I would like to draw the attention of the Chancellor to the duty on sugar which is used in manufacture of some beers, and to point out that in the last year the duty on beer has been largely increased, so that it seems rather hard to put an additional tax upon it in this way. There are certain classes of beer in the production of which sugar is used, and although it does not affect my own case 1687 I wish to mention it. I know that the Chancellor will adhere to his former answer, that having taxed such sugar in the past he intends to continue to do so. The principle of exemption is, however, admitted in the Schedule of the Bill in the case of molasses used in the production of spirits. The duty on that is remitted owing, of course, to the fact that the spirit itself is very heavily taxed. The duty on sugar used in the production of beer is not remitted. There is one point I would like to press upon the right hon. Gentleman's attention, and that is that no provision whatever has been made to deal with drawback duties on beer made with sugar which is taxed to this extent. That I think seems to be an omission. It is difficult to draw up an Amendment to put the matter right, but probably the Inland Revenue officials will be able to devise a means of dealing with it. I think that principle of drawback aught to be followed in this instance, and I throw out the suggestion to the right hon. Gentleman so that we may be able to deal with it on the Report stage.
Mr. TYSON WILSON
I wish to endorse what my colleague the Member for Sunderland (Mr. Goldstone) said in regard to this tax. I notice that the Chancellor, with a certain amount of complacency, referred to the fact that the consumption of sugar had not declined during the present year, but surely he does not forget that that is due to the very large purchases of sweets of all kinds and sent to the soldiers at the front. He pointed out that everybody must contribute towards the revenue to pay for the War. It seems to me that the revenue raised by indirect taxation on sugar and on tea differs from the tax on incomes in this way, that in the case of Income Tax the greater the income the more the individual pays, while in the case of indirect taxation the less the income of the individual the more he pays. For instance, if you have a man with a wife and one child at £2 wages per week a certain amount is paid indirectly, but if you take another man with a wife and five children then obviously that man has got to pay much more indirect taxation than the man with the wife and one child. In the case of Income Tax, a man with anything from one to five or more children under sixteen years of age, has an exemption of £25 in respect of each, whereas the fact that a man has children means that he is taxed more heavily as 1688 far as indirect taxation is concerned. The tax on sugar is a tax on food, because, taking into consideration the price of living now, the poorer people will be driven to use molasses and jam in the place of butter and other articles of food. Therefore, I say that the Chancellor of the Exchequer has not made out a good case for the tax on sugar. I hope that even now he will reconsider the situation, and agree to the deletion of this Clause. I do not know that I quite agree with my hon. Friend with regard to not taking a Division on the Clause. I am inclined to think that more Members would vote in favour of deleting this Clause than voted in favour of deleting the tax on tea. I would like to hear the opinion on that point of more Members than have yet spoken.
§ Mr. McKENNA
The arguments that have been addressed against this tax in the main existed against the duty of 1s. 10d. For instance, the hon. Member opposite (Sir G. Younger) takes the point with regard to brewing sugar. It was true of the 1s. 10d. as it is true of the 9s. 4d. The argument against indirect taxation, that a man with five children pays more than the man with one child, is true also of the tax at 1s. 10d. I admit at once the truth and force of that argument; but are we as a Committee at this moment likely to come to the conclusion to which that argument points—that we should give up all the revenue which we now obtain from indirect taxes? Is it conceivable that during the War, when we need revenue more than at any other time, we are going to accept the logical conclusion of that perfectly sound argument against indirect taxes? We have already been told that indirect taxes bring us in about £80,000,000. I am not sure whether that is the exact figure, but it is certainly somewhere near it. I cannot conceive the Committee considering for a moment that we should now abandon our revenue from indirect taxes. [An HON. MEMBER: "On necessaries of life."] The argument does not limit itself to necessaries of life. It is just as true, whether the money is payable on one taxable article or another, so long as it is an article which is ordinarily consumed.
The only argument to which I think the Committee will expect me at this moment to address myself is that raised by the hon. Member for Sunderland (Mr. Goldstone)—that the amount has been very largely increased, from 1s. 10d. to 9s. 4d. per cwt. As I have already explained, the whole of 1689 that increase is not reflected in the price. The price charged to the consumer has been raised, not by the difference between 1s. 10d. and 9s. 4d., but by 4s. 8d. If the full amount had been charged to the consumer, the price would have been raised by 7s. 6d. We must consider the argument on the basis of an increase of 4s. 8d., not 7s. 6d. Let the Committee enter for a moment into the difficulties of anyone occupying my position at the present time. It is admited on all hands that we are forced to raise a very large amount in taxation during the War, not merely for the purpose of revenue, but because, as any economist will tell hon. Members in much better informed language than I can use, it is essential to limit consumption to what is necessary. What is the case with regard to sugar, both from the point of view of revenue and from the point of view of limiting consumption to what is necessary? If you go back to so recent a year as 1911, when there was a shortage of raw beet, the price of sugar rose not to as high a price as that at which it stands to-day, but to a very much higher level than the ordinary rate before or after 1911. I think that sugar rose from 2d. or 2¼d. to 3¼d., and the effect of the increase was largely to diminish consumption. This year what has happened? We have had an increase of price not to 3¼d., but to 3½d., slightly more than was the case in 1911; but the consumption has hardly been reduced at all.
§ Mr. McKENNA
Does my hon. Friend really consider that the amount used in sweets for the troops is a material factor in a consumption of between 1,600,000 and 1,800,000 tons of sugar in the year?
§ Mr. OUTHWAITE
I thought the right hon. Gentleman was referring to the total consumption of sugar, and I alluded to the effect caused by the great demand per head for those who are now serving with the Colours.
§ Mr. McKENNA
I beg my hon. Friend's pardon. I thought he was laying stress on the point referred to by another hon. Member, who spoke of the sweets sent to the troops at the front. I dare say sweets have been sent, but the amount is absolutely insignificant compared with the total consumption. We are dealing not with packets of sweets, but with hundreds of thousands of tons of sugar. The troops, 1690 taking the average, perhaps use more than they would at home, but the number of men in the Army would not account for the exceptionally large consumption which has taken place in the last year, having regard to the price of sugar. The only point I wish to bring home to the Committee is that, notwithstanding the increase in the price of sugar, there has been little, if any, reduction in the consumption. Sugar is an article which, with the exception of the amount already mentioned, is entirely imported, and consequently it is an article which very materially affects our exchange. If we can reduce the consumption—and I am only looking for a reduction within the limits of health and necessity—we shall beneficially affect our exchanges, and we shall be spending less upon a commodity which to-day is consumed in excess of requirement. I venture to say that at this moment there is no country in the world—I believe that even as regards the United States my statement is accurate—where they consume so much sugar per head as we do in this country. In these circumstances I submit that, from that point of view, sugar was a legitimate article to select for the purpose of raising revenue.
I have to get as much revenue as I reasonably can obtain. How much have I sought to obtain by indirect taxation? Just about one-fourth of the additional taxation imposed this year. Is that an excessive amount? Hitherto the proportion has been higher—very much higher. I am taking a less proportion than would ordinarily be accepted as a reasonable division between direct and indirect taxation. We are raising through the Income Tax and the Excess Profits Tax upwards of £70,000,000. I have not looked up the figures, but I think it is about £76,000,000 or £77,000,000. The whole amount from indirect taxation, including the tax which so much distresses my right hon. Friend opposite (Mr. Lough), comes to about £25,000,000 or £26,000,000. So that the proportion we are raising by direct taxes—the taxes which specially affect the rich—is enormously greater than the amount which we are raising from the poorer classes.
§ Mr. GOLDSTONE
Taking the income of the well-to-do as compared with the income of the working classes, my view 1691 is that the proportion borne by the working classes exceeds the proportion borne by the well-to-do.
§ Mr. McKENNA
Does my hon. Friend consider that the income of the well-to-do is three times as great as the income of the poorer classes?
§ Mr. GOLDSTONE
On the average. The individuals who pay this amount of Income Tax are in the main much better off when they have paid their tax than the men who have to pay the indirect taxes.
§ Mr. McKENNA
Does my hon. Friend wish to push his argument to its logical conclusion? Take a man with £100,000 a year. If you taxed him to the extent of £99,000 he would still have £1,000 and would be much better off than the man with £2 a week. I agree. But does my hon. Friend wish to push that argument to its conclusion? Would he take that £99,000?
§ Mr. GOLDSTONE
I would not; but I would place a higher burden on the man with £100,000 and relieve the very poor.
§ Mr. McKENNA
I agree. We all agree. What burden have we imposed upon such a man? On an income of £100,000 we have imposed an Income Tax of 6s. 10d. in the £—one-third of the man's income.
§ Mr. McKENNA
Yes. But that is not the whole story. He has charges on his income, and in order to pay that £34,000 he has to make sacrifices in his customary living quite as great to him as the sacrifices which the man with an income of £1,000, or the man with £200, has to make in readjusting his style of living. [An HON. MEMBER: "No!"] My hon. Friend says "No!" I have had the advantage of having representations made to me from all classes whom the taxes affect, and I have endeavoured, as far as I could, to treat all alike in the matter of the real burden that the man has to bear—not the burden measured in the money that is left to him, but the real personal burden of sacrifice which he has to make in order to contribute his quota to the necessities of the State. If the argument that everybody should be taxed down to the same level is to be pushed to its conclusion, we have all got to come down to an expendi- 1692 ture of, say, £2 a week, and contribute everything we have in excess of that to the State. Is it the argument that everybody must be taxed down to a couple of pounds a week, everything in excess of that being given up to the State: the man with £3 a week giving up £1, and the man with £4 giving up £2? Must we always direct our attention to the man with £100,000 and leave out of account entirely the man with £500? Nobody has ever proposed that. I have never heard any suggestion of that—not the slightest! All that I am now asking is that with due regard to traditional methods of taxation and the existing habits of the people, and to what everybody would consider as fair and reasonable dealing with different classes, that we should levy certain amounts of our taxation indirectly.
What I ask is that certain amounts should be levied indirectly. The amount I am asking for is just about one quarter of the whole. In selecting the subject of taxation for the raising of this quarter, I quite agree I put a very large amount upon sugar, but if we admit that the total is a fair total, I would appeal to the Committee to accept the sugar, in the present circumstances, as the best article to choose. Take all the existing indirect taxes, article by article, and I think you will find that in the existing circumstances sugar affords every advantage. It is being very largely consumed, in excess of requirements, and it does bring in a very large revenue. It is a heavy import which has a material effect on our exchanges to our disadvantage. Taking, therefore, these three considerations together, it is not unreasonable to impose a large additional duty. We raise £11,000,000 in this way. I do not know if we are agreed that we have to raise this amount, what articles my right hon. Friend would prefer me to select? It has been frequently mentioned that we might take beer or spirits, but for reasons which I think are absolutely conclusive, it has been shown, firstly, that you could not raise your revenue from these articles, and secondly, that the trades affected have already been so much harassed or interfered with by taxes that it would be most unwise to tax them any further. In these circumstances I appeal to the Committee to support the policy of selecting sugar as the proper article for taxation.
§ Mr. ANDERSON
I am very sorry the Chancellor of the Exchequer has not made a more satisfactory statement. He has 1693 told us what would happen if we push our arguments to a logical conclusion. But we never do push our arguments to a logical conclusion in this House. We are concerned here not with what would happen in the event of such a logical conclusion; but we do argue that the taxation is excessive, and will fall very hardly upon the poorer people. Already the price of sugar, without this additional taxation, has gone up by about 80 per cent. since the beginning of the War. I believe that this taxation will mean that in many cases, so far as the very poorest people are concerned, old age pensioners and the like, that sugar will practically be beyond the reach altogether of their households. I do feel that some of these taxes are taxes upon health and physical efficiency. I am quite sure that taxes of this sort never pay. We see that to-day the working people and the poorest are bearing a very heavy burden in food taxation alone, not as the result of special taxation, but as the result, very often, of the operations of food monopolists. This means that there is in effect a special war tax of, at any rate, 5s. in the £. I believe it would have been better if the Chancellor of the Exchequer had reclaimed the whole of the special war profits before he had begun to impose additional taxation such as this upon sugar. He tells us that he is putting special taxation upon the rich, but I can only say this, that time and again the taxes that are placed upon the rich in the first place have a habit of being shifted from the shoulders of the rich on to the shoulders of the poorest people. We see the various claims in relation to the raising of rents, and we are told that the raising of those rents is due to the fact that the landlords have had additional Imperial taxation placed upon them. Taxes are, therefore, shifted down and down till they reach the shoulders of the man who cannot shift them, because there is nobody under him. That man is the workman. Time and again what I have described is what has happened. In all this the working people are paying more than their fair share of the burden of the War.
§ Mr. OUTHWAITE
May I point out to the Chancellor of the Exchequer that one of the arguments he used really emphasises the meanness of this tax? He says that one of the objects for this imposition is that it will limit consumption, and so help us to rectify our exchanges. In what direction will that limitation of consumption take place? The right hon. Gentle- 1694 man mentioned the rich and the mansion of the rich. I know that such limitation will take place in the cottage and amongst the poorest of the poor. It is the poorest that will begin to limit consumption first. Therefore, it amounts to this, that the exchanges of this country are to be rectified by the checking of the consumption of the necessaries of life amongst the poorest members of the community. That is war finance! The Chancellor of the Exchequer in his concluding remarks asked what other articles hon. Members would like to tax. He knows perfectly well that there are many persons in this House who, rather than tax the necessaries of life, and rather than filch out of the pockets of the poor £11,000,000, would prefer that a straight tax was laid upon the land monopolists of this country. [HON. MEMBERS: "Oh!"] I would point out to the right hon. Gentleman that he seems to suppose, when he spoke of taxing a man with an income of £100,000 a year, that he is levying a tax upon an income that that man has gained by his own efforts—that he is levying a personal tax. But the man who has an income of £100,000 a year has been taxing the poor: the mass of the people. He has got that income in rent and in other directions conferred by privilege and monopoly. It is utterly absurd to suppose that the Income Tax is a tax levied upon the individual efforts of the person who pays the tax; consequently the argument of the Chancellor of the Exchequer, based on the fact that the direct tax is one paid not by the poor, but that only indirect taxation is paid by them, is entirely fallacious. I do think it most unjust and unfair that the Chancellor of the Exchequer should propose raising such an enormous increased revenue by a tax upon this particular article of common consumption.
§ Mr. ELLIS DAVIES
Following up what the Chancellor of the Exchequer has said as to the similarity of sacrifice made by the rich and by the working classes, I would point out that what I had in view was that the man who has £100,000 a year and is taxed to the extent of £40,000 will not give up any of the comforts of life, much less any of its necessaries. It means that he can only be asked to reduce the amounts he would otherwise put away, or to refrain from certain luxuries. But the right hon. Gentleman dealt with the case of a man with £200 a year, and suggested the same kind of proportion, the same kind of ratio, between the sacrifices of the rich man and that man with £200 a year. So 1695 far as the man with £200 a year is concerned and is affected by war taxes, it means that he is involved in an expenditure which he can hardly meet except either by reducing the sums spent upon food, upon the education of his children, or upon the provision he makes for after life by the payment of insurance premiums. In the one case there is a real sacrifice; in the other the man is giving up none of the comforts of life, much less the necessaries of life. The right hon. Gentleman, too, seems to have forgotten another fact, that is the distribution of wealth on death in this country. Last year the amount left on which Estate Duty was payable was, roughly, £293,000,000; but £200,000,000 of that £293,000,000 was in the possession of a small class of 4,000 persons. And the curious part is this, that that small class included every man in this country who left more than £10,000. In other words, all the accumulated wealth of the working classes and the professional classes came to an exceedingly small sum; and it is because these taxes fall so heavily upon these classes that we object to a further increase in the food taxes.
§ Question, "That the Clause stand part of the Bill," put, and agreed to.