§ The next item is tobacco. I propose to raise the duty on tobacco from 6s. 5d., at which it now stands., to 8s. 2d., or a rise of 1s. 9d. per pound. The House will remember that I proposed an increase of duty on tobacco last year, part of which, in the course of discussion, was taken off. I do not like to put these heavy taxes on tobacco or anything else, but what we have to consider is that the money must be got, and what are the sources from which it can most fairly be obtained. Judging tobacco from the standpoint which has always applied in the past, as to whether or not it can stand additional taxation, that is, how the consumption is going on, we certainly can stand this additional taxation, for the amount consumed in the United Kingdom in the year before the War has been greatly exceeded. It is now three or four million pounds more, in spite of the high duty. Tobacco prices, as the House knows, are in the hands of a Tobacco Controller, and I think the result has been advantageous to the consumer, and not unfair to those who are engaged in the trade. Representations were made to the Tobacco Controller that, owing to the increased cost of production, it was necessary in any case to raise the price of tobacco by a Id. per ounce. The duty, which has been decided upon, has been fixed after consultation with the Controller, and the whole result will be that the price will be raised by 2d. per ounce, but the House will see that the whole of that is not borne by the consumer, because there would have been Id. advance in any case, and the duty is raised by about l ⅓ d. per ounce. This means that something like one-third of a penny is borne by those who are dealing in it, under the prices arranged. The increase proposed is large, but I am told by the Control Board that there will be no difficulty whatever in getting the higher price, provided we do not irritate the consumer, as we have done in the case of beer, by not only charging him a higher price, but not enabling him to get the article when he is willing to 716 pay for it. He said that whether the taxation could be got without discontent depended on whether or not these supplies can be kept up.
§ The House will readily understand that at a. time like this, when we have to restrict imports in every direction, tobacco, not being, as some think, a necessity of life, is one of those where restriction would naturally come. But I thought it right, as Chancellor of the Exchequer, to point out to the Cabinet Committee which was considering the matter, that in importing tobacco we are almost importing money, and that that was something which ought to be taken into account, especially as the total tonnage required was not largo. The House will realise to what extent that is true when I say that, under the new scale of duties proposed, an import of 6,000 tons of tobacco will give to the Treasury a revenue of £5,500,000 sterling. That is rather a double-barrelled observation. It shows on the one hand—and that was my reason for making it—the advantage from the point of view of the State of bringing in tobacco, and, on the other, shows how largo is the proportion of the price of tobacco which the consumer gives to the state. On the whole, therefore, looking, as I have done, in every direction for taxation, I think this is as fair a source as any which is open to us. The increased yield of this tax will be in the present year £7,500,000. and in a full year £8,000,000.