§ Resolution reported,
§ 6. "That in lieu of the duties of Customs now payable on sugar imported into Great Britain or Ireland there shall, on and after the twenty-second day of September, nineteen hundred and fifteen, 847 until the first day of August, nineteen hundred and sixteen, be charged (without prejudice to the continuance after the said first day of August of the duties now payable) the following duties:—
| £ | s. | d. | |
| Sugar of a polarisation exceeding 98 degrees, the cwt. | 0 | 9 | 4 |
| Sugar of a polarisation not exceeding 76 degrees, the cwt. | 0 | 4 | 6 |
| and intermediate duties varying between 9s. 4d. and 4s. 6d. on sugar of a polarisation not exceeding 98 and exceeding 76 degrees; | |||
| Molasses (including all sugar and extracts from sugar which cannot be tested by the polariscope):— | |||
| if containing 70 per cent. or more of sweetening matter, the cwt. | 0 | 5 | 11 |
| if containing less than 70 per cent. and more than 50 per cent. of sweetening matter, the cwt. | 0 | 4 | 3 |
| if containing not more than 50 per cent. of sweetening matter, the cwt. | 0 | 2 | 1 |
| Glucose:— | |||
| solid, the cwt. | 0 | 5 | 11 |
| liquid, the cwt. | 0 | 4 | 3 |
| Saccharine (including sub-stances of a like nature or use), the oz. | 0 | 3 | 0 |
§ And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
§ Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
§ Mr. LOUGHI think, in view of the length of the Resolution which has just been read, the House, will feel that when we are dealing with such large and complicated duties in this rapid way, we might have the details printed on the Paper, so that we may have an opportunity of studying them. (Mr. Gulland handed the right hon. Gentleman a printed copy of the Resolutions across the Table.) On this particular question there are two or three matters to which I would like to draw the attention of my right hon. Friend. I did not fully understand his statement about sugar in connection with the Budget speech. He explained to us that, in some 848 way, the full extent of the new duty would not fall on the consumer at the present time. I should like to know what the right hon. Gentleman meant by that. He is the greatest sugar merchant—perhaps the sole sugar importer—and he has told us that he proposes so to reduce the tax that the additional burden on the consumer will only be ½d. per lb., although the new duty represents 1d. in the lb. I do not think the House understood that the Government were making a profit of anything like ½d. per lb. out of sugar.
§ Mr. McKENNAA farthing.
§ Mr. LOUGHThen, if they only made a ¼d. per lb. upon their purchases of sugar, how is it, although the new duty represents 1d. per lb., the charge to the consumer will only be at the rate of ½d. per lb.?
§ Mr. McKENNAAs a matter of fact the addition is only ¾d. per lb., not 1d.
§ Mr. LOUGHWe are now getting at the figures. But I do not think it was generally understood throughout the country that the Government were making a profit of ¼d. a lb. on sugar. In a speech which the right hon. Gentleman made he admitted that sugar had doubled in price practically since the War commenced. That is a tremendous increase. Those Gentlemen in this House who are anxious that the Government should fix prices and take charge of particular branches of trade, might well direct their attention to this point; that in the case of the one commodity which the Government have taken entirely in hand, the price has been doubled, and this heavy burden is being placed upon the community. There is another statement upon which my right hon. Friend might very well throw some further light. That was a statement referring to cube or loaf sugar. Most of us to-day see loaf sugar disappearing from our tables and other sugar of various kinds substituted for it. Even in this House we have ceased to get loaf sugar. That is a very serious thing.—[Laughter] —
§ Mr. W. THORNEThere is something more serious than that.
§ Mr. LOUGHAlthough it may seem to be a matter for laughter now, I understand that loaf sugar is mainly manufactured in this country, and if high prices have been paid for it, the Government, or somebody else, must be getting large profits out of it. I should like to know why this great 849 increase should have taken place in the price of this particular quality of sugar. It seems to me there is one thing the right hon. Gentleman might do for the consumers of this article. He might open the ports. It is a shocking thing, at a time when these great additional charges are placed upon the country, that the step should be taken of keeping the ports closed so that nobody can bring in sugar in plentiful supplies if it were found possible to do so. The House might well look at this singular infringement of the principle of Free Trade and the rights of the consumers in this country. At the time my right hon. Friend first succeeded to his office there was only one main reason given for the step taken. There were several reasons, but the chief reason given was that sugar might be imported from enemy countries. There may be some explanation of it, but what it is I do not know, because we have not had much discussion upon the subject. Subject to what we hear from my right hon. Friend, it seems to me now that that difficulty is entirely removed because our enemies cannot export anything anywhere. [HON. MEMBERS: "Don't they?"]
§ Sir A. MARKHAMWhat about coal to Sweden?
§ Mr. LOUGHThat is another thing. I would rather not be drawn aside from my argument. I will put it this way: that it is very difficult for the enemy now to export anything, especially since Italy joined in the War. It is this happy country which appears to be the only land, so far as the belligerent countries are concerned, into which free imports can come. Thanks to the excellent work which has been done by our Navy, our imports are not only keeping up to the usual figure, but are larger than ever before. If we can get imports in freely, why should we not be allowed to import sugar? We are now, if this 1d. is put on, paying three times as much as was charged before the War. Although my right hon. Friend anticipates a smaller amount from this extra 1d., I calculate it will produce, unless consumption is greatly reduced, something like £14,000,000 a year. I do not think so large an amount has been estimated for, because my right hon. Friend is, no doubt, right in making a conservative estimate.
§ Mr. McKENNAIt will be over £14,000,000.
§ Mr. LOUGHAnd at the rate at which it was consumed it would be a burden of 850 £14,000,000. My opinion is, that if the ports were opened and the free import of sugar were permitted from all quarters except enemy countries, the price of sugar would fall very much and there would be a great reduction of price to compensate for the heavy tax we have to bear. The hon. Baronet behind (Sir G. Younger) says the Government will lose a large amount of money. I do not want the Government to lose a lot of money, but I want the Government to be candid and to tell us how much they are getting out of sugar. They ought not to try by a side wind to get a large revenue out of it of which we in this House know nothing. After all, what are we here for—
§ Mr. LOUGHIf it is not to pronounce an opinion upon a matter of this kind. If the Government have taken what they want out of sugar, and this 1d. in the lb. represents something like nearly £14,000,000 a year, that is a good large round sum, and the Government should not try by a side wind to get any more. If they want more, they should make the duty 1¼d. or 1½d. Let them say what they are going to do in an open, straightforward way, and not keep the ports closed, making themselves monopolists of an article of consumption which is of first importance in the articles of food consumed by the people of this country. We have not had a Debate on the question of sugar since my right hon. Friend has had this matter in hand. I have always, looked with some suspicion on the closing of the ports to sugar. In August last year, when my right hon. Friend took the matter up, there was a great panic about sugar and about nearly every commodity. There was a panic about tea, for example. For six months following the Government sometimes prohibited the export of tea—they made six changes with regard to it—and then at the end of six months they dropped tea altogether and left tea to the ordinary laws of supply and demand. The result is that tea is not more than 10 per cent, dearer to-day than before the War broke out. [An HON. MEMBER: "That is the wholesale price."] Quite so. The Board of Trade figures give some 34 per cent., but those are founded on the high prices inflicted by Government interference.
Now that the Government has washed its hands of tea, and says that anybody can do as they please about it, the price has 851 come down, and I believe it will come down to the pre-War figure. Why not take the same wise course with regard to sugar? I believe that my right hon. Friend, if he were quite frank with us, would say that this interference was caused originally by the panic prices. They did not last three weeks. Why should not the Government deal with sugar as they did with wheat, namely, interfere with prices for three weeks and by that means bring down the prices, and then allow the ordinary laws to operate? The matter has never been explained to the House. Now that we are getting the heavy impost of 1d. a lb., and we are candidly told that the prices of some kinds of sugar will go up more than 1d. and a heavy burden is put on the consumer, my hon. Friend should give us some information of the sort I have intimated in a full, complete and candid way. He is the great sugar merchant at home. We all depend on him. He fixes what prices he likes and lets us have loaf sugar or whatever he likes. I should like to ask whether he can hold out any hope of opening the ports to sugar, and what course he proposes to take in regard to it?
§ Mr. OUTHWAITEMy right hon. Friend propounded the question, What are we here for? If we are here for anything else than just to swallow what the Government puts before us in this matter of taxation I think we should oppose these duties, because I do not believe that in accepting them we are representing the views of people outside the House. I wish to enter my protest against this initiation of an endeavour to finance the War to such a great extent by imposing indirect taxes on necessities. It is very obvious that we could have taxation in other directions to a far greater extent without inflicting any hardship upon individuals. These taxes will inflict great hardship upon individuals. The Chancellor of the Exchequer told us in his Budget speech that children were buying more sweets, and therefore it was obvious that he could levy a further duty upon sugar. He did not tell us what is happening to those million old people who are trying to eke out an existence on 5s. a week. Their expenses and their rent have gone up; their tea is taxed, and now we are proposing to levy a heavy tax on sugar. The limitation placed upon us prevents us referring to other alternative systems of taxation, and we can only oppose these taxes without intimating 852 other sources from which the money could be found. At any rate, this tax is a violation of the principles of taxation for which the Liberal party in the past has stood, and I do not propose to swallow my principles to please the Chancellor of the Exchequer at the head of a Coalition Government.
§ Mr. DENMANWe have decided that the preceding Resolutions are to have statutory effect under the Provisional Collection of Taxes Act. In this case we decide nothing of the kind. I want to ask. therefore, if the tax comes into operation before the passage of the Finance Bill into law? As the point arises on later Resolutions, perhaps it will be convenient if the right hon. Gentleman tells us when the motor car and similar taxes will have effect. In no case have we given them statutory effect under the Resolution.
§ Mr. SPEAKERThe hon. Member is mistaken. If he will look at the Resolution with which we are dealing he will find in the last sentence it is declared that it is expedient that this Resolution shall have statutory effect under the Provisional Collection of Taxes Act.
§ Mr. DENMANI beg pardon. It arises on the next Resolution.
§ Mr. GOLDSTONEI want to urge one point upon the notice of the Chancellor of the Exchequer in the matter of the taxation of sugar. In his Budget speech the right hon. Gentleman indicated that his proposals would have the effect of raising the price of granulated sugar by ½d. per lb., but in practice that has not been so. I understand that already the price of granulated sugar is more than it was by at least ½d., and in some cases by 1d. If that is the opinion of the Chancellor of the Exchequer as to what the amount of the increase should be, I suggest that he should cause that to come about by fixing a maximum price for granulated sugar. That is essential if the net amount of the tax is to be imposed upon the consumer. If the seller is to be allowed to squeeze out what additional price he can, it appears to me that the ordinary consumer, particularly the poor consumer, will be very hardly hit. It may not be so from the point of view of the experience of the Chancellor of the Exchequer, but I think he will find, no matter what he may indicate in his Budget speeches, that unless he takes steps to translate those Budget speeches into legislative enactment the 853 ordinary consumer will pay more than he ought to pay under the proposals of the Budget.
§ Mr. McKENNACan the hon. Member give me any data on that point? If he will tell me the names of shops where granulated sugar is being sold for over 4d. a lb. I shall be very glad to deal with the case. I do not know any.
§ Mr. GOLDSTONEI am afraid I cannot give exact data, but I am quite convinced that the right hon. Gentleman should give us the essential corollary to his speech and fix a maximum price. He already holds command of the supplies and it should be quite an easy matter for him, in regulating the sales, to add the net price, so to speak, of the tax, and say that no seller over the counter shall sell the sugar at a greater price than is necessary to give the amount of the tax and the price that has been usual charged. Unless he does that he is not treating the ordinary consumer fairly. In this connection, too, I desire to emphasise what my hon. Friend (Mr. Barnes) said in the matter of the £11,500,000 which will be taken from those who are mostly poor by the results of this Budget taxation of sugar. It occurred to me that there are other measures which might have been taken which would have relieved the mass of the poor from these rises in the price of what are necessaries for them. So far as Income Tax is concerned, when a man's income actually falls he gets his rebate as a matter of course. I do not anticipate that for some time to come the taxes on sugar will be reduced, and if they are maintained, and ordinary people have their wages reduced, as they may when the present production of munitions decreases, employment will be scarcer, and there will be a greater fight on the part of the very poor to maintain anything like their present standard of existence. If the taxes are maintained with a falling weekly wage, you have then, as I think, a difference between the Income Tax payer and the person who is paying on necessities like sugar and tea; for if these taxes are maintained and employment, as I think it may, in certain industries falls, and the weekly wage earners are hit by the falling off of employment, and yet the price of these necessities is kept high because of the tax, you impose a disproportionate tax on the poor if you take this £11,500,000 from sugar and do not, as I think you ought, raise more from Income Tax and less from necessities. The two points I urge on the Chancellor of the Exchequer 854 are the fixing of a maximum price at which sugar should be sold, and also that he should remember in the months to come, when employment is not so brisk, these indirect taxes will press hardly on the poor, on old age pensioners, widows, and the like, and these two points I think are worthy of consideration.
§ Sir W. ESSEXThis is a tax on an article not merely in common use, but one of vital necessity to the people of this country for the upkeep of physical energy, as it provides the necessary equipment of sustaining the strength of all those who have to put out any amount of energy in the discharge of their daily work. I think this is an unfortunate tax. Sugar should have been left alone entirely. Anything that tends to lower the vitality of our people should be regarded with suspicion and doubt. I do not join with the hon. Member (Mr. Goldstone) in his complaint about the incidence of the tax. I do not see how the Chancellor of the Exchequer is going to carry out his proposal to prevent an addition being made by the vendor to the amount which he has to pay in duty. After all, the vendor will have to pay for his duty and the cost of his material. He will want a profit on the totality of the capital he puts out. That is an ordinary matter of business. You may force him on this occasion to a diminution of his profit—and I am not here to say that you should not do so—you may force him to forego the profit that he might reasonably look forward to upon that portion of his expenditure which is represented by this added tax, but it may not be laid down as a general principle upon things involving large expenditure for revenue purposes, that you may take that course safely without doing grave injustice to the traders throughout the country. I hope no one will misunderstand my remarks. I am fully against this tax, but I do want our Friends to see the difficulties in which they put the Chancellor of the Exchequer upon a matter of principle in regard to the expenditure of trading capital and the non-return thereto of interest or profit upon it.
§ Mr. SHERWELLI think my hon. Friend who has just spoken is hardly fair to the case put by the hon. Member for Sunderland (Mr. Goldstone). As I understood the hon. Member for Sunderland, he does not object to the ordinary reasonable profit of trade applying in the case of the vendor of a taxable commodity such as the article we are now considering. 855 While I am perfectly in agreement with the view that at a time of great national crisis and emergency such as this, we must have more than one form of taxation, and that this is not the opportune moment for insistence upon the purist view that all revenue should be derivable from direct taxation alone, I nevertheless most strongly hold the view that at all times, and especially at a time of crisis like this, it is the bounden duty of any Minister who proposes to tax commodities of ordinary consumption to take some measures to protect the consumer against a wholly disproportionate increase of price in that commodity. If the Chancellor of the Exchequer can give the House an assurance that in connection not merely with this particular tax, but in connection with all taxes upon commodities of ordinary consumption, he will take some step to protect the consumer, and notably the poor, against an extortionate increase of price, out of proportion to the additional tax imposed, he will relieve some of us of a very considerable difficulty which we feel at the present moment.
§ Mr. McKENNAI am in doubt as to how to reply to the criticism of my hon. Friend the Member for Sunderland. If he has information that, in the language of my hon. Friend who spoke last, a disproportionate or extortionate increase of price has taken place in sugar, I should be very glad if he will let me have the information.
§ Mr. GOLDSTONEI think I will be able to state a case which my hon. Friend has just mentioned to me since I finished my speech.
§ Mr. McKENNAI am exceedingly sorry that I had not the information earlier. The Royal Commission on Sugar Supplies take every step in their power to prevent any disproportionate or extortionate increase of price, and the system they adopt is a very simple one. They sell the sugar upon the terms that it is to be retailed within a limited price. I shall be very glad indeed to know of any case in which it is alleged that an extortionate profit has been charged. As far as my information goes, there is no such case. Certainly every step has been taken that can be taken to prevent the very evil of which my hon. Friend complains, and of which, as yet, we have no definite information. My right hon. Friend (Mr. Lough) 856 who opened the Debate did not show that exactitude of expression which this House ordinarily expects from him. When he speaks upon matters of trade we anticipate that we shall have precision, definite statement, and just conclusions.
§ Mr. McKENNAMy right hon. Friend asks me why I expect that of him. My reply is short. Twenty years' experience in this House has taught me to expect all these attributes in a speech from him. On this occasion he fell short of the high standard which he has set for himself. He stated, first of all, that the price of sugar has doubled since the War. That statement is an exaggeration. The price of sugar has gone up since the War, not 100 per cent., but, I think, something like 60 per cent, or 66 per cent, in different places. Then he attributed the rise in the price of sugar to the action of the Government. I put the question to the House. How can the action of the Government in closing the ports here against sugar raise the price in America? It is the world's price of sugar which has gone up. The world's price of sugar has risen for the most obvious of all reasons. One of the greatest producers of sugar in the world is Germany, and she is one of the greatest exporters. Germany and Austria between them were the greatest exporters of sugar anywhere.
§ Mr. McKENNANo; Germany and Austria were far greater, and the hon. Member will find that that is so if he will consult the right hon. Gentleman next to him. When the export of German and Austrian sugar was prohibited, naturally there followed a great rise in price, which was not limited to this country, but extended over the whole world. We may be right or we may be wrong—that is not the point we are arguing now—in closing the ports. But, at any rate, there is this to be said for it, that by closing the ports we ensure that in this world's market, which is already depleted owing to the closing of German and Austrian supplies, there shall only be one buyer from this country. No speculation in sugar exists in this country to-day.
§ Mr. McKENNAIt does not speculate. The Government is buying for delivery. The effect of our action has been this. We 857 have bought large quantities of sugar upon Government account. We have had, in buying, the best advice obtainable in the country—the best business advice—and we have, so far at any rate, been fortunate enough in the mass of our purchases to buy considerably below the average of the world's price at any time. Our general purchases have been cheap purchases. The result is that while selling sugar, I will not say with the daily variation of the world's prices, but more or less at the same price at which it could have been bought if the ports had been open, we, by virtue of having bought cheap, have made a profit. Now my right hon. Friend goes on to say that he does not wish the Government to obtain any revenue by a side wind, of which the House knows nothing. The Government have exactly conformed to the standard of my right hon. Friend. Having made this profit, instead of taking the revenue by a side wind, I have asked the House to impose a public duty upon sugar. I am only telling my right hon. Friend how we have avoided doing it by a side wind. Instead of putting this money, by a side wind, into the Exchequer, I have asked the House to adopt a tax; but, having this profit in hand, it is not necessary to add to the price of the sugar which we sell the whole amount of the tax. We are absorbing part of our profit by the tax.
§ 4.0 P.M.
§ Mr. McKENNAI will tell my right hon. Friend in a moment. We absorb part of that profit by the tax. Thus, while we add three farthings to the duty, the rise in price to the public is only one halfpenny. That is to say we distribute to the public a part of the profit from that which we have hitherto made.
§ Mr. McKENNAWe have not. We have still more than that. But we do not propose to pay that further profit by a side wind into the revenue. We propose to keep it for the time being, and for a very simple reason, which I will explain. When we go out of business as sugar dealers—
§ Mr. W. THORNEWhich I hope you never Will.
§ Mr. McKENNAWe shall inevitably have a large stock of sugar on our hands. 858 Now we do not desire that the public should have any loss upon the sugar which we hold at the conclusion of the War, and we therefore hold a certain amount of profit in hand to enable us to sell the last few hundreds of thousands of tons, if necessary, at a lower price than the price at which we bought it. If the world's market is down below that price, we can then come in and sell our sugar at the world's price of the day. If, on the other hand, the world's price is not down, and we end up with a profit, the House will be in that case informed. The House will be asked to vote that profit into the Exchequer. At any rate, if my right hon. Friend goes back over the whole period of this last year since this sugar transaction has been carried on, if he looks at the world's price of sugar, and if he considers the charge for freights, and what the markets would have been if there had been free scope for speculators in this country, he will find that the price which had been actually charged to the consumers in the United Kingdom is less than would have been the case if the consumer had been left to the mercy of the speculator.
§ Mr. McKENNAYes, I can prove it. I can quote the markets abroad from day today, and I can show that the price in this country was, on the average, less than the world's price outside; and I can show as well that as the effect of the profit we are now able to hand over to the public this-reduction in the duty on sugar.
§ Mr. JONATHAN SAMUELIs not that due to the fact that sugar has dropped in America, and that you are buying sugar cheaper?
§ Mr. McKENNANo, it was done before the drop in prices in America. The drop which we have made in the price affects sugar which we bought months ago. A lot of the sugar which we hold now was bought six months ago. We are at the moment buying sugar at a cheaper rate. It is a very convenient moment to buy. It will not remain that. Freights are so heavy as to be almost impossible. That has to be added to the price. My hon. Friend the Member for Sunderland (Mr. Goldstone) asked for consideration for these taxes in future in relation to other taxes after the War is over. Of course, in any future consideration of the taxes, the whole body of taxation will have to be taken in one view. It would be idle to give a pledge 859 about a particular tax and to say that sugar, or tea, or Income Tax must be the first to be relieved. The endeavour has been made to have some balance of taxes which will as far as possible enable us to make the burden tolerably fair over all classes of the community. If that view is correctly carried out it is quite obvious that, when relief comes, relief will have to be spread equally over all classes. I do not think that my hon. Friend imagines that when relief comes the indirect taxpayer will not get fair relief in proportion to that given to other sections of the community.
§ Sir A. MARKHAMI am interested to hear the definition of "speculator" by the Chancellor of the Exchequer. I am interested, as a business man, to hear that when the Government buy they buy for delivery and therefore they do not speculate. Is not the whole transaction, as I understand the statement of the Chancellor, pure speculation and nothing more than speculation? He is going at the end of the War to keep a large stock in hand, so that, if the price should then fall, he will be able to cover himself. What he has not answered, and what the House is entitled to know, is what profit he has made on this transaction. Surely the House of Commons is entitled to know that. I am not at all clear myself that the country does not owe a great debt of gratitude to the Chancellor for having bought this sugar. I am not at all clear that he has not acted quite rightly, but he must not say that he has not speculated, because he has. I do not think that the House of Commons should be kept in the dark as to these financial transactions. Really we might almost wind the House of Commons up altogether if that were to be so. The Government seem to think that they have a right at the present time to withhold all information even when we come to business transactions. According to the Chancellor there has been no speculation. The House of Commons is not given that information. I ask my right hon. Friend to give this information to the House and to the country.
§ Mr. McKENNAMay I, with the leave of the House, say in reply to my hon. Friend that I shall be very glad to give this information if he will not press for it up to a very late date. It would be obviously undesirable to give the information beyond a certain date, but up to a very recent date I can give what the profit has been.
§ Mr. BOOTHI listened with a keen amount of interest to this Debate, and I think that no Minister of the Crown in recent days, speaking from that bench, has ever disclosed such a gigantic transaction as that which my right hon. Friend the Chancellor of the Exchequer has explained. Transactions of this kind are well known in America and in other countries. While I am not in a position, and I do not wish at this stage to challenge that transaction, surely one may utter a note of warning to the House that possibly, if this is going to be applied all round, and if Ministers of the Crown are going to buy and sell on this great scale, great misfortunes to the State may arise in the future. I am perfectly sure that where the right hon. Gentleman is concerned nothing objectionable can possibly occur, but this is the beginning. Things may grow. Transactions may be done afterwards in a hurry, without form. Ministers may not always see where they are being led, and you may have the gravest consequences, both to the trade and to the State. My view of the profit is that it is entirely illusory. The right hon. Gentleman is both buyer and seller. He buys himself and he sells at his own price. He admits that he can fix the retail price, and he speaks then about the profit which he has made. There is not an office boy in the City who could not make a profit if he can fix the price at which he can sell. It is a very deceptive term to use if the right hon. Gentleman can put up the retail price for sugar another ½d. per lb. and then impress the House that he has done a very clever transaction. All that he has done is to tax the community, and particularly the poorest portion of the community, in order to increase his resources. The right hon. Gentleman's profit is simply a tax extracted from the breakfast table. Does the right hon. Gentleman suggest that he is not speculating when he says that the sugar whose price is now being reduced was bought months ago? Any man who buys sugar, not being a sugar dealer but a politician, and goes into the sugar business for the first time and buys in a huge way, and holds it up for months, and decides when he should sell it and at what price, is a speculator, and there is no other term to use. Then we are also told that he is keeping something behind, so that when eventually he removes the tax and abandons his business he may have to cut the loss, and he wants some funds in hand. Surely what is that but speculation? He is not buying for delivery.
§ Mr. BOOTHAnything further away from insurance I do not know. It has nothing to do with insurance. I presume that the right hon. Gentleman does carry insurance, but that is not it. The right hon. Gentleman is going to keep in hand money which he calls profit, which I say is really only a paper estimate.
§ Mr. McKENNAYou say that it is a speculative gain?
§ Mr. BOOTHNo, the right hon. Gentleman does not listen to me as carefully as I listen to him. It is not a speculative gain. No gain has been proved. I do not regard a tax upon the poorest part of the community as a gain. The right hon. Gentleman says that he is going to keep an amount which at present is a paper estimate of the profit he could get, if he exacted from the community a price which he has in his mind. If he did exact that price he estimates that there would be a certain margin which he calls profit, and he is keeping that in hand, so when eventually he gives up business as a sugar dealer and leaves it to the right hon. Gentleman on the Front Opposition Bench, or to other traders, he may be able to minimise any loss that will arise through a forced sale, and clearing out of business quickly. As an ordinary retailer must put up "selling off," "must be sold regardless of price," so when the right hon. Gentleman gets to that stage he wants something in hand to see him through that critical period. I do not object to that. It may be all right, but I wish to support the view of the hon. Baronet (Sir A. Markham). We want more light on this transaction. One cannot forget that his colleague, the Colonial Secretary, when he sat opposite stated, that he was not convinced that this purchase was wise. I am not in a position to express an opinion, but does the right hon. Gentleman, who is now a colleague of the Chancellor of the Exchequer, now say that this transaction was either wise or foolish, or has he looked into it? I do not know. It is one of those mysteries of the Coalition Government into which rude Back Benchers must not inquire. Therefore I leave it. Perhaps some time we shall know whether it was good or bad, but I may utter a note of warning. If transactions of this kind are pursued they may have the greatest peril to the State, a peril as to which the Liberal party and writers outside have warned the public, when these questions were 862 discussed for over a generation. I believe that in this case no harm will result, but, at any rate, I wish to be prudent and to protect ourselves against such transactions in the future.
§ Mr. J. SAMUELI am sorry that I was not in the House in time to ask one question of the Chancellor of the Exchequer with regard to the Sugar Duty, because when I listened to his speech on the Budget I understood that he had reduced the price of sugar by 3s. per cwt., in view of the fact that he was introducing a very large addition to the Sugar Duty. I think that he made the point that the one would counterbalance the other. Now, I believe, that the Government did right in buying this large quantity of sugar at the beginning of the War, and I believe that they have safeguarded the interests of the country when they did so at that period, but I do think that if the Government are going to become the buyer and seller of sugar it ought to adopt the same plan as the sugar merchants do during a time of peace when they buy and sell. Now, there is no market so sensitive as the sugar market in time of peace. That is to say, the prices rise and fall, and if there is a drop in the market of even 1s. per cwt., the merchant gives the advantage to the shopkeeper, and it is transmitted more or less to the consumer. [HON. MEMBERS: "Oh, oh!"] Yes; that goes on. Any drop is periodically certified, and the market is sensitive to the rise and fall occurring each day. I wish to know how long it is since the Government have been able or should have been able to reduce sugar by one ¼d. a lb.
I think I am justified in asking that question because I believe the Government have been holding up this sugar for a very considerable period beyond the time that they should have been justified in doing it; or, in other words, that the reduction which has been made was not due to the increase of the Sugar Duty, but to the fact that the sugar market justified the reduction. The Chancellor of the Exchequer is, I think, chairman of the Commission, and I should like to impress upon him that if the market shows a reduction in the price of sugar it would be wise on the part of the Government, considering the importance of sugar, not only as a raw material, but to the consumer, especially the working-class consumers, that they should give to purchasers the advantage of this reduction day by day, 863 or at least as soon as possible after a reduction has taken place in the sugar market. There is an impression abroad, and I was certainly under that impression until I made inquiries, that this reduction took place because of the increased duty. I do not think that is so, because if it were so you would be losing practically three shillings per cent. on your sugar, which you would not be justified in doing unless you could afford to reduce the price of sugar quite independent of the duty. With regard to the duty, I should like to point out that we are really going back a very long time in the history of the tariffs of this country when we are raising this duty. If the estimate of the right hon. Member for Islington is correct, we are to pay £14,000,000 a year, or, if we take the estimate of the Chancellor of the Exchequer for a full year, £11,700,000, in duty upon sugar.
§ Mr. McKENNAThe two estimates are more or less the same. The £11,700,000 is due to the addition of taxation; my right hon. Friend (Mr. Lough) is including the tax of 1s. 10d. with the addition.
§ Mr. J. SAMUELThat will come out at £14,000,000—the old and new tax. I find, on looking into the history of the Sugar Duty, that the largest amount ever raised in revenue from it, so far as I can find—and I have looked back through the last century—was the amount raised in 1863, namely, £6,249,000. The Sugar Duty then was 18s. 4d. per cwt., and that was reduced in 1864 by Mr. Gladstone to 12s., and again reduced by Mr. Gladstone in 1870 to 6s.; and, up to 1874, it was left by him at nearly a nominal sum. In the year 1874 the Sugar Duty was abolished. This increase is something like £8,000,000 of money from Sugar Duties, and it is a very large increase indeed of taxation upon the consumers—the working classes. I therefore press upon my right hon. Friend that he ought to give the public the advantage of every reduction in the sugar market as soon as it takes place, for I think that the consumer ought to have the advantage of that reduction. I want to raise another point in reference to another part of the Budget, namely, the Plate Glass Tax.
§ Mr. SPEAKERThe question before the House is the Sugar Duty.
§ Mr. J. SAMUELI have said what I wish to say upon that point, and, in regard to the tariff on plate glass, I will reserve my observations for another occasion.
§ Mr. SAMUEL SAMUELWith regard to the Sugar Duty, I should like to have seen a difference of duty between refined sugar and raw sugar. I recollect that in both London and other places we saw a very great sugar industry which was killed by the Sugar Convention, which induced the importation of large quantities of sugar into this country, on which we relied so much on the outbreak of the War. Our refineries and the industry in cane sugar have been killed for many years, and we are dependent upon beet sugar for our everyday requirements. That leads me to the other question of the Government trading in sugar. The Chancellor of the Exchequer, I am afraid, does not know what took place at the outbreak of hostilities. The fact was that they were dependent upon beet sugar, which could be imported into this country almost at a week's notice, and the consequence was that the stocks which came to this country were almost infinitesimal, because they came here week by week to fulfil requirements. When the War broke out it was not difficult for a band of speculators to buy up all the available supplies of sugar that were free in the market. That is what happened, and the price more than doubled at that time. Certain gentlemen went to the then Chancellor of the Exchequer, or to the Treasury, to point out that there was a corner in sugar, that the sugar market had gone mad, and that the best thing to do would be for the Government to go in and take the control of sugar. I have had forty years' business experience in merchandise throughout the world, and I know something of the sugar market. The Government in August bought sugar, and the price of cane sugar in Java was about 12s., free on board.
The Government bought everything they could lay their hands on, and I think that within about a month they had driven the price up to 19s., free on board. There was no competition, and they were buying madly, because they had been advised of this great monopoly in sugar. There is no firm of merchants or bankers, however, who could have carried out the operation of the Government, on account of the enormous expenditure on interest that would have been involved. When the Government had satisfied their appetite and bought everything they could possibly lay their hands on it was discovered, I presume by those who were in control, that they had bought at a very high price, and that there was other sugar in the world that could have been brought into this 865 country and sold at a lower price than the Government could afford to sell for without involving them in a loss. In the month of October, having carried on this business for about two months, it became necessary for the Government to prohibit the import of sugar by anybody else, and the only reason that one can give for that procedure is that they knew that they had bought badly.
§ Mr. McKENNAThe hon. Member will allow me to say that I hope he does not desire to convey to the House the statement he is making is an accurate statement.
§ Mr. S. SAMUELI shall prove that. My own firm were interested in 12,000 tons of sugar in the Argentine. We had advanced money on that sugar to the cultivators in April, May, and June of 1914, and that sugar was to be shipped to this country. Two steamers were chartered to carry the sugar—the "Wentworth" and a "Glen" steamer—at 20s. a ton. On the 26th October one of these boats was nearly loaded when the Government issued their proclamation prohibiting anybody to import sugar into this country. Application was made to the Government to allow these cargoes of sugar, which had been bought and paid for, the amount being £125,000, to come to this country. No business man would say that if those two cargoes had come here it would have put up the price of sugar. The application was refused. These two cargoes were offered to the Government for their purchase, and the Government, or their agents, refused to buy them, without giving any reason or any excuse for not allowing them to be imported into this country. The consequence was that the cargo which had been loaded had to be discharged, and it cost the sugar refiner in the Argentine some thousands of pounds to do that. The steamers were chartered at 20s. a ton, and the freight went up to 50s. The charter of 20s. had to be cancelled, because the owner of this steamer was only too pleased to have the excuse that she was to carry nothing but sugar. I give that as only one instance of many.
§ Mr. McKENNAWill the hon. Gentleman say a word about his proof that the whole reason why the Government prohibited the import was because they had bought badly. That is the point—the proof. The Government said at the time that the reason they prohibited the import was to prevent the export of German-Austrian 866 sugar. That was the reason and the true reason. Perhaps the hon. Gentleman can give some explanation why he denies that that was the true reason.
§ Mr. S. SAMUELI am afraid the right hon. Gentleman does not know very much of the sugar trade, because Argentine sugar is cane sugar—if that is the reason of the prohibition.
§ Mr. McKENNAReally the hon. Gentleman must know that the prohibition was general. It covered all sugar, both beet and cane. The hon. Member, who is familiar with sugar, must know that when refined it is very difficult—I do not say impossible—to distinguish between them. Moreover, cane sugar in America was being replaced by beet sugar from Germany, cane being sent over here, so that we were getting German sugar once removed.
§ Mr. S. SAMUELThe Argentine is not the United States of America, and the Argentine produces cane sugar, and not beet sugar. I do not blame the right hon. Gentleman, because he was not responsible for what took place. I leave the matter to the sense of the House and the sense of the country. They can form their own conclusion as to whether it was justifiable to prohibit the import of sugar at that time. Then it is claimed that the Government have been able to make a profit out of sugar, as the hon. Member who spoke before me pointed out. If they are able to charge any price they like and prohibit the importation of any competing firm, they naturally can make whatever profit they like. I recollect some years ago the case of a gentleman named Colonel North, who tried to create a monopoly in camphor. He bought up everything he could lay his hands on and sent up the price enormously. Everything was, in fact, magnificent so long as he could keep on buying, but the moment he wanted to sell the price went down. That applies to every kind of merchandise. If the Government choose to go in in competition with other people and buy, they can buy as much of anything as they like, but the moment they want to sell they will find, when they come to realise the remainder of their sugar, that they are going to be involved in a very heavy loss. The moment the War is over you will have beet sugar coming in from all parts of the world, and I presume there will be no prohibition unless we put on a special duty against competing 867 sugar. Apparently, as the Chancellor of the Exchequer has told us, the Government have been accumulating a stock of hundreds of thousands of tons of sugar. That is because they do not understand the business. Merchants who have to do the business do not accumulate large stocks. They sell to the consumers. What has helped to send up the price, or, rather, to put the exchange against this country, is the unbusinesslike manner in which these transactions are carried out. I hope that these sugar transactions will prevent the Government from going into other speculation. I am not now, I fear, allowed to talk about wheat or meat and all sorts of things that the Government are dabbling in. The consequence of those will be that the taxpayer will have to pay very heavily for their adventures in transactions of which they have practically no knowledge.
§ Question put, and agreed to.