§ I now have left out of my surplus something under£6,000,000. What can I usefully do with it? Although I do not attach great importance, from the point of view of ultimate incidence, to the time-honoured distinction between direct and indirect taxation, I nevertheless think, especially looking to the cost of living at the present time, that I ought to make some decrease in indirect taxation, if I can, at the same time as I make this reduction in the Income Tax. Therefore I propose to reduce the duty on tea by 4d. 1b., that is to say, from 1s. to 8d. per 1b. The duty of 8d. will only be paid by foreign tea, because there is a preference in respect of tea grown in India and Ceylon and any other tea produced within the Empire, and after all 90 per cent. of the tea consumed comes from within our Empire. The duty upon Empire tea will be less that 8d. by one-sixth, and will amount to 6⅔d. If anybody wonders about the fraction, from the information I get from experts who advise me, that will create no trouble, 1042 because the duty is never paid upon a single pound. Somebody may also ask, Will the full extent of this remission of duty reach the consumer? I am told that the competition in the tea trade to-day is such that there is no doubt with regard to that. This was a matter upon which I desired to be assured, and I am informed that this undoubtedly is so. Those who know the trade from the inside will confirm what I have stated. It appears that the remission of the duty will be felt even down to the consumers who buy their tea in pennyworths.
§ The remission of the duty on tea involves a reduction also of one-third of the duties on coffee, cocoa, and chicory, which are all linked up with the duty on tea. In order that the merchants who have stocks upon which the duty has already been paid may get rid of their duty-paid stock, it is proposed that the reductions on tea, cocoa, coffee and chicory should take effect on 15th May, except in the case of imported cocoa preparations, for which the date will be the 1st July. The reduction of the Tea Duty and its consequences are estimated to cost£5,500,000 for a full year and£5,000,000 in the present year.