§ In lieu of the present Customs duties, drawbacks, and allowance in respect of sugar, molasses, glucose, and saccharin there shall, as from the twenty-third day of April nineteen hundred and eighteen, be charged levied and paid the duties specified in the first column of Part I. of the Third Schedule to this Act, and there shall be paid and allowed the drawbacks and allowance set out in Part II. of that Schedule.
§ Mr. D. MASONI beg to move to leave out this Clause.
I do so because I think that the proposal to increase the duties on sugar, which touches the very poorest of our population, should not be accepted by this House. We know it is a hardship which would press most hardly on the very poor. It would press upon those who are in receipt of old age pensions and who have suffered by the increased cost of living, and if we are asked to support the increase proposed in Clause 8 in the price of sugar it would be, to my mind, reprehensible. No case has been made out in" favour of it. It was well pointed out by the hon. Member for Lanark (Mr. Pringle) that there is also another class, those in receipt of separation allowances, who are suffering from this ever-increasing cost of living, and are we to add to their burdens by increasing still further the cost of this very necessary article of food? Even from a health point of view it seems to me most unwise to increase this duty. Sugar is a very necessary article. To a very large section of the community it is really a question of health. I understand the Government contemplate establishing, if they have not decided to establish, a Ministry of Health, and here is a measure which will go a long way to undermine the health of the community by increasing the price of this very necessary commodity. I have hero a Petition which, I believe, represents many thousands, if not millions of small shopkeepers who are engaged in the small confectionery trade, and their customers. They, of course, are very much affected by this particular provision of the Finance Bill. This Petition states:
We earnestly ask for your assistance on behalf of the many thousands of struggling retail confectioners throughout the country, the majority of whom are women, including a large number of poor widows, spinsters and wives with husbands and sons in the Army. Their means of livelihood are in great peril owing to their inability to obtain sufficient supplies of sweets and chocolates. We believe they are 1261 entitled to your help as they are selling a commodity known to possess great food value and sustaining properties, which, to the mass of the public, is not a luxury, but in these days of war strain, a necessity to most classes of civilian workers, as well as to soldiers and sailors, and particularly beneficial to the health of children. We therefore earnestly petition you to urge the Government to release at the earliest possible moment further supplies of sugar needed for the manufacture of sweets and chocolates, whereby public requirements may be met and" the desperate position of shopkeepers may be rightly alleviated.4.0 P.M.While I, of course, recognise that there is a scarcity in this commodity, and the Government has taken control of it and the price has been more or less fixed, I think to accentuate that and make still harder the 1 position of these small shopkeepers and their customers in regard to an article which I have already stated is a very useful article of food, is the height of unwisdom. When we know there is a scarcity, why accentuate the evil? There is another great industry, aerated waters, lemonade and other articles, which are very useful, consumed by a large section of the community and very wholesome. These also are interfered with by making this necessary ingredient still harder to obtain. I have heard no argument by the Government to justify the increase. They say that in the course of a war we must have taxation spread over the whole community, and the working class must bear its share. I contend that the working class has done more than its share. The finance of the Government adds to the burdens of the working class every day, as the Chancellor knows. He knows of a subject to which I have often referred in this House, and that is his action at the Treasury in increasing his paper issues every week, thereby adding to the cost of all commodities, penalising the working classes, and debasing the currency. So that to say that the working classes are not bearing their share is beside the point. I hope that those who support this tax, upon which we intend to vote, will be able to justify to their constituents the increase of this burden on the poor and those least able to bear it.
§ Sir C. HENRYMy hon. Friend ended his remarks by stating that he hoped those who were supporting this would justify it to their constituents. I can say this—and I believe I am expressing the view of a good many constituents throughout the country—that all classes of 1262 the community who are weekly wage earners desire to pay their contribution to the War. My hon. Friend mentioned the Petition he had received, whch, he said, was backed up by I do not know how many thousands or millions of people. It is the usual course, when a Member receives a Petition of such wide character, to deposit it on the Table of the House. I should like to see that Petition upon which my hon. Friend lays so much weight. Why did he not take the usual course and lay it upon the Table of the House? I do hope the Chancellor of the Exchequer will not—I am certain he will not—give way one iota in regard to this tax. It is all very well for my hon. Friend the Member for Coventry to propose a reduction in the duty on a commodity like sugar, which we all recognise is a necessity for every householder in the country, to court a certain amount of popularity of that kind. But that does not help to win the War. This money is necessary to carry on the War. Then he uses the argument that this extra tax on sugar is penalising the small confectionery trade. He is doubtless unaware that the Ministry of Food has quite recently issued an Order by which the small shopkeeper has a preference as regards supplies of the articles he sells, and that large storekeepers are deprived of such confectionery as the small shopkeepers may have. Therefore, again I doubt whether there has been much protest against this Sugar Tax from small shopkeepers. I hope if the hon. Gentleman goes to a Division, the support he receives will be negligible.
Mr. DENNISSI do not intend to vote against this tax, because I consider it is a war tax, and that it is necessary to get money; but I do rise to record an objection to the tax because of its cumulative effect on certain manufactures and industries. If it is to be regarded purely as a war tax, there is no objection to it, but if in times of peace the tax is to be not only on raw materials, in which sugar plays a principal part, but also on the finished articles, it is a cumulative tax which is very injurious to industry. The brewers the other day in the House recorded their protest against the tax in order that when peace is declared they will be able to call upon the Chancellor of the Exchequer to modify the tax in such a way as not tointerfere with their industry. I rise to record the same protest on behalf of the National Mineral Water 1263 Association. The brewers, after all, use an amount of sugar which bears a very small proportion to the value of the finished article—beer—but in the manufacture of mineral waters it forms a very important part indeed. Not only are the mineral water manufacturers taxed upon the sugar, but they are taxed upon the mineral water when it is produced. The proportion that that bears to the cost of the whole article is so great that they feel it is a burden that ought not to be placed upon them except in time of war. In time of war they cheerfully submit in the public interest, but in time of peace I ask the Chancellor of the Exchequer to say he does not intend to continue-this double tax. I know some hon. Members have welcomed it because it hits the teetotaler. If it hit him, I should be very glad, because he pays very little tax indeed. But I am afraid it does not. I have made inquiry, and I find that the teetotaler drinks no soda water, which is a medium for whisky; and with regard to syrups and other drinks, such as lemonade, they are largely drunk by people engaged in industries in the North of England. The teetotaler drinks nothing but tea and cocoa as a rule, and pays little taxation indeed.
Having made that protest I wish to say one word about the small weetstuff retailer. I quite agree with the hon. Baronet who has just spoken that this is a question rather for the Food Controller than the Chancellor of the Exchequer. The Food Controller has done his best, and is doing his best, for the small retailer, and it is only after a long period has elapsed, and only after very much suffering and hardship has been endured by this very worthy and deserving class of people who have no other means of livelihood. It is not so much the duty on the sugar, because they can put the price on the goods, but the scarcity of sugar which is being dealt with in a very sympathetic spirit by my right hon. Friend the Parliamentary Secretary to the Ministry of Food, and I will take this opportunity of publicly congratulating him and the House on the honour just bestowed upon him for his services to the country in the distribution of food.
§ Mr. LOUGHMy hon. Friend who has just sat down once again charmed the Committee with the equivocal course 1264 which he takes in connection with some of these burdens. On the one hand he makes an emphatic protest against the tax, but, on the other hand, he will not vote against it, and if the Committee is satisfied with the reason he gave, I think we may very well leave it there. I think the heavy nature of this tax ought to be considered by the Committee before it is passed. There are many burdens imposed in this Bill that might almost be described as ferocious. We have swept through half-a-dozen already—taxes on tobacco, spirits, and beer, raised to a point quite unprecedented, perhaps, in any country, and certainly in this country—but here is sugar, which is a necessary and delightful diet, treated with greater severity than anything else, and I do think the tax needs more justification than it has received in this House. In July, 1914, a month before the War broke out, the wholesale price of the article was 15s. 10½d. To-day the price is 57s. 9d., so there is a far greater rise with regard to sugar, which is undoubtedly one of the necessities of life, than anything else. Every other article seems to secure some sympathy from the Government except sugar. We have the whole provision of milk threatened by the strenuous efforts the Government are making to keep down the price as much as they can. Great efforts were made to keep the price of meat low. Sugar alone appears to receive this bad treatment from the Government. The retail price in July, 1914, was 2d. a lb.; to-day it is 7d., that is, three and a half times as much. In July, 1914, the duty was 1s. l0d. per cwt.; to-day the Chancellor of the Exchequer makes it thirteen times as great, raising it from Is.l0d. to 25s. 8d. per cwt.
What has sugar done that it should receive such cruel and ruthless treatment from my right hon. Friend? We have not had a good defence of the tax yet. The ratio of increase on this most necessary article of food is 250 per cent., and nothing like it can be shown with regard to any other commodity. I thought it might interest the Committee to know how it has progressed in some of our Dominions, and I take the case of Canada. In Canada the price of sugar per 100 lbs. in July, 1914, was 4 dollars 60 cents.; to-day it is only 8 dollars 80 cents. So that the rise in Canada in the price of sugar, after three and half years of war, has only been 71 per cent. and yet we have 1265 250 per cent. here. When we are considering the tremendous burden placed upon sugar we must also remember that the Government have taken the management of it. My right hon. Friend who is chairman of the Royal Commission on Sugar has really become the sugar merchant of the country, and I think the mismanagement of the supply by the Government has tended to put up the price very much, as well as the placing of this heavy duty upon it. This is the first of the great commodities of which the Government took the management.
I would really ask the right hon. Gentleman to deal with this point if he can—whether there has not been a great deal of substance in the argument put, I think, when we last discussed the matter on the Second Reading of the Bill, by my hon. Friend the Member for Lanark. Here is sugar, which is admitted by everybody to be one of the necessities of life, with this immense burden placed upon it, amounting to £25,000,000 a year, while another article, wheat or bread, a necessity of very little greater importance than sugar, instead of having any burden laid upon it, receives from the Government a great subsidy of about £40,000,000 a year. Why cannot we have a similar policy with regard to sugar? Why take this extraordinarily complicated method with regard to an article which appears to stand on the same platform and be equally necessary to all the people? One they make cheap and the other they make dear, in a way no civilised Government ever attempted before, by placing this heavy tax upon it. I do not suppose this is the occasion for making any long speeches about those matters, but that point is a very grave one; it is a great point of policy. It has not been defended here. The Government goes to one article, wheat or com, and gives a very high price for it; it goes to other articles, and makes production extremely difficult, because of the low prices they fix. In this case they pile on this large tax, which is thirteen times as much as the tax before the War, and in the case of the sister article they give this huge subsidy.
I do think that this policy, these principles on which the Government is moving, ought to be considered. I think we may fairly ask for some more businesslike proceeding that can be more easily defended. It is all very well for the hon. Member opposite to say that we want 1266 money for the War. We do! We are getting a tremendous amount of it under this Budget. In regard to this point of getting the money, this House might very well ask the Chancellor, in one of his first sentences, to state, in connection with the Finance Bill, how much money he wants. I believe he has, under the Finance Bill, already got a great deal more than he wants. He is probably underestimating his gigantic revenue. The same position would appear to apply to the Luxury Tax, where the yield has not been estimated. It may be that its imposition, as things now stand, will be that the Government will be imposing a huge burden before they are done with it. It is not enough to say that money is wanted for the War. I believe the country has gladly contributed the necessary sum, is contributing better than any other country in the world at the present time, and is contributing better in this War than ever before. Therefore these sort of broken sentences that money is wanted for the War ought not to betaken as a justification for a tax which bears this extraordinary feature to which I have ventured to call the attention of the Committee. I do hope that my right hon. Friend will give some attention to-these solid and reasonable arguments.
§ Mr. SNOWDENThe hon. Baronet (Sir C. Henry), in the impassioned oration he delivered a few minutes ago, gave the Government a piece of advice which, in these critical times, ought to be exceedingly valuable. He explained to them an original way of achieving the object they had in view, and that was by increasing the Sugar Tax. The only parallel to the originality of the suggestion put forward by the hon. Baronet is the observation that fell from the Prime Minister some time ago, when he said that the issue of the War now depended upon the potatoes grown during the present year. The statement made by the hon. Member for Coventry that this is not a popular tax amongst the working classes is true. I would ask the hon. Baronet to put this question to a meeting of agricultural labourers. It is not possible, I suggest, to get a meeting of working-class electors, even in the constituency of the hon. Baronet, where a vote would be secured in favour of increasing the tax upon sugar. I know that the working classes resent this tax very much. The Sugar Tax is very unpopular. It is felt to be a very real burden upon the people, who are 1267 already taxed out of proportion to their capacity to pay. It is all very well for the hon. Baronet to put forward the observations he does. The tax does not make much difference to him. I would ask the hon. Baronet to consider which would be better, this exceeding increase in the cost of sugar or an increase in the Income Tax? I would suggest another thing—because my suggestion raises this question—let Mm put before a meeting of working men in his constituency the alternative as to whether "they" would sooner pay an increased Sugar Tax or "he" should pay an increase in the tax upon his not insignificant income? We cannot regard this proposed increase of the Sugar Tax without regarding the other proposals for indirect taxation which are made in this Budget. The Chancellor of the Exchequer, apart from the Luxury Tax, of which no estimate has been made, has imposed as much in indirect taxation this year as in direct taxation. The figures are approximately equal. That surely cannot be sustained, because there is no comparison at all between the capacity of the respective classes to pay increased taxation. The right hon. Gentleman who last sat down tells us that the yield of the Sugar Tax in duty will be about £25,000,000 per year. That £25,000,000 works out at about 10s. per head of the population. Taking the average family at five, it means 50s. a year in Sugar Tax alone, or Is. per week upon each of the members of the average working-class family. This is a real burden upon the hundreds and thousands of families in the country today who have an income not too adequate to meet the essential needs of existence. Indeed, the thing that surprises me beyond all other things is how the working people of the country live, with prices as they are. With a strain so heavy and a burden so great, an increase of 2d. or 3d. in the cost of living makes a very perceptible difference indeed. I am not now urging the objection that I urged previously. It was recognised by the Liberal Government, when it came into power in 1906, that the Sugar Tax, which had been imposed by the preceding Government, ought at the earliest possible opportunity to be reduced or abolished. When the War broke out the Government were under a promise to repeal the Sugar Tax. For these reasons I therefore support the Amendment moved by my hon. Friend opposite. I 1268 was glad to hear him make the remarks he did. If he presses the thing to a Division, whatever may be the amount of support in that Division, at any rate he may take away this satisfaction, that in persisting in his intention he has expressed the feeling of the overwhelming mass of the working people of this country.
§ Mr. BALDWIN (Joint Financial Secretary to the Treasury)I do not propose to detain the Committee at any length on this subject, which was discussed during the earlier stage of the Budget. After all, it is not one in which further arguments can easily be adduced, either for or against. I know sugar is a subject which very often generates a certain amount of warmth in this country, as, for instance, in the case of the right hon. Gentleman the Member for Islington (Mr. T. Lough). After all, we must look at this proposal as we must look at all other proposals in the Budget—strictly from a business point of view, and also from this point of view: We want the Committee to believe that we are attempting to spread the enormous burden which has to be spread on the shoulders of the people as equitably as we can. I am quite aware that no tax in itself can be popular. I agree entirely with the hon. Member for Blackburn (Mr. Snowden) that there is no single tax against which, given the right kind of audience, you could not get a unanimous vote. On the other hand, there is no single tax where, again if you choose your audience, you could not get an enthusiastic support for laying that particular burden on the shoulders of someone else ! After all, it is not my business here to do either of these two things. I must try and justify to the House the course that has been taken by the Chancellor of the Exchequer. In framing our Budget this year we attempted—I still maintain it in spite of criticism—to deal lightly with those who nave small incomes. As was pointed out in the course of the Budget Debate, this increase in the Sugar Duty—I do not think I need remind hon. Members how small is the actual increase!—is the only additional tax this year which falls on men of less income than £500 a year.
§ Mr. BONAR LAWOf necessity!
§ Mr. BALDWINYes, which of necessity falls on those who have a less income 1269 than £500 a year. Having regard to the increase of taxation in Income Tax, Super-tax, and liquor, it seems to me that a slight burden should be put even on those who are at the lower end of the scale as regards Income Tax. Consider the case against sugar. It is easy to recognise it. Of course it arises from this, that you come down to the men who have below £500 a year, you work down through the men who have a living wage, beyond, down to the poor, and then to the very poor. I quite recognise there is additional hardship, although only a slight additional hardship, in this increased tax on the very poor. It is, however, impossible to devise any method of taxation which is not felt in those quarters. I would ask the Committee to bear in mind that if we had not proposed this tax, we should have left alone, without any additional taxation, at a time when everyone else is paying it, those who receive the smaller incomes.
It is very easy for the hon. Member for Blackburn to say, "Put what you would have gained; by this on the Income Tax." I think we may already claim to have paid, I think, considerable attention to the Income Tax during this financial year. We feel that there should be something in reserve in that direction, for, if the War should be prolonged, we may have to come to the House another year, and ask for still Member for Islington spoke as though we were in charge of an overflowing were in charge of an overflowing Treasury. My view is that we should get every penny we can. If we can get more money than we have budgeted for, so much the better for the country. the right hon. Gentleman asks, "Why should sugar be penalised in the way it is?" Sugar suffers, as some other articles do, from the one defect from the point of view of sugar, and that is that it is an article of universal consumption. It is an axiom in taxation that if you want to get revenue, you should get hold of some article that everybody uses and tax it. At a time like this sugar is rationed. The amount of it is limited, the tax is an easy one to impose and collect, and the whole amount of the tax goes to the Revenue, with very little trouble or expense for collection. As objection may be taken to this tax in certain quarters of the House, I think that consideration is one which will commend itself to the Committee as being part of this Budget as a 1270 whole, and I hope the Committee will support us in carrying this Clause as it stands, just as in the later stages of this Budget we shall ask for the united support of the Committee to defeat many schemes that will be brought forward to whittle down this form of taxation which affect certain classes of the community.
§ Mr. PRINGLEThe hon. Gentleman who has just replied has reminded the Committee that this subject has already been under discussion, and that on a former occasion the main contention of the Government was that that was a highly inconvenient time to discuss the subject, and we were given to understand that the full reply of the Government would be made at a later stage. Now, I think, the Committee will agree that the hon. Gentleman who has replied for the Government has hardly come up to expectations. Personally, I should have preferred not to have taken part in this discussion today in view of what is going on elsewhere, but when one opens the morning paper and sees business as usual and birthday honours and baronetcies for profiteers, we feel entitled to protest against taxing the poor man's sugar. We have to consider, first of all, whether this is an equitable tax. It is not disputed that it will be a productive tax. Nobody has suggested that the Revenue will not come to the Exchequer by the increase of the tax upon sugar, but both the Financial Secretary to the Treasury and the Chancellor of the Exchequer in previous speeches have, I think, signally failed to make out a case for the equity of this proposal.
There are two different lines of arguments put forward in justification of the action of the Government. The first line is that it is only equitable to adopt this form of taxation when new direct taxation is being imposed, because it is urged that those who contribute to the Revenue solely in the form of indirect taxation should also be called upon for contributions. As a general rule there is a great deal to be said for that contention, but there are special circumstances which arise in connection with what may be called the non-tax paying classes. Who are the non-tax paying classes at the present time 2 They are not the more prosperous working classes, because those classes are already within the Income Tax, and the great majority of munition workers receiving the 12½per cent. bonus are now within the ranks of Income Tax payers. Many of them are dependants of soldiers who are 1271 at present in the Army fighting in France or some other theatre of war, and they are not receiving any war bonus. If you take the case of a wife and three children, the munificent provision made by the Government amounts to 29s. 6d. per week, and surely it is a heavy Income Tax on this poor woman to have an increased Sugar Tax levied upon her!
My hon. Friend asserts that there is no popular feeling against this proposal, but in these days popular feeling cannot be ascertained on matters of this kind. If a woman in receipt of a separation allowance sends a letter to the Press it is suppressed. You are making all the editors of newspapers knights now, and they have to make some return to the Government in the way of the suppression of expressions of popular opinion. The consequence is that the Government are not aware of the real feeling of large sections of the people on this question. They recognise that organised workers can always make their position felt in the country. There was an inquiry in regard to industrial unrest last year, conducted by the right hon. Gentleman the Member for the Blackfriars Division (Mr. Barnes), and he told the Government that industrial unrest was due to the increased cost of living, and the Ministry of Munitions distributed another 12½ per cent. all over the country. I think the Committee is entitled to know, if there is discontent as a result of this new tax on sugar, whether this vicious circle is to be still further continued, and whether there is to be a still further large concession to the workers in order to alleviate discontent. There are the people in receipt of separation allowances, and there are also the widows of soldiers who are deceased. They have no means of getting something to compensate them for what is taken from them under this form of taxation, and I think it is a matter of gross unfairness that the Government should by this means seek to take away part, of what these people are rightly entitled to. These are not the only people who will suffer. There are the old age pensioners, who are in an equally unfortunate position. Take also the case of the agricultural labourers, whose wages are now, I suppose, raised to 25s. a week. It was stated by the senior Member for York in a former Debate that this tax amounted to an Income Tax of 5½d. on the agricultural labourer. Surely that is impos- 1272 ing a charge altogether out of proportion, if it means an Income Tax of 5½d to what is being imposed upon other classes of the community!
Then there is the further defence put forward that it is necessary to impose some part of the burden upon non-Income Tax payers, but they are paying in another way. They are paying in the cost of everything they buy owing to the policy adopted by the Government, and they are paying for this reason more than anybody else in the country. Every article of prime necessity has increased in cost on account of the inflation of prices, and to say that the people who are suffering high prices on account of this inflation are not affected by the financial policy of the country is, I think, totally misleading the Committee. Another argument used is that this tax is a set-off against the subsidy paid for the reduced price of the loaf. As the hon. Gentleman was silent about that point, I wonder whether we are to understand that this argument has now been definitely and finally abandoned by the Government! It-is well if that is so, because a more fallacious argument has never been brought forward to justify any tax in this House. First of all we all know that the bread subsidy is a temporary one, and yet the Government are seeking to justify a permanent indirect tax on the basis that it counterbalances a temporary subsidy. I do not think that can be justified, and the Government could have achieved their object by a temporary adjustment in the price of sugar, but they are seeking to use this temporary subsidy for the purpose of imposing a permanent charge upon the indirect taxpayer.
Does this subsidy justify the imposition of this tax? We know enough now about the administration of this subsidy to be able to assert that it is extremely wasteful in its character, and that by a rearrangement of the subsidy the whole amount to be obtained from this increased tax could be saved by the Government without adding a penny to the price of the loaf. In these circumstances I think the Government should be asked to abandon the tax and to fix on the more economical and equitable administration of the subsidy, so that the money which is sought to be raised by this tax may be made up to the Exchequer. I think that is a wise and rational course. I remember in a former Debate the Leader of the Labour party, whom I congratu- 1273 late upon the honour he has just received, indicated that he was going to do terrible things on the Committee stage. He was one of the speakers who held that it would be very inconvenient that we should discuss this matter on the Report stage, and he then stated that he would be prepared to move the rejection of the Clause on behalf of the Labour party. Up to the present, however, he has taken no very conspicuous part in this Debate, neither has the Labour party as a whole, but I am hoping that now he has been reminded of his former attitude he will once more state here what the Labour party is thinking. We have always known what the Labour party thought when it was out of office in the past. In 1916 the Member for the Blackfriars Division, who is now a member of the War Cabinet, protested against a much smaller increase of the Sugar Tax, and now he is telling us about the diabolical ingenuity of the Germans—
§ The CHAIRMANI have allowed the hon. Member a good deal of latitude, but it is not fair to introduce wholly irrelevant matter to which hon. Members are not entitled to reply. It is very unfair.
§ Mr. PRINGLEI do not wish to enter into a discussion upon the consistency of the action of members of the Labour party, but I think an hon. Member might always be allowed to strengthen his case by referring to the former views of hon. Members of this House. The staple arguments between the two Front Benches have always been what they themselves have said previously, and now an hon. Member is not to be entitled to refer to what a Minister said before he became a Minister. Of course I accept your ruling, Mr. Chairman. Two years ago the right hon. Gentleman the Member for the Blackfriars Division made a speech protesting against a small increase in the Sugar Duty, and I was quoting his opinion to strengthen my case against a larger increase. The same argument also applies to a speech made by the Secretary to the Ministry of Food, who has now become a right hon. Gentleman. I am not going to enter into the question as to the value of the arguments then adduced, but I say that if those gentlemen were entitled to put forward their opinions then, it is surely quite within the competence and the right of other hon. Members who have not come into office to adhere to their former views, 1274 and also to put forward what it is surely important for this Committee to remember in regard to the former views of those right hon. Gentlemen. I say that this tax cannot be justified as an equivalent to the subsidy on bread, and it is a tax which is going to affect large classes of the community, many of them most deserving— namely, the dependants of soldiers and sailors who are fighting at the front, and the dependants of deceased soldiers and sailors. Under these circumstances I shall certainly go into the Lobby against this Clause.
§ Sir J. D. REESIt seems to me that those who welcomed on the introduction of this Budget the principles upon which it was framed cannot very consistently now object to support the operative Clauses of it. It is all very well when you come to a particular tax to say it is open to objection, but hon. Members in the position I have indicated are not justified in pressing their objection. I only rose to ask the Chancellor of the Exchequer whether it is feasible for him to communicate with the Food Department with a view to the exercise of the most merciful consideration in the administration of this tax for an exceedingly poor class of persons, the small sweetmeat shopkeepers, of whom a large number are to be found in my Constituency.
§ The CHAIRMANThat does not arise here. It is another Department altogether.
§ Mr. ADAMSONI rise to support the Amendment put forward by the hon. Member for Coventry (Mr. D. Mason). It may be within the recollection of the Committee that on the occasion when this matter was last discussed I said a few words in support of a similar Motion. [An Hon. Member: "You said you would put an Amendment down on the Committee stage to reject the Clause."] There is an Amendment down to reject the Clause, and I am about to support it. I support it not because of the extraordinary appeal made to me by the hon. Member for Lanark (Mr. Pringle), but because this is an unjust tax. It is a tax upon that section of the people who are least able to bear it, and I think the Chancellor of the Exchequer would be very well advised if he were to agree to the Amendment and to try and find compensation in other directions where the burden would be less excessive than it is in the case of this particular duty. The hon. Baronet the Member for Wellington 1275 (Sir C. Henry) stated that an Amendment of this kind did not help us to win the War. May I reply that a tax of this kind does not help us to win the War, and if we are levying a tax on a section of the people who are unable to bear it we are bound to breed dissatisfaction and discontent, which I think will not help us to win the War. There are many other directions in which the Chancellor of the Exchequer could look for the money that he is securing from this tax—directions that would have less effect on the moral of our people. If you are to go successfully through the present struggle it is very important to keep up the moral of the people. As has been pointed out by the hon. Member for Blackburn (Mr. Snowden), the Income Tax at certain stages could have afforded the money which is involved in this Sugar Tax. I hope that before the discussion ceases we shall have the Chancellor of the Exchequer agreeing to this Amendment. The increase in the cost of living which has taken place since the War began is a very serious matter for a large section of our people. This tax certainly affects very seriously old age pensioners and those who are dependent on separation allowances. But it does not affect them alone, because there are large masses of working people who have had little or no increase in their wages, and yet have had to meet the increased cost of living which is going on outside anything that has been done by the Chancellor of the Exchequer. There is, therefore, all the more reason why we should avoid adding to the burden of that section of our people, and I hope consequently the right hon. Gentleman will see his way to abandon this proposed increase of the Sugar Tax.
§ Mr. BONAR LAWI am obliged to hon. Members for the brevity of their speeches on this subject, and I agree that the conditions in which we are placed to-day make it unsuitable for those ordinary party recriminations which usually take place in the discussions on the Budget. This remark is suggested by an observation which fell from the hon. Member for Coventry (Mr. D. Mason), recalling how during pre-war days at election times it was customary for people to go round the constituencies complaining that certain candidates had voted against the reduction of the Tea or Sugar Taxes. As a matter of fact, any supporter 1276 of the Government of that time who voted in favour of those taxes did so because they were necessary for carrying on the government of the country. Surely this taxation is still much more necessary now, and I feel quite confident that the votes of hon. Members will therefore not be influenced by considerations of that kind. This is not a tax which I had any pleasure in imposing, and I would ask the Committee to bear in mind that, in framing these Budget proposals, what we had to consider was whether the burden as a whole is fairly put on all sections of the community that were able to pay. The hon. Member for Blackburn (Mr. Snowden) spoke of the proportion of direct to indirect taxation. I am one of those who think it not only a matter of right, but also a matter of necessity that the big financial burden of a war like this can only be borne by those who have the money available. It is the well-to-do classes that must bear the great proportion of this additional taxation. Perhaps the Committee will be surprised to learn what a complete change there has been in the proportion of direct to indirect taxation since the War broke out. In the last year before the War, 1913–14, the proportion of direct taxation was 57½ per cent. as against 42½ per cent. of indirect taxation. This year direct taxation amounts to between 81 and 82 per cent. of the whole, as compared with between 18 and 19 per cent. of indirect taxation. No one, therefore, can fail to recognise that direct taxation has been asked to pay a very large part of the additional burden due to the War.
When we come to this particular tax I would ask the Committee to take into consideration the reasons that must have influenced any Chancellor of the Exchequer in imposing the taxation. It is necessary to take the Budget as a whole. For instance, we had to impose additional Income Tax this year. But in doing so I left out altogether those whose incomes were less than £500 a year. But I did not feel I should be justified in doing that unless at the same time I was able to get something out of those classes who were thus exempted. As a matter of fact, the only additional burden in connection with this new taxation falling upon anyone with an income of less than £500 a year is this particular tax on sugar—putting aside, of course, such things as beer and tobacco, which are regarded as luxuries and which some people do not think a necessity at all. I quite recognise that in the taxation 1277 of sugar you are imposing a burden which falls on all classes of the community, and which, inasmuch as the consumption of sugar is pretty equally distributed throughout the population, falls therefore more heavily on the class least able to pay it. That is true, but then I ask the Committee to remember that in this same Budget in regard to Income Tax I granted an allowance for the wife, placing her in that respect on the same level as a child. Therefore, so far as any member of the working class who is called upon to pay Income Tax is concerned, he actually, with this additional duty on sugar, pays less than he did before that allowance was decided upon. At the present rate of Income Tax the allowance for the wife represents the sum of £2 16s. 3d. per year. This calculation has been made. Take the case of a family of seven—a husband, wife and five children. The extra duty on the present sugar ration for that family amounts to 18s. 11d. per year. There are, of course, other articles containing sugar which are consumed by the family, such as jam, and in respect of that the consumer is not paying on those articles anything like a full share of the additional burden for sugar. It has been estimated that the duty on these other articles represents not more than one-third of the duty on the sugar ration, making the whole burden in that respect £l 5s. 3d. per annum, as against the allowance for the wife of £2.16s. 3d. It is quite obvious, therefore, that in the case of the working classes, where they are paying Income Tax, they are not Being asked to pay any part of this additional burden.
5.0 p.m.
Now we come to the poorest classes, those who do not come within the Income Tax scales. The hon. Member for Lanark (Mr. Pringle) has suggested that it is not fair to bring into account in this connection the subsidy which has been given on bread. I think he is mistaken in that view, although he was quite right when he said that the subsidy on bread was for the period of the War only, while the Sugar Duty might go on after the War. Of course, any financial Bill, whatever may be the intentions of the Chancellor of the Exchequer, can only apply to that year in which the Bill is passed. Therefore it is for this year only, and in estimating the amount which would be raised under a general system of taxation this 1278 must be reconsidered in the light of events which arise out of the War and it does not follow that the same rate will be kept on after the War is over. If the principle is sound and if the burden we are now imposing on the people of this country is reasonable you are entitled to take the subsidy on the loaf into account. I ask the Committee to look at what this is. Here again I have had a calculation made If you take the same sized family which I gave before and assume that only the-voluntary ration allowance is used,. though as a matter of fact a good deal more than that is being used—then the saving for a family of seven is £3 5s., whereas the extra Sugar Duty is only £l 5s. 3d. My right hon. Friend and the Member for Lanark said this is a very complicated way of doing this. So it is, but I do not think it follows that it is a bad way. I know there is a good deal to be said on both sides as to the wisdom of this subsidy on bread, but I would point out to the Committee that France, a country less able to do this sort of thing, than ourselves, had arranged for the loaf to be fixed at a lower price before we came to this decision, and when hon. Members say we should just take off the bread subsidy and not put on the Sugar Duty, I do not believe they are representing the views of the poorest classes of the consumers of this country. If they had to choose between the cheaper loaf and the dearer sugar I think on the whole they would rather the dearer sugar than the dearer loaf. The hon. Member for Lanark seemed rather to complain that we do not make long speeches.
§ Mr. PRINGLENo, I did not!
§ Mr. BONAR LAWI thought the hon. Member said so, but I do not know how it is possible to give the same arguments over and over again without being a nuisance to the House of Commons, and that I am sure is not the desire either of Ministers or the House of Commons. Let me just summarise what I have said. You must take this Budget as a whole. For this year at all events if you take the subsidy into account we are putting no additional burden on anyone with an income below £500 a year. In this instance I do feel it would be very wrong to use the same kind of arguments as we are accustomed to use in ordinary 1279 times, though I am aware that certain Members do hold and express strong views, but I do ask them to realise that at all events there has been an effort to deal fairly with this whole question of taxation. I hope that we will now be
| Division No. 46.] | AYES. | [5.5 p.m. |
| Agg-Gardner, sir James Tynte | Fleming, Sir J. (Aberdeen, S.) | Palmer, Godfrey Mark |
| Archdale, Lieut. E. M. | Foster, Philip Staveley | Pearce, Sir Robert (Staffs, Leek) |
| Baird, John Lawrence | Geddes, Sir A. C. (Hants, N.) | Pearce, Sir William (Limehouse) |
| Baldwin, Stanley | Gibbs, Col. George Abraham | Pease, Rt. Hon. H. Pike (Darlington) |
| Banbury, Rt. Hon. Sir Frederick G. | Gilmour, Lieut.-Col. John | Pratt, J. W. |
| Barnes, Rt. Hon. George N. | Greenwood, Sir Hamar (Sunderland) | Prothero, Rt. Hon. Roland Edmund |
| Barnett, Captain R. W. | Greig, Colonel J. W. | Pryce-Jones, Col. E. |
| Barnston, Major Harry | Gretton Col. John | Pulley, C. T. |
| Beach, William F. H. | Hall, Lt.-Col. Sir Fred (Dulwich) | Rawlinson, John Frederick Peel |
| Beauchamp, Sir Edward | Hambro, Angus Valdemar | Rees, G. C. (Carnarvonshire, Arfon) |
| Beck, Arthur Cecil | Hamersley, Lt.-Col. Alfred St. George | Rees, Sir J. D. (Nottingham, E.) |
| Beckett, Hon. Gervase | Hanson, Charles Augustin | Richardson, Albion (Peckham) |
| Bird, Alfred | Hardy, Rt. Hon. Laurence | Roberts, Sir J. H. (Denbighs) |
| Black, Sir Arthur W. | Harmsworth, Cecil (Luton, Beds.) | Roberts, Sir S. (Sheffield, Ecclesall) |
| Blake, Sir Francis Douglas | Harris,.Sir Henry P. (Paddington, S.) | Robertson, Rt. Hon. J. M. |
| Boles, Lieut.-Col. Dennis Fortescue | Haslam, Lewis | Royds, Major Edmund |
| Booth, Frederick Handel | Havelock-Allan, Sir Henry | Rutherford, Sir W. (L'pool, W. Derby) |
| Boscawen, sir Arthur S. T. Griffith | Henderson, John M. (Aberdeen, W.) | Samuel, Rt. Hon. Sir Harry (Norwood) |
| Boyton, Sir James | Henry, Sir Charles (Shropshire) | Scott, A. MacCallum (Glas., Bridgeton) |
| Brace, Rt. Hon. William | Henry, Denis S. (Londonderry, S.) | Sharman-Crawford, Col. R. G. |
| Brassey, H. L. C. | Hewart, Rt. Hon. Sir Gordon | Small wood, Edward |
| Bridgeman, William Clive | Hodge, Rt. Hon. John | Smith, Rt. Hon. Sir F. E. (Liverpool) |
| Brookes, Warwick | Hohler, Gerald Fitzroy | Spear, Sir John Ward |
| B runner, John F. L. | Holt, Richard Durning | Spicer, Rt. Hon. Sir Albert |
| Bull, Sir William | Hope, James Fitzalan (Sheffield) | Stirling, Lieut.-Col. Archibald |
| Burgoyne, Captain A. H. | Hughes, Spencer Leigh | Strauss, Arthur (Paddington, North) |
| Burn, Colonel C. R. | Hunter, Major Sir Charles Rodk. | Strauss, Edward E. (Southwark, West) |
| Carson, Rt. Hon. Sir Edward H. | Illingworth, Rt. Hon. Albert H. | Sykes, Col. Sir Mark (Hull Central) |
| Cheyne, Sir W. W. | Jackson, Lieut.-Col. Hon. F. S. (York) | Terrell, George (Wilts, N.W.) |
| Clyde, James Avon | Jones, J. Towyn (Carmarthen, E.) | Walsh, Stephen (Lanes., Ince) |
| Clynes, John R. | Jones, W. Kennedy (Hornsey) | Walton, Sir Joseph |
| Coats, Sir Stuart A. (Wimbledon) | Kinloch-Cooke, Sir Clement | Wardle, George J. |
| Colvin, Col. Richard Beale | Lambert, Rt. Hon. G. (Devon, S.Molton) | Warner, Sir Thomas Courtenay T. |
| Compton-Rickett, Rt. Hon. Sir J. | Law, Rt. Hon. A. Bonar (Bootle) | Watson, John Bertrand (Stockton) |
| Cornwall, Sir Edwin A. | Lewis, Rt. Hon. John Herbert | Whiteley, Sir H. J. |
| Craig, Colonel Sir J. (Down, E.) | Lonsdale, James R. | Whittaker, Rt. Hon. Sir Thomas P. |
| Craik, Rt. Hon. Sir Henry | Lowe, Sir F. W. (Birm., Edgbaston) | Williams, Aneurin (Durham, N.W.) |
| Croft, Brigadier-General Henry Page | M'Callum, Sir John M. | Williams, Col. Sir R. (Dorset, W.) |
| Currie, George w. | MacCaw, William J. MacGeagh | Willoughby, Lieut.-Col. Hon. Claud |
| Dalrymple, Hon. H. H. | McKenna, Rt. Hon. Reginald | Wilson, Capt. A. Stanley (Yorks. E.R.) |
| Davies, David (Montgomery Co.) | Mackinder, Halford J. | Wilson, Col. Leslie C. (Reading) |
| Denniss, E. R. B. | Macmaster, Donald | Winfrey, Sir Richard |
| Dickinson, Rt. Hon. Sir W. H. | McMicking, Major Gilbert | Wood, Hon. E. F. L. (Yorks, Ripon) |
| Dougherty, Rt. Hon. Sir J. B. | Maitland, Sir A. D. Steel- | Wright, Captain Henry Fitzherbert |
| Du Pre, Major W. Baring | Mason, James F. (Windsor) | Young, William (Perth, East) |
| Essex, Sir Richard Walter | Mond, Rt. Hon. Sir Alfred | Younger, Sir George |
| Fell, Sir Arthur | Money, Sir L. G. Chiozza. | Yoxall, Sir James Henry |
| Fisher, Rt. Hon. H. A. L. (Hallam) | Morgan, George Hay | |
| Fisher, Rt. Hon. W. Hayes (Fulham) | Munro, Rt. Hon. Robert | TELLERS FOR THE AYES.—Lord |
| Fitzroy, Hon. Edward A. | Newman, Sir Robert (Exeter) | Edmund Talbot and Mr. Dudley |
| Flannery, Sir J. Fortescue | Nicholson, William G. (Petersfield) | Ward. |
| NOES. | ||
| Adamson, William | Hancock, John George | Roch, Walter F. (Pembroke) |
| Anderson, W. C. | Hudson, Walter | Rowlands, James |
| Arnold, Sydney | Jowett, Frederick William | Snowden, Philip |
| Baker, Joseph Allen (Finsbury, E.) | Lambert, Richard (Wilts, Cricklade) | Thomas, Rt. Hon. J. H. (Derby) |
| Barlow, Sir John Emmott (Somerset) | Lough, Rt. Hon. Thomas | Trevelyan Charles Philips |
| Bowden, Major G. R. Harland | Macdonald, J. Ramsay (Leicester) | Wednwood, Lieut.-Commander Josiah C. |
| Bowerman, Rt. Hon. C. W, | Outhwaite, R. L. | Whitehouse, John Howard |
| Burns, Rt. Hon. John | Peto, Basil Edward | Wiles, Rt. Hon. Thomas |
| Chancellor, Henry George | Ponsonby, Arthur A. W. H. | |
| Forens, Rt. Hon. Thomas Robinson | Price, C. E. (Edinburgh, Central) | TELLERS FOR THE NOES.—Mr. |
| Galbraith, Samuel | Pringle. William M. R. | David Mason and Capt. A. Smith. |
| Glanville, Harold James | Richardson, Thomas (Whitehaven) |