HC Deb 19 October 1915 vol 74 cc1696-704

(1) In addition to the duties of Customs payable on dried or preserved fruits imported into Great Britain or Ireland 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 following additional duties, that is to say:—

£ s. d.
Figs and fig cakes, plums (commonly called French plums and prunelloes), prunes, all other dried or preserved plums, and raisins, the cwt. 0 3 6

(2) Nothing in this Section shall render any article liable to duty which was not liable to duty before the twenty-second day of September, nineteen hundred and fifteen.

Motion made, and Question proposed, "That the Clause stand part of the Bill."


The Amendment handed in by the right hon. Gentleman the Member for Islington (Mr. Lough) to leave out Sub-Section (2) will also, I am afraid, if it has any effect at all, have the effect of unduly increasing the charge, and is therefore out of order.


There are certain features of this tax to which I desire to call the special attention of the Chancellor of the Exchequer and the House. Unlike those taxes which we have been discussing, this increase of tax on dried fruit raises no question of Protection or Free Trade. It is simply a question of taxing a species of food, one which comes from abroad and which is not grown similarly in this country. In the first place, there is the fundamental objection to the tax that it is taxing a class of wholesome food, namely, dried fruit, and it is especially undesirable that we should tax these now, because dried fruits are specially necessary during winter time, indeed they are about the only kind of fruit which poor people can afford to have during the winter season. It is, however, not only a question of the poor amongst ourselves, we also have to think of the men who are serving the country abroad, both those who are fighting and otherwise engaged in the Armies, and even the more unfortunate who are prisoners of war. If anyone who has to do with sending out food comforts to the troops will go to those places which prepare lists of the most suitable things he will see that currants and raisins and various other things, such as plum puddings made from currants and raisins, are amongst the things most desired to be sent out to our gallant men at the front and to the prisoners of war in Germany. It seems very undesirable that this should be the thing selected for increasing a very undesirable tax upon. I would point out also that it is most undesirable, for the trade will be unduly disturbed by putting on this additional tax at this time.

7.0 P.M.

On the merits of the tax, I should like to point out to the Chancellor of the Exchequer that it is really of an antiquated character. We have only to look at the Clause of the Bill to see that. We put it on the word prunelloe. What is a prunelloe? I understand, by looking it up, that it is used to be the Italian for a little prune, but the word is entirely obsolete in Italy now, and it is entirely obsolete in our language as well. Indeed, it is interesting to see how this tax arose. I do not want to take up too much of the time of the House, but I do say that in looking through the latest figures which are available, namely, for 1914, that more than one-half of the taxes raised from these dried fruits were raised by taxes on raisins. Two hundred and sixty thousand pounds out of £513,000 were raised by taxes on raisins. As my hon. Friend who occupies the Front Bench knows, the raisin appears under two names. As a fruit it appears as a raisin, under the name of "raisin," and as a cooked article it appears under the name of "plum," and thus gives the name to our plum pudding. I want to point out how this tax arose. I had the curiosity to look up Mr. Dowell's interesting "History of Taxation and Taxes." I would like to read a single short passage, because it gives the key to the basis of this tax:— During the Commonwealth, when plum puddings were regarded with aversion by the Puritans, who were also inimical to Spain, the importation of raisins from Spain was heavily taxed. I simply put that as the principal object of the raising of the taxes with which we are dealing. From time to time they underwent alteration, I quite agree that as the Puritans put on the taxes to discourage plum puddings, after the Restoration they should have been removed, but it happened that Charles II. wanted money and still kept them on. They were varied from time to time, until at last they came under Mr. Gladstone's great proposals of financial reform. In 1853 he reduced the tax from 15s. 9d. a cwt. to 10s. a cwt. In 1860 it was reduced from 10s. to 7s., the amount at which it now stands. It was embodied in the Customs Tariff Act of 1876 at that figure. This is the first occasion on which it has been proposed to increase this tax, and, therefore, I think the House should give this tax the very closest attention. This 7s. duty was made by Mr. Gladstone a uniform duty on all these dried fruits, and so things remained until 1890, when, by the Customs and Inland Revenue Act of that year, the duty on currants, which were singled out alone for this reduction, was reduced from 7s. a cwt. to 2s. a cwt., leaving the other fruits at 7s. I frankly admit that one cannot but regard it as a great pity that Mr. Gladstone, in abolishing so many of the other petty taxes—for instance, the tax which then existed on oranges and lemons—did not abolish this heavy tax on dried fruit as well. He did as much as he could, however, and it seems a very great pity that this House now should move steadily in the contrary and reactionary direction.

This tax is really an illogical tax, and is conceived on no reasonable principle. On what possible ground can any economist or country justify taxing figs and raisins and not dates? The reason dates are not included is purely historical. The tax rests on no principle at all. It is an antiquated tax imposed when the trade was not the large trade it is now. Even as regards the taxed fruits, what reason or what logic is there in putting a tax upon fruit when it is dried and letting the fruit come in free if it is tinned or canned or bottled? There is absolutely no reason whatever. Indeed, to show how mystified people may be over these things, I will read a description as to how the tax works from the latest Customs Report:— Plums include greengages, damsons, mirabelles and dried, crystallised or glacé apricots. Tinned and bottled apricots in syrup or water, and apricot pulp, are not liable to duty as preserved plums, but when added sugar is present, as in the case of syrup, they are chargeable under the heading of sugar. This seems to me a petty tax, a complicated tax, and a very undesirable tax, not only in the interests of the Home country, but also because of its international aspect. These taxes in their international aspect are petty causes of friction, and we should avoid putting a tax on those goods coming from other countries and neutral countries, particularly at this time, because there never was a time in the history of our country when it was more necessary to lubricate the international relations and to avoid every petty cause of friction. I know what my right hon. Friend will say is the general excuse for all the departures from principle which have taken place—that it is really a small tax and makes no difference whatever. That may be in the minds of some Members, and so I would like to answer by pointing out that this is a time in international relations when even a small cause of friction may make a great ultimate difference. More than that, the facts show that it does make a difference.

I would ask the House to remember what happened when this first appeared in the Budget Resolution. It was proposed to increase not only the tax on raisins and other dried fruits, but also the tax upon currants, but my right hon. Friend rose to delete the proposed duty on currants. There had been a treaty that the duty on currants would not be raised until after a certain notice had been given. Why did the Greek Government move in that respect? Not merely because of any technicality as regards that Treaty, but because they knew that, if an extra one-third tax were put upon currants, the Greek currant trade would be thrown out of gear for the time being. The attention of the Government, therefore, was called to the Treaty, and the Government abandoned the idea of putting the extra tax on currants. But let me remind my right hon. Friend, as I pointed out a few minutes ago, in 1890 the duty on currants had been reduced to 2s., so that this one-third was only an extra duty of 8d. a cwt. on currants; yet the Greek Government saw what would probably be the effect of that on the Greek currant trade, and they protested, and the tax was withdrawn. On these other articles, the present duty is still 7s., and, that being so, the additional one-third is a very much greater proportion, namely, 2s. 4d. a cwt., which will fall with very considerable weight on those countries from which we get raisins and fruits other than currants. If you take, for instance, the latest financial statement of our trade, issued within the last week, it will be found that in the last financial year we got from Spain 230,000 cwts. of raisins of a value of more than £400,000. Yet without a word of warning to Spain, a friendly neutral country, we suddenly impose an additional tax of 2s. 4d. a cwt.

I put these matters because I think it is important in discussing these taxes that the Committee should recognise the international as well as the national aspect of affairs. It is not only the case of Spain. Let me call attention to one other country—Portugal. The principal dried fruit we get from Portugal are figs and fig cake. During the last financial year those imports from Portugal amounted to rather more than £24,000. Why should we do anything to risk the continuance of friendly relations with Portugal? It is very important we should have friendly relations with that country. I speak very seriously on the matter. Next to our own Colonial Empire, the greatest Colonial Empire in the world, or one of the greatest, is that of Portugal. We have always valued the friendship of Portugal very highly, and it was last year, I think, that we passed an Act with regard to the proper use of the names of Port and Madeira. Our object was to secure for Portugal the advantages of the Most-Favoured-Nation Treaty; in other words, we went out of our way only about a year ago to secure, and we did secure, and we were glad to secure, a Most-Favoured-Nation Treaty with Portugal, while this year we put a tax to the extent that I have mentioned in a way which is likely to cause friction and to no small extent undo the good work that the Most-Favoured-Nation Treaty did. Further, let it be remembered that we cannot, of course, get figs now from Smyrna and other parts of Turkey, and on this diminished trade we impose this increased taxation. After all these disadvantages, what does this produce? £120,000 in a full year. Is it worth while risking all these things for that sum, which is petty and ridiculous in comparison with the enormous amount of money we have to raise? I have put these considerations, I hope, in a temperate way and as shortly as I could, because I believe they are important considerations from every point of view, and I would make an appeal to the Government to reconsider this tax and not to press it, in the interests of sound finance, of social well-being, and of international good-will.


I must express my admiration for the great ingenuity of the speech to which we have just listened. It is really extraordinary the amount of research and learning and eloquence devoted to the question whether we should raise a few hundred thousand pounds upon raisins or not. I must say I did not find the arguments so convincing as they were interesting. I could not make out whether the hon. Member was more solicitous for plum pudding or for the Portuguese Empire, but there was one thing in his interesting historical survey which convinced me we ought to support the Government, and that was in the very beginning of his speech. The origins of taxation are extraordinary, and the hon. Member opposite told us that this taxation on dried fruit was to be traced back to the action of the Commonwealth. I am not quite sure that I accept the reasons given why it arose in the Commonwealth. I think a little more research would show that the reasons were more dislike of Spain than plum pudding. Let us brush aside all these difficulties which the hon. Member has been trying to make out about our international relations. Let the House of Commons support the Government and clap on this tax as a token to the memory of Cromwell at a time when we wish we had him back.


I wish to call attention to the unevenness and the unfair incidence of this tax. We are very much indebted to the hon. Member who gave us such an interesting historical survey of this tax, but he forgot to mention that during the Napoleonic Wars the tax on currants amounts to 44s. per cwt. at a time when the price was not 55s. or 60s., but when they were as much as 105s. per cwt. Therefore we are very much better off to-day than our forefathers were, and we are very much indebted to Mr. Gladstone for the great work he did in that respect. At present the tax is 7s. per cwt. The Chancellor of the Exchequer has now raised that tax by 3s. 6d., or 50 per cent., making it 10s. 6d. per cwt. My attention has been called to the fact that there must be a very serious loss to the merchants or there must be an excessive profit on the part of the retailer. If the tax was increased by 2s. 4d., it would make it 1d. per lb., or 9s. 4d. per cwt. You would then transmit the penny to the merchant, and the merchant would transmit it to the consumer; but by charging 1s. 2d. and making the tax 10s. 6d. per cwt. there is a difference of 1s. 2d. That must be a loss either to the merchant, or if he charges it to the retailer he must put on another 2s. 4d. in order to make it 11s. 8d., because he must charge 1¼d. per lb.; otherwise he will go 1s. 2d. beyond the 1d. If you had an uneven charge, either the merchant is bound to lose or the retailer is bound to gain by charging a larger price to the consumer to make up the difference. I think the right hon. Gentleman the Member for Islington (Mr. Lough) will bear me out when I say that this will be a very serious loss to the merchants, or it is going to be an excessive gain to the retailer, and the consumer will be charged at least 1s. 2d. extra per cwt. I should like to press upon the Chancellor of the Exchequer that between this and the Report stage he will consider the argument which has been put forward that he has automatically increased the tax by 50 per cent, without taking into account the possibility of its incidence. If the right hon. Gentleman looks into the matter I am sure he will conclude that it would be much better to charge either 9s. 4d. or 11s. 8d.


I think my hon. Friend opposite has made his points perfectly clear. I did not move my Amendment to this Clause, because I did not want to impede business, and I thought I should be able to say all I desired to say on the Clause. I wish to express the admiration with which I listened to the most interesting speech we have had on this tax from the hon. Member opposite (Mr. Dundas White.) I think he made out an excellent case for the Chancellor of the Exchequer reconsidering this tax. The origin of this tax is simply that the Chancellor of the Exchequer got an idea from the Commissioners of Customs that all these taxes could be raised 50 per cent., but he is not able to carry out that suggestion. There is no connection, for instance, between this tax and the tax on tea. The right hon. Gentleman was not able to apply it to currants at all, because he found that there was an international agreement, and therefore he had to strike it out. Now there is only £120,000 left, and therefore the amount he will get out of these taxes is extremely small. I heard the word "mean" applied to another tax, but I think it might with great fairness be attributed to this tax. I think more weight ought to be attached to the arguments than the Chancellor of the Exchequer appears to think is necessary that these are not days for disturbing our relations with friendly Powers for a small sum. A question of the importation of currants and raisins may be dealt with hurriedly here, but Spain and Portugal attach a great deal of importance to them, and for a small sum of money like this it is a great pity to risk disturbing those relations, and at the same time interfere with a trade which is running on smooth lines. My right hon. Friend has not been able to run on with his principle of 50 per cent. He did not apply 50 per cent., but 400 per cent., to the Sugar Duty, and therefore there is no principle at the back of this tax. The Chancellor of the Exchequer might take note of the eloquent historical speech made by the hon. Member opposite and give up this taxation altogether. If he does not see his way to do that then I want to ask him what is the meaning of Subsection (2) which provides that:— (2) Nothing in this Section shall render any article liable to duty which was not liable to duty before the twenty-second day of September, nineteen hundred and fifteen. Why should anything in that Clause render an article liable which was not liable before? There is a good deal of uncertainty. The hon. Member asked why are dates not taxed. There are no reasons. I might ask, where does a raisin end and a currant begin, because a currant is only a small raisin, and it is very hard to draw a satisfactory line between a currant and a raisin. Perhaps the hon. Gentleman will tell us why we want Sub-section (2) at all. I think the best thing to do would be to get rid of this niggling tax altogether. When the Chancellor of the Exchequer is in a better position with regard to finance, I hope he will get rid of all these taxes on dried fruit, and then he would confer a great benefit.


I think the proposal to increase this duty has been of the utmost importance, because after the great researches so eloquently detailed to the House by the hon. Gentleman behind me, I venture to say the Committee knows more about dried fruits than it ever knew before, and when better times arrive and my right hon. Friend or his successor is in a position to give up money, I agree with my right hon. Friend opposite that there will be a great deal to be said for getting rid of the dried fruit taxes. I do not think the revenue which will be produced by these taxes ought to be despised. These taxes are based on the general principle upon which my right hon. Friend has acted of an increase of 50 per cent. on existing duties. I know there are exceptions, but the same principle has guided the suggestion of this tax as guided the suggestion of the tax on cocoa, coffee and tea. It was suggested that the man who ate chocolate should pay 50 per cent., and therefore the man who ate preserved fruits should be put in a similar position. I can assure the right hon. Gentleman opposite that we have had no representations from abroad as to the effect of these taxes. We did have representations from the Greek Government with whom we have a treaty. I do not know what a prunello is, but if I should find one I should be pleased to place it in the tea room of the House of Commons. The word is kept in because it appeared in the old Clause, and this is not a good time to be placing new duties on the Customs authorities identifying new animals or fruits, and consequently the same wording has been kept. I do not know whether it can be avoided, and it would not be a good thing to run the risk of allowing a prunello to escape because the Customs authorities were not able to detect the difference between it and a plum. As regards Section 2 the explanation is very simple. The right hon. Gentleman will see that the first part deals with plums dried or preserved. In the Finance Act of 1901 it was provided that tinned and bottled apricots in syrup or water and apricot pulp shall be liable as preserved plums. As the Chancellor of the Exchequer was anxious that nothing should be taxed in this Clause which was not taxed before, he put in Sub-section (2) in order to preserve intact the apricot and the plum.

Question, "That the Clause stand part of the Bill," put, and agreed to.