§ I will deal now with the duties of Customs and Excise. In considering to which dutiable articles it would be proper to grant relief this year, I have borne in mind that my right hon. Friend who was Chancellor of the Exchequer last year (Sir Robert Horne) reduced the Tea Duty by 4d. per 1b. in the last Budget. In these circumstances I do not think any further relief from the Tea Duty is called for this year. The next duty which I have had under consideration is the Sugar Duty, and in this connection I thought it important to investigate very carefully how far, in the present condition of the world's markets, the consumer could be expected to retain for any length of time the initial advantage that he would derive from a reduction of the present rate. As the Committee is aware, sugar prices have risen, owing to the anticipated shortage of the world's supplies of sugar. In other words, the; sugar market to-day is a seller's market.
1738§ In these circumstances, although it is practically certain that a reduction of duty would be at once accompanied by a proportionate reduction in price, I think it is highly improbable that the consumer would be the gainer for more than a very short time. The reduction in price would lead to an increased demand which would tend further to increase the world price, and the result would be that the money sacrificed by the Exchequer would go straight into the hands of the producers and the dealers in sugar. It may be argued that, even if prices did rise, they would still be lower by the extent of the reduction of the duties. In my opinion this would not follow, as the increased demand following an immediate reduction in price must lead, under present conditions, to a greater increase in price than would otherwise take place. In these circumstances I have, with great reluctance, refrained from proposing any reduction in the Sugar Duty, but it is my sincere hope that the position of the world's markets will be such that a reduction may be justified at an early date.