§ I have done with my largest head of Revenue. I turn now to the proposals for additional Taxation under the head of Customs and Excise. The most important source of revenue, if the Committee agree, will spring from the increase in the Duty on Sugar. We have now a duty on sugar amounting to 1s. 10d. a cwt. I propose to increase the duty to 9s. 4d. a cwt.
§ Mr. W. THORNEWhere are you going?
§ Mr. McKENNAI will console my hon. Friend, however, by telling him that the whole of this increase of duty will not be effective in the usual way in raising the price to the consumer. At the same time that we increase the duty it is proposed that the Royal Commission on Sugar Supplies, which now supplies the whole of the sugar to the consumers of the country, shall reduce its price to the refiners and dealers by a general reduction ranging from 2s. 6d. to 3s. a cwt. The Royal Commission has bought very large supplies of sugar at such times and seasons as the market appeared to offer them a favourable opportunity, with the result that we are now in a position to reduce the price to the great advantage of the trade and the consumer, and to the great advantage of the Revenue. The effect, then, of the double action of the increase in the duty and the reduction in price will be to raise the cost of sugar about 5s. a cwt., or a halfpenny in the pound. If this tax be accepted, granulated sugar will be sold at 4d. a pound instead of 3½d. Other kinds of sugar will vary in price according to their quality, but cube sugar, as it is known in the trade, or lump sugar, as it is known in domestic circles, will necessarily rise a great deal in price, not on account of the tax, but on account of the shortage of supply. How- 360 ever, the article which is of general consumption, sugar which is to-day 3½d., will become 4d. a pound. The anticipated Revenue from the increase in the Sugar Tax is £5,360,000 this year, and £11,700,000 in a full year.
I come next to the familiar subjects of tea, tobacco, cocoa, coffee, chicory and dried fruits. On each of these articles an all-round increase is proposed of 50 per cent, on the existing duties. The Committee is so familiar with all the arguments for and against each of these duties that I am sure they will be glad to be spared a repetition of them by me. The financial effect of these changes will be to increase the Revenue in a full year from tea by £4,500,000, from tobacco by £5,100,000, from cocoa, coffee and chicory by £290,000, and from dried fruits by £180,000.
Neither spirits nor beer are included in the present proposals. As the Committee will remember, beer was very heavily taxed by my predecessor in his Budget last November, when he explained the reasons for not adding to the duty on spirits—reasons which still hold good to-day. On the other hand, the general question of the consumption of liquor is being dealt with, where necessary, by measures of restriction under the direction of the Board of Control of the Liquor Traffic, whose efforts, I understand, have already resulted in a considerable reduction of consumption.
On motor spirits I propose an increase of duty of 3d. a gallon, thereby raising the existing rates of 3d. and 1½d. to 6d. and 4½d. a gallon respectively. The proceeds of the tax will, for the time being, be retained in the Exchequer, and not paid out to the Road Improvement Fund. The yield this year is estimated at £550,000, and in a full year at £1,100,000. The figures I have given relate to the additional tax. I hope that the whole of the tax will be retained in the Exchequer during the War; but that is a subject upon which it would not be now proper to dwell. Then I propose to double the patent medicine duty, with an addition to the Revenue in a full year of £250,000.