CLAUSE 1.—(Increased Duties on Cocoa.) (Hansard, 21 June 1916)

§ Mr. LOUGH

I beg to move, after the words "duties of Customs, that is to say:" to insert the words, Cocoa (not de-husked or kiln-dried) the cwt. £2 2s. 0d. I desire that the Cocoa Duties should be equalised with the Tea Duties. I have pressed this point on the Chancellor of the Exchequer on several Budget occasions. I thought that in the present Budget the Resolution passed through Committee had affected my purpose. I was therefore surprised to find, when the Resolution came into operation, that it had a somewhat different effect to that which the House of Commons believed and intended it should have. The object of my Amendment is to correct the matter. I am glad to see that in the Amendment put down by the Chancellor of the Exchequer the principle is accepted. Anyone wishing to understand this Amendment should look at Clause 2, which deals with coffee, and he will then see the point. The Cocoa 153 Duty was quite out of relation both to the Tea and Coffee Duty. This matter has been brought before the Chancellor of the Exchequer, and I am glad to say it has received sympathetic attention. The Amendment proposed to-day really establishes the Cocoa Duty on a correct and scientific basis, and if this change were not made you would not have the three duties agreeing with one another, but a most important trade in this country would suffer under an injustice. Perhaps the Committee will realise how great the trade is when I say it has more than doubled in the last two or three years. I thought it right to give that explanation of the Amendment, though I need not enlarge on the subject further.

§ The CHANCELLOR of the EXCHEQUER (Mr. McKenna)

Perhaps the Committee will allow me to make a few explanations in answer to my right hon. Friend's Amendment, as to why it is that we propose now to alter by 25 per cent, the original duties which were contained in the Resolution passed by this House. Our object, as I stated on introducing the Finance Bill was to secure that we should get precisely the same charge upon the beverage of cocoa as we had already upon the beverage of tea. There had been for a very long time a complaint in this House, from all quarters, that cocoa and coffee were more lightly taxed than tea, with the result that those who drank cocoa and coffee were less taxed than the tea-drinkers. We felt the force of that criticism, and we therefore resolved, in so far as we could, to invite the Committee to alter the taxation on coffee and cocoa in order to impose upon them precisely the same burden as was imposed upon tea. That meant that the cup of cocoa or the cup of coffee should have imposed upon it, having regard to the amount of coffee or cocoa contained in that cup, the same tax as the cup of tea. The Committee will understand that in any change of taxation of this kind we are necessarily very hampered in the inquiries which we can make before the Budget is actually introduced. We did all that we could by way of discreet inquiry in order to discover what would be the precise true relation between tea, coffee and cocoa. I have now to admit that our inquiries did not lead us to the right result. Since the Budget was introduced we have had a flood of facts and figures laid open to us which we never could have obtained in any circumstances before the Budget was 154 introduced, and until the great pressure of a new tax was imposed upon the trade. We have come to the conclusion, after the fullest inquiry, that the true relation between cocoa, coffee and tea is 4½d. a. pound, on cocoa, 4½d. a pound on raw coffee, and 1s. a pound on tea. It is within the experience of every hon. Member present that in making a cup of tea you put muck less tea into the pot than you have to put coffee or cocoa in making a cup of equal strength. I venture, therefore, to propose to the Committee that these rates should now be accepted as a final settlement of the question as between tea, coffee and cocoa, and I should hope that in all future impositions or alterations of the tax we should retain once, and for all these relations between the rates of duty. Therefore, while I would ask my right hon. Friend not to proceed with his Amendment, I would ask the Committee to accept the three subsequent Amendments which I shall have to move. I would only add this single point: the tax has been in existence now for some number of weeks at the rate of 6d. a pound. Cocoa has been sold to the consumer at the higher price, and I do not think it would be equitable to reduce the tax back to the time of its original imposition, which would mean that the dealers would get the money returned to them which they paid in full tax, whereas the public could not get it back. I propose therefore that the change should only date from the 21st day of June, that is to-day, and that up till to-day the original tax should remain.

					£	s.	d.
"Cocoa	…	…	…	the lb.	0	0	6"

				£	s.	d.
"Cocoa butter	…	…	the lb.	0	0	6"

		£	s.	d.
Cocoa	the lb.	0	0	6
Cocoa husks and shells	the cwt.	0	12	0
Cocoa butter	the lb.	0	0	6